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[G.R. No. 86963. August 6, 1999] BATONG BUHAY GOLD MINES, IN ., petitioner, vs.

HONORABLE DIONISIO DELA SERNA IN HIS A!A ITY AS THE UNDERSE RETARY O" THE DE!ARTMENT O" LABOR AND EM!LOYMENT, ELSIE ROSALINDA TY, ANTONIO MENDELEBAR, MA. ON E! ION #. REYES, AND THE OTHER OM!LAINANTS $ IN ASE NO. N R%LSED% I%&'()%8)* M"T OR!ORATION AND SALTER HOLDINGS !TY. LTD., respondents. RESOLUTION !URISIMA, J.+ At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court with a Prayer for Preliminary Injunction and or Restraining Order brought by Batong Buhay old !ines" Inc# $BBGMI for brevity% to annul three orders issued by res&ondent 'ndersecretary (ionisio dela )erna of the (e&artment of *abor and +m&loyment" dated )e&tember ,6" ,-.." (ecember ,/" ,-.. and 0ebruary ,1" ,-.-" res&ectively# 2he Order of )e&tember ,6" ,-.. stated the facts as follows3 "444 on 5 0ebruary ,-.5" +lsie Rosalinda B# 2y" Antonia *# !endelebar" !a# Conce&cion O# Reyes and ,"6/5 others filed a com&laint against Batong Buhay old !ines" Inc# for3 $,% 7on8&ayment of their basic &ay and allowances for the &eriod of 6 9uly ,-.1 to 5 9uly ,-./" inclusive" under :age Order 7o# 6; $6% 7on8&ayment of their basic &ay and allowances for the &eriod ,6 9une ,-./ to 5 October ,-.6" inclusive under :age Order 7o# 5; $1% 7on8&ayment of their salaries for the &eriod ,6 !arch ,-.6 to the &resent; $/% 7on8&ayment of their ,1th month &ay for ,-.5" ,-.6 and ,-.5; $5% 7on8&ayment of their vacation and sic< leave" and the com&ensatory leaves of mine site em&loyees; and $6% 7on8 &ayment of the salaries of em&loyees who were &laced on forced leaves since 7ovember" ,-.5 to the &resent" if this is not feasible" the affected em&loyees be awarded corres&onding se&aration &ay# On - 0ebruary ,-.5" the Regional (irector set the case for hearing on ,5 0ebruary ,-.5# On ,5 0ebruary ,-.5" the res&ondent moved for the resetting of the case to 6 !arch ,-.5# On 65 0ebruary ,-.5" the com&lainants filed a !otion for the issuance of an ins&ection authority# 444 On ,1 9uly ,-.5" the *abor )tandards and :elfare Officers submitted their re&ort with the following recommendations3 =WHEREFORE, premises considered, this case is hereby s bmitted !ith the recommendation that an Order of Comp"iance be iss ed directin# respondent Baton# B hay Go"d Mines Inc$ to pay comp"ainants% E"sie Rosa"ina &y, et a"$ FO'R MI((IO) EIGH& H')*RE* EIGH&EE) &HO'+,)* +E-E) H')*RE* FOR&./+I0 1E+O+ ,)* FOR&. CE)&,-O+ $12,343,526$27% by !ay of npaid sa"aries of !or8ers from March 46, 4935 to present, npaid and ECO(, differentia"s nder Wa#e Order )os$ : and ; npaid 4<th months pay for 493; and 4936, and paid =sic> vacation?sic8?compensatory "eave benefits$% On 1, 9uly ,-.5" the Regional (irector >,? ado&ted the recommendation of the *):Os and issued an order directing the res&ondent to &ay the com&lainants the sum of P/".,."5/6#/@ re&resenting their un&aid ,1th month &ay for ,-.5 and ,-.6" wage and +CO*A differentials under wage order 7os# 6 and 5" un&aid salaries from ,6 !arch ,-.6 to &resent and vacationAsic< leave benefits for ,-./" ,-.5 and ,-.6# On ,- August ,-.5" the com&lainants filed an e48&arte motion for the issuance of a writ of e4ecution and a&&ointment of s&ecial sheriff# 444 On 6, August ,-.5" the Regional (irector issued an Order directing the res&ondent to &ut u& a cash or surety bond otherwise a writ of e4ecution will be issued# 444 :hen the res&ondent failed to &ost a cashAsurety bond" and u&on motion for the issuance of a writ of e4ecution by the com&lainants" the Regional (irector" on ,/ )e&tember ,-.5 issued a writ of e4ecution a&&ointing !r# 9ohn +s&iridion C# Ramos as )&ecial )heriff and directing him to do the following3 =.o are to co""ect the above/stated amo nt from the respondent and deposit the same !ith Cashier of this Office for appropriate disposition to herein comp"ainants nder the s pervision of the office of the *irector$ Other!ise, yo are to e@ec te this !rit by attachin# the #oods and chatte"s of the respondent not e@empt from e@ec tion or in case of ins fficiency thereof a#ainst the rea" or immovab"e property of the respondent$B 2he )&ecial )heriff &roceeded to e4ecute the a&&ealed Order on ,5 )e&tember ,-.5 and seiCed three $1% units of Peterbuilt truc<s and then sold the same by &ublic auction# Darious materials and motor vehicles were also seiCed on different dates and sold at &ublic auction by said sheriff# 444 444 444 On ,, (ecember ,-.5" the res&ondent finally &osted a su&ersedeas bond which &rom&ted this Office to issue an Order dated 66 9anuary ,-.." restraining the com&lainants and sheriff Ramos from enforcing the writ of e4ecution# 444E >6? BB !I a&&ealed the Order dated 9uly 1," ,-.5 of Regional (irector *una C# PieCas to res&ondent 'ndersecretary (ionisio de la )erna" contending that the Regional (irector had no jurisdiction over the case# On )e&tember ,6" ,-.." the &ublic res&ondent issued the first challenged Order u&holding the jurisdiction of the Regional (irector and annulling all the auction sales conducted by )&ecial )heriff 9ohn Ramos# 2he decretal &ortion of the said Order ruled3 EWHEREFORE, the Order dated <4 A "y 4935 of the Re#iona" *irector, )ationa" Capita" Re#ion, is hereby ,FFIRME*$ ,ccordin#"y, the !rit of e@ec tion dated 42 +eptember 4935 iss ed in connection thereto is hereby dec"ared -,(I* # Ho!ever, the p b"ic a ction sa"es cond cted by specia" sheriff Aohn Ramos p rs ant to the !rit of e@ec tion dated 42 +eptember 4935 on :2 +eptember :, :7, :<, and :9 October 4935 are a"" hereby dec"ared )'(( ,)* -OI* # F rthermore, the persona" properties so"d and the proceeds thereof !hich have been t rned over to the comp"ainants thr their "e#a" co nse" are hereby ordered ret rned to the c stody of the respondent and the b yers respective"y$ +O OR*ERE*$F>1? On October ,1" ,-.." a !otion for Reconsideration of the aforesaid order was &resented by the com&lainants in Case 7o# 7CR8*)+(8CI8 6@/58.5 but the same was denied# On 7ovember 5" ,-.." a !otion for Intervention was filed by !02 Cor&oration" inviting attention to a (eed of )ale e4ecuted in its favor by 0idel BermudeC" the highest bidder in the auction sale conducted on October 6-" ,-.5#

On (ecember 6" ,-.." another !otion for Intervention was filed" this time by )alter Goldings Pty#" *td#" claiming that !02 Cor&oration assigned its rights over the subject &ro&erties in favor of movant as evidenced by a )ales Agreement between !02 Cor&# and )alter Goldings Pty#" *td# 2he two !otions for Intervention were granted in the second Huestioned order dated (ecember ,/" ,-.." directing the e4clusion from annulment of the &ro&erties sold at the October 6-" ,-.5 auction sale and claimed by the intervenors" including one cluster of jun< mining machineries" eHui&ment and su&&lies" and dis&osing thus3 E:G+R+0OR+" in view of the foregoing" the motions for reconsideration filed by intervenors !02 and )alter are hereby granted# Corres&ondingly" this OfficeBs Order dated ,6 )e&tember ,-.. is hereby modified to e4clude from annulment Ethe one lot of jun< mining machineries" eHui&ment and su&&lies as8is8where8isF sold by )heriff 9ohn C# Ramos in the auction sale of 6- October ,-.5# 444 444 444F !otions for Reconsideration were inter&osed by Batong Buhay old !ining" Inc# and the res&ondent em&loyees but to no avail# 2he same were li<ewise denied in the third assailed Order dated 0ebruary ,1" ,-.-# Gence" the &etition under scrutiny" ascribing grave abuse of discretion amounting to lac< or e4cess of jurisdiction to the &ublic res&ondent in issuing the three Orders under attac<# 2he Huestioned Orders aforementioned have given rise to the issues3 $,% whether the Regional (irector has jurisdiction over the com&laint filed by the em&loyees of BB !I; and $6% whether or not the auction sales conducted by the said )&ecial )heriff are valid# Anent the first issue" an affirmative ruling is indicated# 2he Regional (irector has jurisdiction over the BB !I em&loyees who are the com&lainants in Case 7umber 7CR8*)+(8CI86@/58.5# 2he subject labor standards case of the &etition arose from the visitorial and enforcement &owers by the Regional (irector of (e&artment of *abor and +m&loyment $(O*+%# *abor standards refers to the minimum reHuirements &rescribed by e4isting laws" rules and regulations relating to wages" hours of wor<" cost of living allowance and other monetary and welfare benefits" including occu&ational" safety and health standards#>/? *abor standards cases are governed by Article ,6.$b% of the *abor Code# 2he &ivot of inHuiry here is whether the Regional (irector has jurisdiction over subject labor standards case# As can be gleaned from the records on hand" subject labor standards case was filed on 0ebruary 5" ,-.5 at which time Article ,6. $b% read as follows>5?3 Art# ,6. $ b% Disitorial and enforcement &owers 8 E$b% 2he !inister of *abor or his duly authoriCed re&resentative shall have the &ower to order and administer" after due notice and hearing" com&liance with the labor standards &rovisions of this Code based on the findings of labor regulation officers or industrial safety engineers made in the course of ins&ection" and to issue writs of e4ecution to the a&&ro&riate authority for the enforcement of their order" e4ce&t in cases where the em&loyer contests the findings of the labor regulations officers and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the ordinary course of ins&ection#F Petitioner theoriCes that the Regional (irector is without jurisdiction over subject case" &lacing reliance on the ruling in Bamba"es Base Inc$ vs$ Minister of (abor>6?and Oreshoot Minin# Company vs$ ,re""ano$>5? Res&ondent 'ndersecretary (ionision C# (ela )erna" on the other hand" u&held the jurisdiction of Regional (irector *una C# PieCas by relying on +#O# ,,," to Huote3 EConsidering therefore that there still e4ists an em&loyer8em&loyee relationshi& between the &arties; that the case involves violations of the labor standard &rovisions of the labor code; that the issues therein could be resolved without considering evidentiary matters that are not verifiable in the normal course of ins&ection; and" if only to give meaning and not render nugatory and meaningless the visitorial and enforcement &owers of the )ecretary of *abor and +m&loyment as &rovided by Article ,6.$b% of the *abor Code" as amended by )ection 6 of +4ecutive Order 7o# ,,, which states3 =2he &rovisions of article 6,5 of this code to the contrary notwithstanding and in cases where the relationshi& of em&loyer8em&loyee still e4ists" the !inister of *abor and +m&loyment or his duly authoriCed re&resentative shall have the &ower to order and administer" after due notice and hearing" com&liance with the labor standards &rovision of this Code based on the findings of the findings of labor regulation officers or industrial safety engineers made in the course of ins&ection" and to issue writs of e4ecution to the a&&ro&riate authority for the enforcement of their order" e4ce&t in cases where the em&loyer contests the findings of the labor regulations officers and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the ordinary course of ins&ection#B :e agree with the com&lainants that the regional office a C o has jurisdiction to hear and decide the instant labor standard case# 444 444 444F>.? 2he Court agrees with the &ublic res&ondent# In the case of Maternity Chi"dren%s Hospita" vs +ecretary of (abor $,5/ )CRA 616%" the Court in u&holding the jurisdiction of the Regional (irector over the com&laint on under&ayment of wages and +CO*As filed on !ay 61" ,-.6" by the em&loyees of !aternity ChildrenBs Gos&ital" held3 E2his is a labor standards case and is governed by Art# ,6.$b% of the *abor Code" as amended by +#O# ,,,# 444 444 444 Prior to the &romulgation of +#O# ,,, on (ecember 6/" ,-.6" the Regional (irectorBs authority over money claims was unclear# 2he com&laint in the &resent case was filed on !ay 61" ,-.6 when +#O# ,,, was not yet in effect# 444 444 :e believe" however " that even in the absence of +#O# ,,, " Regional (irectors already had enforcement &owers over money claims" effective under P#(# .5@" issued on (ecember ,6" ,-55" which transferred labor standards cases from the arbitration system to the enforcement system#E In the aforecited case" the Court in reinforcing its conclusion that Regional (irector has jurisdiction over labor standards cases" treated +#O# ,,, as a curative statute" ruling as follows3 E+#O# 7o# ,,, was issued on (ecember 6/" ,-.6 or three$1% months after the &romulgation of the )ecretary of *aborBs decision u&holding &rivate res&ondentsB salary differentials and +CO*As on )e&tember 6/" ,-.6# 2he amendment of the visitorial and enforcement &owers of the Regional (irector $Article ,6.$b%% by said +#O# ,,, reflects the intention enunciated in Policy Instructions 7os# 6 and 15 to em&ower the Regional (irectors to resolve ncontested money c"aims in cases !here an emp"oyer/emp"oyee re"ationship sti"" e@ists # 2his intention must be given weight and entitled to great res&ect# As held in Progressive :or<erBs 'nion" et al# vs# 0#P# Aguas" et al# #R# 7o# 5-5,,8,6" !ay 6-" ,-.5" ,5@ )CRA /6-3

#B44 2he inter&retation by officers of laws which are entrusted to their administration is entitled to great res&ect# :e see no reason to detract from this rudimentary rule in administrative law" &articularly when later events have &roved said inter&retation to be in accord with the legislative intent# 44B 2he &roceedings before the Regional (irector must" &erforce be u&held on the basis of Article ,6.$b% as amended by +#O# 7o# ,,," dated (ecember 6/" ,-.6" this e4ecutive order =to be considered in the nature of a curative statute with retros&ective a&&lication#B $Progressive :or<ersB 'nion" et al# vs# Gon# Aguas" et al# $+ pra%; !# arcia vs# 9udge A# !artineC" et al# #R#7o# l8/566-" may 6.",-5-" -@ )CRA 11,%# :ith regard to the &etitionerBs reliance on the cases of Bamba"es Base, Inc$ vs$ Minister of (abor $s pra% and Oreshoot Minin# Company vs$ ,re""ano,$s pra%" this is mis&laced# In the case of Iambales Base" Inc#" the court has already ruled that3 E444" in view of the &romulgation of +4ecutive Order 7o# ,,," Zambales Base Metals vs. Minister of Labor ,s -o .o-g/0 goo1 .23# $+m&hasis su&&lied% +4ecutive Order 7o# ,,, is in the character of a curative law" that is to say" it was intended to remedy a defect that" in the o&inion of the *egislature $the incumbent Chief +4ecutive in this case" in the e4ercise of her lawma<ing &owers under the 0reedom Constitution% had attached to the &rovision under the amendment# 444 444 444F>-? 2he case of Oreshoot Minin# Corporation" on the other hand" involved money claims of illegally dismissed em&loyees# As the em&loyer8 em&loyee relationshi& has already ceased and reinstatement is sought" jurisdiction necessarily falls under the *abor Arbiter# Petitioner should not have used this to su&&ort its theory as this &etition involves labor standards cases and not monetary claims of illegally dismissed em&loyees# 2he Court would have ruled differently had the &etitioner shown that subject labor standards case is within the &urview of the e4ce&tion clause in Article ,6. $b% of the *abor Code# )aid &rovision reHuires the concurrence of the following elements in order to divest the Regional (irector or his re&resentatives of jurisdiction" to wit3 $a% that the &etitioner $ emp"oyer% contests the findings of the labor regulations officer and raises issues thereon; $b% that in order to resolve such issues" there is a need to e4amine evidentiary matters; and $c% that such matters are not verifiable in the normal course of ins&ection#>,@? 7owhere in the records does it a&&ear that the &etitioner alleged any of the aforestated grounds# In fact" in its !otion for Reconsideration of the Order of the Regional (irector dated August 6@" ,-.5" the grounds which &etitioner raised were the following3 E,# 2his Gonorable Office has no jurisdiction to hear this case and its Order of 1, October ,-.5 is therefore null and void; 6# Batong Buhay old !ines" Inc# is erroneously im&leaded as the sole &arty res&ondent" the com&laint should have been directed also against the Asset PrivatiCation 2rust# In the other &leadings filed by &etitioner in 7CR8*)+(8C,86@/58.5" such as the 'rgent Omnibus !otion to declare void the :rit of +4ecution for lac< of jurisdiction and the O&&ositions it filed on the !otions for Intervention Huestioning the legal &ersonality of the intervenors" Huestions as to the amounts com&lained of by the em&loyees or absence of violation of labor standards laws were never raised# Raising lac< of jurisdiction in a !otion to (ismiss is not the contest contem&lated by the e4ce&tion clause under Article ,6.$b% of the *abor Code which would ta<e the case out of the jurisdiction of the Regional (irector and bring it before the *abor Arbiter# 2he only instance when there was a semblance of raising the aforestated grounds" was when they filed an A&&eal !emorandum dated 9anuary ,/" ,-.." before the res&ondent undersecretary# In the said A&&eal !emorandum" &etitioner comes u& with the defense that the Regional (irector was without jurisdiction" as em&loyer8em&loyee relationshi& was absent" since &etitioner had ceased doing business since ,-.5# Records indicate that the *abor )tandards and :elfare Officers" &ursuant to Com&laint Ins&ection Authority 7o# CI868@/58.5" were not allowed to loo< into records" vouchers and other related documents# 2he officers of the &etitioner alleged that the com&any is &resently under receivershi& of the (evelo&ment Ban< of the Phili&&ines# >,,? In lieu of this" the Regional (irector had ordered that a summary investigation be conducted#>,6? (es&ite &ro&er notices" the &etitioner refused to a&&ear before the Regional (irector# 2o give it another chance" an order to file its &osition &a&er was issued to substantiate its defenses# 7otwithstanding all these o&&ortunities to be heard" &etitioner chose not to avail of such# As held in the case of M$ RamireD Ind stries vs$ +ec$ of (abor and Emp"oyment" $666 )CRA ,,,%3 E444 'nder Art# ,6.$a% of the *abor Code" the )ecretary of *abor or his duly authoriCed re&resentatives" such as the Regional (irectors" has visitorial &owers which authoriCe him to ins&ect the records nd &remises of an em&loyer at any time of the day or night whenever wor< is being underta<en therein" to Huestion any em&loyee and investigate any fact" condition or matter" and to determine violations of labor laws" wage orders or rules and regulations# If the employer refuses to attend the inspection or conference or to submit any record, such as payrolls and daily time records, he will be deemed to have waived his right to present evidence .F $em&hasis su&&lied% PetitionerBs refusal to allow the *abor )tandards and :elfare Officers to conduct ins&ection in the &remises of their head office in !a<ati and the failure to file their &osition &a&er is eHuivalent to a waiver of its right to contest the claims of the em&loyees# 2his Court had occasion to hold there is no violation of due &rocess where the Regional (irector merely reHuired the submission of &osition &a&ers and resolved the case summarily thereafter#>,1? 0urthermore" the issuance of the com&liance order was well within the jurisdiction of the Regional (irector" as )ection ,/ of the Rules on the (is&osition of *abor )tandards Cases &rovides3 S/4t,o- 1(. "2,.u0/ to A55/20 8 :here the em&loyer or the com&lainant fails or refuses to a&&ear during the investigation" des&ite &ro&er notice" for two $6% consecutive hearings without justifiable reasons" the hearing officer may recommend to t6/ R/g,o-2. D,0/4to0 t6/ ,ssu2-4/ o7 2 4o85.,2-4/ o01/0 92s/1 o- t6/ /:,1/-4/ 2t 62-1 o0 2- o01/0 o7 1,s8,ss2. o7 t6/ 4o85.2,-t 2s t6/ 42s/ 82; 9/ # $+m&hasis su&&lied% It bears stressing that this &etition involves a labor standards case and it is in <ee&ing with the law that Ethe wor<er need not litigate to get what legally belongs to him" for the whole enforcement machinery of the (e&artment of *abor e4ists to insure its e4&editious delivery to him free of charge#E>,/? 2hus" their claim of closure for business" among other things" are factual issues which cannot be brought here for the first time# As &etitioner refused to &artici&ate in the &roceedings below where it could have ventilated the a&&ro&riate defenses" to do so in this &etition is unavailing# 2he reason for this is that factual issues are not &ro&er subjects of a s&ecial civil action for certiorari to the )u&reme Court#>,5? It is therefore abundantly clear that at the time of the filing of the claims of &etitionerBs em&loyees" the Regional (irector was already e4ercising visitorial and enforcement &owers# Regional (irectorBs visitorial and enforcement &owers under Art# ,6. $b% has undergone series of amendments which the Court feels to be worth mentioning#

=a> =b> =c> =d>

Confusion was engendered by the &romulgation of the decision in the case of +ervando%s Inc$ vs$ +ecretary of (abor and Emp"oyment and the Re#iona" *irector, Re#ion -I, *epartment of (abor and Emp"oyment$ >,6? In the said case" the Regional (irector too< cogniCance of the labor standards cases of the em&loyees of )ervandoBs Inc#" but this Court held that3 EIn the case of Briad ,#ro *eve"opment Corporation vs$ *e"a Cerna and Cam s En#ineerin# Corp$ vs$ +ec$ Of "abor app"yin# E$O$ 444 the Co rt reco#niDed the conc rrent F risdiction of the +ecretary of "abor =or Re#iona" *irectors> and the "abor ,rbiters to pass on emp"oyees money c"aims, inc" din# those cases !hich the "abor ,rbiters had previo s"y e@ercised F risdiction$ Ho!ever, in a s bseC ent modificatory reso" tion in the Briad ,#ro Case, dated 9 )ovember 4939, the Co rt modified its ori#ina" decision in vie! of the enactment of R, 654;, and phe"d the po!er of the Re#iona" *irectors to adF dicate money c"aims s bFect to the conditions set forth in +ection : of said "a! =R, 654;>$ &he po!er then of the Re#iona" *irector = nder the present state of "a!> to adF dicate emp"oyees money c"aims is s bFect to the conc rrence of a"" the reC isites provided nder +ec$ : of R, 654;, to !it3 the c"aim is represented by an emp"oyer or person emp"oyed in domestic or ho seho"d service, or ho sehe"perG the c"aim arises from emp"oyer/emp"oyee re"ationshipG the c"aimant does not see8 reinstatementG and the a##re#ate money c"aim of each emp"oyee or ho sehe"per does not e@ceed 1;,777$ @@@ @@@ @@@H>,5? 2he )ervando ruling" in effect" e4&anded the jurisdictional limitation &rovided for by RA 65,5 as to include labor standards cases under Article ,6. $b% and no longer limited to ordinary monetary claims under Article ,6-# In fact" in the !otion for Reconsideration >,.? &resented by the &rivate res&ondents in the )ervando case" the court a&&lied more sHuarely the P5"@@@ limit to the visitorial and enforcement &ower of the Regional (irector" to wit3 E2o construe the visitorial &ower of the )ecretary of *abor to order and enforce com&liance with labor laws as including the &ower to hear and decide cases involving em&loyeeBs claims for wages" arising from em&loyer8em&loyee relations" even if the amount of said claims e4ceed P5"@@@ for each em&loyee" would" in our considered o&inion" emasculate and render meaningless" if not se"ess, the provisions of ,rt$ :45 =a> and =6> and ,rtic"e 4:9 of the (abor Code !hich, as above/pointed o t, confer e@c" sive F risdiction on the (abor ,rbiter to hear and decide s ch emp"oyees% c"aims, re#ard"ess of amo nt, can be heard and determined by the +ecretary of (abor nder his visitoria" po!er$ &his does not, ho!ever, appear to be the "e#is"ative intent$ F But &revailing law and juris&rudence rendered the )ervando ruling ina&&licable# In the recent case of Francisco G ico, Ar$ vers s &he Honorab"e +ecretary of (abor I Emp"oyment (eonardo ,$ J is mbin#, GR K 4<45;7, prom "#ated on )ovember 46, 4993 " this Court u&held the jurisdiction of the Regional (irector notwithstanding the fact that the amounts awarded e4ceeded P5"@@@# Re&ublic Act 551@" the law governing the visitorial and enforcement &owers of the *abor )ecretary and his re&resentatives reads3 EArticle ,6. $b% Not3,t6st2-1,-g t6/ 50o:,s,o-s o7 A0t,4./s 1&9 2-1 &1) o7 t6,s o1/ to the contrary" and in cases where the relationshi& of em&loyer8em&loyee still e4ists" the )ecretary of *abor and +m&loyment or his duly authoriCed re&resentatives shall have the &ower to issue com&liance orders to give effect to the labor standards &rovisions of this Code and other labor legislation based on the findings of labor em&loyment and enforcement officers or industrial safety engineers made in the course of ins&ection# 2he )ecretary or his duly authoriCed re&resentative shall issue writs of e4ecution to the a&&ro&riate authority for the enforcement of their orders" e4ce&t in cases where the em&loyer contests the findings of the labor em&loyment and enforcement officer and raises issues su&&orted by documentary &roofs which were not considered in the course of ins&ection# 444 444 444F $em&hasis su&&lied% 2he &resent law" RA 551@" can be considered a curative statute to reinforce the conclusion that the Regional (irector has jurisdiction over the &resent labor standards case# :ell8settled is the rule that jurisdiction over the subject matter is determined by the law in force when the action was commenced" unless a subseHuent statute &rovides for its retroactive a&&lication" as when it is a curative legislation# >,-? Curative statutes are intended to su&&ly defects" abridge su&erfluities in e4isting laws and curb certain evils# 2hey are intended to enable &ersons to carry into effect that which they have designed and intended" but has failed of e4&ected legal conseHuence by reason of some statutory disability or irregularity in their own action# 2hey ma<e valid that which" before the enactment of the statute" was invalid# >6@? In arriving at this conclusion" the case of Briad ,#ro *eve"opment vs$ *e "a Cerna >6,? comes to the fore# In the said case" RA 65,5 was held to be a curative statute# 2here" the Court ruled that RA 65,5 is deemed a curative statute and should be a&&lied to &ending cases# 2he rationale of the ruling of the Court was that &rior to RA 65,5" Article 6,5 as amended by +#O# ,,," created a scenario where the *abor Arbiter and the Regional (irector of (O*+ had overla&&ing jurisdiction over money claims# )uch a situation was viewed as a defect in the law so that when RA 65,5 was &assed" it was treated or inter&reted by the Court as a rectification of the infirmity of the law" and therefore curative in nature" with retroactive a&&lication# Parenthetically" the same rationale a&&lies in treating RA 551@ as a curative statute# +4&licit in its title>66? is the legislative intent to rectify the error brought about by this CourtBs ruling that RA 65,5 covers even labor standards cases where the amounts to be awarded by the Regional (irector e4ceed P5"@@@ as &rovided for under RA 65,5# Congressional records relative to Re&ublic Act 551@ reveal that" Ethis bill see<s to do away with the jurisdictional limitations im&osed thru said ruling $ referrin# to +ervando% and to finally settle any lingering doubts on the visitorial and enforcement &owers of the )ecretary of *abor and +m&loyment#F >61? All the foregoing studiedly considered" the ineluctable conclusion is that the a&&lication of RA 551@ to the case under consideration is &ro&er# 2hus" it is decisively clear that the &ublic res&ondent did not act with grave abuse of discretion in issuing the Order dated )e&tember ,6" ,-..# 2he second issue for resolution is the validity of the auction sales conducted by )&ecial )heriff Ramos# It bears stressing that the writ of e4ecution issued by the Regional (irector led to the several auction sales conducted on )e&tember 6/" ,-.5" October 6" ,-.5" October 61" ,-.5" October 6-" ,-.5 and October 1@" ,-.5# In the first Order of &ublic res&ondent" the five $5% auction sales were declared null and void# As the &ublic res&ondent &ut it" Ethe scandalously low &rice for which the &ersonal &ro&erties of the res&ondent were sold leads us to no other recourse but to invalidate the auction sales conducted by the s&ecial sheriff#F >6/?

In the )e&tember ,6" ,-.. Order >65? of &ublic res&ondent" the &ersonal &ro&erties and corres&onding &rices for which they were sold were as follows3 E!/0so-2. 50o5/0t,/s so.1 o- S/5t/89/0 &(, 198)+ ,# One $,% unit &eterbuilt truc< !odel ,-5. with +ngine 7o# 6A/,@6865" Chassis 7o# ,1-,558P not running condition# 6# One $,% unit ,-5. !odel &eterbuilt truc< with +ngine 7o# 6/658.@/@" Chassis 7o# 6A/,@615" truc< with +ngine 7o# $2ruc< /% not running condition# 1# One $,% unit ,-5. !odel &eterbuilt truc< with +ngine 7o# 6A/,@1,-" Chassis 7o# ,1-,618P 2ruc< 7o# / not running condition# Proceeds of )ale ############P,5."@@@#@@ !/0so-2. !0o5/0t,/s So.1 o- O4to9/0 &, 198)+ ,# One $,% unit &eterbuilt truc< model ,-5." with +ngine 7o# 6A/,@1/5" Chassis 7o# ,1-,51-8P# 6# One $,% unit &eterbuilt truc< !odel ,-5. with +ngine 7o# 6A/,@165" Chassis 7o# ,1-,/-# 1# One $,% unit &ayloader $cater&illar with +ngine 7o# $not visible% -66# /# One $,% unit 0or<lift; one $,% unit crowler crane" +ngine 7o# $not visible%; and one $,% *ot of scra& irons im&ounded inside the Batong Buhay Com&ound" Calanan" Jalinga A&ayao# 5# One $,% unit &anel IsuCu with +ngine 7o# .6, PO06@@6@5" Plate 7o# PBD 1.6# Proceeds of )ale####P66."55@#@@ !/0so-2. !0o5/0t,/s So.1 o- O4to9/0 &3, 198)+ ,# One $,% 'nit 2oyota *and Cruiser" with +ngine 7o# BO//661/@" Chassis 7o# .,/@@5@@665" Plate 7o# BA2 151" burned" damage not running condition" ty&e of body jee& motor not visible# 6# 2wo $6% units &eterbuilts" damaged" burned motor 7os# $not visible% and Chassis 7os# not visible# 1# One $,% 'nit *ayland" burned" damaged and !otor 7o# not visible# /# 2wo $units% air com&ressor" burned" damaged and one $,% generator# 5# One $,% 'nit *oader !ichigan 5@" damaged and burned" and 6# One $,% roc< crasher" damaged" burned" scra& iron jun<# Proceeds of )ale###########P-."@@@#@@ !0o5/0t,/s so.1 o- O4to9/0 &9, 198)+ ,# One $,% lot of scra& construction materials 6# One $,% lot of scra& mining machineries eHui&ments and su&&lies# 1# One $,% lot of jun< machineries" eHui&ments and su&&lies# Proceeds of )ale############P,"6--"---#-!/0so-2. !0o5/0t,/s So.1 o- O4to9/0 &', 198)$ ,# One $,% lot of scra& construction materials 6# One $,% lot of scra& mining machineries" eHui&ments and su&&lies !0o4//1s o7 S2./...........!&,18<,'''.'' Tot2. !0o4//1s S2./.... !(,389,)(9.99 to satisfy the judgment award in the amount of !(,818,)(6.''#F As a general rule" findings of fact and conclusion of law arrived at by Huasi8judicial agencies are not to be disturbed absent any showing of grave abuse of discretion tainting the same# But in the case under scrutiny" there was grave abuse of discretion when the &ublic res&ondent" without any evidentiary su&&ort" adjudged such &rices as Escandalously lowF# Ge merely relied on the self8serving assertion by the &etitioner that the value of the auctioned &ro&erties was more than the &rice bid# Obviously" this ratiocination did not suffice to set aside the auction sales# 2he &resum&tion of regularity in the &erformance of official function is a&&licable here# Conformably" any &arty alleging irregularity vitiating auction sales must come forward with clear and convincing &roof# 0urthermore" it is a well8settled &rinci&le that3 EMere inadeC acy of price is not, of itse"f s fficient #ro nd to set aside an e@ec tion sa"e !here the sa"e is re# "ar, proper and "e#a" in other respects, the parties stand on an eC a" footin#, there are no confidentia" re"ation bet!een them, there is no e"ement of fra d, nfairness, or oppression, and there is no miscond ct, accident, mista8e or s rprise connected !ith, and tendin# to ca se, the inadeC acy$H >66? ConseHuently" in declaring the nullity of the subject auction sales on the ground of inadeHuacy of &rice" the &ublic res&ondent acted with grave abuse of discretion amounting to lac< or e4cess of jurisdiction# But" this is not to declare the Huestioned auction sales as valid# 2he same are null and void since on the &ro&erties of &etitioner involved was constituted a mortgage between &etitioner and the (evelo&ment Ban< of the Phili&&ines" as shown by the3 $a% (eed of !ortgage dated (ecember 6.",-51; $b% 9oint !ortgage $Amending (eed of !ortgage% dated August 65" ,-55; $c% Amendment to 9oint !ortgage dated October ,." ,-56# $d% Confirmation of !ortgage dated !arch 65",-5-; and $e% Additional 9oint 0irst !ortgage dated !arch 1," ,-.,#>65? 2he aforementioned documents were e4ecuted between the &etitioner and (evelo&ment Ban< of the Phili&&ines $ *B1% even &rior to the filing of the com&laint of &etitionerBs em&loyees# 2he &ro&erties having been mortgaged to (BP" the a&&licable law is )ection ,/ of +4ecutive Order 7o# .," dated 1 (ecember ,-.6" otherwise <nown as the E2he ,-.6 Revised Charter of the (evelo&ment Ban< of the Phili&&ines"F which e4em&ts the &ro&erties of &etitioner mortgaged to (BP from attachment or e4ecution sales# )ection ,/ of +#O# .," reads3 ec. !". #$emption from %ttachment$ &he provisions of any "a! to the contrary not!ithstandin#, sec rities on "oans and?or other accommodations #ranted by the Ban8 or its predecessor/in/interest sha"" not be s bFect to attachment, e@ec tion or any other co rt process, nor sha"" they be inc" ded in the property of inso"vent persons or instit tions, n"ess a"" debts and ob"i#ations of the Ban8 or its predecessor/in/ interest, pena"ties, co""ection of e@penses, and other char#es, s bFect to the provisions of para#raph =e> of +ec$ 9 of this Charter$H

In fact" a letter dated 9anuary 1," ,--@ of 9ose C# )ison" Associate +4ecutive 2rustee of the Asset PrivatiCation 2rust" to the Office of the Cler< of Court of the )u&reme Court" certified that the &etitioner is covered by Proclamation 7o# 5@ issued on (ecember ." ,-.6 by President CoraCon C# AHuino# Kuoted hereunder are the &ertinent &ortions of the said letter3 >6.? RE+ BBGMI :s. Ho-. 1/.2 S/0-2, GR No. 86963 Su50/8/ ou0t /0t,o020, )IR3 444 444 444 444 all the assets $real and &ersonalAchattel% of Batong Buhay old !ines" Inc# $BB !I% have been transferred and entrusted to the Asset PrivatiCation 2rust $AP2% by virtue of Proclamation 7o# 5@ dated (ecember ." ,-.6 of her +4cellency" President CoraCon C# AHuino# All the said assets of BB !I are covered by real and chattel mortgages e4ecuted in favor of the Phili&&ine 7ational Ban< $=P7BB%" the (evelo&ment Ban< of the Phili&&ines $=(BPB% and the 7ational Investment and (evelo&ment Cor&oration $=7I(CB%# 444 444 444 )ection ,/" +4ecutive Order 7o# .,3 444 444 444 Pursuant to the above8Huoted &rovision of law" you are hereby warned that all the assets $real and &ersonal Achattel% of BB !I are e4em&ted from writs of e4ecution" attachment" or any other lien or court &rocesses# 2he overnment" through AP2" shall initiate any administrative measures and remedies against you for any violation of the vested rights of P7B" (BP and AP2# 444 444 444 $sgd% 9O)+ C# )I)O7 2he e4em&tion referred to in the aforecited letter is one of the circumstances contem&lated by Rule 1- of the Revised Rules of Court" to wit3 ES/4. 13# !0o5/0t; /=/85t 70o8 /=/4ut,o-. % +4ce&t as otherwise e4&ressly &rovided by law" the following &ro&erties" and no other" shall be e4em&t from e4ecution3 444 444 444 $m% Pro&erties s&ecially e4em&ted by law# 444 444 444F Private res&ondents contend that even if subject &ro&erties were mortgaged to (BP $ no! nder ,sset 1rivatiDation &r st %" Article ,,@>6-? of the *abor Code" as amended by RA 65,5" a&&lies just the same# According to them" the said &rovision of law grants &reference to money claims of wor<ers over and above all credits of the &etitioner# 2his contention is untenable# In the case of *B1 vs$ )(RC">1@? the )u&reme Court held that the wor<ers &reference regarding wages and other monetary claims under Article ,,@ of the *abor Code" as amended" contem&lates ban<ru&tcy or liHuidation &roceedings of the em&loyerBs business# :hat is more" it does not disregard the &referential lien of mortgagees considered as &referred credits under the &rovisions of the 7ew Civil Code on the classification" concurrence and &reference of credits# :e now come to the issue with res&ect to the second Order" dated (ecember ,/" ,-.." which declared as valid the auction sale conducted on October 6-" ,-.5 by )&ecial )heriff 9ohn Ramos# Public res&ondent had no authority to validate the said auction sale on the ground that the intervenors" !02 Cor&oration and )alter Goldings Pty#" *td#" as &urchasers for value" acHuired legal title over subject &ro&erties# It is well to remember that the said &ro&erties were transferred to the intervenors" when 0idel BermudeC" the highest bidder at the auction sale" sold the &ro&erties to !02 Cor&oration which" in turn" sold the same &ro&erties to )alter Goldings Pty#" *td# Public res&ondent o&ined that the contract of sale between the intervenors and the highest bidder should be res&ected as these sales too< &lace during the interregnum after the auction sale was conducted on October 6-" ,-.5 and before the issuance of the first dis&uted Order declaring all the auction sales null and void# On this issue" the Court rules otherwise# As regards &ersonal &ro&erties" the general rule is that title" li<e a stream" cannot rise higher than its source# >1,? ConseHuently" a seller without title cannot transfer a title better than what he holds# !02 Cor&oration and )alter Goldings Pty#" *td# trace their title from 0idel BermudeC" who was the highest bidder of a void auction sale over &ro&erties e4em&t from e4ecution# )uch being the case" the subseHuent sale made by him $Fide" Berm deD% is inca&able of vesting title or ownershi& in the vendee# 2he Order dated (ecember ,/" ,-.." declaring the October 6-" ,-.5 auction sale as valid" was issued with grave abuse of discretion amounting to lac< or e4cess of jurisdiction# >HERE"ORE" the &etition is hereby RA72+(" insofar as the Order dated (ecember ,/" ,-.. of 'ndersecretary (ionisio dela )erna is concerned" which Order is )+2 A)I(+# 2he Order of )e&tember ,6" ,-.." u&holding the jurisdiction of the Regional (irector" is A00IR!+(# 7o &ronouncement as to costs# SO ORDERED. G.R. No. L%1(')8 M2046 ), 1919 RUBI, ET AL. ?82-gu,2-/s@, &laintiffs" vs# THE !ROAIN IAL BOARD O" MINDORO, defendant# *$ R$ Wi""iams I Fi"emon +otto for p"aintiff$ Office of the +o"icitor/Genera" 1aredes for defendant$ MAL OLM, J.+ In one of the cases which denote a landmar< in American Constitutional Gistory $:orcester vs$ eorgia >,.16?" 6 Pet#" 5,5%" Chief 9ustice !arshall" the first luminary of American juris&rudence" began his o&inion $relating to the status of an Indian% with words which" with a slight change in &hraseology" can be made to introduce the &resent o&inion L 2his cause" in every &oint of view in which it can be &laced" is of the

dee&est interest# 2he legislative &ower of state" the controlling &ower of the constitution and laws" the rights if they have any" the &olitical e4istence of a &eo&le" the &ersonal liberty of a citiCen" are all involved in the subject now to be considered# 2o imitate still further the o&inion of the Chief 9ustice" we ado&t his outline and &roceed first" to introduce the facts and the issues" ne4t to give a history of the so called Mnon8Christians"M ne4t to com&are the status of the Mnon8ChristiansM with that of the American Indians" and" lastly" to resolve the constitutional Huestions &resented# I# I72RO('C2IO7# 2his is an a&&lication for habeas corp s in favor of Rubi and other !anguianes of the Province of !indoro# It is alleged that the !aguianes are being illegally de&rived of their liberty by the &rovincial officials of that &rovince# Rubi and his com&anions are said to be held on the reservation established at 2igbao" !indoro" against their will" and one (abalos is said to be held under the custody of the &rovincial sheriff in the &rison at Cala&an for having run away form the reservation# 2he return of the )olicitor8 eneral alleges3 ,# 2hat on 0ebruary ," ,-,5" the &rovincial board of !indoro ado&ted resolution 7o# 65 which is as follows3 2he &rovincial governor" Gon# 9uan !orente" 9r#" &resented the following resolution3 M:hereas several attem&ts and schemes have been made for the advancement of the non8Christian &eo&le of !indoro" which were all a failure" M:hereas it has been found out and &roved that unless some other measure is ta<en for the !angyan wor< of this &rovince" no successful result will be obtained toward educating these &eo&le# M:hereas it is deemed necessary to obliged them to live in one &lace in order to ma<e a &ermanent settlement" M:hereas the &rovincial governor of any &rovince in which non8Christian inhabitants are found is authoriCed" when such a course is deemed necessary in the interest of law and order" to direct such inhabitants to ta<e u& their habitation on sites on unoccu&ied &ublic lands to be selected by him and a&&roved by the &rovincial board# M:hereas the &rovincial governor is of the o&inion that the sitio of 2igbao on *a<e 7aujan is a &lace most convenient for the !angyanes to live on" 7ow" therefore be it MReso"ved" that under section 6@55 of the Administrative Code" .@@ hectares of &ublic land in the sitio of 2igbao on 7aujan *a<e be selected as a site for the &ermanent settlement of !angyanes in !indoro subject to the a&&roval of the Gonorable )ecretary of the Interior" and MReso"ved f rther" 2hat !angyans may only solicit homesteads on this reservation &roviding that said homestead a&&lications are &reviously recommended by the &rovincial governor#M 6# 2hat said resolution 7o# 65 $series ,-,5% of the &rovincial board of !indoro was a&&roved by the )ecretary of the Interior of 0ebruary 6," ,-,5# 1# 2hat on (ecember /" ,-,5" the &rovincial governor of !indoro issued e4ecutive order 7o# 6 which says3 M:hereas the &rovincial board" by Resolution 7o# 65" current series" has selected a site in the sitio of 2igbao on 7aujan *a<e for the &ermanent settlement of !angyanes in !indoro# M:hereas said resolution has been duly a&&rove by the Gonorable" the )ecretary of the Interior" on 0ebruary 6," ,-,5# M7ow" therefore" I" 9uan !orente" jr#" &rovincial governor of !indoro" &ursuant to the &rovisions of section 6,/5 of the revised Administrative Code" do hereby direct that all the !angyans in the townshi&s of 7aujan and Pola and the !angyans east of the Baco River including those in the districts of (ulangan and RubiNs &lace in Cala&an" to ta<e u& their habitation on the site of 2igbao" 7aujan *a<e" not later than (ecember 1," ,-,5# MAny !angyan who shall refuse to com&ly with this order shall u&on conviction be im&risoned not e4ceed in si4ty days" in accordance with section 655- of the revised Administrative Code#M /# 2hat the resolution of the &rovincial board of !indoro co&ied in &aragra&h , and the e4ecutive order of the governor of the same &rovince co&ied in &aragra&h 1" were necessary measures for the &rotection of the !angyanes of !indoro as well as the &rotection of &ublic forests in which they roam" and to introduce civiliCed customs among them# 5# 2hat Rubi and those living in his rancheria have not fi4ed their dwelling within the reservation of 2igbao and are liable to be &unished in accordance with section 655- of Act 7o# 65,,# 6# 2hat the undersigned has not information that (oroteo (abalos is being detained by the sheriff of !indoro but if he is so detained it must be by virtue of the &rovisions of articles 7os# 6,/5 and 655- of Act 7o# 65,,# It thus a&&ears that the &rovincial governor of !indoro and the &rovincial board thereof directed the !anguianes in Huestion to ta<e u& their habitation in 2igbao" a site on the shore of *a<e 7aujan" selected by the &rovincial governor and a&&roved by the &rovincial board# 2he action was ta<en in accordance with section 6,/5 of the Administrative Code of ,-,5" and was duly a&&roved by the )ecretary of the Interior as reHuired by said action# Petitioners" however" challenge the validity of this section of the Administrative Code# 2his" therefore" becomes the &aramount Huestion which the court is called u&on the decide# )ection 6,/5 of the Administrative Code of ,-,5 reads as follows3 )+C# 6,/5# Estab"ishment of non/Christina pon sites se"ected by provincia" #overnor # L :ith the &rior a&&roval of the (e&artment Gead" the &rovincial governor of any &rovince in which non8Christian inhabitants are found is authoriCed" when such a course is deemed necessary in the interest of law and order" to direct such inhabitants to ta<e u& their habitation on sites on unoccu&ied &ublic lands to be selected by him an a&&roved by the &rovincial board# In connection with the above8Huoted &rovisions" there should be noted section 655- of the same Code" which read as follows3 )+C# 655-# Ref sa" of a non/Christian to ta8e p appointed habitation # L Any non8Christian who shall refuse to com&ly with the directions lawfully given by a &rovincial governor" &ursuant to section two thousand one hundred and forty8five of this Code" to ta<e u& habitation u&on a site designated by said governor shall u&on conviction be im&risonment for a &eriod not e4ceeding si4ty days# 2he substance of what is now found in said section 6,/5 is not new to Phili&&ine law# 2he genealogical tree of this section" if we may be &ermitted to use such terminology" would read3 )ection 6@55" Administrative Code of ,-,6; section 66" Act 7o# ,1-5; section 6 of various s&ecial &rovincial laws" notably of Act 7o# 5/5" s&ecifically relating to the !anguianes; section 6-" Act 7o# 1.5# )ection 6,/5 and its antecedent laws ma<e use of the term Mnon8Christians#M 2his word" as will later be disclosed" is also found in varying forms in other laws of the Phili&&ine Islands# In order to &ut the &hrase in its &ro&er category" and in order to understand the &olicy of the overnment

of the Phili&&ine Islands with reference to the unciviliCed elements of the Islands" it is well first of all to set down a s<eleton history of the attitude assumed by the authorities towards these Mnon8Christians"M with &articular regard for the legislation on the subject# II# GI)2ORO# A# B+0OR+ ACK'I)I2IO7 O0 2G+ PGI*IPPI7+ BO 2G+ '7I2+( )2A2+)# 2he most im&ortant of the laws of the Indies having reference to the subject at hand are com&iled in Boo< DI" 2itle III" in the following language# *A: I# 2he +m&eror Charles and the Prince" the governor" at Cigales" on !arch 6," ,55,# Phili& II at 2oledo" on 0ebruary ,-" ,56@# In the forest of )egovia on )e&tember ,1" ,565# In the +scorial on 7ovember ,@" ,56.# Ordinance ,/- of the &oblaciones of ,551# In )an *orenCo" on !ay 6@" ,55." 2GA2 2G+ MI7(IO)M B+ R+('C+( I72O MPOB*ACIO7+)M CO!!'7I2I+)%# In order that the indios may be instructed in the )acred Catholic 0aith and the evangelical law" and in order that they may forget the blunders of their ancient rites and ceremonies to the end that they may live in harmony and in a civiliCed manner" it has always been endeavored" with great care and s&ecial attention" to use all the means most convenient to the attainment of these &ur&oses# 2o carry out this wor< with success" our Council of the Indies and other religious &ersons met at various times; the &relates of new )&ain assembled by order of +m&eror Charles D of glorious memory in the year one thousand five hundred and forty8si4 L all of which meetings were actuated with a desire to serve od an our Jingdom# At these meetings it was resolved that indios be made to live in communities" and not to live in &laces divided and se&arated from one another by sierras and mountains" wherein they are de&rived of all s&iritual and tem&oral benefits and wherein they cannot &rofit from the aid of our ministers and from that which gives rise to those human necessities which men are obliged to give one another# Gaving realiCed that convenience of this resolution" our <ings" our &redecessors" by different orders" have entrusted and ordered the viceroys" &residents" and governors to e4ecute with great care and moderation the concentration of the indios intored cciones; and to deal with their doctrine with such forbearance and gentleness" without causing inconveniences" so that those who would not &resently settle and who would see the good treatment and the &rotection of those already in settlements would" of their own accord" &resent themselves" and it is ordained that they be not reHuired to &ay ta4es more than what is ordered# Because the above has been e4ecuted in the greater &art of our Indies" we hereby order and decree that the same be com&lied with in all the remaining &arts of the Indies" and the encomederos shall entreat com&liance thereof in the manner and form &rescribed by the laws of this title# 444 444 444 *A: DIII# Phili& II at the Pardo" on (ecember ," ,551# Phili& III at !adrid" October ,@" ,6,.# 2G+ MR+('CC2IO7+)M B+ !A(+ I7 ACCOR(A7C+ :I2G 2G+ CO7(I2IO7) O0 2GI) *A:# 2he &laces wherein the p eb"os and red cciones shall be formed should have the facilities of waters# lands" and mountains" ingress and egress" husbandry and &assageway of one league long" wherein the indios can have their live stoc< that they may not be mi4ed with those of the )&aniards# *A: IP# Phili& II at 2oledo" on 0ebruary ,-" ,-56# 2GA2 2G+ MI7(IO)M I7 MR+('CCIO7+)M B+ 7O2 (+PRID+( O0 2G+ *A7() PR+DIO')*O G+*( BO 2G+!# :ith more good8will and &rom&tness" the indios shall be concentrated in red cciones# Provided they shall not be de&rived of the lands and granaries which they may have in the &laces left by them# :e hereby order that no change shall be made in this res&ect" and that they be allowed to retain the lands held by them &reviously so that they may cultivate them and &rofit therefrom# 444 444 444 *A: PIII# 2G+ )A!+ A) ABOD+# 2GA2 2G+ MR+('CCIO7+)M B+ 7O2 R+!OD+( :I2GO'2 OR(+R O0 2G+ JI7 " DIC+ROO" OR CO'R2# 7o governor" or magistrate" or a"ca"de mayor" or any other court" has the right to alter or to remove the p eb"os or the red cciones once constituted and founded" without our e4&ress order or that of the viceroy" &resident" or the royal district court" &rovided" however" that the encomenderos" &riests" or indios reHuest such a change or consent to it by offering or giving information to that en# And" because these claims are often made for &rivate interests and not for those of the indios" we hereby order that this law be always com&lied with" otherwise the change will be considered fraudulently obtained# 2he &enalty of one thousand &esos shall be im&osed u&on the judge or encomendero who should violate this law# *A: PD# Phili& III at !adrid" on October ,@" ,6,.# 2GA2 2G+R+ B+ !AOOR) A7( A*(+R!+7 I7 2G+ MR+('C2IO7+)"M :GO )GA** B+ MI7(IO)#M :e order that in each town and red ccion there be a mayor" who should be an indio of the same red ccion; if there be more than eighty houses" there should be two mayors and two aldermen" also indios; and" even if the town be a big one" there should" nevertheless" be more than two mayors and four aldermen" If there be less than eighty indios but not less than forty" there should be not more than one mayor and one alderman" who should annually elect nine others" in the &resence of the &riests " as is the &ractice in town inhabited by )&aniards and indios# *A: PPI# Phili& II" in !adrid" On !ay 6" ,561" and on 7ovember 65" ,55.# At 2omar" on !ay ." ,5.,# At !adrid" on 9anuary ,@" ,5.-# Phili& III" at 2odesillas" on 9uly ,6" ,6@@# Phili& ID" at !adrid" on October , and (ecember ,5" ,6/6# 0or this law and the one following" see *aw I" 2it# /" Boo< 5# 2GA2 I7 2G+ 2O:7) O0 2G+ MI7(IO)"M 2G+R+ )GA** *ID+ 7O )PA7IAR()" 7+ RO+)" M!+)2IIO)"M A7( !'*A22O+)# :e hereby &rohibit and forbid )&aniards" negroes" mulattores" or mestiDos to live to live in the red ccionesand towns and towns of the indios" because it has been found that some )&aniards who deal" trade" live" and associate with the indios are men of troublesome nature" of dirty ways of living; robbers" gamblers" and vicious and useless men; and" to avoid the wrongs done them" the indios would leave their towns and &rovinces; and the negroes" mestiDos" and mulattoes" besides maltreating them and utiliCing their services" contaminate them with their bad

customs" idleness" and also some of their blunders and vices which may corru&t and &ervert the goal which we desire to reach with regard to their salvation" increase" and tranHuillity# :e hereby order the im&osition of grave &enalties u&on the commission of the acts above8mentioned which should not be tolerated in the towns" and that the viceroys" &residents" governors" and courts ta<e great care in e4ecuting the law within their &owers and avail themselves of the coo&eration of the ministers who are truly honest# As regards the mestiDos and Indian and Chinese half8 breeds $Dambai#os%" who are children of indias and born among them" and who are to inherit their houses and haciendas" they all not be affected by this law" it a&&earing to be a harsh thing to se&arate them from their &arents# $*aw of the Indies" vol# 6" &&# 66." 66-" 61@" 61,#% A clear e4&osition of the &ur&oses of the )&anish government" in its efforts to im&rove the condition of the less advanced inhabitants of the Islands by concentrating them in Mreducciones"M is found in the (ecree of the overnor8 eneral of the Phili&&ine Islands of 9anuary ,/" ,..," reading as follows3 It is a legal &rinci&le as well as a national right that every inhabitant of a territory recogniCed as an integral &art of a nation should res&ect and obey the laws in force therein; while" on other hand" it is the duty to conscience and to humanity for all governments to civiliCe those bac<ward races that might e4ist in the nation" and which living in the obscurity of ignorance" lac< of all the nations which enable them to gras& the moral and material advantages that may be acHuired in those towns under the &rotection and vigilance afforded them by the same laws# It is eHually highly de&ressive to our national honor to tolerate any longer the se&aration and isolation of the non8Christian races from the social life of the civiliCed and Christian towns; to allow any longer the commission of de&redations" &recisely in the Island of *uCon wherein is located the seat of the re&resentative of the overnment of the" metro&olis# It is but just to admit the fact that all the governments have occu&ied themselves with this most im&ortant Huestion" and that much has been heretofore accom&lished with the hel& and self8denial of the missionary fathers who have even sacrificed their lives to the end that those degenerate races might be brought to the &rinci&les of Christianity" but the means and the &reaching em&loyed to allure them have been insufficient to com&lete the wor< underta<en# 7either have the &unishments im&osed been sufficient in certain cases and in those which have not been guarded against" thus giving and customs of isolation# As it is im&ossible to consent to the continuation of such a lamentable state of things" ta<ing into account the &restige which the country demands and the inevitable duty which every government has in enforcing res&ect and obedience to the national laws on the &art of all who reside within the territory under its control" I have &roceeded in the &remises by giving the most careful study of this serious Huestion which involves im&ortant interests for civiliCation" from the moral and material as well as the &olitical stand&oints# After hearing the illustrious o&inions of all the local authorities" ecclesiastics" and missionaries of the &rovinces of 7orthern *uCon" and also after finding the unanimous conformity of the meeting held with the Archbisho& of !anila" the Bisho&s of 9aro and Cebu" and the &rovincial &relates of the orders of the (ominicans" Agustinians" Recoletos" 0ranciscans" and 9esuits as also of the meeting of the Council of Authorities" held for the object so indicated" I have arrived at an intimate conviction of the inevitable necessity of &roceeding in a &ractical manner for the submission of the said &agan and isolated races" as well as of the manner and the only form of accom&lishing such a tas<# 0or the reasons above stated and for the &ur&ose of carrying out these objects" I hereby &romulgate the following3 (+CR++# ,# All the indian inhabitants $indios% of the Islands of *uCon are" from this date" to be governed by the common law" save those e4ce&tions &rescribed in this decree which are bases u&on the differences of instructions" of the customs" and of the necessities of the different &agan races which occu&y a &art of its territory# 6# 2he diverse rules which should be &romulgated for each of these races L which may be divided into three classes; one" which com&rises those which live isolated and roaming about without forming a town nor a home; another" made u& of those subdued &agans who have not as yet entered com&letely the social life; and the third" of those mountain and rebellious &agans L shall be &ublished in their res&ective dialects" and the officials" &riests" and missionaries of the &rovinces wherein they are found are hereby entrusted in the wor< of having these races learn these rules# 2hese rules shall have e4ecutive character" beginning with the first day of ne4t A&ril" and" as to their com&liance" they must be observed in the manner &rescribed below# 1# 2he &rovincial authorities in conjunction with the &riests shall &roceed" from now on" with all the means which their Ceal may suggest to them" to the ta<ing of the census of the inhabitants of the towns or settlement already subdued" and shall ado&t the necessary regulations for the a&&ointment of local authorities" if there be none as yet; for the construction of courts and schools" and for the o&ening or fi4ing u& of means of communication" endeavoring" as regards the administrative organiCation of the said towns or settlements" that this be finished before the first day of ne4t 9uly" so that at the beginning of the fiscal year they shall have the same rights and obligations which affect the remaining towns of the archi&elago" with the only e4ce&tion that in the first two years they shall not be obliged to render &ersonal services other than those &reviously indicated# /# )o long as these subdued towns or settlements are located infertile lands a&&ro&riate for cultivation" the inhabitants thereof shall not be obliged to move their dwelling8houses; and only in case of absolute necessity shall a new residence be fi4ed for them" choosing for this &ur&ose the &lace most convenient for them and which &rejudices the least their interest; and" in either of these cases" an effort must be made to establish their homes with the reach of the sound of the bell# 5# 0or the &rotection and defense of these new towns" there shall be established an armed force com&osed &recisely of native Christian" the organiCation and service of which shall be determined in a regulations based u&on that of the abolished &ercios de 1o"icia $division of the G ardia Civi"%# 6# 2he authorities shall see to it that the inhabitants of the new towns understand all the rights and duties affecting them and the liberty which they have as to where and now they shall till their lands and sell the &roducts thereof" with the only e4ce&tion of the tobacco which shall be bought by the Hacienda at the same &rice and conditions allowed other &roducers" and with the &rohibition against these new towns as well as the others from engaging in commerce of any other transaction with the rebellious indios" the violation of which shall be &unished with de&ortation# 5# In order to &ro&erly carry out this e4&ress &rohibition" the limits of the territory of the rebellious indiosshall be fi4ed; and whoever should go beyond the said limits shall be detained and assigned governmentally wherever convenient# .# 0or the &ur&ose of assisting in the conversion of the &agans into the fraternity of the Catholic Church" all by this fact along be e4em&t for eight years from rendering &ersonal labor#

-# 2he authorities shall offer in the name of the )tate to the races not subdued $ aetas and mountains igorrots the following advantages in returns for their voluntary submission3 to live in towns; unity among their families; concession of good lands and the right to cultivate them in the manner they wish and in the way them deem most &roductive; su&&ort during a year" and clothes u&on effecting submission; res&ect for their habits and customs in so far as the same are not o&&osed to natural law; freedom to decide of their own accord as to whether they want to be Christians or not; the establishment of missions and families of recogniCed honesty who shall teach" direct" &rotect" and give them security and trust them; the &urchase or facility of the sale of their harvests; the e4em&tion from contributions and tributes for ten years and from theC intas $a <ind of ta4% for twenty years; and lastly" that those who are governed by the local authorities as the ones who elect such officials under the direct charge of the authorities of the &rovince or district# ,@# 2he races indicated in the &receding article" who voluntarily admit the advantages offered" shall" in return" have the obligation of constituting their new towns" of constructing their town hall" schools" and country roads which &lace them in communication with one another and with the Christians; &rovided" the location of these towns be distant from their actual residences" when the latter do not have the good conditions of location and cultivations" and &rovided further the &utting of families in a &lace so selected by them be authoriCed in the towns already constituted# ,,# 2he armed force shall &roceed to the &rosecution and &unishment of the tribes" that" disregarding the &eace" &rotection" and advantages offered them" continue in their rebellious attitude on the first of ne4t A&ril" committing from now on the crimes and ve4ations against the Christian towns; and for the this &ur&oses" the Ca&tain eneralNs Office shall &roceed with the organiCation of the divisions of the Army which" in conjunction with the rural guards $c adri""eros%" shall have to enter the territory of such tribes# On the e4&iration of the term" they shall destroy their dwelling8houses" labors" and im&lements" and confiscate their &roducts and cattle# )uch a &unishment shall necessarily be re&eated twice a year" and for this &ur&ose the military headHuarters shall immediately order a detachment of the military staff to study the Cones where such o&erations shall ta<e &lace and everything conducive to the successful accom&lishment of the same# ,6# 2he chiefs of &rovinces" &riests" and missioners" local authorities" and other subordinates to my authorities" local authorities" and other subordinates to may authority" civil as well as military authorities" shall give the most effective aid and coo&eration to the said forces in all that is within the attributes and the sco&e of the authority of each# ,1# :ith res&ect to the red ccion of the &agan races found in some of the &rovinces in the southern &art of the Archi&elago" which I intend to visit" the &receding &rovisions shall conveniently be a&&lied to them# ,/# 2here shall be created" under my &residency as overnor8 eneral" Dice8Royal Patron" a council or &ermanent commission which shall attend to and decide all the Huestions relative to the a&&lication of the foregoing regulations that may be brought to it for consultations by the chiefs of &rovinces and &riests and missionaries# ,5# 2he secondary &rovisions which may be necessary" as a com&lement to the foregoing" in brining about due com&liance with this decree" shall be &romulgated by the res&ective official centers within their res&ective jurisdictions# $ Gaceta de Mani"a" 7o# ,5% $*iccionario de "a ,dministracion" vol# 5" &&# ,6.8,1/#% B# A02+R ACK'I)I2O7 O0 2G+ PGI*IPPI7+) BO 2G+ '7I2+( )2A2+)# +ver since the acHuisition of the Phili&&ine Islands by the 'nited )tates" the Huestion as to the best method for dealing with the &rimitive inhabitants has been a &er&le4ing one# ,# Or#anic "a!# 2he first order of an organic character after the inauguration of the American overnment in the Phili&&ines was President !cJinleyNs Instructions to the Commission of A&ril 5" ,-@@" later e4&ressly a&&roved and ratified by section , of the Phili&&ine Bill" the Act of Congress of 9uly ," ,-@6# Portions of these instructions have remained undisturbed by subseHuent congressional legislation# One &aragra&h of &articular interest should here be Huoted" namely3 In dealing with the unciviliCed tribes of the Islands" the Commission should ado&t the same course followed by Congress in &ermitting the tribes of our 7orth American Indians to maintain their tribal organiCation and government and under which many of these tribes are now living in &eace and contentment" surrounded by civiliCation to which they are unable or unwilling to conform# )uch tribal governments should" however" be subjected to wise and firm regulation; and" without undue or &etty interference" constant and active effort should be e4ercised to &revent barbarous &ractices and introduce civiliCed customs# 7e4t comes the Phili&&ine Bill" the Act of Congress of 9uly ," ,-@6" in the nature of an Organic Act for the Phili&&ines# 2he &ur&ose of section 5 of the Phili&&ine Bill was to &rovide for a legislative body and" with this end in view" to name the &rereHuisites for the organiCation of the Phili&&ine Assembly# 2he Phili&&ine *egislature" com&osed of the Phili&&ine Commission and the Phili&&ine Assembly" was to have jurisdiction over the Christian &ortion of the Islands# 2he Phili&&ine Commission was to retain e4clusive jurisdiction of that &art of said Islands inhabited by !oros or other non8Christian tribes# 2he latest Act of Congress" nearest to a Constitution for the Phili&&ines" is the Act of Congress of August 6-" ,-,6" commonly <nown as the 9ones *aw# 2his transferred the e4clusive legislative jurisdiction and authority theretofore e4ercised by the Phili&&ine Commission" to the Phili&&ine *egislature $sec# ,6%# It divided the Phili&&ine Islands into twelve senatorial districts" the twelfth district to be com&osed of the !ountain Province" Baguio" 7ueva DiCcaya" and the (e&artment of !indanao and )ulu# 2he overnor8 eneral of the Phili&&ine Islands was authoriCed to a&&oint senators and re&resentatives for the territory which" at the time of the &assage of the 9ones *aw" was not re&resented in the Phili&&ine Assembly" that is" for the twelfth district $sec# ,6%# 2he law establish a bureau to be <nown as the MBureau of non8Christian 2ribesM which shall have general su&ervision over the &ublic affairs of the inhabitants which are re&resented in the *egislature by a&&ointed senators and re&resentatives$ sec# 66%# Phili&&ine organic law may" therefore" be said to recogniCed a dividing line between the territory not inhabited by !oros or other non8Christian tribes" and the territory which !oros or other non8Christian tribes" and the territory which is inhabited by !oros or other non8Christian tribes# 6# +tat te "a!# *ocal governments in the Phili&&ines have been &rovided for by various acts of the Phili&&ine Commission and *egislature# 2he most notable are Acts 7os# /. and /- concerning the Province of Benguet and the Igorots; Act 7O# .6" the !unici&al Code; ;Act no# .1" the Provincial overnment Act; Act 7o# ,.1" the Character of the city of !anila; Act 7o# 5..5" &roviding for the organiCation and government of the !oro Province; Act 7o# ,1-6" the )&ecial Provincial overnment Act; Act 7o# ,1-5" the 2ownshi& overnment Act; Act 7o# ,665" relating to the

organiCation of settlements; Act 7o# ,-61" the Baguio charger; and Act 7o# 6/@." the Organic Act of the (e&artment of !indanao and )ulu# 2he major &ortion of these laws have been carried forward into the Administrative Codes of ,-,6 an d,-,5# Of more &articular interest are certain s&ecial laws concerning the government of the &rimitive &eo&les# Beginning with Act 7o# 1.5" sections 6.85," enacted on ,pri" 9, 497:, by the 'nited +tates 1hi"ippine Commission " having reference to the Province of 7ueva DiCcaya" Acts 7os# /,,," /66" //5" 5@@" 5/5" 5/." 5/-" 55@" 55-" 551" .55" ,,,1" ,,/5" /56." ,1@6 were enacted for the &rovinces of Abra" AntiHue" Bataan" Ilocos 7orte" Ilocos )ur" Isabela# *e&anto8Bontoc" !indoro" !isamis" 7ueva DiCcaya" Pangasinan" Paragua $Palawan%" 2arlac" 2ayabas" and Iambales# As an e4am&le of these laws" because referring to the !anguianes" we insert Act 7o# 5/53 7o# 5/5# L A7 AC2 PRODI(I7 0OR 2G+ +)2AB*I)G!+72 O0 *OCA* CIDI* OD+R7!+72) 0OR 2G+ !A7 'IA7+) I7 2G+ PRODI7C+ O0 !I7(ORO# By a thority of the 'nited +tates, be it enacted by the 1hi"ippine Commission, that 3 )+C2IO7 ,# :hereas the !anguianes of the Provinces of !indoro have not &rogressed sufficiently in civiliCation to ma<e it &racticable to bring them under any form of munici&al government" the &rovincial governor is authoriCed" subject to the a&&roval of the )ecretary of the Interior" in dealing with these !anguianes to a&&oint officers from among them" to fi4 their designations and badges of office" and to &rescribe their &owers and duties3 Provided" 2hat the &owers and duties thus &rescribed shall not be in e4cess of those conferred u&on townshi& officers by Act 7umbered 2hree hundred and eighty8seven entitled MAn Act &roviding for the establishment of local civil overnments in the townshi&s and settlements of 7ueva DiCcaya#M )+C# 6# )ubject to the a&&roval of the )ecretary of the Interior" the &rovincial governor is further authoriCed" when he deems such a course necessary in the interest of law and order" to direct such !anguianes to ta<e u& their habitation on sites on unoccu&ied &ublic lands to be selected by him and a&&roved by the &rovincial board# !anguianes who refuse to com&ly with such directions shall u&on conviction be im&risonment for a &eriod not e4ceeding si4ty days# )+C# 1# 2he constant aim of the governor shall be to aid the !anguianes of his &rovince to acHuire the <nowledge and e4&erience necessary for successful local &o&ular government" and his su&ervision and control over them shall be e4ercised to this end" an to the end that law and order and individual freedom shall be maintained# )+C# /# :hen in the o&inion of the &rovincial board of !indoro any settlement of !anguianes has advanced sufficiently to ma<e such a course &racticable" it may be organiCed under the &rovisions of sections one to si4ty8seven" inclusive" of Act 7umbered three hundred and eighty8seven" as a townshi&" and the geogra&hical limits of such townshi& shall be fi4ed by the &rovincial board# )+C# 5# 2he &ublic good reHuiring the s&eedy enactment of this bill" the &assage of the same is hereby e4&edited in accordance with section two of NAn Act &rescribing the order of &rocedure by the Commission in the enactment of laws"N &assed )e&tember twenty8si4th" nineteen hundred# )+C# 6# 2his Act shall ta<e effect on its &assage# +nacted" (ecember /" ,-@6# All of these s&ecial laws" with the e4ce&tion of Act 7o# ,1@6" were re&ealed by Act 7o# ,1-6 and ,1-5# 2he last named Act incor&orated and embodied the &rovisions in general language# In turn" Act 7o# ,1-5 was re&ealed by the Administrative Code of ,-,6# 2he two Administrative Codes retained the &rovisions in Huestions# 2hese different laws" if they of the non8Christian inhabitants of the Phili&&ines and a settled and consistent &ractice with reference to the methods to be followed for their advancement# C# 2+R!I7O*O O# 2he terms made use of by these laws" organic and statutory" are found in varying forms# M'nciviliCed tribesM is the denomination in President !cJinleyNs instruction to the Commission# 2he most commonly acce&ted usage has sanctioned the term Mnon8Christian tribes#M 2hese words are to be found in section 5 of the Phili&&ine Bill and in section 66 of the 9ones *aw# 2hey are also to be found in Act 7o# 651 of the Phili&&ines Commission" establishing a Bureau of non8 Christian 2ribes and in Act 7o# 665/ of the Phili&&ine *egislature" carried forward into sections 5@,85@5 of the Administrative Code of ,-,5" reestablishing this Bureau# Among other laws which contain the &hrase" there can be mentioned Acts 7os# ,65" ,6." 1.5" 5/5" 5/." 5/-" 55@" ,1-5" ,61-" and 655,# M7on8Christian &eo&le"M Mnon8Christian inhabitants"M and Mnon8Christian 0ili&inosM have been the favorite nomenclature" in lieu of the un&o&ular word Mtribes"M since the coming into being of a 0ili&iniCed legislature# 2hese terms can be found in sections 6@56" 6@55" 61-@" 61-/" Administrative Code of ,-,6; sections 5@,85@5" 6,/5" 6/66" 6/66" Administrative Code of ,-,5; and in Acts 7os# 6/@/" 6/15" 6///" 665/ of the Phili&&ine *egislatures" as well as in Act 7o# ,665 of the Phili&&ine Commission# 2he Administrative Code s&ecifically &rovides that the term Mnon8ChristianM shall include !ohammedans and &agans# $)ec# 6556" Administrative Code of ,-,5; sec# 656," Administrative Code of ,-,6" ta<en from Act 7o# 6/@." sec# 1#% (# !+A7I7 O0 2+R! M7O78CGRI)2IA7#M If we were to follow the literal meaning of the word Mnon8Christian"M it would of course result in giving to it a religious signification# Obviously" Christian would be those who &rofess the Christian religion" and non8Christians" would be those who do not &rofess the Christian religion# In &artial corroboration of this view" there could also be cited section 6556 of the last Administrative Code and certain well8<nown authorities" as IuQiga" M+stadismo de las Islas 0ili&inas"M Professor 0erdinand Blumentritt" MPhili&&ine 2ribes and *anguages"M and (r# 7# !# )aleeby" M2he Origin of !alayan 0ili&inos#M $)ee Blair R Robertson" M2he Phili&&ine Islands"M ,/-18,.-." vol# III" &# 1@@" note; Craig8BeniteC" MPhili&&ine Progress &rior to ,.-."M vol# I# &# ,@5#% 7ot content with the a&&arent definition of the word" we shall investigate further to ascertain what is its true meaning# In one sense" the word can have a geogra&hical signification# 2his is &lainly to be seen by the &rovisions of many laws# 2hus" according to the Phili&&ine Bill" the authority of the Phili&&ine Assembly was recogniCed in the MterritoryM of the Islands not inhabited by !oros or other non8 Christian tribes# Again" the 9ones *aw confers similar recognition in the authoriCation of the twelfth senatorial district for the Mterritory not now re&resented in the Phili&&ine Assembly#M 2he Phili&&ines *egislature has" time and again" ado&ted acts ma<ing certain other acts a&&licable to that M&artM of the Phili&&ine Islands inhabited by !oros or other non8Christian tribes# )ection 6,/5" is found in article PII of the Provincial *aw of the Administrative Code# 2he first section of this article" &receding section 6,/5" ma<es the &rovisions of the article a&&licable only in s&ecially organiCed &rovinces# 2he s&ecially organiCed &rovinces are the !ountain Province" 7ueva DiCcaya" !indoro" Batanes" and Palawan# 2hese are the &rovinces to which the Phili&&ine *egislature has never seen fit to give

all the &owers of local self8government# 2hey do not" however" e4actly coincide with the &ortion of the Phili&&ines which is not granted &o&ular re&resentation# 7evertheless" it is still a geogra&hical descri&tion# It is well8<nown that within the s&ecially organiCed &rovinces" there live &ersons some of who are Christians and some of whom are not Christians# In fact" the law s&ecifically recogniCes this# $ )ec# 6/66" Administrative Code of ,-,5" etc#% If the religious conce&tion is not satisfactory" so against the geogra&hical conce&tion is li<ewise inadHuate# 2he reason it that the motive of the law relates not to a &articular &eo&le" because of their religion" or to a &articular &rovince because of its location" but the whole intent of the law is &redicated n the civiliCation or lac< of civiliCation of the inhabitants# At most" Mnon8ChristianM is an aw<ward and unsatisfactory word# A&ologetic words usually introduce the term# M2he so8called non8ChristianM is a favorite e4&ression# 2he )ecretary of the Interior who for so many years had these &eo&le under his jurisdiction" recogniCing the difficulty of selecting an e4act designation" s&ea<s of the Mbac<ward Phili&&ine &eo&les" commonly <nown as the Nnon8Christian tribes#MN $)ee Gearings before the Committee on the Phili&&ines" 'nited )tates )enate" )i4ty8third Congress" third session on G#R# ,./5-" An Act to declare the &ur&ose of the Peo&le of the 'nited )tates as to the future &olitical status of the Phili&&ine Islands and to &rovide a more autonomous government for the Islands" &&# 1/6" 15,; letter of the )ecretary of the Interior of 9une 1@" ,-@6" circulated by the +4ecutive )ecretary#% 2he idea that the term Mnon8ChristianM is intended to relate to degree of civiliCation" is substantiated by reference to legislative" judicial" and e4ecutive authority# 2he legislative intent is borne out by Acts 7os# /." 651" 1.5" ,665" and 665/" and sections 5@, et seC" and sections 6/66 et seC" of the Administrative Code of ,-,5# 0or instance" Act 7o# 651 charged the Bureau of non8Christian tribes to conduct Msystematic investigations with reference to non8Christian tribes # # # with s&ecial view to determining the most &racticable means for bringing about their advancement in civiliCation and material &ro&erty &ros&erity#M As authority of a judicial nature is the decision of the )u&reme Court in the case of 'nited )tates vs$ 2ubban >Jalinga? $>,-,5?" 6-" Phil#" /1/%# 2he Huestion here arose as to the effect of a tribal marriage in connection with article /61 of the Penal code concerning the husband who sur&rises his wife in the act of adultery# In discussing the &oint" the court ma<es use of the following language3 # # # we are not advised of any &rovision of law which recogniCes as legal a tribal marriage of so/ca""ed non/Christians or members of ncivi"iDed tribes" celebrated within that &rovince without com&liance with the reHuisites &rescribed by eneral Orders no# 6.# # # # :e hold also that the fact that the accused is shown to be a member of an ncivi"iDed tribe, of a "o! order of inte""i#ence, nc "t red and ned cated " should be ta<en into consideration as a second mar<ed e4tenuating circumstance# Of much more moment is the uniform construction of e4ecution officials who have been called u&on to inter&ret and enforce the law# 2he official who" as a member of the Phili&&ine Commission" drafted much of the legislation relating to the so8called Christians and who had these &eo&le under his authority" was the former )ecretary of the Interior# 'nder date of 9une 1@" ,-@6" this official addressed a letter to all governor of &rovinces" organiCed under the )&ecial Provincial overnment Act" a letter which later received recognition by the overnor8 eneral and was circulated by the +4ecutive )ecretary" reading as follows3 )ir3 :ithin the &ast few months" the Huestion has arisen as to whether &eo&le who were originally non8Christian but have recently been ba&tiCed or who are children of &ersons who have been recently ba&tiCed are" for the &ur&oses of Act ,1-6 and ,1-5" to be considered Christian or non8 Christians# It has been e@treme"y diffic "t, in framin# "e#is"ation for the tribes in these is"ands !hich are not advanced far in civi"iDation, to hit pon any s itab"e desi#nation !hich !i"" fit a"" cases$ &he n mber of individ a" tribes is so #reat that it is a"most o t of the C estion to en merate a"" of them in an ,ct$ It !as fina""y decided to adopt the desi#nation Lnon/ChristiansL as the one most satisfactory, b t the rea" p rpose of the Commission !as not so m ch to "e#is"ate for peop"e havin# any partic "ar re"i#io s be"ief as for those "ac8in# s fficient advancement so that they co "d, to their o!n advanta#e, be bro #ht nder the 1rovincia" Government ,ct and the M nicipa" Code # 2he mere act of ba&tism does not" of course" in itself change the degree of civiliCation to which the &erson ba&tiCed has attained at the time the act of ba&tism is &erformed# 0or &ractical &ur&oses" therefore" you will give the member of so8called Mwild tribesM of your &rovince the benefit of the doubt even though they may recently have embraced Christianity# 2he determining factor in deciding whether they are to be allowed to remain under the jurisdiction of regularly organiCed munici&alities or what form of government shall be afforded to them should be the degree of civiliCation to which they have attained and you are reHuested to govern yourself accordingly# I have discussed this matter with the Gonorable" the overnor8 eneral" who concurs in the o&inion above e4&ressed and who will have the necessary instructions given to the governors of the &rovinces organiCed under the Provincial overnment Act# $Internal Revenue !anual" &# 6,/#% 2he &resent )ecretary of the Interior" in a memorandum furnished a member of this court" has the following to say on the subject3 As far as names are concerned the classification is indeed unfortunate" but while no other better classification has as yet been made the &resent classification should be allowed to stand # # # I believe the term carries the same meaning as the e4&ressed in the letter of the )ecretary of the Interior $of 9une 1@" ,-@6" herein Huoted%# It is indicative of the degree of civiliCation rather than of religious denomination" for the hold that it is indicative of religious denomination will ma<e the law invalid as against that Constitutional guaranty of religious freedom# Another official who was concerned with the status of the non8Christians" was the Collector of Internal Revenue# 2he Huestion arose for ruling relatives to the cedula ta4ation of the !anobos and the Aetas# 2hereu&on" the view of the )ecretary of the Interior was reHuested on the &oint" who" by return indorsement" agreed with the inter&retation of the Collector of Internal Revenue# 2his Construction of the Collector of Internal Revenue can be found in circular letter 7o# ,.. of the Bureau of Internal Revenue" dated 9une ,," ,-@5" reading as follows $Internal Revenue !anual" &# 6,/%3 2he internal revenue law e4em&ts Mmembers of non8Christian tribesM from the &ayment of cedula ta4es# 2he Collector of Internal Revenue has inter&reted this &rovision of law to mean not that &ersons who &rofess some form of Christian worshi& are alone subject to the cedula ta4" and that all other &erson are e4em&t; he has inter&reted it to mean that all &ersons &reserving tribal relations with the so8called non8Christian tribes are e4em&t from the cedula ta4" and that all others" including 9ews" !ohammedans" Confucians" Buddists" etc#" are subject to said ta4 so long as they live in cities or towns" or in the country in a civiliCed condition# In other words" it is not so much a matter of a manNs form of religious worshi& or &rofession that decides whether or not he is subject to the cedula ta4; it is more de&endent on whether he is living in a civiliCed manner or is associated with the mountain tribes" either as a member thereof or as a recruit# )o far" this Huestion has not come u& as to whether a

Christian" maintaining his religious belief" but throwing his lot and living with a non8Christian tribe" would or would not be subject to the cedula ta4# On one occasion a &rominent Gebrew of !anila claimed to this office that he was e4em&t from the cedula ta4" inasmuch as he was not a Christian# 2his Office" however" continued to collect cedula ta4es from all the 9ews" +ast Indians" Arabs" Chinamen" etc#" residing in !anila# Kuite a large &ro&ortion of the cedula ta4es &aid in this city are &aid by men belonging to the nationalities mentioned# Chinamen" Arabs and other s are Huite widely scattered throughout the Islands" and a condition similar to that which e4ist in !anila also e4ists in most of the large &rovincial towns# Cedula ta4es are therefore being collected by this Office in all &arts of these Islands on the broad ground that civiliCed &eo&le are subject to such ta4es" and non8civiliCed &eo&le &reserving their tribal relations are not subject thereto# $)gd#% 97O# )# GOR(" Co""ector of Interna" Reven e$ On )e&tember ,5" ,-,@" the Collector of Internal Revenue addressed circular letter 7o# 165" a&&roved by the )ecretary of 0inance and 9ustice" to all &rovincial treasurers# 2his letter in &art reads3 In view of the many Huestions that have been raised by &rovincial treasurers regarding cedula ta4es due from members of non8Christian tribes when they come in from the hills for the &ur&oses of settling down and becoming members of the body &olitic of the Phili&&ine Islands" the following clarification of the laws governing such Huestions and digest of rulings thereunder is hereby &ublished for the information of all concerned3 7on8Christian inhabitants of the Phili&&ine Islands are so classed" not by reason of the fact that they do not &rofess Christianity" but because of their unciviliCed mode of life and low state of develo&ment# All inhabitants of the Phili&&ine Islands classed as members of non8Christian tribes may be divided into three classes in so far as the cedula ta4 law is concerned # # # :henever any member of an non8Christian tribe leaves his wild and unciviliCed mode of life" severs whatever tribal relations he may have had and attaches himself civiliCed community" belonging a member of the body &olitic" he thereby ma<es himself subject to &recisely the same law that governs the other members of that community and from and after the date when he so attaches himself to the community the same cedula and other ta4es are due from him as from other members thereof# If he comes in after the e4&iration of the delinHuency &eriod the same rule should a&&ly to him as to &ersons arriving from foreign countries or reaching the age of eighteen subseHuent to the e4&iration of such &eriod" and a regular class A" (" 0" or G cedula" as the case may be" should be furnished him without &enalty and without reHuiring him to &ay the ta4 for former years# In conclusion" it should be borne in mind that the &rime factors in determining whether or not a man is subject to the regular cedula ta4 is not the circumstance that he does or does not &rofess Christianity" nor even his maintenance of or failure to maintain tribal relations with some of the well <nown wild tribes" but his mode of life" degree of advancement in civiliCation and connection or lac< of connection with some civiliCed community# 0or this reason so called MRemontadosM and M!ontescosM will be classed by this office as members of non8Christian tribes in so far as the a&&lication of the Internal Revenue *aw is concerned" since" even though they belong to no well recogniCed tribe" their mode of life" degree of advancement and so forth are &ractically the same as those of the Igorrots and members of other recogniCed non8Christina tribes# Dery res&ectfully" $)gd#% +**I) CRO!:+**" Co""ector of Interna" Reven e, A&&roved3 $)gd#% R+ ORIO ARA7+2A" +ecretary of Finance and A stice$ 2he two circular above Huoted have since been re&ealed by Bureau of Internal Revenue Regulations 7o# ," &romulgated by Denancio Conce&cion" Acting Collector of Internal Revenue" and a&&roved on A&ril ,6" ,-,5" by Gonorable Dictorino !a&a" )ecretary of 0inance and 9ustice# )ection 1@ of the regulations is &ractically a transcri&t of Circular *etter 7o# 165# 2he subject has come before the Attorney8 eneral for consideration# 2he Chief of Constabulary reHuest the o&inion of the Attorney8 eneral as to the status of a non8Christian who has been ba&tiCed by a minister of the os&el# 2he &recise Huestions were these3 M(oes he remain non8 Christian or is he entitled to the &rivileges of a ChristianS By &urchasing into4icating liHuors" does he commit an infraction of the law and does the &erson selling same lay himself liable under the &rovision of Act 7o# ,61-SM 2he o&inion of Attorney8 eneral AvanceQa" after Huoting the same authorities hereinbefore set out" concludes3 In conformity with the above Huoted constructions" it is &robable that is &robable that the &erson in Huestion remains a non8Christian" so that" in &urchasing into4icating liHuors both he and the &erson selling the same ma<e themselves liable to &rosecution under the &rovisions of Act 7o# ,61-# At least" I advise you that these should be the constructions &lace u&on the law until a court shall hold otherwise# )olicitor8 eneral Paredes in his brief in this case says3 :ith res&ect to the meaning which the &hrase non8Christian inhabitants has in the &rovisions of the Administrative code which we are studying" we submit that said &hrase does not have its natural meaning which would include all non8Christian inhabitants of the Islands" whether 0ili&ino or strangers" civiliCed or unciviliCed" but sim&ly refers to those unciviliCed members of the non8Christian tribes of the Phili&&ines who" living without home or fi4ed residence" roam in the mountains" beyond the reach of law and order # # # 2he Phili&&ine Commission in denominating in its laws that &ortion of the inhabitants of the Phili&&ines which live in tribes as non8Christian tribes" as distinguished from the common 0ili&inos which carry on a social and civiliCed life" did not intended to establish a distinction based on the religious beliefs of the individual" but" without dwelling on the difficulties which later would be occasioned by the &hrase" ado&ted the e4&ression which the )&anish legislation em&loyed to designate the unciviliCed &ortion of the inhabitants of the Phili&&ines# 2he &hrase Nnon8Christian inhabitantsN used in the &rovisions of articles 6@55 and 65/, of Act 7o# 6655 $articles 6,/5 and 655-% should be understood as eHuivalent to members of unciviliCed tribes of the Phili&&ines" not only because this is the evident intention of the law" but because to give it its lateral meaning would ma<e the law null and unconstitutional as ma<ing distinctions base the religion of the individual# 2he Official Census of ,-@1" in the &ortion written by no less an authority than (e# (avid P# Barrows" then MChief of the Bureau of non8 Christian 2ribes"M divides the &o&ulation in the Christian or CiviliCed 2ribes" and non8Christian or :ild 2ribes# $Census of the Phili&&ine Islands >,-@1?" vol# ," &&# /,, et seC%# 2he &resent (irector of the Census" Gon# Ignacio Dillamor" writes that the classification li<ely to be used in the Census now being ta<en is3 M0ili&inos and Primitive 0ili&inos#M In a Pronouncing aCetteer and eogra&hical (ictionary of the Phili&&ine

Islands" &re&ared in the Bureau of Insular Affairs" :ar (e&artment" a sub8division under the title non8Christian tribes is" MPhysical and Political Characteristics of the non8Christian 2ribes"M which sufficiently shows that the terms refers to culture and not to religion# In resume" therefore" the *egislature and the 9udiciary" inferentially" and different e4ecutive officials" s&ecifically" join in the &ro&osition that the term Mnon8ChristianM refers" not to religious belief" but" in a way " to geogra&hical area" and" more directly" to natives of the Phili&&ine Islands of a law grade of civiliCation" usually living in tribal relationshi& a&art from settled communities# +# 2G+ !A7 'IA7+)# 2he so8called non8Christians are in various state a&&roaching civiliCation# 2he Phili&&ine Census of ,-@1 divided them into four classes# Of the third class" are the !anguianes $or !angyans% of !indoro# Of the derivation of the name M!anguianM (r# 2# G# Pardo de 2avera in his Etimi"o#ia de "os nombres de RoDas de Fi"ipinas" says3 In 2agalog" Bicol" and Disaya" !anguian signifies Msavage"M Mmountainer"M M&agan"M Mnegro#M It may be that the use of this word is a&&licable to a great number of 0ili&inos" but nevertheless it has been a&&lied only to certain inhabitants of !indoro# +ven in &rimitive times without doubt this name was given to those of that island who bear it to8day" but its em&loyed in three 0ili&ino languages shows that the radical n#ian had in all these languages a sense to8day forgotten# In Pam&ango this ending still e4ists and signifies Mancient"M from which we can deduce that the name was a&&lied to men considered to be the ancient inhabitants" and that these men were &ushed bac< into the interior by the modern invaders" in whose language they were called the Mancients#M 2he !anguianes are very low in culture# 2hey have considerable 7egrito blood and have not advanced beyond the 7egritos in civiliCation# 2hey are a &eaceful" timid" &rimitive" semi8nomadic &eo&le# 2hey number a&&ro4imately ,5"@@@# 2he manguianes have shown no desire for community life" and" as indicated in the &reamble to Act 7o# 5/5" have not &rogressed sufficiently in civiliCation to ma<e it &racticable to bring them under any form of munici&al government# $)ee Census of the Phili&&ine $Islands >,-@1?" vol# I" &&# 66" 61" /6@#% III# CO!PARA2ID+ L 2G+ A!+RICA7 I7(IA7)# Reference was made in the PresidentsN instructions to the Commission to the &olicy ado&ted by the 'nited )tates for the Indian 2ribes# 2he methods followed by the overnment of the Phili&&ines Islands in its dealings with the so8called non8Christian &eo&le is said" on argument" to be &ractically identical with that followed by the 'nited )tates overnment in its dealings with the Indian tribes# Daluable lessons" it is insisted" can be derived by an investigation of the American8Indian &olicy# 0rom the beginning of the 'nited )tates" and even before" the Indians have been treated as Min a state of &u&ilage#M 2he recogniCed relation between the overnment of the 'nited )tates and the Indians may be described as that of guardian and ward# It is for the Congress to determine when and how the guardianshi& shall be terminated# 2he Indians are always subject to the &lenary authority of the 'nited )tates# Chief 9ustice !arshall in his o&inion in :orcester vs$ eorgia" hereinbefore mentioned" tells how the Congress &assed an Act in ,.,- Mfor &romoting those humane designs of civiliCing the neighboring Indians#M After Huoting the Act" the o&inion goes on L M2his act avowedly contem&lates the &reservation of the Indian nations as an object sought by the 'nited )tates" and &ro&oses to effect this object by civiliCing and converting them from hunters into agriculturists#M A leading case which discusses the status of the Indians is that of the 'nited )tates vs$ Jagama $>,..6?" ,,. '#)#" 155%# Reference is herein made to the clause of the 'nited )tates Constitution which gives Congress M&ower to regulate commerce with foreign nations" and among the several )tates" and with the Indian tribes#M 2he court then &roceeds to indicate a brief history of the &osition of the Indians in the 'nited )tates $a more e4tended account of which can be found in !arshallNs o&inion in :orcester vs$ eorgia" s pra%" as follows3 2he relation of the Indian tribes living within the borders of the 'nited )tates" both before and since the Revolution" to the &eo&le of the 'nited )tates" has always been an anomalous one and of a com&le4 character# 0ollowing the &olicy of the +uro&ean overnments in the discovery of American towards the Indians who were found here" the colonies before the Revolution and the )tates and the 'nited )tates since" have recogniCed in the Indians a &ossessory right to the soil over which they roamed and hunted and established occasional villages# But they asserted an ultimate title in the land itself" by which the Indian tribes were forbidden to sell or transfer it to other nations or &eo&les without the consent of this &aramount authority# :hen a tribe wished to dis&ose of its lands" or any &art of it" or the )tate or the 'nited )tates wished to &urchase it" a treaty with the tribe was the only mode in which this could be done# 2he 'nited )tates recogniCed no right in &rivate &ersons" or in other nations" to ma<e such a &urchase by treaty or otherwise# :ith the Indians themselves these relation are eHually difficult to define# 2hey were" and always have been" regarded as having a semi8inde&endent &osition when they &reserved their tribal relations; not as )tates" not as nation not a &ossessed of the fall attributes of sovereignty" but as a se&arate &eo&le" with the &ower of regulating their internal and social relations" and thus far not brought under the laws of the 'nion or of the )tate within whose limits they resided# 2he o&inion then continues3 It seems to us that this $effect of the law% is within the com&etency of Congress# 2hese Indian tribes are the wards of the nation# 2he are communities dependent on the 'nited )tates# de&endent largely for their daily food# (e&endent for their &olitical rights# 2hey owe no allegiance to the )tates" and receive from the no &rotection# Because of the local ill feeling" the &eo&le of the )tates where they are found are often their deadliest enemies# 0rom their very wea<ness and hel&lessness" so largely due to the course of dealing of the 0ederal overnment with them and the treaties in which it has been &romised" there arise the duty of &rotection" and with it the &ower# 2his has always been recogniCed by the +4ecutive and by Congress" and by this court" whenever the Huestion has arisen # # # 2he &ower of the eneral overnment over these remnants of race once &owerful" now wea< and diminished in numbers" is necessary to their &rotection" as well as to the safety of those among whom they dwell# it must e4ist in that government" because it never has e4isted anywhere else" because the theater of its e4ercise is within the geogra&hical limits of the 'nited )tates" because it has never been denied" and because it alone can enforce its laws on all the tribes# In the later case of 'nited )tates vs$ )andoval $>,-,1?" 61, '#)#" 6.% the Huestion to be considered was whether the status of the Pueblo Indians and their lands was such that Congress could &rohibit the introduction of into4icating liHuor into those lands notwithstanding the admission of 7ew !e4ico to statehood# 2he court loo<ed to the re&orts of the different su&erintendent charged with guarding their interests and founds that these Indians are de&endent u&on the fostering care and &rotection of the government Mli<e reservation Indians in general#M Continuing" the court said Mthat during the )&anish dominion" the Indians of the p eb"os were treated as wards reHuiring s&ecial &rotection" where subjected to restraints and official su&ervisions in the alienation of their &ro&erty#M And finally" we not the following3 M7ot only does the Constitution e4&ressly authoriCe Congress to regulate commerce with the Indians tribes" but long8continued legislative and e4ecutive usage and an unbro<en current of judicial decisions have attributed to the 'nited )tates as a su&erior and civiliCed nation the &ower and the duty of e4ercising a

fostering care and &rotection over all de&endent Indian communities within its borders" whether within its original territory or territory subseHuently acHuired" and whether within or without the limits of a state#M :ith reference to laws affecting the Indians" it has been held that it is not within the &ower of the courts to overrule the judgment of Congress# 0or very good reason" the subject has always been deemed &olitical in nature" not subject to the jurisdiction of the judicial de&artment of the government# $!atter of Geff >,-@5?" ,-5 '#)#" /..; '#)# vs$ Celestine >,-@-?" 6,5 '#)#" 65.; '#)# vs$ )andoval" s pra; :orcester vs$ eorgia" s pra; '#)# vs$ Rogers >,./6?" / Gow#" 565; the Chero<ee 2obacco >,.5,?" ,, :all" 6,6; Roff vs$ Burney >,.-5?" ,6. '#)#" 6,.; 2homasvs$ ay >,.-.?" ,6- '#)##" 66/; *one :olf vs$ Gitchcoc<>,-@1?" ,.5 '#)#" 551; :allace vs$ Adams >,-@5?" 6@/ '#)#" /,5; Conley vs$ Bollinger >,-,@?" 6,6 '#)#" ./; 2iger vs$ :estern Invest# Co# >,-,,?" 66, '#)#" 6.6; '#)# vs$ *ane >,-,1?" 616 '#)##" 5-.; Cyr vs$ :al<er $,-,,?" 6- O<la" 6.,; 15 *#R#A# >7# )#?" 5-5#% :henever" therefore" the 'nited )tates sets a&art any &ublic land as an Indian reservation" it has full authority to &ass such laws and authoriCe such measures as may be necessary to give to the Indians thereon full &rotection in their &ersons and &ro&erty# $'#)# vs$ 2homas >,.-/?" ,5, '#)#" 555#% All this borne out by long8continued legislative and e4ecutive usage" and an unbro<en line of judicial decisions# 2he only case which is even remotely in &oint and which" if followed literally" might result in the issuance of habeas corp s" is that of 'nited )tates vs$ Croo< $>,.5-?" 0ed# Cas# 7o# ,/.-,%# 2his was a hearing u&on return to a writ of habeas corp s issued against Brigadier eneral eorge Croo< at the relation of )tanding Bear and other Indians" formerly belonging to the Ponca 2ribe of Indians# 2he &etition alleged in substance that the relators are Indians who have formerly belonged to the Ponca tribe of Indians" now located in the Indian 2erritory; that they had some time &reviously withdrawn from the tribe" and com&letely severed their tribal relations therewith" and had ado&ted the general habits of the whites" and were then endeavoring to maintain themselves by their own e4ertions" and without aid or assistance from the general government; that whilst they were thus engaged" and without being guilty of violating any of the laws of the 'nited )tates" they were arrested and restrained of their liberty by order of the res&ondent" eorge Croo<# 2he substance of the return to the writ was that the relators are individual members of" and connected with" the Ponca tribe of Indians; that they had fled or esca&ed form a reservation situated some &lace within the limits of the Indian 2erritory L had de&arted therefrom without &ermission from the overnment; and" at the reHuest of the )ecretary of the Interior" the eneral of the Army had issued an order which reHuired the res&ondent to arrest and return the relators to their tribe in the Indian 2erritory" and that" &ursuant to the said order" he had caused the relators to be arrested on the Omaha Indian 2erritory# 2he first Huestion was whether an Indian can test the validity of an illegal im&risonment by habeas corp s# 2he second Huestion" of much greater im&ortance" related to the right of the overnment to arrest and hold the relators for a time" for the &ur&ose of being returned to the Indian 2erritory from which it was alleged the Indian esca&ed# In discussing this Huestion" the court reviewed the &olicy the overnment had ado&ted in its dealing with the friendly tribe of Poncase# 2hen" continuing" the court said3 M*aws &assed for the government of the Indian country" and for the &ur&ose of regulating trade and intercourse with the Indian tribes" confer u&on certain officers of the overnment almost unlimited &ower over the &ersons who go u&on the reservations without lawful authority # # # :hether such an e4tensive discretionary &ower is wisely vested in the commissioner of Indian affairs or not " need not be Huestioned# It is enough to <now that the &ower rightfully e4ists" and" where e4isting" the e4ercise of the &ower must be u&held#M 2he decision concluded as follows3 2he reasoning advanced in su&&ort of my views" leads me to conclude3 ,# that an Indian is a N&ersonN within the meaning of the laws of the 'nited )tates" and has" therefore" the right to sue out a writ of habeas corp s in a federal court" or before a federal judge" in all cases where he may be confined or in custody under color of authority of the 'nited )tates or where he is restrained of liberty in violation of the constitution or laws of the 'nited )tates# 6# 2hat eneral eorge Croo<" the res&ondent" being commander of the military de&artment of the Platte" has the custody of the relators" under color of authority of the 'nited )tates" and in violation of the laws therefore# 1# 2hat n rightful authority e4ists for removing by force any of the relators to the Indian 2erritory" as the res&ondent has been directed to do# /# that the Indians &ossess the inherent right of e4&atriation" as well as the more fortunate white race" and have the inalienable right to Mlife" liberty" and the &ursuit of ha&&iness"M so long as they obey the laws and do not tres&ass on forbidden ground# And" 5# Being restrained of liberty under color of authority of the 'nited )tates" and in violation of the laws thereof" the relators must be discharged from custody" and it is so ordered# As far as the first &oint is concerned" the decision just Huoted could be used as authority to determine that Rubi" the !anguian &etitioner" a 0ili&ino" and a citiCen of the Phili&&ine Islands" is a M&ersonM within the meaning of the Habeas Corp s Act" and as such" entitled to sue out a writ in the Phili&&ine courts# $)ee also In re Race Gorse >,.-5?" 5@ 0ed#" 5-.#% :e so decide# As to the second &oint the facts in the )tanding Bear case an the Rubi case are not e4actly identical# But even admitting similarity of facts" yet it is <nown to all that Indian reservations do e4ist in the 'nited )tates" that Indians have been ta<en from different &arts of the country and &laced on these reservation" without any &revious consultation as to their own wishes" and that" when once so located" they have been made to remain on the reservation for their own good and for the general good of the country# If any lesson can be drawn form the Indian &olicy of the 'nited )tates" it is that the determination of this &olicy is for the legislative and e4ecutive branches of the government and that when once so decided u&on" the courts should not interfere to u&set a carefully &lanned governmental system# Perha&s" just as may forceful reasons e4ists for the segregation as e4isted for the segregation of the different Indian tribes in the 'nited )tates# ID# CO7)2I2'2IO7A* K'+)2IO7)# A# (+*+ A2IO7 O0 *+ I)*A2ID+ PO:+R# 2he first constitutional objection which confronts us is that the *egislature could not delegate this &ower to &rovincial authorities# In so attem&ting" it is contended" the Phili&&ine *egislature has abdicated its authority and avoided its full res&onsibility# 2hat the ma4im of Constitutional *aw forbidding the delegation of legislative &ower should be Cealously &rotected" we agree# An understanding of the rule will" however" disclose that it has not bee violated in his instance# 2he rule has nowhere been better stated than in the early Ohio case decided by 9udge Ranney" and since followed in a multitude of case" namely3 M2he true distinction therefore is between the delegation of &ower to ma<e the law" which necessarily involves a discretion as to what it shall be" and conferring an authority or discretion as to its e4ecution" to be e4ercised under and in &ursuance of the law# 2he first cannot be done; to the later no valid objection can be made#M $Cincinnati" :# R I# R# Co# vs$ CommNrs# Clinton County >,.56?" , Ohio )#t" ..#% (iscretion" as held by Chief 9ustice !arshall in :ayman vs$ )outhard $>,.65?" ,@ :heat#" ,% may be committed by the *egislature to an e4ecutive de&artment or official# 2he *egislature may ma<e decisions of e4ecutive de&artments of subordinate official thereof" to whom t has committed the e4ecution of

certain acts" final on Huestions of fact# $'#)# vs$ Jin<ead >,-,.?" 6/. 0ed#" ,/,#% 2he growing tendency in the decision is to give &rominence to the MnecessityM of the case# Is not all this e4actly what the *egislature has attem&ted to accom&lish by the enactment of section 6,/5/ of the Administrative CodeS Gas not the *egislature merely conferred u&on the &rovincial governor" with the a&&roval of the &rovincial board and the (e&artment Gead" discretionary authority as to the e4ecution of the lawS Is not this MnecessaryMS 2he case of :est vs$ Gitchoc<" $>,-@6?" 6@5 '#)#" .@% was a &etition for mandamus to reHuire the )ecretary of the Interior to a&&rove the selection and ta<ing of one hundred and si4ty acres by the relator out of the lands ceded to the 'nited )tates by the :ichita and affiliated bands of Indians# )ection /61 of the 'nited )tates Revised )tatutes &rovided3 M2he Commissioner of Indian Affairs shall" under the direction of the )ecretary of the Interior" and agreeably to such regulations as the President may &rescribe" have the management of all Indian affairs" and of all matters arising out to the Indian relations#M 9ustice Golmes said3 M:e should hesitate a good deal" es&ecially in view of the long established &ractice of the (e&artment" before saying that this language was not broad enough to warrant a regulation obviously made for the welfare of the rather hel&less &eo&le concerned# 2he &ower of Congress is not doubted# 2he Indians have been treated as wards of the nation# )ome such su&ervision was necessary" and has been e4ercised# In the absence of s&ecial &rovisions naturally it would be e4ercised by the Indian (e&artment#M $)ee also as corroborative authority" it any is needed" 'nion Bridge Co# vs$ '#)# >,-@5?" 6@/ '#)##" 16/" reviewing the &revious decisions of the 'nited )tates )u&reme Court3 '#)# vs$ *ane >,-,/?" 616 '#)#" 5-.#% 2here is another as&ect of the Huestion" which once acce&ted" is decisive# An e4ce&tion to the general rule# sanctioned by immemorial &ractice" &ermits the central legislative body to delegate legislative &owers to local authorities# 2he Phili&&ine *egislature has here conferred authority u&on the Province of !indoro" to be e4ercised by the &rovincial governor and the &rovincial board# :ho but the &rovincial governor and the &rovincial board" as the official re&resentatives of the &rovince" are better Hualified to judge Mwhen such as course is deemed necessary in the interest of law and orderSM As officials charged with the administration of the &rovince and the &rotection of its inhabitants" who but they are better fitted to select sites which have the conditions most favorable for im&roving the &eo&le who have the misfortune of being in a bac<ward stateS )ection 6,/5 of the Administrative Code of ,-,5 is not an unlawful delegation of legislative &ower by the Phili&&ine *egislature to &rovincial official and a de&artment head# B# R+*I IO') (I)CRI!I7A2IO7 2he attorney de officio" for &etitioners" in a truly remar<able brief" submitted on behalf of his un<nown clients" says that L M2he statute is &erfectly clear and unambiguous# In lim&id +nglish" and in words as &lain and uneHuivocal as language can e4&ress" it &rovides for the segregation of Nnon8ChristiansN and none other#M 2he inevitable result" them" is that the law Mconstitutes an attem&t by the *egislature to discriminate between individuals because of their religious beliefs" and is" conseHuently" unconstitutional#M CounselNs &remise once being conceded" his arguments is answerable L the *egislature must be understood to mean what it has &lainly e4&ressed; judicial construction is then e4cluded; religious eHuality is demanded by the Organic *aw; the statute has violated this constitutional guaranty" and K# +# (# is invalid# But" as hereinbefore stated" we do not feel free to discard the long continued meaning given to a common e4&ression" es&ecially as classification of inhabitants according to religious belief leads the court to what it should avoid" the nullification of legislative action# :e hold that the term Mnon8ChristianM refers to natives of the Phili&&ines Islands of a low grade of civiliCation" and that section 6,/5 of the Administrative Code of ,-,5" does not discriminate between individuals an account of religious differences# C# *IB+R2O; ('+ PROC+)) O0 *A:; +K'A* PRO2+C2IO7 O0 2G+ *A:)# 2he third constitutional argument is grounded on those &ortions of the PresidentNs instructions of to the Commission" the Phili&&ine Bill" and the 9ones *aw" &roviding M2hat no law shall be enacted in said Islands which shall de&rive any &erson of life" liberty" or &ro&erty without due &rocess of law" or deny to any &erson therein the eHual &rotection of the laws#M 2his constitutional limitation is derived from the 0ourteenth Amendment to the 'nited )tates Constitution L and these &rovisions" it has been said Mare universal in their a&&lication" to all &ersons within the territorial jurisdiction" without regard to any differences of race" of color" or of nationality#M $Oic< :o vs$Go&<ins >,..6?" ,,. '#)#" 156#% 2he &rotection afforded the individual is then as much for the non8Christian as for the Christian# 2he conce&tion of civil liberty has been variously e4&ressed thus3 +very man may claim the fullest liberty to e4ercise his faculties" com&atible with the &ossession of li<e liberty by every other# $)&encer" )ocial )tatistics" &# -/#% *iberty is the creature of law" essentially different from that authoriCed licentiousness that tres&asses on right# 2hat authoriCed licentiousness that tres&asses on right# It is a "e#a" and a refined idea, the offsprin# of hi#h civi"iDation " which the savage never understood" and never can understand# *iberty e4ists in &ro&ortion to wholesome restraint; the more restraint on others to <ee& off from us" the more liberty we have # # # that man is free who is &rotected from injury# $II :ebsterNs :or<s" &# 1-1#% *iberty consists in the ability to do what one caught to desire and in not being forced to do what one ought not do desire# $!ontesHue" s&irit of the *aws#% +ven liberty itself" the greatest of all rights" is no unrestricted license to ac according to oneNs own will# It is only freedom from restraint under conditions essential to the eHual enjoyment of the same right by others# $0ield" 9#" in Crowley vs$ Christensen >,.-@?" ,15 '#)#" .6#% *iberty does not im&ort Man absolute right in each &erson to be" at all times and in all circumstances" wholly freed from restraint# 2here are manifold restraints to which every &erson is necessarily subject for the common good# On any other basis" organiCed society could not e4ist with safety to its members# )ociety based on the rule that each one is a law unto himself would soon be confronted with disorder and anarchy# Real liberty for all could not e4ist under the o&eration of a &rinci&le which recogniCes the right of each individual &erson to use his own" whether in res&ect of his &erson or his &ro&erty" regardless of the injury that may be done to others # # # 2here is" of course" a s&here with which the individual may asserts the su&remacy of his own will" and rightfully dis&ute the authority of any human government L es&ecially of any free government e4isting under a written Constitution L to interfere with the e4ercise of that will# But it is eHually true that in very well8ordered society charged with the duty of conserving the safety of its members" the rights of the individual in res&ect of his liberty may at times" under the &ressure of great dangers" be subjected to such restraint to be enforced by reasonable regulations" as the safety of the general &ublic may demand#M $Garlan" 9#" In 9acobson vs$ !assachusetts >,-@5? ,-5 '#)#" ,,#% *iberty is freedom to do right and never wrong; it is ever guided by reason and the u&right and honorable conscience of the individual# $A&olinario !abini#%

Civil *iberty may be said to mean that measure of freedom which may be enjoyed in a civiliCed community" consistently with the &eaceful enjoyment of li<e freedom in others# 2he right to *iberty guaranteed by the Constitution includes the right to e4ist and the right to be free from arbitrary &ersonal restraint or servitude# 2he term cannot be dwarfed into mere freedom from &hysical restraint of the &erson of the citiCen" but is deemed to embrace the right of man to enjoy the faculties with which he has been endowed by this Creator" subject only to such restraints as are necessary for the common welfare# As enunciated in a long array of authorities including e&och8ma<ing decisions of the 'nited )tates )u&reme Court" *iberty includes the right of the citiCens to be free to use his faculties in all lawful ways; to live an wor< where he will; to earn his livelihood by an lawful calling; to &ursue any avocations" an for that &ur&ose# to enter into all contracts which may be &ro&er" necessary" and essential to his carrying out these &ur&oses to a successful conclusion# 2he chief elements of the guaranty are the right to contract" the right to choose oneNs em&loyment" the right to labor" and the right of locomotion# In general" it may be said that *iberty means the o&&ortunity to do those things which are ordinarily done by free men# $2here can be noted Cummings vs$ !issouri >,.66?" / :all" 655; :il<inson vs$ *eland >,.6-?" 6 Pet#" 665; :illiams vs$ 0ears >,-@@?" ,5- '#)#" 65/; Allgeyer vs$ *ouisiana >,.-6?" ,65" '#)#" 55.; )tate vs$ JreutCberg >,-@6?" ,,/ :is#" 51@# )ee 6 R#C#*#" 65." 66,#% One thought which runs through all these different conce&tions of *iberty is &lainly a&&arent# It is this3 M*ibertyM as understood in democracies" is not license; it is M*iberty regulated by law#M Im&lied in the term is restraint by law for the good of the individual and for the greater good of the &eace and order of society and the general well8being# 7o man can do e4actly as he &leases# +very man must renounce unbridled license# 2he right of the individual is necessarily subject to reasonable restraint by general law for the common good# :henever and wherever the natural rights of citiCen would" if e4ercises without restraint" de&rive other citiCens of rights which are also and eHually natural" such assumed rights must yield to the regulation of law# 2he *iberty of the citiCens may be restrained in the interest of the &ublic health" or of the &ublic order and safety" or otherwise within the &ro&er sco&e of the &olice &ower# $)ee Gall vs$ eiger89ones >,-,6?" 6/6 '#)#" 51-; Gardie82ynes !anufacturing Co# vs$CruC >,-,/?" ,.- Al#" 66#% 7one of the rights of the citiCen can be ta<en away e4ce&t by due &rocess of law# (aniel :ebster" in the course of the argument in the (artmouth College Case before the 'nited )tates )u&reme Court" since a classic in forensic literature" said that the meaning of Mdue &rocess of lawM is" that Mevery citiCen shall hold his life" liberty" &ro&erty" an immunities under the &rotection of the general rules which govern society#M 2o constitute Mdue &rocess of law"M as has been often held" a judicial &roceeding is not always necessary# In some instances" even a hearing and notice are not reHuisite a rule which is es&ecially true where much must be left to the discretion of the administrative officers in a&&lying a law to &articular cases# $)ee !c ehee" (ue Process of *aw" &# 15,#% 7either is due &rocess a stationary and blind sentinel of liberty# MAny legal &roceeding enforced by &ublic authority" whether sanctioned by age and customs" or newly devised in the discretion of the legislative &ower" in furtherance of the &ublic good" which regards and &reserves these &rinci&les of liberty and justice" must be held to be due &rocess of law#M $Gurtado vs$ California >,..1?" ,,@" '#)#" 5,6#% M(ue &rocess of lawM means sim&ly # # # Mfirst" that there shall be a law &rescribed in harmony with the general &owers of the legislative de&artment of the overnment; second" that this law shall be reasonable in its o&eration; third" that it shall be enforced according to the regular methods of &rocedure &rescribed; and fourth" that it shall be a&&licable ali<e to all the citiCens of the state or to all of a class#M $'#)# vs$ *ing )u 0an >,-@.?" ,@ Phil#" ,@/" affirmed on a&&eal to the 'nited )tates )u&reme Court# 1% M:hat is due &rocess of law de&ends on circumstances# It varies with the subject8matter and necessities of the situation#M $!oyer vs$ Peablody >,-@-?" 6,6 '# )#" .6#% 2he &ledge that no &erson shall be denied the eHual &rotection of the laws is not infringed by a statute which is a&&licable to all of a class# 2he classification must have a reasonable basis and cannot be &urely arbitrary in nature# :e brea< off with the foregoing statement" leaving the logical deductions to be made later on# (# )*AD+RO A7( I7DO*'72ARO )+RDI2'(+# 2he fourth constitutional contention of &etitioner relates to the 2hirteen Amendment to the 'nited )tates Constitution &articularly as found in those &ortions of Phili&&ine Organic *aw &roviding M2hat slavery shall not e4ist in said Islands; nor shall involuntary servitude e4ist e4ce&t as a &unishment for crime whereof the &arty shall have been duly convicted#M It is Huite &ossible that the 2hirteenth Amendment" since reaching to Many &lace subject toM the MjurisdictionM of the 'nited )tates" has force in the Phili&&ine# Gowever this may be" the Phili&&ine *egislature has" by ado&tion" with necessary modifications" of sections 66. to 65, inclusive of the 'nited )tates Criminal Code" &rescribed the &unishment for these crimes# )lavery and involuntary servitude" together wit their corollary" &eonage" all denote Ma condition of enforced" com&ulsory service of one to another#M $Godges vs$ '#)# >,-@6?" 6@1 '#)#" ,#% 2he term of broadest sco&e is &ossibly involuntary servitude# It has been a&&lied to any servitude in fact involuntary" no matter under what form such servitude may have been disguised# $Bailey vs$ Alabama >,-,@?" 6,- '#)#" 6,-#% )o much for an analysis of those constitutional &rovisions on which &etitioners rely for their freedom# 7e4t must come a descri&tion of the &olice &ower under which the )tate must act if section 6,/5 is to be held valid# +# 2G+ PO*IC+ PO:+R# 7ot attem&ting to &hrase a definition of &olice &ower" all that it is necessary to note at this moment is the farreaching sco&e of the &ower" that it has become almost &ossible to limit its wee&" and that among its &ur&oses is the &ower to &rescribe regulations to &romote the health" &eace" morals" education" and good order of the &eo&le" and to legislate so as to increase the industries of the )tate" develo& its resources and add to is wealth and &ros&erity# $)ee Barbier vs$ Connolly >,../?" ,,1 '#)#" 65#% :hat we are not interested in is the right of the government to restrain liberty by the e4ercise of the &olice &ower# M2he &olice &ower of the )tate"M one court has said" # # # Mis a &ower coe4tensive with self8&rotection" and is not ina&tly termed the Nlaw of overruling necessity#N It may be said to be that inherent and &lenary &ower in the )tate which enables it to &rohibit all things hurtful to the comfort" safety and welfare of society#M $*a<e Diew vs$ Rose Gill Cemetery Co# >,.51?" 5@ Ill#" ,-,#% Carried onward by the current of legislation" the judiciary rarely attem&t to dam the on rushing &ower of legislative discretion" &rovided the &ur&oses of the law do not go beyond the great &rinci&les that mean security for the &ublic welfare or do not arbitrarily interfere with the right of the individual# 2he overnment of the Phili&&ine Islands has both on reason and authority the right to e4ercise the sovereign &olice &ower in the &romotion of the general welfare and the &ublic interest# M2here can be not doubt that the e4ercise of the &olice &ower of the Phili&&ine overnment belongs to the *egislature and that this &ower is limited only by the Acts of Congress and those fundamental &rinci&les which lie at the foundation of all re&ublican forms of government#M $Churchill and 2ait vs$ Rafferty >,-,5?" 16 Phil#" 5.@; '#)# vs$ Pom&eya >,-,5?" 1, Phil#" 6/5#%

:ith the foregoing a&&ro4imation of the a&&licable basic &rinci&les before us" before finally deciding whether any constitutional &rovision has indeed been violated by section 6,/5 of the Administrative Code" we should endeavor to ascertain the intention of the *egislature in enacting this section# If legally &ossible" such legislative intention should be effectuated# 0# *+ I)*A2ID+ I72+72# 2he &reamble of the resolution of the &rovincial board of !indoro which set a&art the 2igbao reservation" it will be remembered" assigned as reasons fort the action" the following3 $,% 2he failure of former attem&ts for the advancement of the non8Christian &eo&le of the &rovince; and $6% the only successfully method for educating the !anguianes was to oblige them to live in a &ermanent settlement# 2he )olicitor8 eneral adds the following; $1% 2he &rotection of the !anguianes; $/% the &rotection of the &ublic forests in which they roam; $5% the necessity of introducing civiliCed customs among the !anguianes# 2he &resent )ecretary of the Interior says of the 2igbao reservation and of the motives for its selection" the following3 2o inform himself of the conditions of those !anguianes who were ta<en together to 2igbao" the )ecretary of the Interior on 9une ,@ to ,1" ,-,." made a tri& to the &lace# 2here he found that the site selected is a good one; that creditable &rogress has been made in the clearing of forests" construction of buildings" etc#" that there a&&ears to be encouraging reaction by the boys to the wor< of the school the reHuirements of which they a&&ear to meet with enthusiastic interest after the first wee<s which are necessarily a somewhat trying &eriod for children wholly unaccustomed to orderly behaviour and habit of life# Ge also gathered the im&ression that the results obtained during the &eriod of less than one year since the beginning of the institution definitely justify its continuance and develo&ment# Of course" there were many who were &rotesting against that segregation# )uch was naturally to be e4&ected# But the )ecretary of the Interior" u&on his return to !anila" made the following statement to the &ress3 MIt is not deemed wise to abandon the &resent &olicy over those who &refer to live a nomadic life and evade the influence of civiliCation# 2he overnment will follow its &olicy to organiCe them into &olitical communities and to educate their children with the object of ma<ing them useful citiCens of this country# 2o &ermit them to live a wayfaring life will ultimately result in a burden to the state and on account of their ignorance" they will commit crimes and ma<e de&redation" or if not they will be subject to involuntary servitude by those who may want to abuse them#M 2he )ecretary of the Interior" who is the official charged with the su&ervision of all the non8Christian &eo&le" has ado&ted as the &olaris of his administration L Mthe advancement of the non8Christian elements of our &o&ulation to eHuality and unification with the highly civiliCed Christian inhabitants#M 2his is carried on by the ado&tion of the following measures3 $a% Pursuance of the closer settlement &olicy whereby &eo&le of seminomadic race are induced to leave their wild habitat and settle in organiCed communities# $b% 2he e4tension of the &ublic school system and the system of &ublic health throughout the regions inhabited by the non8Christian &eo&le# $c% 2he e4tention of &ublic wor<s throughout the !ohammedan regions to facilitate their develo&ment and the e4tention of government control# $d% Construction of roads and trials between one &lace and another among non8Christians" to &romote social and commercial intercourse and maintain amicable relations among them and with the Christian &eo&le# $e% Pursuance of the develo&ment of natural economic resources" es&ecially agriculture# $ f % 2he encouragement of immigration into" and of the investment of &rivate ca&ital in" the fertile regions of !indanao and )ulu# 2he )ecretary adds3 2o attain the end desired" wor< of a civiliCing influence have been continued among the non8Christian &eo&le# 2hese &eo&le are being taught and guided to im&rove their living conditions in order that they may fully a&&reciate the benefits of civiliCation# 2hose of them who are still given to nomadic habits are being &ersuaded to abandon their wild habitat and settle in organiCed settlements# 2hey are being made to understand that it is the &ur&ose of the overnment to organiCe them &olitically into fi4ed and &er manent communities" thus bringing them under the control of the overnment" to aid them to live and wor<" &rotect them from involuntary servitude and abuse" educate their children" and show them the advantages of leading a civiliCed life with their civiliCed brothers# In short" they are being im&ressed with the &ur&oses and objectives of the overnment of leading them to economic" social" and &olitical eHuality" and unification with the more highly civiliCed inhabitants of the country# $)ee Re&ort of the (e&artment for ,-,5#% 2he fundamental objective of governmental &olicy is to establish friendly relations with the so8called non8Christians" and to &romote their educational" agricultural" industrial" and economic develo&ment and advancement in civiliCation# $7ote Acts 7os# 66@." 6/@/" 6///#% Act 7o# 665/ in reestablishing the Bureau of non8Christian 2ribes" defines the aim of the overnment towards the non8Christian &eo&le in the following uneHuivocal terms3 It shall be the duty of the Bureau of non8Christian 2ribes to continue the wor< for advancement and liberty in favor of the region inhabited by non8Christian 0ili&inos and foster by all adeHuate means and in a systematical" ra&id" and com&lete manner the moral" material" economic" social" and &olitical develo&ment of those regions" always having in view the aim of rendering &ermanent the mutual intelligence between" and com&lete fusion of" all the Christian and non8Christian elements &o&ulating the &rovinces of the Archi&elago# $)ec# 1#% !ay the !anguianes not be considered" as are the Indians in the 'nited )tates" &ro&er wards of the 0ili&ino &eo&leS By the fostering care of a wise overnment" may not these unfortunates advance in the Mhabits and arts of civiliCationSM :ould it be advisable for the courts to intrude u&on a &lan" carefully formulated" and a&&arently wor<ing out for the ultimate good of these &eo&leS In so far as the !anguianes themselves are concerned" the &ur&ose of the overnment is evident# Gere" we have on the Island of !indoro" the !anguianes" leading a nomadic life" ma<ing de&redations on their more fortunate neighbors" uneducated in the ways of civiliCation" and doing nothing for the advancement of the Phili&&ine Islands# :hat the overnment wished to do by bringing than into a reservation was to gather together the children for educational &ur&oses" and to im&rove the health and morals L was in fine" to begin the &rocess of civiliCation# this method was termed in )&anish times" Mbringing under the bells#M 2he same idea ada&ted to the e4isting situation" has been followed with reference to the !anguianes and other &eo&les of the same class" because it reHuired" if they are to be im&roved" that they be gathered together# On these few reservations there live under restraint in some cases" and in other instances voluntarily" a few thousands of the unciviliCed &eo&le# )egregation really constitutes &rotection for the manguianes# 2heoretically" one may assert that all men are created free and eHual# Practically" we <now that the a4iom is not &recisely accurate# 2he !anguianes" for instance" are not free" as civiliCed men are free" and they are not the eHuals of their more fortunate brothers# 2rue" indeed" they

are citiCens" with many but not all the rights which citiCenshi& im&lies# And true" indeed" they are 0ili&inos# But just as surely" the !anguianes are citiCens of a low degree of intelligence" and 0ili&inos who are a drag u&on the &rogress of the )tate# In so far as the relation of the !anguianes to the )tate is concerned" the &ur&oses of the *egislature in enacting the law" and of the e4ecutive branch in enforcing it" are again &lain# )ettlers in !indoro must have their cro&s and &ersons &rotected from &redatory men" or they will leave the country# It is no argument to say that such crimes are &unished by the Penal Code" because these &enalties are im&osed after commission of the offense and not before# If immigrants are to be encouraged to develo& the resources of the great Islands of !indoro" and its" as yet" un&roductive regions" the overnment must be in a &osition to guarantee &eace and order# :aste lands do not &roduce wealth# :aste &eo&le do not advance the interest of the )tate# Illiteracy and thriftlessness are not conducive to homogeneity# 2he )tate to &rotect itself from destruction must &rod on the laggard and the sluggard# 2he great law of overwhelming necessity is all convincing# 2o Huote again from the instructive memorandum of the )ecretary of the Interior3 *iving a nomadic and a wayfaring life and evading the influence of civiliCation" they $the manguianes% are engaged in the wor<s of destruction L burning and destroying the forests and ma<ing illegal caiQgins thereon# 7ot bringing any benefit to the )tate but instead injuring and damaging its interests" what will ultimately become of these &eo&le with the sort of liberty they wish to &reserve and for which they are now fighting in courtS 2hey will ultimately become a heavy burden to the )tate and on account of their ignorance they will commit crimes and ma<e de&redations" or if not they will be subjected to involuntary servitude by those who may want to abuse them# 2here is no doubt in my mind that this &eo&le a right conce&tion of liberty and does not &ractice liberty in a rightful way# 2hey understand liberty as the right to do anything they will L going from one &lace to another in the mountains" burning and destroying forests and ma<ing illegal caiQgins thereon# 7ot <nowing what true liberty is and not &ractising the same rightfully" how can they allege that they are being de&rived thereof without due &rocess of lawS 444 444 444 But does the Constitutional guaranty that Nno &erson shall be de&rived of his liberty without due &rocess of lawN a&&ly to a class of &ersons who do not have a correct idea of what liberty is and do not &ractise liberty in a rightful wayS 2o say that it does will mean to sanction and defend an erroneous idea of such class of &ersons as to what liberty is# It will mean" in the case at bar" that the overnment should not ado&t any measures loo<ing to the welfare and advancement of the class of &ersons in Huestion# It will mean that this &eo&le should be let along in the mountains and in a &ermanent state of savagery without even the remotest ho&e of coming to understand liberty in its true and noble sense# In dealing with the bac<ward &o&ulation" li<e the !anguianes" the overnment has been &laced in the alternative of either letting them alone or guiding them in the &ath of civiliCation# 2he latter measure was ado&ted as the one more in accord with humanity and with national conscience# 444 444 444 2he national legislation on the subject of non8Christian &eo&le has tended more and more towards the education and civiliCation of such &eo&le and fitting them to be citiCens# 2he &rogress of those &eo&le under the tutelage of the overnment is indeed encouraging and the signs of the times &oint to a day which is not far distant when they will become useful citiCens# In the light of what has already been accom&lished which has been winning the gratitude of most of the bac<ward &eo&le" shall we give u& the noble wor< sim&ly because a certain element" believing that their &ersonal interests would be injured by such a measure has come forward and challenged the authority of the overnment to lead this &eo&le in the &at of civiliCationS )hall we" after e4&ending sweat" treasure" and even blood only to redeem this &eo&le from the claws of ignorance and su&erstition" now willingly retire because there has been erroneously invo<ed in their favor that Constitutional guaranty that no &erson shall be de&rived of his liberty without due &rocess of lawS 2o allow them to successfully invo<e that Constitutional guaranty at this time will leave the overnment without recourse to &ursue the wor<s of civiliCing them and ma<ing them useful citiCens# 2hey will thus left in a &ermanent state of savagery and become a vulnerable &oint to attac< by those who doubt" nay challenge" the ability of the nation to deal with our bac<ward brothers# 2he manguianes in Huestion have been directed to live together at 2igbao# 2here they are being taught and guided to im&rove their living conditions# 2hey are being made to understand that they object of the government is to organiCe them &olitically into fi4ed and &ermanent communities# 2hey are being aided to live and wor<# 2heir children are being educated in a school es&ecially established for them# In short" everything is being done from them in order that their advancement in civiliCation and material &ros&erity may be assured# Certainly their living together in 2igbao does not ma<e them slaves or &ut them in a condition com&elled to do services for another# 2hey do not wor< for anybody but for themselves# 2here is" therefore" no involuntary servitude# But they are com&elled to live there and &rohibited from emigrating to some other &laces under &enalty of im&risonment# Attention in this connection is invited to the fact that this &eo&le" living a nomadic and wayfaring life" do not have &ermanent individual &ro&erty# 2hey move from one &lace to another as the conditions of living warrants" and the entire s&ace where they are roving about is the &ro&erty of the nation" the greater &art being lands of &ublic domain# :andering from one &lace to another on the &ublic lands" why can not the government ado&t a measure to concentrate them in a certain fi4ed &lace on the &ublic lands" instead of &ermitting them to roam all over the entire territoryS 2his measure is necessary both in the interest of the &ublic as owner of the lands about which they are roving and for the &ro&er accom&lishment of the &ur&oses and objectives of the government# 0or as &eo&le accustomed to nomadic habit" they will always long to return to the mountains and follow a wayfaring life" and unless a &enalty is &rovinced for" you can not ma<e them live together and the noble intention of the overnment of organiCing them &olitically will come to naught# # APP*ICA2IO7 A7( CO7C*')IO7# Our e4haustive study should have left us in a &osition to answer s&ecific objections and to reach a general conclusion# In the first &lace" it is argued that the citiCen has the right" generally s&ea<ing" to go where he &leases# Could be not" however" be <e&t away from certain localities S 2o furnish an e4am&le from the Indian legislation# 2he early Act of Congress of ,.@6 $6 '#)# )tat# at *#" &# ,/,% Indian reservation# 2hose citiCens certainly did not &ossess absolute freedom of locomotion# Again the same law &rovided for the a&&rehension of marauding Indians# :ithout any doubt" this law and other similar were acce&ted and followed time and again without Huestion# It is said that" if we hold this section to be constitutional" we leave this wea< and defenseless &eo&le confined as in a &rison at the mercy of unscru&ulous official# :hat" it is as<ed" would be the remedy of any o&&ressed !anguianS 2he answer would naturally be that the official into

whose hands are given the enforcement of the law would have little or not motive to o&&ress these &eo&le; on the contrary" the &resum&tion would all be that they would endeavor to carry out the &ur&oses of the law intelligently and &atriotically# If" indeed" they did ill8treat any &erson thus confined" there always e4ists the &ower of removal in the hands of su&erior officers" and the courts are always o&en for a redress of grievances# :hen" however" only the validity of the law is generally challenged and no &articular case of o&&ression is called to the attention of the courts" it would seems that the 9udiciary should not unnecessarily ham&er the overnment in the accom&lishment of its laudable &ur&ose# 2he Huestion is above all one of sociology# Gow far" consistently with freedom" may the right and liberties of the individual members of society be subordinated to the will of the overnmentS It is a Huestion which has assailed the very e4istence of government from the beginning of time# 7ow &urely an ethical or &hiloso&hical subject" nor now to be decided by force" it has been transferred to the &eaceful forum of the 9udiciary# In resolving such an issue" the 9udiciary must realiCe that the very e4istence of government renders im&eratives a &ower to restrain the individual to some e4tent" de&endent" of course" on the necessities of the class attem&ted to be benefited# As to the &articular degree to which the *egislature and the +4ecutive can go in interfering with the rights of the citiCen" this is" and for a along time to come will be" im&ossible for the courts to determine# 2he doctrines of "aisseD faire and of unrestricted freedom of the individual" as a4ioms of economics and &olitical theory" are of the &ast# 2he modern &eriod has shown as wides&read belief in the am&lest &ossible demonstration of governmental activity# 2he courts unfortunately have sometimes seemed to trial after the other two branches of the government in this &rogressive march# Considered" therefore" &urely as an e4ercise of the &olice &ower" the courts cannot fairly say that the *egislature has e4ceeded its rightful authority# it is" indeed" an unusual e4ercise of that &ower# But a great malady reHuires an eHually drastic remedy# 0urther" one cannot hold that the liberty of the citiCen is unduly interfered without when the degree of civiliCation of the !anguianes is considered# 2hey are restrained for their own good and the general good of the Phili&&ines# 7or can one say that due &rocess of law has not been followed# 2o go bac< to our definition of due &rocess of law and eHual &rotection of the law" there e4ists a law ; the law seems to be reasonable; it is enforced according to the regular methods of &rocedure &rescribed; and it a&&lies ali<e to all of a class# As a &oint which has been left for the end of this decision and which" in case of doubt" would lead to the determination that section 6,/5 is valid# it the attitude which the courts should assume towards the settled &olicy of the overnment# In a late decision with which we are in full accord" ambles vs$ Danderbilt 'niversity $6@@ )outhwestern Re&orter" 5,@% the Chief 9ustice of the )u&reme Court of 2ennessee writes3 :e can seen objection to the a&&lication of &ublic &olicy as a ratio decidendi# +very really new Huestion that comes before the courts is" in the last analysis" determined on that theory" when not determined by differentiation of the &rinci&le of a &rior case or line of cases" or by the aid of analogies furnished by such &rior case# In balancing conflicting solutions" that one is &erceived to ti& the scales which the court believes will best &romote the &ublic welfare in its &robable o&eration as a general rule or &rinci&le# But &ublic &olicy is not a thing infle4ible# 7o court is wise enough to forecast its influence in all &ossible contingencies# (istinctions must be made from time to time as sound reason and a true sense of justice may dictate#M Our attem&t at giving a brief history of the Phili&&ines with reference to the so8called non8Christians has been in vain" if we fail to realiCe that a consistent governmental &olicy has been effective in the Phili&&ines from early days to the &resent# 2he idea to unify the &eo&le of the Phili&&ines so that they may a&&roach the highest conce&tion of nationality# If all are to be eHual before the law" all must be a&&ro4imately eHual in intelligence# If the Phili&&ines is to be a rich and &owerful country" !indoro must be &o&ulated" and its fertile regions must be develo&ed# 2he &ublic &olicy of the overnment of the Phili&&ine Islands is sha&ed with a view to benefit the 0ili&ino &eo&le as a whole# 2he !anguianes" in order to fulfill this governmental &olicy" must be confined for a time" as we have said" for their own good and the good of the country# !ost cautiously should the &ower of this court to overrule the judgment of the Phili&&ine *egislature" a coordinate branch" be e4ercised# 2he whole tendency of the best considered case is toward non8interference on the &art of the courts whenever &olitical ideas are the moving consideration# 9ustice Golmes" in one of the a&horisms for which he is justly famous" said that Mconstitutional law" li<e other mortal contrivances" has to ta<e some chances#M $Blinn vs$ 7elson >,-,,?" 666 '#)#" ,#% If in the final decision of the many grave Huestions which this case &resents" the courts must ta<e Ma chance"M it should be with a view to u&holding the law" with a view to the effectuation of the general governmental &olicy" and with a view to the courtNs &erforming its duty in no narrow and bigoted sense" but with that broad conce&tion which will ma<e the courts as &rogressive and effective a force as are the other de&artments of the overnment# :e are of the o&inion that action &ursuant to section 6,/5 of the Administrative Code does not de&rive a &erson of his liberty without due &rocess of law and does not deny to him the eHual &rotection of the laws" and that confinement in reservations in accordance with said section does not constitute slavery and involuntary servitude# :e are further of the o&inion that section 6,/5 of the Administrative Code is a legitimate e4ertion of the &olice &ower" somewhat analogous to the Indian &olicy of the 'nited )tates# )ection 6,/5 of the Administrative Code of ,-,5 is constitutional# Petitioners are not unlawfully im&risoned or restrained of their liberty# Gabeas cor&us can" therefore" not issue# 2his is the true ruling of the court# Costs shall be ta4es against &etitioners# )o ordered# [G.R. No. 1&''9<. August <, 1996] BMM !ROMOTION AND MANAGEMENT, IN ., 2-1 CARY INTERNATIONAL, IN ., petitioner, vs. HON. OURT O" A!!EALS, HON. MA. NIEAES ON"ESSOR, t6/- S/40/t20; o7 t6/ D/520t8/-t o7 t6/ L29o0 2-1 E85.o;8/-t, HON. BOSE BRILLANTES, ,- 6,s 42524,t; 2s 24t,-g S/40/t20; o7 t6/ D/520t8/-t o7 L29o0 2-1 E85.o;8/-t 2-1 HON. "ELI ISIMO BOSON, ,- 6,s 42524,t; 2s A18,-,st02to0 o7 t6/ !6,.,55,-/ O:/0s/2s E85.o;8/-t A18,-,st02t,o-, respondents. DE ISION CA!UNAN, J.+ 2he limits of government regulation under the )tateNs Police Power are once again at the vorte4 of the instant controversy# Assailed is the governmentNs &ower to control de&loyment of female entertainers to 9a&an by reHuiring an Artist Record Boo< $ARB% as a &recondition to the &rocessing by the PO+A of any contract for overseas em&loyment# By contending that the right to overseas em&loyment" is a &ro&erty right within the meaning of the Constitution" &etitioners vigorously aver that de&rivation thereof allegedly through the onerous reHuirement of an ARB violates the due &rocess clause and constitutes an invalid e4ercise of the &olice &ower# 2he factual antecedents are undis&uted#

0ollowing the much8&ubliciCed death of !aricris )ioson in ,--," former President CoraCon C# AHuino ordered a total ban against the de&loyment of &erforming artists to 9a&an and other foreign destinations# 2he ban was" however" rescinded after leaders of the overseas em&loyment industry &romised to e4tend full su&&ort for a &rogram aimed at removing <in<s in the system of de&loyment# In its &lace" the government" through the )ecretary of *abor and +m&loyment" subseHuently issued (e&artment Order 7o# 6." creating the +ntertainment Industry Advisory Council $+IAC%" which was tas<ed with issuing guidelines on the training" testing certification and de&loyment of &erforming artists abroad# Pursuant to the +IACNs recommendations" >,? the )ecretary of *abor" on 9anuary 6" ,--/" issued (e&artment Order 7o# 1 establishing various &rocedures and reHuirements for screening &erforming artists under a new system of training" testing" certification and de&loyment of the former# Performing artists successfully hurdling the test" training and certification reHuirement were to be issued an ArtistNs Record Boo< $ARB%" a necessary &rereHuisite to &rocessing of any contract of em&loyment by the PO+A# '&on reHuest of the industry" im&lementation of the &rocess" originally scheduled for A&ril ," ,--/" was moved to October ," ,--/# 2hereafter" the (e&artment of *abor" following the +IACNs recommendation" issued a series of orders fine8tuning and im&lementing the new system# Prominent among these orders were the following issuances3 ,# (e&artment Order 7o# 18A" &roviding for additional guidelines on the training" testing" certification and de&loyment of &erforming artists# 6# (e&artment Order 7o# 18B" &ertaining to the Artist Record Boo< $ARB% reHuirement" which could be &rocessed only after the artist could show &roof of academic and s<ills training and has &assed the reHuired tests# 1# (e&artment Order 7o# 18+" &roviding the minimum salary a &erforming artist ought to receive $not less than ')T6@@#@@ for those bound for 9a&an% and the authoriCed deductions therefrom# /# (e&artment Order 7o# 180" &roviding for the guidelines on the issuance and use of the ARB by returning &erforming artists who" unli<e new artists" shall only undergo a )&ecial Orientation Program $shorter than the basic &rogram% although they must &ass the academic test# In Civil Case 7o# -585655@" the 0ederation of +ntertainment 2alent !anagers of the Phili&&ines $0+2!OP%" on 9anuary 65" ,--5 filed a class suit assailing these de&artment orders" &rinci&ally contending that said orders ,% violated the constitutional right to travel; 6% abridged e4isting contracts for em&loyment; and 1% de&rived individual artists of their licenses without due &rocess of law# 0+2!OP" li<ewise" averred that the issuance of the Artist Record Boo< $ARB% was discriminatory and illegal and Min gross violation of the constitutional right### to life liberty and &ro&erty#M )aid 0ederation conseHuently &rayed for the issuance of a writ of &reliminary injunction against the aforestated orders# On 0ebruary 6" ,--6" 9!! Promotion and !anagement" Inc# and Jary International" Inc#" herein &etitioners" filed a !otion for Intervention in said civil case" which was granted by the trial court in an Order dated ,5 0ebruary" ,--5# Gowever" on 0ebruary 6," ,--5" the trial court issued an Order denying &etitionersN &rayer for a writ of &reliminary injunction and dismissed the com&laint# On a&&eal from the trial courtNs Order" res&ondent court" in CA #R# )P 7o# 165,1 dismissed the same# 2racing the circumstances which led to the issuance of the ARB reHuirement and the assailed (e&artment Order" res&ondent court concluded that the issuances constituted a valid e4ercise by the state of the &olice &ower# :e agree# 2he latin ma4im sa" s pop "i est s prema "e@ embodies the character of the entire s&ectrum of &ublic laws aimed at &romoting the general welfare of the &eo&le under the )tateNs &olice &ower# As an inherent attribute of sovereignty which virtually Me4tends to all &ublic needs"M >6? this Mleast limitableM>1? of governmental &owers grants a wide &ano&ly of instruments through which the state" as parens patriae gives effect to a host of its regulatory &owers# (escribing the nature and sco&e of the &olice &ower" 9ustice !alcolm" in the early case of R bi v$ 1rovincia" Board of Mindoro>/? wrote3 M2he &olice &ower of the )tate"M one court has said###Nis a &ower coe4tensive with self8&rotection" and is not ina&tly termed Nthe law of overruling necessity#N It may be said to be that inherent and &lenary &ower in the state which enables it to &rohibit all things hurtful to the comfort" safety and welfare of society#N Carried onward by the current of legislature" the judiciary rarely attem&ts to dam the onrushing &ower of legislative discretion" &rovided the &ur&oses of the law do not go beyond the great &rinci&les that mean security for the &ublic welfare or do not arbitrarily interfere with the right of the individual#M>5? 2hus" &olice &ower concerns government enactments which &recisely interfere with &ersonal liberty or &ro&erty in order to &romote the general welfare or the common good# As the assailed (e&artment Order enjoys a &resumed validity" it follows that the burden rests u&on &etitioners to demonstrate that the said order" &articularly" its ARB reHuirement" does not enhance the &ublic welfare or was e4ercised arbitrarily or unreasonably# A thorough review of the facts and circumstances leading to the issuance of the assailed orders com&els us to rule that the Artist Record Boo< reHuirement and the Huestioned (e&artment Order related to its issuance were issued by the )ecretary of *abor &ursuant to a valid e4ercise of the &olice &ower# In ,-./" the Phili&&ines emerged as the largest labor sending country in Asia dwarfing the labor e4&ort of countries with mammoth &o&ulations such as India and China# According to the 7ational )tatistics Office" this diaspora was augmented annually by over /5@"@@@ documented and clandestine or illegal $undocumented% wor<ers who left the country for various destinations abroad" lured by higher salaries" better wor< o&&ortunities and sometimes better living conditions# Of the hundreds of thousands of wor<ers who left the country for greener &astures in the last few years" women com&osed slightly close to half of those de&loyed" constituting /5U between ,-.58,--," e4ceeding this &ro&ortion $5.U% by the end of ,--," >6? the year former President AHuino instituted the ban on de&loyment of &erforming artists to 9a&an and other countries as a result of the gruesome death of 0ili&ino entertainer !aricris )ioson# It was during the same &eriod that this Court too< judicial notice not only of the trend" but also of the fact that most of our women" a large number em&loyed as domestic hel&ers and entertainers" wor<ed under e4&loitative conditions Mmar<ed by &hysical and &ersonal abuse#M >5? +ven then" we noted that M>t?he sordid tales of maltreatment suffered by migrant 0ili&ina wor<ers" even ra&e and various forms of torture" confirmed by testimonies of returning wor<ersM com&elled Murgent government action#M >.? Pursuant to the alarming number of re&orts that a significant number of 0ili&ina &erforming artists ended u& as &rostitutes abroad $many of whom were beaten" drugged and forced into &rostitution%" and following the deaths of a number of these women" the government began instituting measures aimed at de&loying only those individuals who met set standards which would Hualify them as legitimate &erforming

artists# In s&ite of these measures" however" a number of our countrymen have nonetheless fallen victim to unscru&ulous recruiters" ending u& as virtual slaves controlled by foreign crime syndicates and forced into jobs other than those indicated in their em&loyment contracts# :orse" some of our women have been forced into &rostitution# 2hus" after a number of inadeHuate and failed accreditation schemes" the )ecretary of *abor issued on August ,6" ,--1" (#O# 7o# 6." establishing the +ntertainment Industry Advisory Council $+IAC%" the &olicy advisory body of (O*+ on entertainment industry matters# >-? Acting on the recommendations of the said body" the )ecretary of *abor" on 9anuary 6" ,--/" issued the assailed orders# 2hese orders embodied +IACNs Resolution 7o# ," which called for guidelines on screening" testing and accrediting &erforming overseas 0ili&ino artists# )ignificantly" as the res&ondent court noted" &etitioners were duly re&resented in the +IAC" >,@? which gave the recommendations on which the ARB and other reHuirements were based# Clearly" the welfare of 0ili&ino &erforming artists" &articularly the women was &aramount in the issuance of (e&artment Order 7o# 1# )hort of a total and absolute ban against the de&loyment of &erforming artists to Mhigh ris<M destinations" a measure which would only drive recruitment further underground" the new scheme at the very least rationaliCes the method of screening &erforming artists by reHuiring reasonable educational and artistic s<ills from them and limits de&loyment to only those individuals adeHuately &re&ared for the un&redictable demands of em&loyment as artists abroad# It cannot be gainsaid that this scheme at least lessens the room for e4&loitation by unscru&ulous individuals and agencies# !oreover" here or abroad" selection of &erforming artists is usually accom&lished by auditions" where those deemed unfit are usually weeded out through a &rocess which is inherently subjective and vulnerable to bias and differences in taste# 2he ARB reHuirement goes one ste& further" however" attem&ting to minimiCe the subjectivity of the &rocess by defining the minimum s<ills reHuired from entertainers and &erforming artists# As the )olicitor eneral observed" this should be easily met by e4&erienced artists &ossessing merely basic s<ills# 2he tests are aimed at segregating real artists or &erformers from those &assing themselves off as such" eager to acce&t any available job and therefore e4&osing themselves to &ossible e4&loitation# As to the other &rovisions of (e&artment Order 7o# 1 Huestioned by &etitioners" we see nothing wrong with the reHuirement for document and boo<ing confirmation $(#O# 18C%" a minimum salary scale $(#O# 18+%" or the reHuirement for registration of returning &erformers# 2he reHuirement for a venue certificate or other documents evidencing the &lace and nature of wor< allows the government closer monitoring of foreign em&loyers and hel&s <ee& our entertainers away from &rostitution fronts and other wor<sites associated with unsavory" immoral" illegal or e4&loitative &ractices# Parenthetically" none of these issuances a&&ear to us" by any stretch of the imagination" even remotely unreasonable or arbitrary# 2hey address a felt need of according greater &rotection for an oft8e4&loited segment of our OC:Ns# 2hey res&ond to the industryNs demand for clearer and more &racticable rules and guidelines# !any of these &rovisions were fleshed out following recommendations by" and after consultations with" the affected sectors and non8government organiCations# On the whole" they are aimed at enhancing the safety and security of entertainers and artists bound for 9a&an and other destinations" without stifling the industryNs concerns for e4&ansion and growth# In any event" a&art from the )tateNs &olice &ower" the Constitution itself mandates government to e4tend the fullest &rotection to our overseas wor<ers# 2he basic constitutional statement on labor" embodied in )ection ,. of Article II of the Constitution &rovides3 )ec# ,.# 2he )tate affirms labor as a &rimary social economic force# It shall &rotect the rights of wor<ers and &romote their welfare# !ore em&hatically" the social justice &rovision on labor of the ,-.5 Constitution in its first &aragra&h states3 2he )tate shall afford full &rotection to labor" local and overseas" organiCed and unorganiCed and &romote full em&loyment and eHuality of em&loyment o&&ortunities for all# Obviously" &rotection to labor does not indicate &romotion of em&loyment alone# 'nder the welfare and social justice &rovisions of the Constitution" the &romotion of full em&loyment" while desirable" cannot ta<e a bac<seat to the governmentNs constitutional duty to &rovide mechanisms for the &rotection of our wor<force" local or overseas# As this Court e4&lained in 1hi"ippine ,ssociation of +ervice E@porters=1,+EI> v$ *ri"on">,,? in reference to the recurring &roblems faced by our overseas wor<ers3 :hat concerns the Constitution more &aramountly is that such an em&loyment be above all" decent" just" and humane# It is bad enough that the country has to send its sons and daughters to strange lands because it cannot satisfy their em&loyment needs at home# 'nder these circumstances" the overnment is duty8bound to insure that our toiling e4&atriates have adeHuate &rotection" &ersonally and economically" while away from home# :e now go to &etitionersN assertion that the &olice &ower cannot" nevertheless" abridge the right of our &erforming wor<ers to return to wor< abroad after having earlier Hualified under the old &rocess" because" having &reviously been accredited" their accreditation became a &ro&erty right"M &rotected by the due &rocess clause# :e find this contention untenable# A &rofession" trade or calling is a &ro&erty right within the meaning of our constitutional guarantees# One cannot be de&rived of the right to wor< and the right to ma<e a living because these rights are &ro&erty rights" the arbitrary and unwarranted de&rivation of which normally constitutes an actionable wrong# >,6? 7evertheless" no right is absolute" and the &ro&er regulation of a &rofession" calling" business or trade has always been u&held as a legitimate subject of a valid e4ercise of the &olice &ower by the state &articularly when their conduct affects either the e4ecution of legitimate governmental functions" the &reservation of the )tate" the &ublic health and welfare and &ublic morals# According to the ma4im" sic tere t o t a"ien m non "aedas" it must of course be within the legitimate range of legislative action to define the mode and manner in which every one may so use his own &ro&erty so as not to &ose injury to himself or others# >,1? In any case" where the liberty curtailed affects at most the rights of &ro&erty" the &ermissible sco&e of regulatory measures is certainly much wider#>,/? 2o &retend that licensing or accreditation reHuirements violates the due &rocess clause is to ignore the settled &ractice" under the mantle of the &olice &ower" of regulating entry to the &ractice of various trades or &rofessions# Professionals leaving for abroad are reHuired to &ass rigid written and &ractical e4ams before they are deemed fit to &ractice their trade# )eamen are reHuired to ta<e tests determining their seamanshi&# *ocally" the Professional Regulation Commission has began to reHuire &reviously licensed doctors and other &rofessionals to furnish documentary &roof that they had either re8trained or had underta<en continuing education courses as a reHuirement for renewal of their licenses# It is not claimed that these reHuirements &ose an unwarranted de&rivation of a &ro&erty right under the due &rocess clause# )o long as Professionals and other wor<ers meet reasonable regulatory standards no such de&rivation e4ists# 0inally" it is a futile gesture on the &art of &etitioners to invo<e the non8im&airment clause of the Constitution to su&&ort their argument that the government cannot enact the assailed regulatory measures because they abridge the freedom to contract# In 1hi"ippine ,ssociation of

+ervice E@porters, Inc$ vs$ *ri"on " we held that M>t?he non8im&airment clause of the Constitution### must yield to the loftier &ur&oses targeted by the government#M>,5? +Hually im&ortant" into every contract is read &rovisions of e4isting law" and always" a reservation of the &olice &ower for so long as the agreement deals with a subject im&ressed with the &ublic welfare# A last &oint# Petitioners suggest that the singling out of entertainers and &erforming artists under the assailed de&artment orders constitutes class legislation which violates the eHual &rotection clause of the Constitution# :e do not agree# 2he eHual &rotection clause is directed &rinci&ally against undue favor and individual or class &rivilege# It is not intended to &rohibit legislation which is limited to the object to which it is directed or by the territory in which it is to o&erate# It does not reHuire absolute eHuality" but merely that all &ersons be treated ali<e under li<e conditions both as to &rivileges conferred and liabilities im&osed# >,6? :e have held" time and again" that the eHual &rotection clause of the Constitution does not forbid classification for so long as such classification is based on real and substantial differences having a reasonable relation to the subject of the &articular legislation# >,5? If classification is germane to the &ur&ose of the law" concerns all members of the class" and a&&lies eHually to &resent and future conditions" the classification does not violate the eHual &rotection guarantee# In the case at bar" the challenged (e&artment Order clearly a&&lies to all &erforming artists and entertainers destined for jobs abroad# 2hese orders" we stressed hereinbefore" further the Constitutional mandate reHuiring overnment to &rotect our wor<force" &articularly those who may be &rone to abuse and e4&loitation as they are beyond the &hysical reach of government regulatory agencies# 2he tragic incidents must somehow sto&" but short of absolutely curtailing the right of these &erformers and entertainers to wor< abroad" the assailed measures enable our government to assume a measure of control# >HERE"ORE" finding no reversible error in the decision sought to be reviewed" &etition is hereby (+7I+(# +7 BA7C > #R# 7o# *8,--15# 0ebruary ,-" ,-5-#? A)OCIACIO7 (+ A RIC'*2OR+) (+ 2A*I)AO8)I*AO" I7C#" 2RI7O !O72I7O*A" 0+R7A7(O C'+7CA" +('AR(O *+(+)!A" +!I*IO 9I)O7" 7I*O *IIAR+)" 7ICO*A) 9A*A7(O7I and )+CR+2ARO O0 *ABOR" &laintiffs8a&&ellees" vs# 2A*I)AO8 )I*AO !I**I7 CO#" I7C#" and *'IO7 )'R+2O CO#" I7C#" defendants8a&&ellants" PGI*IPPI7+ 7A2IO7A* BA7J and 2G+ )' AR K'O2A A(!I7I)2RA2OR" defendants8a&&ellees# > # R# 7o# *86,1@/#? R+P'B*IC O0 2G+ PGI*IPPI7+)" &etitioner" vs# GO7# 9O)+ 0+R7A7(+I" 2A*I)AO8)I*AO !I**I7 CO#" I7C# and 2A*I)AO8 )I*AO I7(')2RIA* COOP+RA2ID+ A))OCIA2IO7" res&ondents# )an 9uan" Africa" onCales R )an Agustin for Asociacion de Agricultores" etc#" et al# +rnesto 7# CruC R +milia 0# Andres for 2he )ecretary of *abor# 0eli&e" )ison" 2orres R Associates for 2alisay8)ilay !illing" Co#" Inc# 2olentino" arcia R (# R# CruC for *uCon )urety Co#" Inc# Conrado !edina for Phil# 7ational Ban<# Office of the )olicitor eneral" for 2he Re&ublic of the Phili&&ines# Ivan )olidum for 2alisay8)ilay Industrial Coo&erative Association# )olicitor eneral +stelito P# !endoCa" Assistant )olicitor eneral 9ose 0# Racela" 9r#" and )olicitor Pio C# uerrero" counsel for &etitioner# )O7OP)I) In a class suit" &laintiffs P*A72+R) and their laborer sought the benefits of the increased sharing &artici&ation &rescribed by Re&ublic Act 7o# .@- $)ugar Act of ,-56% for cro& year ,-568,-51 and for every year thereafter" &redicated on the claim that a majority of the P*A72+R) had no milling contracts with the C+72RA*; or" in the alternative" in the event that the court should rule that the sharing &ro&ortions &rescribed by Re&ublic Act .@- was not a&&licable to the district" the increased sharing &artici&ation granted by defendant C+72RA* in contracts entered into with eight &lanters in ,-5/ should be declared a&&licable to them starting from cro& year ,-5/8,-55 and every year thereafter &ursuant to the &rovisions of milling contracts between P*A72+R) and the C+72RA* since the year ,-6@8,-6, wherein the C+72RA* bound itself to give all &lanters having contracts with it the highest rate of &artici&ation it would ever give to any &lanter $a sort of a most8favored &lanter clause%# After finding the )ugar Act constitutional and a&&licable to the &laintiffs and without &assing u&on &laintiffNs alternative cause of action" the trial court granted the main reliefs &rayed for in the com&laint and denied all counterclaims of the defendant C+72RA*# 2he C+72RA* a&&ealed# It Huestioned the trial judgeNs having engaged the services of the P*A72+R)N counsel as his own lawyer; assailed the constitutionality of Re&ublic Act .@-; and assigned as errors the findings that a majority of the P*A72+R) had milling contracts with it and that Re&ublic Act .@was a&&licable even to P*A72+R) who had milling contracts# 2he )u&reme Court held that it will not invalidate and set aside the trial judgeNs judgment des&ite his having engaged P*A72+R)N counsel as his own lawyer" because the records show that P*A72+R)N o&&onent for not been de&rived of a fair and im&artial trial# 2he Gigh 2ribunal u&held the constitutionality of Re&ublic Act .@- on the ground that it was a social justice and &olice &ower measure for the &romotion of labor conditions in sugar &lantations" hence" whatever rational degree of constraint it e4erts on freedom of contract and e4isting contractual obligations is constitutionally &ermissible# It further found that majority of the P*A72+R) had milling contracts with the C+72RA*" hence the sharing &ro&ortions &rescribed in )ection , of Re&ublic Act .@- was not a&&licable to them" but ruled that the higher sharing &artici&ation granted by the C+72RA* to eight &lanters in ,-5/ was a&&licable to &laintiffs P*A72+R) &ursuant to the most8favored &lanter clause contained in milling contracts between Planters and the Central since cro& year ,-6@8,-6," and the reference &oint in determining the ratio of sharing among the C+72RA*" the P*A72+R) and the latterNs laborers is the &rovision of )ection - of Re&ublic Act .@- $which allots 6@U of the &roceeds of any increase in the &artici&ation granted the &lanters above their &resent share%" in conjunction with the effect of the most8 favored &lanter clause# (ecision modified# )O**AB') Of the Ruling of the Court ,# 9'(ICIA* +2GIC); (I)K'A*I0ICA2IO7) O0 9'( +); :G+R+ J7O:7 R+*A2IO7) O0 9'( + :I2G CO'7)+* 7O2 A!O7 2GO)+ +PPR+))*O I7C*'(+( I7 *A: A) RO'7( 0OR (I)K'A*I0ICA2IO7# L :here the judge continues to act in a

case des&ite his <nown relations with the &arties or counsel before him" which although not included e4&ressly in law or rule among the disHualifications for him to ta<e cogniCance thereof" leaves room for doubt as to his absolute im&artiality" the remedy does not lie in the outright invalidation and setting aside of his actuations# 2he ultimate test this Court has established in such a millieu is for the a&&ellate tribunal to determine from the record whether or not actually the &arty com&laining has been de&rived of a fair and im&artial trial" and in the affirmative" to corres&ondingly grant a new trial# 6# CO7)2I2'2IO7A* *A:; R+P'B*IC AC2 .@- $)' AR AC2 O0 ,-56% I) A )OCIA* 9')2IC+ A7( PO*IC+ PO:+R !+A)'R+# L Re&ublic Act .@- is a social justice and &olice &ower measure for the &romotion of labor conditions in sugar &lantations hence whatever rational degree of constraint it e4erts on freedom of contract and e4isting contractual obligations is constitutional &ermissible# 1# I(#; 2+)2 O0 CO7)2I2'2IO7A*I2O# L one are the days when courts could be adhering to the doctrine that interference with contracts can only be justified by e4ce&tional circumstances" for the test of validity today under the due &rocess clause" even in the case of legislation interfering with e4isting contracts" in reasonableness# In other words" freedom from arbitrariness" ca&riciousness and whimsicality is the test of constitutionality# /# I(#; )OCIA* 9')2IC+ OA* )')2AI7) DA*I(I2O O0 A )2A2'2+# L In the Phili&&ines" whenever any government measure designed for the advancement of the wor<ing class is im&ugned on constitutional grounds and shadows of doubt are cast over the sco&e of the )tateNs &rerogative in res&ect thereto" the im&erious mandate of the social justice ideal consecrated in our fundamental laws" both the old and the new" asserts its majesty" calling u&on the courts to accord utmost consideration to the s&irit animating the act assailed" not just for the sa<e of enforcing the e4&licit social justice &rovisions of the article on M(eclaration of Princi&les and )tate PoliciesM" but more fundamentally" to serve the sacred cause of human dignity" which is actually what lies at the core of those constitutional &rece&ts as it is also the decisive element always in the determination of any controversy between ca&ital and labor# 5# I(#; I(#; 2+)2 0OR (+2+R!I7I7 :G+2G+R OR 7O2 )OCIA* 9')2IC+ GA) B++7 OD+R+P2+7(+(# L 2he criterion for determining whether or not social justice has been overe4tended in any given case is nothing more than the economic viability or feasibility of the &ro&osed law in favor of labor" and certainly not the e4istence of e4ce&tional circumstances# In other words" as long as ca&ital in industry or agriculture will not be fatally &rejudiced to the e4tent of incurring losses as a result of its enforcement" any legislation to im&rove labor conditions would be valid" &rovided the assailed legislation is more or less demanded as a measure to im&rove the situation in which the wor<ers and laborers are actually found# 6# I(#; +K'A* PRO2+C2IO7 O0 2G+ *A:; )2A7(AR( 0IP+( BO R+P'B*IC AC2 .@- R+ AR(I7 I2) APP*ICABI*I2O I) 7O2 ARBI2RARO# L Re&ublic Act .@- which &rovides for bigger shares to the &lanters in the big milling districts than those in the small milling districts does not violate the eHual &rotection clause considering that the more a central &roduces" the bigger would be its margin of &rofit which can be corres&ondingly cut for the &ur&ose of enlarging the share of the &lanters# 7either does it contravene the said constitutional mandate by not including the wor<ers in the centrals as among com&onent of labor in the a&&ortionment of the fruits of their joint efforts with the &lanters" because the laborers in the centrals &erform wor< the nature of which is entirely different from that of those wor<ing in the farms" thereby reHuiring the a&&lication to them of other laws advantageous to labor# Besides" the laborers in the centrals are being more or less sufficiently ta<en care of under other e4isting laws and the &revailing terms and conditions of their em&loyment# Also" )ection 1 of the Act shows its concern for the laborers by enjoining the centrals from ado&ting any measure that would in any manner &lace the former in a worse &osition than where they were before the effectivity of the Act# 5# I(#; R+P'B*IC AC2 .@-" )P+CI0ICA**O )+C2IO7 -" APP*I+) +D+7 :G+R+ A !A9ORI2O O0 2G+ P*A72+R) GAD+ :RI22+7 CO72RAC2) :I2G 2G+ C+72RA*# L Any increase in &artici&ation given to &lanters in contracts e4ecuted after the a&&roval of Re&ublic Act .@- must be shared with laborers of the &lanter in the manner &rovided in )ection - $which gives 6@U of whatever increase the &lanter would get from the miller% even if by reason of the e4istence of a majority of &lanters having contracts with the central" )ection , would not a&&ly# 2o construe the Act otherwise would render it unconstitutional because it would manifestly be inconsistent with its basic intent of ameliorating the condition of labor" since it would be &ossible within the &rovision of this statute for the &lanters to secure e4clusively for themselves any increase they want" and even more than that s&ecified for them in )ection , thereof" without being necessarily bound to share the same with their laborers" by the sim&le e4&edient of the majority of them signing contracts with the centrals &roviding for such increase# 0urthermore" it is entirely within the &urview of the legislative &ro8labor8and8&ro8social justice intent of Re&ublic Act .@- that any increase the central should concede to the &lanters by contract e4ecuted after the &assage thereof is an increase Munder the ActM as &rovided for in )ection -# 0or" it is an inesca&able conclusion that what brought about the increased &artici&ation for the &lanters concerned in the contracts cannot be anything else than the feared conseHuence of the a&&lication of )ection , of the Act# 2hus" there can be no doubt that at least in logic and eHuity" if not in strict law" the said increase come under the &rovision of )ection - which refers to Many increase in the &artici&ation granted the &lanters Munder this Act#M .# I(#; )2A2'2ORO CO7)2R'C2IO7; CO7)2R'C2IO7 )GO'*( 0ADOR CO7)2I2'2IO7A*I2O O0 )2A2'2+# L It is familiar rule to constitutional law that when a statute is rationally ca&able of different constructions" that which will render it unconstitutional should be disregarded# 'nder the same &rinci&le" the constitutionality of a statute should not be &rejudiced by a&&lying the same in a manner that would render it unconstitutional# -# I(#; I(#; )+C2IO7 ," R+P'B*IC AC2 .@- (O+) 7O2 7+C+))ARI*O +7DI)A + I7)+PARABI*I2O O0 I2) APP*ICABI*I2O 0RO! +70ORC+ABI*I2O O0 2G+ R+)2 O0 2G+ AC2# L All that )ection , of Re&ublic Act .@- im&lies is that the &ro&ortions of sharing therein s&ecified would no longer hold in the event a majority of the &lanters in the district should have written milling contracts with the centrals# In that sense" it cannot be said that the Act im&airs the freedom of contract to which the central and the &lanters are entitled# 2he language of said section does not however a&&ear to necessarily envisage inse&arability of its a&&licability from the enforceability of the rest of the Act# On the contrary" it is im&licit in the se&arability clause contained in )ection ,@ of the Act itself that to avoid that the unconstitutionality of any &rovision of the Act which may result from its a&&lication in relation to another &rovision thereof" such &rovisions should be accordingly a&&lied inde&endently of each other" s&ecially if by so doing" the objective of the statute can be best achieved# ,@# *ABOR *A:; APP*ICABI*I2O O0 )+C2IO7 ," R+P'B*IC AC2 .@- )GO'*( B+ (+2+R!I7+( +D+RO CROP O+AR# L 2he determination of the &resence or non8&resence of a majority of contract &lanters contem&lated in )ection , of Re&ublic Act .@- should be made every cro& year and not only once" that is" when the Act too< effect#

,,# *ABOR *A:; CO72AC2) PRODI(I7 0OR )GARI7 PROPOR2IO7) B+2:++7 P*A72+R) A7( !I**+R) +P+C'2+( A02+R +00+C2IDI2O O0 R+P'B*IC AC2 .@- AR+ +70ORC+AB*+; P'RPO)+ O0 2G+ AC2# L Contracts &roviding for sharing &ro&ortions between &lanters and the central" &ur&osely entered into to avoid the ratio of sharing &rescribed in )ection , of Re&ublic Act .@- are valid and enforceable" because it is not the &ur&ose of said Act to &revent the e4ecution of new contracts" even of this would create a majority of contract &lanters in any district# 2he obvious objective of the Act is more to induce the centrals to enter written agreements with the &lanters in their res&ective districts &roviding for better sharing ratios than the old 6@8/@ scheme" rather than to fi4 for them such ratio in the manner &rescribed in its )ection ,# ,6# I(#; MP*A72+R)M" (+0I7+(# L A M&lanterM is one who is entitled to &roduce sugar on a &lantation and to deliver his &roduce to a sugar mill for milling# 2he M&lanterM referred to in Re&ublic Act .@- may be either the owner of the &lantation who &roduces or is entitled to &roduce sugarcane on his &lantation or any lessee" usufructuary or &erson $other than the owner% who has a right to cultivate and to &roduce sugar thereon" &rovided that in either case" the &lanter has the right to deliver the sugar to the Central for milling# $O&inion 7o# .5" )eries of ,-5/" )ecretary of 9ustice%# ,1# I(#; BA)I) 0OR (+2+R!I7I7 7'!B+R O0 P*A72+R) :I2GO'2 !I**I7 CO72RAC2) I7 A (I)2RIC2# L )ection , of Re&ublic Act .@- &roviding for its a&&licability in the absence of written milling agreements between the majority of the &lanters and the millers of sugarcane in any milling district in the Phili&&ines contem&lates only the total number of actual &lanters milling in a given central" such that if the majority of that number have written milling contracts" the &rovision would no longer a&&ly" regardless of the number of &lantations any of such &lanters cultivate and whether or not all of such &lantations are covered by contracts# ,/# I(#; BA)I) 0OR (+2+R!I7I7 7'!B+R O0 P*A72+R) :I2G !I**I7 CO72RAC2)# L In determining the number of &lanters with milling contracts the basis should not solely be the numerical count of the contracts but also the fact that a &lanter might have e4ecuted more than one contract" or that one contract might have bound more than one &lanter# ,5# I(#; G+IR) A7( *+))++) O0 P*A72A2IO7) O0 A (+C+A)+( CO72RAC2 P*A72+R AR+ CO72RAC2 P*A72+R)# L Geirs or lessees of &lantations that belonged to the estates of deceased &ersons can be counted as contract &lanters even if they did not e4ecute milling contracts with the central themselves" but were sim&ly covered by contracts signed by the decedents themselves or by e4tension contracts signed by the juridical administrators of the estates# !illing contracts entered into by administrators of estates of decedent should be considered valid until declared invalid in &ro&er &roceedings# ,6# CO72RAC2); :G+7 CO'R2 !AO 0IP ('RA2IO7 O0 OB*I A2IO7# L 2he &ower of the court to fi4 the duration of an obligation may be e4ercised only when either of the contracting &arties should so reHuest" or should see< to terminate the obligation" but the court cannot motu &ro&rio retro8actively and arbitrarily declare a contract to be terminated several years bac< when the said judicial declaration is not sought by any of the contracting &arties# ,5# I(#; BA)+) O0 )GO:I7 PROPOR2IO7) A!O7 C+72RA*" P*A72+R) A7( 2G+ *A22+RN) *ABOR+R) :G+R+ A !A9ORI2O O0 P*A72+R) GAD+ !I**I7 CO72RAC2); CA)+ A2 BAR# L :here a majority of the &lanters in a district have milling contracts and the sharing &ro&ortions &rescribed in )ection , of Re&ublic .@- do not a&&ly" the basic &lantation share for &lantation or &arts thereof not covered by written milling contracts shall be the most freHuent basic &lantation milling share sti&ulated in valid written milling contracts $)ection 5 $b% and ,, $b% of +4ecutive Orders 7os# -@@ and -@," )eries of ,-15%# Gowever" where in milling contracts between the &lanters and the central since cro& year ,-6@86, the central bound itself to give all &lanters having contracts with it the highest rate of &artici&ation it would ever give to any &lanter $sort of a most8favored8&lanter8clause%" and the central entered into contracts with eight &lanters after the effectivity of Re&ublic Act .@-" giving the said eight &lanters higher sharing &artici&ation than the most freHuent basic &lantation share in the district" the latter &artici&ation should be a&&licable to all &lanters of the districts" with or without contracts# In the latter case" the reference &oint in determining the ratio of sharing among the central" the &lanters and the latterNs laborers is the &rovision of )ection -" Re&ublic Act .@-# ,.# I(#; !I**I7 CO72RAC2); ORI I7A* PAR2I+) 2G+R+2O !AO 2RA7)0+R 2G+IR RI G2) A7( OB*I A2IO7) ('RI7 ('RA2IO7 O0 CO72RAC2)# L A sti&ulation in milling contracts entered into during the ,-6@86, cro& year whereby the central bound itself to automatically grant the &lanters who had obligated themselves to mill their sugarcane in the factory during the ,-6@86, harvest $a los Hue se obliguen a moler su cana dulce en la fabrica &ara la cosecha de ,-6@86,% did not refer e4clusively to the &lanters who signed the original contracts for the ,-6@86, cro& year# It did not de&rive the original &arties thereto of the &rerogative to transfer and transmit their rights and obligations to others during the duration of their contracts# 2he guarantee of eHual treatment im&licit in the &rovision is in line with the characteristic uniformity that &ervades among all the com&onent elements of the industry" and in consonance with Article ,1,, of the Civil Code which &rovides that Mcontracts ta<e effect only between the &arties" their assigns and heirs" e4ce&t in cases where the rights and obligations arising from the contract are not transmissible by their nature" or by sti&ulation or by law#M ,-# *ABOR *A:; PO*ICO O0 +PP+(I2I7 *ABOR CA)+); R+!A7( 2O 2RIA* CO'R2 0OR 0'R2G+R PROC++(I7 ) (I)P+7)+( :I2G# L :here in a Huarter of a century case involving dis&ute in sharing &ro&ortions among the sugar central" the &lanters and the latterNs laborers" evidence on the dis&uted matters which were &resented by the &arties in the lower court is com&lete only u& to what referred to cro& year ,-5-86@" but the &roceeds of each yearNs &roduction continued to be held in escrow u& to cro& year ,-66865" the )u&reme Court on a&&eal would o&t to dis&ense with further &roceedings in the trial court for the &ur&ose of dis&osing of the issues involved in the cro& years after ,-5-86@ u& to ,-66865" where what could be factual issues that the trial court world be called u&on to resolve are no longer controverted by the &arties" in line with the CourtNs &olicy of e4&editing and sim&lifying of cases involving labor# 6@# AC2IO7); PAR2I+) 2G+R+2O; :G+7 A *A)) )'I2 :O'*( PRO)P+R; CA)+ A2 BAR# L A class suit will lie where the factual issues to be determined have to do only with the number of &lanters there were in the district during the &eriods in dis&ute and how many of them had written milling agreements with the central" where it cannot be denied that the same issues were of common interest to all the &lanters and" in fact to their res&ective laborers" since it is on the correct resolution thereof that the e4&ected im&rovement or augmentation of their share in the &roduction of the central would de&end; and where the number of &lanters involved" not to mention the number of laborers to be affected" is so numerous as to ma<e it im&racticable to bring them all to court# !oreover" the theory in the 'nited )tates that a class suit is &ermissible whenever there is community of interest in the Huestion involved and in the relief sought" even in the absence of community of interest in the subject matter of the litigation" Mmay be ado&ted in the Phili&&ines under the &resent rules which authoriCe joinder of &arties who have common interest in the same Huestion of fact or law where the relief sought arises out of the same transaction or series of transactions#M

6,# )'R+2I+); *IABI*I2O O0 2G+ BO7(; :G+R+ 9'( !+72 A AI7)2 )'R+2O I) 7O2 7+C+))ARO# L :here a dis&uted &ortion of the sugar &roduced in ,-5/855 has been sold and the amount realiCed are turned over to the defendant central under a surety bond conditioned on the courtNs findings that the &lanters are entitled to additional &artici&ation of their res&ective &roduction in ,-5/8,-55" the )u&reme Court will not render any judgment which can be e4ecuted against the surety com&any where a large &ortion of money held in escrow by ban<s for the &ur&ose of the case will go the defendant central and the reHuirements of justice can be fully satisfied by deducting therefrom whatever amount corres&onds to the &lanters and their laborers# 66# +DI(+7C+; 9'RI)(IC2IO7 O7 2G+ CO'R2) 2O (+CI(+ K'+)2IO7) R+*A2+( 2O CROP O+AR) R+ AR(I7 :GICG 2G+ PAR2I+) (I( 7O2 PR+)+72 +DI(+7C+# L 2he )u&reme Court will decide and consider Huestions relating to the cro& years after trial was terminated in ,-6, even if on a&&eal the &arties to a case did not &resent evidence or any sti&ulation of fact" if the &leadings of the &arties in the trial court referred not only to the cro& years ,-56851 but to Mevery cro& year thereafterM; the Gigh Court is convinced that there are no &ossible new issues; and the &lanters and their laborers have been constantly as<ing that the judgment should include the later cro& years" to which &rayer the defendant Central has manifested no serious objections# 61# AC2IO7); PAR2I+) 2G+R+2O; 2RA7)0+R++ P+7(+72+ *I2+ 7++( 7O2 B+ I!P*+A(+( BO 7A!+# L A transferee &endente lite under )ection 6@ of Rule 1 does not have to be included or im&leaded by name in order to be bound by the judgment" because the action or suit may be continued for or against the original &arty or the transferor and still be binding on the transferee# 6/# *ABOR *A:; RA2IO O0 )GARI7 0IP+( I7 R+P'B*IC AC2 .@- R+0+R) 2O '7R+0I7+( )' AR A) :+** A) A** BO8PRO('C2) A7( (+RIDA2ID+) 2G+R+O0# L 'nder )ection , of Re&ublic Act .@-" it is clear that the ratio of sharing therein fi4ed refers not only to unrefined sugar &roduced by the miller of the sugarcane of the &lanters but of all the by8&roducts and derivatives thereof" by which is meant the bagasse" &ress ca<es and molasses# 65# CO7)2I2'2IO7A* *A:; )'PR+!+ CO'R2 :I** PA)) 'PO7 K'+)2IO7 O0 CO7)2I2'2IO7A*I2O :G+7 )P+CIA**O P*+A(+(# L As a general rule" the constitutionality of a law will not be considered unless the &oint is s&ecially &leaded" insisted u&on the adeHuately argued# (+CI)IO7 BARR+(O" 9 &3 APP+A*" in #R# 7o# *8,--15" by the defendants 2alisay8)ilay !illing Co#" Inc# and *uCon )urety Com&any" from the decision rendered by the Court of 0irst Instance of !anila in Civil Case 7o# 6/,6." entitled Asociacion de Agricultores de 2alisay8)ilay" Inc# et al# vs# 2alisay8)ilay !illing Co#" Inc# et al#" on 9anuary 66" ,-66 as well as from its order dated A&ril 6." ,-66 amending the same" which together granted the main reliefs &rayed for in the com&laint" based on Re&ublic Act .@-" and dismissed all of the counterclaims of the defendants; and P+2I2IO7" in #R# 7o# *86,1@/" filed by the )olicitor eneral in behalf of the Re&ublic of the Phili&&ines for certiorari andAor mandamus to com&el res&ondent judge of the Court of 0irst Instance of 7egros Occidental to a&&oint" in Civil Case 7o# 6-.@ of said court" entitled Re&ublic of the Phili&&ines vs# 2alisay8)ilay !illing Co#" Inc#" an administrator of res&ondent Central" which the overnment had ta<en over" &ursuant to the &rovisions of the same Re&ublic Act .@- aforementioned" res&ondent judge having refused to do so" holding that the ta<e8over of the Central by the overnment is unconstitutional# 2he two cases" although &roceeding from different courts and reHuiring distinct remedies" have been consolidated because they involve closely related or &artially identical issues between &ractically the same &arties# *e4*ib Re3 #R# 7o# *8,--15 2G+ PROC++(I7 ) B+*O: ,# 2he &leadings and sti&ulations of fact 2he original basic com&laint in this case filed as a class suit on )e&tember 61" ,-5/ named as &laintiffs the Asociacion de Agricultores de 2alisay8)ilay" Inc# and si4 sugarcane &lanters" namely" 2rino !ontinola" 0ernando Cuenca" +duardo *edesma" +milio 9ison" 7ilo *iCares and 7icolas 9alandoni" hereinafter to be referred to" jointly with the Asociacion" as P*A72+R)" and as defendant the 2alisay8)ilay !illing Co#" Inc#" hereinafter to be referred to as CO72RO*# *ater on" on (ecember 6@" ,-56" an amended com&laint was filed to su&ersede the original one# In the amended com&laint" the )ecretary of *abor was joined as &laintiff" to re&resent the laborers favored by the law in dis&ute" whereas" the *uCon )urety Com&any and Phili&&ine 7ational Ban< were im&leaded as defendants# 2he amended com&laint alleged three main causes of action $the second" an alternative one%" namely3 'nder the first cause of action" the claim of the &laintiffs is that inasmuch as under Re&ublic Act .@-" a&&roved on 9une 66" ,-56" it is &rovided that3 M)ection ,# In the absence of written milling agreements between the majority of &lanters and the millers of sugarcane in any milling district in the Phili&&ines" the unrefined sugar &roduced in that district from the milling by any sugar central of the sugar8cane of any sugar8cane &lanter or &lantation owner" as well as all by8&roducts and derivatives thereof" shall be divided between them as follows3 M)i4ty &er centum for the &lanter" and forty &er centum for the central in any milling district the ma4imum actual &roduction of which is not more than four hundred thousand &iculs3 Provided" 2hat the &rovisions of this section shall not a&&ly to sugar centrals with an actual &roduction of less than one hundred fifty thousand &iculs# M)i4ty8two and one8half &er centum for the &lanter" and thirty8seven and one half &er centum for the central in any milling district the ma4imum actual &roduction of which e4ceeds four hundred thousand &iculs but does not e4ceed si4 hundred thousand &iculs; M)i4ty8five &er centum for the &lanter" and thirty8five &er centum for the central in any milling district the ma4imum actual &roduction of which e4ceeds si4 hundred thousand &iculs but does not e4ceed nine hundred thousand &iculs; M)i4ty8seven and one8half &er centum for the &lanter" and thirty8two and one8half &er centum for the central in any milling district the ma4imum actual &roduction of which e4ceeds nine hundred thousand &iculs but does not e4ceed one million two hundred thousand &iculs; M)eventy &er centum for the &lanter" and thirty &er centum for the central in any milling district the ma4imum actual &roduction of which e4ceeds one million two hundred thousand &iculs# MBy actual &roduction is meant the total &roduction of the mill for the cro& year immediately &receding#M and considering that" according to them" in the 2alisay8)ilaymilling district to which they belong" a majority of the &lanters had no milling contracts" the court should3 M,# (eclare the a&&licability to the 2alisay8)ilay !ill (istrict of the sharing &artici&ation &rescribed by Re&ublic Act 7o# .@- for every cro& year starting from the cro& year ,-568513

M6# Adjudicate in favor of &laintiffs P*A72+R) and their laborers who are herein re&resented by &laintiff )ecretary of *abor the amounts de&osited with the defendant Phili&&ine 7ational Ban< " in the account entitled NIn 2rust for 2alisay8)ilay !illing Co#" Inc#" Asociacion de Agricultores de 2alisay8)ilay" Inc#" and (e&artment of *abor;N , M1# Order the defendant C+72RA* to account for any unsold escrow Huedans or the &roceeds thereof which have not been de&osited with the Phili&&ine 7ational Ban< in the above mentioned trust account; M/# Order defendant C+72RA* and the defendant *uCon )urety Co#" Inc# to account for and &ay jointly and severally to &laintiffs P*A72+R) and their laborers re&resented by the &laintiff )ecretary of *abor the &roceeds of the sugar re&resenting the increased &artici&ation $58,A6U% for the ,-5/865 cro& year &lus legal interest in favor of the &laintiffs P*A72+R)" com&uted on the basis of the average mar<et &rice during the month within which the sugar was sold; M5# Order defendant C+72RA* to account for and &ay to &laintiffs P*A72+R) and their laborers the increased &artici&ation in the by8 &roducts and derivatives" namely3 molasses" bagasse" and filter ca<e;M $&&# ,/8,5" Record on A&&eal of Central#%# As second and alternative cause of action" the P*A72+R) averred that on or before October 6/" ,-5/" the C+72RA* e4ecuted contracts with eight &lanters in which a higher &ercentage of &artition in the sugar and by8&roducts and derivatives &roduced by the C+72RA* was given to said eight &lanters than those given to the rest of the &lanters in the district" that is" 61U to 6/U" the latter" whenever the &roduction of the C+72RA* should be ,"6@@"@@@ &iculs or over" whereas all the others were given only 6@U" and inasmuch as under the &rovisions of the milling contracts between the P*A72+R) and the C+72RA* since the cro& year ,-6@8,-6," the C+72RA* bound itself to give all &lanters having contracts with it" the highest rate of &artici&ation it would ever give to any &lanter" $a sort of most8favored8&lanter clause%" the court should3 **&r M,# (eclare" in the event that this Gonorable Court should rule that the sharing &ro&ortion &rescribed by Re&ublic Act 7o# .@- is not a&&licable to the 2alisay8)ilay !ill (istrict" that the sharing &artici&ation of 61U" or 6/U in case the total &roduction of defendant C+72RA* is ,"6@@"@@@ &iculs or over" in favor of &laintiffs P*A72+R) shall be a&&licable to the 2alisay8)ilay !ill (istrict starting from the cro& year ,-5/855 and for every cro& year thereafter; M6# Order the defendant C+72RA* to account for and &ay to &laintiffs P*A72+R) the &roceeds of the sugar and molasses re&resenting the increased &artici&ation in favor of said &laintiffs P*A72+R) during the &ast cro& years starting from ,-5/855 cro& year;M $&&# ,58,6" Id#%# As third cause of action" the P*A72+R) alleged that notwithstanding that the a&&licability of Re&ublic Act .@- to the 2alisay8)ilay milling district had already been ruled u&on by the )ugar Kuota Administrator" the Central still refused to abide by said ruling and to cause the release to the &laintiffs of the corres&onding amounts to which they are entitled" hence they were constrained to engage the services of legal counsel" for which reason they &rayed that the court3 M,# Order the defendant C+72RA* to &ay the amount of P5@"@@@#@@ as attorneyNs fees and litigation e4&enses incurred by &laintiff A)OCIACIO7 and &laintiffs P*A72+R); M6# Order the defendant C+72RA* to &ay &laintiff A)OCIACIO7 and &laintiffs P*A72+R) by way of moral and e4em&lary damages" such amount as this Gonorable Court may deem sufficient to set an e4am&le for &ublic good as &rovided for in Articles 66,5 and 66,- of the 7ew Civil Code; M $&# ,6" Id#%# In the course of the &roceedings below which terminated only in ,-66" five $5% su&&lements to the amended com&laint were successively filed" year after year" to cover the claims of the P*A72+R) and the )ecretary of *abor for additional &artici&ation corres&onding to the cro& years" ,-558,-5." ,-5.8,-5-" ,-5-8,-6@" ,-6@8,-6, and ,-6,8,-66# In the meantime and within the &eriods fi4ed in the Rules" the defendant C+72RA* filed its res&ective answers to the amended com&laint and the su&&lements thereto# In said answers to the C+72RA* alleged in substance the following defenses3 $,% that Re&ublic Act .@- is invalid and unconstitutional; $6% that even if said Act were valid" it is not a&&licable to the 2alisay8)ilay milling district because the majority of the &lanters had written milling contracts with the C+72RA* at the time said Act went into effect" and that this situation continued during the cro& years ,-5,856" ,-56851" ,-5185/" and all the subseHuent cro& years inN dis&ute; $1% that the &lanters who entered into said milling contracts did so voluntarily and those voluntary contracts may not be altered or modified without infringing the constitutional guarantee on freedom of contracts and the non8im&airment clause of the Constitution; and as to those &lanters who entered into contracts after the effective date of the law" they should be deemed as having voluntarily waived all the rights and benefits that might accrue to them under it; $/% that the Act does not contain any e4&ressed or im&lied &rovision invalidating the written milling contracts entered into between the C+72RA* and the owners of adherent &lantations before its effective date; $5% that the Act sanctions and allows the entering into milling contracts after its effective date" and as a matter of fact a large number of the P*A72+R) are also &lanters in the Gawaiian8Phili&&ine milling district" adjoining the 2alisay8)ilay milling district" and they had entered into milling contracts with the Gawaiian8Phili&&ine Co# one year and four months after the effectivity of the Act and in their milling contracts they had sti&ulations regarding sharing &artici&ation without regard to the ratios fi4ed in the Act" and they have abided by those milling contracts and $6% that the arrangement" regarding the issuance of escrow Huedans and the de&osit of the &roceeds of the sale of the dis&uted increased &artici&ation of the &lanters was agreed to and acce&ted by the C+72RA* from the )ugar Kuota Administrator under duress" because said Administrator would not allow the issuance of any warehouse recei&t on the share of the mill unless the C+72RA* agreed to the escrow Huedans arrangement; $5% that neither are the P*A72+R) entitled to increased &artici&ation as claimed by them in their second and alternative cause of action because they do not Hualify as the P*A72+R) contem&lated in their invo<ed twenty second $Digesimo )egundo% &aragra&h of the original milling contract" since what are referred to in that &aragra&h are only the P*A72+R) MHue se obliguen a moler caQadulce en la fabrica &ara la cosecha ,-6@86,M; $.% that the &rovisions of Re&ublic Act .@- relating to the increased sharing &artici&ation of the &lanters would affect and alter the allocation of e4&ortable sugar to the 'nited )tates $e4&ort A sugar% among Phili&&ine mills and &lantation owners" in violation of the 2rade Relations Agreement between the Phili&&ines and the 'nited )tates" and this is &recisely what is e4&ected from the a&&lication of the law as &rovided in the second &aragra&h of )ection . of the very same Re&ublic Act .@-; and $-% that the instant case is not a &ro&er one for a class suit# &r** 2he C+72RA* also alleged various counterclaims" briefly stated as follows3 As first counterclaim" it is averred that an e4amination of the records of defendant C+72RA*Ns mill site office revealed that during the ,-5,856 cro& year there was a total of ,.6 &lanters adhered to the C+72RA*" and ,@5 of those &lanters had milling contracts while 55 did not have; that in said cro& year" the C+72RA* started milling on October ,." ,-5, and sto&&ed on !arch 6/" ,-56" hence even before the effective date of Re&ublic Act .@- the C+72RA* had written milling agreements with a majority of the &lanters; that during the ,-56851 year the C+72RA*

had milling contracts with ,,. of the 6@5 &lanters; and in ,-5185/ cro& year it had milling contracts with ,16 out of 6, &lanters" and the said majority of &lanters who had milling contracts with the C+72RA* had thereafter been maintained" if not actually increased# As second counterclaim" the C+72RA* claims that the most freHuent basic &lantation milling share in the written contracts is 6@U for the &lanters and /@U for the central in all classes of sugar" and this sharing was a&&lied to the non8contract &lanters &ursuant to )ection 5 of +4ecutive Order 7o# -@@ and )ection ,, of +4ecutive Order 7o# -@,; that the correct sharing &ro&ortion between the C+72RA* and all the &lanters in the ,-5,856" ,-56851" ,-5185/" ,-5/855" ,-55856" ,-56855 and all succeeding cro& years" unless and until voluntarily changed by the &arties" should have been and should be 6@U for the &lanters and /@U for the C+72RA*" e4ce&ting only few &lanters with whom the C+72RA* had e4ecuted written milling contracts establishing different sharing &ro&ortions; and the C+72RA* had the right to demand s&ecific &erformance by all the contract &lanters of their res&ective written milling contracts# As third counterclaim" it is alleged that the C+72RA*" before the recount of those &lanters having milling contracts" had shared" as a tem&orary measure" with the &lanters on the general basis of 55U for the &lanters and /5U for the miller in e4&ort sugar" and 65U for the &lanters and 15U for the miller in domestic sugar" and a readjustment in the sharing had to be made after the recount" so that the &arties had to ma<e mutual restitution for the cro& year ,-5185/# As fourth counterclaim" it is insisted that Re&ublic Act .@- is unconstitutional and invalid on the following grounds3 M$a% Contrary to the &rovisions of Art# DI" )ec# 6,$,% of the ,-15 Constitution" the Act embraces more than one subject# MIn addition to &roviding" among other things" for the division of the sugar manufactured at sugar mills" Nas well as all by8&roducts and derivatives thereofN" the act amends the minimum wage law by &roviding that 6@U of the &roceeds of the increased &artici&ation in the sugar and all by8&roducts and derivatives thereof" of the &lantation owner or sugar cane &lanter" shall be &aid to his laborers# M$b% 2he title of the act reads as follows3 NAn Act to regulate the relations among &ersons engaged in the sugar industryN" and the subject8 matter of )ec# / of the act" which" among other things" authoriCes the overnment of the Phili&&ines to ta<e a sugar mill" and o&erate it through an administrator; of )ec# 6" which" among other things" authoriCes the overnment to ta<e over and administer a sugar &lantation; of )ec# 6" which" among other things" fi4es the &eriod of duration of the o&eration of a sugar mill by the administrator; of )ec# 5 which" among other thing" establishes the &rocedure for the a&&ointment of the administrator" and for ascertaining the com&ensation to be &aid for the o&eration of the sugar mill; of )ec# ." which" among other things" determines where the com&ensation to be &aid to the sugar mill or &lantation owner" or sugar cane &lanter shall be ta<en from; and of )ec# -" which &rovides that 6@U of the &roceeds of the increased &artici&ation in the sugar cro& and all by8&roducts and derivatives thereof of the &lantation owner or sugar cane &lanter shall be &aid to his laborers" are not e4&ressed in the title of the act" as is reHuired by )ec# 6,$,% of Art# DI of the ,-15 Constitution which renders the act" or" at least" said )ection 1" /" 5" 6" 5" . and - invalid# M$c% 2he act de&rives sugar mills" among them" defendant herein" or authoriCes the de&rivation of said sugar mills of their &ro&erty $factories%" without due &rocess of law" and without just com&ensation# M2he act authoriCes the seiCure by the overnment of the Phili&&ines of sugar mills u&on a mere &roclamation issued by the President of the Phili&&ines" and the act does not &rovide for just com&ensation therefor to the owners of the sugar mills" or for losses due to mismanagement by the administrator" or other causes not attributable to the owners of the sugar mills# M)ection . of the act &rovides for com&ensation to the owners of sugar mills but the same should be &aid Nout of the &roceeds of the o&eration which would have corres&onded to said centralN" or" in other words" the com&ensation to be &aid to the owners of sugar mills will be ta<en from the &ro&erty of the sugar mills themselves#M $&&# 6- to 5," Record on A&&eal of Central#%# As fifth counterclaim" is alleged that the &laintiffsN action is clearly unfounded and the C+72RA* was com&elled to incur e4&enses" to &rotect its rights and interests through the em&loyment of attorneys to re&resent it in this case" in the total amount of P,@@"@@@#@@# (efendant C+72RA* &rayed for the dismissal of the amended com&laint" and" &articularly" for a declaration that as to sugar for e4&ort to the 'nited )tates" Re&ublic Act .@-" even if it is declared constitutional and valid" became ino&erative as of 9anuary ," ,-56" the effective date of the Revised 2rade Agreement between the Phili&&ines and the 'nited )tates# It further &rayed" under the first counterclaim" to order the Phili&&ine 7ational Ban< to turn over to the C+72RA* all the de&osits of the &roceeds of the sales of the sugar covered by escrow Huedans; under the second counterclaim" to order the s&ecific &erformance by the contract P*A72+R) of their res&ective written milling contracts with the C+72RA* and to adjudge that the sharing &ro&ortions between the C+72RA* and its &lanters" both contract and non8contract" in the sugar and by8&roducts &roduced" shall be 6@U for the P*A72+R) and /@U for the C+72RA* in all the cro& years referred to in the counterclaim" unless and until voluntarily changed by the &arties; to order the )ugar Kuota Administrator to adjust the issuance of Huedans to the P*A72+R) and to the C+72RA* in accordance with the aforesaid sharing &ro&ortion" and to instruct his &ermit agent detailed with the C+72RA* to sign such Huedans; under the third counterclaim" to order the P*A72+R) concerned and the C+72RA* to ma<e the reci&rocal restitutions and readjustments as mentioned in the counterclaim; under the fourth counterclaim" to declare Re&ublic Act .@- unconstitutional and invalid; under the fifth counterclaim" to order the &laintiffs" jointly and severally to indemnify the C+72RA* in the sum of P,@@"@@@#@@ for attorneyNs fees and e4&enses of litigation# llcd 2he &laintiffs filed their answer to the counterclaims of the C+72RA*" denying the material allegations therein" and reiterating that when Re&ublic Act .@- too< effect on 9une 66" ,-56 a majority of the &lanters adhered to the C+72RA* had no written milling contract with it and even after the effectivity of said Act still the majority of the &lanters did not have milling contracts" and if there were some &lanters who e4ecuted milling contracts after the effectivity of the Act" said additional contracts cannot be counted for the &ur&ose of determining whether or not Re&ublic Act .@- is a&&licable to the district; denying at the same time that Re&ublic Act .@- is unconstitutional" and &raying that defendantNs counterclaims be dismissed# 2he defendant )ugar Kuota Administrator also filed his answer to the C+72RA*Ns counterclaims" alleging defenses more or less similar to those of the &laintiffs A)OCIACIO7 and P*A72+R)# 2he )ecretary of *abor li<ewise filed his answer to the counterclaims of the C+72RA*" alleging &ractically the same defenses as those of the P*A72+R)# 2he defendant *uCon )urety Co#" after its motion to dismiss the com&laint was denied by the court" filed an answer and &ut u& as s&ecial defenses3 that the com&laint fails to state a cause of action against it; that there is no &rivity between it and some of the &laintiffs; that the condition &recedent" Min the event that the courts should finally adjudge that said Re&ublic Act .@- is a&&licable to ,-5/855 cro& of the 2alisay8 )ilay !ill (istrict and that the &lanters are entitled to an additional &artici&ation # # # the central will &ay to each and every &lanter concerned # # #M had not yet been fulfilled" hence the action of the &laintiffs against it was &rematurely brought; that the terms and conditions of

the )urety Bond had been materially altered andAor novated without its written conformity" thereby releasing it from liability if there is any# 2he *uCon )urety Co# also demanded" by way of counterclaim" the &ayment to it by the &laintiffs of the sum of P6@"@@@#@@ as attorneyNs fees# 6 2he &laintiffs filed their answer to the counterclaim of the *uCon surely Co#" Inc# denying all the allegations in said &leading# 0rom time to time between 9uly 1@" ,-55 and (ecember 5" ,-6@" the &arties filed ten &artial sti&ulations of facts with su&&orting e4hibits" on the basis of which they submitted the case for decision without any &resentation of any inde&endent e4clusive evidence of any of them# !eanwhile" on August 1," ,-6@" &laintiffs filed a !anifestation as<ing the court to notify the Office of the )olicitor eneral that the Huestion of constitutionality of Re&ublic Act .@- was raised# In answer thereto" the )olicitor eneral filed on October ,/" ,-6@" the following !anifestation3 MCO!+) 7O: the undersigned counsel and in com&liance with the Order dated )e&tember 5" ,-6@ reHuiring the undersigned to e4&ress their view on the constitutionality of Re&ublic Act 7o# .@- &ursuant to the &rovisions of )ection 61 of Rule 1" of the Rules of Court" to this Gonorable Court res&ectfully allege3 M,# 2hat on A&ril 1" ,-55" the undersigned counsel filed in behalf of the )ugar Kuota Administrator the &leading entitled" NAmended Answer of the )ugar Kuota Administrator to the Counterclaims of the (efendant 2alisay8)ilay !illing Co#" Inc#N dated A&ril 6" ,-55; M6# 2hat in their answer to the fourth counterclaim" the undersigned counsel have e4&ressed their view on the constitutionality of Re&ublic Act 7o# .@-" and for the &ur&ose of this manifestation is re&roduced hereunder3 N2O 2G+ 0O'R2G CO'72+RC*AI! ,# 2hat he re&roduces by reference his answer to the allegations re&roduced by reference in &aragra&h ,; 6# 2hat he denies the allegation in &aragra&h 6 that Re&ublic Act 7o# .@- violates the constitutional &rohibition that N7o bill which may be enacted into law shall embrace more than one subject which shall be e4&ressed in the title of the billN $Art# DI" sec# 6, $,%" ,-15 Constitution%" and states in connection therewith that the various sections cited by defendant are germane to the title and general object of the law $ ovNt" v# Gong<ong R )hanghai Ban<" 66 Phil# /.1%; 1# 2hat he denies the allegation in &aragra&h 6$c% that the Act de&rives defendant !ill of its &ro&erty $factories% or authoriCes such de&rivation without due &rocess of law and without just com&ensation" and states as reasons for such denial as follows3 $a% Re&ublic Act 7o# .@-" entitled NAn Act to Regulate the Relations Among Persons +ngaged in the )ugar IndustryN was to co&e with N2he necessity for increasing the share of the &lanters and laborers in the income derived from the sugar industry # # #N $+4&lanatory 7ote to G#B# ,5,5% and an im&lementation of the constitutional mandate that N2he )enate shall afford &rotection to labor # # # and shall regulate the relations between # # # labor and ca&ital in industry and agricultureN $Art# PID" )ec# 6" ,-15 Constitution % and is a &ro&er and valid e4ercise of &olice &ower; $b% 2he Act does not &rovide for nor authoriCe the seiCure of any central but only the transfer or tem&orary assum&tion by the government of the administration thereof" $,% NIn the event that any central shall be unable to arrive at a milling agreement with a majority of the &lanters affiliated with it" and shall refuse to mill the sugarcane of such &lanters in the absence of such an agreementN $)ection /% and $6% such N&revention" interru&tion" or cessation of the milling of sugar by the central concerned # # # shall" in the judgment of the President" lead to a deficiency or delinHuency in the filing of the entire national Huota for any &articular yearN $)ec# 6" &ar# ,%; $c% 2hat contrary to defendantNs claim" the Act &rovides for the &ayment of Njust com&ensation to be &aid for the tem&orary o&eration or administration of the same $Central%N $)ec# 5% Mwith due regard for the costs of o&eration or administration and such other charges and deductions as the court may deem just and &ro&erN $)ec# .%" although" strictly s&ea<ing" in the a&&lication of certain laws and regulations enacted &ursuant to &olice &ower" annoyance and financial loss are not com&ensable $!alcolm" Phili&&ine Constitutional *aw%# Provided the means ado&ted are reasonably necessary for the accom&lishment of the end in view" not unduly o&&ressive u&on individuals" and in the interest of the &ublic generally rather than of a &articular class" the legislature may ado&t such regulations as it deems &ro&er restricting" limiting" and regulating the use of &rivate &ro&erty in the e4ercise of its &olice &ower $'#)# v# 2oribio" ,5 Phil# .5 cited in '#)# v# Dillareal" 6. Phil# 1-@%# Persons and &ro&erty may be subjected to all <inds of restraint and burdens" in order to secure the general comfort" health" and &ros&erity of the )tate $'#)# v# omeC 9esus" 1, Phil# 6,." cited in Calalang v# A#(# :illiams" et al#" /@ O# # 5th )u&&# 61-%#M $&&# 1,-8161" Rec# on A&&eal of C+72RA*#%# 6# 2he incident of the alleged disHualification of the judge# Before deciding the case" on October ,6" ,-6," the trial judge brought to the attention of the &arties that he had engaged" on 9anuary 65" ,-6@" the services of Attorney 9ose *# Africa" of the law firm of counsel for &laintiffs" to re&resent him in Civil Case 7o# /6@16" also of the Court of 0irst Instance of !anila" entitled 0eli&e Cuaderno )r# vs# Carmelino # Alvendia" et al#" in which he was a &arty defendant" and that he wanted to hear from the &arties whether they had any objection to his deciding this case# 2he defendant C+72RA* &rayed" on October 61" ,-6," that the &residing judge inhibit himself# On the other hand" the )ugar Kuota Administrator" the Phili&&ine 7ational Ban<" the )ecretary of *abor and the P*A72+R) manifested that they had no objection to the &residing judge rendering the decision# '&on the ground that the majority of the lawyers e4&ressed no objection to his deciding the case" on 7ovember 6," ,-6," the &residing judge issued an order stating that he considered himself duty8bound to &roceed ta<ing cogniCance of the case and that unless restrained by an order of a )u&erior Court within 6@ days" he would &roceed to render a decision on the merits# 2he motion for the reconsideration of said order was denied# *ib*e4 1# 2he original decision of the trial court# On 9anuary 6@" ,-66" the trial court rendered a decision u&holding the constitutionality of Re&ublic Act .@-" u&on the ground that its enactment is a legitimate e4ercise of the &olice &ower of the )tate" and declaring that said law is a&&licable to the 2alisay8)ilay milling district" because from the record it a&&ears that the majority of the &lanters in the district did not have milling contracts with the C+72RA*# Accordingly" &laintiffs8a&&ellees were adjudged to be entitled to the dis&uted &ortions of all the sugar milled at the C+72RA* and all the corres&onding by8 &roducts and derivatives" starting from the cro& year ,-568,-51 u& to cro& year ,-6@86,# 7o &ronouncement was made as regards the P*A72+R)N alternative cause of action# :ith &articular reference to the sugar &roduced in the cro& year ,-5/8,-55" the lower court ordered the C+72RA* and the *uCon )urety Com&any" Inc#" jointly and severally" to &ay the &laintiffs8a&&ellees the sum of P-/-".56#51 with interest thereon at the rate of 1U &er annum from the time said amount was delivered to the Central in the year ,-55 until the same is fully &aid# It further ordered the Phili&&ine 7ational Ban< to deliver to the &laintiffs8a&&ellees all the amounts de&osited with the said Ban< as &roceeds of the sugar in dis&ute corres&onding to the cro& years ,-568,-51 u& to ,-6@8,-6," as well as the &roceeds of the sale of the by8&roducts and derivatives corres&onding to the same cro& years# Corres&ondingly" the )ugar Kuota Administrator was ordered to be guided by the courtNs decision in the distribution of the sugar and by8

&roducts and derivatives &roduced in the 2alisay8)ilay mill district beginning with the agricultural year ,-6,8,-66# 2he C+72RA* was further sentenced to &ay the &laintiffs8a&&ellees the sum of fifty thousand &esos $P5@"@@@#@@% as attorneyNs fees" &lus costs# /# 2he amended decision# On !ay /" ,-66" u&on two motions for reconsideration of &ractically the same tenor" one filed by the P*A72+R) and the other by the )ecretary of *abor" the lower court amended its decision M# # # in the case that the increase in the &lantersN share of the sugar and the by8&roducts of sugarcane &roduced during the agricultural year ,-5-8,-6@ should be ,@U" thereby entitling the &laintiffs to 5@U of the sugar &roduction and by8&roducts for that year and the defendant )ugar Central to 1@U of said sugar &roduction#M 2he decision was also amended so that a &ortion of the decision would read3 M2he Court further orders the Phili&&ine 7ational Ban< to deliver to the &laintiffs all the amounts with said ban< as &roceeds of the sugar in dis&ute corres&onding to the following years3 ,-568,-51" ,-518,-5/" ,-558,-56 u& to ,-6@8,-6,# 2he defendant 2alisay8)ilay !illing Com&any" Inc# is hereby ordered to deliver to the &laintiffs their share in accordance with the &ro&ortion indicated in this decision" ta<ing into account the increased &ro&ortion of the &lantersN share corres&onding to the agricultural years ,-568,-51 u& to ,-6@8,-6,#M 2he decision was further corrected" changing the name MAgustin P# *ocsonM a&&earing in the decision to MAgustin 2# *ocsinM# Gence" this a&&eal# 5# 2he other incidents in the course of this a&&ellate &roceeding# $a% On )e&tember ,6" ,-66" &laintiffs8a&&ellees filed a motion &raying that the C+72RA* be directed to issue Huedans covering the ,-66861 sugar &roduction in the &ro&ortion of 6@U for the P*A72+R)" 168,A6U for the C+72RA*" and 58,A6U in Mescrow HuedansM in the joint name of the A)OCIACIO7" the C+72RA* and the )ecretary of *abor" to be dis&osed of only by unanimous action of the three &arties and the &roceeds of the sale of said Mescrow HuedansM to be de&osited with the Phili&&ine 7ational Ban< under )avings Account 7o# ,5,65@ in trust for said entities as in the &revious cro& years" or" in the alternative" that the movants be allowed to ta<e the dis&uted 58,A6U u&on filing of a bond to be fi4ed by the Court# 2his motion was reiterated on A&ril 65" ,-61" !ay 65" ,-61 and August ,@" ,-61# *ater" on )e&tember 5" ,-61" a su&&lemental motion was filed in order to include a similar &rayer regarding the ,-6186/ &roduction# On )e&tember 66" ,-61" the Court issued the following resolution3 MIn #R# 7o# *8,--15" Associacion de Agricultores" etc# vs# 2alisay8)ilay !illing" etc#" acting on a&&ellees su&&lemental &etition dated )e&tember 5" ,-61" the Court directed the a&&ellant Central to issue escrow Huedans covering the 58,A6U of the sugar &roduction for ,-668-61 $&resently stored in its warehouse" .-"@@@ &iculs of sugar% in the joint name of the Associacion de Agricultores de 2alisay8)ilay" Inc#" the 2alisay8)ilay !illing Co# and the )ecretary of *abor" said escrow Huedan to be dis&osed only by unanimous action of said three &arties" and the &roceeds of the sale" if any" to be de&osited with the Phili&&ine 7ational Ban< under )avings Account 7o# ,5,65@ in trust for said entities" as in the &revious cro& years# M:ith the understanding that this order having been issued only for the &reservation andAor timely mar<eting of the said sugar cro&" does not decide the Huestion whether it could or should be included in this a&&ealed litigation or should be dis&osed of in the Civil Case 7o# 5,@/ of the 7egros Occidental Court entitled N2alisay8)ilay Industrial" etc# vs# 2alisay8)ilay !illing Co#" etc#N which defendant8a&&ellant mentioned in its latest N!anifestation#NM $b% On October 1," ,-61" &laintiffs8a&&ellees filed a su&&lement to the aforementioned &etition dated )e&tember 6" ,-61 as<ing the Court to resolve the matter referring to the ,-6186/ &roduction" which had been left out" claiming at the same time that the dis&uted &ortion should be ,@U# 2he C+72RA* filed its o&&osition on the ground that it was no longer the o&erator of the mill" the same having been leased for three cro& years the 2alisay8)ilay Industrial Coo&erative Associacion $hereinafter referred to as 2A)ICA%" beginning with the cro& year ,-618,-6/# As a matter of fact" the dis&uted &ortions of the cro& years ,-66861 and ,-6186/ were already the subject of litigation in Civil Case 7o# 5,@/ of the Court of 0irst Instance of 7egros Occidental" entitled M2alisay8)ilay Coo&erative Associacion vs# 2alisay8)ilay !illing Co#" Inc#"M an action of inter&leader filed by 2A)ICA as<ing that the C+72RA* and the P*A72+R) be made to litigate between themselves in regard to the dis&uted &ortion of those cro& yearsN &roductions# 2he )ecretary of *abor filed a motion on 7ovember 5" ,-61 su&&orting the motion of &laintiffs8 a&&ellees# On 7ovember 5" ,-61" the Court resolved that Mthe CourtNs resolution of )e&tember 66" ,-61 in connection with the 58,A6 &ercent of the sugar &roduction for ,-668,-61 shall be a&&licable and e4tended to the same &ortion of the sugar cro& year ,-6186/ under the same terms and conditions#M It will be noted that the P*A72+R) referred to the dis&uted &ortion as amounting to ,@U" whereas Our resolution mentioned only 58,A6U# According to the P*A72+R)" although the total &roduction in the 2alisay8)ilay mill that year was less than ,"6@@"@@@ &iculs" there should be added to it what were milled by some of the &lanters in the Bacolod8!urcia and !a8ao sugar centrals and with said addition" the total would e4ceed ,#6! &iculs# :e reserved the resolution of that issue until the decision of the case# $c% On (ecember ,6" ,-61" the 2A)ICA filed a s&ecial a&&earance Huestioning Our jurisdiction over the incident" contending that it was the lessee of the central of a&&ellant milling com&any and miller beginning with the cro& year ,-618,-6/" and inasmuch as the &leadings in the trial court covered only u& to cro& year ,-6,866" the subseHuent cro& years should be the subject of another case" and" further" that since it is not a &arty herein" it could not be legally subjected to any resolution issued by the Court in this case# An o&&osition and counter&etition was filed by the P*A72+R) and the )ecretary of *abor on (ecember 6," ,-61# 2he Court resolved" on (ecember 61" ,-61" to defer action on that matter of jurisdiction until the case is considered on the merits# $d% On !arch 6@" ,-6/" the manager of 2A)ICA invalidated the escrow Huedans covering the dis&uted 58,A6 &ercent of the cro& year ,-6186/" for which reason the P*A72+R) filed a &etition on !arch 65" ,-6/ to hold 2A)ICA in contem&t of court and to declare without force and effect the invalidation made by it of the escrow Huedans# On !ay ,." ,-6/" the Court li<ewise resolved to defer action thereon until this case is decided on the merits# $e% On A&ril 6" ,-6/" the )ecretary of *abor filed an urgent motion as<ing the Court to declare illegal and violative of Our Resolution of 7ovember 5" ,-61 the act of 2A)ICA of allowing the diversion of 2alisay8)ilay canes to the Bacolod8!urcia !illing Co#" Inc# and to issue a restraining order or writ of &reliminary injunction &rohibiting said diversion# 2he P*A72+R) joined said &etition on A&ril ,5" ,-6/# After hearing the &arties on !ay 65" ,-6/" on the same date" the Court resolved to deny the &rayer for &reliminary injunction" since" anyway &etitioners may just the same &rotect their interests by &roducing or com&elling the &roduction of the milling record of any sugar that might be so diverted# $f% )ince the resolution of 7ovember 5" ,-61 remained unim&lemented" on August 6," ,-6/" the P*A72+R) filed a &etition &raying for an order directing 2A)ICA andAor the )ugar Kuota Administrator to issue Huedans covering the dis&uted &ortion of the &roduction for the cro& year ,-618,-6/# On )e&tember 6." ,-6/ :e ordered the issuance of escrow Huedans in the joint names of the A)OCIACIO7" the )ecretary of

*abor" and 2A)ICA" and the sugar covered by the Huedans to be sold u&on the unanimous consent of the three &arties and the &roceeds to be de&osited with a new ban< in trust for all said &arties" without &rejudice to resolving later the Huestions of jurisdiction and of the sharing8 &artici&ation for the cro& year ,-6186/# 6 $g% '&on &etition of the P*A72+R)" on 9une 6" ,-65" the Court li<ewise directed the issuance of escrow Huedans covering the dis&uted &ortion of the &roduction for the cro& year ,-6/865 in the joint names of the A)OCIACIO7" 2A)ICA" and the )ecretary of *abor" to be dis&osed of under the same conditions as the dis&uted &ortion of the &receding cro& year# $h% )imilarly" u&on &etition also of the P*A72+R)" on !ay 65" ,-66" :e ordered the issuance of escrow Huedans covering the dis&uted &ortion of the sugar &roduction for the cro& year ,-658,-66 under the same conditions as the dis&uted &ortion of the &receding year# $i% In a resolution of 0ebruary ." ,-65" the Court resolved merely to note the contents of the manifestation of the P*A72+R) &raying for the dis&osal of the dis&uted &ortion of the &roduction for the cro& year ,-668,-65 and to consider the controversy relative thereto when the case is decided on the merits# $j% 2here are other motions and manifestations and o&&ositions and counter8motions filed by the &arties" but they all deal basically with the issues of $,% whether or not this Court has jurisdiction to resolve matters related to the cro& years subseHuent to that of ,-6@8,-6, covered by the decision of the trial court and the su&&lemental &leadings submitted before said decision and $6% whether or not this Court has acHuired jurisdiction over 2A)ICA for the &ur&oses of this case# '&on motions filed by each of them" Attys# Roman OCaeta $now deceased%" 9ose +# Romero $also already deceased%" and +nriHue Belo" and the law firm of 2aQada" 2eehan<ee and Carreon" were allowed to a&&ear as amici curiae in this case# 2he Court has duly considered the &oints they have discussed and the arguments they have advanced and is a&&reciative of their valuable assistance# **&hil *ong after these cases had been submitted for resolution and when :e were already finaliCing Our decision" all of a sudden" on 9une 1@" ,-5." the a&&elleesN counsel filed a motion &raying for another oral argument" which was subseHuently joined by &rivate counsel a&&earing for the laborers# Over the o&&osition of a&&ellant C+72RA*" the Court granted said motion and set the hearing on )e&tember 6" ,-5. but this was first &ost&oned to October ,@" ,-5. and later reset on 7ovember ,5" ,-5." after which" the P*A72+R) filed in addition to their !emorandum in Am&lification of Oral Argument dated 7ovember ,5" ,-5." a motion and manifestation dated (ecember ," ,-5." while on the other hand" the C+72RA* filed a su&&lemental memorandum dated (ecember 6" ,-5.# At the hearing" the new counsel for the C+72RA*" Assemblyman +mmanuel PelaeC" formally withdrew the C+72RA*Ns first and second assignments of error in its brief relative res&ectively to the alleged disHualification of the trial judge and to the challenge against the constitutionality of Re&ublic Act .@-# 2his withdrawal was reiterated in the C+72RA*Ns su&&lemental memorandum dated (ecember 6" ,-5. which added its si4th assignment of error among those it is withdrawing# Considering" however" that actually" such withdrawal of the first and second assignments of error was made after the case had long been submitted for decision" and anyway the two issues concerned have already been sufficiently discussed by the &revious counsels of the &arties" as well as by the amici curiae" both orally and in writing" the Court has o&ted to nevertheless &ass on the assignments of error referred to" in view of the transcendental im&ortance of said issues" &articularly those vis8a8vis the constitutional &rovisions on social justice and freedom of contract and the &olice &ower of the state to regulate the relations among the three main elements of the sugar industry in the Phili&&ines" the &lanters" the millers and the laborers# As will be e4&lained later" :e are also disregarding the withdrawal of the si4th assignment of error# 2he case was deemed resubmitted for decision as of (ecember 6" ,-5.# OPI7IO7 2he C+72RA* has assigned seven errors allegedly committed by the trial court# 2he *uCon )urety Com&any has assigned two# On the other hand" the &laintiffs8a&&ellees" aside from refuting the assignments made by the a&&ellants" have made a counter8assignment of three alleged errors# 2o sim&lify and abbreviate discussion" and considering that the su&&osed errors of the trial court counter8assigned by a&&ellees are inse&arably related to some of the errors alleged by a&&ellant Central" :e shall resolve a&&elleesN counter8assigned errors together with the errors assigned by the Central to which they res&ectively corres&ond# I 2he C+72RA*Ns first assigned error is as follows3 M2G+ 9'( + A K'O :GO" 7O2:I2G)2A7(I7 2G+ P+7(+7CO O0 2GI) CA)+ B+0OR+ GI!" +7 A +( A22O# 9O)+ A0RICA O0 2G+ P*A72+R) A) GI) O:7 *A:O+R" RAD+*O DIO*A2+( 2G+ CA7O7) O0 9'(ICIA* +2GIC) A7( )+RIO')*O +RR+( I7 A02+R:AR() I7)I)2I7 2GA2 I2 )2I** :A) GI) BO'7(+7 A7( '7ADOI(AB*+ ('2O 2O CO72I7'+ 2O PR+)I(+ I7 A7( (+CI(+ 2GI) CA)+; $,% Because" in soliciting" contracting" andAor acce&ting the services of Atty# 9ose Africa of the &lanters as his own lawyer" the 9udge a Huo had most im&ro&erly &laced himself under obligation to said counsel for the &lanters" who" in the ordinary course of nature and the ordinary habits of life" would &resumably not acce&t and" much less" demand &ayment for his services rendered to the 9udge; $6% Because" in accordance with the s&irit and intent of our law" as inter&reted by this Gonorable Court in the case of utierreC vs# )antos $ #R# 7o# *8,5.6/%" the judge a Huo and client of Atty# 9ose Africa of the &lanters had thereby disHualified himself to further &reside and render judgment in this case; $1% Because" in accordance with recogniCed juris&rudence" also cited and relied u&on by this Gonorable Court in the same case" Ndue &rocess of law reHuired a hearing before an im&artial and disinterested tribunal;N that Nsecond only to the duty of rendering a just decision is the duty of doing it in a manner that will not arouse any sus&icion as to its fairness and the integrity of the 9udge;N and Nthat no 9udge shall &reside in a case in which he is not wholly free" disinterested" im&artial and inde&endent# And in relation to this alleged error" the C+72RA* &rays3 M2hat 9udge Carmelino Alvendia be declared legally disHualified" within the intention and meaning of )ection ," Rule ,66 of the Rules of Court $Rule ,15 of the Revised Rules of ,-5/% and that therefore his decision and all &roceedings in this case be declared null and void#M 2he issue thus &osed is doubtless interesting and im&ortant# But in the &eculiar &remises of the instant case" :e do not deem it necessary to run once more thru the whole gamut of juris&rudence here and elsewhere elucidating on the high ethical &rinci&les that should guide a judge in every case where" because of <nown relation he has with any of the &arties or counsel before him" which although not included e4&ressly in any law or rule among the disHualifications for him to ta<e cogniCance thereof" may yet leave room for doubt as to his absolute im&artiality# )uffice it to say that if for one reason or another not amounting to evident bad faith and deliberate malintention" a judge in such a situation continues to act L for undeniably" there are men endowed with im&regnable integrity who can unHuestionably rise above the feared com&ulsions of

otherwise sus&icious circumstances L the remedy does not lie in the outright invalidation and setting aside of his actuations# 2he ultimate test this Court has established in such a mileu is for the a&&ellate tribunal to determine from the record whether or not actually the &arty com&laining has been de&rived of a fair and im&artial trial" and in the affirmative" to corres&ondingly grant a new trial# $(ais vs# 2orres" 55 Phil# .-5#% **&hil Indeed" in the case at hand" it is not im&erative to rule on any &ossible bias on the &art of the trial judge# As :e have indicated earlier" this case was submitted for decision of the trial court on the basis e4clusively of various agreed sti&ulations of facts of the &arties" accom&anied by corres&onding undis&uted documents# 7o oral evidence was &resented by any of them# 2here was" therefore" no &ossibility that the trial judge had either admitted or rejected any &iece of evidence im&ro&erly or in violation of any rule over the objection of anyone of them# 7either do :e have to accord the usual deference given by a&&ellate courts to any of his findings of fact on account of his having been better situated to a&&reciate the credibility of any witness# 2he com&lete record of the agreed sti&ulations of the &arties and the &ertinent accom&anying documents are before 's for our own first hand e4amination" consideration and a&&reciation# :e are entirely free to draw our own conclusions from them without any regard to what a&&ear in the a&&ealed decision# 7eedless to say" the rulings on Huestions of law therein are com&letely o&en to our review# In the last analysis" therefore" no substantial &rejudice to the right of the &arties to a just" fair and legal determination of the issues herein can be caused by rejecting a&&ellant CentralNs &rayer for annulment of the decision under review# On the contrary" with the time that has &assed since this a&&eal came to this Court and in view of the unusually long list of e4hibits attached to the sti&ulations $from +4hibit A to +4hibit RRRRRR" with subsidiary numbers% it would be most im&ractical and unfair to all concerned for 's to send this controversy bac< to the trial court" just so all of these sti&ulations and e4hibits may be the subject of another decision by a different judge" who will have to study them all over again before he renders his decision" which inevitably will have to be a&&ealed to 's" and no one <nows how many years again such re&etitive &rocedure will ta<e# Accordingly" the C+72RA*Ns &rayer for annulment must be" as it is hereby" overruled# II )econdly" the Central" thru counsel" Atty# Dicente Gilado" assails the trial courtNs negative resolution of the constitutional issues raised by it# According to the Central3 M2G+ 9'( + A K'O A7( C*I+72 O0 A22O# 9O)+ A0RICA O0 2G+ P*A72+R) +RR+( I7 7O2 (+C*ARI7 R+P'B*IC AC2 .@'7CO7)2I2'2IO7A* A7( 7'** A7( DOI(; M$,% Because Police Power is a law of necessityN which can be e4ercised by the )tate only when necessary to &rotect the interest of the &eo&le in general; but not just to favor" and increase the &rofits of a &articular grou& or grou&s of sugarcane &lanters and their own laborers" at the e4&ense of the sugar centrals; in clear violation of the constitutional &rohibition against class legislation and denial of the eHual &rotection of the laws; M$6% Because it seems to us most illogical and unreasonable to assume that the sugar industry in any milling district could not be saved" unless the &lanters therein are given s&ecial &rotection and treatment" so as to increase their &rofits; while the same industry in other milling districts could very well be saved without giving the &lanters therein eHual &rotection and treatment to increase their own &rofits; M$1% Because it seems to us eHually illogical and unreasonable to assume that the sugar industry in any milling district could very well be saved without giving the &lanters therein such s&ecial &rotection and treatment to increase their &rofits" when 0ifty8one $5,% out of every One hundred $,@@% of them have written milling contracts with the miller in their district" M$/% Because" it seems to use li<ewise illogical and unreasonable to assume that the interest of the &eo&le in general reHuires that only the laborers of the &lanters in the milling districts where the majority of their em&loyers have no written milling contracts with the miller in their district should" at the e4&ense of the Central" be so favored and so discriminatory given higher and additional com&ensations over and above the minimum wage fi4ed by law for all other laborers in the country; but not those in districts where the majority of their em&loyers have such milling contracts with the miller in their district; M$5% Because it seems to us also illogical and unreasonable to assume that the interest of the &eo&le in general reHuires that the &lanters $big or small% in the bigger milling districts be given higher &artici&ations or shares in the sugar &roduced from their sugarcane than the &lanters $big or small% in the smaller milling districts#M $P&# c8d" CentralNs Brief#%# 9oining the Central in this &osture are the amici curiae" the late 9ustice Roman OCaeta and Ambassador 9ose +# Romero and Atty# +nriHue !# Belo# On the other hand" aside from 9ustice !arceliano !ontemayor and the law office of )an 9uan" Africa and Benedicto" counsel for the &laintiff8a&&ellee association and the sugar &lanters" Attys# Paciano Dillavieja and Porfirio Dillanueva of the (e&artment of *abor and the other amici curiae" the law office of 2aQada" 2eehan<ee and Carreon" have &resented to the court the o&&osite view# &rcd :e have carefully considered the &ros and cons forcefully and brilliantly discussed by this array of learned legal luminaries" and it must be stated that their res&ective scholarly and illuminating dissertations on the various constitutional Huestions herein raised have considerably made the wor< of the Court much easier# LAL R+P'B*IC AC2 .@- I) A )OCIA* 9')2IC+ A7( PO*IC+ PO:+R !+A)'R+ 0OR 2G+ PRO!O2IO7 O0 *ABOR CO7(I2IO7) I7 )' AR P*A72A2IO7)" G+7C+ :GA2+D+R RA2IO7A* (+ R++ O0 CO7)2RAI72 I2 +P+R2) O7 0R++(O! O0 CO72RAC2 A7( +PI)2I7 CO72RAC2'A* OB*I A2IO7) I) CO7)2I2'2IO7A**O P+R!I))IB*+# (es&ite very strongly &ersuasive arguments to the contrary of the distinguished lawyers su&&orting the &osition of the centrals" the Court has arrived at the conclusion that Re&ublic Act .@- was conceived and enacted as a social legislation designed &rimarily to ameliorate the condition of the laborers in the sugar &lantations" and the fact that at the same time the &lanters would also be benefited by it does not detract from if it does not add to such basic &ur&ose of the Act# :e do not deem it necessary to ma<e here an e4tended historical account of how the statute came into being# 2he following observations of the trial court which" as the record reveals" are more or less basically accurate should suffice" to Our mind" to &roject the social s&irit that animated the legislature3 M!oreover" Re&ublic Act 7o# .@- see<s to reduce the ineHuality in the benefits being received by the Central and the laborers" It should be noted that under )ection - of the law" 6@U of the increased &artici&ation shall be given to the laborers and /@U for the &lanters# 2he a&&lication of the Act would go a long way towards &romoting better relations between the laborers on one side and the &lanters and the Central on the other side# M2he almost yearly recurrence of stri<es in the farms by the laborers has for its root cause discontent generated by the inadeHuate earnings of the laborers# 2heirs is a miserable lot for they do not earn enough to give their families the minimum needed to maintain a decent living in a civiliCed society" not to mention the e4&enses necessary for the education of their children#

MOn the other hand" the &lanters are not without their &roblems# 2hey have to bear the e4&enses of cultivation of the land which includes the cost of the seeds and fertiliCer# 2hey have to &ay their ta4es# 2hey have to assume the unforeseen ris<s incident to raising and &roducing the sugar cane li<e drought" locusts and the li<e# And when the sugar cane is about ready for milling" there is the added danger of fires which not infreHuently reduce the harvest to an amount which is not enough to cover the e4&enses in &roducing the cane# MConsidering that the share of the Central is entirely its own" and that the share of the &lanters includes that of the laborers and" therefore" has to be divided between them" a small increase in the &ercentage of distribution of the yearly cro& de&ending u&on an increased &roduction is" in the o&inion of the Court" just and eHuitable# MOears ago" when the sugar industry was just being develo&ed and moderniCed" with the introduction in the Phili&&ines of machinery to re&lace the crude and antiHuated means of e4tracting sugar from the cane" it was necessary to induce ca&italists to invest big sums in building sugar centrals# 2heir ca&ital has already been recu&erated &lus allowance for reasonable earnings yearly# At &resent" the only e4&enses of the Central consists of the maintenance of its eHui&ment" the re&lacement of worn out &arts" the fuel consumed during the milling season and the salaries of &ersonnel# Certainly" the Centrals are now in a &osition to contribute to the burden of &roducing the cane and to solve the &erennial labor &roblems caused by the discontent of laborers arising from their meager income# 2his &roblem is a constant threat to the very e4istence of the sugar industry# MRealiCing this danger to the biggest industry of the country" the late President KueCon caused a survey of the causes of the discontent of the laborers and the recurrent trouble in the sugar regions# 2he re&ort submitted by the late !r# 9ustice !oran after he investigated the boo<s of the Centrals and those of the &lanters" advocated very strongly the necessity of a new and better sharing &lan for the sugar &lanters# MA bill similar to Gouse Bill 7o# ,5,5 which finally became Re&ublic Act 7o# .@- was &assed by Congress in ,-5," but the same was vetoed by the President# !embers of both houses of the *egislative a&&roved Re&ublic Act 7o# .@- because they found it necessary to save the countryNs biggest industry# :hen the welfare of the &ublic is at sta<e" the state may" in the e4ercise of its &olice &ower" enact legislation which may cause harm or injury to a certain class of the inhabitants as long as it benefits the greater majority# 2he welfare of the &eo&le is the su&reme law#M $(ecision of *ower Court" &&# /@-8/,6 of the CentralNs Record on A&&eal#% 2he &rimary &ur&ose of the law to insure that the sugar &lantation wor<ers are &aid just wages is" indeed" stated by the authors themselves of the law in the e4&lanatory note of their bill" G# 7o# ,5,5 thus3 cd&hil M2he necessity for increasing the share of the &lanters and the laborers in the income derived from the sugar industry for its stabiliCation is not a new Huestion but an admitted fact even before the outbrea< of :orld :ar II# MOn 0ebruary 61" ,-1." President KueCon a&&ointed 9ustice !anuel D# !oran to ma<e a study of the Ndistribution of sugar resulting from the milling of sugar8cane between the centrals and the &lanters with a view to ameliorating the condition of the &lantersN laborersN" and after an e4haustive investigation covering several months" 9ustice !oran filed his re&ort on A&ril 1@" ,-1-" recommending an increase in the &artici&ation of sugar &lanters" even in violation of e4isting milling contracts" contending that such a law is constitutional as a valid e4ercise of the &olice &ower of the state# 2he 7ational )ugar Board created by +4ecutive Orders 7os# ,55 and ,6." which made another investigation of the sugar industry" in its re&ort to the President of the Phili&&ines on August 6" ,-1-" confirmed &ractically the findings of 9ustice !oran#M $A&&elleesN Brief" &&# 5185/#%# One &articular legislative incident should dis&el all doubts about the overriding intent of Congress in a&&roving the Act" which" although by its title" a&&ears to be only to regulate the relations among the &ersons engaged in the sugar industry" is in fact to im&rove the living conditions of the laborers in the farms# )ection ,@ of the original bill" G# 7o# ,5,5" reads this wise3 M)+C# ,@#+ffective u&on the a&&roval of this Act" the daily wage of sugar farm wor<ers shall be in accordance with the following scale3 M$a% In milling districts where the &artici&ation between &lanters and central is 6@U for the &lanters and /@U for the central" the sugar farm laborers shall receive a minimum daily wage eHuivalent to ,@U of the average mar<et &rice of e4&ort sugar &er &icul of the &receding year" as declared by the Bureau of Commerce" including free lodging; but in no case shall sugar farm laborers be &aid a daily wage of less than P,#6@ and free lodging# M$b% In milling districts where" under the &rovisions of section one hereof" the &artici&ation of the &lanters is over 6@U" the sugar farm laborers shall receive in addition to the minimum daily wage &rovided for in &aragra&h $a% of this section" an additional rate of P@#,@ &er every ,U increase in &artici&ation beyond 6@U#M +vidently" this &rovision was inserted in the bill to give it the social ingredient without which President Kuirino felt any regulation fi4ing the sharing &ro&ortion between only the millers and the &lanters would be unconstitutional" not only for im&airing contractual obligations but for in effect denying altogether to said &arties the freedom to contract" hence his veto of the original bill# +ven then" when the bill reached the )enate" the consensus among the senators was that it was im&erative that the laborers be given a &ro&ortionally bigger benefit than what the &lanters were to get from the latterNs increased share &ro&osed in the Gouse Bill# 2he records of the )enate deliberations on this &oint showing how )ection - as it now a&&ears was molded unmista<ably su&&ort Our conclusion" On &# 5/- et seH# of the Congressional Record" )econd Congress of the Re&ublic of the Phili&&ines" 2hird Regular )ession" Dol# III" 7os# 16815" !arch ,5 R ,." ,-56" it is recorded thus3 M)enator !O72A7O# !r# President" I have another amendment to offer" but before I do so I wish to ma<e a statement# M2his is a joint amendment of )enators Puyat" (elgado and myself" but before offering it" I wish to state that it was my intention to file an amendment that reads as follows3 N2he &roceeds of any increase in the &artici&ation granted the &lanters under this Act over and above their &resent share shall accrue to the e4clusive benefit of the laborers of the said &lanters in terms not only of wages but also of living conditions" and said &roceeds shall be &laced under the control and administration of the (e&artment of *abor#N MGowever" since legislation not only is the ultimate result of logical &resentation and argument but also of com&romise" the gentleman from Bulacan" )enator (elgado" and the gentleman from Pam&anga" )enator Puyat" have e4&ressed their desires to su&&ort an amendment similar in nature only of lesser im&act to the &lanters# )o" therefore# I am offering this joint amendment of )enators Puyat" (elgado and myself3 MOn &age 5" stri<e out the whole of )ection ,@ from line / to line ,. and in lieu thereof" insert the following3 N2G+ PROC++() O0 A7O I7CR+A)+ I7 2G+ PAR2ICIPA2IO7 RA72+( 2G+ P*A72+R) '7(+R 2GI) AC2 OD+R A7( ABOD+3 2G+IR PR+)+72 )GAR+ )GA** B+ (IDI(+( B+2:++7 2G+ P*A72+R A7( GI) *ABOR+R) I7 2G+ P*A72A2IO7 I7 2G+ 0O**O:I7 PROPOR2IO73 )IP2O P+R C+72'! O0 2G+ I7CR+A)+( PAR2ICIPA2IO7 0OR 2G+ *ABOR+R) A7( /@ P+R

C+72'! 0OR 2G+ P*A72+R)" 2G+ (I)2RIB'2IO7 O0 2G+ )GAR+ CORR+)PO7(I7 2O 2G+ *ABOR+R) )GA** B+ !A(+ '7(+R 2G+ )'P+RDI)IO7 O0 2G+ (+PAR2!+72 O0 *ABORN# 444 444 444 M)enator !O72A7O# !r# President" I shall &roceed now to ma<e a statement on the amendment &resented by )enators Puyat" (elgado and myself" !r# President" if there was any reason adduced in su&&ort of the measure under consideration fi4ing the new arrangements in the division of the &roduce in the sugar &lantation and centrals" there was no argument more &otent" more convincing than the su&&osed benefit that labor would ultimately rea& from these new arrangements# +ven the e4&lanatory note to the bill under consideration lays &ro&er stress on this &hase of the issue before the Congress today" that is" that the &ro&onents of the &resent amendment desire to im&rove the lot of the &lanters by an increased share in the cro& so that they will then be in a &osition to &ay more to their laborers in the farm# MIn consonance with this belief" we the &ro&onents of this amendment have seen fit to &resent a modification to the bill in the sense that any and all increases that will accrue to the &lanters by virtue of the bill" shall be divided in such &ro&ortion as to give 6@ &ercent to the laborers and /@ &er cent to the &lanters# Before &resenting this amendment" I made a &reliminary statement to the effect that it was my intention to &resent an amendment which would give to labor in the &lantations all the benefits that would accrue to &lanters by virtue of the &assage and a&&roval of this bill# 2hat was my intention" gentlemen" because it is a <nown fact" it is a common belief in this country" that of all agricultural &lanters" the sugar &lanters are the most benefited no only by the legislations already &assed by Congress but by the &rogress of the sugar industry# M$+n este momento el Presidente Protem&ore ocu&a la &residencia" &or designacion de la !esa%# MPR+ '72A) (+* )+7# O)IA)# M)enator O)IA)" !r# President" may the gentleman be interru&ted at this &oint for a HuestionS :ill the gentleman <indly yieldS M2he PR+)I(+72 PRO 2+!POR+# 2he gentleman may yield" if he so desires# M)enator O)IA)# I just want to follow the trend of thought of the gentleman" which I thin< is in the right direction# But may I <now from him the share that is alloted by this amendment to the &lanters and the laborersS M)enator !O72A7O# )i4ty &er cent of any increase is alloted to the laborers and forty &er cent to the &lanters# M)enator O)IA)# !ay I announce that in due time I shall submit an amendment to the amendment to ma<e it 5@85@# 2hat is just an announcement" and I than< the gentleman for having &ermitted me to inter&ellate him# M)enator !O72A7O# $Continuing% !r# President" of all the &eo&le in this country who live by cultivating the soil" the sugar &lanters" es&ecially those in the &rovince of 7egros" are <nown to be the most &ros&erous# 2here are even claims among those who o&&ose the bill" that there is no necessity for the &resent &lant to increase the &artici&ation of the &lanters# 2here as a time when the whole country witnesses sugar &lanters and sugar barons from 7egros who lived lu4uriously" and remembering this" many of our countrymen believe that their &resent claim that they cannot even &ay their laborers decently has no basis in fact# 2he original bill !r# President and gentleman" des&ite the claim that it will benefit labor" does not in fact do that" because the said bill &rovides that in those &lantations where the increased share of the &lanters does not e4ceed 65 &er cent" labor shall not receive any benefit from the increased &artici&ation of the &lanters because" in those &lantations the minimum wage law which already benefits labor shall govern# 2he original te4t of the bill is no other than that the laborers shall &artici&ate only in the increase where the &artici&ation given to the &lanters is over and above 65 &er cent# M entlemen" there is a &otent grou& which comes to Congress and &leads for an increase in the &lantersN &artici&ation in the sugar cro&" under the &rete4t of giving more &artici&ation to labor" but with this bill" gentlemen of the )enate" the Congress is miserably misled because if these &lanters do not receive more than 5 &er cent above the basic 6@ &er cent" the laborers will not receive any benefit from that increased &artici&ation of the &lanters# M!r# President" I am glad that the gentleman from *a 'nion" who announced his intention to file an amendment to my amendment by reducing the share of labor from 6@ &er cent to 5@ &er cent" will give his <ind su&&ort to an amendment that will truly benefit labor and the sugar &lanters# I am glad" but at the same time" I regret that such a distinguished gentleman" and future &residential candidate" shall double the reasonable ,@ &er cent reduction in the 6@8/@ sharing L 6@ for labor and /@ for ca&ital L and ma<e it 5@ for labor and 5@ for &lanters# I res&ect the o&inion of the gentleman from *a 'nion" and I am certain that has a reason for announcing that he would &resent an amendment ma<ing 5@85@ the &ro&ortion which is &ro&osed at 6@8/@ in this amendment# M!r# President and gentlemen L I am now es&ecially addressing myself to the gentleman who announced that he would file such an amendment" because this ,@ &er cent might re&resent the difference between a reasonable standard of living or misery for the laborers" but the ,@ &er cent deducted from the share of the &lanters" es&ecially when the &lanters come from 7egros" will not diminish their lu4urious standard of living# )o" I &lead now" !r# President and gentlemen" that if the gentleman from *a 'nion really wishes to su&&ort the noble &ur&ose behind our amendment" he should do it without reducing the minimum 6@ &er cent &ro&osed to be given to labor to 5@ &er cent" because as I said" that ,@ &er cent might re&resent the difference between misery or an ameliorated lot for the farm laborers# M!r# President" I than< you# M!A7I0+)2ACIO7+) (+* )+7# O)IA)# M)enator O)IA)# !r# President# M2he PR+)I(+72 PRO 2+!POR+# entleman from *a 'nion# M)enator O)IA)# :hen I rose to object an inHuiry to the gentleman from Cavite" who is s&onsoring this amendment" I did so because I wanted to be enlightened on the reasons that motivated the &resentation of this amendment# At the time" I recalled that when this bill under consideration was first &resented" there was no minimum wage law# (uring the &eriod that had ela&sed from the &resentation of this amendment# At the time" I recalled that when this bill under consideration was first &resented" there was no minimum wage law# (uring the &eriod that had ela&sed from the &resentation of the original bill to the &resent L through the various tortous &rocesses that it had to undergo and finally its veto by the Chief +4ecutive L a minimum wage law which is very advantageous to labor and wage earners had been ta<en into consideration# M!r# President" the fundamental consideration that &rom&ted me to give my vote and su&&ort to this measure affecting the sugar industry was that" while admitting that there should be no conflict between central owners on the one hand and &lanters from the other" in the event that there is an unavoidable conflict between these two" my heart instinctively and by conviction goes out to the su&&ort of the &lanters because" they are the owners of the land" and I consider the ownershi& of land in our country as one of the last bulwar<s" if not the last" of democracy in the Phili&&ines#

MIn the course of my brief s&onsorshi& during this session" !r# President" I stated that I would give my vote and su&&ort to this bill" because my thoughts and actuations in this august body in matters of this nature have always been to consider always human rights above &ro&erty rights# M2his amendment see<s" as it does" to benefit not only the &lanters but also the laborers# I want to announce that I desist from my original intention to &resent an amendment to the amendment" and that I shall vote for this amendment offered by the gentlemen from Cavite" Pam&anga and Bulacan# M!A7I0+)2ACIO7+) (+*# )+7# P'OA2# M)enator P'OA2# !r# President# M2he PR+)I(+72 PRO 2+!POR+# $ entleman from Pam&anga and !anila# M)enator P'OA2# !r# President and gentlemen of the )enate3 As a co8author of this amendment" I &lead earnestly for its a&&roval" if for no other reason than that the a&&roval Or this amendment will be a belated act of justice in favor of the laborers wor<ing in an industry which has made thousands of &eo&le millionaires" and which industry at the same time" allows its laborers to subsist on wages of 1@ to /@ centavos a day# It is a sad commentary on any economic system where the u&&er class becomes richer and yet the foundation of the industry L labor L remains in that miserable economic state in which it started# And if we will carry out the s&irit of this bill" !r# President" if we have to be consistent" may I comment that while we are trying to im&rove the &osition of the &lanter" the other factor in &roduction" the laborer" is overloo<ed# )o I say" if we wish to be consistent" we have to ta<e care of that bigger section of the economic field which &recisely is the basis of the industry# M!r# President" I am a &lanter" but at the same time it is <nown that I am the son of a man who started in life as a laborer# 2hus" I understand the &osition of both the &lanter and the laborer# And I say that" to a &lanter one or two thousand &esos more will not ma<e much difference# Oet to an ordinary laborer" an increase of twenty or thirty centavos in his daily wages will mean a bigger meal" a better homes" better o&&ortunities for education and an im&rovement in health for his children# On the basis of this human consideration" !r# President" I &lead that these countless anonymous laborers who have made the sugar industry what it is today" be given this slight increase in their &artici&ation# MI than< you" !r# President# MPR+ '72A) (+* )+7# PRI!ICIA)# M)enator PRI!ICIA)# !r# President will the gentleman may yieldS M2G+ PR+)I(+72 PRO 2+!POR+# 2he gentleman may yield" if he so desires# M)enator P'OA2# I can never refuse the gentleman from Pangasinan" !r# President# M)enator PRI!ICIA)# I wish to state at the outset that I am in favor of this amendment" but one thing stri<es me# 2he amendment" now being s&onsored by Oour Gonor and )enators !ontano and (elgado &ro&oses to stri<e out the whole section ,@ of the original bill which s&ea<s of the !inimum :age *aw# :ould Oour Gonor guarantee that under the &rovision now &ro&osed in substitution of said section ,@" which gives 6@ &er cent of any increase in &artici&ation to the laborers" these laborers will receive at least the minimum com&ensation &rovided for in the !inimum :age *awS M)enator P'OA2# 2he minimum wage &rovided therein is com&ulsory" !r# President# :hether section ,@ is included or not" the &rovisions L of the !inimum :age *aw will have to be a&&lied# M)enator PRI!ICIA)# 2here might be a controversy later on because" under section ,@ of the original bill" the &rovisions of the !inimum :age *aw are to be observed# :ith this amendment" as such &rovision are deleted" which might give rise to the argument later on that it was the intention of the Congress to ma<e ineffective" in this &articular case" the !inimum :age *aw# M)enator P'OA2# Oour Gonor" although I feel that it will be a su&erfluity or a redundancy" to retain that &ortion of the bill which has reference to the a&&lication of the !inimum :age *aw" the s&onsors will offer no objection# M)enator PRI!ICIA)# 0or e4am&le" before the beginning of the &ro&osed amendment in ca&ital letters" I would li<e to insert the following3 N:I2GO'2 PR+9'(IC+ 2O A7O !I7I!'! :A +N# M!A7I0+)2ACIO7+) (+* )+7# (+* A(O M)enator (+* A(O# !r# President" may I just be &ermitted to give briefly the reasons why I joined the s&onsorshi& of this amendmentS M2he PR+)I(+72 PRO 2+!POR+# 2he gentleman from Bulacan has the floor# M)enator (+* A(O !r# President" while I was the Phili&&inesN Resident Commissioner in the 'nited )tates" I had occasion to investigate the living condition of the 0ili&ino laborers in the 'nited )tates# In my travels through Gawaii" uam and other &laces" I had also occasion to receive most com&lementary re&orts regarding 0ili&ino laborers# It is indeed strange that there should be many &eo&le who believe that the 0ili&ino as a laborer in his own country susce&tible to criticism# I attribute this to the manner they are treated and the wages they earn in their own country# MI am therefore co8s&onsoring this amendment" because I firmly believe that it will be an incentive for the 0ili&inos as laborers in their own country to attain the same height of success and industry as the 0ili&inos in America" Gawaii" uam and elsewhere have achieved" MI than< you" !r# President# M+7!I+7(A) PRI!ICIA) A *A) +7!I+7(A) !O72A7O P'OA2 O (+* A(O M2he PR+)I(+72 PRO 2+!POR+# 2he gentleman from Pangasinan may state now his amendment# M)enator PRI!ICIA)# 2he amendment to the amendment that I &ro&ose is as follows3 Insert before the te4t of the amendment in ca&ital letters the words N:I2GO'2 PR+9'(IC+ 2O A7O !I7I!'! :A + *A:N# M)enator !O72A7O# !r# President" may I suggest to the gentleman from Pangasinan the change of the &hraseology to the following3 2G+ PRODI)IO7) O0 2G+ !I7I!'! :A + *A: 7O2:I2G)2A7(I7 # M)enator PRI!ICIA)# 7o" that would carry the reverse meaning# 2hat would be just the o&&osite of what I intended# M2he PR+)I(+72 PRO 2+!POR+# (o the authors of the original amendment acce&t the amendmentS M)enator !O72A7O# !r# President" as announced before" we have no objection to any amendment that would clarify the amendment we &resented" although it is a belief that any amendment tending to clarify it is a su&erfluity since the !inimum :age *aw is already a law# Gowever" we cannot offer any objection to anything that will im&rove the amendment# )o" we acce&t the amendment of the gentleman from Pangasinan# M2he PR+)I(+72 PRO 2+!POR+# Are there any remar<s on the amendment to the amendmentS

M+* )+7# PRI!ICIA) RAIO7A )' +7!I+7(A M)enator PRI!ICIA)# !r# President" I cannot e4actly agree to the claim that the amendment to the amendment is a su&erfluity# )hould the matter come before the courtsM" lawyers will be loo<ing for loo&holes in the law# It is better to be on the safe side# I therefore submit the amendment to the amendment# M2he PR+)I(+72 PRO 2+!POR+# Is the )enate ready to vote on the amendment of the gentleman from Pangasinan to the amendment submitted by )enators !ontano" Puyat and (elgadoS M+* )+7# *A'R+* 0I(+ '7A AC*ARACIO7 M)enator *A'R+*# !r# President" just for a clarification# M2he PR+)I(+72 PRO 2+!POR+# 2he gentleman from Batangas# M)enator *A'R+*# I understand that the amendment as amended will read as follows3 N:ithout &rejudice to any minimum wage law the &roceeds of any increase in the &artici&ation granted the &lanters # # #N etc# (oes it mean that a laborer" who is receiving the minimum wage" will get more" or may be get less when we say without &rejudice to any minimum wage lawSN 2his amendment seems to im&ly that if the laborer is getting the minimum wage and his share &ro&osed in the bill does not reach the minimum wage" the laborer will get the minimum wage and no more" even if he may get more on the basis of the &ro&ortion outlined in the amendment# I wish to be clarified with regard to the meaning of the amendment as &ro&osed to be amended# M2he PR+)I(+72 PRO 2+!POR+# :ill the author of the amendment to the amendment &lease clarifyS M)enator PRI!ICIA)# I thin<" !r# President" we can clarify that by changing the &hraseology in this wise3 NI7 A((I2IO7 2O 2G+ B+7+0I2) RA72+( BO 2G+ !I7I!'! :A + *A: # # #N etc# M)enator *A'R+*" CanNt we say" for instance3 NI7 A((I2IO7 2O 2G+ !I7I!'! :A + 2O :GICG A *ABOR+R I) +72I2*+( # # #N etcS In other words" the laborer will get the minimum wage in all cases" in addition to what he is entitled to under the &ro&osed amendment# If that is the meaning then I su&&ose it should be worded that way L NI7 A((I2IO7 2O 2G+ !I7I!'! :A + 2O :GICG 2G+ *ABOR+R I) +72I2*+( L" then follow the rest# M)enator PRI!ICIA)# 2hen" !r# President" may I as< that my amendment be reworded this way3 NI7 A((I2IO7 2O 2G+ B+7+0I2) RA72+( BO 2G+ !I7I!'! :A + *A:N# M2he PR+)I(+72 PRO 2+!POR+# (o the authors of the amendment acce&t the amendment to the amendment now rewordedS M)enator !O72A7O# :e acce&t the amendment# M2he PR+)I(+72 PRO 2+!POR+# Are there any further remar<s to the amendment to the amendmentS $)ilence% 2he )ecretary will &lease read the amendment to the amendment before we vote# M2he )+CR+2ARO# M2he te4t in ca&ital letters shall be &receded by the following words3 NI7 A((I2IO7 2O 2G+ B+7+0I2) RA72+( BO 2G+ !I7I!'! :A + *A:N# MAPROBACIO7 (+ *A +7!I+7(A PRI!ICIA) A *A +7!I+7(A !O72A7O" P'OA2 O (+* A(O M2he PR+)I(+72 PRO 2+!POR+# 2hose who are in favor of the amendment to the amendment just read" will &lease say AO+# $)everal )enatos# Aye% 2hose who are o&&osed will &lease say 7AO# $)ilence% 2he amendment to the amendment is a&&roved#M $Congressional Record" )enate# 2hird Regular )ession# )econd Congress of the Re&ublic" Dol# III" 7os# 16 R 15" !arch ,5 R ,." ,-56" &&# 5/-" 5568556# Bold letters su&&lied%M# Police Power It is therefore beyond cavil that dealing as it did with the unfortunate &light of the farm laborers crying for just and urgent amelioration and confronted with the usual constitutional objections whenever contractual relations are sought to be regulated" Congress ultimately availed of the stateNs &olice &ower" in the face of which all arguments about freedom of contract and im&airment of contractual obligations have generally been held not to &revail# In *utC vs# Araneta $ #R# 7o# *86.5-" (ec# 66" ,-5-%" this Court recogniCed the &ro&riety of e4ercising &olice &ower when it is needed to do so in order that our sugar industry may be stabiliCed" and to that end" it was held that the legislature could &rovide that the distribution of benefits from the &roceeded of sugar be readjusted among the com&onents of the industry to enable it to resist the added strain of the increase in ta4es that it had to sustain then# :ith at least eHual &ersuasiveness must such reasoning obtain when the readjustment of the distribution of &roceeds is im&elled by the need to render social justice among all the &artici&ants in the industry" s&ecially the laborers# cdll 2rue it is that" as counsel for the centrals contend" &olice &ower cannot be resorted to just any time the legislature wishes" but it is not correct to say that it is indis&ensable that e4ce&tional circumstances must e4ist before &olice &ower can be e4ercised# As very a&tly &ointed out by the able amicus curiae" Attys# 2aQada" 2eehan<ee and Carreon" gone are the days when courts could Mbe found adhering to the doctrine that interference with contracts can only be justified by e4ce&tional circumstancesM" for the Mtest of validity today under the due &rocess clause" even in the case of legislation interfering with e4isting contracts" is reasonableness" as held by this Gonorable )u&reme Court in the case of Peo&le vs# Ieta# 1 In other words" freedom from arbitrariness" ca&riciousness and whimsicality is the test of constitutionality#M $&# ,5" Brief of Amicus Curiae in Behalf of )ilay8)aravia PlantersN Association" Attys# 2aQada" 2eehan<ee and Carreon#% And there is not enough showing here of unreasonableness in the legislation in Huestion# Kuite to the contrary" as will b e discussed anon" :e find all the &rovisions of the im&ugned act to germane to the end being &ursued# )ocial 9ustice But it is not &olice &ower alone that sustains the validity of the statutory &rovision in dis&ute# Gaving in view its &rimary objective to &romote the interests of labor" it can never be &ossible that the )tate would be bereft of constitutional authority to enact legislations of its <ind# Gere" in the Phili&&ines" whenever any government measure designed for the advancement of the wor<ing class is im&ugned on constitutional grounds and shadows of doubt are cast over the sco&e of the )tateNs &rerogative in res&ect thereto" the im&erious mandate of the social justice ideal consecrated in our fundamental laws" both the old and the new" / asserts its majesty" calling u&on the courts to accord utmost consideration to the s&irit animating the act assailed" not just for the sa<e of enforcing the e4&licit social justice &rovisions of the article on M(eclaration of Princi&les and )tate PoliciesM" but more fundamentally# to serve the sacred cause of human dignity" which is actually what lies at the core of those constitutional &rece&ts as it is also the decisive element always in the determination of any controversy between ca&ital 6,nd labor#

2hus" )ection 5 of Article II of the Constitution of ,-15" under the aegis of which the law in Huestion was enacted" made it one of the declared &rinci&les to which the &eo&le committed themselves that Mthe &romotion of social justice to insure the well being and economic security of all the &eo&le should be the concern of the )tate#M !ore s&ecifically in regard to labor" there was also )ection 6 of Article PIP" to the effect that Mthe )tate shall afford &rotection to labor # # # and shall regulate the relation between # # # labor and ca&ital in industry and in agriculture#M 5 It is difficult to conceive of any legislation more a&tly rooted in the declared &rinci&le and the &lain injunction of the old Constitution just Huoted than the Act under discussion which is a law to regulate the relations between the centrals and the &lanters with the &rimordial objective of &rotecting and &romoting the interests of labor# In regard then to the arguments of the centrals relative to due &rocess and the sanctity of contractual obligations as well as the freedom of contract" :e hold that more cogently than in regard to the e4ertion of &olice &ower as discussed above" the criterion for determining whether or not social justice has been overe4tended in any given case is nothing more than the economic viability or feasibility of the &ro&osed law in favor of labor" and certainly not the e4istence of e4ce&tional circumstances# In other words" as long as ca&ital in industry or agriculture will not be fatally &rejudiced to the e4tent of incurring losses as a result of its enforcement" any legislation to im&rove labor conditions would be valid" &rovided the assailed legislation is more or less demanded as a measure to im&rove the situation in which the wor<ers and laborers are actually found# And in the case at bar" there is not even a &retension that the finances of the centrals would be anywhere in the red as a result of the enforcement of Re&ublic Act .@-# In the light of the foregoing considerations" :e do not find the &osition of the Central that )ection , of Re&ublic Act .@- interferes unconstitutionally with e4isting contracts and the freedom of all the &arties concerned in entering into new ones to be sufficiently &ersuasive# Cd&r LBL 2G+ AC2 (O+) 7O2 DIO*A2+ 2G+ +K'A* PRO2+C2IO7 C*A')+# 7o uneHual &rotection of the laws It is ne4t argued that the challenged Act denies eHual &rotection of the laws in several ways to the different grou&s of laborers in the sugar industry# 0or instance" it is &ointed out that whereas it alleviates the condition of the wor<ers in some sugar &lantations" it does not &rovide for similar treatment to the laborers in the centrals# In fact" it is stressed" even among those wor<ing in the sugar farms" there is uneHual treatment" not only because )ection , of the law e4&ressly e4cludes from its a&&lication milling districts with centrals having an actual &roduction of less than one hundred fifty thousand &iculs of refined sugar" but also according to the schedule &rescribed in the same section" the share of the &lanters together with the resultant share of the laborers is made &ro&ortional to the amount of &roduction of the corres&onding mills instead of being uniform# )o also it is decried that even as among milling districts &roducing not less than ,5@"@@@ &iculs" only the laborers wor<ing in the &lantations within the districts where the majority of the &lanters do not have written milling contracts with the res&ective centrals are entitled to the benefits ordained by the law and not all the laborers in all &lantations where the &lanters have been given increase in their shares" regardless of the e4istence of such majority# L,L Considering the &ur&ose of the law" the bigger share given to &lanters in districts with bigger centrals is rational# Anent the indictment that the law discriminates between the &lanters in the big milling districts" on the one hand" and those in small milling districts" on the other" by &roviding for bigger shares to the &lanters in the former and smaller shares to those in the latter" it a&&ears to 's to be obvious that as the standard used by the legislature is the amount of &roduction in each district" naturally" the &lanters adhered to the bigger centrals should be given bigger shares" considering that the more a central &roduces" the bigger could be its margin of &rofit which can be corres&ondingly cut for the &ur&ose of enlarging the share of the &lanters# 'nderstandably" the smaller centrals may not be able to afford to have their shares reduced substantially" which is evidently the reason why the law has not been made a&&licable to centrals having a &roduction of less than ,5@"@@@ &iculs a year# In any event" the &oint raised relates to the wisdom of the standard fi4ed by the legislature" which the courts are bound to u&hold" absent any indication" as in this case" of arbitrariness or ca&riciousness in it# As a&&ellees &ut it" Mthe law is a&&licable to all mill districts whose &roductions fall within the standards set forth therein; the graduated scale of &roduction is the goal the law see<s to attain3 L an increased &roduction#M $&# 16" A&&elleesN Brief#%# L6L *aborers in the centrals are differently situated and are already &rotected by other laws# !uch lees is there substantial basis for the claim that it is within the constitutional &roscri&tion under discussion for the Act to discriminate against the wor<ers in the centrals by not including them among the com&onents of labor in the a&&ortionment of the fruits of their joint efforts with the &lanters" :e have loo<ed into the corres&onding factual &remises of this contention of the Central relative to the eHual &rotection clause with the care they deserve" and :e are of the considered o&inion that the criterion on which the &rovisions in issue is &redicated &recludes the conclusion of ca&ricious and arbitrary discrimination which the Charter abhors# 2he laborers in the centrals &erform wor< the nature of which is entirely different from that of those wor<ing in the farms" thereby reHuiring the a&&lication to them of other laws advantageous to labor" which u&on the other hand" do not corres&ondingly favor &lantation or &urely agricultural man&ower# Besides" there is no denying the fact that as industrial or semi8industrial wor<ers" the laborers in the centrals" even the farmlands" therein" are being more or less sufficiently ta<en care of under other e4isting laws and the &revailing terms and conditions of their em&loyment" for which reason there is no <nown nor demonstrated demand" much less &erce&tible urgent need" to bring them under the coverage of the instant legislative bounty# 7onetheless" for the better &rotection of the laborers in the centrals against any attem&t of their em&loyers to &rejudice them in retaliation for the reduction of the income that the o&eration of the law might cause the centrals concerned" )ection 1 of the Act ordains thus3 M)ec# 1# 7either the enforcement of this Act nor anything contained herein shall be deemed sufficient and just cause for the reduction of the wages of wor<ers em&loyed by sugar centrals" for the withdrawal or cancellation of any benefits" facilities" &rivileges" or other concessions heretofore granted to them" or for the tem&orary lay8off or &ermanent dismissal of any of the said wor<ers#M 444 444 444 It is im&licit in this &rovision that &recisely because the legislature could not e4tend any increase to the laborers of the centrals at the same time that the millersN share in the &roduction is being reduced" it however showed its concern for the laborers by enjoining the centrals from ado&ting any measure that would in any manner &lace the former in a worse &osition than where they were before the effectivity of the Act# cdre& In this connection" :e note that the following a&t observations in the brief of Attys# 2aQada" 2eehan<ee and Carreon stand unrefuted by any of the o&&osing counsels3

MAlleged discrimination against laborers of sugar centrals# L )ection - of Re&ublic Act .@- reHuires that 6@U of the increased rate of &artici&ation be &aid to the &lantation laborers" while no additional benefit is &rovided in the law for central laborers# On this ground" it is contended that Re&ublic Act .@- discriminates against laborers of sugar centrals# Considered by itself the law a&&ears to be lac<ing in abstract symmetry" but when the actual facts regarding em&loyment conditions of &lantations laborers" on one hand" and central laborers on the other" are ta<en into account" the seeming ineHuality will disa&&ears# 2here are many &oints of material differences between the two categories of laborers# !ost im&ortant is the fact that because centrals" since their establishment in the 6@s" had been receiving an undue &ro&ortion of the sugar &rocessed from the &lantersN sugarcane" they have always been financially able to give their laborers better wages and better em&loyment conditions than &lanters could give to their laborers# Another im&ortant difference that may be noted is the fact that the laborers of &lanters" with their families" are more numerous than the central laborers with their families# +ven e4isting legislation" a&art from Re&ublic Act .@-" has &rovided or made available more benefits to central laborers# 2oday" as at the time of &assage of the )ugar Act" farm laborers are e4&ressly e4cluded from the benefits to central laborers# 2oday" as at the time of &assage of the )ugar Act" farm laborers are e4&ressly e4cluded from the benefits of co# Act ///" otherwise <nows as the +ight8Gour *abor *aw $)ection 6%; of Act ,./5" otherwise <nown as 2he +m&loyersN *iability Act $)ection -%; of the !inimum :age *aw $Re&# ct 6@6%" unless they are em&loyed in a farm over ,6 hectares in siCe $)ection 1" &ar# >b?#%" and even then" the !inimum :age *aw &rovides for a much lower wage level for farm laborers than that &rovided for industrial laborers" the daily minimum wage for farm laborers being originally P,#55 a day to become P6#@@ a day one year after the effective date of the !inimum :age *aw and P6#5@ a day one year still later" and for industrial laborers the minimum wage being P/#@@ a day in !anila and P1#@@ outside of !anila" but to be increased to P/#@@ one year after the effective date of the law $Pars# >a? and >b?" )ec# 1%; of Act 1-6," as amended by Com# Act 16/ and Re&# Act /6" &roviding for emergency medical treatment to be furnished by their em&loyers" unless the number of farm laborers of any given em&loyer is 1@ or more $)ection ,%; of Re&# 61-" &roviding for emergency dental treatment" unless their number is 5@ or more $)ection ,%; and of Com# Act ,@1 in regard to submitting dis&utes to the Court of Industrial Relations unless their number e4ceeds 1@ $)ection 1%; while laborers in sugar centrals enjoy the benefits conferred by all the laws mentioned either because they come sHuarely within their &rovisions or because" where the laws fi4 the minimum number reHuired in order to avail of their benefits" the number of laborers in any given central always and inevitably e4ceeds the minimum number res&ectively fi4ed in the various laws mentioned; and few" if any" farm laborers can ta<e advantage of the collective bargaining rights &rovided in Com# Act 6,1 and the Industrial Peace Act" and at any rate" farm laborers are" relatively" in wea<er bargaining &ositions in negotiating with their res&ective individual em&loyers than laborers in sugar centrals# RA .@- is therefore but a belated attem&t to com&ensate &lantation laborers in some form for what e4isting legislation denies to them but grants to laborers of centrals# 2hough the )ugar Act &rovides no new benefits for laborers of centrals# 2hough the )ugar Act &rovides no new benefits for laborers in centrals" it ensures that its enforcement and o&eration shall not be occasion for the reduction or withdrawal of benefits at &resent enjoyed by them $)ection 1%#M $Amicus curiaeNs Brief" &&# /68/-#% L1L Gow )ections , and - should be construed in order not to defeat the basic objective of the Act and to avoid unconstitutionality thereof# 2he claim of ineHuality in the benefits to labor resulting from the criterion of e4istence of non8e4istence in the different milling districts of a majority of &lanters with written contracts in the determination of the a&&licability of the Act reHuires more e4tended disHuisition# Indeed" it is in connection with this &oint that :e &erceive a feature of the Act which unless viewed in &ro&er light would render the same constitutionality objectionable# Considering that because under the terms of )ection , of the Act the ratios of sharing therein s&ecified are to be observed only those milling districts where the majority of the &lanters have no written contracts with the centrals" it is &ointed out that it" therefore" ma<es the benefits intended by it for the laborers de&endent on the subjective contingency of the millers and the &lanters signing or not written agreements" instead of automatically by direct legislative fiat regardless of the will of either the millers or the &lanters or both# :orse" it is contended" in conseHuence of such condition in the law" it contains within its own &rovisions the very means by which the &lanters can be benefited e4clusively by an increase in their share" without any obligation on their &art to share such benefit with their laborers" des&ite the fact that such laborersN share" as :e have &ointed out above" is &recisely the very element &ur&osely and deliberately incor&orated in the law to ma<e it the social legislation that it is" e4em&ted from the constitutional injunctions and constraints relative in contractual obligations and the freedom of contract# 2o &ut it otherwise" it is argued that it is actually &ossible within the letter of this statute for the &lanters to secure e4clusively for themselves any increase they want" and even more than that s&ecified for them in )ection , thereof" without being necessarily bound to share the same with their laborers" by the sim&le e4&edient of the majority of them signing contracts with the centrals &roviding for such increase" thus thwarting the very avowed &rimary &ur&ose of the legislature in a&&roving the same# In brief" the terms of the statute can easily be ta<en advantage of by the &lanters and the centrals in com&lete disregard of the interests of labor for whom it was s&ecifically designed# cdll Diewed in this manner" the Act would a&&ear to be self8defeating in so far as the laborers are concerned" but efficacious in &roviding what the P*A72+R) desire for themselves" contrary to its true objective of increasing the share of the &lanters only as a means of ameliorating the situation of the laborers# Parenthetically" the Central insists that this was actually the real scheme of the &articular legislators who framed the law L to com&el the centrals to augment the share of the &lanters" and not really to im&rove the lot of the laborers# Indeed" if such is the inevitable result of a&&lying the &rovisions in Huestion" there is am&le ground for considering them as violative of the Constitution# 0or instance" a&&lying the bare letter of the Act" if the central and the majority of the &lanters in any district having a &roduction of more than one million two hundred thousand &iculs should agree by contract to reduce the share of the central from /@U to 1/U and to increase that of the &lanters from 6@U to 66U" not only would the &lanters be greatly benefited by the increase in their shares" but the centrals would also save /U which otherwise it would have to give to the &lanters if it were not to sign contracts with the majority" and yet the laborers of the &lanters would get no &art of the increase their &lanters8em&loyers would be entitled to" since it would be argued that the clause in )ection , ma<ing the Mabsence of written milling agreements between the majority of &lanters and the millers in any milling districtM is the condition sine Hua non of the enforceability of the whole Act" including )ection -" which is the one that &rovides for the increase of the share of the laborers# 2his literal reading of the Act manifestly inconsistent with its basic intent" does render the Act unconstitutional" since any legislative enactment that is dece&tive by ostensibly being a social legislation to ameliorate the condition of labor so that it may hurdle constitutional obstacles as a &olice &ower or social justice measure" when in truth it is only intended to o&erate in favor of the em&loyer or of ca&ital" must be stric<en down as a des&icable fraud which no constitution in the world can ever be conceived as allowing the legislature under it to &er&etrate u&on the &eo&le#

Instead of &romoting social justice" the Act would clearly be a double instrument of injustice and o&&ression to labor" for aside from &er&etuating their wretched condition" they would be the victims of a legislative dece&tion# Accordingly" :e feel it is the &ro&er evaluation of the considerations just discussed that is most decisive in the ultimate resolution of the controversy before 's# Incidentally" :e note that none of the learned counsels has discoursed on them from what :e deem to be the correct &ers&ective" L namely" that" as has been &ointed out above" the &rimary reason for being of Re&ublic Act .@- is the im&rovement of the condition of the &lantation laborers# It is Huite regrettable that counsel of the )ecretary of *abor too< no &ains to ado&t an inde&endent &osition from the lawyers of the &lanters and merely co8signed a joint brief with them for the &laintiffs8a&&ellees" hence their inability to draw attention to the inevitable inconsistency and conflict of interest between the &lanters and the laborers resulting from the literal a&&lication of the law as above &ointed out# 2hey have overloo<ed the incontrovertible &ro&osition that unless the laudable intention of the law to &rotect the laborers is carried out in the construction and a&&lication of )ections , and - vis8a8vis each other" any other way of im&lementing the same would render it unconstitutional# :e reiterate that as can be seen in the &ortion of the trial courtNs decision :e have Huoted earlier" the declared foundation of the Act was the so8 called !oran Re&ort" co&y of the full te4t of which is attached to the &rinted memorandum of counsels for the &lanters# 2he thrust of said re&ort is that the sugar industry" a very vital element of the national economy" would colla&se if no means could be devised to com&el the centrals to increase the share of the &lanters in their milled sugarcane &roduction" for without such increase" the &lanters would not be able to contain the surging unrest and imminent refusal of their laborers to wor< unless their demand for higher wages" which they badly needed" were granted# 2he re&ort &ro&osed remedial measures to co&e with the situation" and the Act is the legislative effort in that direction# 2o Huote again from the decision of the learned trial judge3 M!oreover" Re&ublic Act 7o# .@- see<s to reduce the ineHuality in the benefits being received by the Central and the laborers# It should be noted that under )ection - of the law" 6@U of the increased &artici&ation shall be given to the laborers and /@U for the &lanters# 2he a&&lication of the Act would go a long way towards &romoting better relations between the laborers on one side and the &lanters and the Central on the other side# M2he almost yearly recurrence of stri<es in the farms by the laborers has for its root cause discontent generated by the inadeHuate earnings of the laborers# 2heirs is a miserable lot for they do not earn enough to give their families the minimum needed to maintain a decent living in a civiliCed society" not to mention the e4&enses necessary for the education of their children3 444 444 444 MRealiCing this danger to the biggest industry of the country" the late President KueCon caused a survey of the causes of the discontent of the laborers and the recurrent trouble in the sugar regions# 2he re&ort submitted by the late !r# 9ustice !oran after he investigated the boo<s of the Centrals and those of the &lanters" advocated very strongly the necessity of a new and better sharing &lan for the sugar &lanters#M $Brief of A&&ellees" &&# 6-81@; &# 1,#%# 2he !oran Re&ort itself contains the following &ertinent observations3 MConsidering the laborers to have been most adversely affected by the limitation" the &lanters had come out o&enly for an increase in the wages of their &lantation laborers &rovided their share in the milling contract be also increased# 2he following gives us a fair view of their stand# NAt the beginning of this brief we have e4&ressed our indorsement" in &rinci&le" of the &ro&osition to fi4 minimum wage for the laborers in the sugar &lantations# 2his is because we are with the laborers in their needs and in the im&rovement of their lot# But under the conditions in which the finances of the mass of the &lanters are found" nothing more can be done unless the state of such finances is also ameliorated# 2he &ro&osed fi4ing of minimum wages is intended to be a measure of social justice to the laboring class but to render justice to a class at the e4&ense of another class that also needs the 7ew (eal will be most unjust# :e have an abiding faith in the wisdom of our government and of those who control it" and that when it renders justice it does it not only to one class but to all classes needing it# 0inally" we trust that when the government ta<es the ste&s towards adjusting the wages of the laborers at the e4&ense of &lanters it will" at the same time ado&t measure that will insure the &lanters of the increase of the benefits they derived from the industry# Any measure that the government may ado&t toward raising the standard of wages for farm labor should be accom&anied by a readjustment of the milling contract increasing the &lanterNs share of the sugar" otherwise such a measure will be unfair and unjust to the &lanter#N $)ee &&# 1/815 of Preliminary Re&ort dated )e&t# ,." ,-15" of 9udge 0rancisco Iulueta" Court of Industrial Relations" to Gis +4cellency" the President#%M 444 444 444 M0rom what has been thus far discussed" two cardinal facts are clear3 $,% that in general the &rofits of the centrals greatly out &ro&ortion those of the &lanters and $6% that the latter can not be made to ameliorate the condition of their laborers unless their milling shares be increased# It is thus obvious that the &roblem of im&roving the lot of the laborers in the sugar industry de&ends u&on and is inse&arably bound with another &roblem arising from the contractual relation between &lanters and centrals# 2here can be no Huestion" however" that if the centrals refuse to adjust their milling contracts" to give room for increased &artici&ation in favor of the &lanters and thus obstruct the governmentNs legitimate &olicy of im&roving the condition of the &lantersN laborers" its rightful authority may be e4ercised either in the form of ta4ation or &olice &ower# It may im&ose a ta4 on centralNs recei&ts # # #M $!emorandum of 9ustice !ontemayor" &&# *PI to *PII; *PD to *PDI; )ee also +4hibit O#%# Any increase in &artici&ation given to &lanters in contracts e4ecuted after the a&&roval of Re&ublic Act .@- must be shared with laborers of the &lanters in the manner &rovided in )ection -" even if by the reason of the number of such contracts" )ection , would not a&&ly# In other words" it is conceivable for Re&ublic Act .@- to survive the constitutional attac< mounted by the counsels for the C+72RA*" if in any instance its &rovisions can be availed of to get some advantage for the &lanters without their laborers being corres&ondingly benefited# A greater and more intolerable social injustice would result in such an event# In a sense" a dilemma has emerged# If :e declare the Act unconstitutional u&on the ground that it is unwarranted invasion of the freedom of contract as between the millers and the &lanters" the de&lorable condition of the laborers in the sugar farms would remain as it was before its enactment# On the other hand" if :e sustain its validity but at the same time a&&ly it literally and sanction a construction thereof that would enable the centrals and their &lanters to enter into agreements" under which the latter would have to be given increased &artici&ation without any obligation to share the same with their laborers" the Court would be a &arty to a cons&iracy to virtually defraud labor of the benefits" the grant of which is &recisely its sole redeeming feature to save it from unconstitutionality# 0or it is clear for anyone to see that without the Act" under the conditions &revailing in the industry" the &lanters would have no means of &ersuading" much less com&elling" the centrals or millers to give them any increase in their res&ective shares" whereas" with this law" faced with the &ros&ect of being forced to grant the &lanters their &ro&ortion of sharing &rescribed by it" if no written contracts were to be signed by them with the majority of the &lanters" naturally" the centrals would readily agree to give the &lanters the increase they want" L which could be less

than that sti&ulated in the Act and yet be e4actly what the &lanters would get under it if the majority of them were not to have written contracts with the central# In which eventuality" and should we u&hold the &ro&osed strictly literal construction of the Act" the laborers would be left holding the &roverbial em&ty bag# In that way" the interests of the ca&italist com&onents of the industry" the millers and &lanters" would be served by the com&ulsive effect of the law but labor would not be assured of receiving even the crumbs" when the truth is that the legislation would have no reason for being as a constitutional and enforceable statute if it did not include mandatory &rovisions designed to lift them from misery# 2he Court em&hatically refuses to have anything to do with such an unconscionable &osture vis8a8vis the fate of labor" which &ose" after all" :e must assume could not have been in the contem&lation of the legislature that &recisely inserted into it its &ro8labor element in order to bring it within the ambit of the social justice and &olice &ower &rotection of the fundamental law# :e condemn such a view as definitely anti8 social and as a gross injustice to labor" which no res&ectable legislature com&osed of duly elected re&resentatives of the &eo&le may ever be deemed as ca&able of dirtying the sacred statute boo<s with# Conscious of the highmindedness of the Congress and aware that dece&tion" &articularly if it would victimiCe labor" could never have been within their contem&lation" :e are thoroughly convinced that the Act should never be construed in the manner suggested# &r** 2he benefit to labor contem&lated in )ection - is ineludible eve if )ection , should be ina&&licable# 2he way then to remove from Re&ublic Act .@- any taint of any furtive character is to construe it in the only manner its social justice &ur&ose can be attained# 7ever should its &rovisions be deemed as &ermitting the &lanters to benefit from the o&eration thereof without their being com&elled to give their laborers that without which the Act would not have been a&&roved by Congress nor allowed by President Kuirino to la&se into a law and for which alone it can avoid being struc< down as unconstitutional# It is a familiar rule in constitutional law that when a statute is rationally ca&able of different constructions" that which will render it unconstitutional should be disregarded# 'nder the same &rinci&le" the constitutionality of a statute should not be &rejudiced by a&&lying the same in a manner that would render it unconstitutional# As has already been demonstrated" Re&ublic Act .@- owes its constitutionality e4clusively to its labor content" hence to allow it to be a&&lied in a way that would stri& it of that &articular element would be fatal to its constitutional life# In this connection" it is vigorously insisted that the terms of )ection , are &lain and e4&licit to the effect that the Act may be a&&lied only in the milling districts where the majority of the &lanters do not have written milling contracts with the centrals# *i<ewise" it is as vehemently contended that )ection - com&els the &lanters to share with their laborers whatever increase the centrals would give them only and only if such increase is given to them Munder the ActM more s&ecifically" its )ection ," and" therefore" whatever increase should be given to the &lanters by written contract rather than by the ine4istence of a majority of such written contracts would not be within the coveraged the Act# Diewing these arguments in the light of the social justice im&eratives that inform the Act" as discussed above" the Court cannot agree# 2here is latent ambiguity in the Act" hence the justification and the need for 9udicial construction# ranting arguendo that the words of the &rovisions referred to do not suffer from &atent ambiguity" :e nevertheless discern latent ambiguity in them L latent in the sense that while the mandate to always &rotect labor whichever way said &rovisions might be construed does not seem a&&arent in the language em&loyed" such com&ulsion L &ro&elled by the indubitable s&irit and objective of the Act L is readily &erce&tible in the obvious coercive &ressure that )ection , e4erts u&on the centrals for them to yield to the demand of the &lanters for written contracts with increased shares for the latter" as other wise" that is" if the majority of the &lanters should not have written contracts" that is" if the majority of the &lanters should not have written contracts" the full force of said &rovision would fall on them $the centrals% and they would have no alter native than to give their &lanters the higher ratio of shares &rescribed therein# In view of such latent ambiguity" judicial construction is im&erative# 2hus" reading the &rovisions in Huestion from the ineludible &ers&ective of its &ro8labor intendment" :e are not convinced that the e4istence of the majority of contractual &lanters mentioned in )ection ," attained after the effectivity of the Act" would ine4orably result in the ina&&licability of )ection -" such that by such majority of written contracts" the &lanters would be able to get by contract the increase intended for them by )ection , without being mandatorily bound to give their laborers any &ortion thereof# :e believe that to read )ections , and - in such manner would be contrary to the very &ur&ose for which the Act was conceived and a&&roved# It is clear to 's that all that )ection , im&lies is that the &ro&ortions of sharing therein s&ecified would no longer hold in the event a majority of the &lanters in the district should have written milling contracts with the centrals# In that sense" it cannot be aid that the Act im&airs the freedom of contract to which the C+72RA* and the &lanters are entitled# 2he language of said section does not however a&&ear to 's to necessarily envisage inse&arability of its a&&licability from the enforceability of the rest of the Act# On the contrary" it is im&licit in the se&arability clause contained in )ection ,@ of the Act itself that to avoid that the unconstitutionality of any &rovision of the Act which may result from its a&&lication in relation to another &rovision thereof" such &rovisions should he accordingly a&&lied inde&endently of each other" s&ecially if by so doing" as in this instance" the objective of the statute can be best achieved# !ore s&ecifically with reference to the contention that )ection - &egs or &redicates the right of labor to &arta<e in the increase of the shares of the &lanters to the increase resulting from the absence of a majority of contract &lanters &rovided for in )ection ," :e hold that it is entirely within the &urview of the legislative &ro8labor8and8social8justice intent of the Act that any increase the central should concede to the &lanters by contract e4ecuted after the &assage thereof is an increase Munder the ActM" thereby resulting in the a&&lication of its )ection -" for there can be no doubt that the centrals would only grant such increase for the ultimate &ur&ose of avoiding the a&&lication of )ection ," which is to say that the centralsN act of entering into written contracts would &lainly be nothing less than an ineludible conseHuence of the com&ulsive effect of the Act intended by the legislature# 2hat this construction may not give the laborers e4actly what the Act contem&lates" since the contracts to be entered into might actually &rovide for &ro&ortions less favorable to the &lanters than that sti&ulated in )ection , is no argument to render it untenable# :hat would ha&&en in such a case is only a lesser evil that the totally anti8social disaster of labor getting absolutely nothing while the &lanters would be getting an increase which could be as much as that &rovided for them $&lanters% in said section# 2o reiterate" the &ercentage for labor s&ecified in )ection - may be safely construed to be demandable whatever be the &ercentage of increase for the &lanters that their contracts with their centrals might &rovide# And inasmuch as this constitutional a&&roach just indicated is the only one consistent with the manifest objective of the Act" :e are duty bound to ado&t the same in the case at bar# 2he s&irit rather than the latently ambigous letter of the Act must be enforced# **&r :hy new contracts e4ecuted to secure majority were not illegal nor in bad faith# At this &oint" it may be as<ed" since the new contracts just referred to were entered into &ur&osely to avoid the a&&lication of )ection , of the Act" should it not follow that they should be declared non8e4istent in the determination of whether or not there was absence of a majority of &lanters without written milling agreements with the C+72RA*S At first blush" it would seem reasonable to so hold# On dee&er reflection and

deliberation" however" it will be realiCed that it is not the &ur&ose of the Act to &revent the e4ecution of new contracts" even if this would create a majority of contract &lanters in any district# 2here is an abundant &roof in the record that the interference with contractual freedom intended by the Act was &recisely in the sense that the millers be &laced in such a &osition that" for fear of being obliged to follow the ratio of sharing &rescribed in its )ection ," they would have to sign new contracts agreeing to increase the share of the &lanters" leaving it to the &lanters to secure in the &rocess of bargaining the &ercentage they consider adeHuate for them under the circumstances# In other words" the new contracts here in Huestion cannot be deemed as entered into in bad faith or for an illegal &ur&ose" since the e4&ected effect of the Act is that there would be more contracts e4ecuted# Indeed" it was in the e4ecution of those agreements that the objective of the law may be said to have been ideally achieved# At the same time that freedom of contract was observed" the desired increase of the share of the &lanters was also assured# It is as if the Act merely gave the &lanters a bargaining force with which to induce the millers to increase the share to be given to them $&lanters%" albeit on the condition that from any such increase" the &lantation laborers would in turn be given the benefit sti&ulated for them in )ection -# As :e see it" the schedule of sharing as fi4ed in )ection , was not designed to be the standard to be observed when the &arties are willing to negotiate by themselves# )aid schedule has to be followed only when either the majority of the &lanters in the district or the miller refuses to sign any agreement# In conclusion" :e hold that Re&ublic Act .@- is a legitimate &olice &ower measure and at the same time a &ro&er and valid im&lementation of the social justice &rovisions of the Constitution" and :e have no alternative but to construe its &rovisions in the manner most conducive to that end# 2his is the basic criterion :e will ado&t in dis&osing of the other issues in this case" as will be seen anon# LCL O2G+R CO7)2I2'2IO7A* OB9+C2IO7) *+)) 2+7AB*+# 2he rest of the constitutional issues raised by the C+72RA* are even less im&ressive# Indeed" that the Act does not embrace more than one subject" that all the matters dealt with by its &rovisions are sufficiently covered by its title and are germane and that it does not de&rive the C+72RA* of any &ro&erty without due &rocess of law is clearly elucidated in the manifestation of the )olicitor eneral dated October ,/" ,-6@ Huoted earlier in this decision# :e find the &osition ta<en herein by the )olicitor eneral to be well ta<en# :e are thus fully satisfied that the whole Re&ublic Act .@-" &ro&erly a&&lied as indicated in this decision" was well within the &ower of the legislature to enact and that it does not violate any &rovision of the Constitution# III 2hirdly" the C+72RA* maintains that3 M2G+ 9'( + A K'O A7( C*I+72 O0 A22O# 9O)+ A0RICA O0 2G+ P*A72+R) +RR+( I7 GO*(I7 2GA2 2G+R+ :A) A7 AB)+7C+ O0 :RI22+7 !I**I7 CO72RAC2) B+2:++7 2G+ (+0+7(A72 C+72RA* A7( 2G+ !A9ORI2O O0 2G+ P*A72+R) I7 2G+ 2A*I)AO8)I*AO !I**I7 (I)2RIC2 )I7C+ 2G+ CROP O+AR ,-56851; M$,% Because Gis Gonor has disregarded even the official figures of the )ugar Kuota Administrator" who after investigating the &lantersN com&laint" found that in the cro& year ,-5685- there were only One Gundred 0ifty82wo $56% &lanters in the 2alisay8)ilay milling district3 and instead Gis Gonor has inflated said number to One Gundred )eventy $,5@%" or by +ighteen $,. more &lanters; by the sim&le e4&edient of $,%" listing two &lanters twice; $6% including in his list as &lanters in the district" +ight $.% &ersons who were not registered &lanters" and were cultivating only Nemergency &lantationsN" not included in the )ugar Audit" as defined in Act /,66 $)ugar *imitation *aw%; and $1% counting +ight $.% other &lanters in his list two times $)ee Anne4 NCN of &laintiffsN amended com&laint%#M $6% Because even the &lanters themselves" in their said com&laint filed with the )ugar Kuota Administrator" claimed that there were only NOne Gundred 0ifty80our $,5/% &lanters adhered to the 2alisay8)ilay !illing (istrictN" and that N+ighty8One $.,% &lanters have written milling contracts" )i4ty82wo $66% of which were e4ecuted on or before the effectivity of Re&ublic Act 7o# .@-" and 7ineteen $,-%" after the effectivity of the above lawN $)ee A&&endi4 N,6N of CentralNs answer%# M$1% Because the 9udge a Huo has clearly confused the number of milling contracts with the number of &lanters who cultivated and &roduced sugarcane on the &lantations covered by said milling contracts#M $C+72RA*Ns Brief" &&# 5685.#%# As can be seen" the issue raised in this assignment of error is mainly factual# Gowever" there are certain situations involved in the resolution of said factual issue that call for the a&&lication of legal conce&ts which the trial court a&&ears not to have correctly considered# 2he criterion established by )ection , should be observed not only once but year by year# 2hus" the first &oint that has to be determined is whether the &resence of the majority of contract &lanters contem&lated in the law has reference only to the contracts e4isting during the first cro& year after the &assage of the act or to that of each year" starting from said first cro& year# In other words" should the e4istence of such majority be determined only once" that is" when the Act too< effect or year by yearS 2he P*A72+R) claim it should be only once while the C+72RA* contends it should be every cro& year# In fact" in this connection" in their brief" the P*A72+R) have counter assigned as alleged error of the trial court that3 &r** M$6% 2G+ *O:+R CO'R2 +RR+( I7 GO*(I7 2GA2 2G+ (+2+R!I7A2IO7 O0 !A9ORI2O )GO'*( B+ !A(+ 0RO! O+AR 2O O+AR#M $Page a" Brief of P*A72+R)#% 2he ruling of the trial court on this &oint is as follows3 M2he Court holds that the sharing of the sugarcane &roduced during one agricultural year between the &lanters and the Central shall de&end u&on the e4istence or non8e4istence of the majority of &lanters during that year as &rovided by )ection , of Re&ublic Act 7o# .@-# In other words" it is &ossible that during one agricultural year the majority of the &lanters may not have written milling agreements with the Central and" therefore" the sharing &ro&ortions &rovided for in )ection , of the Re&ublic Act 7o# .@- shall a&&ly; while the following year the majority of said &lanters may have written milling agreements with the Central" in which case the terms of the contracts of the &lanters" both oral and written" shall govern# It is" therefore" necessary that the determination of the e4istence or non8e4istence of said majority be made each year# MIn arriving at the above conclusion" the Court has ta<en into consideration the te4t of the law as a whole and the &ur&ose or objective of the legislature in enacting the same# 2hat the Central is not de&rived by Re&ublic Act 7o# .@- of its right to induce the &lanters to enter into written milling contracts with it subseHuent to the effectivity of said act for the &ur&ose of avoiding the a&&lication of the sharing &ro&ortions &rovided for in )ection , of said Act is evident from the te4t of )ection / of the same Act which reads as follows3 N)+C# /# In the event that any central shall be unable to arrive at a milling agreement with a majority of the &lanters affiliated with it" and shall refuse to mill the sugarcane of such &lanters in the absence of such an agreement" the President of the Phili&&ines shall issue a &roclamation declaring that" in the interest of the national welfare" the overnment of the Phili&&ines has ta<en over the central concerned" and thereu&on the

central shall be o&erated in the name and under the authority of the overnment by an administrator to be a&&ointed in the court &roceeding &rovided for in section seven of this Act#N M2his section clearly allows the Central to attem&t to arrive at a written milling agreement with a majority of the &lanters affiliated with it# )aid attem&t may he e4ercised at any time after the &assage of the Act and as often as the Central wishes to ma<e the attem&t# 2he result of said attem&t or attem&ts shall be considered yearly in determining whether or not the majority of the &lanters have written milling contracts with the Central for the &ur&ose of determining whether or not Re&ublic Act 7o# .@- is a&&licable that year# M2his inter&retation is in accordance with the ruling of this Court above to the effect that lessees are included within the meaning of the term N&lanter# 2he lease may be for two or three years or more# 2he lessee may enter into a written milling contract with the Central for the duration of the lease# If he shall be considered as one &lanter with a written milling agreement for the &ur&ose of a&&lying )ection , of Re&ublic Act 7o# .@-# '&on the e4&iration of the lease" the right to enter or not to enter into a written milling agreement with the Central reverts to the owner or &asses to a new lessee or to both owner and new lessee# 0or this reason" Congress worded Re&ublic Act 7o# .@- in such a way that the a&&licability of said Act should be determined every year#M :e agree with the reasoning and conclusion of the trial court# Indeed" there are other strong reasons in su&&ort of such holding# As :e see it" the obvious objective of the Act is more to induce the centrals to enter into written agreements with the &lanters in their res&ective districts &roviding for better sharing ratios than the old 6@8/@ scheme" rather than to directly fi4 for them such ratio in the manner &rescribed in )ection ,# :ere it the intent of the Act to definitely fi4 said sharing ratios" without regard to the contractual agreements between the &arties" it would have been worded accordingly in the clearest terms" considering that such fi4ing would amount to a curtailment of the freedom of contract and may" therefore" be u&held only when the legislative intent is manifest and the e4ertion of &olice &ower in the &remises is reasonably justified# It would have been the easiest thing for Congress to have &rovided clearly that thenceforth the sharing ratios should be as indicated in the Act instead of ma<ing its own a&&licability and enforcement de&endent on factors obviously subjective to the &arties concerned# 2he Huestion may be as<ed" why did the law lay down as the criterion for its a&&licability or enforcement such a subjective condition as the absence of a majority of &lanters with written milling contractsS A cursory reading of the &ertinent &rovisions of the Act would readily reveal that Congress was aware that the best way to deal with the &roblems of the sugar industry it had in mind was to base their solution on the situation of the relationshi& between the &lanters and the millers in each milling district instead of in all of them as a whole# It is a matter of judicial notice that such situation in each district varied# A uniform formula of solution must have a&&eared to the legislature as im&ractical and unjustified to the members who were conversant regarding the &roblems of the industry# 2hus" the lawma<ers <new that the e4istence of a majority with written contracts in a district would naturally indicate that the &lanters were satisfied with the terms being given to them by the miller" hence the im&ro&riety in such a district of any state interference by legislative fiat based on &olice &ower# In the language of the P*A72+R)N brief" Mif such condition was im&osed by Congress" it would only mean that Congress was willing to let well enough alone in a milling district wherein the majority of the &lanters a&&eared to be satisfied#M $&&# 5585.#% On the other hand" the absence of such a majority would signify the contrary; and usually" this sad state of affairs was due to the fact that the &lanters were &ractically at the mercy of the miller who could refuse to mill their sugarcane e4ce&t under its terms# It is this virtual stranglehold by the miller that the law must have intended to remedy# And so" by &roviding that unless it entered into written contracts with the majority of the &lanters affiliated to it" the miller would have to follow the higher sharing ratio &rescribed in the law" and it was assumed that the miller would rather yield to the &lanters by agreeing by written contract to a better sharing ratio if it was to save itself from having to suffer a bigger cut in its share of the &roceeds# But why would the &lanters &refer to sign written contracts with a sharing ratio for them different from or less than that &rescribed by the law which would a&&ly if the majority of them were to refrain from entering into written contractsS 2he reason may be found in the fact that there are other advantages in having such contracts" aside from the sharing ratio" which could &robably offset the resulting loss in the &ercentage of sharing# !oreover" for the good of the industry and better relations between the &lanters and the miller it is always better to have written contracts to govern their relationshi&# 7othing can best &romote the interests of the industry as a whole than mutual formal accord between the &lanters and the millers# $)ee &&# 66861" Printed !emorandum on behalf of P*A72+R) and *ABOR+R) in am&lification of oral argument dated August 6-" ,-61#%# 2he foregoing considerations ma<e it Huite evident that the Congress could not have contem&lated ma<ing the situation obtaining on the date of its effectivity as a law the sole and e4clusive criterion for determining its a&&licability in the res&ective milling districts of the Phili&&ines# Our considered o&inion is that the lawma<ers were aware of how the situation used to vary from cro& year to cro& year in each district" so they must have deemed it best to ma<e the a&&licability of the Act go along the way such variations would demand# :e are certain the legislature could not have intended that the benefits for labor envisaged in the law should be allowed to be com&letely negated nor rendered ineffective for all the cro& years to follow just because there was a majority of &lanters with contracts in cro& year ,-56851" a &ossibility which it could not have ignored# **&hil 2he &lanters and laborers contend that the Congress must have had in contem&lation the fact that most if not all the contracts of ,-6@86, had e4&ired in ,-5@ and that it was more li<ely that there would be only a minority of the &lanters with contracts by the time the Act would be in force" hence the criterion under discussion# In any event" they insist that the Congress must have contem&lated that the contracts signed after the a&&roval of the Act should not be considered# :e do not see the relevant circumstances that way# 2he truth revealed in the records is that many of the old contracts had already been e4tended way bac< in ,-/.# :ithal" :e cannot read in the &rovisions of the Act any indication to curtail the freedom of the &arties to enter into contracts after the &assage of the Act# Again" if the Congress really intended to either su&&ress that freedom or ma<e the terms of future contracts subject to the sharing ratios &rescribed in )ection ," :e cannot conceive of any &onderous consideration why words to that effect were not used# If Congress had in mind that the old contracts had already e4&ired and it was its intention to disregard the new contracts to be signed after its &assage" it would have" with more reason" directly &rovided for the definite and unconditional enforcement of )ection , instead of im&osing the condition about the absence of a majority of contract &lanters# :ithal" weighty reasons of constitutional &olicy &revent 's from ado&ting a construction that would ma<e the Act violative of the freedom of contract# As a matter of fact" the P*A72+R) and *ABOR+R) themselves &ractically concede the legal &ossibility of new contracts &roviding for a ratio different from that in )ection ,# $)ee &# 6," Printed !emo" su&ra#%# But the P*A72+R) insist that the above construction would mischievously leave it entirely in the hands of some &lanters" who would augment the number of contract &lanters by belatedly e4ecuting contracts with the C+72RA*" the fate of the other &lanters and the laborers" who otherwise should be benefited by the Act# :e are not unaware of such &ossibility# Gowever" :e have to consider that" as already stated" it is

Huite evident from the records of the deliberations in Congress that there was no intent to entirely do away with the right of the &arties to enter into written contracts# It must have been assumed that faced with the inevitability of having to follow the sharing ratio &rescribed in )ection ," the millers would be more than willing to enter into contracts &roviding for a ratio less &rejudicial to them than that fi4ed in )ection , but more beneficial to the &lanters than the old 6@8/@ ratio# In other words" increasing the share of the &lanters would still have been inevitable# 2hus" the &lanters would not really stand to lose very much" what with the other benefits that go with a written contract# And as far as the laborers are concerned" as :e shall show later" any increase the &lanters would be able to get would naturally entitle the laborers to the corres&onding share &rovided for in )ection - of the Act# 0or all these reasons" :e find no alternative than to overrule the P*A72+R)N second counter8assignment of error# LAL 2G+ 7'!B+R O0 P*A72+R) I7 2G+ 2A*I)AO8)I*AO (I)2RIC2 I7 ,-66851 CROP O+AR# Gow many &lanters were there in the sugar district in Huestion during the cro& year ,-66851S It is but logical that in the solution of the &roblem on hand the first thing :e have to determine is the correct number of &lanters who were affiliated to the 2alisay8)ilay sugar district during the first cro& year $,-56851% of the effectivity of Re&ublic Act .@-# In this connection" the trial court found that there were one8hundred and seventy $,5@% of them# But a&&ellant C+72RA* maintains that in arriving at such conclusion" Gis Gonor ado&ted a conce&t of the term M&lanterM which is in some res&ects or as a&&lied to some of the actual situations herein involved is not legally correct" much less realistic# A review of the record shows that the C+72RA*Ns observation is well ta<en# 2hus" the trial court found3# M0or the sa<e of clarity" according to +4h# G8," the &lanters affiliated to the 2alisay8)ilay !illing (istrict as at 9une 66" ,-56 are the following3 ,# Alano" Amado (r# 6# AlvareC" Rosendo 1# Jilay<o" 0rancisco (r# /# Beson" 9ose 5# Cla&arols" C#*# Dda# de 6# +strella" (eogracias 5# Cordova" Candido .# +steban" loria A# de -# !isa" !aria *# de ,@# *abayen" 9ulio (# ,,# Olim&o" 0elicidad ,6# aston" Benjamin ,1# Perovano" +stefania R# Dda# de ,/# OsmeQa" *ourdes R# de ,5# *o&eC" *olita R# de ,6# )ian" Aniceta Rama de ,5# amboa" Aguinaldo )# ,.# amboa" eneroso" 9r# ,-# amboa" Romeo B# 6@# )antibaQeC" +fraim 6,# aston" Am&aro Dda# de 66# Genares" 0idel !# 61# 9areQo" Catalino 6/# Geirs of GernaeC" Amalia 65# GernaeC" (ominador 66# GernaeC" Pedro C# 65# Infante" Purita G# de 6.# *o&eC" A&eles" Conce&cion 6-# Gilado" 2acela Dda# de 1@# *edesma" Anita *# de 1,# *ocsin" Agusto !# 16# !ontinola" 2rino (r# 11# Gilado" Alfonso 1/# +scay" 9ose # 15# 9avellana" !anuel A# 16# Oca" il de 15# 9ison" (ominador 1.# 9ison" +miliano 1-# *iCares" 0eli4 A# /@# *acson" Caridad /,# *acson" Ignacio et al# /6# *acson" (omingo !# /1# *acson" )alvador //# Cuaycong" 9ose # /5# 2am&ingco" loria *# de /6# Ousay" +nriHue (r# /5# *acson" +rnesto

/.# /-# 5@# 5,# 56# 51# 5/# 55# 56# 55# 5.# 5-# 6@# 6,# 66# 61# 6/# 65# 66# 65# 6.# 6-# 5@# 5,# 56# 51# 5/# 55# 56# 55# 5.# 5-# .@# .,# .6# .1# ./# .5# .6# .5# ..# .-# -@# -,# -6# -1# -/# -5# -6# -5# -.# --# ,@@# ,@,# ,@6# ,@1# ,@/# ,@5# ,@6# ,@5# ,@.# ,@-# ,,@# ,,,# ,,6#

*edesma" +duardo *acson" Pedro *acson" (amaso Ayalde" Ceferino 2# (r# *edesma" 7icolas R *# !# *edesma" +duardo R !# *# *iCares" +miliano Oca" *uC de *iCares" Antonio (r# *iCares" (emetria Dda# de *iCares" Co#" Inc# Obiernas" Dicente Panlilio" +ncarnacion *# Dda# de *iCares" !aria A# Camon" +milio Oca" 0elisa de Oca" *ibrada de *iCares" 7ilo *iCares" )im&licio Oca" Pedro de Pison" +s&edito Coscolluela" Agustin 9alandoni" 7icolas *acson" +duardo amboa" )erafin Jilay<o" Ramiro *acson" Rafael 2recho" !iguela 2recho" 0elimon Dillarde" Pelagio 2recho" Benjamin 2reyes" +milia ranada" Roberto ranada" :alterio Coscolluela" loria de 9ocson" 0lory # de ranada" Caridad ranada" Alfredo Jilay<o" Celsa *# Dda# de aston" erardo 9alandoni" (aniel G# 9ofileQa" !anuel )# 9alandoni" Carolina *o&eC" 9ulieta G# de GofileQa" 0e )# *abayen" +mma G# de *omotan" Dioleta G# de GofileQa" *uis Ramos GofileQa" Gector *# *iCares" enerosa Dda# de *iCares" Purita *iCares" Carmen G# Dda# de GofileQa" RoHue ranada" Pura # de 9ison" +milio *# *acson" Consolacion *acson" 0eli&e B# Cuaycong" 7atividad AlvareC" Ramon 2reyes" 0lorentino Cordova# Consoling Cordova" Balconeri Oca" Aniceto de Oca" 0rancisco de 9imeneC" Conrado *#

,,1# *acson" Purita ,,/# *acson" 9osefina ,,5# +s&uelas" Dictoria ,,6# 9alandoni" 0elisa Dda# de ,,5# *iCares" 9esus ,,.# *iCares" Geirs of +nriHue ,,-# *iCares" Rodolfo ,6@# Pascual" 9ose ,6,# )ausi" Atanacio ,66# amboa" Angel )# ,61# DeleC" )ergio ,6/# Agravante" (ominador ,65# 9onota" 9ulian ,66# 9undos" +nriHue ,65# !edel" !agdalena ,6.# Robello" Armando ,6-# Dillasor" !ilagros ,1@# +reQeta" 0ernando G# ,1,# onCaga" Adoracion ,16# amboa" 9ose B# ,11# *acson" (aniel ,1/# Dillanueva" !anuel !# ,15# 2reyes" orgonio ,16# onCaga" 9ulian (r# ,15# Gerrera" Patricio ,1.# *iCares" Antonio !# ,1-# !ascuQana" Angel ,/@# GofileQa" Dicente ,/,# OrtiC" Rosario # de ,/6# *acson" Angelina B# ,/1# 2reyes" orgonio ,//# DasHueC" Ramon ,/5# Bustamante" Arturo ,/6# Dillanueva" Alfredo ,/5# *acson" Dictoria ,/.# onCaga" *uis *# ,/-# *ocsin" Agustin ,5@# 2orres" 9ose R R# de *eon ,5,# Blanca" *ucilo ,56# !agallanes" 9esus A# ,51# 7e&omuceno" !iguel de ,5/# 2orres" 9ose 9r# ,55# 7essia" +legio ,56# Arnaldo" Ricardo ,55# !alejan" Renato ,5.# Rentoy" 0ederico ,5-# Castor" 9uanito ,6@# Advincula" Rufino ,6,# *ayson" Dicente ,66# Puentebella" Romulo MAs listed above" such &lanter was counted as one although he may be &lanting two or more &lantations# 2o the above ,66 &lanters should be added . other &lanters thereby ma<ing a total of ,5@ &lanters in the 2alisay8)ilay !illing (istrict as at 9une 66" ,-66# 2hese . &lanters are already included among the ,66 listed in +4h G8, out they have to be listed twice because each of them o&erates at least one &lantation under a written milling contract and one other &lantation without written milling contract# 2hese &lanters are3 7o# in the list &er +4h# G8, ,# *acon" Rafael 51 6# *acson" )alvador /1 1# *acson" +rnesto /5 /# *acson" +duardo 5, 5# *acson" (aniel ,11 6# *acson" Dictoria ,/5 5# 9alandoni" (aniel .. .# Oca" il de 16M $P&# /6,8/6." Record on A&&eal of C+72RA*#%

Analysis of the trial courtNs findings# A careful analysis of the above8Huoted &ortion of the a&&ealed decisions reveals certain misconce&tions in the mind of Gis Gonor# ,# 2he trial court erred in including +miliano 9ison# In regard to the number ,66 used as main figure by Gis Gonor" admittedly" the basis thereof is +4hibit G8," the Associated PlantersN 0inal Re&ort for the cro& year ,-568,-51" &re&ared by the C+72RA*# It is conceded by the a&&ellees" however" that" on that basis or from the &oint of view of who are listed in +4hibit G8," the correct number is really one hundred and si4ty8one $,6,% only# 2here is agreement between the &arties that the name of +miliano 9ison $7o# 1.% in the trial courtNs list% should be e4cluded" since there is no &lanter with that name in the district# 2here is an +milio 9ison" who is 7o# ,@6 in the list above# 2he name +miliano 9ison on &age , of +4hibit G8, o&&osite Plantation Audit 7o# 5.8d is admitted by the P*A72+R) to actually refer to +milio 9ison" even as the latter is also listed on &age 1 of the same e4hibit" which is nothing strange because of the different &lantation audit numbers to which each of said entries corres&ond" considering that +milio 9ison was wor<ing in two se&arate registered &lantations# cdre& On the other hand" the other contention of the C+72RA* that the name of orgonio 2reyes had also been listed twice by the trial court" while a&&arently correct" is sufficiently e4&lained by the fact that the second listing of 2reyesN name as 7o# ,/1 by Gis Gonor should really corres&ond to and should be substituted with the name of 9osefina Dda# de *acson who" together with 2reyes" is covered by Plantation Audit 7o# ,668e" as may be seen on &age / of +4hibit G8," thus entitling her to be included in the list of &lanters affiliated to the C+72RA* in addition to those listed in the decision under review# :ho is considered &lanter within the contem&lation of R#A# .@-S At this juncture" it becomes im&erative to define the term M&lanterM as that word is used in Re&ublic Act .@-# In this regard" since the Act itself does not contain any definition" the trial court ado&ted the o&inion of the )ecretary of 9ustice $O&inion 7o# .5" )eries of ,-5/% and held that a &lanter is Mone who is entitled to &roduce sugar on a &lantation and to deliver his &roduce to a sugar mill for milling"M and that Mthe N&lanterN referred to in Re&ublic Act .@- may be either the owner of the &lantation who &roduces or is entitled to &roduce sugarcane on his &lantation or any lessee" usufructuary or &erson $other than the owner% who has a right to cultivate and to &roduce sugar thereon" &rovided that in either case" the &lanter has the right to deliver the sugar to the Central for millingM# $P&# /,18/,/" Record on A&&eal of the C+72RA*#% Basically" both the C+72RA* and the P*A72+R) adhere to this definition but do not see eye to eye on how to a&&ly the same# 6# !ay MemergencyM &lanters be counted as &lanters for the &ur&oses of this caseS :e believe not" but this &oint is hardly of any conseHuence# 2he inclusion in the list of the trial court of the following eight &ersons" namely3 ,# (ominador Agravante 6# 9ulian 9onota 1# +nriHue 9undos /# Dicente *ayson 5# !agdalena !edel 6# Romulo Puentebella 5# Armando Robello and .# !ilagros Dillasor is assailed by the C+72RA* on the ground that as can be seen in +4hibit G8," they are merely MemergencyM &lanters" so called because they have no corres&onding &lantation audit number# It is insisted that inasmuch as under )ection 5 of +4ecutive Order 7o# .51 and )ection ,6 of +4ecutive Order 7o# ..5" )eries of ,-15" su&&lementing the &rovisions of Act /,66" the )ugar *imitation *aw" a &lanter is Many &erson" firm or cor&oration" or combination thereof" entitled by virtue of ownershi&" or by virtue of written or oral contract with the owner of the &lantation" to &roduce sugarcane on the &lantation and to deliver the same to the mill to fill the whole or a &art of the &lantation8ownerNs allotmentM" and" since the lands cultivated by the above8named eight &ersons had no allotment of centrifugal sugar or were not included in the audit of sugar mills and sugar &lantations &rovided for in +4ecutive Order of overnor eneral 7o# /5-" they could not be deemed M&lanters in the districtM within the contem&lation of the sugar limitation laws# On the other hand" the P*A72+R) contend that considering that sugarcane cultivated by them was undis&utably delivered to the C+72RA* from their &lantations" those &lantations should be considered &art of the mill district# it being &rovided in )ection , $e% of Act /,66" as amended" that Ma &lantation is adherent by virtue of sugarcane being delivered therefrom to a mill regardless of contract relations between the mill com&any and the &lantation owner andAor any other &erson cultivating sugarcane on the &lantation# &rcd Anent such conflicting views" it is" of course" beyond Huestion that an said eight &ersons did &roduce sugarcane from the &lantations they cultivated and did deliver their &roduce to the C+72RA* and the latter did mill their sugarcane during the cro& year ,-56851" albeit" contrary to the contention of the P*A72+R) on &age /- of their brief" none of them had any &roduction coefficients and allotments# :e have carefully e4amined +4hibit A8," the lit of coefficients and &roduction allotments for ,-56851 cro& year and :e have not found any of their names among those listed therein# In fact" :e have e4amined the lists for the other years" +4hibits A" A86" A81" A8/" etc# 2heir names are not in any of them# )ince they had no &roduction allotments" it stands to reason that they were not &roducing to fill any Huota allotments# But even if :e should hold that these eight emergency &lanters should be e4cluded from the ,6, :e have found above" the final outcome of the main issue under discussion would not be altered" considering Our other finding" as will be stated later" regarding the number of contract &lanters adherent to the C+72RA* during the cro& year ,-56851# 1# 2he trial court erroneously counted eight other &lanters twice# According to the trial court" as a&&ears in the above Huoted &ortion of its decision" eight &lanters" namely" Rafael *acson" )alvador *acson" +rnesto *acson" +duardo *acson" (aniel *acson" Dictoriano *acson" (aniel 9alandoni and il de Oca" although they are already included among the ,6, listed by it Mhave to be listed twice because each of them o&erates at least one &lantation under a written milling contract and one other &lantation without written milling contract#M $P&# /658/6." Record on A&&eal of C+72RA*#% :e cannot agree# As :e read )ection , of Re&ublic Act .@-" Mthe absence of written milling agreements between the majority of the &lanters and the millers of sugarcane in any milling district in the Phili&&inesM &lainly contem&lates only the total number of actual &lanters milling in a given central such that if the majority of that number have written milling contracts" the &rovision would no longer a&&ly" regardless of the number of &lantations any of such &lanters have cultivated and whether or not all of such &lantations are covered by contracts# In other words" it is absence of written contracts with the majority of the &lanters that is the criterion# If a &lanter has a contract with the Central covering one &lantation he wor<s on" there can be no absence of

contract with him" even if he cultivates other &lantations not covered by any contract# Indeed" it is absurd to thin< that a &lanter is a contract &lanter and a non contract &lanter at the same time" where the law" as in this case" does not refer to &lantations covered or not covered by contracts" but only to &lanters who have or do not have contracts with the central 2hus" it is evident that the trial court erred in counting those eight &lanters twice" once as contract &lanters and se&arately again as non contract &lanters" in com&uting the total number of &lanters in the district# 7either the number of &lantations wor<ed by a &lanter nor the number of Huotas he has is relevant# Anyway" as long as a &lanter has a contract covering one &lantation" the li<elihood" insofar as the ratio of sharing is concerned# is that he would get the same ratio for the &lantations not covered by the contract" since under +4ecutive Orders 7os# -@@ and -@," )eries of ,-16" the &lantation milling share for the &lantations not covered by any contract with the miller Mshall be the most freHuent basic &lantation milling share sti&ulated in valid written contracts#M In connection with the above figures" it is interesting to &oint out that in the official communication of the )ugar Administrator" Anne4 C of the com&laint in this case" it is stated that according to the records of his office there were ,56 &lanters adherent to 2alisay8)ilay !illing Com&any during the cro& year ,-56851# :hile neither &arty admits the correctness of such figure" it may be noted that the C+72RA*Ns contention in regard to the &oint at issue seems nearer to the finding of the )ugar Administrator" whereas the conclusion of the trial judge" sustained by the P*A72+R)" a&&ears to be Huite farfetched# 6 2here were ,6, &lanters in ,-56851# In the light of the foregoing disHuisition" and ado&ting a liberal view as to the emergency &lanters# Our conclusion is that for the &ur&oses of the a&&lication of )ection , of Re&ublic Act .@- to the 2alisay8)ilay sugar district during the cro& year ,-568,-51" there were one hundred si4ty8 one $,6,% &lanters adherent to the C+72RA*# LBL 2G+ 7'!B+R O0 CO72RAC2 A7( 7O78CO72RAC2 P*A72+R) I7 2G+ 2A*I)AO8)I*AO (I)2RIC2 I7 ,-56851 CROP O+AR# Gaving arrived at the conclusion that there were ,6, &lanters in the district in Huestion in cro& year ,-56851" the ne4t issue for Our resolution is" how many of those &lanters had contracts with the C+72RA* during that &eriod# Otherwise stated" was there absence of contract with a majority of them during that cro& yearS In arriving at its conclusion as to the number of contract &lanters" the trial court merely counted the contracts but omitted to consider how many &lanters are bound thereby and" incidentally" who they are# Ruling on this issue" after finding albeit erroneously that there were ,5@ &lanters in the district" when there were actually only ,6," including already the . emergency ones" Gis Gonor held3 MOf the above &lanters" the following have written milling contracts with the Central on 9une 66" ,-56 as shown by their contracts +4hs# C" C8, to C8663 +4hibit C L Rosendo AlvareC C8, L A# Be Chingsuy C86 L Gormesinda (iaC C81 L 0ernando +reQeta C8/ L 0undador +s&uelas C85 L )imon +s&uelas C86 L Dictoria +s&uelas C85 L Blandina amboa C8. L 9ose B# amboa C8L 9ulian 0# onCaga C8,@ L )erafin R# amboa C8,, L )oledad amboa Dda# de DeleC C8,6 L Carlota onCaga C8,1 L !aria G# !aramba in her ca&acity as 9ud# Admt4# of +state of +steban Genares C8,/ L Patricio Gerrera C8,5 L (aniel G# 9alandoni C8,6 L Celsa *# Dda# de Jilay<o C8,5 L Rufina C# Dda# de Jilay<o C8,. L Carolina *acson igante C8,L Rodrigo *acson R (amaso *acson C86@ L (aniel *acson for himself and in &lace and stead of 9osefa *acson" Irene *acson" )alvacion *acson and 2eresa *acson de Presbitero C86, L +duardo B# *acson C866 L +rnesto 9# *acson C861 L loria *acson 2am&inco C86/ L !ercedes *acson C865 L 0eli&e *acson C866 L Rafael *acson C865 L Rosario AvanceQa Dda# de *acson C86. L Rosario AvanceQa Dda# de *acson C86L )alvador *acson C81@ L )ofia *acson de onCaga C81, L Dictoria *acson C816 L (r# Antonio A# *iCares C811 L Antonio !# A# *iCares C81/ L Carmen G# Dda# de *iCares

C815 L (emetria Dda# de *iCares C816 L +miliano *iCares C815 L +state of the deceased +nrica Alunan Dda# de *iCares re&resented by (r# Antonio *iCares C81. L 0eli4 A# *iCares C81L enerosa B# Dda# de *iCares C8/@ L !aria A# *iCares" 0elisa *# de 9alandoni R (r# Antonio A# *iCares C8/, L Purita *iCares 2iongson C8/6 L )im&licio *iCares &or los heredores de la difunta Agueda *iCares C8/1 L )im&licio *iCares C8// L Adela *# Dda# de !a&a C8/5 L Angel !ascuQana C8/6 L !aria *iCares de !isa C8/5 L !aria *iCares de !isa for herself and by general &ower of attorney for the &lace and stead of 7icolas I# !isa C8/. L !aria *# de !isa" erman *acson" +rnesto *acson R Cecilia *# de !isa C8/L Patricia Dda# de Oca C85@ L +ncarnacion *# Dda# de Panlilio" +figenia *# Dda# de Paredes" Remedios *# de uinto y *eon uinto C85, L 2estate +state of (on +steban de la Rama C856 L +state of (omingo RodrigueC re&resented by (r# Antonio A# *iCares C851 L *eontina 7# de )ian C85/ L *eontina 7ovella de )ian for herself and in her ca&acity as Attorney8in8fact for the co8owners of Gda# Cafe consisting of *ots 7os# /.@ and /., C855 L Ciriaco 2recho C856 L 0elimon 2recho C855 L !iguela 2recho C85. L Petra 2recho C85L !agdalena *# de 2reyes" for herself and by &ower of Attorney for the &laces and stead of all the other heirs C86@ L orgonio 2reyes C86, L Anita de *eon de Dillanueva C866 L Pelagio Dillarde# MAmong the &lanters in +4h# G8," eleven $,,% who did not have the milling contracts when Re&ublic Act 7o# .@- was enacted" entered into milling contract on 0ebruary ,5" ,-51 $+4hs# (" (8," (86" (8/" (8,5" (8,6" (8,5" (8,." (866" (86/ and (865%# 2hey should be added to the 61 with milling contracts during the agricultural year ,-568,-51" thereby ma<ing a total of 5/# )ince the majority of ,5@ is .6" the Court holds that a majority of the &lanters in the 2alisay8)ilay !illing (istrict did not have a written milling contract during the agricultural year ,-568,-51# Re&ublic Act 7o# .@- is" therefore" a&&licable that year#M $P&# /6.8/16" Record on A&&eal of C+72RA*#%# It is to be noted that in arriving at the foregoing conclusion" the trial judge did not more than count the number of contracts &resented in evidence" +4hibits C" C8, to C866" (" (8," (86" (8/" (8,6" (8,6" (8,5" (8,." (866" (86/ and (865# 7o effort was made to e4amine the details of said contracts in order to find out who and how many" in fact" are the &lanters bound by each of them# Actually" these details are of decisive im&ortance" for the basis ado&ted by the trial court ignores the realities of the true situation as well as the legal im&ort of said contracts vis8a8vis the main issue &resented for its determination# On &ages -@8-6 of its brief" the C+72RA* ma<es the &ertinent observations that3 *ib*e4 M# # # 2hus" an e4amination of the milling contracts" in Huestion" will show that some of the &lanters listed by the 9udge" as for e4am&le" !aria *# de !isa $7o# -%" actually had e4ecuted and signed at least three milling contracts mentioned by the 9udge" namely3 +4hibits NC8/6N" NC8/5N and NC8/.N%# On the other hand" some milling contracts" as" for e4am&le" +4hibit NC815N" e4ecuted on !ay ,1" ,-/." by the 9udicial Administrator of the owner" +state of +nrica A# Dda# de *iCares" actually covers two &lantations or haciendas named N!inuluanN and N+figeniaN# But after the &roject of &artition of said +state of +nrica Alunan Dda# de *iCares was later a&&roved" as shown by +4hibit NDN" the hacienda N!inuluanN alone was actually subdivided among si4teen heirs" and each subdivision was given a se&arate &lantation audit number in the name of the corres&onding heir" from Plantation 7o# 6,1 to Plantation 7o# 66-8a; in such a way that in the list of &lantation owners" and their corres&onding Production Coefficients and Allotments" contained in +4hibit NA8,N $&ar# ," 0irst )ti&ulation" &&# ,-.8,--" CentralNs Record on A&&eal% for the cro& year ,-568,-51" each of the newly numbered subdivision &lantations was already registered in the name of the res&ective heirs" as follows3 Plantation 7o# Plantation Owners 6,1 *iCares" !aria A# 6,/a Obiernas" +strella !# de and !a&a" Placido *# 6,5 *iCares" )im&licio 6,6a *iCares" Geirs of 7icolas 6,5 *iCares" +miliano 6,. Jilay<o" Celsa *# Dda# de 6,-a Panlilio" +ncarnacion *# Dda# de 66@ 9alandoni" 0elisa *# Dda# de 66,a *iCares" (r# Antonio A# 666 *iCares" Geirs of +nriHue 661a Paredes" +figenia *# Dda# de 66/a uinto" Remedios *# de 665 9alandoni" 0elisa *# Dda# de 665 *iCares" Rodolfo 66.a *iCares" Asuncion *o&eC Dda# de

66-a !oreno" 9immy 7olanM AnalyCing the 61 contracts" +4hibits C" C8, to C866" &lus the eleven new ones ta<en into consideration by the trial court" the obvious inevitable result is that there were .6 contract &lanters# 2here is am&le su&&ort in the record for the &oints thus raised by the C+72RA*# Indeed" a close scrutiny of the evidence shows Huite &lainly that there are contracts listed in the lower courtNs decision $+4hs# C8C8, to C866% that bound not the &ersons who a&&ear to have e4ecuted the contracts with the C+72RA* but their successors in interest or their lessees# An e4am&le of this is the case of +4h# C8, in the name of A# Be Chingsuy# 2his A# Be Chingsuy is not listed in +4hibit G8, as one of the &lanters affiliated with the C+72RA* during the cro& year ,-56851# 2he evidence shows that 9ose Beson is a transferee by absolute sale of Gda# 2abayag" PAA ." from A# Be Chungsuy $+4h# GG% and a lessee of Gda# Cataywa" PAA 6a" and Gda# *uciana PAA 5a $+4h# A8, &# 6%# It is also shown that 0rancisco Jilay<o is lessee of Gda# Bantod" PAA /c $+4h# A8, &# 6%# All these haciendas mentioned are covered by contract +4hibit C8, entered into by A# Be Chingsuy with the C+72RA*# Both 9ose Beson and 0rancisco Jilay<o are listed in +4hibit G8, as &lanters affiliated with the C+72RA* in the cro& year ,-56851 and the P*A72+R) e4&ressedly admit in their brief that 9ose Beson and 0rancisco Jilay<o were contract &lanters for the cro& year ,-56851# $&# D" Anne4 A% 2he milling contract bound 9ose Beson and 0rancisco Jilay<o because of the &rovision of &aragra&h ,5" which is found in all milling contracts" as follows3 cd&hil M,5# Kue este contrato" y todos sus terminos obligaciones y condiciones se entenderan contraidos tambien &or las tierras y &lantaciones mencionadas" y seran obligaterias &ara los Plantadores testamentarios" albaceas" cesionarios y re&resentantes de los Plantadores y &ara las &lantaciones y las tierrasM# 2here are many other &ersons a&&earing as the ones who e4ecuted the milling contracts" but were not &lanters affiliated to the C+72RA* during the cro& year ,-56851# 2his is where the lower court committed error# It sim&ly assumed that the 61 contracts $+4hs# C" C8, to C866% as re&resent also 61 &lanters with milling contracts" without ta<ing into consideration that there were many of those contracts that bound not the &ersons who e4ecuted them but the &erson or &ersons who are the successors in interest of those who did so# :hat the lower court did was sim&ly to count the contracts as they are L 61 in all L without even considering that there are cases of two or three contracts a&&earing in the name of one &erson# )uch" for instance" is the case of !aria *# de !isa" as &ointed out by counsel for the C+72RA*" who a&&ears to have e4ecuted three contracts $+4hs# C /6" C8/5 and C8/.%# 2hen there is the case of Rosario AvanceQa Dda# de *acson who a&&ears to have e4ecuted two contracts $+4hs# C865 and C86.%# As can be seen" Rosario AvanceQa Dda# de *acson is not even listed in +4h# G8, as a &lanter affiliated to the C+72RA* during the cro& year ,-56851# 2here is also the case of )im&licio *iCares who a&&ears to have e4ecuted two contracts L one for himself $+4h# C8/1% and another for the heirs of the late Agueda *iCares $+4h# /6%# In other words" the finding of the trial court that there were 61 contract &lanters has no other basis than that there were numerically 61 contracts e4tent in the record# 7o thought at all was given to the fact just &ointed out that in a number of said contracts the P*A72+R) involved are the same# 7either did Gis Gonor consider" that" on the other band" there are contracts that bound more than one P*A72+R" such as the contracts e4ecuted by (aniel *acson" for himself and for four others $+4h# C86@%; the contract e4ecuted by the e4ecutor of the estate of +nrica Alunan Dda# de *iCares $+4h# C815%; the contract e4ecuted by the e4ecutor of the estate of +steban de la Rama $+4h# C85,%; the contract e4ecuted by the administrator of the estate of (omingo RodrigueC $+4h# C856%; the contract e4ecuted by !agdalena *# de 2reyes" for herself and as attorney8in8fact of the other heirs" who were individually &lanters in their own rights" etc# 2hese cases certainly ma<e manifest the error committed by the lower court in sim&ly counting the 61 contracts as re&resenting 61 contract &lanters affiliated with the C+72RA* during the cro& year ,-56851# Contrary to the finding of the trial court there were .6 contract &lanters# It is Our considered o&inion" and so :e hold" that the trial courtNs finding that there were only seventy8four $5/% contract &lanters in the 2alisay8 )ilay district in cro& year ,-56851" $the 61 that the court based on +4hibits C" C8, to C866 &lus the eleven borne by +4hibits (" (8," (86" (8/" (8,5" (8,6" (8,5" (8,." (866" (86/ and (865" the contracts e4ecuted on 0ebruary ,5" ,-51" that is" after the Act too< effect on 9une 66" ,-56 but within the cro& year ,-56851% is inaccurate and does not reflect the true im&ort of the undis&uted documents in the record submitted by the &arties along with their sti&ulations of fact# :e have scrutiniCed each of the contracts referred to by Gis Gonor and chec<ed and rechec<ed their &ertinent &rovisions regarding the status of the contracting &arties therein# :e are fully convinced that" on the basis thereof" it is beyond Huestion that there were no less than eighty8si4 $.6% contract &lanters in the district in Huestion during the material &eriod here in dis&ute# 2o begin with" there are forty8four $//% &lanters as to whim the C+72RA* and the P*A72+R) a&&ear to be agreed they are contract &lanters" namely3 ,# AlvareC" Ramon 6# AlvareC" Rosendo 1# Beson" 9ose *# /# Bustamante" Arturo 5# Camon" +milio 6# Coscolluela" Agustin 5# +reQeta" 0ernando G# .# +s&uelas" Dictoria -# amboa" 9ose B# ,@# amboa" )erafin ,,# onCaga" 9ulian ,6# onCaga" *uis *# ,1# Genares" 0idel !# ,/# Gerrera" Patricio ,5# GofileQa" Dicente ,6# 9alandoni" 0elisa Dda# de ,5 #9alandoni" 7icolas ,.# Jilay<o" Celsa *# Dda# de ,-# Jilay<o" 0rancisco (r# 6@# Jilay<o" Ramiro C#

6,# *abayen" 9ulio (# 66# *acson" 0eli&e 61# *acson" Pedro 6/# *iCares" Antonio (r# 65# *iCares" Antonio !a# 66# *iCares" Carmen G# Dda de 65# *iCares" (emetria Dda# de 6.# *iCares" +miliano 6-# *iCares" 0eli4 A# 1@# *iCares" enerosa" Dda# de 1,# *iCares" !aria A# 16# *iCares" Purita 11# *iCares" )im&licio 1/# !ascuQana" Angel 15# !isa" !aria *# de 16# Olim&o" 0elicidad 15# Panlilio" +ncarnacion *# Dda# de 1.# )antibaQeC" +fraim 1-# 2an&ingco" loria *# de /@# 2orres" 9ose and R# de *eon /,# 2recho" !iguela /6# 2reyes" orgonio /1# Dillanueva" Alfredo //# Dillarde" Pelagio $C+72RA*Ns Brief" &&# -18,,5; P*A72+R)N Brief" A&&endi4 A" P&# ID to *IP#%# Gowever" in the uidelines and 2abulations submitted to the Court by counsel for the P*A72+R)" Atty# !iguel D# onCaleC" to which is anne4ed as +4h# A8, a list of the &lanters indicating who in the view of said P*A72+R) had written contracts with the C+72RA* during cro& year ,-56851" the name of +fraim )antibaQeC" 7o# 1. above" does not a&&ear as a contract &lanter" whereas )ergio DeleC and !anuel Dillanueva" who are not listed above are included as contract &lanters# )ince it is rather too late in the day now for the P*A72+R) to alter the classification" already given by them in their brief" in a manner that would favor them" while any admission made by them at this stage adverse to their interest should bind them" it results that :e should consider the status of /6 &lanters to be contract &lanters during cro& year ,-56851 as no longer controversial# )o" also are the &arties in virtual agreement that the following seventy8five $55% &lanters are non8contract ones3 5 ,# Agravante" (ominador 6# Alano" Amado (r# 1# Ayalde" Ceferino 2# (r# /# Cla&arols" C#P# Dda# de 5# Cordova" Balconeri 6# Cordova" Candido 5# Cordova" Consoling .# Coscolluela" loria (# -# Cuaycong" 9ose 9# ,@# Cuaycong" 7atividad *# de ,,# +steban" loria de ,6# +strella" (eogracias ,1# amboa" Aguinaldo ,/# amboa" Angel ,5# amboa" eneroso ,6# amboa" Romeo )# ,5# aston" Am&aro C# Dda# de ,.# aston" Benjamin ,-# aston" erardo 6@# ranada" Alfredo 6,# ranada" Caridad 66# ranada" Pura 9# de 61# ranada" Roberto 6/# ranada" :alterio 65# GernaeC" Geirs of Amalia 66# GernaeC" Pedro C# 65# Genares" (ominador 6.# Gilado" Alfonso 6-# Gilado" 2arcela Dda# de 1@# GofileQa" 0e )# 1,# GofileQa" Gector *# 16# GofileQa" *uis Ramiro

11# GofileQa" !anuel )# 1/# GofileQa" RoHue 15# Infante" Purita G# de 16# 9alandoni" Carolina 15# 9avellana" !anuel A# 1.# 9imeneC" Conrado *# 1-# 9ison" (ominador *# /@# 9ison" +milio *# /,# 9ocson" 0lory 9# de /6# 9onota" 9ulian /1# 9ondos" +nriHue //# *abayen" +mma G# de /6# *acson" Angelina de /6# *acson" Consolacion /5# *acson" (omingo :# and +nriHueta /.# *acson" Ignacio" et al# /-# *acson" 9osefita Dda# de 5@# *acson" Purita 5,# *ayson" Dicente 56# *edesma" Anita *# de 51# *edesma" +duardo and !#*# 5/# *edesma" 7icolas and *#!# 55# *iCares" 7ilo 56# *ocsin" Augusto !# 55# *omotan" Dioleta G# de 5.# *o&eC" A&eles Conce&cion and Pom&eyo 5-# *o&eC" 9ulieta G# de 6@# !edel" !agdalena 6,# !ontinola" 2rino (r# 66# Oca" Aniceta de 61# Oca" 0elisa de 6/# Oca" 0rancisco de 65# Oca" *ibrada de 66# Oca" Pedro de 65# OrtiC" Rosario 9# de 6.# Pascual" 9ose 6-# Pison" +4&edito 5@# Puentebella" Romulo 5,# Robello" Armando 56# )ausi" Atanacio 51# 2reyes" +milia 5/# DasHueC" Ramon 55# Dillasor" !ilagros $Included already among these 56 are the . emergency &lanters &reviously referred to as being controversial#% 2hus" it would a&&ear that it is with res&ect only to the following forty $/@% &lanters listed in the trial courtNs decision that there is controversy in this case as to whether they are contract &lanters or not3 &r** ,# Advincula" Rufino 6# Arnaldo" Ricardo 1# Blanca" *ucilo /# Castor" 9uanito 5# +scay" 9ose # 6# onCaga" Adoracion 5# 9alandoni" (aniel .# 9areQo" Catalino -# *acson" Caridad ,@# *acson" (amaso ,,# *acson" (aniel ,6# *acson" +duardo ,1# *acson" +rnesto ,/# *acson" 9osefina ,5# *acson" Rafael ,6# *acson" )alvador ,5# *acson" Dictoria ,.# *edesma" +duardo *acson ,-# *iCares Co#" Inc#

6@# *iCares" Geirs of +nriHue 6,# *iCares" 9esus 66# *iCares" Rodolfo 61# *ocsin" Agustin 2# 6/# *o&eC" *olita $(olores R# de% 65# !agallanes" 9esus 66# !alajan" Renato 65# 7e&omuceno" !iguel de 6.# 7essia" +ligio 6-# Oca" il de 1@# Oca" *uC de 1,# OsmeQa" *ourdes R# de 16# Pirovano" +stefania Dda# de 11# Rentoy" 0ederico de 1/# )ian" Aniceta Rama de 15# 2orres" 9ose 16# 2recho" Benjamin 15# 2recho" 0elimon 1.# 2reyes" 0lorentino 1-# Obiernas" Dicente /@# Ousay" +nriHue (r# 7ow" of this /@" ten $,@%" namely" $,% Rufino Advincula" $6% Ricardo Arnaldo" $1% *ucilo Blanca" $/% 9uanito Castor" $65% 9esus de !agallanes" $66% Renato !alejan" $65% !iguel de 7e&omuceno" $6.% +ligio 7essia" $11% 0ederico de Rentoy and $15% 9ose 2orres" who is different from 9ose R# 2orres 9r#" were held by the trial court to have been contract &lanters in ,-56851" as already stated earlier" in view of +4hibits (" (8," (86" (8 /" (8,5" (8,6" (8,5" (8,." (866 and (86/" . the ten $,@% contracts e4ecuted by them on 0ebruary ,5" ,-51# In this regard" contrary to the contention of the P*A72+R) in their first counter8assignment of error in their brief to the effect that3 M$,% 2G+ *O:+R CO'R2 +RR+( I7 GO*(I7 2GA2 !I**I7 CO72RAC2) +P+C'2+( A02+R 9'7+ 66" ,-56 )GO'*( B+ CO7)I(+R+( I7 2G+ CO'72I7 O0 CO72RAC2 P*A72+R)#M $Page a" Brief of A&&ellees#%# there can be no &ossible doubt as to the &ro&riety of these &lanters being considered as contract &lanters for the &eriod in Huestion# 2he evidence shows that the sugarcane cro& year in the 2alisay8)ilay !illing district begins on )e&tember of each year and technically ends in August of the following year# It is thus obvious that the cro& year ,-668,-51 began in )e&tember of ,-56# And since the ten $,@% contracts referred to were e4ecuted in 0ebruary ,-51" it follows that they corres&ond to the ,-568,-51 cro& year here in dis&ute" hence" said counter assignment of error should be as it is hereby overruled# 2herefore" Our remaining tas< is limited to the determination of the status of only the remaining thirty $1@% &lanters in the above list# cdre& On this score" the evidence clearly establishes the status of those 1@ &lanters to be as follows3 O7IA A" A(ORACIO7 $7o# 6% L )he is the absolute owner of a definite &ortion of Gda# Bubog" with PAA 6@b covered by contract +4h# C81 signed by 0ernando G# +reQeta covering the said entire Gda# Bubog# '&on acHuiring that definite &ortion of Gda# Bubog and also her own PAA" Adoracion onCaga milled her sugarcane with the C+72RA* under the terms of the contract +4h# C81 $+4hs# G8," &# /; A8," &# 6; and O%# 9A*A7(O7I" (A7I+* $7o# 5% L In the very list of contracts in the decision of the lower court" it a&&ears that contract +4h# C8,5 is in the name of (aniel G# 9alandoni as the owner of PAA ,56a and PAA ,51a $+4h# G8," &# 1%# 2his &lanter had milling contract as heir and owner of the Gda# Cabug" PAA 7o# ,56a and 7o# ,51a" formerly belonging to his aunt Rosario GofileQa and his mother Carmen GofileQa# Ge signed the milling contract +4h# C8,5 as owner# It does not a&&ear that Rosario GofileQa or Carmen GofileQa ever e4ecuted a milling contract# Gowever" PAA ,56a and PAA ,51a cover among other lands *ot 7o# 5/6" and contract +4h# C8,5 e4ecuted on 9uly 6@" ,-/. by (aniel 9alandoni covered &recisely *ot 7o# 5/6 of Gda# Cabug# 2here is identity of the lot covered by contract +4h# C8,5" and PAA 7os# ,56a and ,51a# $+4hs# A8," and D8,,%# *AC)O7" CARI(A( $7o# -% L It a&&ears that contract +4h# C86@ signed by (aniel *acson covers Gda# BinoQga" *ot /.6# It is shown in +4h# O that *ot /.6 is covered by PAA 7os# 6,a" 6,c" and 6,d# PAA 6,a is &lanted by (aniel *acson while PAA 6,c is &lanted and owned by Caridad *acson $+4h# A8, &# 1% as successor in interested the former owners# *AC)O7" (A!A)O $7o# ,@% L Ge is the &lanter with PAA 7O# 58a" Gda# Puyas $+4h# G ," &# 6%# In the very list of contracts in the decision of the lower court it a&&ears that contract +4h# C8,- was e4ecuted by Rodrigo *acson and (amaso *acson# 2here is no Huestion" therefore" that (amaso *acson is a contract &lanter# *AC)O7" (A7I+* $7o# ,,% L It a&&ears that (aniel *acson has PAA 7o# 6,a# In the very list of contracts in the lower courtNs decision" it a&&ears that contract +4h# C86@ was e4ecuted by (aniel *acson for himself and in the &lace and stead of 9osefa *acson" Irene *acson" )alvacion *acson and 2eresa *acson de Presbitero# +4h# O" &# 6 shows that PAA 7os# 6,a" 6,c" 6,d $Gda# BinoQga8Othella% &ertain to *ot 7o# /.6# Contract +4hibit 86@ e4ecuted by (aniel *acson for himself and his co8heirs covers &recisely *ot 7o# /.6# *AC)O7" +('AR(O $7o# ,6% L Ge is the owner of PAA 7o# ,-@" Gda# )ta# !aria $+4hs# G8, &# 1; A8, &# /%# In the very list of contracts a&&earing in the decision of the lower court" it a&&ears that +duardo +# *acson e4ecuted contract +4h# C86,# Ge e4ecuted +4h# C86, on 9une ,6" ,-/." covering Gda# )ta# !aria# *AC)O7" +R7+)2O $7o# ,1% L In the very list of contracts in the decision of the lower court" it a&&ears that +rnesto *acson e4ecuted contract +4h# C866# Ge is the owner of PAA 7o# 6.e and lessee of PAA 6.g owned by !ercedes" 0ernando" Carolina and +strella *acson $+4hs# A8," &# 1%# Ge e4ecuted the contract +4h# C866 on 9uly ," ,-/." covering the &ortion corres&onding to him of *ots 7os# 5@, and 5,@ of the cadastral survey of 2alisay $+4h# O &# 6%# *AC)O7" 9O)+0I7A $7o# ,/% L )he owned and &lanted Gda# )an Antonio" PAA 6@5 $+4h# G8, &# 1 and +4h# A8, &# 5%# )he is successor in interest of Rosario AvanceQa Dda# de *acson who e4ecuted contract +4h# C86.#

*AC)O7" RA0A+* $7o# ,5% L In the very list of contracts in the decision of the lower court" it a&&ears that Rafael *acson e4ecuted contract +4h# C866# Ge owns Gda# Dista , and 6 $+4h# G8, &# 6% PAA 7o# ,66a" and Gda# )ta# !aria $+4h# G8, &# 1% with PAA 7o# ,./# It a&&ears that he e4ecuted contract +4h# C866 on August ,/" ,-/. covering these two haciendas# *AC)O7" )A*DA(OR $7o# ,6% L In the very list of contracts in the decision of the lower court" it a&&ears that )alvador *acson e4ecuted contract +4hibit C86-# Ge has a contract $+4h# C86-% for PAA 6@6" Gda# )an Rafael $+4h# G8," &# 1%# *AC)O7" DIC2ORIA $7o# ,5% L In the very list of contracts" in the decision of the lower court" it a&&ears that Dictoria *acson e4ecuted contract +4hibit C81,# Ger contract covered PAA ,.6" *ot 5 com&rised in Gda# )ta# !aria# *+(+)!A" +('AR(O *AC)O7 $7o# ,.% L2he evidence shows that +duardo *acson *edesma is lessee of a &ortion of Gda# )an 9uan" PAA 6./ owned by Aurora and +lisa *acson" successors in interest to PAA 6.h" covered by contract" +4h# C866" e4ecuted by +rnesto 9# *acson# *IIAR+) Co#" Inc# $7o# ,-% LIt is the owner of Gda# Cabiayan with PAA .6 $+4h# G8," &# 6; and +4h A8," &# 1% covered by contract +4h# C816 e4ecuted by +miliano *iCares" former owner# *IIAR+)" G+IR) O0 +7RIK'+ $7o# 6@% *IIAR+)" 9+)') $7o# 6,% *IIAR+)" RO(O*0O $7o# 66% 2he evidence shows that these three &lanters were affiliated to the C+72RA* during the cro& year ,-56851# 2he Geirs of +nriHue *iCares owned &art of Gda# !inuluan with PAA 666 $+4h# G8," &# /" and +4h# A8, &# 5%# 2he date of entry in the (istrict 2ransfer Registry shows that as of August ." ,-6, the Geirs of +nriHue *iCares already &ossessed a PAA number $+4hs# 222 and BB%# 9esus *iCares was lessee of PAA 6,6a" Gda# !inuluan" owned by the Geirs of 7icolas *iCares who were the heirs of +nrica Alunan Dda# de *iCares# Ge is also the lessee of PAA Gda# !inuluan" owned by Asuncion Dda# de *iCares" an heir of +nrica Dda# de *iCares# 2he evidence shows that as of October 6," ,-6," the date of entry of the lease between 9esus *iCares and the Geirs of 7icolas *iCares in the (istrict Planters Registry" the heirs of 7icolas *iCares already &ossessed a PAA number $+4h# 7777" +4h# BB and +4h# A8,%# 2he evidence also shows that as of October ,6" ,-6," the date of entry of the lease between 9esus *iCares and Asuncion Dda# de *iCares in the (istrict Planters Registry" Asuncion *# Dda# de *iCares already &ossessed a PAA number $+4h CCCCC; +4h# BB and +4h# A8,%# **jur Rodolfo *iCares is the successor in interest of 7olan 9esus" Ramon and !ary" all surnamed *iCares" who owned PAA 665" Gda# !inuluan" in common as heirs of +nrica Dda# de *iCares# PAA 665 was transferred to Rodolfo *iCares on August ." ,-6, and entered in the (istrict 2ransfer Registry on same date $+4h AAAAA; +4h# BB; and +4h# A8,%# 2he Gda# !inuluan formed &art of the estate of +nrica Dda# de *iCares which was covered by milling contract +4h# 815 e4ecuted by the Administrator of the estate# 2here was a &roject of &artition and adjudication" of the estate of +nrica Dda# de *iCares" a&&roved by the court $+4h# D%" and all the &ortions adjudicated to the heirs were bound by the milling contract +4h# 15# +)CAO" 9O)+ # $7o# 5% *OP+I" *O*I2A $(O*OR+)" R# (+% $7o# 6/% O)!+VA" *O'(+) R# $7o# 1,% PIRODA7O" +)2+0A7IA D(A# (+ $7o# 16% )IA7" A7IC+2A RA!A (+ $7o# 1/% 2he foregoing &ersons are listed as &lanters affiliated to the C+72RA* during the cro& year ,-56851# 9ose +scay was lessee of Gda# +smeralda" PAA ,,/b $+4h# G8," &# ,; +4h# A8," &# 1%" which &lantation was &art of the estate of +steban de la Rama re&resenting Gijos de I# de la Rama# 2he (istrict Planters Registry shows that as of 9uly 1@" ,-15 +# de la Rama" re&resenting Gijos de I# de la Rama had PAA number# $+4h# PPPPPP%# 9ose +scay was bound by contract" +4h# C85, e4ecuted by the administrator of the estate of +steban de la Rama# *olita $(olores% de *o&eC was the owner of PAA 61861" 6585@ and /@86/ $+4h# G8," &# ,%" Gda# Cabanbanan" as heir and successor in interest of +steban de la Rama# $+4h# A86" &# ,,%# 2he (istrict 2ransfer Registry shows that on 9uly ,," ,-66" she already had a PAA number $+4h# AAAAAA" and +4h# BB%# )he milled her sugarcane with the C+72RA* under contract +4h# C85, e4ecuted by the administrator of the estate of +steban de la Rama# *ourdes R# OsmeQa was the owner of PAA 61866" 668/- and /@861 $+4h# G8," &# ,%" Gda# Cabanbanan $+4h# A86" &# ,,%# As of 9uly ,," ,-56 the (istrict 2ransfer Registry shows she had already a PAA number $+4h# OOOOO and +4h# BB%# )he was bound by contract" +4h# C85, e4ecuted by the administrator of the estate of +steban de la Rama# +stefania Dda# de Pirovano was the owner of PAA 6186, and /@866 $+4h# G8," &# ,%" Gda# Cabanbanan $+4h# A86" &&# ,@8,,%# As of 9uly ,," ,-56 the (istrict 2ransfer Registry shows she had her PAA number $+4h# ::::: and +4h# BB%# )he was also bound by contract +4h# C85," e4ecuted by the administrator of the estate of +steban de la Rama# Aniceta Rama de )ian was the owner of PAA 6686/ and /@865# Gda# Cabanbanan $+4h# G8," &# ,%" also &art of the estate of +steban de la Rama# )he was bound by contract +4h# C85, e4ecuted by the administrator of the estate of +steban de la Rama# !oreover" according to +4hibit (861" this &lanter e4ecuted a written agreement with the C+72RA* on 9une 61" ,-51# Regarding the estate of +steban de la Rama" the distribution of the estate is shown in the &roject of &artition +4h# D8/" and the identification of the lots inherited by the heirs is shown in +4h# O# 2he P*A72+R) contend that the &lanters who are heirs or lessees of &lantations that belonged to the estate of +nrica Alunan Dda# de *iCares and to the estate of +steban de la Rama can not be counted as contract &lanters because they did not e4ecute milling contracts with the C+72RA* themselves" but were sim&ly covered by the contracts e4ecuted by the judicial administrators of those estates $+4hs# C815 and C85,%# 2he P*A72+R) assert that the judicial administrators were not authoriCed by the court to enter into the milling contracts" and so the milling contracts were null and void" s&ecially because the milling contracts contained &rovisions which would convey to the C+72RA* certain real rights over the &lantations covered by the contracts" such as easements" etc# 0or the &ur&oses of this case" the contention of the P*A72+R) can not be sustained# 2he validity or nullity of the milling contracts entered into by the administrators of the estates of +nrica Alunan Dda# de *iCares and of +steban de la Rama is not in issue in the &resent case# :hat is sim&ly sought to be determined in this case is whether or not on 9une 66" ,-66 when R#A# .@- went into effect the &lanters who &roduced sugarcane in the &lantations formerly belonging to the estates of +nrica A# Dda de *iCares and +steban de la Rama were milling their sugarcane with the C+72RA* under contracts that were then acce&ted by the &lanters as binding on them and the C+72RA*# 'ntil those contracts are

declared invalid by the court in &ro&er &roceedings" those contracts should be considered valid and binding between the &arties thereto and their successors in interest" us the said &arties did in fact consider them to be so# It cannot be gainsaid that those contracts were entered into by the e4ecutor or administrator as a &ro&er act of administration" and the heirs and successors in interest of the &ro&erties belonging to the estate acce&ted" and benefited from" that act of the administrator# :e have found that the administrators of the estates of +nrica A# Dda# de *iCares and +steban de la Rama did not" in fact" enter into new contracts# 2hey sim&ly signed e4tension contracts" or contracts that e4tended the very contracts signed by the decedents themselves during their lifetime" because those administrators considered it necessary for the &ro&er administration of the sugar &lantations that framed &art of the estates under their administration# 2he administrator of the estate of a deceased &erson may e4ercise all acts of administration without s&ecial authority from the court# - 2he fact that even after the judicial administration of the estates the heirs or successors in interest continued to abide by the milling contracts e4ecuted by the administrators" and acce&ted the benefits arising from the contracts" showed that those heirs and successors in interest ratified the acts of the administrators and submitted themselves to the terms and conditions of the milling contracts# :e hold" therefore" that for the &ur&oses of the a&&lication of R#A# .@- to the 2alisay8)ilay !illing (istrict for the cro& year ,-56851" the milling contracts" +4h# C815" e4ecuted by the administrator of the estate of +nrica A# Dda# de *iCares" and +4h# C85," e4ecuted by the administrator of the estate of +steban de la Rama" should be considered not as merely the contracts of two &lanters but as the se&arate contracts of the individual successors in interests of said estate who had already received their res&ective shares in the res&ective inheritances and who were actually holding se&arate and distinct Plantation Audit 7umbers res&ectively and who were actually dealing with the Central inde&endently of each other" as they were deemed by the Central to be such# *OC)I7" A ')2I7 2# $7o# 61% L 2he evidence shows that Agustin 2# *ocsin" was the owner of P8AA 616" Gda# !atabang" $+4hs# G8," &# 6; and A86 &# ,@%# 2his &lanter e4ecuted milling contract +4h# (8,/ on A&ril ,/" ,-51# Considering that cro& year ,-56851 commenced on )e&tember ," ,-56 to August 1," ,-51" he is thereby a contract &lanter for said cro& year# **jur OCA" I* (+ $7o# 6-% L Ge was the lessee of Gda# *ibrada" PAA -@e $+4h# G8," &# ,% owned by Patricia de Oca who e4ecuted contract" +4hibit C8/-%# OCA" *'I (+ $7o# 1@% L )he was the owner and &lanter of Gda# !atabang" PAA 5- $+4h# G8," &# 6% and which was covered by contract" +4h C8/6" e4ecuted by )im&licio *iCares for the heirs of Agueda *iCares# 2R+CGO" 0I*+!O7 $7o# 15% L In the very list of contracts in the lower courtNs decision" it a&&ears that 0ilemon 2recho e4ecuted milling contract" +4h# C856# Ge owned PAA ,66 and is &art owner of Gda# Pantayanan $+4h G8," &# 6#% In fact" +4hibit C856 clearly states that he signed the same as owner of *ots 7os# 56@8A" 565" -66 and ,1@1 all of the cadastral survey of 2alisay" 7egros Occidental" hence" the observation of the P*A72+R) about his being a lessee without any right to enter into a contract is not borne by the record# 2R+O+)" 0*OR+72I7O $7o# 1.% L Ge was owner of PAA ,-/" Gda# Baga8as $+4h# G8," &" 1%# Gda# Baga8as" with PAA ,-1 and ,-/ $)ee +4h# O% was covered by contract +4h# C85- e4ecuted by !agdalena 2reyes" and as &ower of attorney of all other heirs# 0lorentino 2reyes is successor in interest to PAA ,-/ $+4h# G8," &# 1 and +4h# A8," &# /%# OBI+R7A)" DIC+72+ $7o# 1-% L Ge was the lessee of Gda# Cabiayan" PAA .5b $+4h# G8," &# 6% owned by Placido !a&a and +strella !a&a de Obiernas $+4h# A8," &# 1% who were the successors in interest of the former owner" Adela *# Dda# de !a&a who e4ecuted contract# +4h# C8//# O')AO" +7RIK'+ $7o# /@% L Ge was owner of Gda# )an 9uan" PAA 6.b $+4hs# A8," &# 1 and +4h# G8," &# 6%# Ge was the successor in interest of Carolina *acson igante" former owner of &art of Gda# )an 9uan that was acHuired by +nriHue Ousay" who e4ecuted contract" +4h# C8,.# 9AR+VO" CA2A*I7O $7o# .% L Catalino 9areQo was owner of PAA 1.a" Gda# 2rinidad" $+4h# G8," &# , and +4h# A8," &# 6%# !aria G# !aramba as judicial administratri4 of the +state of +steban Genares signed contract" +4h# C8,1" covering Gda# +ncarnacion with PAA 15b and Gda# 2rinidad with PAA 1.a# Gda# 2rinidad was sold to Aniceta 9areQo Perdigueros $+4h# GG% and Catalino 9areQo was successor in interest of Aniceta 9areQo Perdigueros# 2R+CGO" B+79A!I7 $7o# 16% L Ge was owner of PAA ,1@b" Gda# Pantayanan $+4h# G8," &# 6; and +4h# A86" &# /%# Ge was successor in interest of Pelagio Dillarde who e4ecuted contract +4h# C866 which covered Gda# Pantayanan# As intimated earlier" these 1@ &lanters :e have found to have been established by undis&utable evidence to be contract &lanters" as just e4&lained" added to the /6 &lanters mutually admitted by the &arties to be also contract &lanters" &lus the ,@ whom the trial court correctly included because they unHuestionably signed contracts on 0ebruary ,5" ,-51" ma<e eighty8si4 $.6% contract &lanters# It is inconceivable how any lesser number can be said to be borne by the evidence on the record" hence" this figure is well nigh incontestable# 2o summariCe then the situation obtaining in the 2alisay8)ilay sugar district during the cro& year ,-56851" :e can see that out of the one8 hundred si4ty8one $,6,% &lanters :e found there were in the district during that &eriod" eighty8si4 $.6% had contracts binding unto themselves# Clearly" therefore" since the majority of ,6, is .," there was a majority of &lanters with written contracts during said cro& year" hence )ection , of Re&ublic Act .@- could not be a&&lied in said district as far as that cro& year is concerned# LCL 2G+ )I2'A2IO7 I7 CROP O+AR ,-518,-5/ Contrary to the finding of the trial court" the majority of the contract &lanters in ,-5185/ was bigger and more indubitable# It is to be regretted that the trial court made a very scanty discourse of the situation that obtained during the ,-5185/ cro& year# 2his is how briefly it viewed the matter3 M0or the year ,-5185/" Alfredo A# Bustamante" a new &lanter entered into a written milling contract but without duration or e4&iry date $+4h# (8 1%# It shall be considered a written milling contract for ,-518,-5/ only and the number of &lanters shall be deemed increased to ,5,# MAgustin 2# *acson also entered into a written milling contract $+4h# (8,/% effective from ,-518,-5/ to 9une ," ,-65# Ge was a &lanter in ,-568 ,-51 without a written milling contract and" therefore" the total number of &lanters for that cro& year will not be affected# MAniceta R# de )ian milled her ,-568,-51 cro& under written milling contract +4h# 85, e4ecuted by the administrator of the estate of +steban de la Rama# Ger contract +4h# (861 dated 9une 61" ,-51 has no date of effectivity# It should be considered for the ,-5185/ cro& only and will increase the number of &lanters with written milling contracts for that year by one because her share of the &ro&erties covered by the written contract e4ecuted by the administratri4 $+4h# C85,% is segregated and is now covered by +4h# (861" a se&arate contract# 2herefore" the &lanters for ,-518,-5/ are ,51 and the majority is .5#

MAdding the three written contracts +4hs# (81" (8,/ and (861 to the 5/ written milling contracts for the ,-568,-51 agricultural year will give 55" which is still short by ,@ to obtain a majority for that year# Gence" for the year ,-518,-5/" Re&ublic Act 7o# .@- also a&&lies#M $P&# /168/11" Record on A&&eal#%# 2he evidence" however" reveals much more than what the trial judge cared to discuss# 0or instance" of the ,6, &lanters in ,-56851 :e found above" as listed in +4hibit G8," the following twelve $,6% &lanters listed together with their res&ective status already determined earlier% no longer a&&ear in +4hibit G86" the list of &lanters in cro& year ,-5185/3 ,# Cordova" Candido $non8contract% 6# amboa" Angel )# $non8contract% 1# ranada" Pura # de $non8contract% /# Gilado" Alfonso $non8contract% 5# *iCares" (emetria Dda# de $contract% 6# *iCares" Geirs of +nriHue $contract% 5# *iCares" Purita $contract% .# *ocsin" Augusto !# $non8contract% -# !edel" !agdalena $non contract% ,@# Oca" Aniceta de $non8contract% ,,# Oca" 0rancisco de $non8contract% ,6# Dillanueva" !anuel G# $contract%# 2his absence sim&ly means that they did not cultivate any &lantation during that &eriod" thereby leaving only ,/- of the initial ,6, to be considered as having continued to be &lanters in the ,-5185/ &eriod# As can be seen" only four $/% of them were contract &lanters; the rest or eight $.% were non8contract ones# On the other hand" +4hibit G86 contains the names of fourteen $,/% &lanters not listed in +4hibit G8," thereby indicating that these ,/ must have been new &lanters who came in only in the ,-5185/ cro& year# Adding these ,/ to the ,/- left of ,-56851 list" the total of &lanters in ,-5185/ cro& year was ,61# 2he names of these ,/ new &lanters as well as their res&ective contract status" as shown by the documentary evidence corres&ondingly annotated after their res&ective names follow3 &r** ,# Bustamante" Alfredo $+4h# G86" &# 5% $contract% +4ecuted on 0eb# ,5" ,-61 +4h# (81# 6# Cuenca" 0ernando $+4h# G86" &# ,% $non8contract% 1# amboa" Arturo $+4h# G86" &" /% $non contract% /# onCaga" Ricardo $+4h# G86" &# 6% $non8contract% 5# ranada" +dgardo $+4h# G86" &# /% $contract% Ge e4ecuted milling contract" +4h# (85 on 0ebruary ,6" ,-6/#+8Alibaso $without Huota% $+4h# G86" &# /% 6# 9ocson" 7arciso $+4h# G86" &# /% $non8contract% 5# Jilay<o" Agustin $+4h# G86" &# 1% $contract% PAA 7o# ,/5a L Gda# !atab8ang $+4h# G8a" &# 1% 2he owner is Celsa *# Dda# de Jilay<o $+4h# A86" &# -%# According to +4h# O" &# 1" PAA ,/5a" together with PAA .-a" is com&rised" among others" in lots 7os# //@8A# *ot //@8A is covered by +4h# C8 ,6" e4ecuted by the owner Celsa *# Dda# de Jilay<o on A&ril 1@" ,-/.# Planter8lessee must" therefore" be considered as also under contract# .# Jilay<o" 9esus *# $+4h# G86" &# ,% $contract% PAA 7o# /d L Gda# Bantud $+4h# G8a" &# ,% Owner is Alejandro Be Chingsuy $+4h# A86" &# 5%# Plantation 7o# /d" Gda# Bantud" is covered by contract +4h# C8," e4ecuted by the owner on August ,6" ,-/." covering lot 7o# 55@" which &recisely com&rised PAA /d $+4h# O" &# ,%# Planter" must" therefore" be considered as a lessee under contract# -# *iCares" Cecilia de *acson $+4h# G86" &# /% $contract% PAA 7o# 6,1 L Gda# Cabiayan $+4h# G86" &# /% Owner $+4h# A86" &# ,@%# Gacienda Cabiayan $PAA 7os# .5b" ,65" and 6/1% is com&rised in lots 7os# 5,," 5,1 C $+4h# O" &# 1%# *ot 5,1 C is under contract" +4h# C8//" e4ecuted by Adela *# Dda# de !a&a on A&ril 1@" ,-/.# Planter must therefore be considered as a successor in interest to a &lantation under contract" and must be considered as under contract also# ,@# *iCares" *ourdes $+4h# G86" &# /% $contract% PAA 7o# 661b L Gda# !inuluan $+4h# G86" &# /%" 6/6 L Gda# Baga8as $+4h# G86" &# /%" 666 L Gda# !inuluan $+4h# G86" &# /%" 665 L Gda# Conce&cion $+4h# G86" &# /%# MPlanter is owner of PAA 6/6 $+4h# A86" &# ,@%; and lessee of PAA 661b owned by +figenia *# Dda# de *iCares $+4h# A86" &# ,@%# 2he owners of PAA 7os# 666 and 665 do not a&&ear in +4h# A86# +4h# O" &# 1" shows that PAA 6/6 com&rises lots 7os# /56" /51" /6,8B" /55" /5," and /6-# 2hese lots are covered by +4h# C816" e4ecuted by (emetria Dda# de *iCares# Planter must be considered the latterNs successor in interest to said lot" and must be considered as under contract# ,,# *iCares" !aria (# $+4h# G86" &# 6% $contract% PAA 7o# ,/@8Gda# )an 0ernando $+4h# G86" &# 6%# Owner $+4h# A86" &# -%# +4h# O" &# 6" shows that PAA ,/@ $together with ,1-b% com&rises lots 7os# 565 and ,,6.# +4h# C8/6" e4ecuted by !aria *iCares de !isa covered lot 7o# 565# Gence PAA ,/@ must be considered under contract" and &lanter must be considered also under contract# ,6# Oca" )everino de $+4h# G86" &# /% $contract% +8Gda# Conce&cion $without Huota% $+4h# G86" &# /%# +4ecuted contract (8,- on 0ebruary ,6" ,-6/# ,1# 2orre" Pablo (r# $+4h# G86" &# ,% $non8contract% ,/# Ousay" 9ulieta $+4h# G86" &# 6% $non8contract%# In other words" eight $.% of the fourteen $,/% new &lanters in ,-5185/ had contracts while si4 $6% had none# As to the ,/- &lanters who continued in ,-5185/" hereunder is the list of their names together with the indications of their res&ective contract status during that &eriod" em&hasis being given to those who had no contracts in ,-56851 but who subseHuently e4ecuted written agreements the following year3 ,# Advincula" Rufino $contract% 6# Agravante" (ominador $now8contract &lanter%#

2his &lanter" non8contract in the cro& year ,-568,-51 e4ecuted +4h# (86 on !arch 61" ,-5/# Ge must therefore be considered under contract in cro& year ,-518,-5/# 1# Alano" Amado (r# $contract% /# AlvareC" Ramon 2# $contract% 5# AlvareC" Rosendo $contract% 6# Arnaldo" Ricardo 9r# $contract% 5# Ayalde" Ceferino 2# (r# $non8contract% .# Beson" 9ose *# $contract%# In ,-518,-5/" 9ose *# Beson cultivated also PAA 7o# 5a L Gda# Catabla $+4h# G86" &# ,%# 2his cannot change his status as contract &lanter for he continued cultivating PAA 7os# 6a and 5a which were under contract# -# Blanca" *ucilo $contract% ,@# Bustamante" Arturo $contract% ,,# Camon" +milio $contract% ,6# Castor" 9uanito $contract% ,1# Cla&arola" C# *# Dda# de $non8contract% ,/# Cordova" Balconeri $non8contract% ,5# Cordova" Consoling$non8contract% ,6# Coscolluela" Agustin $contract% ,5# Coscolluela" loria de $non8contract% $now is owner of ,/6c R ,5/ $A8a" &# -% ,.# Cuaycong" 9ose # $now8contract% ,-# Cuaycong" 7atividad *# de $now contract% 7atividad *# de Cuaycong" a non8contract &lanter in ,-568,-51" e4ecuted with her s&ouse 9ose Cuaycong" +4h# (85 on August ,." ,-6/" which date is within the cro& year ,-518,-5/# Both 9ose and 7atividad should" therefore" be considered contract &lanters from that year# 6@# +reQeta" 0ernando G# $contract% 6,# +scay" 9ose # $contract% 66# +s&uelas" Dictoria $contract% 61# +steban" loria A# de $non8contract% 6/# +strella" (eogracias $non8contract% 65# amboa" Aguinaldo )# $non8contract% 66# amboa" eneroso 9r# $non8contract% 65# amboa" 9ose B# $contract% 6.# amboa" Romeo )# $non8contract% 6-# amboa" )erafin R# $contract% 1@# aston" Am&aro C# Dda# de $non8contract% 1,# aston" Benjamin $non8contract% 16# aston" erardo $non8contract% 11# onCaga" Adoracion $contract% 1/# onCaga" 9ulian (r# $contract% 15# onCaga" *uis *# $contract% 16# ranada" Alfredo $non8contract% 15# ranada" Caridad $non8contract% 1.# ranada" Roberto $non8contract% 1-# ranada" :alterio $non8contract% /@# Geirs of GernaeC" Amalia $non8contract% /,# Genares" 0idel !# $contract% /6# GernaeC" (ominador C# $non8contract% /1# GernaeC" Pedro C# $non8contract% //# Gerrera" Patricio $contract% /5# Gilado" 2arcela Dda# de $non8contract% /6# GofileQa" 0e )# $non8contract% /5# GofileQa" Gector *# $non8contract% /.# GofileQa" *uis Ramiro $non8contract% /-# GofileQa" !anuel )# $non8contract% 5@# GofileQa" RoHue $non8contract% 5,# GofileQa" Dicente $contract% 56# Infante" Purita G# de $non8contract% 51# 9alandoni" Carolina $non8contract% 5/# 9alandoni" (aniel $contract% 55# 9alandoni" 0elisa Dda# de $contract% 56# 9alandoni" 7icolas $contract% 55# 9areQo" Catalino $contract% 5.# 9avellana" !anuel A# $non8contract% 5-# 9imeneC" Conrado *# $non8contract% 6@# 9ison" (ominador *# $non8contract% 6,# 9ison" +milio *# $non8contract%

66# 9ocson" 0lory # de $non8contract% !rs# 0lory # de 9ocson" who was a non8contract &lanter in ,-56851" e4ecuted +4h# (8- on 9une 65" ,-5/" which is within the cro& year ,-518 ,-5/# )he must be considered therefore a contract &lanter in this cro& year# 61# 9onota" 9ulian $non8contract% 6/# 9undos" +nriHue $now8contract%# +nriHue 9undos e4ecuted +4hibit (8,@ on 9uly 6-" ,-5/; so he should be counted as contract &lanter in this cro& year# 65# Jilay<o" Celsa *# Dda# de $contract% 66# Jilay<o" 0rancisco (r# $contract% (r# 0rancisco Jilay<o ceased to &lant PAA /8c in ,-518,-5/" but continued to be &lanter lessee of PAA ,1-b" which is also under contract" +4h# C8,6" e4ecuted by the owner# Ge continued" therefore" as contract &lanter# 65# Jilay<o" Ramiro C# $contract% 6.# *abayen" +mma G# de $non8contract% 6-# *abayen" 9ulio (# $contract% 5@# *acson" Angelina B# $non8contract% 5,# *acson" Caridad $contract% 56# *acson" Consolacion $non8contract% 51# *acson" (amaso $contract% 5/# *acson" (aniel $contract% 55# *acson" (omingo :# R +nriHueta $non8contract% 56# *acson" +duardo B# $contract% 55# *acson" +rnesto 9# $contract% 5.# *acson" 0eli&e B# $contract% 5-# *acson" Ignacio" et al# $non8contract% .@# *acson" 9osefina $contract% .,# *acson" 9osefita Dda# de $non8contract% .6# *acson" Pedro $contract% .1# *acson" Purita de !ora $non8contract% ./# *acson" Rafael $contract% .5# *acson" )alvador $contract% .6# *acson" Dictoria $contract% .5# *ayson" Dicente $non8contract% Dicente *ayson" formerly a non8contract &lanter" e4ecuted +4h# (8,6 or 0eb# -" ,-5/ and (8,1 on 0eb# ,6" ,-5/ as sublessee# ..# *edesma" Anita *# de $non8contract% .-# *edesma" +duardo R !# *# $non8contract% -@# *edesma" +duardo *acson $contract% -,# *edesma" 7icolas and *# !# $non8contract% -6# *iCares" Antonio" (r# A# $contract% -1# *iCares" Antonio !#A# $contract% -/# *iCares" Carmen G# Dda# de $contract% -5# *iCares" Co#" Inc# $contract% -6# *iCares" +miliano $contract% -5# *iCares" 0eli4 A# $contract% -.# *iCares" enerosa Dda# de $contract% --# *iCares" 9esus *# $contract% ,@@# *iCares" !aria A# $contract% ,@,# *iCares" 7ilo $non8contract% ,@6# *iCares" Rodolfo $contract% ,@1# *iCares" )im&licio $contract% ,@/# *ocsin" Agustin 2# $contract% ,@5# *omotan" Dioleta G# de $non8contract% ,@6# *o&eC" A&eles" Conce&cion R Pom&# $non8contract% ,@5# *o&eC" 9ulieta G# de $non8contract% ,@.# *o&eC" *olita $(olores% R# de $contract% ,@-# !agallanes" 9esus $contract% ,,@# !alejan" Renato $contract% ,,,# !ascuQana" Angel $contract% ,,6# !isa" !aria *# de $contract% ,,1# !ontinola" 2rino (r# $non8contract% ,,/# 7e&omuceno" !iguel de $contract% ,,5# 7essia" +ligio $contract% ,,6# Oca" 0elisa de $non8contract% ,,5# Oca" il de $contract% ,,.# Oca" *ibrada de $non8contract% ,,-# Oca" *uC de $contract% ,6@# Oca" Pedro de $non8contract%

,6,# Olim&o" 0elicidad $contract% ,66# OrtiC" Rosario # de $non8contract% ,61# OsmeQa" *ourdes R# de $contract% ,6/# Panlilio" +ncarnacion *# Dda# de $contract% 2his &lanter did not cultivate PAA 7o# ..d in ,-5185/# 2his will not change her status for she still cultivated PAA ..b which was under contract# ,65# Pascual" 9ose 7# $non8contract% ,66# Perovano" +stefania R# Dda# de $contract% ,65# Pison" +s&edito $non8contract% ,6.# Puentebella" Romulo $non8contract% ,6-# Rentoy" 0ederico (# $contract% ,1@# Robello" Armando $non8contract% ,1,# )antibaQeC" +fraim $contract% ,16# )ausi" Atanacio $non8contract% ,11# )ian" Aniceta Rama de $contract%# 2his &lanter" under contract +4h# (861" in ,-56851" cultivated a new &lantation PAA 665 $6185 e4 6585,% 8 Gda# Cabanbanan $+4h# G86" &# /% in ,-5185/# ,1/# 2an&inco" loria *# de $contract% ,15# 2orres" 9ose R# $contract% ,16# 2orres" 9ose R# 9r# $contract% ,15# 2recho" Benjamin $contract% ,1.# 2recho" 0elimon I# $contract% ,1-# 2recho" !iguela" $contract% ,/@# 2reyes" +milia $non8contract% ,/,# 2reyes" 0lorentino $contract% ,/6# 2reyes" orgonio $contract% ,/1# DasHueC" Ramon $non8contract% ,//# DeleC" )ergio $contract% ,/5# Dillanueva" Alfredo (r# $contract% ,/6# Dillarde" Pelagio $contract% ,/5# Dillasor" !ilagros $non8contract% ,/.# Obiernas" Dicente R# $contract% ,/-# Ousay" +nriHue (r# $contract% 2hus" it a&&ears that out of the ,/- &lanters referred to" eighty two $.6% continued having contracts" while si4 $6% who had none became contract &lanters" ,@ hence" there were eighty8eight $..% contract &lanters and si4ty one $6,% non8contract ones among them# cdre& 2here was a majority of contract &lanters in ,-5185/ cro& year# In brief" as already shown" there were ,61 &lanters adhered to the C+72RA* during the cro& year ,-5185/# :e have found that there were ,6, such &lanters in ,-56851# 2o reiterate" twelve $,6% of them ceased cultivating in the following year# 7ow" four $/% of these were contract &lanters and eight $.% were non8contract ones" hence" of the .6 :e found to be contract &lanters in ,-56851" only eighty8two $.6% remained# But of the fourteen $,/% new &lanters that cultivated in ,-5185/" eight $.% had contracts and si4 $6% did not have# Adding the . new contract &lanters to the .6 left of the ,-56851" it results that there were ninety $-@% contract &lanters# 2o this so we have to add also the si4 $6% non8contract &lanters of ,-56851 who" as shown in the above list of ,/-" entered into written contracts with the C+72RA* in ,-5185/# ConseHuently" :e can see that there was a total of ninety8si4 $-6% contract &lanters during that &eriod# As to the non8contract &lanters" of the 56 :e found in ,-56851" eight $.% ceased to cultivate" thus leaving only 65 of them# But with the coming in of si4 $6% new ones in ,-5185/" the number would have risen again to 51" were it not for the fact that" as already shown" si4 $6% of the non8 contract &lanters of ,-56851" entered into contracts" as just stated" in ,-5185/" thus de&leting the number of non8contract &lanters bac< to 65# Our conclusion" therefore" is that of the one hundred si4ty8three $,61% &lanters adhered to the C+72RA* in ,-5185/" ninety8si4 $-6% were contract &lanters and only si4ty8seven $65% were non8contract &lanters# And so" there was also a clear majority of contract &lanters in the 2alisay8)ilay district in the ,-518,-5/ cro& year and )ection , of Re&ublic Act .@- cannot be a&&lied to said district during that cro& year# L(L 2G+ )I2'A2IO7) ('RI7 +ACG O0 2G+ )'B)+K'+72 CROP O+AR) 0RO! ,-5/855 2O ,-5-86@ 2here was no material change in the situation of the &arties after ,-5185/ u& to ,-5-86@# Our conclusions just set forth a&&ly as well to the situations obtaining in the subseHuent cro& years from ,-5/855 to ,-5-86@# In all of said cro& years" there was a majority of P*A72+R) in the 2alisay8)ilay district with written agreements with the C+72RA*# Brief statement of the situation during each of the cro& years mentioned" beginning with ,-5/855# L,L :e have found that in cro& year ,-5185/" there were ,61 &lanters" -6 of whom had contracts and 65 without# In ,-5/855" seven $5% of them did not &lant" three $1% of whom" namely" Arturo Bustamante" 9osefina *acson and +miliano *iCares" were contract &lanters while the other four $/%" namely" 0e )# GofileQa" Gector *# GofileQa" *uis Ramiro GofileQa and Conrado *# 9imeneC were not# Gowever" twelve $,6% new &lanters went in that year# 2hese ,6" together with their &ertinent circumstances were3 ,# Consing" A# C#!# $+4h# G81" &# 6% $non8contract%# 7o contract a&&ears to have been entered into# 6# amboa" +rnesto $+4h# G81" &# /% $non8contract% 1# onCales" 0austo $+4h# G81" &# 6% $contract% PAA .1 8 Gda# +smeralda $+4h# G81" &# 6% Owner is Gijos de Inocentes de la Rama $+4h# A8/" &# 6%#

According to +4h# O" &# 1" Gda# +smeralda" com&rising PAA 7os# ,,/8b" ,,/8c" and .1" is covered by *ot 7o# 56@# 2his lot is covered by +4h# C85," e4ecuted on !arch ,6" ,-6, by the Administrator of the 2estate +state of +steban de la Rama# /# *acson" Adela D# de $+4h# G81" &# 1% $contract% PAA 7o# 6@5 L Gda# )an Antonio $+4h# G81" &# 1% 5# *eduna" Inocenta $+4h# G81" &# 1% $contract% 6# *iCares" Purita $contract%# 2his &lanter did not &lant in ,-5185/" but &lanted again in ,-5/855 the same Gda# PAA ,6." )an Antonio +4h# G81" &# 1# 0or having e4ecuted +4h# C8/, on 9une ,6" ,-/." she must be deemed to continue to be under contract# 5# !alan" )everino $+4h# G81" &# /% $non8contract% .# Oca" Aniceto de $+4h# G81" &# 1% $non8contract% -# Pimentel" Isabelo $+4h# G81" &# 6% $contract% ,@# 2reyes" Dictor $+4h# G81" &# /% $non8contract% ,,# DeleC" +nriHueC $+4h# G81" &# 6% $contract% ,6# Dillanueva" !anuel G# $+4h# G81" &# 6% $contract%# As will be noted" of the ,6" there were seven $5% contract &lanters and five $6% non contract &lanters# Accordingly" as there were ,61 &lanters in ,-5185/ and seven ceased cultivating in ,-5/855 but twelve new ones came in" there were one hundred si4ty8eight $,6.% L ,61 L 5 W ,56 X ,6 W ,6. 8 &lanters in the subseHuent year# 7ow" of the -6 contract &lanters in the former year" 1 sto&&ed" but of the ,6 who newly cultivated in ,-5/855" 5 had contracts and only 5 had none" and so" ta<ing into account also the change of status of *iCares R Co# Inc#" from non8contract to contract &lanter" the number of contract &lanters in ,-5/855 rose to ,@@ $-6 L 1 W -1 X 5 W ,@@% while the non8contract &lanters increased only by one for a total of 6.# Clearly then" there was no absence of written milling agreements between majority of &lanters and ten millers in the 2alisay8)ilay district in cro& year ,-5/855# L6L In cro& year ,-55856 Practically the same story may be re&eated as to cro& year ,-55856# Of the ,6. &lanters of the &receding year" twenty8two $66% did not cultivate in ,-55856" but fourteen $,/% new ones came in" thus" there were ,6@ $,6. L 66 W ,/6 X ,/ W ,6@% &lanters that year# Of the 66" fifteen $,5% were contract &lanters" namely" Rufino Advincula" *ucito Blanca" Alfredo Bustamante" 9uanito Castor" +dgardo ranada" 0idel !# Genares" Dicente GofileQa" Agustin 2# *ocsin" 9esus !agallanes" Renato !alejan" !iguel de 7e&omuceno" +ligio !essia" *ourdes R# de OsmeQa" Isabelo Pimentel and 0ederico (# Rentoy" whereas seven $5% were not" namely" (r# Amado Alano" A# #!# Consing" Geirs of Amalia GernaeC" 7arciso 9ocson" Anita *# de *edesma" 9ulieta G# de *o&eC and )everino !alan# On the other hand" hereunder is what the evidence shows as to who the new &lanters were and what was the res&ective status of each of them3 ,# A<ol" Claudio 9r# $+4h# G8/" &# ,% $non8contract% PAA 7o# 6b L Gda# Constancia +4h# G8/" &# ,% ,/-b L Gda# 7ormandia $+4h# G8/" &# 1%# 2hese &lantations were formerly cultivated by (r# Amado Alano $+4h# A8/" &# ,%" and" as &reviously stated" were not under contract $see &# /6 cro& year ,-56851%# 6# A<ol" Claudio" )r# $+4h# G8/" &# /% $non8contract% 1# Consing" 9osefina !# Dda# de $+4h# G8/" &# 5% $contract% PAA 7o# 615 L Gda# !agdalena $+4h# G8/" &# 5%# 2his &lantation was formerly cultivated by Agustin 2# *ocsin $+4h# A8/" &# ,%# 2he &arties had sti&ulated" as stated above $see &# 61" cro& year ,-56851%" that PAA 616 is under contract $+4h# GG%# Planter must" therefore" be considered under contract# /# arcia" Alfonso $+4h# G8/" &# 6, $contract% PAA 6/. L Gda# Camantiro $+4h# G8/" &# 5%# 2his &lantation was formerly cultivated by +ligio 7essia $+4h# A8/" &# ,%# 2his &lantation is covered by +4h# (8,. $see 7o# ,6/" cro& year ,-568 51%# Planter must be considered a contract &lanter# 5# arcia" Dicente $+4h# G8/" &# 5% $contract% PAA 7o# 6// L Gda# Camantiro $+4h# G8/" &# 65# 2his &lantation was formerly cultivated by *ucilo Blanca $+4h# A8/" &# ,%# 2his &lantation was under contract +4h# d86" and should be considered" contract &lanter# 6# GofileQa" 0e )# $+4h# G8," &# 1% $non8contract% PAA 7o# ,65 L Gda# Cabug $+4h# G8/" &# 1%# 5# GofileQa" Gector *# $+4h# G8/" &# 1% $non8contract% PAA 7o# ,6, 8 Gda# Cabug $+4h# G8/" &# 1% .# Jilay<o" 9ose !aria $G8/" &# 1% $non8contract% -# *edesma" *uis *# $+4h# G8/" &# /% $non8contract% ,@# Rivilla" Carlos $+4h# G8/" &# /% $non8contract% ,,# )ian" Antonio 7# $+4h# G8/" &# /% $contract% PAA 7o# ,@@b L Gda# Binaliwan $+4h# G8/" &# /,66b L Gda# Cafe $+4h# G8/" &# /%# 2hese &lantations were formerly cultivated by Dicente GofileQa $+4h# A8/" &# ,%# It was cultivated by Dicente GofileQa $+4h# A8/" &# ,%# It was stated in cro& year ,-56851 that the &lantations were covered by written contract# Gence &lanter must also be considered under contract# ,6# 2orres" Genrietta $+4h# G8/" &# 5% $contract% PAA 66- L Gda# Camantiro $+4h# G8/" &# 5%# 2his &lantation was &reviously cultivated by Rufino Advincula $+4h# A8/" &# ,% who e4ecuted +4h# (# )he is a contract &lanter# ,1# 2orres" !anuel $+4h# G8/" &# 5% $contract% PAA 7o# 6/6 L Gda# Camantiro $+4h# G8/" &# 5%" 6/6 L Gda# Camantiro $+4h# G8/" &# 5%# Previous to the &resent cro& year" PAA 6/6 was cultivated by 9esus !agallanes" and covered by (8,6" and PAA 6/6 by !iguel 7e&omuceno" and covered by +4h# (8,5# $)ee &# /6" cro& year ,-568,-51#% ,/# 2orres" RaHuel $+4h# G8/" &# 5% $contract% PAA 7o# 666 L Gda# Camantiro $+4h# G8/" &# 5%# 2his &lantation was formerly cultivated by 9uanito Castor $+4h# A8/ &# ,%" who" as already stated $cro& year ,-56851%" e4ecuted +4h# (8/# As can be seen" seven $5% of them had contracts and seven $5% also had none# It results" therefore" that of the ,@@ contract &lanters in ,-5/855" only .5 were left" but one of them" +nriHue DeleC became a non8contract &lanter because" while he had . contract the year before for PAA .6a" Gda# Cabiayan" he ceased to &lant therein the following year and continued only with the other &lantation not covered by contract# )o" there were in the ultimate only ./ left" to whom must be added the 5 new ones named above" thus ma<ing a total of -, contract &lanters# On the other hand" from the 6. non8contract &lanters of ,-5/855" must be deducted seven who did not cultivate the following year" but :e have to add again the new 5 who came in# 2hus" the non8contract &lanters would have remained at 6. were it not for DeleC having become a non8contract &lanter" thereby increasing their number of 6-# Com&ared to the -, contract &lanters" 6-

is certainly a minority# Again" the same formula a&&lied to the ,-5/855 cro& year is a&&licable to ,-55856" for the reasons already discussed above# llcd L1L In cro& year ,-56855# 2he evidence on record relative to the situation that obtained during cro& year ,-56855 shows Huite &lainly that Our conclusion as to the ratio of sharing among the &arties for that year cannot be different from that of the &revious years already considered# )&ecifically" seven $5% out of the ,6@ &lanters in ,-55856 did not &lant in ,-56855" while eighteen $,.% new &lanters registered during said &eriod" thereby resulting in their being one hundred seventy one $,5% &lanters to be considered for the latter cro& year# 2hree $1% &lanters" namely" Am&aro # Dda# de aston" Ignacio *acson et al#" and Dictor 2reyes" of those who ceased in ,-56855" had no contract" whereas four $/%" namely" Ramiro C# Jilay<o" Inocenta *eduna" 0elicidad Olim&o and )ergio DeleC had# 2herefore" there were only .5 contract &lanters left" but as may be noted hereunder" ten $,@% of the new &lanters had contracts and only eight $.% had none# Gere is what the evidence shows as to the ,. new &lanters3 ,# ArCadon" 2arcila Dda# de $+4h# G85" &# ,% $non8contract%# 2he owner is 2arcila Dda# de Gilado $+4h# A85" &# ,%# 6# Bustamante" Alfredo $+4h# G85" &# 5% $contract% +86- L (os Germanos with Huota $+4h# G85" &# 5% Owner $+4h# A85" &# 5%# As said in cro& year ,-5/855" owner e4ecuted contract +4h# (81 on 0ebruary ,5" ,-61# Planter is therefore with contract# 1# Ca&ay" !a4imo $+4h# G85" &# ,% $contract% PAA 7o# 15 L Gda# +ncarnacion $+4h# G85" &# ,% Owner $+4h# A85" &# ,%# As &er +4h# GG" the &arties have sti&ulated that PAA 15b $which a&&ears to be the same as PAA 7o# 15% Gda# +ncarnacion" sold to !a4imo Ca&ay on Oct# 61" ,-6/" is under contract# Gence" &lanter must be so considered# /# +reQeta" 9osefina" et al#" $+4h# G85" &# 6% $contract% +8/ L Gda# Bayusan with Huota $+4h# G8/" &# 6%" + 8 Gda# Bagaas with Huota $+4h# G85" &# 6%# 2he last mentioned &lantation was &lanted by +reQeta" 9usta and 9osefina# 2his a&&ears to be the same as +reQeta" 9osefina et al#" hence the two &lantations are &laced under the same &lanter# +8Bagaas as well as +8/ Bayusan are owned by +reQeta" 9usta and 9osefina" et al# $+4h# A85" &# /%# It does not a&&ear that owners have entered into any written milling contract# But we find that Gda# Baga8as of which Gda# +" together with PAA ,-1 and ,-/ are covered by +4h# C85-# Gence" &lanter is to be considered as with contract# 5# aston" Antonio R !ar# (# de *ocsin $+4h# G85" &# ,% $non8contract%6# aston" Dirgilio $Adm#% +4h# G85" &# , $contract% PAA 7o# 11f L Gda# Puyas Y , $+4h# G85" &# ,%# 2he owner of Gda# Puyas Y ," according to +4h# A85" &# 6" was Rufina C# de Paula# 2his hacienda was cultivated by (avid *acson" who" as said in cro& year ,-56851" was under contract# Gence" &lanter must be considered to be under contract# 5# uinto" Remedios *# de $+4h# G85" &# /% $contract% PAA 7o# 6./a 8 Gda# !inuluan $+4h# G85" &# /% Owner $+4h# A85" &# /%# 2he evidence shows that owner was one of those who e4ecuted +4h# C85@ on !ay /" ,-/.# )he is" therefore" a &lanter with contract# .# 9alandoni" !anuel A# $+4h# G85" &# ,% $non8contract% -# 9imeneC" Conrado *# $+4h# G85" &# 1% $non8contract% ,@# 9ocson" 7arciso $+4h# G85" &# 6% $contract% +85 8 Gda# Caridad with Huota $+4h# G85" &# 6% Owner is 9ocson" 0lory # de $+4h# A85" &# /%# 2he evidence shows that 7arciso 9ocson" as attorney8in8fact of his wife" 0lory # de 9ocson" e4ecuted +4h# (8- on 0eb# -" ,-5/ covering lot" among others" 7o# ,1,68B of the Cadastral )urvey of 2alisay" which lot according to +4h# O" &# ," com&rises Gda# Caridad of which +85 forms &art# 2he &lantation is" therefore" under contract and &lanter should be considered a &lanter with contract# ,,# Jilay<o" Romeo C# $+4h# G85" &# 1% $contract% PAA 7o# ,61 C8Gda# Cafe $+4h# G85" &# 1%# 2his &lantation was &lanted by Ramiro C# Jilay<o in the &revious years" and that the &lantations was covered by contract +4h# C8,5" e4ecuted by the owner Rufina C# Dda# de Jilay<o on 9uly 6@" ,-/.# ,6# *iCares" +miliano $+4h# G85" &# /% $contract% ,1# *iCares" 0elisa $+4h# G85" &# 6% $non8contract% ,/# !alan" )everino $+4h# G85" &# 6% $non8contract% ,5# !edel" !agdalena $+4h# G85" &# 1% $non8contract% ,6# !isa" 7icolas" and !aria *# de $+4h# G85" &# ,% $contract% PAA 7o# ,. L Gda# Imbang Y 6 $+4h# G85" &# ,%" ,- L Gda# Imbang Y 1 $+4h# G85" &# ,% Owner $+4h# A85" &# 1%# ,5# Rama" +steban de la $+4h# G85" &# 1% $non8contract% PAA 7o# ,,1" Gda# Cabanbanan $+4h# G85" &# 1% Owner $+4h# A85" &# /%# It does not a&&ear that &lanter owner ever entered into any written milling contract# Gence" he is without contract# ,.# DeleC" )oledad # de $+4h# G85" &# /% $contract% PAA 7o# 61- 8 Gda# Camantiro $+4h# G85" &# /% Owner $+4h# A85" &# /%# Planter owner e4ecuted +4h# C8,, on August ,@" ,-/.# )he is" therefore" with contract# )ummariCing the foregoing data" :e have ,5, &lanters" -. of them with contracts $,@, L / W -5 X , conversion from non8contract to contract% and 51 $6- L 1 W 66 X . W 5/ 8 ," the conversion just mentioned% without# 7o doubt" the a&&lication of the same formula as in &revious years is &ro&er regarding the sharing of that year - &roduction among the &arties# L/L In cro& year ,-5585. 7either can :e esca&e from the same conclusion as above when :e come to cro& year ,-5585.# 2he evidence is clear that there were one hundred si4ty8nine $,6-% &lanters then" ninety8seven with contracts" seventy8two $56% without# 2hirteen $,1% of the ,5, in ,-56855 failed to cultivate" but eleven $,,% new ones did# $,5, L ,1 W ,6. X ,, W ,6-#% Of said ,1" si4 $6%" namely" Romeo C# Jilay<o" 9ulio (# *abayen" Pedro *acson" *uC de Oca" +frain )antibaQeC and 0ilemon I# 2recho had written agreements" while seven $5%" namely" :alterio ranada" RoHue GofileQa" 2arcela Dda# de Gilado" !anuel A# 9alandoni" +duardo R !# *# *edesma" 0elisa *iCares and )everino !alan had none# 2he following list shows that of the eleven $,,% new &lanters" si4 $6% were contract &lanters and five $5% were not3 ,# Camon" !elchor $+4h# J" &# ,% $non8contract% 6# +reQeta" 9usta A# $+4h# J" &# /% $contract% PAA +8Baga8as owned by &lanter $+4h# J" &# /%#

It a&&ears that Gda# Baga8as PAA 7os# ,-1" ,-/ and + cover lots 7os# ,65. +" /5, A" /5," and /56" which lots are covered by +4h# C85-# 1# amboa" Oscar $+4h# J" &# ,% $contract% PAA 7o# 6-c L Gda# Camantiro $+4h# J# &# ,% Owner is (omingo R Rodrigo *acson $+4h# J" &# ,%# It a&&ears that owner Rodrigo *acson e4ecuted +4h# C8,- on Aug# ,@" ,-/. covering lots 7os# 56, and 561" which lots" among others" are covered by PAA 6- $PAA 6-c and 6@/%# /# 9avellana" !ercedes *# $+4h# J" &# 6 $non8contract% 5# Jilay<o" (r# 9ose C# $+4h# J" &# 6% $contract% PAA ,61e L Gda# !atab8ang $+4h# J" &# 6% Owner $+4h# J" &# 6%# Owner entered into contract +4h# C8,5 covering Gda# Cafe# 6# *abayen" Amando $+4h# J" &# 6% $contract% PAA 7o# ,5e L Gda# !atab8ang $+4h# J" &# 6% Owner $+4h# J" &# 6%# By sti&ulation of the &arties as set forth in +4h# GG" this &lantations is to be considered under contract# 5# *abayen" Geirs of Dicente $+4h# J" &# 6% $contract% PAA 7o# ,5e L Gda# !atab8ang $+4h# J" &# 6% Owner $+4h# J" &# 6%# 2his &lantation is com&rised in lot ,6.5 A which is covered by +4h# C86" e4ecuted by Gormecinda (iaC on A&ril 1@" ,-/.# .# !alan" )ilvino $+4h# J" &# /% $non8contract% -# !ascuQana" +milio $+4h# J" &# 5% $non8contract% ,@# )iason" R# R Ousay" )# $+4h# J" &# 6% $non8contract% ,,# 2reyes" Dictor" et al# $+4h# J" &# /% $contract% PAA ,6.d 8 Gda# Pantayanan" owned by 0elimon 2recho $+4h# J" &# /%; +86@ 8 Gda# !ansueto" owned by &lanter $+4h# J" &# /% 2hese &lantations were &lanted in the &revious year by 0elimon 2recho" and 0elimon 2recho was a contract &lanter# $)ee cro& year ,-56851#% L5L In cro& year ,-5.86It is almost a monotone to say that as to cro& year ,-5.85-" :e have not seen any evidence that could materially bring about a conclusion different from those :e arrived at relative to &revious years# 2hus" to the one hundred si4ty8nine $,6-% &lanters in ,-5585." must be added eleven $,,% new ones as follows3 ,# Bonin" 9uan I# $+4h# KKKKKK86" &# ,% $contract% PAA 6.a L Gda# erminal" owned by 9ose B# amboa $+4h# KKKKKK86" &# ,%# Owner e4ecuted +4h# C8. on 9uly 61" ,-/. covering Gda# erminal# $)ee cro& year ,-568,-51%# Planter lessee must" therefore" be considered under contract# Cd&r 6# Cordova" Romulo $+4h# KKKKKK86" &# ,% $non8contract% 1# 0lorentino" Pedro $+4h# KKKKKK86" &# ,% $contract% PAA 5a L Gda# Catabla" 6a L Gda# Cataywa" 5a L Gda# *uciana# All the &lantations are owned by Alejandra Ching )uy# 2hese &lantations were in the &revious years &lanted by 9ose *# Beson $cro& year ,-568,-51%" and as said before" they were covered by +4h# C8, e4ecuted by the owner# /# *acson" Remedios *# $+4h# KKKKKK86" &# 1% $contract% PAA 7o# 65 L Gda# Bagacay owned by 0eli4 *acson# Gda# Bagacay was formerly &lanted by loria 2am&inco who e4ecuted +4h# C861 over it# Gence" &lanter must also be considered under contract# 5# *iCares" (omingo $+4h# KKKKKK86" &# 1% $contract% PAA 7o# 65 L Gda# )an 9acinto" owned by Purita *iCares%# Owner e4ecuted +4h# C8/, over the Gacienda# $)ee cro& year ,-568,-51#%# 6# DeleC" +nriHue R 9# 9alandoni $+4h# KKKKK86" &# /% $contract% PAA 7o# .5a L Gda# Dirgen del Pilar owned by *iCares R Co# 2his &lantation was formerly &lanted by +miliano *iCares $see cro& year ,-568,-51%" who e4ecuted +4h# C816 covering Gda# del Pilar# 5# Dillarde" 0austa P# $+4h# KKKKKK86" &# /% $contract% PAA 7o# ,6-LGda# Pantayanan owned by &lanter# 2his &lantation was formerly &lanted by Pelagio Dillarde $cro& year ,-568,-51%# 2he &lantation is covered by +4h# C855" e4ecuted by 0elicidad Olim&o Dda# de 2recho# .# Dillarde" !auricia $+4h# KKKKKK86" &# /% $contract% PAA ,1@ L Gda# Pantayanan owned by &lanter# 2his &lantation is covered by +4h# C866 e4ecuted by Pelagio Dillarde# $)ee cro& year ,-56851#% -# 2reyes" (ominga $+4h# KKKKKK86" &# /% $contract% PAA 7o# +8118a L Gda# Baga8as" owned by 9usta A# +reQeta# Gda# +8Baga8as was covered by +4h# C85-# $)ee cro& year ,-568,-55" 7ew Planters#% Planters should be considered under contract# ,@# onCaga" Anunciacion $+4h# KKKKKK86" &# /% $non8contract% ,,# Dillanueva" )amuel $+4h# KKKKKK86" &# 5% $non8contract%# In other words" eight $.% new contract &lanters and three $1% non8contract ones came in# On the other hand" si4teen $,6% of the ,6- did not &lant L thirteen $,1% of them contract &lanters" namely" 9osefa Consing" 9usta a# +reQeta" Adoracion onCaga" *uis *# onCaga" (r# 0rancisco Jilay<o" heirs of Dicente *abayen" *iCares R Co# Inc#" +miliano *iCares" Purita *iCares" 7icolas and !aria *# de *iCares" )everino (# Oca" loria *# de 2am&inco and &elagio Dillarde" and three $1% of them non8contract ones" namely" +rnesto amboa" Benjamin C# aston and Caridad ranada# On the basis of these data" :e should add that ,, new &lanters to the ,6- and then subtract the ,6 who did no &lant" which results in there having been ,6/ $,6- X ,, W ,. 8 ,6 W ,6/% &lanters that year# 2hen" to the -5 contract &lanters in ,-5585." :e should add the . new ones named above and afterwards subtract the ,1 who did not cultivate that year" thereby getting -6 $-5 X . W ,@5 L ,1 W -6% as to the number of contract &lanters for the &eriod# :e have to add one $,% more to these" ma<ing the total -1" because 9ose 7# Pascual who was in the list of non8contract &lanters in ,-5585." &lanted in ,-5.85- PAA ,1-b owned by Celsa *# Dda# de Jilay<o" $+4hibit KKKKKK86" &# /% which is covered by contract" +4hibit C8,6" for which reason" he became a contract &lanter# On the other hand" the non8contract &lanters would be 5, because 1" already listed above" sto&&ed" and also 1" above8named" came in" but there was , conversion from non8contract to contract# Again" therefore" there was a majority of contract &lanters in the district during cro& year ,-5.85-# L 6L In cro& year ,-5-86@ Cro& year ,-5-86@" the last :e will consider" was not also essentially different from the &revious years# 2here were fourteen $,/% new &lanters in that cro& year" but eight $.% of the ,6/ in the &revious year sto&&ed" hence there were ,5@ $,6/ X ,/ W ,5. L . W ,5@% &lanters then# 0our $/% of the ,/ new ones had contracts and ten $,@% had none" thus3 ,# Bautista" Benjamin $+4h# KKKKK81" &# ,% $non8contract% 6# BraganCa" Angela $+4h# KKKKKK81" &# ,% $contract%#

2his &lantation was covered by +4h# C85-# $)ee cro& year ,-56851#%# 1# amboa" +milieta $+4h# KKKKKK81" &# ,% $non8contract% /# 9alandoni" Cesar 9r# $+4h# KKKKKK81" &# 6% $non8contract% 5# 9albuena" Augusto $+4h# KKKKKK81" &# 6% $contract% PAA 7o# ,65b L Gda# Cabiayan" .6b L Gda# Cabiayan# Both &lantations were owned by *iCares R Co# PAA .6 was covered by contract $+4h# GG%# Planter8lessee was" therefore" a contract &lanter# 6# 9avellana" 9ose 7o# $+4h# KKKKKK81" &# 6% $non8contract% 5# 9ison" 9osefina *# de $+4h# KKKKKK81" &# 6% $non contract% .# *acson" +rnesto (# $+4h# KKKKKK81" &# 1% $contract% PAA ,-a L Gda# Imbang Y 1" owned by !isa" !aria *# de" and 7icolas# 2his &lantation was covered by +4h# C8/5 $see cro& year ,-568,-51%# -# *acson" erman $+4h# KKKKKK81" &# 1% $contract% PAA 7o# ,6b L Gda# Imbang Y , owned by !isa" !aria *# de" ,.b L Gda# Imbang 7o# 6 owned by !isa" !aria *# de R 7icolas" ,/@a L Gda# )an 0ernando" owned by !isa" !aria (# PAA 7os# ,6 and ,. were covered by +4h# C8/. and +4h# C8/5 $see cro& year ,-56851%# PAA ,/@a is covered by +4h# C8/6 $see 7o# ,," new Planters" cro& year ,-518,-5/%# Planter8lessee must" therefore" be considered as contract &lanter# ,@# *acson" Ignacio" et al# $+4h# KKKKKK81" &# 1% $non8contract% ,,# *acson" *uis *# $+4h# KKKKKK81" &# /% $non8contract% ,6# Oca" Gernando" de $+4h# KKKKKK81" &# /% $non8contract% ,1# OrtiC" Dictor $+4h# KKKKKK81 &#/% non8contract% ,/# DasHueC" 9ose *# $+4h# KKKKKK81" &# 5% $non8contract% 2he / contract &lanters who ceased that year were Adela Dda# de *acson" !aria (# *iCares" 9ose 2orres 9r# and +nriHue DeleC and the / non8 contract one were 0ernando Cuenca" !ercedes *# 9avellana" !agdalena !edel and (r# Pablo 2orre# 2he result is that of the ,5@ &lanters" there were -1 $-1 X / W -5 L / W -1% contract &lanters and 55 $5, X ,@ W ., L / W 55% non8contract ones then# (efinitely" there was a majority of contract &lanters during cro& year ,-5-86@# L+L 2G+ )IP CO72RAC2) +PC*'(+( BO 2G+ 2RIA* CO'R2 CA77O2 A00+C2 2G+ R+)'*2 :+ GAD+ ARRID+( A2# In its decision" the lower court singled out si4 contracts that it considered as effective only for the cro& year ,-5/8,-55# According to the lower court the contracts did not &rovide for a s&ecific &eriod of duration" and so that should not be counted in determining who were contract &lanters during the cro& years subseHuent to the cro& year ,-5/8,-55# 2hese contracts are3 +4hibit (85" e4ecuted by the s&ouses 9ose Cuaycong and 7atividad *acson de Cuaycong; +4hibit (85" e4ecuted by +dgardo ranada; +4hibit (8,-" e4ecuted by Dicente *ayson; +4hibit (8,-" e4ecuted by )everino de Oca; +4hibit (86," e4ecuted by Isabelo Pimentel; and +4hibit (861" e4ecuted by Aniceta R# de )ian# 2he truth of the matter" however" is that whether the si4 &lanters concerned are considered to be contract &lanters or not" the result of this case" as may be deduced from the above discussion and e4&lanation of the relevant details" cannot be altered# 2he fact that there was always a majority of contract &lanters during the years referred to will &ersist# ,, 7evertheless" just to dis&ose of all the &oints on which the trial court &redicated its decision" :e shall set forth Our views relative to the &articular ruling :e are referring to# Cd&r :e have e4amined these contracts one by one# :e find that in +4hibit (86" e4ecuted by 9ose Cuaycong and his wife" it is clearly stated therein that the contract is to be effective u& to 9une ," ,-6/# :e also find that +4hibits (85" (8,1" (8,- and (86," res&ectively e4ecuted by +dgardo ranada" Dicente *ayson" )everino de Oca" and Isabelo Pimentel" were milling contract that were e4ecuted by lessees of &lantations adherent to the C+72RA*# It is &rovided in all these four milling contracts that the effectivity of the contracts was for the entire duration of the lease# :e do not find in the records of this case those contracts of lease" but it is &resumed" unless the contrary is shown" that the leases would last for several years after their e4ecution in ,-5/# 7ecessarily" the milling contracts would also last for several years# 2here is absolutely no evidence in the record that the milling contracts" +4hibits (85" (8,1" (8,- and (86, were intended to be good for only one year# On the contrary" there is reason to believe that those milling contracts" li<e the other contracts e4isting between the C+72RA* and the other &lanters" would last until the cro& year ,-5-86@# As regards +4hibit (861" e4ecuted by Aniceta R# de )ian" it had really no date of effectivity of the milling contract" but :e do not agree with the view of the lower court that the contract was good for only one cro& year# 2his contract" +4hibit (861" was an e4tension of a &revious milling contract" and it is similar to the other contracts of e4tension" signed by the other &lanters" which would e4&ire during the cro& year ,-5-8 ,-6@# 2he lower court was not called u&on to determine the &eriod of the duration of the si4 contracts in Huestion# :hat was to be determined only as whether or not during a &articular cro& year a &lanter was milling his sugarcane with the C+72RA* under a milling contract" which was then mutually observed by the &arties thereto# 2he &ower of the court to fi4 the duration of an obligation may be e4ercised only when either of the contracting &arties should so reHuest" or should see< to terminate the obligation" but the court cannot motu &ro&rio retroactively and arbitrarily declare a contract to be terminated several years bac< when the said judicial declaration is not sought by any of the contracting &arties# Our finding is that the &ersons who e4ecuted the si4 contracts in Huestion had been milling their sugarcane with the C+72RA* under the terms and conditions of those contracts# In conseHuence" :e hold that the lower court erred when it considered the si4 contracts" +4hibits (85" (85" (8,1" (8,-" (86, and (861" as effective only for the cro& year ,-5/855# L0L 2G+ CO'R2 )')2AI7) 2G+ 2GIR( CO'72+R8A))I 7!+72 O0 +RROR I7 P*AI72I00)8APP+**++)N BRI+0 R+ 2G+ !O)28 0ADOR+( P*A72+R C*A')+ :GICG B+CA!+ +00+C2ID+ ('RI7 2G+ ,-5/855 CROP O+AR# At this juncture" :e have arrived at the most im&ortant legal as&ect of this case# In a sense" where :e are is actually the turning &oint of the instant litigation# Gere is where the Court will have to enforce the evident and indubitable s&irit of Re&ublic Act .@- rather than what :e have seen earlier in this decision to be the rather latently ambiguous tenor of its &rovisions# Our fundamental &ers&ective cannot be more com&elling" which is to &rotect and &reserve by all &ossible means within logic and law whatever benefit can be derived by the sugar &lantation laborers

from the im&lementation of the statute# Indeed" :e would be miserably failing the &rimary objective of the Act" were :e to &ermit the ca&italist sectors of the sugar industry L the millers and the &lanters L to ta<e advantage of the &assage of the law thru some <ind of device" seemingly &ermitted by its language but which could e4clude the less fortunate third sector L the &lantation laborers L from deriving any benefit from the enforcement of the Act which :e have found earlier in this decision to have been a&&roved &recisely to ameliorate their financial and social condition# Im&ortantly" :e reiterate em&hatically the &ro&osition :e have rather lengthily discussed earlier herein that any construction of the statute under scrutiny that would allow the millers and &lanters to enter into contracts that can have the effect of de&riving the &lantation laborers of any share in the &roduce of the sugar district to which their &lanter8em&loyers belong must have to be ruled out" if :e are to remain faithful to its basic character as a &olice &ower and social justice measure# 2he Central increased by contract the shares of some &lanters in ,-5/855# )uch increase is of transcendental significance# As :e have stated earlier" in the amended com&laint" &laintiffs8a&&ellees" it is alleged as a second and alternative cause of action that3 M6# 2hat defendant C+72RA* has refused and continues to refuse to give all the &laintiffs P*A72+R) a sharing &artici&ation in e4cess of 6@U; M1# 2hat on October 66" ,-5/" the defendant C+72RA* through its eneral !anager#" !#7# CastaQeda" sent the &laintiff A)OCIACIO7 a letter" co&y of which is hereto attached as Anne4 NBN and made an integral &art of this Amended Com&laint" informing the latter that certain &lanters have been given a share in the sugar &roduction as high as 61U to 6/U $6/U if the &roduction of the defendant C+72RA* is ,"6@@"@@@ &iculs or over%; M/# 2hat although the old written milling contracts in the 2alisay8)ilay !ill (istrict only sti&ulate a sharing &artici&ation of 6@U for the &lanter" the higher sharing &artici&ation &rovided for in the new milling contracts is deemed incor&orated in the old written milling contracts because of the following &rovision of the old written milling contracts3 NDI +)I!O )+ '7(O3 N*a CentralN conviene en Hue no firmara in ace&tara" mas adelante" contratos con ningun Plantador" Hue reunan mejores condiciones Hue las concedidas a los Hue se obliguen a moler su caQa dulce en la fabrica &ara la cosecha de N-6@86,; Huedando obligada" is contraviniese esta clausula" a conceder a dichos Plantadores los &rivilegios favorables Hue concediere a los nuevos#N# M5# that both )ections 5 $b% and ,, $b% of the +4ecutive Orders 7os# -@@ and -@," )eries of ,-15" &rovide as follows3# NPlantation milling share# L 2he &ercentage of the sugar manufactured by the mill from sugarcane grown on a &lantation which the mill com&any returns to" or credits to the account of" the owner andAor &lanters of the &lantation shall be <nown as the Nbasic &lantation milling shareN and shall be determined as follows3 444 444 444 $b% 0or &lantations or &arts thereof not covered by valid written milling contract between the mill com&any and the owners andAor &lanters of such &lantations" the basic &lantation share shall be the most freHuent basic &lantation milling share sti&ulated in valid written milling contracts between the mill com&any and the owners andAor &lanters of other &lantations adherent to the mill#N M6# 2hat construing together the above Huoted &rovisions of the law and the contract" the &laintiffs P*A72+R)" both with and without written milling contracts" are therefore entitled starting from the cro& year ,-5/855 to a sharing &artici&ation of 61U of the &roduction" or 6/U in case the sugar &roduction of the defendant C+72RA* is ,"6@@"@@@ &iculs or over" inasmuch as said higher &artici&ation should be considered as the most freHuent basic &lantation milling share for the 2alisay8)ilay !ill (istrict;M $P&# ,@8,1" CentralNs Rec# on A&&eal#%# 2he &rayer corres&onding to the foregoing cause of action is as follows3 MO7 2G+ )+CO7( A7( A*2+R7A2ID+ CA')+ O0 AC2IO7 L ,# (eclare" in that event that this Gonorable Court should rule that the sharing &ro&ortion &rescribed by Re&ublic Act 7o# .@- is not a&&licable to the 2alisay8)ilay !ill (istrict" that the sharing &artici&ation of 61U" or 6/U in case the total &roduction of defendant C+72RA* is ,"6@@"@@@ &iculs or over" in favor of &laintiffs P*A72+R) shall be a&&licable to the 2alisay8)ilay !ill (istrict starting from the cro& year ,-5/855 and for every cro& year thereafter; 6# Order the defendant C+72RA* to account for and &ay to &laintiffs P*A72+R) the &roceeds of the sugar and molasses re&resenting the increased &artici&ation in favor of said &laintiffs P*A72+R) during the &ast cro& years starting from ,-5/855 cro& year;M $P&# ,58,6" Id#%# 2he third counter8assignment of error of the &laintiffs8a&&ellees in their brief deals with the failure of the trial court to ma<e a finding on their above alternative cause of action# Among other things" in said brief they argue3 MIt is clear" therefore" that if Re&ublic Act 7o# .@- is not a&&licable to the 2alisay8)ilay !ill (istrict" then the Nmost favored &lanter clauseN can be invo<ed by all contract &lanters of the 2alisay8)ilay !ill (istrict# ConseHuently" the higher sharing &artici&ation given by the defendant Central to the &lanters mentioned in +4h# N'N became the most freHuent basic &lantation milling share of the said district starting from the cro& year ,-5/855 as contem&lated in +4ecutive Orders 7os# -@@ and -@, series of ,-15#M $Page ,-" A&&ellees Brief#% 2he &rayer in said brief in res&ect to that counter8assignment of error is3 M$6% In the alternative" declaring that the &lanters of the 2alisay8)ilay8!ill (istrict are entitled to a higher sharing &artici&ation of 61U" or 6/U if the &roduction of the Central e4ceeds P,"6@@"@@@ &iculs" starting from the ,-5/855 cro& year;M $&age ,,," A&&ellees Brief#% In connection with such &osture of the P*A72+R)" admitted it is that on October 66" ,-5/" eneral !anager !# 7# CastaQeda of the C+72RA* addressed the following letter to the A)OCIACIO73 M2G+ 2A*I)AO8)I*AO !I**I7 CO#" I7C# 2A*I)AO" 7+ RO) OCCI(+72A* PGI*IPPI7+)# October 66" ,-5/ Asociacion de Agricultores de 2alisay8)ilay 2alisay" 7egros Occidental )irs3 Please be advised that in accordance with the milling contracts e4ecuted by this Central and the &lanters indicated below" the sugar distributions corres&onding to the signatories thereof are as follows3 7ame Gacienda Central Planter )hare )hare

9ocson" 0lory C# de loria 1.U 66U *ayson" Dicente !#Bayusan 1.U 66U !agbuyo 1.U 66U 2ambara 1.U 66U ranada" +dgardo loria 1.U 66U Oca" )everino de Caridad 1.U 66U (alimos8os" Bonifacia A# 1.U 66U 9undos" +nriHue Conce&cion 15U816U 61U86/U *acson" 7atividad )ta# !aria 15U816U 61U86/U *acson" Angelina )ta# !aria 15U816U 61U86/U $Ramon *acson% 7ote3 16U86/U for centralNs and &lanterNs &artici&ation" res&ectively" in force if &roduction e4ceeds or reaches ,"6@@"@@@ &iculs# Oours truly" sA!#7# CastaQeda tA!#7# CastaQeda eneral !anagerM $P&# 1-181-/" Record on A&&eal#% 2he letter does not say so" but the evidence is uncontradicted that all the contracts referred to were e4ecuted between 0ebruary and )e&tember" ,-5/" hence they corres&ond to the ,-5185/ cro& year# ,6 Gowever" in its su&&lemental memorandum of (ecember 6" ,-5." the C+72RA* maintains that although there were really increases given to some &lanters in their new contracts" as thus alleged by the P*A72+R)" the &rovisions granting said increases were never fully im&lemented and" in fact" it war solely during cro& year ,-5/855 that it was &artially im&lemented" as shown" according to it" in Anne4 A of said su&&lemental memorandum; which is the record of actual &ercentage shares given to the so8called favored &lanters from cro& year ,-5185/ to cro& year ,-5-8 6@# In other words" whereas" on the one hand" the P*A72+R) contend that the most8favored8&lanter clause should be held by 's to have been in force from cro& year ,-5/855 and all subseHuent cro& years" on the other hand" the C+72RA* maintains that at most it should a&&ly only to cro& year ,-5/855# In regard to this controverted &oint" it is Our considered o&inion and so :e hold that both &arties should be bound by their res&ective &leadings in the trial court and to the &ositions ta<en by them in their res&ective briefs# 7otwithstanding that :e note that the contracts containing the most8favored &lanter clause became effective during the ,-5185/ cro& year" the P*A72+R) have s&ecifically as<ed in their &leadings that the same a&&lied from cro& year ,-5/855 and the subseHuent ones" which must be due to the fact that as the C+72RA* contends" according to the records" it was only in that year that it was im&lemented# But :e cannot" on the other hand" sustain the &ose of the C+72RA* that said enforcement of the clause in controversy be limited to the ,-5/855 cro& year e4clusively" because :e find this contention to be rather late" since in the C+72RA*Ns answer to the amended com&laint of the P*A72+R) filed on (ecember 66" ,-56 already" which answer is dated 0ebruary 6." ,-55" on which date the actual facts must have been by then within the <nowledge of the C+72RA*" it was com&letely silent in res&ect to this &articular &oint" even as it denied the correctness of the P*A72+R)N construction of the most8favored8&lanter clause# !ore" the P*A72+R) reiterated their &osition in their brief as a&&ellees" by way of a third counter assignment of error" and no re&ly brief a&&ears to have been filed by the C+72RA*# Indeed" :e cannot consider as admissible evidence at this a&&eal stage" the aforementioned Anne4 A of the C+72RA*Ns su&&lemental memorandum of (ecember 6" ,-5.# 2he best :e can do under the circumstances is to bind the P*A72+R) to their re&eated &osture of as<ing that the said clause in Huestion be considered in relation to cro& year ,-5/855 onward# *e4*ib 2he effect of such most8favored8&lanter clause 2hus" it is such increase in the shares of some &lanters given by the C+72RA* by virtue of the contracts referred to that entails the legal conseHuences :e are about to consider# 2he P*A72+R) maintain that3# M:e res&ectfully submit that the *ower Court should have made a s&ecific finding on the alternative cause of action" notwithstanding its finding on the first cause of action# M2his alternative cause of action is &redicated on +4ecutive Order 7o# -@@ series of ,-15 section 5 $b% and +4ecutive Order 7o# -@, series of ,-15 section ,, $b% which both &rovide as follows3# NPlantation milling shares# L 2he &ercentage of the sugar manufactured by the mill from sugarcane grown on a &lantation which the mill com&any returns to" or credits to the account of the owner andAor &lanters of the &lantation milling shareN and shall be determined as follows3 444 444 444 N$b% 0or &lantations or &arts thereof not covered by valid written milling contract between the mill com&any and the owners andAor &lanters of such &lantation" the basic &lantation share shall be the most freHuent basic &lantation milling share sti&ulated in valid written milling contracts between the mill com&any and the owners andAor &lanters of other &lantations adherent to the mill#N MBefore ,-5/" the ma4imum share given by the defendant C+72RA* to any &lanter of the 2alisay8)ilay !ill (istrict was 6@U# Gowever" the written milling contracts contained this sti&ulation3 NDI +)I!O )+ '7(O; N*a CentralN conviene en Hue no firmara in ace&tra" mas adelante" contratos con ningun Plantador" Hue reunan mejores condiciones Hue las concedidas a los Hue se obliguen a moler su caQa dulce en la fabrica &ara la cosecha de ,-6@86,; Huedando obligada" si contraviniese esta clausula a conceder a dichos Plantadores los &rivilegios favorables Hue concediere a los nuevos#N $)ee the aforementioned &aragra&h of the !illing Contracts attached to +4h# C" C8, to C866#% MOn October 66" ,-5/" the defendant C+72RA* sent a letter to the &laintiff A)OCIACIO7 $+4h# N'N% informing the latter that certain &lanters had been given a share in the sugar &roduction as high as 61U to 6/U $6/U if the &roduction of the defendant C+72RA* is ,"6@@"@@@ &iculs or over%# 2his higher sharing &artici&ation can also be seen in the !illing Contracts mar<ed as +4hs# (85 and (8,@# MConsidering" therefore" the effects of the Nmost favored &lanter clauseN in the old milling contracts" it follows that the higher sharing &artici&ation of 6186/U in favor of the &lanters is deemed incor&orated into the new contracts" becoming thereby the most freHuent basic &lantation milling share in the 2alisay8)ilay !ill (istrict starting from the ,-5/855 cro& year#

MIt should be &ointed out that the &hrase NHue reunan mejores condiciones Hue las concedidas a los Hue se obliguen a moler su caQa dulce en la fabrica &ara la cosecha de ,-6@86,N does not mean that only &lanters who agreed to start milling their canes from the ,-6@86, cro& are entitled to the Nmost8favored &lanter clauseN# 2he correct inter&retation is that the said clause shall be a&&licable to all &lanters whose contracts contained the same terms and conditions as those in the ,-6@86, contracts# An e4amination of the milling contracts $+4h NCN" NC8,N to NC866N% would show that &ractically all of them are e4tensions of the old ,-6@86, contract# 2his ,-6@86, contract is the &re8war standard milling contract of the 2alisay8)ilay !ill (istrict# As a matter of fact" all &re8war contracts" regardless of date of e4ecution" were deemed to have commenced from ,-6@86, and to terminate 1@ years thereafter or ,-/-85@# 2hus" the old standard milling contract &rovided3 OB*I ACIO7+) (+* P*A72A(OR NPrimera3 Kue durante &eriod o de treinta $1@% aQos" a contar desde el momento en Hue *a Central le notifiHue Hue se halla a recibirla" entregara a la mencionada N*a CentralN" debidamente des&untada y lim&ia de &unta y hoja" toda la caQa Hue se siembre" cultive y &roduCca en sus dichas tierras y haciendas#N 444 444 444 OB*I ACIO7+) !'2'A*+) N,6# +ste contrato estara en vigor hasta el dia &rimero de 9unio de ,-5@# *a &rimera cosecha del Plantador Hue se sujetara a los terminos del &resente contrato" sera la cosecha de ,-6@86," y la ultima" la de ,-/-8,-5@#N $A&&endi4 N,/N of the Answer found on &&# ,5@ and ,51 of the CentralNs Record on A&&eal#% MIt is clear" therefore" that if Re&ublic Act 7o# .@- is not a&&licable to the 2alisay8)ilay !ill (istrict" then the Nmost favored &lanter clauseN can be invo<ed by all contract &lanters of the 2alisay8)ilay !ill (istrict# ConseHuently" the higher sharing &artici&ation given by the defendant Central to the &lanters mentioned in +4h N'N became the most freHuent basic &lantation milling share of the said district starting from the cro& year ,-5/855 as contem&lated in +4ecutive Orders 7os# -@@ and -@, series of ,-15#M $P&# ,58,-" P*A72+R)N Brief#% On the other hand" the &osition of the C+72RA* in res&ect to the issue thus raised by the P*A72+R) is stated in its answer to the amended com&laint thus3 M/# In answer to &aragra&h / of said )econd and Alternative Cause of Action" it avers that in the old written milling contracts in the 2alisay8)ilay mill district the sti&ulated &lanterNs &artici&ation is 55U" and that is" as a&&ears from the co&y of clause MD+ I)I!O )+ '7(OM thereof inserted in &aragra&h / of the )econd and Alternative Cause of Action" the sti&ulations of said clause are confined to &lanters NHue se obliguen a moler caQa dulce en la fabrics &ara la cosecha ,-6@86,N" and none of the instant &laintiffs Hualifies under that descri&tion#M $Page /@" Record on A&&eal#% As :e read it" the contractual sti&ulation around which the instant controversy between the a&&ellant and the a&&ellees revolves does not really &resent much difficulty as to what it must have been contem&lated by the &arties to signify# It is a &rovision found in all contracts between the Central and the Planters# It reads3 MDI +)I!O )+ '7(O3 N*a CentralN conviene en Hue no firmara in ace&tara" mas adelante" contratos con ningun Plantador" Hue reunan mejores condiciones Hue las concedidas a los Hue se obliguen a moler su caQa dulce en la fabrica &ara ;a cosecha de ,-6@86,; Huedando obligada" si contraviniese esta clausula" a conceder a dichos Plantadores los &rivilegios favorables Hue concediere a los nuevos#M It is Our considered o&inion that the following free literal translation of such )&anish8worded &rovision fairly conveys what the &arties to the contracts in dis&ute had in mind3 M2:+72O )+CO7(3M N2he CentralN agrees that it win neither sign nor acce&t" henceforth" contracts with any Planter" which will &rovide conditions better than those conceded to those $Planters% who had obligated themselves to mill their sugarcane in the factory during the ,-6@86, harvest; thereby being bound" should it contravene this clause to concede to those Planters the same favorable conditions which it shall have conceded to the new ones#M 2he obvious thrust of this &rovision is to see to it that the &lanters who had bound themselves by their contracts with the C+72RA* in ,-6@ to the ratio of sharing therein sti&ulated are not tied down to said rates should the C+72RA* grant higher &ercentage of sharing to any &lanter subseHuently e4ecuting contracts with it# 'nder this sti&ulation" should such eventuality materialiCe during the life of the earlier contracts" all the &lanters concerned would automatically be entitled henceforth to the higher ratio sti&ulated in the new contracts" as if the former contracts were corres&ondingly amended for the &ur&ose# In effect" this twenty second clause of the ,-6@86, contracts &arta<e of the nature of a most8favored8 &lanter clause" to the end that no &lanter in the district can be granted a higher &ercentage of sharing than any other" thereby to maintain uniformity in the relations of the C+72RA* with all the affiliated &lanters and thereby corres&ondingly avoid discrimination among them which could be &rejudicial to the interests of the industry# :e cannot acce&t the C+72RA*Ns &ose that the P*A72+R) of ,-5185/ do not Hualify under the descri&tion of &lanters MHue se obliHuen a moler caQa dulce en la fabrica &ara la cosecha ,-6@86,M $in +nglish 8 who had obligated themselves to mill their sugarcane in the factory during the ,@6@86, harvest%# According to the C+72RA*" this clause refers e4clusively to the very &lanters who signed the original contracts for the ,-6@86, cro& year" thereby e4cluding entirely from the enjoyment of the benefits thereof even the successors8in8interest of said &lanters# In effect" the theory of the C+72RA* is that the right created thereby and its corres&onding obligation related thereto is &urely &ersonal to the &lanters of ,-6@86,# &rcd 2he Court cannot agree# A studious e4amination of all the contracts in the record would give anyone the unmista<able im&ression that the contractual relationshi& between the millers and the &lanters in all the sugar districts of the Phili&&ines is characteriCed by uniformity and eHual treatment among all the &lanters# ,1 2here are no instances where any &lanter or grou& of &lanters of a given district is e4tended any favorable term or terms not similarly given to all the other affiliated &lanters of that district# Indeed" :e are im&ressed that it is essential for the good of the sugar industry itself that the millers do not discriminate among their &lanters# )o much so that to maintain such even treatment" s&ecially as to the ratio of sharing in the &roceeds of &roduction" )ection 5 $b% of +4ecutive Order 7o# -@@" series of ,-15 and )ection ,, $b% of +4ecutive Order 7o# -@," of the same series" both &rovide as follows3 MPlantation milling shares# L 2he &ercentage of the sugar manufactured by the mill from sugarcane grown on a &lantation which the mill com&any returns to" or credits to the account of the owner andAor &lanters of the &lantation milling share and shall be determined as follows3 444 444 444

M$b% 0or &lantations or &arts thereof not covered by valid written milling contract between the mill com&any and the owners andAor &lanters of such &lantation" the basic &lantation share shall be the most freHuent basic &lantation milling share sti&ulated in valid written contracts between the mill com&any and the owners andAor &lanters of other &lantations adherent to the mill#M thereby e4tending even to the non contract &lanters the reHuired eHuality and uniformity among the contract &lanters# In fact" the &eriods of the contracts are &ractically co8terminus with each other" e4ce&t &erha&s in the instances where the &lanters who dealt directly with the C+72RA* ha&&ened to be mere lessees for limited &eriods# $+4hibits (85" (8,1" (8,- and (86,#% )uch being the case" :e are more inclined to view the right involved in the clause in Huestion as not &ersonal to the original &lanters of ,-6@86," contrary to the claim of the C+72RA*# :e read sti&ulation as not de&riving the original &arties thereto of the &rerogative to transfer and transmit their rights and obligations to others during the duration of their contracts# 2he guarantee of eHual treatment im&licit in the &rovision is in line with the characteristic uniformity that &ervades among all the contracts among the com&onent elements of the industry# :e see no reason why the assignees and transferees of the original &arties should be discriminated against# 2o be sure" this is the logical and legal conseHuence of sti&ulation 7o# ,5 of the ,-6@86, contracts which reads as follows3 M,5# Kue este contrato" y todos sus terminos obligaciones y condiciones se entenderan contraidos tambien &or las tierras y &lantaciones mencionadas" y sera" obligatorios &ara los Plantadores testamentarios" albaceas" cesionarios y re&resentantes de los Plantadores y &ara las &lantaciones y las tierras#M $)ee Anne4 A of +4hibit C#%# 2his is in consonance with Article ,1,, of the Civil Code which &rovides that Mcontracts ta<e effect only between &arties" their assigns and heirs" e4ce&t in cases where the rights and obligations arising from the contract are not transmissible by their nature" or by sti&ulation or by law#M $Cristobal v# omeC" 5@ Phil# .,@; +leiCegue vs# *awn 2ennis Club" 6 Phil# 1@-#% 7ot only that# All but eleven of the contracts here in dis&ute are mere e4tensions of the original contracts of ,-6@86," 0or e4am&le" +4hibit C" the contract between the C+72RA* and P*A72+R Rosendo AlvareC" which is mutatis mutandis identical with all the others" contains the following &rovisions3 M:G+R+A)" the P*A72+R re&resents and warrants that he is the &resent true and lawful owner" in fee sim&le" of the following described land $hereinafter referred to as the P*A72A2IO7%3 $descri&tion% M:G+R+A)" the said P*A72A2IO7 is subject to a milling contract heretofore e4ecuted by and between the &arties $or their &redecessors in interest% Nduly registered and annotated on the 2itle of the said &ro&ertyN under the terms and conditions set forth in the &rinted form of the said milling contract" co&y of which is hereto attached and made an integral &art thereof" mar<ed as Anne4 A; M:G+R+A)" the said milling contract is due to e4&ire on 9une ," ,-5@" and the &arties hereto have agreed to e4tend the same for the &eriod herein fi4ed" under the same terms and conditions" e4ce&t as herein otherwise &rovided" changed or modified#M 2he ready and necessary im&lication of these whereases is that the P*A72+R) who are &arties in the instant case are either the same &lanters of ,-6@86, or their successors# And since it is sti&ulated that they are Msubject to the same terms and conditions contained in the &rinted form Anne4 A"M regardless of whether they are the same &arties or successors" the ineludible inference is that all the rights and obligations of the original P*A72+R bound by said contract were transmitted to said successors" without any Hualification" much less any diminution# Again" from the second whereas above Huoted it can be clearly gathered that the e4tension agreed u&on was made subject to the same terms and conditions of the original contracts" Me4ce&t as herein otherwise &rovided" changed or modified"M And scrutiniCing the terms of said contracts" it is obvious that there is no contrary &rovision" change or modification sti&ulated therein in regard to the clause under consideration# In this connection" it may also be e4&lained that in the new contracts" +4hibits (86 to (8,1" inclusive" and (8,-" (86, and 777777 the only modifications contained therein which differentiate them from the old ones consist in the reference to the P*A72+R) concerned as not being either the same &lanters of ,-6@86, or their successors but new ones" and" of course" the additional corres&onding sti&ulations arising from that fact# :hat is im&ortantly relevant is that it is e4&ressly sti&ulated in these new contracts that the &arties have agreed to ma<e the same subject to the identical terms and conditions as those in the ,-6@86, contracts" which necessarily means that all the rights granted to the ,-6@86, &lanters were also being e4tended to the new &lanters# In other words" as to these new &lanters" the so8called most8favored8&lanters clause became obligatory u&on the C+72RA* not by transmission from a &redecessor8in8interest but by conseHuent concession on the &art of the C+72RA* in the new contracts" when it agreed that they would be subject to the terms and conditions of the ,-6@86, contracts# 0or better a&&reciation" :e Huote the &ertinent &rovision thus3 M:G+R+A)" the P*A72+R re&resents and warrants that is the &resent true and lawful owner" in fee sim&le" of the following described land $hereinafter referred to as the P*A72A2IO7%3 $descri&tion% M:G+R+A)" the &arties herein have agreed and sti&ulated to subject the said &lantation to the a&&licable terms" conditions and sti&ulations of a milling contract heretofore e4ecuted by and between the C+72RA* and other adherent &lanters" as set forth in the &rinted form of the said milling contract" co&y of which is hereto attached and made an integral &art hereof" mar<ed as Anne4 A" e4ce&t as such a&&licable terms and conditions of Anne4 A are herein otherwise &rovided" changed or modified; M7O:" 2G+R+0OR+" for and in consideration of the &remises and of the mutual covenants and underta<ings herein and in said Anne4 A &rovided" the &arties have agreed and sti&ulated" and by these &resents do hereby agree and sti&ulate" as follows3 M,# L P+RIO( O0 !I**I7 CO72RAC2# M2his agreement" as well as the aforesaid a&&licable terms" conditions and sti&ulations of Anne4 A shall be effective immediately and shall e4tend until the first day of 9une" ,-6/ and the last cro& of the P*A72+R to be subject thereto" as hereby amended" shall be the sugar cro& of ,-6186/# M6# L RAI*ROA(# M2he C+72RA* will maintain and o&erate its e4isting lines of steam or motor railway" or both" with all e4isting sidings" for the trans&ortation of sugarcane" sugar" fertiliCer" materials and su&&lies over rights8of8way now used by it" during the whole &eriod of this contract# M2he C+72RA*" if it should find it necessary" will also construct such branch lines of railway" either &ermanent or tem&orary" at such &oints or &laces as may in its judgment from time to time deem necessary" to receive and trans&ort sugarcane from the P*A72+RNs lands to the mill" either inde&endently or in connection with the aforesaid e4isting railroad systems as the C+72RA* may consider most convenient for the general o&eration of its factory#

M1# LPAR2ICIPA2IO7 I7 2G+ )' AR A7( BO8PRO('C2)# MParagra&h NDI +)I!OPRI!+RON of the NPAC2O) A K'+ )+ OB*I A *A C+72RA*N of the aforesaid Anne4 A is hereby amended by reducing the share of the C+72RA* in the sugar and the molasses &roduced" from 0orty8five &ercent $/5U% to thirty8eight &ercent $1.U%M $+4hibit (86#% 0rom the very nature of the clause in dis&ute" :e are convinced that it is obviously among the terms and conditions referred to in this &rovision as Ma&&licableM# Briefly stated" the very circumstances indicated in the contracts in dis&ute com&el the natural and inesca&able conclusion that the &laintiffs8 P*A72+R) in the instant case are entitled to the benefits of the most8favored8&lanter clause just discussed# '&on these &remises" :e find no alternative than to sustain the P*A72+R)N third counter8assignment of error# :e hold that under the above8Huoted twenty8second clause of the contracts :e have discussed" the a&&ellant C+72RA* must e4tend to all the Planters having contracts with it during the ,-5185/ cro& year the highest rate of sharing sti&ulated in the contracts it had newly entered into with some &lanters in ,-5/ as s&ecified in the foregoing discussion# And &ursuant to +4ecutive Orders 7os# -@@ and -@, just cited" the same ratio should govern insofar as the non8contract &lanters are concerned# *ib*e4 !ay )ection - of Re&ublic Act .@- be a&&lied to such ensuing situation" such that the &lantation laborers should be held entitled to a &ortion of the increase thus given to the &lantersS :e believe so# In conseHuence of the foregoing conclusion :e have arrived at" the ne4t issue for Our resolution is whether or not the increase in the share :e have thus recogniCed the P*A72+R) to be entitled to corres&ondingly carries with it the a&&lication of )ection - of Re&ublic Act .@- which &rescribes a share for the laborers to be ta<en from any increase that the P*A72+R) would get Munder the Act#M 2his is what that )ection &rovides3 M)ec# -# In addition to the benefits granted by the !inimum :age *aw" the &roceeds of any increase in the &artici&ation granted the &lanters under this Act and above their &resent share shall be divided between the &lanter and his laborer in the &lantation in the following &ro&ortion3 M)i4ty &er centum of the increased &artici&ation for the laborers and forty &er centum for the &lanters# 2he distribution of the share corres&onding to the laborers shall be made under the su&ervision of the (e&artment of *abor# M2he benefits granted to laborers in sugar &lantations under this Act and in the !inimum :age *aw shall not in any way be diminished by such labor contracts <nown as Nby the &iece"N Nby the volume"N Nby the area"N or by any other system of N&a<yaw"N the )ecretary of *abor being hereby authoriCed to issue the necessary orders for the enforcement of this &rovision#M But before :e address Ourselves to that all8im&ortant legal issue" :e should &erha&s find out first what is the e4act factual milieu that will serve as definite basis for Our action# According to the trial court" and here does not seem to be any dis&ute about it" the official records show that the res&ective annual sugar &roductions in the C+72RA* during the &eriods material to this case are3 Piculs MCro& Oear Produced +4hibit ,-568,-51 .6/"/-1 ,-518,-5/ ,"@5-"@15 ,-5/8,-55 ,"@5,"1/6#-. ,-558,-56 .66",1@#-5 ,-568,-55 .@-",,5#5,-558,-5. -.5"5.6#5. AA86 ,-5.8,-5,"65@"@@.#5@ KKKKK8, ,-5.8,-6@ ,",.-".15#15 RRRRR8,M $Page /16" Record on A&&eal#% and that the by8&roducts &roduced during the same &eriods are as follows3 +4hibit Oear !olasses Pressed Ca<e Bagasse $gallons% $tons% $tons% ,-568,-61 6",56"-16 -",.5#.5@ ,,5"6-6#.5, ,-518,-5/ 6",5-"-5,,"-6@#@5/ ,16"5/6#155 ,-5/8,-55 6"/-@"5/. ,,"6,- ,/,"-65#/15 ,-558,-56 ,"65-"//5 ."5-/#6 ,@.".6,#61 ,-568,-55 ,"6.1"151 5"-,6#@55 ,@1",/.#/@. AA86 ,-558,-5. ,"516"6@6 ."/,,#.5 ,61"5,5#-15 KKKKK8, ,-5.8,-56"-5@",5. ,1"565#5.,56"/-6#.@6 RRRRR8, ,-5-8,-6@ 6"65-"6/6 ,1"561#6@@ ,65"1/5#51-M $P&# /168/15" Record on A&&eal#% On the basis of the foregoing figures" e4cluding" of course" cro&s years ,-56861 and ,-5185/ before the most8favored &lanter clause went into effect" and if )ection , of Re&ublic Act .@- were to be a&&lied" the sharing ratio between the mill and the &lanters in the 2alisay8)ilay district would have been 65U for the &lanters and 15U for the mill in the cro& years ,-56855 and ,-5585.; and 658,A6U for the &lanters and 168,A6 for the mill in cro& years ,-5/855" ,-5585." and ,-5.85-; and 5@U for the &lanters and 1@U for the mill in cro& year ,-5-86@# 7ow" the res&ective ratios sti&ulated in the contracts concerned are these3 +4hibit (85" contract of 9ose Cuaycong L 15U for the Central and 61U for the &lanter +4hibit (86 of (ominador Agravante andAor his wife Bonifacia A# (alimo8os L 1.U for the Central and 66U for the &lanter

+4hibit (85 of +dgardo ranada L 1.U for the Central and 66U for the &lanter +4hibit (8- of 0lory de 9ocson L 1.U for the Central and 66U for the &lanter# +4hibit (8,@ of +nriHue 9undos L 15U for the Central and 61U for the &lanter +4hibit (8,6 of Dicente *ayson L 1.U for the Central and 66U for the &lanter +4hibit (8,1 also of Dicente *ayson L 1.U for the Central and 66U for the &lanter +4hibit (8,- of )everino de Oca L 1.U for the Central and 66U for the &lanter" with the &roviso that in any cro& year wherein the &roduction e4ceeds ,"6@@"@@@ &iculs" the &ro&ortion would be 6/U816U# 2hus" there were at least two &lanters given 61U# 'nder the most8favored8&lanter clause" and because there was always a majority of contract &lanters" the P*A72+R) became entitled" instead of that &rovided by the law" to a sharing of on 61 8 15 during the whole &eriod referred to" e4ce&t for cro& year ,-5-86@" when it was 6/816# Accordingly" :e hereby declare and hold that out of the 1U and /U increase :e have thus found the P*A72+R) are entitled to" their res&ective laborers are in turn entitled to 6U# 2herefore" the &ortions in dis&ute and held in escrow" namely" 5U for ,-56855 and ,-5585.; 58 ,A6U for ,-5/855" ,-55866 and ,-5.85-; and ,@U for ,-6-86@" should be shared as follows3 Cd&r !ill Planters *aborers $a% 0or cro& years ,-5/855 to ,-5585. and ,-5-86@ /8,A6U ,#6U ,#.U $b% 0or cro& year ,-5. 6- 18,A6U ,#6U 6#/U ,/ 2he legal reasons and the logic and eHuity behind this ruling# As earlier intimated" the legal basis of the foregoing ruling may not be readily discernible# One may not &erceive it from the language of the statute read in isolation from the inesca&able objective of the enactment and the com&elling reasons that brought about its &assage# As far as the P*A72+R) are concerned" they would view the legal conseHuence of the most8favored8&lanter clause in their contracts with the C+72RA* as being outside the &urview of Re&ublic Act .@-# And from the &oint of view of the C+72RA*" they would naturally rather be adjudged liable to give the sti&ulated increase by virtue of said clause than be com&elled to com&ly with the ratios &rovided for in )ection , thereof# 2hus" if :e did nothing more than enforce the twenty8second contractual clause in Huestion" it is to be e4&ected that all the P*A72+R)" herein &laintiffs" would be more than contended to receive the increase of 1U or /U in their share of the &roduction in ,-5/855" and the subseHuent years &rovided they would not have any obligation to give any &art thereof to their laborers# *ib*e4 :e are fully convinced# however" that the Court is called u&on to go further and inHuire as to the a&&licability of )ection - of the Act in the &remises# It is to 's utterly inconceivable that the legislature ever contem&lated that as a conseHuence of the direct or indirect enforcement of the Act" the P*A72+R) would by contract be getting an increase of their &artici&ation in the sugar &roduction of their district for themselves alone" with their laborers not getting any &ortion thereof# And" as :e view it" the &ivotal consideration in that res&ect is whether or not the e4ecution of the new contracts in ,-5185/" &articularly those that &rovided for increased shares for the &lanters" and the conseHuent enforcement of the most8favored8&lanter clause may be deemed as resulting in an increase of the share of the P*A72+R) Munder the ActM as that &hrase is used in )ection - thereof" as effectively as if there had been an Mabsence $during said cro& year% of written milling agreements between the majority of &lanters and the millers of sugarcaneM in the 2alisay8)ilay district referred to in its )ection ,# In this connection" it may be recalled that in the cro& year ,-56851" the first year of enforceability of Re&ublic Act .@-" there were initially only 56 &lanters with contracts with the C+72RA*# It was the e4ecution of ,@ contracts on 0ebruary ,5" ,-51 that increased their number to .6# Gad those ,@ &lanters o&ted not to sign any contract" there would have been a majority of non contract &lanters during that year" for out of the ,6, &lanters" there would have been only 56 with contracts and .5 without# :ith those figures and the rates of increase &rovided for in )ection , of the Act in mind" it is not difficult to surmise and deem as a certainty that the &arties concerned must have e4erted all efforts to bring about new contracts" and the bargaining and concessions involved in the &rocess may well be left for the imagination# One has to be very naive to believe that those ,@ contracts which overturned the situation for the benefit of the C+72RA* were offered to the C+72RA* by the &lanters concerned on a silver &latter# 2his is not to ascribe bad faith &er se to any of the &arties involved; it is only a recognition of how hard economic factors can force those adversely affected thereby to see< alternatives and devices" not anyway &roscribed by the letter of the law" by which the e4&ected harm can at least be mitigated" if not evaded# :hat ha&&ened in the cro& years after ,-56851 must have been the same story told all over# 2he majority of contract &lanters had to maintained# 2hus" as :e have already e4&lained with s&ecific reference to the &ertinent detailed facts" the majority of ,, in ,-56851 became 6- in ,-5185/ and 16 in ,-5/856# After the most favored &lanter clause went into effect" the situation for the P*A72+R) became less critical" and so" the majorities in ,-55856 and ,-5.85- were only 66" in ,-56855 and ,-5585. were 65 and in ,-5-86@" 66# Besides" many of the contracts were e4&iring by end of the ,-5@Ns# :e ta<e judicial notice of the fact that as things stood in the sugar industry at the time of the &assage of Re&ublic Act .@-" the millers occu&ied such a &osition of dominance over the &lanters that enabled the former to dictate unHuestioningly under what terms the sugarcane of the latter

would be milled" it is easily understandable that nothing short of governmental com&ulsion in the form of authoritative mandatory regulations or legislations could have made the C+72RA* yield to any diminution of its &artici&ation in the sugar &roduction of its district of that &revailing at the time# An effective legislative threat s&elling economic disadvantage to it was im&erative# 2he !oran re&ort above referred to attests to that# Indeed" it may be mentioned here that the Court <nows that in other sugar districts judicial controversies e4ist involving claims that" with the coo&eration of the &lanters concerned" contracts have been e4ecuted in frantic attem&ts to minimiCe as much as &ossible the effects of the law insofar as the millers were concerned" to the &rejudice of the &lantation laborers who were made to conform" if they did" to minor im&rovements of their condition which were much less than what would otherwise have been given to them under it# 2he conclusion is thus inesca&able that what brought about the increased &artici&ation for the &lanters concerned in the contracts here in dis&ute cannot be anything else than the feared conseHuence of the a&&lication of )ection , of the law under discussion# In other words" those increases were given &ur&osely to avoid the effects of said &rovision# 2hus" there can be no doubt that at least in logic and eHuity" if not in strict law" the said increases come under the &rovision of )ection - which refers to Many increase in the &artici&ation granted the &lanters under this Act#M :e can assume that the legislature is not as naive as to ma<e the &rimordial &ur&ose of its enactment to &rovide relief to the &lantation laborers de&endent e4clusively on the absence of a majority of &lanters having written agreements with the millers" when it was aware or ought to have been aware that it was the easiest thing for the millers to concede to the &lanters by contract increases much less than those &rescribed by the statute and thereby &reclude the a&&lication of )ection ,# 2he Court is thoroughly convinced that the increase contem&lated in )ection - as the criterion for the direct &artici&ation of labor in the &roduction of the district could not be only that &rescribed in )ection ," which is based on absence of contracts with the majority of the &lanters in the district# After mature deliberation on all relevant circumstances and considerations" :e have arrived at the conclusion that even when there is a majority of contract &lanters in the district" )ection - would still a&&ly as long as the contracts &roviding for increase in the &artici&ation of the &lanters have been e4ecuted &ur&ortedly to attain the majority reHuired by )ection ," and thereby to &revent the a&&lication of the higher rates of increase &rescribed by the &rovisions thereof# It is only by this construction that the full intent of the law under consideration can be realiCed# *e4*ib :e are not unmindful of the vehement suggestion of counsel for the laborers that the more reasonable construction of the Act is that all contracts entered into to avoid the a&&lication of its )ection , should be deemed illegal and void as having been e4ecuted in contravention or avoidance of &ublic &olicy# :e have in fact given considerable weight to it# :e could not" however" ignore the more &onderous consideration that the law was not intended to do away entirely with the freedom of contract" guaranteed by the Constitution# 2here are to be sure the forces of &olice &ower and the social justice &rovisions of the Constitution that" as :e have e4&lained earlier" can be availed of" but :e are &ersuaded on the basis of the circumstances record in this case as well as those within judicial notice that the Congress had no intent to im&rove the condition of the &lanters and their laborers in a manner that would curtail the normal e4ercise by the &lanters and the mill owners of their liberty to contract# It is &recisely in the com&ulsion that )ection - carries to ma<e the &lanters share" by giving 6@U of whatever increase the latter would obtain from the miller" the &olice &ower and the social justice &rovisions o&erated# :ithal" it cannot be said with e4act certainty that the contracts in Huestion were entered into in bad faith# 2he stronger &robability is that all the &arties concerned might have understood the Act as merely a means by which to com&el the millers to rela4 their adamance to revise the contracts that were about to e4&ire# If nothing were done to &rovide the &lanters with something to effectively induce the millers to im&rove the formerNs situation" both the &lanters and their laborers would have remained chained to their wretched condition" &articularly the laborers# :ith the Act" however" the millers were de&rived of their su&erior &osition from which they could dictate their terms" for the sim&le reason that if they refused to enter into contracts the ratio &rovided in )ection , would hurt them to its full e4tent# 2hus" the &lanters were enabled to bargain with the miller for better terms without having to lose the advantages that go with having a contract" as against having none# And in Our view" it is also in relation to any im&roved share that the &lanters may gain by contract that the Act conceived the corres&onding increase for the &lantation laborers sti&ulated in )ection -# 2he &roceeds from milled sugarcane during cro& year ,-5/855 were retained by the C+72RA* hence there should be a se&arate com&utation in relation thereto# As has been indicated in the earlier &ortions of this o&inion" by agreement of the &arties and on the security of a bond given by the defendant a&&ellant *uCon )urety Com&any" all the &roceeds of the sugarcane milled during the ,-5/855 cro& year in the amount of P-/-".56#51 were retained by the C+72RA*# 2he trial court sentenced the C+72RA* to &ay the A)OCIACIO7 the said amount &lus interest of 1U &er annum from October ," ,-66 to the date of &ayment# In this a&&eal" the C+72RA* denied liability therefor u&on the sole ground that there was a majority of &lanters with contracts during said cro& year# It did not raise any issue as to the amount# On the other hand" the P*A72+R) did not a&&eal from nor did they even counter8assign as error the rate of interest fi4ed by the trial court# Accordingly" :e are without authority to change the rate of interest thus fi4ed by Gis Gonor# 2herefore" as of 7ovember 1@" ,-5." the amount in issue should have been P,"6,@"@@6#-/" including already the interest earned# 2his amount corres&onds to the 58,A6U that should have been held in escrow of the total &roduction for that cro& year# 7ow" since :e hold that the correct ratio for that cro& year should be 15U for the C+72RA* and 61U for the P*A72+R)" instead of /@86@" the result is" as already indicated earlier" that of the said 58,A6U which should have been held in escrow" /8,A6U should &ertain to the C+72RA* and 1U to the P*A72+R)" and inasmuch as to ma<e the com&utation sim&ler" /8,A6U of 58,A6U is 6@U and /U of 58,A6U is /@U" it follows that the C+72RA* is obligated to the A)OCIACIO7 for only P6//"@@6#56 and the P*A72+R) shall &ay their res&ective laborers a total of P1.6"/@,#66 out of the said amount# L L P'B*IC I72+R+)2 CO!P+*) 2G+ CO'R2 2O +P2+7( 2GI) (+CI)IO7 2O A** )'B)+K'+72 CROP O+AR) 'P to ,-66865 2he evidence regarding cro& year ,-6@86, is inconclusive# 2he decision under review covers even cro& year ,-6@86,# 2he &ertinent &ortion thereof runs that3 MAfter the year ,-558,-56" u& to the &resent there has not been any a&&reciable change in the number of &lanters with written milling contracts with the Central# 2his is &articularly true after the cro& year ,-5-8,-6@ because that was the last year of effectivity of the contracts +4h# C" C8, to C86# 2herefore" Re&ublic Act 7o# .@- is a&&licable to all subseHuent agricultural years u& to ,-6@8,-6,#M $Page /15" Record on A&&eal of C+72RA*#%

In truth" however" the conclusion of Gis Gonor regarding cro& year ,-6@86, is not based on solid evidence# 2hus" with res&ect to all the &revious years" the &arties submitted sti&ulations of facts" accom&anied by documents which &rovided sufficient basis for the needed findings of fact regarding the number of &lanters that cultivated during each of those cro& years and who among them were the contract and non8contract ones# But the last of those sti&ulations was that of (ecember 5" ,-6@ covering the ,-5-86@ cro& year# 2here was no similar sti&ulation touching on cro& year ,-6@86,# On the contrary" after the trial court had" by its order of (ecember ," ,-5- declared the case submitted for se&arate judgment" &ursuant to the joint motion of the &arties of 7ovember ,1" ,-5-" as regards cro& years ,-56851 to ,-5.85-" albeit no such se&arate judgment was ever rendered" and after it had later on again declared the whole case submitted for decision in its order of !arch 65" ,-6," as &ointed out in P*A72+R)N motion in the court below of )e&tember 66" ,-6," in that very motion" P*A72+R) as<ed to be allowed to resort to a ReHuest for Admission &recisely for the reason that Mthe &arties have not been able to agree on the sti&ulation of factsM because of Munavoidable circumstances occasioned by the chec<ing of the records and their transmission from 7egros to !anila#M 2he record does not even show how this motion was dis&osed of# 7either does it a&&ear that the reHuest for admission just mentioned" if it went thru its course" brought forth any results# 2rue it is that +4hibit )))))) attached to the said reHuest for admission could be a genuine record of the C+72RA* as to how many &lanters there were in ,-6@86," but :e cannot find in the record any reliable concrete evidence as to how many of them had written milling agreements with the C+72RA*# &rcd In a word" the evidence on the dis&uted matters in this case which were &resented by the &arties in the lower court is com&lete only u& to what refers to cro& years ,-5-86@# 2here is &artial evidence showing the number of &lanters in cro& year ,-6@86, but not enough about the number of contract &lanters# But the &roceeds of each yearNs &roduction continued to be held in escrow" as indicated in this decision u& to cro& year ,-668 65" even after the entry of 2A)ICA hereinto" hence" from time to time" as already stated at the outset" corres&onding motions were filed for the &ro&er dis&osition of said &roceeds" including those corres&onding to the cro& years subseHuent to ,-5-86@ u& to ,-66865# 2he &roblem which confronts 's at this &oint is whether or not this case should be remanded to the trial court for a&&ro&riate dis&osition of the matters relative to the cro& years from ,-6@86, to ,-66865# 2he foregoing consideration notwithstanding" :e hold that there is no need for such remand# Cases involving labor deserve e4&editious and sim&lified handling not only by the courts but more a&&ro&riately by the em&loyers whose attitude should be o&enness and goodwill rather than reluctance and antagonism# In this connection" the Court cannot but articulate the observation that" even as the submission by the &arties of sti&ulations of facts as to material matters relative to cro& years ,-56851 to ,-5-86@ is creditably in the right direction" much more could have been accom&lished to facilitate the e4&editious termination of this very im&ortant litigation and thus bring into reality the amelioration of the laborers in the sugar industry designed by Re&ublic Act .@-" had the C+72RA* and the P*A72+R) been more candid to each other regarding such a sim&le matter of how many contract and non8contract &lanters there were in the district# It cannot be overem&hasiCed that labor has a big sta<e here# Re&ublic Act .@- accorded the &lantation laborers the all8im&ortant o&&ortunity to secure what they should have had long before" namely" a direct share in the &roduction of the sugar industry in which they constitute an indis&ensable element# Certainly" it is to be regretted that it has ta<en all those long years before those laborers could be finally told they can get at that only a fraction of the measure of amelioration they had e4&ected# 2hat is not to say that the Court is not entirely blameless for its own &art in such delay" added to the si4 or seven years that the &roceedings in the court below lasted" even if Our failure to act earlier can be e4&lained# 2hese cases were submitted for decision by the Court as early as August ,6" ,-61# In the usual course of the CourtNs functioning" the records &assed from one 9ustice to another# In the &rocess" some of them reached their com&ulsory age of retirement# It too< sometime before they were succeeded by new ones who had to go over the said records all over again# One can have an idea of the time those 9ustices and the writer of this o&inion had to ta<e in going over and studying the same" if it is considered that there are no less than five volumes of &leadings" almost two feet thic< and as many bundles of e4hibits numbering over a thousand mar<ed as +4hibits A" A8, et seH# u& to RRRRRR8, consisting of documents" tabulations" re&orts and rather voluminous manuscri&ts of various <inds" some of them mere co&ies which can be read only with difficult and the use of magnifying glasses# 2his mountain of &a&ers" data and literature would have been entirely unnecessary had there been honest and sincere effort on the &art of both &arties to ma<e the Act effective" if only for the sa<e of giving labor &rom&tly what was due it# All technicalities should have been set aside# )urely" the Huestion of how many &lanters there were in the district each year could not have been dis&utable" being so concrete and readily demonstrable# And the Huestion of how many of said &lanters had written agreements with the C+72RA* was no more com&licated# It is incom&rehensible why so much evidence had to be &roduced to com&licate the determination of these &ractically obvious facts# 2rue it is that certain situations involving some &lanters or some contracts reHuired the settlement of differences of views as to their legal status" but the determination to those issues" as :e have seen them" did not reHuire the mass of evidence :e have been made to e4amine and evaluate# 2his should not have been the case# Although the rulings this Court has made on the &oint under discussion in earlier cases referred only to e4&editing of e4ecution of judgments" already final" awarding monetary claims of laborers" :e hold that the &rinci&les underlying the same can a&&ly corres&ondingly with as much reason and force to the circumstances" of the instant litigation# Para&hrasing what :e said in (anao (evelo&ment Cor&oration vs# 7ational *abor Relations Commission et al#" # R# 7os# *8/@5@68@5" &romulgated on 0ebruary ,6" ,-5." which was a reiteration of Our admonition in the earlier case of +ast Asiatic Com&any *td# et al# vs# 2he Court of Industrial Relations" /@ )CRA 56," claims of laborers must be attended to with com&lete o&enness and in the best of faith" to the end that there may be the most e4&editious determination thereof soonest by mutual admissions between the &arties relative to matters that should ordinarily be beyond dis&ute# In such instances" it is the inesca&able duty of management or of the ca&italist sector to lay its boo<s o&en for a&&ro&riate ins&ection and e4amination of the duly authoriCed re&resentatives of the laborers and to otherwise furnish them with correct and accurate information needed by them" considering the nature of the controversy# +Hually it is the obligation of labor and other &arties concerned to reveal without loss of time and in all good faith facts of their own &eculiar <nowledge which are relevant and material to the investigation# *ib*e4 ,# 2he matters related to the cro& years after ,-5-86@ should therefore be settled here" if legally &ossible# 6# All the &roceeds from ,-6@86, to ,-66865 belong to the P*A72+R) and their laborers in the &ro&ortion of /@86@ &er )ection -# :ith these considerations in mind and yielding to the &rayer of the P*A72+R)" the Court has o&ted to dis&ense with further &roceedings in the trial court for the &ur&ose of dis&osing of the issues involved in the cro& years after ,-5-86@ u& to ,-66865# In doing this" :e are not overloo<ing that the C+72RA* as later on 2A)ICA have always insisted that the &leadings including the su&&lemental ones" filed with the lower court and in which the &arties joined issued for resolution of Gis Gonor refer to events that too< &lace only u& to ,-5-86@ or at the latest ,-6@86, and" therefore" in this a&&eal" this Court has no jurisdiction to &ass on matters affecting cro& years ,-6@86, to ,-66865" much less those subseHuent thereto#

)trictly s&ea<ing from the technical &oint of view" the C+72RA* and 2A)ICA could have merit# But under the circumstances now obtaining and with the changed attitude of the &arties manifested at the hearing of October ,@" ,-5. and their latest written re&resentations &rior and subseHuent thereto" it would a&&ear that for 's to limit this decision to the cro& years u& to ,-5-86@ and leave the matters related to subseHuent cro& years for further &roceedings in the trial court by reHuiring the filing of new &leadings and corres&onding &resentation of evidence would be to waste time" effort and money to all concerned# As :e see it" what could be factual issues that the trial court would be called u&on to resolve are no longer controverted by the &arties" namely" $,% whether or not there was a majority of &lanters with written milling contracts during those cro& years in Huestion and $6% the &roduction figures corres&onding thereto# As to such first issue" the &leadings and manifestations of the &arties relative to the latest relevant develo&ments in the controversy among them as well as in the sugar industry" &articularly in the 2alisay8)ilay milling district do not indicate any &ossibility that the majority of the &lanters therein had renewed or e4tended their contracts with the C+72RA* or that a sufficient number of new ones had entered into written contracts such as to maintain the majority of contract &lanters beyond cro& year ,-5-86@# 7owhere in its latest re&resentations does the C+72RA* ma<e any claim that such majority has continued after the ,-5-86@ contracts e4&ired# In fact" neither the C+72RA* nor 2A)ICA has s&ecifically and effectively denied the allegation in &aragra&h 5 $a% of the Counter8Petition of the P*A72+R) dated (ecember 6," ,-61 and &aragra&h 6 $b% $,% of the !anifestation and !otion of 9anuary ,@" ,-65 of the P*A72+R) that as found by the trial court" Mcro& year ,-5-86@ # # # was the last year of effectivity of the contracts +4hs# C" C8, to C866M and" therefore" the majority of &lanters in the 2alisay8)ilay milling district did not have written milling agreements since then# And as far as the &roduction figures for the cro& years ,-6@86, to ,-66865 su&&lied by the &arties and e4tant in the record" :e do not &erceive any dis&ute as to their accuracy" e4ce&t as to cro& year ,-6186/ where according to the figures of the C+72RA* the total &roduction was only ,",55#@6/#@- &iculs whereas the P*A72+R) claim it was ,",.6"65-#15 &iculs &lus ,6"1/@#16 &iculs milled thru accommodation in !a8ao )ugar Central and 6@6#55 &iculs milled in Bacolod8!urcia !illing Co# to ma<e a total of ,"6@1"666#/. &iculs# Actually" the P*A72+R) have been as<ing for a reconsideration of Our resolution of 7ovember 5" ,-61 which fi4ed the &ercentage of dis&uted sharing at 668,A6 and 158,A6" contending that it should have been 5@81@ because allegedly the &roduction was over ,"6@@"@@@ &iculs# Accordingly" leaving for further dis&osition the 68,A6U in controversy for cro& year ,-6186/" it is Huite obvious that what would be done by the trial court to dis&ose of the controversy regarding cro& years ,-6@86, to ,-66865 may be as well done here and now" thereby cutting short this litigation# '&on the foregoing &remises and in the e4ercise of Our &lenary adjudicatory &owers" thereby to avoid delaying further the com&lete termination of this Huarter8of8a8century8old case" :e laid and hold that in contrast to cro& years ,-56851 to ,-5-86@" Re&ublic Act .@-" &articularly )ections , and - thereof" was a&&licable to and in force and effect in the 2alisay8)ilay milling district from cro& year ,-6@86, to cro& year ,-66865 and that all the dis&uted &roceeds of &roduction during the whole of said &eriod de&osited in the various ban<s hereinafter to be s&ecified &ertain e4clusively to the P*A72+R) and their res&ective &lantation laborers in the &ro&ortion of /@U thereof for the P*A72+R) and 6@U for the *ABOR+R)# L ID L 2he C+72RA*Ns fourth assignment of error is to the effect that3 M2G+ 9'( + A K'O A7( C*I+72 O0 A22O# 9O)+ A0RICA O0 2G+ P*A72+R) +RR+( I7 APPAR+72*O OD+R*OOJI7 2GA2 2G+ CO7 R+)) O0 2G+ PGI*IPPI7+) (I( 7O2 I72+7( A7( (I( 7O2 !+A7 2O APP*O R+P'B*IC AC2 .@- I7 A !A77+R 2GA2 :O'*( 7'**I0O +PI)2I7 CO72RAC2'A* RI G2) A7( I!PAIR 2G+ OB*I A2IO7 O0 +PI)2I7 CO72RAC2); $,% Because" the Congress of the Phili&&ines in the +4&lanatory 7ote to the Bill $G# 7o# ,5,5% which became Re&# Act 7o# .@- has in effect clearly ac<nowledged its constitutional duty and intention to res&ect and u&hold the obligation of e4isting contracts" by fran<ly stating that Nthis bill does not violate e4isting milling agreements between &lanters and millers of sugarcane as its &rovisions are only a&&licable in the absence of such milling contractsN" in fact" )ection ,@ of said Act clearly antici&ates that the a&&lication of its &rovisions to &lanters under contract would be invalid; $6% Because it seems to us clearly illogical and unreasonable to hold that said Act would violate or im&air the obligation of e4isting contracts only when the &lanters under contract ha&&en to be in the majority" but not when the &lanters under contract ha&&en to be in the minority in their district; $1% Because" Re&ublic Act .@- cannot in good conscience be inter&reted in a manner that will so unjustly allow or &ermit any &lanter under contract to re&udiate his contractual obligations to the Central" but at the same time to retain and enjoy all the rights and benefits accruing to him under the same contract" regardless of whether he ha&&ens to be in the majority or in the minority of the &lanters in his district; $/% Because" contractual rights are also &ro&erty rights" and the )tate cannot" by sim&le legislative fiat" de&rive the millers of their contractual and &ro&erty rights" just to give them to" and increase the &rofits of" the &lanters; and also to ma<e the millers &ay additional com&ensation to the &lantersN own laborers" over the minimum wage fi4ed by law for all other laborers in the country" regardless of whether the &lanters under contract ha&&en to be in the majority or in the minority in their milling district#M $P&# ,6/8,66" Brief of C+72RA*#% LAL 2GI) 0O'R2G A))I 7!+72 O0 +RROR O0 2G+ C+72RA* GA) B+CO!+ ACA(+!IC# )tated differently" the &osition of the C+72RA* is that even on the assum&tion that there was absence of a majority of &lanters in the district with written milling agreements with it during the &eriods in Huestion and hence" )ection , of Re&ublic Act .@- would be a&&licable during said &eriods" the ratios of sharing therein &rescribed may not be a&&lied to those of the minority who had written contracts &roviding for lesser &ercentage of shares for the res&ective &lanters concerned# Considering" however" that in dis&osing of the C+72RA*Ns third assignment of error" :e have reversed the lower courtNs finding on which the instant assignment of error is &remised" the issue thus raised by the C+72RA* has lost relevance# And more so because :e have sustained the P*A72+R)N third counter8assignment of error# As may be recalled" it is Our ruling above that the reference &oint in determining the ratio of sharing among the C+72RA*" the P*A72+R) and the latterNs laborers need not be the absence alone of a majority of &lanters with written milling agreements with the C+72RA* referred to in )ection , of the Act but the &rovisions of its )ection - construed in conjunction with the effect of the most8favored8&lanter clause in the &revailing milling contracts" even if the &lanters having such contracts were in the majority" with the result that the &ercentage of the share of all the &lanters with contracts should be 61U for the years from ,-56851 to ,-5-86@" e4ce&t for ,-5.85- when it should be 6/U# And such being the case" said 61U and 6/U" as the case may be" constituted Mthe most freHuent basic &lantation milling share sti&ulated in valid written milling contracts between the mill com&any and the owners andAor &lanters of other &lantations adherent to the millM referred to in +4ecutive Orders 7os# -@@ and -@," )eries of ,-15# It

follows from this that the said 61U and 6/U became the &ercentage to which &lanters without written contracts with the C+72RA* became entitled# :ith the foregoing view :e have ta<en of the basic &oints related to the C+72RA*Ns fourth assignment of error" and since" in the light of such view" the &redicate of the instant assignment can not e4ist" further discussion thereof is now &urely academic and of no &ractical bearing on the final result of this case# In brief" no distinction need be drawn between contract &lanters and non8contract &lanters for the &ur&ose of determining the share to which the &lanters in the district should be entitled# **jur LDL 2he C+72RA* submits as its fifth assignment of error that3 M2G+ 9'( + A K'O A7( C*I+72 O0 A22O# 9O)+ A0RICA O0 2G+ P*A72+R) A*)O +RR+( I7 APPAR+72*O OD+R*OOJI7 2GA2 R+P'B*IC AC2 .@-" BO +PPR+)) PRODI)IO7 O0 )+C2IO7 . 2G+R+O0" :A) 7O2 I72+7(+( A7( CA77O2 B+ P+R!I22+( 2O A00+C2 2G+ A**OCA2IO7 O0 2G+ PRO('C2IO7 A7(AOR !ARJ+2I7 A**O2!+72) OR A**O:A7C+) O0 2G+ +PPOR2" OR MAM )' AR $+PPOR2AB*+ 2O 2G+ '7I2+( )2A2+) O0 A!+RICA%" 2G+ A**OCA2IO7 O0 :GICG A!O7 A** 2G+ !I**I7 (I)2RIC2) I7 2G+ PGI*IPPI7+)" A7( I7 2'R7 B+2:++7 2G+ !I**+R) A7( 2G+ P*A72+R) I7 2G+IR R+)P+C2ID+ !I**I7 (I)2RIC2)" GA) B++7 0IP+( I7 ACCOR(A7C+ :I2G 2G+ 2RA(+ R+*A2IO7) A R++!+72 B+2:++7 2G+ PGI*IPPI7+) A7( 2G+ '7I2+( )2A2+) O0 A!+RICA#M $Page ,15" C+72RA*Ns Brief#% LAL 2GI) A*2+R7A2ID+ PROPO)I2IO7 O0 2G+ C+72RA* 7++( 7O2 B+ CO7)I(+R+( B+CA')+ GO*( 2GA2 )+C2IO7 , O0 R+P'B*IC AC2 .@- (I( 7O2 APP*O 2O 2G+ 2A*I)AO8)I*AO (I)2RIC2 ('RI7 2G+ !A2+RIA* O+AR) I7 (I)P'2+# 2he sole &oint raised by the C+72RA* under the last aforeHuoted assignment of error is that it is not within the &ower of the Phili&&ine *egislature to alter or modify" as it does in )ection , of Re&ublic Act .@-" the allocation of e4&ort or MAM sugar in view of the &rovisions of its )ection . which reads &ertinently as follows3 M)+C# .# 2he com&ensation to the central or &lanter or &lantation owner shall be &aid out of the &roceeds of the o&eration which would have corres&onded to the said central or &lanter or &lantation owner" with due regard for the costs of o&eration or administration and such other charges and deductions as the court may deem just and &ro&er# M7othing in this Act shall be deemed to affect the agreement between the Re&ublic of the Phili&&ines and the 'nited )tates of America concerning trade and related matters during a transitional &eriod following the institution of Phili&&ine Inde&endence" and the &rotocol and anne4es thereof" as &roclaimed on the first day of 9anuary" nineteen hundred and forty8seven#M It is argued that under Public *aw 15, of the Congress of the 'nited )tates" a&&roved on A&ril 1@" ,-/6 and otherwise <nown as the Phili&&ine 2rade Act of ,-/6" as well as Commonwealth Act 511 a&&roved on 9uly 1" ,-/6" which authoriCed the acce&tance of the trade agreement Mto be entered into between the President of the Phili&&ines and the President of the 'nited )tates &ursuant to Public *aw 15,M" the allocation of sugar e4&ortable from the Phili&&ines to the 'nited )tates was e4&ressly limited M# # # to the sugar &roducing mills and &lantation owners in the Phili&&ines in the calendar year ,-/@" whose sugars were e4&orted to the 'nited )tates during such calendar year" or their successor8in8interest" &ro&ortionately on the basis of their average annual &roduction $or in the case of such a successor8in8interest" the average annual &roduction of his &redecessor8in8interest% for the calendar years ,-1,8,-16 and ,-11" and the amount of sugar which may be so e4&orted shall be allocated each year between each mill and the &lantation owners on the basis of the &ro&ortion of sugars to which each mill and the &lantation owners are res&ectively entitled" in accordance with any milling agreements between them or any e4tension" modification" or renewal thereof#M Gence" it would be violative of the laws mentioned for the Congress of the Phili&&ines to alter the a&&ortionment of ratio of sharing between the C+72RA* and the P*A72+R) in the instances where there are no contracts# llcd :hatever merit there may be in such &ose" :e consider it Huite &ointless for 's to rule on it" since" as :e have held above" the distribution of the &roceeds of sugar &roduction from each cro& year from ,-56851 to cro& year ,-5-86@ should be on the basis of the e4isting contracts between the C+72RA* and the P*A72+R)" including &articularly the most favored8&lanter clause" which became o&erative directly on the P*A72+R)" majority of whom had written milling agreements with the C+72RA* during said &eriods" together with the &rovisions of +4ecutive Orders 7os# -@@ and -@," )eries of ,-15" on the non8contract &lanters and" therefore" such allocation is &lainly Min accordance with any milling agreement between them $the millers and &lanters% or any e4tension" modification or renewal thereof"M as reHuired by the statutes invo<ed# In any event" :e wish to ma<e it clear that :e agree with the following ratiocination of distinguished counsel for the P*A72+R)3 M,# Congress of the Phili&&ines has the &ower to legislate on the allocation of our Huota to the '#)# mar<et# M2he argument of A&&ellant Central on this &oint smac<s of a colonial mentality# 2he Phili&&ine American agreements on the subject of sugar never contem&lated the abdication of our sovereign rights on the matter# )ection 6,, of the Phili&&ine 2rade Act of ,-/6 &rovides3 N$d% Allocation of Huotas for 'nrefined )ugars# L 2he Huota for unrefined sugars" including that reHuired to manufacture the refined sugars" established by this section shall be allocated annually to the sugar &roducing mills and &lantation owners in the Phili&&ines in the calendar year ,-/@ whose sugars were e4&orted to the 'nited )tates during such calendar year" or their successors in interest" &ro&ortionately on the basis of their average annual &roduction $or in the case of such a successor in interest" the average annual &roduction of his &redecessor in interest% for the calendar years ,-1," ,-16 and ,-11" and the amount of sugars which may be so e4&orted shall be allocated in each year between each mill and the &lantation owners on the basis of the &ro&ortion of sugars to which each mill and the &lantation owners are res&ectively entitled" in accordance with any milling agreements between them" or any e4tension" modification" or renewal thereof#N M2he e4tension" modification or renewalM of milling agreements mentioned in the foregoing legal &rovision is not necessarily limited to an e4tension" modification or renewal arising from contracts# 2he same may arise from law as a result of the e4ercise of &olice &ower# N7ot only are e4isting laws read into contracts in order to fi4 obligations as between the &arties" but the reservation of essential attributes of sovereign &ower is also read into contracts as a &ostulate of the legal order#N $Gome Bldg# *oan Assn# v# Blaisdell" 6-@ '#)# 1-.%# M2he absence of intention on the &art of the 'nited )tates to encroach on the e4ercise of our sovereign functions nor on the &art of the Phili&&ines to abdicate its sovereign rights is clear from the wording of )ection 6,5 of the said Phili&&ine 2rade Act of ,-/6 which states3 N)ec# 6,5# *aws &utting into effect allocations of Kuotas# 2he necessary laws and regulations for &utting into effect the allocation of Huotas on the basis &rovided for in sections 6,," 6,6" and 6,/" res&ectively" shall not be enacted by the 'nited )tates" it being the &ur&ose of this title that such laws and regulations shall be enacted by the Phili&&ines#N

M2here is" therefore" no justification in construing the 2rade Agreement as a restriction on the &ower of Congress to legislate on the sharing &artici&ation between millers and &lanters# 2he 'nited )tates had no reason to reHuire the Phili&&ines to relinHuish its &olice &ower to regulate the relations between millers and &lanters" &articularly to fi4 their sharing &artici&ation in the sugar &roduction# In other words" the 'nited )tates had no &reoccu&ation as to how the e4&ort Huota would be distributed among the millers and &lanters" its only concern being that said Huota should not be e4ceeded# MAs this Gonorable Court has &ointed out3 NIt is to be observed that both Acts $Bell and 2ydings8!c(uffie% &rovide for allocation of the sugar Huota in each year between the mills and the &lanters" thereby im&lying that the allocation could vary from year to year#N $)uareC v# !t# Arayat R *86/15" (ecision &rom# !arch 1," ,-55%# MIn the absence of clear and e4&ress treaty limitation" it should never be assumed that the Phili&&ines abdicated its sovereign &ower on a matter essential to our economy# N)tatus in derogation of sovereignty should be strictly construed in favor of the state" so that its sovereignty may be u&held and not narrowed or destroyed" and should not be &ermitted to divest the state or its government of any of its &rerogatives" rights" or remedies" unless the intention of the legislature to effect this object is clearly e4&ressed# $Peo&le v# Center8O !art" 6,/ P# 6d 15.; Dalley County v# 2homas" -5 P# 6d 1/5; ,@!ont# 1/5; A&&eal of Reading Co#" 66 A# 6d -@6" 1/1 Pa# 16@; 5- C#9# &# ,,6, note 6.; .6 C#9#)# &# -16%# MIt should also be remembered that the allocation of the sugar Huota is not in the nature of a reward or bounty# As this Gonorable Court in the )uareC case observed3 N)uch contention unwarrantedly assumes that the allocation &rovided in )ection 6,, of the ,-/6 Phili&&ine 2rade Act $Bell Act% is in the nature of a bounty or reward for &ast services in &roducing and e4&orting sugar to the 'nited )tates on or before ,-/@# :e see no reason for such construction# 2he reference to ,-/@ e4&ort in )ection 6,, $d% in our o&inion merely &ur&orts to restrict future sugar e4&orts to the Phili&&ine sugar &roducers entitled to Huotas in ,-/@" and to e4clude those who entered the sugar &roduction field at a later date# 2he &lain terms of the section indicate that it was designed to merely continue the original system of allocation between &lanters and sugar &roducing mills initiated in ,-1/ by the 2ydings !c(uffie Act" in recognition of the com&lementary roles and res&ective contributions of &lanters and &rocessors to the &roduction and manufacture of the sugar# It is to be observed that both Acts $Bell and 2ydings !c(uffie% &rovide for allocation of the sugar Huota in each year between the mills and the &lanters" thereby im&lying that the allocation could vary from year to year#N $)uareC vs# !ount Arayat" (ecision" su&ra%# M+4ecutive Order 7o# -@@" it is true" established a formula for the determination of the res&ective mar<eting coefficients of the &lantation8 owners and millers" but it does not follow that the basis of the Huota8sharing is fi4ed and absolute as to &reclude change# M)ection 5 of +4ecutive Order 7o# -@@ &rovides N5# Plantation milling share# L 2he &ercentage of the sugar manufactured by the mill from sugarcane grown on a &lantation which the mill com&any returns to" or credits to the account of" the owner andAor &lanters of the &lantation shall be <nown as the Mbasic &lantation milling shareN and shall be determined as follows3 $a% 0or any &lantation or a &art thereof covered by a valid written milling contract between the mill com&any and the owner andAor &lanters of that &lantation" the basic &lantation share shall be as sti&ulated in the contract# M$b% 0or &lantations or &arts thereof not covered by a valid written milling contract between the mill com&any and the owner andAor &lanters of such &lantations" the basic &lantation share shall be the most freHuent basic &lantation milling share sti&ulated in valid written milling contracts between the mill com&any and the owners andAor &lanters of other &lantations adherent to the mill# In determining the most freHuent basic &lantation milling share" &lantations owned by or o&erated for the account of the mill com&any shall not be considered# $c% 2he Hualification $basic% as used in this sections shall be ta<en to include any general increase in &lantation milling shares effected by action of the management" directors" trustees" shareholders or owners of the mill so long as such action shall be valid or subsisting# Dariations in &lantation milling shares due to bonuses" &enalties" or methods of cane delivery" &rovided for in valid written milling contracts shall not be considered as MbasicN in determining &lantation milling shares" but may be adjusted between the mill com&any and the owners andAor &lanters concerned by cash &ayments" or in sugar by endorsement of warehouse recei&ts from one &arty to other # # #N MBy no stretch of the imagination can this &rovision be considered as an obstacle to the e4ercise of legislative authority" &articularly one based on &olice &ower" which may alter the basis or formula contained in +4ecutive Order 7o# -@@# 7eedless to state" irre&ealable laws are not countenanced in this jurisdiction# N2here can be no vested right to the continued e4istence of a statute which &recludes its change or a&&eal#N $2rau4 v# Corrigan" 655 '#)# 1,6" 66 *# +d# 65/%# MIn other words" the original Huota allocation by the )tate having been &redicated on the e4ercise of &olice &ower" there is no reason why the same &olice &ower cannot now be e4ercised to &romote the &ublic welfare# M*i<e +4ecutive Order 7o# -@@ which established a formula for the determination of mar<eting coefficients for A sugar $'#)# +4&ort%" +4ecutive Order 7o# -@, established a formula for the determination of the mar<eting coefficients for B and C sugar $(omestic and Reserve )ugar%# )aid +4ecutive Order 7o# -@, &rovides3 N,,# Plantation milling share# L 2he &ercentage of the sugar manufactured by the mill from sugarcane grown on a &lantation which the mill com&any returns to" or credits to the account of" the owner andAor &lanters of the &lantation shall be <nown as the Nbasic &lantation milling shareN and shall be determined as follows3 $a% 0or any &lantation or a &art thereof covered by a valid written milling contract between the mill com&any and the owner andAor &lanters of that &lantation" the basic &lantation share shall be as sti&ulated in the contract# $b% 0or &lantation or &arts thereof not covered by a valid written milling contract between the mill com&any and the owner andAor &lanters of such &lantations" the basic &lantation share shall be the most freHuent basic &lantation milling contracts between the mill com&any and the owners andAor &lanters of other &lantations adhered to the mill# In determining the most freHuent basic &lantation milling share" &lantations owned by or o&erated for the account of the milling com&any shall not be considered# $c% 2he Hualification NbasicN as used in this section shall be ta<en to include any general increase in &lantation milling shares effected by action of the management" directors" trustees" shareholders" or owners of the mill so long as such action shall be valid or subsisting # # #N

M)ince this involves &ractically the same argument in the case +4ecutive Order 7o# -@@" was res&ectfully reiterate our refutation thereof &articularly that there can be no vested right in the formula established in the +4ecutive Order because the same is susce&tible to change by the e4ercise of the very same &olice &ower to which it owes its e4istence#M $P&# .68-," Brief of A&&ellees#% as well as the arguments along the same vein by Amicus Curiae" Attys# 2aQada" 2eehan<ee and Carreon on &ages 6 to /@ of their brief" which for the sa<e of brevity" :e just incor&orate hereto by reference# L DI L 2he si4th assignment of error of the C+72RA* is as follows3 M2G+ 9'( + A K'O A7( C*I+72 O0 A22O# 9O)+ A0RICA O0 2G+ P*A72+R) GA( 7O 9'RI)(IC2IO7 A7( +RR+( I7 A(9'(ICA2I7 A7( OR(+RI7 2G+ (+*ID+RO 2O 2G+ P*AI72I00) I7 2GI) CA)+" 2G+ 2O2A* A!O'72 (+PO)I2+( :I2G 2G+ PGI*IPPI7+ 7A2IO7A* BA7J" :GICG" +D+7 I0 2G+ CO72ROD+R2+( *A: I) 0I7A**O G+*( DA*I( A7( APP*ICAB*+" :O'*( B+*O7 " 7O2 2O 2G+ 0+: P*A72+R) :GO AR+ P*AI72I00) I7 2GI) CA)+" B'2 2O 2G+ 7'!+RO') O2G+R P*A72+R) I7 2G+ (I)2RIC2 :GO GAD+ 7O2 9OI7+( A7( AR+ 7O2 PAR2I+) I7 2GI) CA)+" +PC+P2 0OR 2G+ R+*A2ID+*O )!A** POR2IO7 :GICG :O'*( CORR+)PO7( 2O )AI( 0+: P*A72+R) :GO AR+ P*AI72I00) I7 2GI) CA)+;M LAL 2G+ 2GR')2 O0 2GI) A**+ +( +RROR O0 2G+ 2RIA* CO'R2 I) 2G+ +RRO7+O') 2G+ORO O0 2G+ C+72RA* 2GA2 2G+ I7)2A72 AC2IO7 I) 7O2 A C*A)) )'I2" :GICG :+ GO*( I2 I)" G+7C+ 2G+ !O7+O I7 +)CRO: I7 2G+ BA7J) !AO B+ (I)PO)+( O0 I7 2GI) CA)+ 7O2 O7*O A!O7 A** 2G+ 7A!+( PAR2I+) G+R+I7 B'2 A!O7 A** 2G+ P*A72+R) I7 2G+ (I)2RIC2" 2G+IR R+)P+C2ID+ *ABOR+R) A7( 2G+ C+72RA*#M 2he evident &remise of the C+72RA*Ns si4th assignment of error aforeHuoted is that the &resent action may not be deemed as a class suit" hence" the trial court had no authority to adjudicate the money held in escrow by the ban<s in favor the P*A72+R) who are not actually named as &arties herein# On thus score" the C+72RA* see<s umbrage under the ruling in Berses vs# Dillanueva" 65 Phil# /51" wherein :e held that where numerous defendants or individuals are occu&ying different &ortions of a big &arcel of land" a class suit would not lie because Meach of the defendants had an interest only in the &articular &ortion of the land he was occu&ying#M Cd&r :e are of the considered view that a&art from the correctness of the &rocedural theory advanced by the P*A72+R) as regards the &articular issue under discussion" &ractical considerations conducive to the earliest determination of inevitable subseHuent controversies between the unnamed &lanters" on the one hand" and the C+72RA*" on the other" which would necessarily hinge on the main &ro& of this decision" ma<e it desirable and &ro&er that any such further litigation" which cannot have any different result" be now foreclosed# But very little elucidation is needed to demonstrate the &al&able community of interest of all the &lanters in the district in the settlement of the two vital issues of fact and the various issues of law submitted for Our determination in this case" the resolution of which has no bearing on and cannot in any event affect either the res&ective allocations or Huota of each individual &lanter in the district or their rights of ownershi& or &ossession over the res&ective &lantations they wor<ed on during the material &eriods herein involved# :e believe the C+72RA* cannot be unaware of these considerations" and :e welcome its formal withdrawal of the above assignment of error# $C+72RA*Ns )u&&lemental !emorandum of (ecember 6" ,-5." &# ,% But" just the same" :e feel that for the benefit of all concerned" it is best to e4&lain why its &osition cannot be sustained# 2hus" by settling the controversy as to whether or not )ection , of Re&ublic Act .@- a&&lies to the 2alisay8)ilay district" the factual issues to be determined have to do only with the number of &lanters there were in the district during the &eriods in dis&ute and how many of them had written milling agreements with the C+72RA*# Of course" it was of &articular interest res&ectively to each of those who wor<ed on the &lantations within the district as to who of them should be deemed as &lanters or not" and being &lanters who among them were contract and non contract &lanters within the contem&lation of )ection 5 of Re&ublic Act .@-# But at the same time" it cannot be denied that the same issues were of common interest to all the P*A72+R) and" in fact" to their res&ective laborers" since it is on the correct resolution thereof that the e4&ected im&rovement or augmentation of their share in the &roduction of the C+72RA* would de&end# In other words" all the P*A72+R) in the district as well as their res&ective laborers were similarly situated" whether they were named &arties or not# !ore than that" the resolution of said issues could not in any event be different as to any of them" which is virtually saying that the subject matter of the controversy cannot be but of common and general interest to all of them# On the other band" the number of &lanters involved" not to mention the number of laborers to be affected" is so numerous as to ma<e it im&racticable to bring them all to court# 'nder these circumstances" the &ro&riety of considering the &resent litigation as a class suit cannot be o&en to Huestion# As a matter of fact" in another case &ractically on all fours with the instant one" :e already ruled against the &retention of the C+72RA* here" :e refer to the case of 0eli&e Acar et al# vs# Gon# Inocencio Rosal etc# et al#" ,)CRA 665" wherein it was held that the suit filed by ten $,@% laborers to recover Mtheir alleged &artici&ation or shares amounting to the aggregate sum of P,/"@1@".16#5/" in the sugar" molasses" bagasse and other derivatives" based on the &rovisions of Re&ublic Act .@- $2he )ugar Act of ,-56%M" the very law here in issue" was a &ro&er class suit# **jur !oreover" according to Chief 9ustice !oran" ,5 the theory in the 'nited )tates that a class suit is &ermissible whenever there is community of interest in the Huestion involved and in the relief sought" even in the absence of community of interest in the subject matter of the litigation" Mmay be ado&ted in the Phili&&ines under the &resent rules which authoriCe joinder of &arties who have common interest in the same Huestion of fact or law where the relief sought arises out of the same transaction or series of transactions#M 2his view strengthens the &osition of a&&ellees in this case# L DII L 2he seventh assignment of error of the C+72RA* alleging that3 M2G+ 9'( + A K'O A7( C*I+72 O0 A22O# 9O)+ A0RICA O0 2G+ P*A72+R) 0I7A**O +RR+( I7 R+7(+RI7 BO2G 2G+ ORI I7A* 9'( !+72 A7( 2G+ )'B)+K'+72 A!+7(A2ORO OR(+R G+R+I7 APP+A*+( 0RO!#M is a mere corollary of its &receding assignments which :e have overruled and does not" therefore" need further discussion# *i<e the &revious ones" the same must &erforce be similarly overruled# L DIII L R+3 2G+ APP+A* O0 *'IO7 )'R+2O CO#" I7C# LAL 2G+ APP+A* O0 *'IO7 )'R+2O CO#" I7C# I) PRAC2ICA**O ACA(+!IC

(efendant8a&&ellant *uCon )urety Co#" Inc# submits the following assignments of error3 MI 2G+ *O:+R CO'R2 +RR+( I7 7O2 (I)!I))I7 2G+ CO!P*AI72 A AI7)2 2G+ (+0+7(A72 *'IO7 )'R+2O CO#" I7C#" O7 2G+ RO'7( 2GA2 2G+ AC2IO7 A AI7)2 I2 :A) PR+!A2'R+*O PR+)+72+(# MII 2G+ *O:+R CO'R2 +RR+( I7 OR(+RI7 (+0+7(A72 *'IO7 )'R+2O CO#" I7C#" 2O PAO P*AI72I00) 2G+ DA*'+ O0 I2) BO7(#M 2he factual bac<ground of *uConNs a&&eal is sim&le# It is more or less accurately narrated in said a&&ellantNs brief thus3 M)2A2+!+72 O0 2G+ 0AC2) A7( O0 2G+ CA)+# MOn )e&tember 61" ,-5/" &laintiffs filed the original com&laint against defendant 2alisay8)ilay !illing Co#" Inc# $R#A &# ,%# MOn 7ovember 6@" ,-5/" the defendant *uCon )urety Co#" Inc# and the defendant 2alisay8)ilay !illing Co#" Inc# issued a bond binding themselves to &ay jointly and severally the )ugar Kuota Administrator and the Asociacion de Agricultores de 2alisay8)ilay" Inc# in the sum of P,"@@@"@@@#@@ under the condition that3 in the event that the courts should finally adjudge that said Re&ublic Act 7o# .@- is a&&licable to the ,-5/855 cro& of 2alisay8)ilay !ill (istrict" and that the &lanters are entitled to an additional &artici&ation of )+D+7 A7( A GA*0 $58,A6U% P+RC+72" or less" over and above )IP2O $6@U% P+RC+72" of their res&ective &roduction in that year" the C+72RA* will &ay to each and every &lanter concerned" through the )ugar Kuota Administration and the Asociacion de Agricultores de 2alisay8)ilay" Inc#" the value of such additional &artici&ation of )+D+7 A7( A GA*0 $58,A6U% P+RC+72" or less" as may be determined by the courts in accordance with the average mar<et &rice during the month within which the sugar is sold# $Anne4 NAN" R#A# &&# ,.86/%#M In the light of the foregoing sti&ulation and u&on finding and holding that Re&ublic Act .@- a&&lied to the 2alisay8)ilay district during cro& year ,-5/855" the trial court rendered its a&&ealed judgment" the &ertinent &ortion of which reads thus3 M:ith res&ect to the dis&uted &ortion of the sugar &roduced in ,-5/8,-55" inasmuch as the same has been sold and the amount realiCed and turned over to the defendant Central under the surety bond filed by the *uCon )urety R Com&any" Inc# has been determined to be valued in the amount of P-/-".56#51" the Court renders judgment against the defendant Central" 2alisay8)ilay !illing Com&any" Inc# and the *uCon )urety Com&any" Inc#" jointly and severally" to &ay the &laintiffs the sum of P-/-".56#51" with interest thereon at the rate of 1U &er annum from the time the said amount was delivered to the Central in the year ,-55 until the same is fully &aid # # #M $P&# /1-8//@" Record on A&&eal#%# '&on these &remises" :e do not believe *uConNs a&&eal reHuires e4tended discussion# In fact" it a&&ears to 's to be virtually academic" and :e are thus relieved of having to &ass on any of the legal arguments advanced by counsel in their brief# In this decision" :e hold" as already e4&lained above" that during the cro& year ,-5/855" there was a majority of &lanters in the 2alisay8)ilay district with written milling agreements with the C+72RA*" hence )ection , of Re&ublic Act .@- did not a&&ly then# :e are further holding" however" that by virtue of the most favored &lanter clause" the P*A72+R) are entitled to a 1U increase in their share of the &roduction of the C+72RA* in that year" 6@U of which should in turn be &aid to the res&ective &lantation laborers of the P*A72+R) &ursuant to )ection - of the Act# Gence" it is clear that the basic contingency that is the condition of *uConNs bond in Huestion has fundamentally materialiCed" e4ce&t that it would not be enforceable" strictly s&ea<ing from the &oint of view of the matter most favorable to *uCon" until after this decision has become final and the C+72RA* does not &ay# 7ow" under the terms of this decision" the C+72RA* is entitled to receive a total amount much more than what is involved in the *uCon bond because of our holding above that from cro& year ,-56851 to cro& year ,-5-86@" Re&ublic Act .@- was not a&&licable to the 2alisay8)ilay milling district and" therefore" a large &ortion of the money held in escrow by the Phili&&ine 7ational Ban< for the &ur&oses of this case will go to the C+72RA*# And so" brushing aside technicalities otherwise a&&licable" this controversy involving *uCon may more e4&editiously be dis&osed of by holding that whatever amount corres&onds to the P*A72+R) and their laborers of the money that the C+72RA* got under the *uCon bond corres&onding to the ,-5/855 cro& year should be deducted from the total sum that the C+72RA* is entitled to under this decision# Anyway" the C+72RA* is the &rinci&al under the bond" and since it has the necessary amount with which to com&ly with the terms thereof" it is unnecessary to render any judgment which can be e4ecuted against *uCon# Accordingly" the reHuirements of justice can be fully satisfied by a modification of the judgment of the trial court sentencing the C+72RA* to &ay the P*A72+R) and their laborers P-/-".56#51 &lus interest at 1U &er annum in the sense that the judgment should be that of the total amount that is due the C+72RA* under this decision of the &roceeds de&osited in escrow for the cro& years ,-56851" ,-5185/ and ,-55856 to ,-5-86@" there should be deducted the eHuivalent of 6@U of said P-/-".56#51 &lus 1U &er annum which shall be &aid instead to the P*A72+R) and their res&ective laborers at the ratio of /@U thereof for the former and 6@U for their laborers or the )ecretary of *abor# IP I7CI(+72) ('RI7 2G+ APP+A* Issues raised by the 2A)ICA# As stated in the &refatory &ortion of this decision" during the &endency of this a&&eal" the C+72RA* leased for a &eriod of three years" beginning )e&tember ," ,-61" its mill to the 2A)ICA" which thereby acHuired the mill rights and became the miller in the 2alisay8)ilay milling district starting from the cro& year ,-618,-6/# In the resolution dated 7ovember ." ,-61" the Court ordered that the resolution of )e&tember 66" ,-61" in connection with the dis&osition of the controverted 58,A6 &ercent of the sugar &roduction for the cro& year ,-66861 be made a&&licable to the controverted &ortion of the sugar &roduction during the cro& year ,-618,-6/" under the same terms and conditions# On (ecember ,6" ,-61" 2A)ICA filed a s&ecial a&&earance Huestioning the jurisdiction of this Court over its &erson" on the ground that it was not a &arty to this case" and therefore" could not be legally bound by any of its resolution with res&ect to the sugar &roduction for the cro& year ,-618,-6/# :e deferred action on the Huestion of jurisdiction until the case would be considered on the merits# *i<ewise" :e deferred action on the contem&t charge against the 2A)ICA arising from the invalidation by its !anager of the escrow Huedans covering the controverted 58,A6 &ercent of the &roduction for the cro& year ,-618,-6/# 2he a&&ellees and the amici curiae maintain that 2A)ICA is subject to the jurisdiction of this Court and is liable for contem&t of this Court because $,% 2A)ICA" being a lessee of the mill and the milling rights of the C+72RA*" was a transferee &endente lite" and" by the &rovision of )ection 6@" Rule 1" of the Rules of Court" it was bound by any judgment or order which might be rendered against the original &arty and transferor; and $6% 2A)ICA had actual notice of the resolution of this Court of 7ovember 5" ,-61 which it violated when it invalidated the escrow Huedans issued &ursuant to said resolution# Cd&r

As :e have indicated earlier" :e feel it is in the best interest of justice that the whole controversy regarding the a&&lication of Re&ublic Act .@to the 2alisay8)ilay milling district should be com&letely determined" is legally and eHuitably &ossible" in this &roceeding# Indeed# as :e see it" nothing substantial would be gained by any of the &arties if we reserved for the trial court the remaining issues just mentioned affecting 2A)ICA# After all" the lease contract between the C+72RA* e4&ired in cro& year ,-66865 and no new material circumstances have been shown to have ta<en &lace during the &eriod of said lease that could in any way alter the &oints in dis&ute which arose relative to cro& year ,-6186/# :ithal" Our im&ression is that the 2A)ICA arrangement might have been intended to &rolong the controversy" but in truth it is Huite obvious that the base of the C+72RA* did not and could not have had the effect of substantially changing the basic issue herein# On the issue of jurisdiction# 2he contention of the 2A)ICA that this Court has no jurisdiction to consider and decide Huestions related to the cro& years regarding which the &arties did not &resent evidence or any sti&ulations of fact in the court below loses sight of the fact that in a general sense the &leadings filed by the &arties in the trial court refer not only to the cro& year ,-56851 but to all subseHuent cro& years# 2hus" at least in the &rayer of the amended com&laint referring to the second alternative cause of action" the &laintiffs8a&&ellees as< for judgment covering Mcro& year ,-5/855 and L every cro& year thereafterM# Accordingly" it cannot be said that the cro& years ,-6@86, to ,-66865 are not covered by the &leadings# Of course inasmuch as the trial was terminated in ,-6," strictly s&ea<ing" it would be more a&&ro&riate to reHuire su&&lemental &leadings and corres&onding hearings by the trial court" if indeed there were any factual issues on which the &arties are in disagreement and the new legal issues are being raised# But" des&ite the contention of the C+72RA* and 2A)ICA in its earlier &leadings in this Court that they would be denied due &rocess if they were not given an o&&ortunity to be heard on facts and issues related to the later cro& years" a com&rehensive view of the case convinces 's that there are no such &ossible new issues# 2he main factual Huestion of number of contract &lanters" as already observed earlier in this o&inion" became a dead issue after the e4&iration of most of contracts at the end of cro& year ,-5-86@# And the figures regarding the &roduction during the later cro& years cannot be controversial" e4ce&t as to the ,-6186/ cro& year" which :e are resolving elsewhere in this decision# !ore im&ortantly" the P*A72+R) and the laborers have been constantly as<ing that the judgment herein should include these later cro& years" and although the C+72RA* has as late as in its su&&lemental memorandum of (ecember 6" ,-5. insisted formally on a remand of this case to the trial court for the &ur&oses under discussion" Our &lain understanding from counsel for the Central" when they submitted the detailed figures relative to the money in dis&ute here de&osited in escrow in different ban<s is that the C+72RA* has no serious objection to the &rayer of the P*A72+R) and laborers# On the joinder of 2A)ICA# )imilarly" 2A)ICANs contention that it is not a transferee &endente lite of the C+72RA* from the &oint of view of )ection 6@ of Rule 1 is without merit# 2he &redicate of its argument is that the cro& years ,-6@86, are not covered by the &leadings in the lower court" which :e have just shown is not accurate# 'nder the cited rule" a transferee &endente lite does not have to be included or im&leaded by name in order to be bound by the judgment because the action or suit may be continued for or against the original &arty or the transferor and still be binding on the transferee# On the alleged contem&t committed by 2A)ICA# 2he motion for contem&t against 2A)ICA is based on the MinvalidationM by its manager of the Huedans in escrow for cro& year ,-6186/" which were issued to 2A)ICA instead of the C+72RA* as reHuired by Our resolution of 7ovember 5" ,-61# 2he C+72RA* and 2A)ICA have e4&lained that the su&&osed invalidation was an unintentional mista<e# Besides" Our subseHuent resolution of )e&tember 6." ,-6/ has been duly com&lied with and with such com&liance" no substantial injury can be said to have been suffered by the P*A72+R)# :e find the e4&lanation of 2A)ICA satisfactory" hence the motion to declare it in contem&t is hereby denied# I7 R+ 2G+ K'+)2IO7 O0 :GO I) 2G+ CO'7)+* 0OR 2G+ P*A72A2IO7 *ABOR+R) Incidentally" and on the basis of the com&liance filed by the )ecretary of *abor dated August 61" ,-55 and by Attys# !ontemayor and (imaano and Camilo *# )abio dated August ,5" ,-55" the Court ma<es it clear that the &rinci&al counsel of record of the &laintiffs &lantation laborers in this case are the official lawyers of the )ecretary of *abor" who under Re&ublic Act .@-" is their sole legal re&resentative" namely Attorneys +rnesto G# CruC and +milia +# Andres of the *egal (ivision of the (e&artment of *abor" with whom collaborating counsels Attys# !ontemayor" (imaano and )abio" are e4&ected to coordinate for common re&resentation on behalf of said laborers# 2G+ !A22+R O0 BA A))+" !O*A))+)" PR+)) CAJ+) A7( O2G+R (+RIDA2ID+) A7( BO8PRO('C2) O0 !I**+( )' ARCA7+ 2he decision of the trial court under review adjudged the A)OCIACIO7 to be entitled to increased shares not only of the &roceeds of milled sugar but also that of the corres&onding derivatives and by8&roducts of the milled sugarcane# Gis Gonor is correct" for under )ection , of Re&ublic Act .@-" it is clear that the ratio of sharing therein fi4ed refers not only to the unrefined sugar &roduced by the miller of the sugarcane of the &lanters but of all the by8&roducts and derivatives therefore" by which is meant the bagasse" &ress ca<es and molasses# In other words" the law reHuires that these derivatives and by8&roducts should be divided between the C+72RA* and the A)OCIACIO7 in the same &ro&ortion as the money that has been de&osited in escrow which corres&onds only to the &roceeds of unrefined sugar# As may be noted" however" the record reveals nothing as to the amount and value of said by8&roducts and derivatives &roduced during the whole &eriod here in dis&ute from cro& years ,-56851 to ,-66865" and it is to be &resumed that no corres&onding de&osits in escrow had been made therefor# Accordingly" it is im&erative that such accounting be made by the C+72RA*# On the basis of the result of such accounting" the C+72RA* should &ay the res&ective amounts due the A)OCIACIO7" and" of course" the res&ective P*A72+R) should in turn &ay the 6@U share due their laborers" &ursuant to )ection - of the Act" as :e have construed the same above# **jur )&ecifically" since" as discussed earlier" )ection , did not a&&ly to the 2alisay8)ilay milling district during cro& years ,-56851 to ,-5-86@ because there was always a majority then of &lanters with written milling contracts with the miller" the A)OCIACIO7 would not have been entitled to any increased share in the &roduce during those cro& years were it not for Our holding herein that by virtue of the most favored8 &lanter clause" the A)OCIACIO7 is entitled to the 1U and /U increases in the share of the &lanters" as already shown earlier# It follows then that the A)OCIACIO7" and corres&ondingly the laborers" should also share in the &roceeds of the by8&roducts and derivatives during the whole &eriod that the most favored &lanter clause was o&erative" namely" from cro& year ,-5/855 to cro& year ,-5-86@" in the same &ro&ortion as the increase in the &roceeds of unrefined sugar# 2he same is true as regards cro& years ,-6@86, to ,-66865 where the whole dis&uted &ortions should go to the A)OCIACIO7 and the laborers# R+3 #R# 7O# *86,1@/

As stated earlier" the &etition in this case was filed on !ay ,6" ,-61 for the &ur&ose of securing an order of this Court com&elling the res&ondent judge to a&&oint in Civil Case 7o# 6-.@ of the Court of 0irst Instance of 7egros Occidental" a tem&orary administrator to o&erate the res&ondent sugar central until the end of the milling &eriod ,-668,-61" &ursuant to )ections / and 5 of Re&ublic Act .@-" &etitioner claiming that notwithstanding that res&ondent C+72RA* was refusing to mill the sugarcane of the &lanters in the district" res&ondent judge declined to a&&oint such administrator" holding that the ta<eover of a central &rovided for in the law is unconstitutional# On !ay 66" ,-61" the Court heard the oral argument of the &arties# On !ay 1," ,-61" the Court" Mreserving its o&inion on the merits of the case and the validity of the lawM directed res&ondent judge to forthwith a&&oint a Hualified administrator Mof the sugar central of the Res&ondent Central for the e4clusive &ur&ose of milling the remaining ,-668,-6. sugarcane cro& of 2alisay8)ilay !ill (istrictM# 'nder date of 9une /" ,-61" res&ondents C+72RA* and A))OCIACIO7 filed an M+48&arte Petition for Immediate Redress of 'nwitting InjusticeM claiming3 M5# L 2hat res&ondents therefore sincerely believe and most res&ectfully submit that the highest interests of justice reHuire that the so called &reliminary mandatory injunction" which for an &ractical intents and &ur&oses" was under the circumstances virtually a definite writ of mandamus issued by this Gonorable Court in Baguio on !ay 1," ,-61" without <nowing about the settlement of the alleged subseHuent controversy regarding the cutting of said young canes" should be &rom&tly set aside" with or without a decision on the merits" in order to thereby redress" even &artially" the undeniable moral damage and injury" mental anguish serious an4iety" besmirched re&utation" moral shoc< and social humiliation caused by the same to the res&ondents in this case $Article 66,5" Civil Code%# Gowever" u&on being reHuired to answer by the Court" the )olicitor eneral filed an o&&osition to this &etition stating that3 MRes&ondentsN motion dated 9une /" ,-61 see<s in effect a reconsideration of the resolution of this Gonorable Court dated !ay 1," ,-61 granting the a&&ointment of an administrator# M2he resolution however directed that the administrator should act only for the Ne4clusive &ur&ose of milling the remaining ,-668 61 sugarcane cro& of the 2alisay8)ilay !ill (istrict#N 2he milling of the said sugarcane cro& was officially terminated on 9une 5" ,-61 at ,,3@5 P#!# $Co&y of )&ecial Administrative Order 7o# 5% is attached hereto as Anne4 N,N% and both &etitioner and res&ondents filed se&arate motions before the Court of 0irst Instance of 7egros Occidental to declare the administration terminated# MOn 9une ,5" ,-61" the Court of 0irst Instance of 7egros Occidental granted both motions and declared the a&&ointment of the administrator terminated $A co&y of the Order is attached hereto as Anne4 N6N%# M2he said motion of 9une /" ,-61 therefore is now moot and academic#M $P&# ,618,6/" Record#%# And so" on 9uly ," ,-61" the Court reHuired the )olicitor eneral Mto show cause L why this case should not be dismissed#M In com&liance therewith" the )olicitor eneral made the following re&resentation3 M,# 2hat the issue before this Gonorable Court has not been rendered moot and academic by the termination of the administration of the sugar central of the res&ondent 2alisay8)ilay !illing Co#" Inc# because3 a% 2he Huestioned Order of the Res&ondent 9udge contains a declaration of the unconstitutionality of )ection 5 of Re&ublic Act 7o# .@-" thereby necessitating a review by this Gonorable Court; b% 2he &etition see<s to obtain an inter&retation of )ection 5 of Re&ublic Act 7o# .@-" &articularly as to whether or not under said )ection" it is the duty of the Court of 0irst Instance to a&&oint an administrator before conducting a hearing on the legality or &ro&riety of +4ecutive Proclamation for the administration of a sugar central# M6# 2hat the resolution of the legal Huestions are of vital and transcendental im&ortance to the &ublic at large and to the sugar industry in &articular" inasmuch as the legal &rovision under consideration is the only feasible and effective remedy in &reventing &araliCation of the milling o&erations in a !ill (istrict" which in turn will lead to a deficiency or delinHuency in the filling of the entire national Huota# M!oreover" there is the &ractical consideration that the need for governmental administration of a sugar central under Re&# Act 7o# .@- would &robably arise only towards the end of the milling season when the &roduction is about to e4ceed ,"6@@"@@@ &iculs and the central owner stubbornly refuses to &roduce further" because to e4ceed ,"6@@"@@@ &iculs would mean an increase in the &artici&ation of the &lanters and their laborers in the ne4t cro& year in accordance with )ec# , of Re&# Act 7o# .@-# )ince the time reHuired to mill the remaining canes would usually be very short" as in the case at bar" any governmental administration granted by this Gonorable Court as an ancillary remedy will naturally be terminated before this Gonorable Court can have an o&&ortunity to act on the main case# M1# 2hat this Gonorable Court in cases wherein &ublic interest is involved has &roceeded to act on the case even if the matter may be moot and academic" as in the case of Jriven<o vs# Register of (eeds $// O# # /5,%# M:G+R+0OR+" it is res&ectfully &rayed that this Gonorable Court consider for resolution the issues raised in the &etition for certiorari and or mandamus" &articularly the Huestion as to whether or not )ection 5 of Re&ublic Act 7o# .@- is unconstitutional insofar as it reHuires the a&&ointment of an administrator &rior to the hearing on the legality or &ro&riety of the +4ecutive Proclamation#M $P&# ,-68,-/" Id#%# and the res&ondents re&resented by Atty# Dicente Gilado countered in a motion filed on October ,@" ,-61 thus3 M7ow come the res&ondents" by their undersigned attorney" and res&ectfully re&resent3 M,# L 2hat in the !anifestation" dated 9uly ,6" ,-61" filed by the )olicitor eneral for the &etitioner in this case" the &etitioner has invo<ed the Nvital and transcendental im&ortance to the &ublic at large and to the sugar industry in &articularN of the legal Huestions involved in this case to justify its &rayer that this Gonorable Court consider for resolution the issues raised in the &etition for certiorari andAor mandamus" &articularly the Huestion as to whether or not )ection 5 of Re&ublic Act .@- is unconstitutional insofar as it reHuire the a&&ointment of an administrator &rior to the hearing on the legality or &ro&riety of the e4ecutive &roclamation#N M6# L 2hat &ursuant to said &rayer of the &etitioner" the Gonorable Court on August ,6" ,-61" a&&roved the following resolution3 NConsidering &etitionerNs comment for the dismissal in *86,1@/ $Re&ublic of the Phili&&ines vs# Gon# 9ose 0ernandeC" 2alisay8)ilay !illing Co#" Inc# and 2alisay8)ilay Industrial Coo&eration Association%" and the )olicitor eneralNs motion that this Court consider for resolution the issue raised in the Huestion as to whether or not )ection 5 of Re&ublic Act .@- is unconstitutional insofar as it is reHuired the a&&ointment in administrator &rior to the hearing on the legality or &ro&riety of the +4ecutive Proclamation# 2G+ CO'R2 R+)O*D+ to consolidate this case with *8,--15#N M1# L 2hat" in view of the fact that )ection 5 of Re&ublic Act .@- does not contain any e4&ress &rovision which ma<es it a mandatory duty s&ecifically enjoined by law $as contem&lated in )ection 1 of Rule 65 of the Rules of Court% for the Court to a&&oint an administrator u&on the filing of the &etition mentioned in said )ection 5 of Re&ublic Act .@-" the res&ondents in this case inter&ret said resolution of this Gonorable

Court to mean only that this Gonorable Court is willing to resolve the Huestion of whether said )ection 5 would not be unconstitutional" as a violation of the constitutional right to due &rocess" if inter&reted in the sense that it ma<es it the s&ecific legal duty of the Court to a&&oint said administrator immediately u&on the filing of the reHuired &etition" and &rior to the hearing on the legality or &ro&riety of the e4ecutive &roclamation involved" which the res&ondent central is e4&ressly given by said )ec# 5 the right to raise" as a &referential Huestion" after due notice" undoubtedly with the intention and &ur&ose &recisely to &reserve and &rotect said constitutional right of the central to due &rocess of law before it may be de&rived of the right to the &ossession and administration of its &ro&erty" which is of course a necessary attribute and integral &art of the right of ownershi&; M/# L 2hat of eHual im&ortance as the legal Huestion of the constitutionality of said )ection 5 of Re&ublic Act .@-" if so inter&reted as to de&rive the res&ondent central of its constitutional right to due &rocess" is" in our humble o&inion" the legal Huestion of validity and &ro&riety arising from the fact that the Presidential Proclamation and conseHuent &etition for a&&ointment of administrator which gave rise to the &resent case were res&ectively issued and filed" notwithstanding that the res&ondent central had already &roduced the total amount of sugar that it has been allocated and licensed to &roduce during the cro& year ,-66861" in accordance with )ections /" 5 and ,5" of the )ugar *imitation *aw $Act /,66" as amended%" which" in effect" &rohibit and &enaliCe the milling andAor manufacture by a sugar central of a bigger amount of sugar than it has been so allocated and licensed to &roduce during each cro& year" as follows3 N)+C# /# After this Act ta<es effect" it shall be unlawful to manufacture centrifugal or MAAM refined sugar without first obtaining a license therefor in accordance with the &rovisions this Act#N N)+C# 5# 2he total amount of centrifugal and MAAM refined sugar for the manufacture of which licenses may be issued for any cro& or calendar year under the terms of this Act" shall be the sum total of the following3 $a% 2he Huantity in short tons of MAM and MAAM sugar which shall be identical with the amount of such sugar" which" under Act of Congress" may be shi&&ed to Continental 'nited )tates during the calendar year; &lus $b% )uch a Huantity in short tons of MBM sugar as the overnor8 eneral may from time to time find to be reHuired for consum&tion within the Phili&&ine Islands" either in its original form or as refined sugar; &lus $c% A Huantity in short tons of MCM sugar eHuivalent to ten &er centum of the total of $a% and $b% or ,@@"@@@ short tons" whichever is greater" &rovided that in" determining said amount the overnor8 eneral may" in his discretion" deduct therefrom the whole or any &art of the amount of MCM sugar in stoc< at time of determination#M N)+C# ,5# Any mill com&any or refining &lant manufacturing centrifugal or MAAM refined sugar" res&ectively" in a Huantity greater than the Huantity &rescribed in its license or any &erson manufacturing centrifugal or MAAM refined sugar without a license shall be &unished by a fine of fifty &esos for each short ton or fraction of more than one8half a short ton so manufactured and such sugar shall be seiCed and dis&osed of as the President of the Phili&&ines shall direct in such manner as will not be inconsistent with the &ur&ose of this Act#N M5# L 2hat said fact is alleged in the NO&&osition to A&&ointment of AdministratorN filed by res&ondents in the court below" which is attached as Anne4 N1N of the &etition in this case" and is also re&roduced and incor&orated by reference as &art of res&ondentsN answer to the &etition in this case $)ee &ar# , of res&ondentsN answer in this case%; M6# L 2hat" in view of said &rovisions of )ections /" 5 and ,5 of the )ugar *imitation *aw" the very im&ortant legal Huestion arises whether or not )ection / of the same Re&ublic Act .@- which allows the overnment to ta<e over and have an administrator a&&ointed for a sugar central which Nshall refuse to mill the sugarcane of such &lanters in the absence of such an agreement"N could or should be inter&reted to include the case of a sugar central which sto& or discontinues further milling and manufacture of sugar after it has manufactured the total amount of sugar which it has been allocated and licensed to &roduce during any cro& year" and thereby avoid &ossible &rosecution and &unishment for violation of said restrictive &rovisions of the )ugar *imitation *aw; in such a way that it would be liable to such &rosecution and &unishment" if it continues to mill and manufacture more than said total &roduction Huota which it has been allocated and licensed to &roduce during that cro& year; and" on the other hand" would be liable to seiCure" if it ceases to mill the e4cessive sugarcanes &roduced by the &lanters" as the overnment has tried to do in this case; M5# L 2hat" as a matter of fact" for the incoming cro& year ,-6186/" the )ugar Kuota Administration has allocated to and licensed the herein res&ondent Central to mill and &roduce the total amount of ,",/5"651#1. &icul; but the big sugarcane cro& &lanted by the &lanters for this cro& year is again e4&ected to &roduce considerably much more than said amount of ,",/5"651#1. &iculs; and it is very &robable that efforts will again be e4erted to threaten and com&el the herein res&ondent central and its &resent lessee $also res&ondent herein% to e4ceed its said total allocated &roduction Huota" in violation of said )ections /" 5 and ,5 of the )ugar *imitation *aw" under &ain of being again subjected to seiCure and &laced under administration by the overnment# Co&y of the &roduction Huotas allocated to each and every milling district in the Phili&&ines for the cro& year ,-6186/ and of the circular letter of transmittal of the )ugar Kuota Administration" dated August 65" ,-61" are attached to and made a &art of this motion" mar<ed as Anne4es N,N and N,8AN# M.# L 2hat" in justice and fairness to the herein res&ondents therefore" and in order to &revent a multi&licity of suits and re&etition of the un&leasant and untenable situation created by the Presidential Proclamation and conseHuent &etition for a&&ointment of administrator which gave rise to the &resent case" it would" in our humble o&inion" be only &ro&er and fitting for this Gonorable Court to consider and resolve in this case also the very im&ortant Huestion of the real im&ort" sco&e and e4tent of said )ection / of Re&ublic Act .@-" &articularly the legality andAor &ro&riety of the e4ecutive &roclamation and &etition for a&&ointment of an administrator for the res&ondent Central" notwithstanding the fact that it had in fact already &roduced more than the total amount of sugar which it has been allocated and licensed to &roduce during" the cro& year ,-66861" in accordance with said )ections /" 5 and ,5 of the )ugar *imitation *aw# M:G+R+0OR+" res&ondents res&ectfully &ray that" in the interest of a s&eedy administration of justice" and thereby avoid continued or renewed and further &rotracted litigation" this Gonorable Court see fit to resolve in this case" once and for all" the very im&ortant legal Huestions hereinabove mentioned" &articularly the legal Huestion of the &ro&er and correct inter&retation" sco&e and e4tent of said )ection / of Re&ublic Act .@-" in the light of the &rovisions of said )ections /" 5 and ,5 of the )ugar *imitation *aw#M $&&# ,-686@," Id#%# :e must resist the tem&tation to acHuiesce to the insistent &rayer of the &arties that the constitutional issue &assed u&on by res&ondent judge be settled" if only because none of the &arties ever raised that issue below" and the considerations now being submitted by the )olicitor eneral of su&&osed urgency of resolving said constitutional Huestion do not" in Our O&inion" justify de&arture from the general rule the Court has always adhered to" as stated in )antiago vs# 0ar +astern Broadcasting" 51 Phil# /@." to the effect that Mthe constitutionality of a law will not be considered unless the &oint is s&ecially &leaded" insisted u&on and adeHuately argued# M $at &" /,6% Anyway" the a&&ointment of an administrator

&ursuant to )ections / and 5 of Re&ublic Act .@- ordered by this Court on !ay 1," ,-61 hardly became of material im&ortance because the administration was" by agreement of the &arties terminated as of 9une 5" ,-61# :e are not im&ressed that the allegations regarding moral damage and injury" etc# in res&ondentsN e48&arte &etition of 9une /" ,-61 can have substantial basis or will even he insisted u&on anymore# In other words" no active and &ositive substantial relief will be due any of the &arties even if :e should decide here the constitutional matter referred to one way or the other# llcd And as regards the &lea of res&ondents relative to the construction of )ection / of Re&ublic Act .@- in relation to )ections /" 5 and ,5 of Act /,66" the )ugar *imitation *aw" it is to be noted that in his M!anifestationM dated October 6-" ,-61" the )olicitor eneral defined the &osition of the overnment to be as follows3 M1# 2hat in connection with the statement of res&ondent )ugar Central in its motion dated October ,@" ,-.1 that if it is com&elled to mill more sugar than the Huota allotted to him" he will criminally liable under the &enal &rovisions of the )ugar *imitations *aw $)ecs# /" 5" and 6%" suffice it to state that a sugar central is subject to seiCure under Re&# Act .@- only when its refusal to mill will cause a deficiency in the national Huota; the fact im&licit therein being that when the mill sto&s o&erating there is sugar yet to be milled and the Huota allotted to it $both the basic and the additional% has not yet been filled#M $P&# 6@586@." Id#% which is substantially in accord with the contention of said res&ondents# 9'( !+72 Predicated on all the foregoing considerations" it is the judgment of the Court in # R# 7o# *8,--15 that the decision of the trial court be" as it is hereby" modified in the following manner" to wit3 $a% Re&ublic Act .@-" otherwise <nown as the )ugar Act of ,-56" is hereby declared not to be unconstitutional and is" therefore" enforceable in all sugar milling districts wherein the relevant facts come within the conditions &rescribed therein# $b% 2hus" inasmuch as relative to cro& years ,-56851 to ,-5-86@ in the sugar milling district of a&&ellant 2A*I)AO8)I*AO !I**I7 CO#" I7C#" it has been &roven that there were written milling agreements between the majority of the &lanters and the miller in said district" the &rovisions of )ection , of said Act &roviding for the manner in which the unrefined sugar &roduced in the district from the milling by said C+72RA* of the sugarcane of the &lanters or &lantation owners" as well as the by8&roducts and derivatives thereof" should be a&&ortioned among them did not a&&ly to said district" hence" the ratio of sharing of the &roceeds of the &roduction during those cro& years must be that fi4ed in the res&ective contracts of the C+72RA* and the P*A72+R)" as construed in this decision3 $c% Accordingly" as regards cro& years ,-56851 and ,-5185/" the amended com&laint of the P*A72+R) and the )+CR+2ARO O0 *ABOR is dismissed and the defendant PGI*IPPI7+ 7A2IO7A* BA7J is hereby sentenced to &ay to the a&&ellant C+72RA*" out of the money de&osited with it in escrow for the &ur&ose of this case" the amounts hereinunder s&ecified as corres&onding to said cro& years" &lus the interest u& to the time full &ayment is made; $d% In relation to cro& year" ,-5/855 in which all the &roceeds of the sugarcane milled by the A)OCIACIO7 amounting to P-/-".56#51 were retained by the C+72RA*" the judgment of the trial court sentencing the C+72RA* to &ay the whole said amount to the A)OCIACIO7 with interest at 1U &er annum is modified only in the sense that only P6//"@@6#56 shall be &aid by the C+72RA* and that out of this latter sum" 6@U thereof" or P166"/@,#66 shall be &aid by the P*A72+R) to their res&ective laborers" &er )ection - of Re&ublic Act .@-# $As e4&lained earlier" the P-/-".56#51 re&resented 58,A6U of the total &roceeds for cro& year ,-5/855 which should have been de&osited in escrow but which" by agreement of the &arties was retained for itself by the C+72RA* under the security of a bond given by the a&&ellant *uCon )urety Com&any conditioned on the &ayment to the A)OCIACIO7" u&on the termination of this case" of whatever amount may be found due thereto" and which amount the lower court fi4ed as above stated# 7o a&&eal was ta<en by the A)OCIACIO7 from said judgment" hence the modification should only be as to the &ro&ortion or ratio of sharing# 'nder the foregoing o&inion" of the 58,A6U in controversy" only 1U should go to the A)OCIACIO7 to com&lete the 61U the P*A72+R) are entitled to under the most8favored8&lanter clause# 7ow" 1U re&resents 6A5 or /@U of the 58,A6U in Huestion" hence of the P-/-".56#51" &lus 1U interest &er annum which totalled to P,"6,@"@@6#-/ as of 7ovember 1@" ,-5." 6@U or P-66"@@/#,/ should be the share of the C+72RA*" which should be considered as already fully &aid" and the remaining /@U or P6//"@@6#66 should be &aid by the C+72RA* to the A)OCIACIO7#% $,% Gowever" to sim&lify matters" the said amount of P6//"@@6#66 should merely be deducted from whatever total amount the C+72RA* is entitled to under this decision" the suns to be added corres&ondingly to the res&ective shares of the P*A72+R) and their laborers in the amounts just indicated" for which reason no judgment need be rendered against the defendant *uCon )urety Com&any and it is hereby relieved of any e4ecution under its bond" +4hibit P" and the said bond is hereby ordered cancelled# $e% As regards cro& years ,-55856 to ,-5-86@" the defendant Phili&&ine 7ational Ban< is hereby sentenced to &ay out of the money de&osited with it for &ur&oses of this case follows3 $,% 2o the &laintiff8a&&ellee A)OCIACIO7 for the benefit of P*A72+R)" /@U of the amounts retained or de&osited corres&onding to each of said cro& years" e4ce&t cro& year ,-5.85-" in res&ect to which the amount should be 51#11U" including in both instances all the interests actually earned u& to the time of full &ayment# $2he &ortions retained for cro& years ,-55856 and ,-5.85- were 58,A6U of the total &roceeds each of said cro& year; for cro& years ,-56855 and ,-5585." 5U; and for cro& year ,-5-86@" ,@U; and inasmuch as the sharing for ,-55856" ,-5585." ,-5.85- and ,-5-86@" &er the most favored8&lanter clause" was 61815 and in ,-5.85- it was 6/816" of the 58,A6 for ,-55856 and of the 5U for ,-56865 and ,-5585." the &lanters should get 1U; of the 58,A6 for ,-5.85-" /U; and of the ,@U for ,-5-86@ also 1U" the total &roduction having e4ceeded ,"6@@"@@@ &iculs only in ,-5.85-; however" what was retained for cro& year ,-5.85- was 58,A6 and in ,-5-86@ it was ,@U#%# $f% As regards cro& year ,-6@86, and all the subseHuent cro& years u& to ,-56855 ,6 the Phili&&ine 7ational Ban<" the Phili&&ine Commercial and Industrial Ban< and the Pacific Ban<ing Cor&oration are hereby ordered to &ay the &laintiff A)OCIACIO7" for the benefit of all the P*A72+R) in this class suit" all the amounts res&ectively de&osited with said ban<s for the &ur&oses of this case in the joint names of the A)OCIACIO7" the C+72RA*A2A)ICA and the )ecretary of *abor during said cro& years" together with all the interests earned u& to the date of full &ayment" and all the P*A72+R) in turn are hereby sentenced to forthwith &ay and distribute" under the su&ervision of the )ecretary of *abor" to their res&ective laborers during said cro& years" 6@U of the amount to be so &aid to each of them by the ban<s# $g% According to the com&liance made by counsel for the C+72RA* dated (ecember 6," ,-5." the detailed data regarding the &roduction in &iculs and the e4act amounts de&osited in escrow in the three different ban<s aforementioned during cro& years material to this case" com&uted together with all the corres&onding interest earned u& to 7ovember 1@" ,-5. and the total thereof" duly confirmed by the res&ective ban<s" are as follows3

2O2A* PRO('C2IO7 CROP O+AR I7 PIC'*) PROC++() ,-56851 .6/"/-1 P ,".5-",,1#6,-5185/ ,"@55"-.@#,,"-/5"./5#/6 ,-55856 .6@"5@/#66",@5"6@/#55 ,-56855 .@6".6/#16 ,"6@,"1,.#1/ ,-5585. -./"./.#51 6"@61",56#/5 ,-5.85- ,"65@"@@.#5@ 1"5/1"166#.5 ,-5-86@ ,",.-".15#15 5"6/6"6,/#5, ,-6@86, ,",15"-,@#16 /"1.,",5@#1,-6,866 ,",/@"5-/#@, /"-.@"@5,#5. ,-66861 ,",.6"65-#15 ."6.,"65.#1/ ,-6186/ ,",55"@6/#@/"5-1",-6#@6 ,-6/865 .66".55#@, /",/.".-6#5,-65866 661"-5.#,/ 6"/@/"65-#65 ,-66865 565"556 6"@,-"-/5#@@ LLLLL 2O2A* P/-"51/"6@5#6. WWWWWWWWWW 2hus" on the basis of these figures" the res&ective amounts for $b%" $e% $,% and $f% above should be as follows3 Amounts to be &aid to3 CROP O+AR C+72RA* P*A72+R) *ABOR+R) ,-56851 P,".5-",,1#6P P ,-5185/ ,"-/5"./5#/6 ,-55856 ,"661"166#5/ 116".-6#51 5@5"1/5#,@ ,-56855 6/@#565#11 1./"1,6#/@ 556"/5/#6, ,-5585. .@-"66.#-. /.5"56,#1. 56."1/6#@,-5.85- ,"5/5"@65#/5 5-."51/#,6 ,",-5".@,#66 ,-5-86@ 1"-56"61@#,5 655"5-1#5/ ,"@,6"1-@#66 ,-6@86, L ,"556"/6.#,5 6"66."5@6#6/ ,-6,866 L ,"--6"@6@#5, 6"-.."@1,#@5 ,-66861 L 1"1,6"661#11 /"-6."--5#@, ,-6186/ L ,".1."/56#.6 6"55/"5,5#6/ ,-6/865 L ,"65-"55.#61 6"/.-"115#-6 ,-65866 L -6,".61#.6 ,"//6"5-5#., ,-66865 L .@5"-5.#.@ ,"6,,"-6.#6@ LLLLL LLLLL LLLLL P,6"6,5"555#56 P,5"@@5"-16#5, P66#5@.#.--#6, WWWWWWWWWWW WWWWWWWWWWW WWWWWWWWWWW Pursuant to &aragra&h $d% $,% above" the amount of P6//"@@6#56 should be deducted from the P,6"6,5#555#56 due the C+72RA*" thereby reducing the total amount to be &aid to it to P,,"551"551#@@ and increasing the amounts due the P*A72+R) and their laborers to P,5"665"511#., and P66".-5"1@@#.5" res&ectively" 6@U" of the P6//"@@6#56 being added to the share of the laborers and /@U thereof or P655"6@,#,@ being added to that of the P*A72+R)# As indicated" an the above figures or amounts are as of 7ovember 1@" ,-5." hence" for &ur&oses of im&lementation or e4ecution" corres&onding additional amounts should be added to cover the res&ective interests from (ecember ," ,-5. to the date of &ayment# $h% 0inally" relative to the amount and value of the by8&roducts and derivatives of the milled sugarcane" the C+72RA* is hereby ordered to ma<e an accounting thereof corres&onding to cro& year ,-5/855 to cro& year ,-66865" and to &ay to the A)OCIACIO7 for the benefit of the P*A72+R)" at the same ratio fi4ed above for the &roceeds of unrefined sugar" the corres&onding value thereof" and the P*A72+R) are in turn sentenced to &ay their res&ective laborers" under the su&ervision of the )ecretary of *abor" ,5 6@U of the amount to be &aid to them by the C+72RA* thru the A)OCIACIO7# as in the case of the &roceeds of unrefined sugar# &r** Resolution of the 2A)ICA incidents# ,# Re3 2he issues of jurisdiction and of joinder of 2A)ICA# Considering that" as already e4&lained earlier" although 2A)ICA was not a &arty in the &roceedings in the court below" the basic issues between the original &arties raised in their &leadings contem&late also the cro& years subseHuent to ,-5-86@ and inasmuch as the &roduction figures during those cro& years which are already before 's as &art of the record of this case are not dis&uted" thus obviating also the necessity of su&&lemental &leadings as well as the &resentation of evidence thereon" for the same would be a mere formality" the Court holds that under these &eculiar circumstances" it has jurisdiction to include as it has included above in this adjudication the matters involving said cro& years# In this connection" it is to be noted that" according to the record" notice of the rehearing of this case was sent by registered mail to counsel of record of 2A)ICA" and nothing further has been heard from said counsel on this &oint at issue" which to Our mind indicates that 2A)ICA has already lost interest in it# Based on the foregoing consideration that the incidents involving 2A)ICA in this a&&eal stage of this case are but incidental to the continuation of the issues duly raised in the court a Huo" the Court holds that 2A)ICA is a mere transferee &endente lite of the interests of the C+72RA* in this case within the contem&lation of )ection 6@ of Rule 1 and that" therefore" this judgment binds 2A)ICA without the need of its being formally im&leaded as a &arty hereto#

0or the reasons already stated earlier which the Court considers satisfactory" the motion for contem&t filed by the &laintiffs8a&&ellees against 2A)ICA is denied# 6# Percentage of dis&uted &ortions in ,-6186/ cro& yearNs &roduction# Anent the issue of whether the dis&uted &ortion for cro& year ,-6186/ should be ,@U instead of 58,A6U" the Court" as may be observed has com&uted the same on the basis of 58,A6U# At the moment" :e are of the view that" unless clear evidence is &resented to show that there were &lanters of the 2alisay8)ilay milling district who milled in the !a8ao )ugar Central and the Bacolod8!urcia !illing Co# for the s&ecific &ur&ose of evading the &rovisions of )ection , of Re&ublic Act .@-" something which is seemingly against the interest of the said farmers themselves" the &osition of the C+72RA* that the said milling in those other centrals was done in the ordinary course and with the authority of the )ugar Administrator" is well ta<en# If the &laintiffs8a&&ellees have the necessary evidence and they feel they can &ursue the matter further" the right to do so is hereby reserved for them# cdre& All of the C+72RA*Ns counterclaims are hereby accordingly overruled# In #R# 7o# *86,1@/" the &etition is hereby dismissed the issues raised therein" as :e have demonstrated a few &ages bac< having already become moot and academic# 7o attorneyNs fees" bad faith on the &art of the C+72RA* in the &remises not having been sufficiently shown# s financial assistance# 3 Both the &etitioner and the &rivate res&ondent a&&ealed to the 7ational *abor Relations Board" which u&held the said decision in toto and dismissed the a&&eals# ( 2he &rivate res&ondent too< no further action" thereby im&liedly acce&ting the validity of her dismissal# 2he &etitioner" however" is now before us to Huestion the affirmance of the above8 Huoted award as having been made with grave abuse of discretion# In its challenged resolution of )e&tember 66" ,-.5" the 7*RC said3 ### Anent the award of se&aration &ay as financial assistance in com&lainantNs favor" :e find the same to be eHuitable" ta<ing into consideration her long years of service to the com&any whereby she had undoubtedly contributed to the success of res&ondent# :hile we do not in any way a&&rove of com&lainants $&rivate res&ondent% mal feasance" for which she is to suffer the &enalty of dismissal" it is for reasons of eHuity and com&assion that we resolve to u&hold the award of financial assistance in her favor# < 2he &osition of the &etitioner is sim&ly stated3 It is conceded that an em&loyee illegally dismissed is entitled to reinstatement and bac<wages as reHuired by the labor laws# Gowever" an em&loyee dismissed for cause is entitled to neither reinstatement nor bac<wages and is not allowed any relief at all because his dismissal is in accordance with law# In the case of the &rivate res&ondent" she has been awarded financial assistance eHuivalent to ten months &ay corres&onding to her ,@ year service in the com&any des&ite her removal for cause# )he is" therefore" in effect rewarded rather than &unished for her dishonesty" and without any legal authoriCation or justification# 2he award is made on the ground of eHuity and com&assion" which cannot be a substitute for law# !oreover" such award &uts a &remium on dishonesty and encourages instead of deterring corru&tion# 0or its &art" the &ublic res&ondent claims that the em&loyee is sufficiently &unished with her dismissal# 2he grant of financial assistance is not intended as a reward for her offense but merely to hel& her for the loss of her em&loyment after wor<ing faithfully with the com&any for ten years# In su&&ort of this &osition" the )olicitor eneral cites the cases of 0irestone 2ire and Rubber Com&any of the Phili&&ines v# *ariosa 6 and )oco v# !ercantile Cor&oration of (avao" ) where the em&loyees were dismissed for cause but were nevertheless allowed se&aration &ay on grounds of social and com&assionate justice# As the Court &ut it in the 0irestone case3 In view of the foregoing" :e rule that 0irestone had valid grounds to dis&ense with the services of *ariosa and that the 7*RC acted with grave abuse of discretion in ordering his reinstatement# Gowever" considering that *ariosa had wor<ed with the com&any for eleven years with no <nown &revious bad record" the ends of social and com&assionate justice would be served if he is &aid full se&aration &ay but not reinstatement without bac<wages by the 7*RC# In the said case" the em&loyee was validly dismissed for theft but the 7*RC nevertheless awarded him full se&aration &ay for his ,, years of service with the com&any# In )oco" the em&loyee was also legally se&arated for unauthoriCed use of a com&any vehicle and refusal to attend the grievance &roceedings but he was just the same granted one8half month se&aration &ay for every year of his ,.8year service# )imilar action was ta<en in 0ili&ro" Inc# v# 7*RC" 8 where the em&loyee was validly dismissed for &referring certain dealers in violation of com&any &olicy but was allowed se&aration &ay for his 6 years of service# In !etro (rug Cor&oration v# 7*RC" 9 the em&loyee was validly removed for loss of confidence because of her failure to account for certain funds but she was awarded se&aration &ay eHuivalent to one8half monthNs salary for every year of her service of ,5 years# In +ngineering +Hui&ment" Inc# v# 7*RC" 1' the dismissal of the em&loyee was justified because he had instigated labor unrest among the wor<ers and had serious differences with them" among other grounds" but he was still granted three months se&aration &ay corres&onding to his 18year service# In 7ew 0rontier !ines" Inc# v# 7*RC" 11 the em&loyeeNs 18 year service was held validly terminated for lac< of confidence and abandonment of wor< but he was nonetheless granted three months se&aration &ay# And in )an !iguel Cor&oration v# (e&uty !inister of *abor and +m&loyment" et al #" 1& full se&aration &ay for 6" ,@" and ,6 years service" res&ectively" was also allowed three em&loyees who had been dismissed after they were found guilty of misa&&ro&riating com&any funds# 2he rule embodied in the *abor Code is that a &erson dismissed for cause as defined therein is not entitled to se&aration &ay# 13 2he cases above cited constitute the e4ce&tion" based u&on considerations of eHuity# +Huity has been defined as justice outside law" 1( being ethical rather than jural and belonging to the s&here of morals than of law# 1< It is grounded on the &rece&ts of conscience and not on any sanction of &ositive law# 16 Gence" it cannot &revail against the e4&ressed &rovision of the labor laws allowing dismissal of em&loyees for cause and without any &rovision for se&aration &ay# )trictly s&ea<ing" however" it is not correct to say that there is no e4&ress justification for the grant of se&aration &ay to lawfully dismissed em&loyees other than the abstract consideration of eHuity# 2he reason is that our Constitution is re&lete with &ositive commands for the &romotion of social justice" and &articularly the &rotection of the rights of the wor<ers# 2he enhancement of their welfare is one of the &rimary concerns of the &resent charter# In fact" instead of confining itself to the general commitment to the cause of labor in Article II on the (eclaration of Princi&les of )tate Policies" the new Constitution contains a se&arate article devoted to the &romotion of social justice and human rights with a se&arate sub8 to&ic for labor# Article PIII e4&ressly recogniCes the vital role of labor" hand in hand with management" in the advancement of the national economy and the welfare of the &eo&le in general# 2he categorical mandates in the Constitution for the

im&rovement of the lot of the wor<ers are more than sufficient basis to justify the award of se&aration &ay in &ro&er cases even if the dismissal be for cause# 2he Court notes" however" that where the e4ce&tion has been a&&lied" the decisions have not been consistent as to the justification for the grant of se&aration &ay and the amount or rate of such award# 2hus" the em&loyees dismissed for theft in the 0irestone case and for animosities with fellow wor<ers in the +ngineering +Hui&ment case were both awarded se&aration &ay notnvithstanding that the first cause was certainly more serious than the second# 7o less curiously" the em&loyee in the )oco case was allowed only one8half month &ay for every year of his ,. years of service" but in 0ili&ro the award was two months se&aration &ay for 6 years service# In 0irestone" the em&lovee was allowed full se&aration &ay corres&onding to his ,, years of service" but in !etro" the em&loyee was granted only one8half month se&aration &ay for every year of her ,5year service# It would seem then that length of service is not necessarily a criterion for the grant of se&aration &ay and neither a&&arently is the reason for the dismissal# 2he Court feels that distinctions are in order# :e note that heretofore the se&aration &ay" when it was considered warranted" was reHuired regardless of the nature or degree of the ground &roved" be it mere inefficiency or something graver li<e immorality or dishonesty# 2he benediction of com&assion was made to cover a multitude of sins" as it were" and to justify the hel&ing hand to the validly dismissed em&loyee whatever the reason for his dismissal# 2his &olicy should be re8e4amined# It is time we rationaliCed the e4ce&tion" to ma<e it fair to both labor and management" es&ecially to labor# 2here should be no Huestion that where it comes to such valid but not iniHuitous causes as failure to com&ly with wor< standards" the grant of se&aration &ay to the dismissed em&loyee may be both just and com&assionate" &articularly if he has wor<ed for some time with the com&any# 0or e4am&le" a subordinate who has irreconcilable &olicy or &ersonal differences with his em&loyer may be validly dismissed for demonstrated loss of confidence" which is an allowable ground# A wor<ing mother who has to be freHuently absent because she has also to ta<e care of her child may also be removed because of her &oor attendance" this being another authoriCed ground# It is not the em&loyeeNs fault if he does not have the necessary a&titude for his wor< but on the other hand the com&any cannot be reHuired to maintain him just the same at the e4&ense of the efficiency of its o&erations# Ge too may be validly re&laced# 'nder these and similar circumstances" however" the award to the em&loyee of se&aration &ay would be sustainable under the social justice &olicy even if the se&aration is for cause# But where the cause of the se&aration is more serious than mere inefficiency" the generosity of the law must be more discerning# 2here is no doubt it is com&assionate to give se&aration &ay to a salesman if he is dismissed for his inability to fill his Huota but surely he does not deserve such generosity if his offense is misa&&ro&riation of the recei&ts of his sales# 2his is no longer mere incom&etence but clear dishonesty# A security guard found slee&ing on the job is doubtless subject to dismissal but may be allowed se&aration &ay since his conduct" while ine&t" is not de&raved# But if he was in fact not really slee&ing but slee&ing with a &rostitute during his tour of duty and in the com&any &remises" the situation is changed com&letely# 2his is not only inefficiency but immorality and the grant of se&aration &ay would be entirely unjustified# :e hold that henceforth se&aration &ay shall be allowed as a measure of social justice only in those instances where the em&loyee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character# :here the reason for the valid dismissal is" for e4am&le" habitual into4ication or an offense involving moral tur&itude" li<e theft or illicit se4ual relations with a fellow wor<er" the em&loyer may not be reHuired to give the dismissed em&loyee se&aration &ay" or financial assistance" or whatever other name it is called" on the ground of social justice# A contrary rule would" as the &etitioner correctly argues" have the effect" of rewarding rather than &unishing the erring em&loyee for his offense# And we do not agree that the &unishment is his dismissal only and that the se&aration &ay has nothing to do with the wrong he has committed# Of course it has# Indeed" if the em&loyee who steals from the com&any is granted se&aration &ay even as he is validly dismissed" it is not unli<ely that he will commit a similar offense in his ne4t em&loyment because he thin<s he can e4&ect a li<e leniency if he is again found out# 2his <ind of mis&laced com&assion is not going to do labor in general any good as it will encourage the infiltration of its ran<s by those who do not deserve the &rotection and concern of the Constitution# 2he &olicy of social justice is not intended to countenance wrongdoing sim&ly because it is committed by the under&rivileged# At best it may mitigate the &enalty but it certainly will not condone the offense# Com&assion for the &oor is an im&erative of every humane society but only when the reci&ient is not a rascal claiming an undeserved &rivilege# )ocial justice cannot be &ermitted to be refuge of scoundrels any more than can eHuity be an im&ediment to the &unishment of the guilty# 2hose who invo<e social justice may do so only if their hands are clean and their motives blameless and not sim&ly because they ha&&en to be &oor# 2his great &olicy of our Constitution is not meant for the &rotection of those who have &roved they are not worthy of it" li<e the wor<ers who have tainted the cause of labor with the blemishes of their own character# A&&lying the above considerations" we hold that the grant of se&aration &ay in the case at bar is unjustified# 2he &rivate res&ondent has been dismissed for dishonesty" as found by the labor arbiter and affirmed by the 7*RC and as she herself has im&liedly admitted# 2he fact that she has wor<ed with the P*(2 for more than a decade" if it is to be considered at all" should be ta<en against her as it reflects a regrettable lac< of loyalty that she should have strengthened instead of betraying during all of her ,@ years of service with the com&any# If regarded as a justification for moderating the &enalty of dismissal" it will actually become a &riCe for disloyalty" &erverting the meaning of social justice and undermining the efforts of labor to cleanse its ran<s of all undesirables# 2he Court also rules that the se&aration &ay" if found due under the circumstances of each case" should be com&uted at the rate of one month salary for every year of service" assuming the length of such service is deemed material# 2his is without &rejudice to the a&&lication of s&ecial agreements between the em&loyer and the em&loyee sti&ulating a higher rate of com&utation and &roviding for more benefits to the discharged em&loyee# 1) :G+R+0OR+" the &etition is RA72+(# 2he challenged resolution of )e&tember 66",-.5" is A00IR!+( in totoe4ce&t for the grant of se&aration &ay in the form of financial assistance" which is hereby (I)A**O:+(# 2he tem&orary restraining order dated !arch 61" ,-.." is *I02+(# It is so ordered# G.R. No. L%39<1( Bu.; &), 1988 ASUN ION BROS. D O., IN ., vs# OURT O" INDUSTRIAL RELATIONS, BUAN B. E!E, /t 2.., res&ondents# EnriC e O$ Chan for petitioners$ 2-1 BOSE ASUN ION, &etitioners"

Basi"io ,$ Carpio for private respondents$ NARAASA, J.& In the case at bar" the defunct Court of Industrial Relations is shown to have sanctioned the disregard of the grievance &rocedure set forth in a collective bargaining agreement" and to have failed to ta<e account of material evidence# It thereby incurred in serious error" im&elling reversal of its decision# 2he &etitioners" Asuncion Bros# R Co#" Inc# and 9ose Asuncion were charged with unfair labor &ractice in the C#I#R# by the Court Prosecutor" on com&laint of certain of their em&loyees and the latterNs labor organiCation" the Asuncion Bros# :oodcraft +m&loyees and *aborers 'nion# 2he com&laint substantially alleged that because the individual com&lainants had organiCed a labor organiCation which later affiliated itself with the Phili&&ine 2rans&ort and eneral :or<ers OrganiCation $P2 :O%the com&any" thru its general manager" 9ose Asuncion" had made the members wor< on rotation basis and eventually dismissed them on various dates# In their answer" the &etitioners denied the accusation; they claimed that the rotation of wor<ers was resorted to on account of circumstances beyond their control" not the least of which was the MsystematicM acts of the com&lainantsN absenting themselves at will" re&orting late" and MmoonlightingM with other firms; and they set u& certain affirmative defenses including the failure of the com&laint to state a cause of action and the CourtNs lac< of jurisdiction# 1 +vidence was thereafter &resented by the &arties before a Gearing +4aminer in accordance with the &rocedure obtaining in the CIR# & 2he Gearing +4aminer found &etitioners guilty as charged and recommended that 3 L ### since res&ondent business firm ### is only a small and growing business entity which may not be in a &osition to immediately im&lement a return to wor< order of com&lainants" we res&ectfully recommend that reinstatement be gradual to minimiCe the Idea of economic dislocation by integrating a labor force that it cannot &ossibly absorb# 2his may be arranged by" say" two $6% com&lainants every month" de&ending on the need and e4igency of the business# And considering further the &recarious situation that may ensue because of antici&ated award of huge amount of damages" which will eat u& the assets of the res&ondents business and since some of the com&lainants have found casual or tem&orary em&loyment elsewhere" the amount of bac<8wages be limited to a &eriod of si4 $6% months com&uted at the rate of the em&loyees were enjoying at the time of their dismissal# ### 2his recommendation" and the factual and legal conclusions of the Gearing +4aminer on which it was founded" were ado&ted by the C#I#R# in its decision dated 9une 65" ,-5/# 2he C#I#R# thereafter also denied the &etitionersN motion for reconsideration# ( 2he case is now before this Court on an a&&eal by certiorari seasonably ta<en by the &etitioners# 2hey see< to ma<e two basic &oints3 $,% the C#I#R# lost jurisdiction of the case on &romulgation of the *abor Code $P( //6% on !ay ," ,-5/" and $6% the judgment is not reasonably su&&orted by the evidence# 2he first &oint is grounded on Article 11. of the Code &roviding that MAll cases &ending before the Court of Industrial Relations and the 7ational *abor Relations Commission established under Presidential (ecree 7o# 6, at the time of the passa#e of this Code should be transferred to and &rocessed by the 7ational *abor Relations Commission created under this Code in accordance with the &rocedure laid down herein#M 2he &etitioners set thepassa#e of the Code at !ay ," ,-5/ and argue that the C#I#R# had already lost jurisdiction by the time it rendered judgment on 9une 65" ,-5/# 2he &oint is not well ta<en# :hile it is true that the *abor Code was &romulgated on !ay ," ,-5/" it e4&ressly &rovided < that its effectivity would commence si4 months thereafter" or on 7ovember ," ,-5/# !oreover" Article 11. relied u&on by the &etitioners was amended by P( 55@8A by inter a"ia changing the wor< "passa#e" to "effectivity$" 2he amendment made the &rovision read as follows3 ### All cases# &ending before the Court of Industrial Relations and the 7ational *abor Relations Commission established under Presidential (ecree 7o# 6, on the date of effectivity of this Code shall be transferred to and &rocessed by the corres&onding labor relations division of the regional labor office" the Bureau of *abor Relations or the 7ational *abor Relations Commission created under this Code having cogniCance of the same in accordance with the &rocedure laid down herein" and im&lementing rules and regulations# ### And the date of effectivity of the Code" fi4ed at 7ovember ," ,-5/" as above stated" was reaffirmed by P( 55@8A# 62here can thus be no doubt that the *abor Court still had jurisdiction of the case at the time it rendered its judgment on 9une 65" ,-5/# As the Court sees it" the error of the *abor Court lies in its omission to ta<e account of relevant evidence on record and the Huite material fact that the em&loyees and their union had com&letely disregard the grievance &rocedure set forth in their collective bargaining agreement with the &etitioner com&any# 2he Court a C o ignored the evidence given by two im&artial witnesses3 ilbert 2umlos &ersonnel manager of Permaline and +ustaHuio Jerr" manager of Jawayan :oodcraft" who both testified to the em&loyment of a majority of the com&lainants in their res&ective firms# ) 2heir sworn declarations are fully corroborative and confirmatory of the testimony of the &etitionersN witnesses" 8 as well as the documents listing the names of those wor<ers whose em&loyment had been terminated" the s&ecific infractions of com&any rules constituting the res&ective causes therefor" and the dates of the commission of said infractions# 9 7o reason is given by the Court for refusing to ta<e account of such material &roofs" and none in truth a&&ears on record to justify it# 2he evidence satisfactorily establishes the &etitionersN claim that their woodcraft &lant // o&erates under an integrated assembly fine system $>where? assignments >are integrated3 e#g#? &attern" cutting" carving" lathe machine" disc sanding" s&indle sanding" drum sanding" varnishing and finishing" &ac<ing%# 0ailure of one unit or set of wor<ers to &erform in time its assigned functions ham&ers the whole o&eration and will cause sto&&age of wor<" to the damage and &rejudice of the enter&rise" a small and budding one at that#M 1' 2he record thus contains adeHuate evidentiary foundation for the dismissal of the com&lainants from em&loyment" a circumstance that at the time constitutes &ersuasive refutation of the theory that said com&lainants were fired sim&ly because of their union activities# 0urther disclosed by the record is the disregard by the com&lainant em&loyees and their union of the grievance &rocedure &rescribed in their collective bargaining agreement with the em&loyer" dated 0ebruary ,-" ,-6-# 11Article PII of that agreement states that L In the event that grievances or differences arise between the 'nion and the Com&any or between a wor<er or grou& of wor<ers on the one hand and the Com&any on the other" as regards the a&&lication" im&lementation of this agreement" or other differences which any of the &arties desire to resolve" the Com&any and the 'nion shall ta<e immediate ste&s to settle the difference in the following manner3 ,# A grievance committee com&osed of four $/% members shall be created" two $6% of which shall come from the Com&any and the other two $6% #### from the 'nion# Any grievance shall be resolved by the said committee within two $6% days after the grievance is submitted to them# 6# In case of disagreement" &arties agree to submit the differences to the Bureau of *abor Relations" (e&artment of *abor" for resolution#

1# If it cannot be resolved by the Bureau of *abor Relations" then the case may be submitted to an arbitrator agreed u&on by both the Com&any and the 'nion whose decision shall be final and una&&ealable# /# If however the &arties cannot agree to arbitration" then the same shall be considered as a labor dis&ute# 7o reason whatever is given by the 'nion and the other com&lainants for ignoring this &rocedure for the settlement of their grievance relating to their wor< rotation which" as &etitioners have &ointed out" could have been Measily threshed out in the rievance Committee"M 1& or their subseHuent dismissal from their em&loyment# 2he collective bargaining agreement was" of course" the law between the &arties 13 and the refusal to com&ly therewith is a violation of the duty to bargain collectively" constituting unfair labor &ractice on the &art of a union# 1( It thus seems that it was not the &etitioners" but the em&loyees and their union" against whom the charge of unfair labor &ractice might &ro&erly have been laid in this case# In any event" there is nothing in the record warranting condemnation of the &etitioners for unfair labor &ractice in having terminated the em&loyment of the com&lainants" such termination of wor< being" on the contrary" justified by the material circumstances# :G+R+0OR+" the judgment of the Court a C o is R+D+R)+( A7( )+2 A)I(+ and another entered" absolving the &etitioners from any unfair labor &ractice or any liability to the &rivate res&ondents# 7o costs# G.R. No. 1<)'1' Bu-/ &1, &''< !HILI!!INE NATIONAL BANC, &etitioner" vs# "LOREN E O. ABANSAG, res&ondent# (+CI)IO7 !ANGANIBAN, J.& 2he Court reiterates the basic &olicy that all 0ili&ino wor<ers" whether em&loyed locally or overseas" enjoy the &rotective mantle of Phili&&ine labor and social legislations# Our labor statutes may not be rendered ineffective by laws or judgments &romulgated" or sti&ulations agreed u&on" in a foreign country# 2he Case Before us is a Petition for Review on Certiorari, under Rule /5 of the Rules of Court" see<ing to reverse and set aside the 9uly ,6" 6@@6 (ecision6 and the 9anuary 6-" 6@@1 Resolution 1 of the Court of A&&eals $CA% in CA8 R )P 7o# 6./@1# 2he assailed (ecision dismissed the CA Petition $filed by herein &etitioner%" which had sought to reverse the 7ational *abor Relations Commission $7*RC%Bs 9une 6-" 6@@, Resolution"/ affirming *abor Arbiter 9oel )# *ustriaBs 9anuary ,." 6@@@ (ecision# 5 2he assailed CA Resolution denied herein &etitionerBs !otion for Reconsideration# 2he 0acts 2he facts are narrated by the Court of A&&eals as follows3 MIn late ,--." >herein Res&ondent 0lorence Cabansag? arrived in )inga&ore as a tourist# )he a&&lied for em&loyment" with the )inga&ore Branch of the Phili&&ine 7ational Ban<" a &rivate ban<ing cor&oration organiCed and e4isting under the laws of the Phili&&ines" with &rinci&al offices at the P7B 0inancial Center" Ro4as Boulevard" !anila# At the time" the )inga&ore P7B Branch was under the helm of Ruben C# 2obias" a lawyer" as eneral !anager" with the ran< of Dice8President of the Ban<# At the time" too" the Branch Office had two $6% ty&es of em&loyees3 $a% e4&atriates or the regular em&loyees" hired in !anila and assigned abroad including )inga&ore" and $b% locally $direct% hired# )he a&&lied for em&loyment as Branch Credit Officer" at a total monthly &ac<age of T) /"5@@#@@" effective u&on assum&tion of duties after a&&roval# Ruben C# 2obias found her eminently Hualified and wrote on October 66" ,--." a letter to the President of the Ban< in !anila" recommending the a&&ointment of 0lorence O# Cabansag" for the &osition# 444444444 M2he President of the Ban< was im&ressed with the credentials of 0lorence O# Cabansag that he a&&roved the recommendation of Ruben C# 2obias# )he then filed an =A&&lication"B with the !inistry of !an&ower of the overnment of )inga&ore" for the issuance of an =+m&loyment PassB as an em&loyee of the )inga&ore P7B Branch# Ger a&&lication was a&&roved for a &eriod of two $6% years# MOn (ecember 5" ,--." Ruben C# 2obias wrote a letter to 0lorence O# Cabansag offering her a tem&orary a&&ointment" as Credit Officer" at a basic salary of )inga&ore (ollars /"5@@#@@" a month and" u&on her successful com&letion of her &robation to be determined solely" by the Ban<" she may be e4tended at the discretion of the Ban<" a &ermanent a&&ointment and that her tem&orary a&&ointment was subject to the following terms and conditions3 =,# Oou will be on &robation for a &eriod of three $1% consecutive months from the date of your assum&tion of duty# =6# Oou will observe the Ban<Bs rules and regulations and those that may be ado&ted from time to time# =1# Oou will <ee& in strictest confidence all matters related to transactions between the Ban< and its clients# =/# Oou will devote your full time during business hours in &romoting the business and interest of the Ban<# =5# Oou will not" without &rior written consent of the Ban<" be em&loyed in anyway for any &ur&ose whatsoever outside business hours by any &erson" firm or com&any# =6# 2ermination of your em&loyment with the Ban< may be made by either &arty after notice of one $,% day in writing during &robation" one month notice u&on confirmation or the eHuivalent of one $,% dayBs or monthBs salary in lieu of notice#B M0lorence O# Cabansag acce&ted the &osition and assumed office# In the meantime" the Phili&&ine +mbassy in )inga&ore &rocessed the em&loyment contract of 0lorence O# Cabansag and" on !arch ." ,---" she was issued by the Phili&&ine Overseas +m&loyment Administration" an =Overseas +m&loyment Certificate"B certifying that she was a bona fide contract wor<er for )inga&ore# 444444444 MBarely three $1% months in office" 0lorence O# Cabansag submitted to Ruben C# 2obias" on !arch -" ,---" her initial = Performance Re&ort#B Ruben C# 2obias was so im&ressed with the =Re&ortB that he made a notation and" on said =Re&ortB3 = OO( :ORJ#B Gowever" in the evening of A&ril ,/" ,---" while 0lorence O# Cabansag was in the flat" which she and Cecilia AHuino" the Assistant Dice8President and (e&uty eneral !anager of the Branch and Rosanna )armiento" the Chief (ealer of the said Branch" rented" she was told by the two $6% that Ruben C# 2obias has as<ed them to tell 0lorence O# Cabansag to resign from her job# 0lorence O# Cabansag was &er&le4ed at the sudden turn of events and the runabout way Ruben C# 2obias &rocured her resignation from the Ban<# 2he ne4t day" 0lorence O# Cabansag tal<ed to Ruben C# 2obias and inHuired if what Cecilia AHuino and Rosanna )armiento had told her was true# Ruben C# 2obias confirmed the veracity of the information" with

the e4&lanation that her resignation was im&erative as a =cost8cutting measureB of the Ban<# Ruben C# 2obias" li<ewise" told 0lorence O# Cabansag that the P7B )inga&ore Branch will be sold or transformed into a remittance office and that" in either way" 0lorence O# Cabansag had to resign from her em&loyment# 2he more 0lorence O# Cabansag was &er&le4ed# )he then as<ed Ruben C# 2obias that she be furnished with a =0ormal AdviceB from the P7B Gead Office in !anila# Gowever" Ruben C# 2obias flatly refused# 0lorence O# Cabansag did not submit any letter of resignation# MOn A&ril ,6" ,---" Ruben C# 2obias again summoned 0lorence O# Cabansag to his office and demanded that she submit her letter of resignation" with the &rete4t that he needed a Chinese8s&ea<ing Credit Officer to &enetrate the local mar<et" with the information that a Chinese8 s&ea<ing Credit Officer had already been hired and will be re&orting for wor< soon# )he was warned that" unless she submitted her letter of resignation" her em&loyment record will be blemished with the notation =(I)!I))+(B s&read thereon# :ithout giving any definitive answer" 0lorence O# Cabansag as<ed Ruben C# 2obias that she be given sufficient time to loo< for another job# Ruben C# 2obias told her that she should be =outB of her em&loyment by !ay ,5" ,---# MGowever" on A&ril ,-" ,---" Ruben C# 2obias again summoned 0lorence O# Cabansag and adamantly ordered her to submit her letter of resignation# )he refused# On A&ril 6@" ,---" she received a letter from Ruben C# 2obias terminating her em&loyment with the Ban<# 444444444 MOn 9anuary ,." 6@@@" the *abor Arbiter rendered judgment in favor of the Com&lainant and against the Res&ondents" the decretal &ortion of which reads as follows3 =:G+R+0OR+" considering the foregoing &remises" judgment is hereby rendered finding res&ondents guilty of Illegal dismissal and devoid of due &rocess" and are hereby ordered3 ,# 2o reinstate com&lainant to her former or substantially eHuivalent &osition without loss of seniority rights" benefits and &rivileges; 6# )olidarily liable to &ay com&lainant as follows3 a% 2o &ay com&lainant her bac<wages from ,6 A&ril ,--- u& to her actual reinstatement# Ger bac<wages as of the date of the &romulgation of this decision amounted to ) ( /@"5@@#@@ or its eHuivalent in Phili&&ine Currency at the time of &ayment; b% !id8year bonus in the amount of ) ( 6"65@#@@ or its eHuivalent in Phili&&ine Currency at the time of &ayment; c% Allowance for )unday ban<ing in the amount of ) ( ,6@#@@ or its eHuivalent in Phili&&ine Currency at the time of &ayment; d% !onetary eHuivalent of leave credits earned on )unday ban<ing in the amount of ) ( ,"555#65 or its eHuivalent in Phili&&ine Currency at the time of &ayment; e% !onetary eHuivalent of unused sic< leave benefits in the amount of ) ( ,",5@#6@ or its eHuivalent in Phili&&ine Currency at the time of &ayment# f% !onetary eHuivalent of unused vacation leave benefits in the amount of ) ( 1,-#.5 or its eHuivalent in Phili&&ine Currency at the time of &ayment# g% ,1th month &ay in the amount of ) ( /"5@@#@@ or its eHuivalent in Phili&&ine Currency at the time of &ayment; 1# )olidarily to &ay com&lainant actual damages in the amount of ) ( ,"-5.#@@ or its eHuivalent in Phili&&ine Currency at the time of &ayment" and moral damages in the amount of PhP 6@@"@@@#@@" e4em&lary damages in the amount of PhP ,@@"@@@#@@; /# 2o &ay com&lainant the amount of ) ( 5"@1-#., or its eHuivalent in Phili&&ine Currency at the time of &ayment" re&resenting attorneyBs fees# )O OR(+R+(#M 6 >+m&hasis in the original#? P7B a&&ealed the labor arbiterBs (ecision to the 7*RC# In a Resolution dated 9une 6-" 6@@," the Commission affirmed that (ecision" but reduced the moral damages to P,@@"@@@ and the e4em&lary damages to P5@"@@@# In a subseHuent Resolution" the 7*RC denied P7BBs !otion for Reconsideration# Ruling of the Court of A&&eals In dis&osing of the Petition for Certiorari" the CA noted that &etitioner ban< had failed to adduce in evidence the )inga&orean law su&&osedly governing the latterBs em&loyment Contract with res&ondent# 2he a&&ellate court found that the Contract had actually been &rocessed by the Phili&&ine +mbassy in )inga&ore and a&&roved by the Phili&&ine Overseas +m&loyment Administration $PO+A%" which then used that Contract as a basis for issuing an Overseas +m&loyment Certificate in favor of res&ondent# According to the CA" even though res&ondent secured an em&loyment &ass from the )inga&ore !inistry of +m&loyment" she did not thereby waive Phili&&ine labor laws" or the jurisdiction of the labor arbiter or the 7*RC over her Com&laint for illegal dismissal# In so doing" neither did she submit herself solely to the !inistry of !an&ower of )inga&oreBs jurisdiction over dis&utes arising from her em&loyment# 2he a&&ellate court further noted that a cursory reading of the !inistryBs letter will readily show that no such waiver or submission is stated or im&lied# 0inally" the CA held that &etitioner had failed to establish a just cause for the dismissal of res&ondent# 2he ban< had also failed to give her sufficient notice and an o&&ortunity to be heard and to defend herself# 2he CA ruled that she was conseHuently entitled to reinstatement and bac< wages" com&uted from the time of her dismissal u& to the time of her reinstatement# Gence" this Petition#5 Issues Petitioner submits the following issues for our consideration3 M,# :hether or not the arbitration branch of the 7*RC in the 7ational Ca&ital Region has jurisdiction over the instant controversy; M6# :hether or not the arbitration of the 7*RC in the 7ational Ca&ital Region is the most convenient venue or forum to hear and decide the instant controversy; and M1# :hether or not the res&ondent was illegally dismissed" and therefore" entitled to recover moral and e4em&lary damages and attorneyBs fees#M . In addition" res&ondent assails" in her Comment" - the &ro&riety of Rule /5 as the &rocedural mode for see<ing a review of the CA (ecision affirming the 7*RC Resolution# )uch issue deserves scant consideration# Res&ondent miscom&rehends the CourtBs discourse in +t$ Martin F nera" Home v$ )(RC,,@ which has indeed affirmed that the &ro&er mode of review of 7*RC decisions" resolutions or orders is by a s&ecial civil action for certiorari under Rule 65 of the Rules of Court# 2he )u&reme Court and the Court of A&&eals have conc rrent ori#ina" jurisdiction over such &etitions for certiorari$ 2hus" in observance of the doctrine on the hierarchy of courts" these &etitions should be initially filed with the CA# ,, Rightly" the ban< elevated the 7*RC Resolution to the CA by way of a Petition for Certiorari$ In see<ing a review by this Court of the CA (ecision 88 on Huestions of jurisdiction" venue and validity of em&loyment termination 88 &etitioner is li<ewise correct in invo<ing Rule /5# ,6

It is true" however" that in a &etition for review on certiorari" the sco&e of the )u&reme CourtBs judicial review of decisions of the Court of A&&eals is generally confined only to errors of law# It does not e4tend to Huestions of fact# 2his doctrine a&&lies with greater force in labor cases# 0actual Huestions are for the labor tribunals to resolve# ,1In the &resent case" the labor arbiter and the 7*RC have already determined the factual issues# 2heir findings" which are su&&orted by substantial evidence" were affirmed by the CA# 2hus" they are entitled to great res&ect and are rendered conclusive u&on this Court" absent a clear showing of &al&able error or arbitrary disregard of evidence# ,/ 2he CourtBs Ruling 2he Petition has no merit# 0irst Issue3 A risdiction 2he jurisdiction of labor arbiters and the 7*RC is s&ecified in Article 6,5 of the *abor Code as follows3 MAR2# 6,5# 9urisdiction of *abor Arbiters and the Commission# Z $a% +4ce&t as otherwise &rovided under this Code the *abor Arbiters shall have original and e4clusive jurisdiction to hear and decide" within thirty $1@% calendar days after the submission of the case by the &arties for decision without e4tension" even in the absence of stenogra&hic notes" the following cases involving all wor<ers" whether agricultural or non8 agricultural3 ,# 'nfair labor &ractice cases; 6# 2ermination dis&utes; 1# If accom&anied with a claim for reinstatement" those cases that wor<ers may file involving wage" rates of &ay" hours of wor< and other terms and conditions of em&loyment /# Claims for actual" moral" e4em&lary and other forms of damages arising from the em&loyer8em&loyee relations; 5# Cases arising from any violation of Article 66/ of this Code" including Huestions involving the legality of stri<es and loc<outs; and 6# +4ce&t claims for +m&loyees Com&ensation" )ocial )ecurity" !edicare and maternity benefits" all other claims" arising from em&loyer8 em&loyee relations" including those of &ersons in domestic or household service" involving an amount of e4ceeding five thousand &esos $P5"@@@#@@% regardless of whether accom&anied with a claim for reinstatement# $b% 2he commission shall have e4clusive a&&ellate jurisdiction over all cases decided by *abor Arbiters# 4 4 4 4 4 4 4 4 4#M !ore s&ecifically" )ection ,@ of RA .@/6 reads in &art3 M)+C2IO7 ,@# Money C"aims$ L 7otwithstanding any &rovision of law to the contrary" the *abor Arbiters of the 7ational *abor Relations Commission $7*RC% shall have the original and e4clusive jurisdiction to hear and decide" within ninety $-@% calendar days after the filing of the com&laint" the claims arising out of an em&loyer8em&loyee relationshi& or by virtue of any law or contract involving 0ili&ino wor<ers for overseas de&loyment including claims for actual" moral" e4em&lary and other forms of damages# 4 4 4 4 4 4 4 4 4M Based on the foregoing &rovisions" labor arbiters clearly have ori#ina" and e@c" sive jurisdiction over claims arising from em&loyer8em&loyee relations" including termination disp tes involving a"" wor<ers" among whom are overseas 0ili&ino wor<ers $O0:%# ,5 :e are not unmindful of the fact that res&ondent was directly hired" while on a tourist status in )inga&ore" by the P7B branch in that city state# Prior to em&loying res&ondent" &etitioner had to obtain an em&loyment &ass for her from the )inga&ore !inistry of !an&ower# )ecuring the &ass was a regulatory reHuirement &ursuant to the immigration regulations of that country# ,6 )imilarly" the Phili&&ine government reHuires non80ili&inos wor<ing in the country to first obtain a local wor< &ermit in order to be legally em&loyed here# 2hat &ermit" however" does not automatically mean that the non8citiCen is thereby bound by local laws only" as averred by &etitioner# It does not at all im&ly a waiver of oneBs national laws on labor# Absent any clear and convincing evidence to the contrary" such &ermit sim&ly means that its holder has a legal status as a wor<er in the issuing country# 4avvphi"$D!M 7oteworthy is the fact that res&ondent li<ewise a&&lied for and secured an Overseas +m&loyment Certificate from the PO+A through the Phili&&ine +mbassy in )inga&ore# 2he Certificate" issued on !arch ." ,---" declared her a bona fide contract wor<er for )inga&ore# 'nder Phili&&ine law" this document authoriCed her wor<ing status in a foreign country and entitled her to all benefits and &rocesses under our statutes# 2hus" even assuming ar# endothat she was considered at the start of her em&loyment as a Mdirect hireM governed by and subject to the laws" common &ractices and customs &revailing in )inga&ore ,5 she subseHuently became a contract wor<er or an O0: who was covered by Phili&&ine labor laws and &olicies u&on certification by the PO+A# At the time her em&loyment was illegally terminated" she already &ossessed the PO+A em&loyment Certificate# !oreover" &etitioner admits that it is a Phili&&ine cor&oration doing business through a branch office in )inga&ore# ,. )ignificantly" res&ondentBs em&loyment by the )inga&ore branch office had to be a&&roved by Benjamin P# Palma il" ,- the &resident of the ban< whose &rinci&al offices were in !anila# 2his circumstance militates against &etitionerBs contention that res&ondent was Mlocally hiredM; and totally Mgoverned by and subject to the laws" common &ractices and customsM of )inga&ore" not of the Phili&&ines# Instead" with more reason does this fact reinforce the &resum&tion that res&ondent falls under the legal definition of mi#rant !or8er" in this case one de&loyed in )inga&ore# Gence" &etitioner cannot esca&e the a&&lication of Phili&&ine laws or the jurisdiction of the 7*RC and the labor arbiter# In any event" we recall the following &olicy &ronouncement of the Court in Roya" Cro!n Internationa"e v$ )(RCN6@ M4 4 4# :hether em&loyed locally or overseas" all 0ili&ino wor<ers enjoy the &rotective mantle of Phili&&ine labor and social legislation" contract sti&ulations to the contrary notwithstanding# 2his &ronouncement is in <ee&ing with the basic &ublic &olicy of the )tate to afford &rotection to labor" &romote full em&loyment" ensure eHual wor< o&&ortunities regardless of se4" race or creed" and regulate the relations between wor<ers and em&loyers# 4a!phi4$net 0or the )tate assures the basic rights of all wor<ers to self8organiCation" collective bargaining" security of tenure" and just and humane conditions of wor< >Article 1 of the *abor Code of the Phili&&ines; +ee a"so )ection ,." Article II and )ection 1" Article PIII" ,-.5 Constitution?# 2his ruling is li<ewise rendered im&erative by Article ,5 of the Civil Code which states that laws =which have for their object &ublic order" &ublic &olicy and good customs shall not be rendered ineffective by laws or judgments &romulgated" or by determination or conventions agreed u&on in a foreign country#BM )econd Issue3 1roper -en e )ection ,$a% of Rule ID of the 7*RC Rules of Procedure reads3

M)ection ,# Denue Z $a% All cases which *abor Arbiters have authority to hear and decide may be filed in the Regional Arbitration Branch having jurisdiction over the wor<&lace of the com&lainantA&etitioner; Provided" however that cases of Overseas 0ili&ino :or<er $O0:% shall be filed before the Regional Arbitration Branch where the com&lainant resides or where the &rinci&al office of the res&ondentAem&loyer is situated" at the o&tion of the com&lainant# M0or &ur&oses of venue" wor<&lace shall be understood as the &lace or locality where the em&loyee is regularly assigned when the cause of action arose# It shall include the &lace where the em&loyee is su&&osed to re&ort bac< after a tem&orary detail" assignment or travel# In the case of field em&loyees" as well as ambulant or itinerant wor<ers" their wor<&lace is where they are regularly assigned" or where they are su&&osed to regularly receive their salariesAwages or wor< instructions from" and re&ort the results of their assignment to their em&loyers#M 'nder the M!igrant :or<ers and Overseas 0ili&inos Act of ,--5M $RA .@/6%" a mi#rant !or8er Mrefers to a &erson who is to be engaged" is engaged or has been engaged in a remunerated activity in a state of which he or she is not a legal resident; to be used interchangeably with overseas 0ili&ino wor<er#M6, 'ndeniably" res&ondent was em&loyed by &etitioner in its branch office in )inga&ore# Admittedly" she is a 0ili&ino and not a legal resident of that state# )he thus falls within the category of Mmigrant wor<erM or Moverseas 0ili&ino wor<er#M As such" it is her o&tion to choose the venue of her Com&laint against &etitioner for illegal dismissal# 2he law gives her two choices3 $,% at the Regional Arbitration Branch $RAB% where she resides or $6% at the RAB where the &rinci&al office of her em&loyer is situated# )ince her dismissal by &etitioner" res&ondent has returned to the Phili&&ines 88 s&ecifically to her residence at 0ilinvest II" KueCon City# 2hus" in filing her Com&laint before the RAB office in KueCon City" she has made a valid choice of &ro&er venue# 2hird Issue3 I""e#a" *ismissa" 2he a&&ellate court was correct in holding that res&ondent was already a regular em&loyee at the time of her dismissal" because her three8month &robationary &eriod of em&loyment had already ended# 2his ruling is in accordance with Article 6., of the *abor Code3 MAn em&loyee who is allowed to wor< after a &robationary &eriod shall be considered a regular em&loyee#M Indeed" &etitioner recogniCed res&ondent as such at the time it dismissed her" by giving her one monthBs salary in lieu of a one8month notice" consistent with &rovision 7o# 6 of her em&loyment Contract# )otice and Hearin# )ot Comp"ied With As a regular em&loyee" res&ondent was entitled to all rights" benefits and &rivileges &rovided under our labor laws# One of her fundamental rights is that she may not be dismissed without due &rocess of law# 2he twin reHuirements of notice and hearing constitute the essential elements of &rocedural due &rocess" and neither of these elements can be eliminated without running afoul of the constitutional guarantee# 66 In dismissing em&loyees" the em&loyer must furnish them two written notices3 ,% one to a&&rise them of the &articular acts or omissions for which their dismissal is sought; and 6% the other to inform them of the decision to dismiss them# As to the reHuirement of a hearing" its essence lies sim&ly in the o&&ortunity to be heard#61 2he evidence in this case is crystal8clear# Res&ondent was not notified of the s&ecific act or omission for which her dismissal was being sought# 7either was she given any chance to be heard" as reHuired by law# At any rate" even if she were given the o&&ortunity to be heard" she could not have defended herself effectively" for she <new no cause to answer to# All that &etitioner tendered to res&ondent was a notice of her em&loyment termination effective the very same day" together with the eHuivalent of a one8month &ay# 2his Court has already held that nothing in the law gives an em&loyer the o&tion to substitute the reHuired &rior notice and o&&ortunity to be heard with the mere &ayment of 1@ daysB salary# 6/ :ell8settled is the rule that the em&loyer shall be sanctioned for noncom&liance with the reHuirements of" or for failure to observe" due &rocess that must be observed in dismissing an em&loyee# 65 )o -a"id Ca se for *ismissa" !oreover" Articles 6.6"66 6.165 and 6./6. of the *abor Code &rovide the valid grounds or causes for an em&loyeeBs dismissal# 2he em&loyer has the burden of &roving that it was done for any of those just or authoriCed causes# 2he failure to discharge this burden means that the dismissal was not justified" and that the em&loyee is entitled to reinstatement and bac< wages# 67otably" &etitioner has not asserted any of the grounds &rovided by law as a valid reason for terminating the em&loyment of res&ondent# It merely insists that her dismissal was validly effected &ursuant to the &rovisions of her em&loyment Contract" which she had voluntarily agreed to be bound to# 2ruly" the contracting &arties may establish such sti&ulations" clauses" terms and conditions as they want" and their agreement would have the force of law between them# Gowever" &etitioner overloo<s the Hualification that those terms and conditions agreed u&on must not be contrary to law" morals" customs" &ublic &olicy or &ublic order# 1@ As e4&lained earlier" the em&loyment Contract between &etitioner and res&ondent is governed by Phili&&ine labor laws# Gence" the sti&ulations" clauses" and terms and conditions of the Contract must not contravene our labor law &rovisions# !oreover" a contract of em&loyment is imbued with &ublic interest# 2he Court has time and time again reminded &arties that they Mare not at liberty to insulate themselves and their relationshi&s from the im&act of labor laws and regulations by sim&ly contracting with each other#M1, Also" while a contract is the law between the &arties" the &rovisions of &ositive law that regulate such contracts are deemed included and shall limit and govern the relations between the &arties# 16 Basic in our juris&rudence is the &rinci&le that when there is no showing of any clear" valid" and legal cause for the termination of em&loyment" the law considers the matter a case of illegal dismissal# 11 ,!ards for *ama#es A stified 0inally" moral damages are recoverable when the dismissal of an em&loyee is attended by bad faith or constitutes an act o&&ressive to labor or is done in a manner contrary to morals" good customs or &ublic &olicy# 1/ Awards for moral and e4em&lary damages would be &ro&er if the em&loyee was harassed and arbitrarily dismissed by the em&loyer# 15 In affirming the awards of moral and e4em&lary damages" we Huote with a&&roval the following ratiocination of the labor arbiter3 M2he records also show that >res&ondentBs? dismissal was effected by >&etitionersB? ca&ricious and high8handed manner" anti8social and o&&ressive" fraudulent and in bad faith" and contrary to morals" good customs and &ublic &olicy# Bad faith and fraud are shown in the acts committed by >&etitioners? before" during and after >res&ondentBs? dismissal in addition to the manner by which she was dismissed# 0irst" >res&ondent? was &ressured to resign for two different and contradictory reasons" namely" cost8cutting and the need for a Chinese>8?s&ea<ing

credit officer" for which no written advice was given des&ite com&lainantBs reHuest# )uch wavering stance or vacillating &osition indicates bad faith and a dishonest &ur&ose# )econd" she was em&loyed on account of her Hualifications" e4&erience and readiness for the &osition of credit officer and &ressured to resign a month after she was commended for her good wor<# 2hird" the demand for >res&ondentBs? instant resignation on ,- A&ril ,--- to give way to her re&lacement who was allegedly re&orting soonest" is whimsical" fraudulent and in bad faith" because on ,6 A&ril ,--- she was given a &eriod of >sic? until ,5 !ay ,--- within which to leave# 0ourth" the &ressures made on her to resign were highly o&&ressive" anti8social and caused her absolute torture" as >&etitioners? disregarded her situation as an overseas wor<er away from home and family" with no &ros&ect for another job# )he was not even &rovided with a return tri& fare# 0ifth" the notice of termination is an utter manifestation of bad faith and whim as it totally disregards >res&ondentBs? right to security of tenure and due &rocess# )uch notice together with the demands for >res&ondentBs? resignation contravenes the fundamental guarantee and &ublic &olicy of the Phili&&ine government on security of tenure# M>Res&ondent? li<ewise established that as a &ro4imate result of her dismissal and &rior demands for resignation" she suffered and continues to suffer mental anguish" fright" serious an4iety" besmirched re&utation" wounded feelings" moral shoc< and social humiliation# Ger standing in the social and business community as well as &ros&ects for em&loyment with other entities have been adversely affected by her dismissal# >Petitioners? are thus liable for moral damages under Article 66,5 of the Civil Code# 444444444 M>Petitioners? li<ewise acted in a wanton" o&&ressive or malevolent manner in terminating >res&ondentBs? em&loyment and are therefore liable for e4em&lary damages# 2his should served >sic? as &rotection to other em&loyees of >&etitioner? com&any" and by way of e4am&le or correction for the &ublic good so that &ersons similarly minded as >&etitioners? would be deterred from committing the same acts#M 16 2he Court also affirms the award of attorneyBs fees# It is settled that when an action is instituted for the recovery of wages" or when em&loyees are forced to litigate and conseHuently incur e4&enses to &rotect their rights and interests" the grant of attorneyBs fees is legally justifiable# 15 >HERE"ORE" the Petition is *E)IE* and the assailed (ecision and Resolution ,FFIRME*$ Costs against &etitioner# )O OR(+R+(# G.R. No. 8&<11 M2046 3, 199& GLOBE%MA CAY ABLE AND RADIO vs# NATIONAL LABOR RELATIONS OMMISSION 2-1 IMELDA SALAEAR, res&ondents# Casti""o, (aman, &an I 1anta"eon for petitioner$ Gerardo +$ ,"ansa"on for private respondent$ OR!ORATION, &etitioner"

ROMERO, J.& 0or &rivate res&ondent Imelda *# )alaCar" it would seem that her close association with (elfin )aldivar would mean the loss of her job# In !ay ,-.6" &rivate res&ondent was em&loyed by lobe8!ac<ay Cable and Radio Cor&oration $ !CR% as general systems analyst# Also em&loyed by &etitioner as manager for technical o&erationsN su&&ort was (elfin )aldivar with whom &rivate res&ondent was allegedly very close# )ometime in ,-./" &etitioner !CR" &rom&ted by re&orts that com&any eHui&ment and s&are &arts worth thousands of dollars under the custody of )aldivar were missing" caused the investigation of the latterNs activities# 2he re&ort dated )e&tember 65" ,-./ &re&ared by the com&anyNs internal auditor" !r# Agustin !aramara" indicated that )aldivar had entered into a &artnershi& styled Concave Commercial and Industrial Com&any with Richard A# Oambao" owner and manager of +lecon +ngineering )ervices $+lecon%" a su&&lier of &etitioner often recommended by )aldivar# 2he re&ort also disclosed that )aldivar had ta<en &etitionerNs missing 0edders airconditioning unit for his own &ersonal use without authoriCation and also connived with Oambao to defraud &etitioner of its &ro&erty# 2he airconditioner was recovered only after &etitioner !CR filed an action for re&levin against )aldivar# 1 It li<ewise a&&eared in the course of !aramaraNs investigation that Imelda )alaCar violated com&any reglations by involving herself in transactions conflicting with the com&anyNs interests# +vidence showed that she signed as a witness to the articles of &artnershi& between Oambao and )aldivar# It also a&&eared that she had full <nowledge of the loss and whereabouts of the 0edders airconditioner but failed to inform her em&loyer# ConseHuently" in a letter dated October ." ,-./" &etitioner com&any &laced &rivate res&ondent )alaCar under &reventive sus&ension for one $,% month" effective October -" ,-./" thus giving her thirty $1@% days within which to" e4&lain her side# But instead of submitting an e4&lanations three $1% days later or on October ,6" ,-./ &rivate res&ondent filed a com&laint against &etitioner for illegal sus&ension" which she subseHuently amended to include illegal dismissal" vacation and sic< leave benefits" ,1th month &ay and damages" after &etitioner notified her in writing that effective 7ovember ." ,-./" she was considered dismissed Min view of $her% inability to refute and dis&rove these findings# & After due hearing" the *abor Arbiter in a decision dated 9uly ,6" ,-.5" ordered &etitioner com&any to reinstate &rivate res&ondent to her former or eHuivalent &osition and to &ay her full bac<wages and other benefits she would have received were it not for the illegal dismissal# Petitioner was also ordered to &ay &rivate res&ondent moral damages of P5@"@@@#@@# 3 On a&&eal" &ublic res&ondent 7ational *abor Relations" Commission in the Huestioned resolution dated (ecember 6-" ,-.5 affirmed the aforesaid decision with res&ect to the reinstatement of &rivate res&ondent but limited the bac<wages to a &eriod of two $6% years and deleted the award for moral damages# ( Gence" this &etition assailing the *abor 2ribunal for having committed grave abuse of discretion in holding that the sus&ension and subseHuent dismissal of &rivate res&ondent were illegal and in ordering her reinstatement with two $6% yearsN bac<wages# On the matter of &reventive sus&ension" we find for &etitioner !CR# 2he inestigative findings of !r# !aramara" which &ointed to (elfin )aldivarNs acts in conflict with his &osition as technical o&erations manager" necessitated immediate and decisive action on any em&loyee closely" associated with )aldivar# 2he sus&ension of )alaCar was further im&elled by th#e discovery of the missing 0edders airconditioning unit inside the a&artment &rivate res&ondent shared with )aldivar# 'nder such circumstances" &reventive sus&ension was the &ro&er remedial recourse available to the com&any &ending )alaCarNs investigation# By itself" &reventive sus&ension does" not signify that the com&any has adjudged the em&loyee guilty of the charges she was as<ed to answer and e4&lain#

)uch disci&linary measure is resorted to for the &rotection of the com&anyNs &ro&erty &ending investigation any alleged malfeasance or misfeasance committed by the em&loyee# < 2hus" it is not correct to conclude that &etitioner !CR had violated )alaCarNs right to due &rocess when she was &rom&tly sus&ended# If at all" the fault" lay with &rivate res&ondent when she ignored &etitionerNs memorandum of October ." ,-./ Mgiving her am&le o&&ortunity to &resent $her% side to the !anagement#M Instead" she went directly to the *abor (e&artment and filed her com&laint for illegal sus&ension without giving her em&loyer a chance to evaluate her side of the controversy# But while we agree with the &ro&riety of )alaCarNs &reventive sus&ension" we hold that her eventual se&aration from em&loyment was not for cause# :hat is the remedy in law to rectify an unlawful dismissal so as to Mma<e wholeM the victim who has not merely lost her job which" under settled 9uris&rudence" is a &ro&erty right of which a &erson is not to be de&rived without due &rocess" but also the com&ensation that should have accrued to her during the &eriod when she was unem&loyedS Art# 65- of the *abor Code" as amended" &rovides3 +ec rity of &en re# L In cases of regular em&loyment" the em&loyer shall not terminate the services of an em&loyee e4ce&t for a just cause or when authoriCed by this 2itle# ,n emp"oyee !ho is nF st"y dismissed from !or8 sha"" be entit"ed to reinstatement !itho t "oss of seniority ri#hts and other privi"e#es and to his f "" bac8!a#es " inclusive of allowances" and to his other benefits or their monetary eHuivalent com&uted from the time his com&ensation was withheld from him u& to the time of his actual reinstatement# 6 $+m&hasis su&&lied% Corollary thereto are the following &rovisions of the Im&lementing Rules and Regulations of the *abor Code3 )ec# 6# +ec rity of &en re# L In cases of regular em&loyments" the em&loyer shall not terminate the services of an em&loyee e4ce&t for a just cause as &rovided in the *abor Code or when authoriCed by e4isting laws# )ec# 1# Reinstatement# L ,n emp"oyee !ho is nF st"y dismissed from !or8 sha"" by entit"ed to reinstatement !itho t "oss of seniority ri#hts and to bac8!a#es#M ) $+m&hasis su&&lied% Before &roceeding any furthers" it needs must be recalled that the &resent Constitution has gone further than the ,-51 Charter in guaranteeing vital social and economic rights to marginaliCed grou&s of society" including labor# iven the &ro8&oor orientation of several articulate Commissioners of the Constitutional Commission of ,-.6" it was not sur&rising that a whole new Article emerged on )ocial 9ustice and Guman Rights designed" among other things" to M&rotect and enhance the right of all the &eo&le to human dignity" reduce social" economic and &olitical ineHualities" and remove cultural ineHuities by eHuitably diffusing wealth and &olitical &ower for the common good#M 8 Proof of the &riority accorded to labor is that it leads the other areas of concern in the Article on )ocial 9ustice" viD#" *abor ran<s ahead of such to&ics as Agrarian and 7atural Resources Reform" 'rban *and Roform and Gousing" Gealth" :omen" Role and Rights of Poo&leNs OrganiCations and Guman Rights# 9 2he o&ening &aragra&hs on *abor states 2he )tate shall afford f "" protection to "abor, local and overseas" organiCed and unorganiCed" and &romote full em&loyment and eHuality of em&loyment o&&ortunities for all# It shall guarantee the rights of all wor<ers to self8organiCation" collective bargaining and negotiations" and &eaceful concerted activities" including the right to stri<e in accordance with law# 2hey shall be entitled to sec rity of ten re" humane conditions of wor<" and a living wage# 2hey shall also &artici&ate in &olicy and decision8ma<ing &rocesses affecting their rights and benefits is may be &rovided by law# 1' $+m&hasis su&&lied% Com&are this with the sole#&rovision on *abor in the ,-51 Constitution under the Article an (eclaration of Princi&les and )tate Policies that &rovides3 )ec# -# 2he state shall afford &rotection to labor" &romote full em&loyment and eHuality in em&loyment" ensure eHual wor< o&&ortunities regardless of se4" race" or creed" and regulate the relations between wor<ers and em&loyers# 2he )tate shall ensure the rights of wor<ers to self8 organiCation" collective baegaining" security of tenure" and just and humane conditions of wor<# 2he )tate may &rovide for com&ulsory arbitration# 11 2o be sure" both Charters recogniCe Msecurity of tenureM as one of the rights of labor which the )tate is mandated to &rotect# But there is no gainsaying the fact that the intent of the framers of the &resent Constitution was to give &rimacy to the rights of labor and afford the sector Mfull &rotection"M at least greater &rotection than heretofore accorded them" regardless of the geogra&hical location of the wor<ers and whether they are organiCed or not# It was then CO7CO! Commissioner" now 9ustice Gilario # (avide" 9r#" who substantially contributed to the &resent formulation of the &rotection to labor &rovision and &ro&osed that the same be incor&orated in the Article on )ocial 9ustice and not just in the Article on (eclaration of Princi&les and )tate Policies Min the light of the s&ecial im&ortance that we are giving now to social justice and the necessity of em&hasiCing the sco&e and role of social justice in national develo&ment#M 1& If we have ta<en &ains to delve into the bac<ground of the labor &rovisions in our Constitution and the *abor Code" it is but to stress that the right of an em&loyee not to be dismissed from his job e4ce&t for a just or authoriCed cause &rovided by law has assumed greater im&ortance under the ,-.5 Constitution with the singular &rominence labor enjoys under the article on )ocial 9ustice# And this transcendent &olicy has been translated into law in the *abor Code# 'nder its terms" where a case of unlawful or unauthoriCed dismissal has been &roved by the aggrieved em&loyee" or on the other hand" the em&loyer whose duty it is to &rove the lawfulness or justness of his act of dismissal has failed to do so" then the remedies &rovided in Article 65- should find" a&&lication# Consonant with this liberaliCed stance vis/a/vis labor" the legislature even went further by enacting Re&ublic Act 7o# 65,5 which too< effect on !arch 6" ,-.- that amended said Article to remove any &ossible ambiguity that juris&rudence may have generated which watered down the constitutional intent to grant to labor Mfull &rotection#M 13 2o go bac< to the instant case" there being no evidence to show an authoriCed" much less a legal" cause for the dismissal of &rivate res&ondent" she had every right" not only to be entitled to reinstatement" but ay well" to full bac<wages#M 1( 2he intendment of the law in &rescribing the twin remedies of reinstatement and &ayment of bac<wages is" in the former" to restore the dismissed em&loyee to her status before she lost her job" for the dictionary meaning of the word MreinstateM is Mto restore to a state" conditione &ositions etc# from which one had been removedM 1< and in the latter" to give her bac< the income lost during the &eriod of unem&loyment# Both remedies" loo<ing to the &ast" would &erforce ma<e her Mwhole#M )adly" the avowed intent of the law has at times been thwarted when reinstatement has not been forthcoming and the ha&less dismissed em&loyee finds himself on the outside loo<ing in#

Over time" the following reasons have been advanced by the Court for denying reinstatement under the facts of the case and the law a&&licable thereto; that reinstatement can no longer be effected in view of the long &assage of time $66 years of litigation% or because of the realities of the situation; 16 or that it would be Minimical to the em&loyerNs interest; M 1) or that reinstatement may no longer be feasible; 18 or" that it will not serve the best interests of the &arties involved; 19 or that the com&any would be &rejudiced by the wor<ersN continued em&loyment; &' or that it will not serve any &rudent &ur&ose as when su&ervening facts have trans&ired which ma<e e4ecution on that score unjust or ineHuitable &1 or" to an increasing e4tent" due to the resultant atmos&here of Manti&athy and antagonismM or Mstrained relationsM or Mirretrievable estrangementM between the em&loyer and the em&loyee# && In lieu of reinstatement" the Court has variously ordered the &ayment of bac<wages and se&aration &ay &3 or solely se&aration &ay# &( In the case at bar" the law is on the side of &rivate res&ondent# In the first &lace the wording of the *abor Code is clear and unambiguous3 MAn em&loyee who is unjustly dismissed from wor< sha"" be entitled to reinstatement# # # # and to his full bac<wages# # # #M &< 'nder the &rinci&lesof statutory construction" if a statute is clears &lain and free from ambiguity" it must be given its literal meaning and a&&lied without attem&ted inter&retation# 2his &lain8meaning rule or verba "e#is derived from the ma4im inde@ animi sermo est $s&eech is the inde4 of intention% rests on the valid &resum&tion that the words em&loyed by" the legislature in a statute correctly e4&ress its intent or will and &reclude the court from construing it differently# &6 2he legislature is &resumed to <now the meaning of the words" to3have used words advisedly" and to have e4&ressed its intent by the use of such words as are found in the statute# &) -erba "e#is non est recedend m " or from the words of a statute there should be no de&arture# 7either does the &rovision admit of any Hualification# If in the wisdom of the Court" there may be a ground or grounds for non8 a&&lication of the above8cited &rovision" this should be by way of e4ce&tion" such as when the reinstatement may be inadmissible due to ensuing strained relations between the em&loyer and the em&loyee# In such cases" it should be &roved that the em&loyee concerned occu&ies a &osition where he enjoys the trust and confidence of his em&loyer; and that it is li<ely that if reinstated" an atmos&here of anti&athy and antagonism may be generated as to adversely affect the efficiency and &roductivity of the em&loyee concerned# A few e4am&les" will suffice to illustrate the CourtNs a&&lication of the above &rinci&les3 where the em&loyee is a Dice8President for !ar<eting and as such" enjoys the full trust and confidence of to& management; &8 or is the Officer8In8Charge of the e4tension office of the ban< where he wor<s; &9 or is an organiCer of a union who was in a &osition to sabotage the unionNs efforts to organiCe the wor<ers in commercial and industrial establishments; 3' or is a warehouseman of a non8&rofit organiCation whose &rimary &ur&ose is to facilitate and ma4imiCe voluntary gifts# by foreign individuals and organiCations to the Phili&&ines; 31 or is a manager of its +nergy +Hui&ment )ales# 3& Obviously" the &rinci&le of Mstrained relationsM cannot be a&&lied indiscriminately# Otherwisey reinstatement can never be &ossible sim&ly because some hostility is invariably engendered between the &arties as a result of litigation# 2hat is human nature# 33 Besides" no strained relations should arise from a valid and legal act of asserting oneNs right; otherwise an em&loyee who shall assert his right could be easily se&arated from the service" by merely &aying his se&aration &ay on the &rete4t that his relationshi& with his em&loyer had already become strained# 3( Gere" it has not been &roved that the &osition of &rivate res&ondent as systems analyst is one that may be characteriCed as a &osition of trust and confidence such that if reinstated" it may well lead to strained relations between em&loyer and em&loyee# Gence" this does not constitute an e4ce&tion to the general rule mandating reinstatement for an em&loyee who has been unlawfully dismissed# On the other hand" has she betrayed any confidence re&osed in her by engaging in transactions that may have created conflict of interest situationsS Petitioner !CR &oints out that as a matter of com&any &olicy" it &rohibits its em&loyees from involving themselves with any com&any that has business dealings with !CR# ConseHuently" when &rivate res&ondent )alaCar signed as a witness to the &artnershi& &a&ers of Concave $a su&&lier of 'ltra which in turn is also a su&&lier of !CR%" she was deemed to have &laced# herself in an untenable &osition as far as &etitioner was concerned# Gowever" on close scrutiny" we agree with &ublic res&ondent that such a circumstance did not create a conflict of interests situation# As a systems analyst" )alaCar was very far removed from o&erations involving the &rocurement of su&&lies# )alaCarNs duties revolved around the develo&ment of systems and analysis of designs on a continuing basis# In other words" )alaCar did not occu&y a &osition of trust relative to the a&&roval and &urchase of su&&lies and com&any assets# In the instant case" &etitioner has &redicated its dismissal of )alaCar on loss of confidence# As we have held countless times" while loss of confidence or breach of trust is a valid ground for terminations it must rest an some basis which must be convincingly established# 3< An em&loyee who not be dismissed on mere &resum&tions and su&&ositions# PetitionerNs allegation that since )alaCar and )aldivar lived together in the same a&artment" it M&resumed reasonably that com&lainantNs sym&athy would be with )aldivarM and its averment that )aldivarNs investigation although unverified" was &robably true" do not &ass this CourtNs test# 36 :hile we should not condone the acts of disloyalty of an em&loyee" neither should we dismiss him on the basis of sus&icion derived from s&eculative inferences# 2o rely on the !aramara re&ort as a basis for )alaCarNs dismissal would be most ineHuitous because the bul< of the findings centered &rinci&ally oh her friendNs alleged thievery and anomalous transactions as technical o&erationsN su&&ort manager# )aid re&ort merely insinuated that in view of )alaCarNs s&ecial relationshi& with )aldivar" )alaCar might have had direct <nowledge of )aldivarNs Huestionable activities# (irect evidence im&licating &rivate res&ondent is wanting from the records# It is also worth em&hasiCing that the !aramara re&ort came out after )aldivar had already resigned from !CR on !ay 1," ,-./# )ince )aldivar did not have the o&&ortunity to refute managementNs findings" the re&ort remained obviously one8sided# )ince the main evidence obtained by &etitioner dealt &rinci&ally on the alleged cul&ability of )aldivar" without his having had a chance to voice his side in view of his &rior resignation" stringent e4amination should have been carried out to ascertain whether or not there e4isted inde&endent legal grounds to hold )alatar answerable as well and" thereby" justify her dismissal# 0inding none" from the records" we find her to have been unlawfully dismissed# :G+R+0OR+" the assailed resolution of &ublic res&ondent 7ational *abor Relations Commission dated (ecember 6-" ,-.5 is hereby A00IR!+(# Petitioner !CR is ordered to R+I7)2A2+ &rivate res&ondent Imelda )alaCar and to &ay her bac<wages eHuivalent to her salary for a &eriod of two $6% years only# 2his decision is immediately e4ecutory# )O OR(+R+(# G.R. No. 89&&&. A50,. ), 1993.

CAR!+7 )A72O)" &etitioner" vs# +!P*OO++)N CO!P+7)A2IO7 CO!!I))IO7 and OD+R7!+72 )+RDIC+ I7)'RA7C+ )O)2+! $Phili&&ine 7avy%" res&ondents# Public AttorneyNs Office for &etitioner# 2he overnment Cor&orate Counsel for the overnment )ervice Insurance )ystem# )O**AB') ,# *ABOR A7( )OCIA* *+ I)*A2IO7; +!P*OO++) CO!P+7)A2IO7; CO!P+7)AB*+ )ICJ7+)); (+0I7+(# L 2he law defines com&ensable sic<ness as any illness definitely acce&ted as occu&ational disease listed by the Commission" or any illness caused by em&loyment subject to &roof that the ris< of contracting the same is increased by the wor<ing conditions# 0or sic<ness and the resulting death of an em&loyee to be com&ensable" the claimant must show either3 $,% that it is a result of an occu&ational disease listed under Anne4 A of the Amended Rules on +m&loyeesN Com&ensation with the conditions set therein satisfied3 or $6% if not so listed" that the ris< of contracting the disease is increased by the wor<ing conditions# 6# I(#; I(#; I(#; R'*+ :G+7 A7 I**7+)) I) 7O2 *I)2+( I7 2G+ 2AB*+ OCC'PA2IO7A* (I)+A)+); CA)+ A2 BAR# L :here the claimantNs illness is not listed in the 2able of Occu&ational (iseases embodied in Anne4 A of the Rules on +m&loyeesN Com&ensation" said claimant must &ositively &rove that the ris< of contracting the disease is increased by the wor<ing conditions# Cirrhosis of the liver is not listed as an occu&ational disease# 7evertheless" in the very recent case of *ibrea v# +m&loyeesN Com&ensation Commission $ #R# 7o# 5..5-" 6@1 )CRA 5/5 >,,-?%# :e do not &retend to be an e4&ert in the realm of medical disci&line# Gowever" :e cannot discount the fact that the cause of death of &etitionerNs husband could very well be related to his &revious wor<ing conditions# +ven the Commission volunteered the theory that &ost necrotic cirrhosis show that of the many ty&es of advanced liver injury" one cause may be due to to4ins# As a welder" 0rancisco was e4&osed to heat" gas fumes and chemical substances coming from the burning electrodes caused by welding# enerally" the metal burned is iron# In the course thereof" other com&ounds and o4ides" such as carbon mono4ide" carbon dio4ide" sulfur and &hos&horus" may be emitted in the &rocess of welding" de&ending on the <ind of material used and e4tend of corrosion of the metal wor<ed on# 2hese va&oriCed metals are inhaled by the welder in the &rocess and significantly in this case" 0rancisco had to do welding jobs within enclosed com&artments# Research shows that ingestion or inhalation of small amounts of iron over a number of years may lead to siderosis# Acute &oisoning brings about circulatory colla&se which may occur ra&idly or be delayed to /. hours with liver failure# 2hese are industrial haCards to which 0rancisco was e4&osed# And in the long course of time" 16 years at that" his continuous e4&osure to burned electrodes and chemicals emitted therefrom would li<ely cause &oisoning and malfunction of the liver# 1# I(#; I(#; (OC2RI7+ O0 CO!P+7)ABI*I2O; +PP*AI7+(# L 2he leading doctrine on com&ensability is that laid down in the case of Raro v# +m&loyeesN Com&ensation Commission" where this court said M2here is a wides&read misconce&tion that the &oor em&loyee is still arrayed against the might and &ower of his rich cor&orate em&loyer# Gence" he must be given all <inds of favorable &resum&tions# 2his is fallacious# It is now the trust fund and not the em&loyer which suffers if benefits are &aid to claimants who are not entitled under the law# 2he em&loyer joins the em&loyee in trying to have their claims a&&roved# 2he em&loyer is s&ared the &roblem of &roving a negative &ro&osition that the disease was not caused by em&loyment#M 2he decision of this Court in Raro v# +CC $,56 )CRA ./5% in effect su&ersedes the cases with conclusions different from that stated therein" such as 7emaria v# +CC" ,55 )CRA ,66 $,-.5%; Ovenson v# +CC" ,56 )CRA 6, $,-.5%; !ercado v# +CC" ,65 )CRA 66/ $,-./%# 2he reason behind the &resent doctrine is that the 7ew *abor Code has abolished the &resum&tion of com&ensability for illness contracted by a wor<er during em&loyment# 2o be entitled to disability benefits" the claimant has to &resent evidence to &rove that his ailment was the result of" or the ris< of contracting the same were aggravated by wor<ing conditions or the nature of his wor<# /# I(#; I(#; PRODI)IO7) 2G+R+I7 )GA** B+ R+)O*D+( I7 0ADOR O0 *ABOR# L :hile the &resum&tion of com&ensability and theory of aggravation under the :or<menNs Com&ensation Act may have been abandoned under the new *abor Code" the liberality of the law in general in favor of the wor<ing man still &revails# 2he +m&loyeesN Com&ensation Act is basically a social legislation designed to afford relief to the wor<ing man and woman in our society# 2he +m&loyeesN Com&ensation Commission" as the agency tas<ed with im&lementing the social justice mandate guaranteed by the Constitution" should be more liberal in resolving com&ensation claims of em&loyees es&ecially where there is some basis in the facts for inferring a wor< connection to the cause of death# this inter&retation gives meaning and substance to the liberal and com&assionate s&irit of the law as embodied in Article / of the 7ew *abor Code which states that Mall doubts in the im&lementation and inter&retation of the &rovisions of the *abor Code including its im&lementing rules and regulations shall be resolved in favor of labor# 2he &olicy is to e4tend the a&&licability of P( 666 to a greater number of em&loyees who can avail of the benefits under the law" which is in consonance with the avowed &olicy of the state to give ma4imum aid and &rotection to labor# (+CI)IO7 7OCO7" 9 &3 Is liver cirrhosis an illness which is com&ensableS 2his is the Huestion &ut forth by &etitioner" Carmen )antos" whose husband died of liver cirrhosis while still a civilian em&loyee of the Phili&&ine 7avy# 0rancisco )antos was em&loyed as welder at the Phili&&ine 7avy and its 7aval )hi&yard as early as !arch 66" ,-55# Ge s&ent the last 16 years of his life in the government service" the first year as a welder hel&er and the last two years as shi&yard assistant# On (ecember 6-" ,-.6" 0rancisco was admitted at the 7aval )tation Gos&ital in Cavite City" on com&laint that he was having e&igastric &ain and been vomiting blood 6 days &rior to his hos&italiCation# Gis case was diagnosed as bleeding Pe&tic 'lcer disease $P'(%" cholelithiasis and diabetes mellitus# On 9anuary ,," ,-.5" he died" the cause of which as indicated in the (eath Certificate was liver cirrhosis# !rs# Carmen A# )antos filed a claim for the death benefit of her husband" 0rancisco" on 9anuary 6." ,-.5" &ursuant to Presidential (ecree 7o# 666" as amended# Gowever" on a letter dated A&ril 1@" ,-.5" the overnment )ervice Insurance )ystem $ )I)%" denied the claim on the ground that u&on &roofs and evidence submitted" 0ranciscoNs ailment cannot be considered an occu&ational disease as contem&lated under P#(# 666" as amended# !rs# )antos then sought the assistance of the Commander of 7A)CO!" P7" who in turn wrote the )I) reHuesting for a favorable action on her claim# )aid letter also substantiated &etitionerNs claim that her husbandNs duties as )enior :elder" assigned at the )tructural Branch of the 7aval )hi&building 0acility" reHuired him to &erform delicate welding jobs inside com&artments of naval vessels" li<e com&artmentation bul< heads; CIC rooms; officers and PONs Huarters; fuel" lube oil and fresh water tan<s" where he was e4&osed to heat and inhalation of burning chemical substances and gas fumes coming from burning welding electrodes#

(es&ite such endorsement" &etitionerNs motion for reconsideration was li<ewise denied" u&on claim of the )I) that 0ranciscoNs job as a welder would instead cause lung disease rather than liver cirrhosis# On a&&eal to the +m&loyeesN Com&ensation Commission $+CC%" the Commission affirmed the denial of the )I) on &etitionerNs claim relying on the fact that the diagnosis on 0ranciscoNs illness did not s&ecify the ty&e of cirrhosis which caused his death# 7evertheless" the Commission too< cogniCant of the fact that the deceased em&loyee did not have a &revious history of alcoholism" he&atitis or a &revious history of biliary condition which could give a clue to the nature of cirrhosis he had# :e find merit in this &etition# 2he law defines com&ensable sic<ness as any illness definitely acce&ted as occu&ational disease listed by the Commission" or any illness caused by em&loyment subject to &roof that the ris< of contracting the same is increased by the wor<ing conditions# 0or sic<ness and the resulting death of an em&loyee to be com&ensable" the claimant must show either3 $,% that it is a result of an occu&ational disease listed under Anne4 A of the Amended Rules on +m&loyeesN Com&ensation with the conditions set therein satisfied; or $6% if not so listed" that the ris< of contracting the disease is increased by the wor<ing conditions# , :here the claimantNs illness is not listed in the 2able of Occu&ational (iseases embodied in Anne4 A of the Rules of +m&loyeesN Com&ensation" said claimant must &ositively &rove that the ris< of contracting the disease is increased by the wor<ing conditions# 6 Cirrhosis of the liver is not listed as an occu&ational disease# 7evertheless" in the very recent case of *ibrea v# +m&loyeesN Com&ensation Commission 1 :e too< a liberal stand and based on the evidence &resented" &ronounced the said sic<ness com&ensable# In the cited case" a (ivision Physical +ducation )u&ervisor" who li<ewise s&ent the last 16 years of his life in &ublic service was adjudged entitled to the benefits of the +CC" u&on his death due to liver cirrhosis# In the said case" the +CC denied the claim of the heirs on the ground that the abundant stress and strain e4&erienced by the deceased em&loyee were too farfetched to cause the develo&ment of liver cirrhosis# According to the medical research made by the Commission in the case" &ortal cirrhosis or cirrhosis of the liver occurs chiefly in males in their late middle life# !alnutrition is believed to be a &redis&osing factor if not the &rimary etiologic factor" and may account for its &revalence among alcoholics# 2his chronic disease characteriCed by increased connective tissue that s&reads from the &ortal s&aces" distorts the liver architecture thereby im&airing liver functions# / In granting the &etition" the Court correlated the fact that the deceased e4&erienced untold sufferings in the course of his ins&ection of barrio schools and that he became malnourished because of the scarcity of food in the &laces he travelled to# All these factors were found to have contributed to the wea<ening of his health rendering him susce&tible to malnutrition and eventually to contracting liver cirrhosis# In the case at bar" the Commission said that liver cirrhosis may be classified by a mi4ture of etiologically and mor&hologically defined entities as follows3 ,% Alcoholic cirrhosis" chronic alcoholism is a major cause of alcohol cirrhosis# 2he amount and duration of ethanol ingestion rather than the ty&e of alcoholic beverage of the &attern of ingestion" a&&ear to be an im&ortant determinant of liver injury# 7utritional factors may augment the detrimental effects of chronic alcohol ingestion on the liver# 6% Post necrotic cirrhosis is the final &athway of many ty&es of advanced liver injury of both s&ecific and un<nown causes# Diral he&atitis" $he&atitis B" 7on A" 7on B% may be an antecedent# Other causes are drugs" to4ins and alcoholic liver disease and &rimary biliary cirrhosis# 1% Biliary cirrhosis results from injury to or &rolonged obstruction of either the intrahe&atic or e4trahe&atic biliary system# /% Cardiac cirrhosis L &rolonged severe right8sided congestive heart failure may lead to chronic liver injury and cardiac cirrhosis# 5% !etabolic" hereditary" drug8related and other ty&es# :e do not &retend to be an e4&ert in the realm of medical disci&line# Gowever" :e cannot discount the fact that the cause of death of &etitionerNs husband could very well be related to his &revious wor<ing conditions# +ven the Commission volunteered the theory that &ost necrotic cirrhosis show that of the many ty&es of advanced liver injury" one cause may be due to to4ins# As a welder" 0rancisco was e4&osed to heat" gas fumes and chemical substances coming from the burning electrodes caused by welding# enerally" the metal burned is iron# In the course thereof" other com&ounds and o4ides" such as carbon mono4ide" carbon dio4ide" sulfur and &hos&horus" may be emitted in the &rocess of welding" de&ending on the <ind of material used and e4tent of corrosion of the metal wor<ed on# 2hese va&oriCed metals are inhaled by the welder in the &rocess and significantly in this case" 0rancisco had to do welding jobs within enclosed com&artments# Research shows that ingestion or inhalation of small amounts of iron over a number of years may lead to siderosis# Acute &oisoning brings about circulatory colla&se which may occur ra&idly or be delayed to /. hours with liver failure# 5 2hese are industrial haCards to which 0rancisco was e4&osed# And in the long course of time" 16 years at that" his continuous e4&osure to burned electrodes and chemicals emitted therefrom would li<ely cause &oisoning and malfunction of the liver# 2he leading doctrine on com&ensability is that laid down in the case of Raro v# +m&loyeesN Com&ensation Commission" 6 where this Court said3 M2here is a wides&read misconce&tion that the &oor em&loyee is still arrayed against the might and &ower of his rich cor&orate em&loyer# Gence" he must be given all <inds of favorable &resum&tions# 2his is fallacious# It is now the trust fund and not the em&loyer which suffers if benefits are &aid to claimants who are not entitled under the law# 2he em&loyer joins the em&loyee in trying to have their claims a&&roved# 2he em&loyer is s&ared the &roblem of &roving a negative &ro&osition that the disease was not caused by em&loyment#M 2he decision of this Court in Raro in effect su&ersedes the cases with conclusions different from that stated therein" such as 7emaria v# +CC" ,55 )CRA ,66 $,-.5%; Ovenson v# +CC" ,56 )CRA 6, $,-.5%; !ercado v# +CC" ,65 )CRA 66/ $,-./%# 2he reason behind the &resent doctrine is that the 7ew *abor Code has abolished the &resum&tion of com&ensability for illness contracted by a wor<er during em&loyment# 2o be entitled to disability benefits" the claimant has to &resent evidence to &rove that his ailment was the result of" or the ris< of contracting the same were aggravated by wor<ing conditions or the nature of his wor<# 5 Gowever" while the &resum&tion of com&ensability and theory of aggravation under the :or<menNs Com&ensation Act may have been abandoned under the new *abor Code" the liberality of the law in general in favor of the wor<ing man still &revails# . 2he +m&loyeesN Com&ensation Act is basically a social legislation designed to afford relief to the wor<ing man and woman in our society# 2he +m&loyeesN Com&ensation Commission" as the agency tas<ed with im&lementing the social justice mandate guaranteed by the Constitution" should be more liberal in resolving com&ensation claims of em&loyees es&ecially where there is some basis in the facts for inferring a wor< connection to the cause of death# -

2his inter&retation gives meaning and substance to the liberal and com&assionate s&irit of the law as embodied in Article / of the 7ew *abor Code which states that Mall doubts in the im&lementation and inter&retation of the &rovisions of the *abor Code including its im&lementing rules and regulations shall be resolved in favor of labor#M ,@ 2he &olicy is to e4tend the a&&licability of P( 666 to a greater number of em&loyees who can avail of the benefits under the law" which is in consonance with the avowed &olicy of the state to give ma4imum aid and &rotection to labor# ,, Premises considered" :e find the &etition meritorious# *iver cirrhosis" although not one among those listed as com&ensable ailment" as considered in the case at bar as covered under the Act" on the ground that the nature of the wor< of &etitionerNs husband" e4&osed him to the ris< of contracting the same# :G+R+0OR+" &etition is hereby RA72+( and the decision of the +m&loyeesN Com&ensation Commission is R+D+R)+(# )O OR(+R+(# G.R. No. 1'1)61. M2046 &(, 1993. 7A2IO7A* )' AR R+0I7+RI+) CORPORA2IO7" &etitioner" vs# 7A2IO7A* *ABOR R+*A2IO7) CO!!I))IO7 and 7B)R )'P+RDI)ORO '7IO7" $PACI:'% 2'CP" res&ondents# 9ose !ario C# Bunag for &etitioner# 2he )olicitor eneral and the Chief *egal Officer" 7*RC" for &ublic res&ondent# Ioilo D# de la CruC for &rivate res&ondent# (+CI)IO7 R+ A*A(O" 9 &3 2he main issue &resented for resolution in this original &etition for certiorari is whether su&ervisory em&loyees" as defined in Article 6,6 $m%" Boo< D of the *abor Code" should be considered as officers or members of the managerial staff under Article .6" Boo< III of the same Code" and hence are not entitled to overtime rest day and holiday &ay# Petitioner 7ational )ugar Refineries Cor&oration $7A)'R+0CO%" a cor&oration which is fully owned and controlled by the overnment" o&erates three $1% sugar refineries located at Bu<idnon" Iloilo and Batangas# 2he Batangas refinery was &rivatiCed on A&ril ,," ,--6 &ursuant to Proclamation 7o# 5@# , Private res&ondent union re&resents the former su&ervisors of the 7A)'R+0CO Batangas )ugar Refinery" namely" the 2echnical Assistant to the Refinery O&erations !anager" )hift )ugar :arehouse )u&ervisor" )enior 0inancialABudget Analyst" eneral Accountant" Cost Accountant" )ugar Accountant" 9unior 0inancialABudget Analyst" )hift Boiler )u&ervisor"" )hift O&erations Chemist" )hift +lectrical )u&ervisor" eneral )ervices )u&ervisor" Instrumentation )u&ervisor" Community (evelo&ment Officer" +m&loyment and 2raining )u&ervisor" Assistant )afety and )ecurity Officer" Gead and Personnel )ervices" Gead 7urse" Pro&erty :arehouse )u&ervisor" Gead of Inventory Control )ection" )hift Process )u&ervisor" (ay !aintenance )u&ervisor and !otor&ool )u&ervisor# On 9une ," ,-.." &etitioner im&lemented a 9ob +valuation $9+% Program affecting all em&loyees" from ran<8and8file to de&artment heads# 2he 9+ Program was designed to rationaliCed the duties and functions of all &ositions" reestablish levels of res&onsibility" and recogniCe both wage and o&erational structures# 9obs were ran<ed according to effort" res&onsibility" training and wor<ing conditions and relative worth of the job# As a result" all &ositions were re8evaluated" and all em&loyees including the members of res&ondent union were granted salary adjustments and increases in benefits commensurate to their actual duties and functions# :e glean from the records that for about ten years &rior to the 9+ Program" the members of res&ondent union were treated in the same manner as ran<8and file em&loyees# As such" they used to be &aid overtime" rest day and holiday &ay &ursuant to the &rovisions of Articles .5" -1 and -/ of the *abor Code as amended# :ith the im&lementation of the 9+ Program" the following adjustments were made3 $,% the members of res&ondent union were re8classified under levels )85 to )8. which are considered managerial staff for &ur&oses of com&ensation and benefits; $6% there was an increase in basic &ay of the average of 5@U of their basic &ay &rior to the 9+ Program" with the union members now enjoying a wide ga& $P,"66-#@@ &er month% in basic &ay com&ared to the highest &aid ran<8and8file em&loyee; $1% longevity &ay was increased on to& of alignment adjustments; $/% they were entitled to increased com&any CO*A of P665#@@ &er month; $5% there was a grant of P,@@#@@ allowance for rest dayAholiday wor<# On !ay ,," ,--@" &etitioner 7A)'R+0CO recogniCed herein res&ondent union" which was organiCed &ursuant to Re&ublic Act 7O# 65,5 allowing su&ervisory em&loyees to form their own unions" as the bargaining re&resentative of all the su&ervisory em&loyees at the 7A)'R+0CO Batangas )ugar Refinery# 2wo years after the im&lementation of the 9+ Program" s&ecifically on 9une 6@" ,--@" the members of herein res&ondent union filed a com&lainant with the e4ecutive labor arbiter for non8&ayment of overtime" rest day and holiday &ay allegedly in violation of Article ,@@ of the *abor Code# On 9anuary 5" ,--," +4ecutive *abor Arbiter Antonio C# Pido rendered a decision 6 dis&osing as follows3 M:G+R+0OR+" &remises considered" res&ondent 7ational )ugar refineries Cor&oration is hereby directed to L ,# &ay the individual members of com&lainant union the usual overtime &ay" rest day &ay and holiday &ay enjoyed by them instead of the P,@@#@@ s&ecial allowance which was im&lemented on 9une ,," ,-..; and 6# &ay the individual members of com&lainant union the difference in money value between the P,@@#@@ s&ecial allowance and the overtime &ay" rest day &ay and holiday &ay that they ought to have received from 9une ," ,-..# All other claims are hereby dismissed for lac< of merit# )O OR(+R+(#M In finding for the members therein res&ondent union" the labor ruled that the along s&an of time during which the benefits were being &aid to the su&ervisors has accused the &ayment thereof to ri&en into contractual obligation; at the com&lainants cannot be esto&&ed from Huestioning the validity of the new com&ensation &ac<age des&ite the fact that they have been receiving the benefits therefrom" considering that res&ondent union was formed only a year after the im&lementation of the 9ob +valuation Program" hence there was no way for the individual su&ervisors to e4&ress their collective res&onse thereto &rior to the formation of the union; and the com&arative com&utations &resented by the &rivate res&ondent union showed that the P,@@#@@ s&ecial allowance given 7A)'R+0CO fell short of what the su&ervisors ought to receive had the overtime &ay rest day &ay and holiday &ay not been discontinued" which arrangement" therefore" amounted to a diminution of benefits#

On a&&eal" in a decision &romulgated on 9uly ,-" ,--, by its 2hird (ivision" res&ondent 7ational *abor Relations Commission $7*RC% affirmed the decision of the labor arbiter on the ground that the members of res&ondent union are not managerial em&loyees" as defined under Article 6,6 $m% of the *abor Code and" therefore" they are entitled to overtime" rest day and holiday &ay# Res&ondent 7*RC declared that these su&ervisory em&loyees are merely e4ercising recommendatory &owers subject to the evaluation" review and final action by their de&artment heads; their res&onsibilities do not reHuire the e4ercise of discretion and inde&endent judgment; they do not &artici&ate in the formulation of management &olicies nor in the hiring or firing of em&loyees; and their main function is to carry out the ready &olicies and &lans of the cor&oration# 1 Reconsideration of said decision was denied in a resolution of &ublic res&ondent dated August 1@" ,--,# / Gence this &etition for certiorari" with &etitioner 7A)'R+0CO asseverating that &ublic res&ondent commission committed a grave abuse of discretion in refusing to recogniCed the fact that the members of res&ondent union are members of the managerial staff who are not entitled to overtime" rest day and holiday &ay; and in ma<ing &etitioner assume the Mdouble burdenM of giving the benefits due to ran<8and8file em&loyees together with those due to su&ervisors under the 9+ Program# :e find creditable merit in the &etition and that the e4traordinary writ of certiorari shall accordingly issue# 2he &rimordial issue to be resolved herein is whether the members of res&ondent union are entitled to overtime" rest day and holiday &ay# Before this can be resolved" however it must of necessity be ascertained first whether or not the union members" as su&ervisory em&loyees" are to be considered as officers or members of the managerial staff who are e4em&t from the coverage of Article .6 of the *abor Code# It is not dis&uted that the members of res&ondent union are su&ervisory em&loyees" as defined em&loyees" as defined under Article 6,6$m%" Boo< D of the *abor Code on *abor Relations" which reads3 M$m% N!anagerial em&loyeeN is one who is vested with &owers or &rerogatives to lay down and e4ecute management &olicies andAor to hire" transfer" sus&end" lay8off" recall" discharged" assign or disci&line em&loyees# )u&ervisory em&loyees are those who" in the interest of the em&loyer effectively recommend such managerial actions if the e4ercise of such authority is not merely routinary or clerical in nature but reHuires the use of inde&endent judgment# All em&loyees not falling within any of those above definitions are considered ran<8and8file em&loyees of this Boo<#M Res&ondent 7*RC" in holding that the union members are entitled to overtime" rest day and holiday &ay" and in ruling that the latter are not managerial em&loyees" ado&ted the definition stated in the aforeHuoted statutory &rovision# Petitioner" however" avers that for &ur&oses of determining whether or not the members of res&ondent union are entitled to overtime" rest day and holiday &ay" said em&loyees should be considered as Mofficers or members of the managerial staffM as defined under Article .6" Boo< III of the *abor Code on M:or<ing Conditions and Rest PeriodsM and am&lified in )ection 6" Rule I" Boo< III of the Rules to Im&lement the *abor Code" to wit3 MArt# .6 Coverage# L 2he &rovisions of this title shall a&&ly to em&loyees in all establishments and underta<ings whether for &rofit or not" but not to government em&loyees" managerial em&loyees" field &ersonnel" members of the family of the em&loyer who are de&endent on him for su&&ort" domestic hel&ers" &ersons in the &ersonal service of another" and wor<ers who are &aid by results as determined by the )ecretary of *abor in A&&ro&riate regulations# MAs used herein" Nmanagerial em&loyeesN refer to those whose &rimary duty consists of the management of the establishment in which they are em&loyed or of a de&artment or subdivision thereof" and to other officers or members of the managerial staff#M $+m&hasis su&&lied#% 444 444 444 N)ec# 6# +4em&tion# L 2he &rovisions of this rule shall not a&&ly to the following &ersons if they Hualify for e4em&tion under the condition set forth herein3 444 444 444 $b% !anagerial em&loyees" if they meet all of the following conditions" namely3 $,% 2heir &rimary duty consists of the management of the establishment in which they are em&loyed or of a de&artment or subdivision thereof3 $6% 2hey customarily and regularly direct the wor< of two or more em&loyees therein3 $1% 2hey have the authority to hire or fire other em&loyees of lower ran<; or their suggestions and recommendations as to the hiring and firing and as to the &romotion or any other change of status of other em&loyees are given &articular weight# $c% Officers or members of a managerial staff if they &erform the following duties and res&onsibilities3 $,% 2he &rimary duty consists of the &erformance of wor< directly related to management &olicies of their em&loyer; $6% Customarily and regularly e4ercise discretion and inde&endent judgment; $1% $i% Regularly and directly assist a &ro&rietor or a managerial em&loyee whose &rimary duty consists of the management of the establishment in which he is em&loyed or subdivision thereof; or $ii% e4ecute under general su&ervision wor< along s&ecialiCed or technical lines reHuiring s&ecial training" e4&erience" or <nowledge; or $iii% e4ecute under general su&ervision s&ecial assignments and tas<s; and $/% :ho do not devote more 6@ &ercent of their hours wor<ed in a wor<8wee< to activities which are not directly and closely related to the &erformance of the wor< described in &aragra&hs $,%" $6%" and above#M It is the submission of &etitioner that while the members of res&ondent union" as su&ervisors" may not be occu&ying managerial &ositions" they are clearly officers or members of the managerial staff because they meet all the conditions &rescribed by law and" hence" they are not entitled to overtime" rest day and su&ervisory em&loyees under Article 6,6 $m% should be made to a&&ly only to the &rovisions on *abor Relations" while the right of said em&loyees to the Huestioned benefits should be considered in the light of the meaning of a managerial em&loyee and of the officers or members of the managerial staff" as contem&lated under Article .6 of the Code and )ection 6" Rule I Boo< III of the im&lementing rules# In other words" for &ur&oses of forming and joining unions" certification elections" collective bargaining" and so forth" the union members are su&ervisory em&loyees# In terms of wor<ing conditions and rest &eriods and entitlement to the Huestioned benefits" however" they are officers or members of the managerial staff" hence they are not entitled thereto# :hile the Constitution is committed to the &olicy of social justice and the &rotection of the wor<ing class" it should not be su&&osed that every labor dis&ute will be automatically decided in favor of labor# !anagement also has its own rights which" as such" are entitled to res&ect and enforcement in the interest of sim&le fair &lay# Out of its concern for those with less &rivileges in life" this Court has inclined more often than not toward the wor<er and u&held his cause in his conflicts with the em&loyer# )uch favoritism" however" has not blinded us to the rule that justice is in every case for the deserving" to be dis&ensed in the light of the established facts and the a&&licable law and doctrine# 5 2his is one such case where we are inclined to ti& the scales of justice in favor of the em&loyer#

2he Huestion whether a given em&loyee is e4em&t from the benefits of the law is a factual one de&endent on the circumstances of the &articular case" In determining whether an em&loyee is within the terms of the statutes" the criterion is the character of the wor< &erformed" rather than the title of the em&loyeeNs &osition# 6 ConseHuently" while generally this Court is not su&&osed to review the factual findings of res&ondent commission" substantial justice and the &eculiar circumstances obtaining herein mandate a deviation from the rule# A cursory &erusal of the 9ob Dalue Contribution )tatements 5 of the union members will readily show that these su&ervisory em&loyees are under the direct su&ervision of their res&ective de&artment su&erintendents and that generally they assist the latter in &lanning" organiCing" staffing" directing" controlling communicating and in ma<ing decisions in attaining the com&anyNs set goals and objectives# 2hese su&ervisory em&loyees are li<ewise res&onsible for the effective and efficient o&eration of their res&ective de&artments# !ore s&ecifically" their duties and functions include" among others" the following o&erations whereby the em&loyee3 ,% assists the de&artment su&erintendent in the following3 a% &lanning of systems and &rocedures relative to de&artment activities; b% organiCing and scheduling of wor< activities of the de&artment" which includes em&loyee shifting scheduled and manning com&lement; c% decision ma<ing by &roviding relevant information data and other in&uts; d% attaining the com&anyNs set goals and objectives by giving his full su&&ort; e% selecting the a&&ro&riate man to handle the job in the de&artment; and f% &re&aring annual de&artmental budget; 6% observes" follows and im&lements com&any &olicies at all times and recommends disci&linary action on erring subordinates; 1% trains and guides subordinates on how to assume res&onsibilities and become more &roductive; /% conducts semi8annual &erformance evaluation of his subordinates and recommends necessary action for their develo&mentAadvancement; 5% re&resents the su&erintendent or the de&artment when a&&ointed and authoriCed by the former; 6% coordinates and communicates with other inter and intra de&artment su&ervisors when necessary; 5% recommends disci&linary actionsA&romotions; .% recommends measures to im&rove wor< methods" eHui&ment &erformance" Huality of service and wor<ing conditions; -% sees to it that safety rules and regulations and &rocedure and are im&lemented and followed by all 7A)'R+0CO em&loyees" recommends revisions or modifications to said rules when deemed necessary" and initiates and &re&ares re&orts for any observed abnormality within the refinery; ,@% su&ervises the activities of all &ersonnel under him and goes to it that instructions to subordinates are &ro&erly im&lemented; and ,,% &erforms other related tas<s as may be assigned by his immediate su&erior# 0rom the foregoing" it is a&&arent that the members of res&ondent union discharge duties and res&onsibilities which ineluctably Hualify them as officers or members of the managerial staff" as defined in )ection 6" Rule I Boo< III of the aforestated Rules to Im&lement the *abor Code" viC#3 $,% their &rimary duty consists of the &erformance of wor< directly related to management &olicies of their em&loyer; $6% they customarily and regularly e4ercise discretion and inde&endent judgment; $1% they regularly and directly assist the managerial em&loyee whose &rimary duty consist of the management of a de&artment of the establishment in which they are em&loyed $/% they e4ecute" under general su&ervision" wor< along s&ecialiCed or technical lines reHuiring s&ecial training" e4&erience" or <nowledge; $5% they e4ecute" under general su&ervision" s&ecial assignments and tas<s; and $6% they do not devote more than 6@U of their hours wor<ed in a wor<8wee< to activities which are not directly and clearly related to the &erformance of their wor< hereinbefore described# 'nder the facts obtaining in this case" we are constrained to agree with &etitioner that the union members should be considered as officers and members of the managerial staff and are" therefore" e4em&t from the coverage of Article .6# Perforce" they are not entitled to overtime" rest day and holiday# 2he distinction made by res&ondent 7*RC on the basis of whether or not the union members are managerial em&loyees" to determine the latterNs entitlement to the Huestioned benefits" is mis&laced and ina&&ro&riate# It is admitted that these union members are su&ervisory em&loyees and this is one instance where the nomenclatures or titles of their jobs conform with the nature of their functions# Gence" to distinguish them from a managerial em&loyee" as defined either under Articles .6 or 6,6 $m% of the *abor Code" is &uerile and in efficacious# 2he controversy actually involved here see<s a determination of whether or not these su&ervisory em&loyees ought to be considered as officers or members of the managerial staff# 2he distinction" therefore" should have been made along that line and its corres&onding conce&tual criteria# II# :e li<ewise no not subscribe to the finding of the labor arbiter that the &ayment of the Huestioned benefits to the union members has ri&ened into a contractual obligation# A# Prior to the 9+ Program" the union members" while being su&ervisors" received benefits similar to the ran<8and8file em&loyees such as overtime" rest day and holiday &ay" sim&ly because they were treated in the same manner as ran<8and8file em&loyees" and their basic &ay was nearly on the same level as those of the latter" aside from the fact that their s&ecific functions and duties then as su&ervisors had not been &ro&erly defined and delineated from those of the ran<8and8file# )uch fact is a&&arent from the clarification made by &etitioner in its motion for reconsideration . filed with res&ondent commission in 7*RC Case 7o# CA 7o# I8@@@@5." dated August ,6" ,--," wherein" it lucidly e4&lained3 MBut" com&lainants no longer occu&y the same &ositions they held before the 9+ Program# 2hose &ositions formerly classified as Nsu&ervisoryN and found after the 9+ Program to be ran<8and8file were classified correctly and continue to receive overtime" holiday and restday &ay# As to them" the &ractice subsists# MGowever" those whose duties confirmed them to be su&ervisory" were re8evaluated" their duties re8defined and in most cases their organiCational &ositions re8designated to confirm their su&erior ran< and duties# 2hus" after the 9+ &rogram" com&lainants cannot be said to occu&y the same &ositions#M It bears mention that this &ositional submission was never refuted nor controverted by res&ondent union in any of its &leadings filed before herein &ublic res&ondent or with this Court# Gence" it can be safely concluded therefrom that the members of res&ondent union were &aid the Huestioned benefits for the reason that" at that time" they were rightfully entitled thereto# Prior to the 9+ Program" they could not be categorically classified as members or officers of the managerial staff considering that they were then treated merely on the same level as ran<8and8file# ConseHuently" the &ayment thereof could not be construed as constitutive of voluntary em&loyer &ractice" which cannot be now be unilaterally

withdrawn by &etitioner# 2o be considered as such" it should have been &racticed over a long &eriod of time" and must be shown to have been consistent and deliberate# ,@ 2he test or rationale of this rule on long &ractice reHuires an indubitable showing that the em&loyer agreed to continue giving the benefits <nowingly fully well that said em&loyees are not covered by the law reHuiring &ayment thereof# ,, In the case at bar" res&ondent union failed to sufficiently establish that &etitioner has been motivated or is wont to give these benefits out of &ure generosity# B# It remains undis&uted that the im&lementation of the 9+ Program" the members of &rivate res&ondent union were re8classified under levels )8 5 )8. which were considered under the &rogram as managerial staff &ur&oses of com&ensation and benefits" that they occu&ied re8evaluated &ositions" and that their basic &ay was increased by an average of 5@U of their basic salary &rior to the 9+ Program# In other words" after the 9+ Program there was an ascent in &osition" ran< and salary# 2his in essence is a &romotion which is defined as the advancement from one &osition to another with an increase in duties and res&onsibilities as authoriCed by law" and usually accom&anied by an increase in salary# ,6 Kuintessentially" with the &romotion of the union members" they are no longer entitled to the benefits which attach and &ertain e4clusively to their &ositions# +ntitlement to the benefits &rovided for by law reHuires &rior com&liance with the conditions set forth therein# :ith the &romotion of the members of res&ondent union" they occu&ied &ositions which no longer met the reHuirements im&osed by law# 2heir assum&tion of these &ositions removed them from the coverage of the law" ergo" their e4em&tion therefrom# As correctly &ointed out by &etitioner" if the union members really wanted to continue receiving the benefits which attach to their former &ositions" there was nothing to &revent them from refusing to acce&t their &romotions and their corres&onding benefits# As the sating goes by" they cannot have their ca<e and eat it too or" as &etitioner suggests" they could not" as a sim&le matter of law and fairness" get the best of both worlds at the e4&ense of 7A)'R+0CO# Promotion of its em&loyees is one of the juris&rudentially8recogniCed e4clusive &rerogatives of management" &rovided it is done in good faith# In the case at bar" &rivate res&ondent union has miserably failed to convince this Court that the &etitioner acted im&lementing the 9+ Program# 2here is no showing that the 9+ Program was intended to circumvent the law and de&rive the members of res&ondent union of the benefits they used to receive# 7ot so long ago" on this &articular score" we had the occasion to hold that3 M# # # it is the &rerogative of the management to regulate" according to its discretion and judgment" all as&ects of em&loyment# 2his flows from the established rule that labor law does not authoriCe the substitution of the judgment of the em&loyer in the conduct of its business# )uch management &rerogative may be availed of without fear of any liability so long as it is e4ercised in good faith for the advancement of the em&loyerNs interest and not for the &ur&ose of defeating on circumventing the rights of em&loyees under s&ecial laws or valid agreement and are not e4ercised in a malicious" harsh" o&&ressive" vindictive or wanton manner or out of malice or s&ite#M ,1 :G+R+0OR+" the im&ugned decision and resolution of res&ondent 7ational *abor Relations Commission &romulgated on 9uly ,-" ,--, and August 1@" ,--," res&ectively" are hereby A77'**+( and )+2 A)I(+ for having been rendered and ado&ted with grave abuse of discretion" and the basic com&laint of &rivate res&ondent union is (I)!I))+(# G.R. No. L%6&&') D/4/89/0 1<, 1986 BUAN vs# GOAERNMENT SERAI E INSURAN E SYSTEM OMMISSION, res&ondents8a&&ellees# Cenon, Roncesva""es, Reyes I (e s for petitioner/appe""ant$

BONI"A IO, &etitioner8a& [M,-,st0; o7 E1u42t,oD u.tu0/] 2-1 EM!LOYEESF

OM!ENS

"ERNAN, J.& Petition for review on certiorari of the decision of the +m&loyees Com&ensation Commission dated August ,-" ,-.6" affirming the denial by the overnment Insurance )ystem of &etitionerNs claim for benefits under P( 7o# 666" as amended" for the death of his s&ouse" *ourdes Bonifacio# 2he facts are undis&uted# 2he late *ourdes Bonifacio was a classroom teacher assigned to the district of Bagamanoc" (ivision of Catanduanes" !inistry of +ducation and Culture from ,-65 until she contracted carcinoma of the breast with metastases to the gastrointestinal tract and lungs which caused her death on October 5" ,-5.# (ra# CoraCon Oabes8Almirante of the Os&ital ng Bagong *i&unan certified that the late *ourdes Bonifacio underwent radical mastectomy for cancer of the ,-51# In ,-56" when her ailment was noted to have metastasiCed to her abdomen" she submitted herself to an o&eration <nown as Me4&loratory la&arotomyM i of the same year# On )e&tember ," ,-5." she com&lained of Mabdominal &ain" abdominal enlargement" vomiting" and failure to &ass stools ins&ite of la4ative o&eration it was found that her entire gastrointestinal tract was envelo&ed by carcinoma# (es&ite chemothera&y" she died on October 5" ,-5. from carcinom breast metastatic to gastrointestinal tract and lungs# 2hereafter a claim for death benefits under P#(# 7o# 666" as amended" was filed by &etitioner with the )I)# 2he same was however denied on the ground decedentNs &rinci&al ailment" carcinoma of the breast with metastases to gastrointestinal tract and lungs" is not an occu&ational disease for her &articular w teacher" nor is the ris< of contracting said disease increased by her wor<ing conditions# 2he +m&loyees Com&ensation Commission" on a&&eal affirmed the decision of the res&ondent )ystem# Petitioner now assails the decision of the res&ondent Commission on the following grounds3 a? 2he res&ondent CommissionNs affirmance of the denial by res&ondent )ystem totally ignored the )u&reme CourtNs &ronouncements on com&ensation cases; b? 'nder the law" in case of doubt in the im&lementation and inter&retation of the &rovisions of the *abor Code" including its im&lementing rules and regulat same shall be resolved in favor of the laborer# :e hold that the )I) and the +m&loyees Com&ensation Commission did not err in denying &etitionerNs claim# A com&ensable sic<ness means Many illness definitely acce&ted as an occu&ational disease listed by the +m&loyees Com&ensation Commission" or any illnes by em&loyment subject to &roof by the em&loyee that the ris< of contracting the same is increased by wor<ing conditions# 0or this &ur&ose" the Comm em&owered to determine and a&&rove occu&ational diseases and wor<8related illnesses that may be considered com&ensable based on &eculiar ha em&loyment#M >Art# ,65$,% *abor Code as amended by P#(# 7o# ,16." effective !ay ," ,-5.?# 2hus" for the sic<ness or the resulting disability or death to be com&ensable" the sic<ness must be the result of an acce&ted occu&ational disease fisted +m&loyees Com&ensation Commission >Anne4 MAM of the Amended Rules on +m&loyees Com&ensation?" or any other sic<ness caused by em&loyment su

&roof by claimant that the ris< of contracting the same is increased by wor<ing conditions# >)ec# ," Rule ,," Amended Rules on +m&loyees Com&ensation?# Carcinoma of the breast with metastases to the gastrointestinal tract and lungs is not listed by the Commission as an occu&ational disease# As to the Mmetastas gastrointestinal tract and lungsM the Commission lists such disease as occu&ational only in the following em&loyment3 Occ pationa" *iseases ,6# Cancer of stomach and other lym&hatic and blood forming vessels; nasal cavity and sinuses ,5# Cancer of the lungs" liver and brain# )at re of Emp"oyment :oodwor<ers" wood &roducts industry car&enters" loggers and em&loyees in &ul& and &a&er mills and &lywood mills Dinyl chloryde wor<ers" &lastic wor<ers#

>Anne4 A" Amended Rules on +m&loyees Com&ensation" see &# 1." Rollo#? 2he cancer which affected the deceased not being occu&ational in her &articular em&loyment" it became incumbent u&on &etitioner to &rove that the decedentNs wor<ing conditions increased the ris< of her contracting the fatal illness# 2his onus &etitioner failed to satisfactorily discharge# :e note the following medical re&ort on breast cancer which the +m&loyees Com&ensation Commission cited in its decision and which the &etitioner failed to controvert3 ### Recent observations on the e&idemeology of breast cancer suggest that it is intimately lin<ed to Mestrogenic hormonesM >:#A#P Anderson" !osby"1atho"o#y 5th edition" &&# ,6,58,6,.?# !ammary carcinoma is li<ely to metastasiCe relatively early to the regional lym&h nodes8a4illary and su&ra clavicular" if the &rimary site is in the outer half of the breast# 0rom thence it s&reads &rimarily to the bones" lungs" s<in and subcutaneous tissues generally; less freHuently to the brain# >:introbe et# al#" HarrisonLs 1rincip"es of Interna" Medicine " 5th edition" &&# 5./8 5.5?# $&&# 18/" +CC decision dated August ,-" ,-.6%# PetitionerNs contention that the decision of the +m&loyees Com&ensation Commission totally ignored the )u&reme CourtNs &ronouncements on com&ensation cases is unmeritorious# 2he &etitioner evidently overloo<ed that his claim is now within the ambit of the *abor Code and the rulings under the old law" Act 7o# 1/6." as amended" no longer control# 2he old law as embodied &articularly in )ection /1 of RA 7o# 556 amending Act 7o# 1.,6" &rovided for Mthe &resum&tion of com&ensability and the rule on aggravation of illness" which favor the em&loyee"M and M&aved the way for the latitudinarian or e4&ansive a&&lication of the :or<menNs Com&ensation *aw in favor of the em&loyee or wor<er#M > + "it v$ ECC" -. )CRA /.1" /.-? 2he &resum&tion in essence states that in any &roceeding for the enforcement of the claim for com&ensation under the :or<menNs Com&ensation Act Mit shall be &resumed in the absence of substantial evidence to the contrary that the claim comes within the &rovisions of the said Act" that sufficient notice thereof was given" that the injury was not occasioned by the willful intention of the injured em&loyee to bring about the injury or death of himself or of another" that the injury did not result solely from the into4icatiojn of the injured em&loyee while on duty" and that the contents of verified medical and surgical re&orts introduced in evidence by claimants for com&ensation are correct#M 2hus" under the :or<menNs Com&ensation *aw" it is not necessary for the claimant to carry the burden of &roof to establish his case to the &oint of demonstration >Abana vs# Kuisumbing" 66 )CRA ,65.?# It is Mnot necessary to &rove that em&loyment was the sole cause of the death or injury suffered by the em&loyee# It is sufficient to show that the em&loyment had contributed to the aggravation or acceleration of such death or ailment#M >0ontesa vs# +CC" 66 )CRA 6.6? MOnce the disease had been shown to have arisen in the course of em&loyment" it is &resumed by law" in the absence of substantial evidence to the contrary" that it arose out of it#M >GernandeC vs# +CC" et# al# *86@6@6" !ay 1," ,-65?# :ith this legal &resum&tion in the old law" the burden of &roof shifts to the em&loyer and the em&loyee no longer suffers the burden of showing causation# 'nder the &resent *abor Code" the Mlatitudinarian or e4&ansive a&&lication of the :or<menNs Com&ensation *aw in favor of the em&loyee or wor<erM no longer &revails as the burden of showing &roof of causation has shifted bac< to the em&loyee &articularly in cases of sic<ness or injuries which are not acce&ted or listed as occu&ational by the +m&loyees Com&ensation Commission# As stated in + "it vs$ Emp"oyees Compensation Commission >s pra? Mthe *abor Code abolished the &resum&tion of com&ensability and the rule on aggravation of illness caused by the nature of the em&loyment# M :hile we do not dis&ute &etitionerNs contention that under the law" in case of doubt in the im&lementation and inter&retation of the &rovisions of the *abor Code" including its im&lementing rules and regulations" the doubt shall be resolved in favor of the laborer" we find that the same has no a&&lication in this case since the &ertinent &rovisions of the *abor Code leave no room for doubt either in their inter&retation or a&&lication# :G+R+0OR+" the &etition is dismissed and the decisions of the )I) and the +m&loyees Com&ensation Commission denying the claim are affirmed# 7o costs# )O OR(+R+(# G.R. No. 8(811 August &9, 1989 SOLID HOMES, vs# TERESITA !AYA>AL 2-1 OURT O" A!!EALS, res&ondents# IN ., &etitioner"

RUE, J.& :e are as<ed to reverse a decision of the Court of A&&eals sustaining the jurisdiction of the Regional 2rial Court of KueCon City over a com&laint filed by a buyer" the herein &rivate res&ondent" against the &etitioner" for delivery of title to a subdivision lot# 2he &osition of the &etitioner" the defendant in that action" is that the decision of the trial court is null and void ab initio because the case should have been heard and decided by what is now called the Gousing and *and 'se Regulatory Board# 2he com&laint was filed on August 1," ,-.6" by 2eresita Payawal against )olid Gomes" Inc# before the Regional 2rial Court of KueCon City and doc<eted as Civil Case 7o# K816,,-# 2he &laintiff alleged that the defendant contracted to sell to her a subdivision lot in !ari<ina on 9une -" ,-55" for the agreed &rice of P 6."@.@#@@" and that by )e&tember ,@" ,-.," she had already &aid the defendant the total amount of P 1."-/-#.5 in monthly installments and interests# )olid Gomes subseHuently e4ecuted a deed of sale over the land but failed to deliver the corres&onding certificate of title des&ite her re&eated demands because" as it a&&eared later" the defendant had mortgaged the &ro&erty in bad faith to a

financing com&any# 2he &laintiff as<ed for delivery of the title to the lot or" alternatively" the return of all the amounts &aid by her &lus interest# )he also claimed moral and e4em&lary damages" attorneyNs fees and the costs of the suit# )olid Gomes moved to dismiss the com&laint on the ground that the court had no jurisdiction" this being vested in the 7ational Gousing Authority under P( 7o# -55# 2he motion was denied# 2he defendant re&leaded the objection in its answer" citing )ection 1 of the said decree &roviding that Mthe 7ational Gousing Authority shall have e4clusive jurisdiction to regulate the real estate trade and business in accordance with the &rovisions of this (ecree#M After trial" judgment was rendered in favor of the &laintiff and the defendant was ordered to deliver to her the title to the land or" failing this" to refund to her the sum of P 1."-/-#.5 &lus interest from ,-55 and until the full amount was &aid# )he was also awarded P 5"@@@#@@ moral damages" P 5"@@@#@@ e4em&lary damages" P ,@"@@@#@@ attorneyNs fees" and the costs of the suit# 1 )olid Gomes a&&ealed but the decision was affirmed by the res&ondent court" & which also berated the a&&ellant for its obvious efforts to evade a legitimate obligation" including its dilatory tactics during the trial# 2he &etitioner was also re&roved for its MgallM in collecting the further amount of P ,"61.#/5 from the &laintiff &ur&ortedly for realty ta4es and registration e4&enses des&ite its inability to deliver the title to the land# In holding that the trial court had jurisdiction" the res&ondent court referred to )ection /, of P( 7o# -55 itself &roviding that3 )+C# /,# Other remedies#82he rights and remedies &rovided in this (ecree shall be in addition to any and all other rights and remedies that may be available under e4isting laws# and declared that Mits clear and unambiguous tenor undermine$d% the $&etitionerNs% &retension that the court a C owas bereft of jurisdiction#M 2he decision also dismissed the contrary o&inion of the )ecretary of 9ustice as im&inging on the authority of the courts of justice# :hile we are disturbed by the findings of fact of the trial court and the res&ondent court on the dubious conduct of the &etitioner" we nevertheless must sustain it on the jurisdictional issue# 2he a&&licable law is P( 7o# -55" as amended by P( 7o# ,1//" entitled M+m&owering the 7ational Gousing Authority to Issue :rits of +4ecution in the +nforcement of Its (ecisions 'nder Presidential (ecree 7o# -55#M )ection , of the latter decree &rovides as follows3 )+C2IO7 ,# In the e4ercise of its function to regulate the real estate trade and business and in addition to its &owers &rovided for in Presidential (ecree 7o# -55" the 7ational Gousing Authority shall have e@c" sive F risdiction to hear and decide cases of the following nature3 A# 'nso nd rea" estate b siness practices; B# Claims invo"vin# ref nd and any other c"aims filed by subdivision lot or condominium unit buyer against the &roject owner" develo&er" dealer" bro<er or salesman; and C# Cases invo"vin# specific performance of contract a"a stat tory ob"i#ations filed by buyers of subdivision lot or condominium unit against the owner" develo&er" dealer" bro<er or salesman# $+m&hasis su&&lied#% 2he language of this section" es&ecially the italiciCed &ortions" leaves no room for doubt that Me4clusive jurisdictionM over the case between the &etitioner and the &rivate res&ondent is vested not in the Regional 2rial Court but in the 7ational Gousing Authority# 3 2he &rivate res&ondent contends that the a&&licable law is BP 7o# ,6-" which confers on regional trial courts jurisdiction to hear and decide cases mentioned in its )ection ,-" reading in &art as follows3 )+C# ,-# A risdiction in civi" cases#8Regional 2rial Courts shall e4ercise e4clusive original jurisdiction3 $,% In all civil actions in which the subject of the litigation is inca&able of &ecuniary estimation; $6% In all civil actions which involve the title to" or &ossession of" real &ro&erty" or any interest therein" e4ce&t actions for forcible entry into and unlawful detainer of lands or buildings" original jurisdiction over which is conferred u&on !etro&olitan 2rial Courts" !unici&al 2rial Courts" and !unici&al Circuit 2rial Courts; 444 444 444 $.% In all other cases in which the demand" e4clusive of interest and cost or the value of the &ro&erty in controversy" amounts to more than twenty thousand &esos $P 6@"@@@#@@%# It stresses" additionally" that BP 7o# ,6- should control as the later enactment" having been &romulgated in ,-.," after P( 7o# -55 was issued in ,-55 and P( 7o# ,1// in ,-5.# 2his construction must yield to the familiar canon that in case of conflict between a general law and a s&ecial law" the latter must &revail regardless of the dates of their enactment# 2hus" it has been held that8 2he fact that one law is s&ecial and the other general creates a &resum&tion that the s&ecial act is to be considered as remaining an e4ce&tion of the general act" one as a general law of the land and the other as the law of the &articular case# ( 444 444 444 2he circumstance that the s&ecial law is &assed before or after the general act does not change the &rinci&le# :here the s&ecial law is later" it will be regarded as an e4ce&tion to" or a Hualification of" the &rior general act; and where the general act is later" the s&ecial statute will be construed as remaining an e4ce&tion to its terms" unless re&ealed e4&ressly or by necessary im&lication# < It is obvious that the general law in this case is BP 7o# ,6- and P( 7o# ,1// the s&ecial law# 2he argument that the trial court could also assume jurisdiction because of )ection /, of P( 7o# -55" earlier Huoted" is also unacce&table# :e do not read that &rovision as vesting concurrent jurisdiction on the Regional 2rial Court and the Board over the com&laint mentioned in P( 7o# ,1// if only because grants of &ower are not to be lightly inferred or merely im&lied# 2he only &ur&ose of this section" as we see it" is to reserve# to the aggrieved &arty such other remedies as may be &rovided by e4isting law" li<e a &rosecution for the act com&lained of under the Revised Penal Code# 6 On the com&etence of the Board to award damages" we find that this is &art of the e4clusive &ower conferred u&on it by P( 7o# ,1// to hear and decide Mclaims involving refund and any other c"aims filed by subdivision lot or condominium unit buyers against the &roject owner" develo&er" dealer" bro<er or salesman#M It was therefore erroneous for the res&ondent to brush aside the well8ta<en o&inion of the )ecretary of 9ustice that8 )uch claim for damages which the subdivisionAcondominium buyer may have against the owner" develo&er" dealer or salesman" being a necessary conseHuence of an adjudication of liability for non8&erformance of contractual or statutory obligation" may be deemed necessarily included in the &hrase Mclaims involving refund and any other claimsM used in the aforeHuoted sub&aragra&h C of )ection , of P( 7o# ,1//# 2he &hrase Many other claimsM is" we believe" sufficiently broad to include any and all claims which are incidental to or a necessary conseHuence of the claimsAcases s&ecifically included in the grant of jurisdiction to the 7ational Gousing Authority under the subject &rovisions#

2he same may be said with res&ect to claims for attorneyNs fees which are recoverable either by agreement of the &arties or &ursuant to Art# 66@. of the Civil Code $,% when e4em&lary damages are awarded and $6% where the defendant acted in gross and evident bad faith in refusing to satisfy the &laintiff Ns &lainly valid" just and demandable claim# 444 444 444 Besides" a strict constr ction of the s bFect provisions of 1* )o$ 4<22 !hich !o "d deny the H+RC the a thority to adF dicate c"aims for dama#es and for dama#es and for attorneyLs fees !o "d res "t in m "tip"icity of s its in that the s bdivision condomini m b yer !ho !ins a case in the H+RC and !ho is thereby deemed entit"ed to c"aim dama#es and attorneyLs fees !o "d be forced to "iti#ate in the re# "ar co rts for the p rpose, a sit ation !hich is obvio s"y not in the contemp"ation of the "a! # $+m&hasis su&&lied#% ) As a result of the growing com&le4ity of the modern society" it has become necessary to create more and more administrative bodies to hel& in the regulation of its ramified activities# )&ecialiCed in the &articular fields assigned to them" they can deal with the &roblems thereof with more e4&ertise and dis&atch than can be e4&ected from the legislature or the courts of justice# 2his is the reason for the increasing vesture of Huasi8 legislative and Huasi8judicial &owers in what is now not unreasonably called the fourth de&artment of the government# )tatutes conferring &owers on their administrative agencies must be liberally construed to enable them to discharge their assigned duties in accordance with the legislative &ur&ose# 8 0ollowing this &olicy in Anti&olo Realty Cor&oration v# 7ational Gousing Authority" 9 the Court sustained the com&etence of the res&ondent administrative body" in the e4ercise of the e4clusive jurisdiction vested in it by P( 7o# -55 and P( 7o# ,1//" to determine the rights of the &arties under a contract to sell a subdivision lot# It remains to state that" contrary to the contention of the &etitioner" the case of 2ro&ical Gomes v# 7ational Gousing Authority 1' is not in &oint# :e u&held in that case the constitutionality of the &rocedure for a&&eal &rovided for in P( 7o# ,1//" but we did not rule there that the 7ational Gousing Authority and not the Regional 2rial Court had e4clusive jurisdiction over the cases enumerated in )ection I of the said decree# 2hat is what we are doing now# It is settled that any decision rendered without jurisdiction is a total nullity and may be struc< down at any time" even on a&&eal before this Court# 11 2he only e4ce&tion is where the &arty raising the issue is barred by esto&&el" 1& which does not a&&ear in the case before us# On the contrary" the issue was raised as early as in the motion to dismiss filed in the trial court by the &etitioner" which continued to &lead it in its answer and" later" on a&&eal to the res&ondent court# :e have no choice" therefore" notwithstanding the delay this decision will entail" to nullify the &roceedings in the trial court for lac< of jurisdiction# :G+R+0OR+" the challenged decision of the res&ondent court is R+D+R)+( and the decision of the Regional 2rial Court of KueCon City in Civil Case 7o# K816,,- is )+2 A)I(+" without &rejudice to the filing of the a&&ro&riate com&laint before the Gousing and *and 'se Regulatory Board# 7o costs# )O OR(+R+(# G.R. No. L%6391< A50,. &(, 198< LORENEO M. TAGADA, ABRAHAM ". SARMIENTO, 2-1 MOAEMENT O" ATTORNEYS "OR BROTHERHOOD, INTEGRITY AND NATIONALISM, IN . [MABINI], &etitioners" vs# HON. BUAN . TUAERA, ,- 6,s 42524,t; 2s E=/4ut,:/ Ass,st2-t to t6/ !0/s,1/-t, HON. BOA#UIN AENUS, ,- 6,s 42524,t; 2s D/5ut; E=/4ut,:/ Ass,st2-t to t6/ !0/s,1/-t , MEL#UIADES !. DE LA RUE, ,- 6,s 42524,t; 2s D,0/4to0, M2.242H2-g R/4o01s O77,4/, 2-1 "LORENDO S. !ABLO, ,- 6,s 42524,t; 2s D,0/4to0, Bu0/2u o7 !0,-t,-g, res&ondents# ES OLIN, J.+ Invo<ing the &eo&leNs right to be informed on matters of &ublic concern" a right recogniCed in )ection 6" Article ID of the ,-51 Phili&&ine Constitution" 1 as well as the &rinci&le that laws to be valid and enforceable must be &ublished in the Official aCette or otherwise effectively &romulgated" &etitioners see< a writ of mandamus to com&el res&ondent &ublic officials to &ublish" andAor cause the &ublication in the Official aCette of various &residential decrees" letters of instructions" general orders" &roclamations" e4ecutive orders" letter of im&lementation and administrative orders# )&ecifically" the &ublication of the following &residential issuances is sought3 a? Presidential (ecrees 7os# ,6" 66" 15" 1." 5-" 6/" ,@1" ,5," ,5-" ,./" ,-5" 6@@" 61/" 665" 6.6" 6-." 1@1" 1,6" 16/" 165" 166" 115" 155" 15." 15-" 16@" 16," 16." /@/" /@6" /,5" /65" /6-" //5" //5" /51" /.6" /-," 5@1" 5@/" 56," 56." 55," 566" 551" 55/" 5-/" 5--" 6//" 65." 66," 5,." 51," 511" 5-1" .@@" .@6" .15" .16" -61" -15" -6," ,@,58,@1@" ,@5@" ,@6@8,@6," ,@.5" ,,/1" ,,65" ,,66" ,6/6" ,6/6" ,65@" ,65." ,65-" ,1@@" ,6//" ,556" ,.@." ,.,@" ,.,18,.,5" ,.,-8,.66" ,.6-8,./@" ,./68,./5# b? *etter of Instructions 7os#3 ,@" 1-" /-" 56" ,@5" ,@." ,,6" ,1@" ,16" ,/," ,5@" ,51" ,55" ,6," ,51" ,.@" ,.5" ,.." ,-6" ,-1" ,--" 6@6" 6@/" 6@5" 6@-" 6,,86,1" 6,5866/" 666866." 61,861-" 6/,86/5" 6/." 65," 651866," 661866-" 65,8651" 65586.1" 6.586.-" 6-," 6-1" 6-586--" 1@,81@1" 1@-" 1,681,5" 165" 165" 1/1" 1/6" 1/-" 155" 15." 166" 165" 15@" 1.6" 1.5" 1.6" 1-681-5" /@5" /1.8//@" ///8 //5" /51" /.6" /.." /-." 5@," 1--" 565" 56," 556" 5.5" 5-/" 5--" 6@@" 6@6" 6@-" 6,@" 6,," 6,6" 6,5" 6/," 6/6" 665" 5@6" 5,685,1" 566" .158.1-" .5.8.5-" ..," ..6" -1-8-/@" -6/"--5",,/-8,,5.",,.@8,65.# c? eneral Orders 7os#3 ,/" 56" 5." 5-" 6@" 66" 61" 6/ R 65# d? Proclamation 7os#3 ,,66" ,,//" ,,/5" ,,5," ,,-6" ,65@" ,6.," ,1,-8,566" ,56-" ,516" ,515" ,51." ,5/@8,5/5" ,55@8,55." ,56,8,5.." ,5-@8,5-5" ,5-/8,6@@" ,6@68,6@-" ,6,68,66." ,61@8,6/-" ,6-/8,6-5" ,6-58,5@," ,5@58,561" ,51,8,51/" ,5158,5/6" ,5//" ,5/68,55," ,556" ,55/" ,566" ,56/8,5.5" ,5.-8,5-5" ,5-5" ,.@@" ,.@68,.@/" ,.@68,.@5" ,.,68,.,/" ,.,6" ,.658,.66" ,.6-" ,.1,8,.16" ,.158,.16" ,.1-8 ,./@" ,./18,.//" ,./68,./5" ,./-" ,.518,.5." ,.6@" ,.66" ,.6." ,.5@" ,.568,..-" ,.-6" ,-@@" ,-,." ,-61" ,-11" ,-56" ,-61" ,-658,-66" ,-6.8,-./" ,-.686@6." 6@1@86@//" 6@/686,/5" 6,/586,6," 6,61866//# e? +4ecutive Orders 7os#3 /,," /,1" /,/" /65" /6-8/5/" /558 /5," /5/8/-6" /-/85@5" 5@-85,@" 566" 56/856." 51,8516" 516" 51." 5/185//" 5/-" 55,8551" 56@" 561" 565856." 55@" 55/" 5-1" 5-/" 5-.86@/" 6@-" 6,,8 6/5" 6/-8655" 65-85@1" 5@585@5" 5,685.6" 5..8.56" .5/8.55# f? *etters of Im&lementation 7os#3 5" ." -" ,@" ,,866" 65865" 1-" 5@" 5," 5-" 56" .@8.," -6" -/" -5" ,@5" ,6@" ,66" ,61# g? Administrative Orders 7os#3 1/5" 1/." 156815/" 16@8 15." 1.@8/11" /168/1-#

2he res&ondents" through the )olicitor eneral" would have this case dismissed outright on the ground that &etitioners have no legal &ersonality or standing to bring the instant &etition# 2he view is submitted that in the absence of any showing that &etitioners are &ersonally and directly affected or &rejudiced by the alleged non8&ublication of the &residential issuances in Huestion & said &etitioners are without the reHuisite legal &ersonality to institute this mandamus &roceeding" they are not being Maggrieved &artiesM within the meaning of )ection 1" Rule 65 of the Rules of Court" which we Huote3 )+C# 1# 1etition for Mandam s#L:hen any tribunal" cor&oration" board or &erson unlawfully neglects the &erformance of an act which the law s&ecifically enjoins as a duty resulting from an office" trust" or station" or unlawfully e4cludes another from the use a rd enjoyment of a right or office to which such other is entitled" and there is no other &lain" s&eedy and adeHuate remedy in the ordinary course of law" the &erson aggrieved thereby may file a verified &etition in the &ro&er court alleging the facts with certainty and &raying that judgment be rendered commanding the defendant" immediately or at some other s&ecified time" to do the act reHuired to be done to Protect the rights of the &etitioner" and to &ay the damages sustained by the &etitioner by reason of the wrongful acts of the defendant# '&on the other hand" &etitioners maintain that since the subject of the &etition concerns a &ublic right and its object is to com&el the &erformance of a &ublic duty" they need not show any s&ecific interest for their &etition to be given due course# 2he issue &osed is not one of first im&ression# As early as the ,-,@ case of +everino vs$ Governor Genera" " 3 this Court held that while the general rule is that Ma writ of mandamus would be granted to a &rivate individual only in those cases where he has some &rivate or &articular interest to be subserved" or some &articular right to be &rotected" inde&endent of that which he holds with the &ublic at large"M and Mit is for the &ublic officers e4clusively to a&&ly for the writ when &ublic rights are to be subserved >!ithchell vs# Boardmen" 5- !#e#" /6-?"M nevertheless" Mwhen the Huestion is one of &ublic right and the object of the mandamus is to &rocure the enforcement of a &ublic duty" the &eo&le are regarded as the real &arty in interest and the relator at whose instigation the &roceedings are instituted need not show that he has any legal or s&ecial interest in the result" it being sufficient to show that he is a citiCen and as such interested in the e4ecution of the laws >Gigh" +4traordinary *egal Remedies" 1rd ed#" sec# /1,?# 2hus" in said case" this Court recogniCed the relator *o&e )everino" a &rivate individual" as a &ro&er &arty to the mandamus &roceedings brought to com&el the overnor eneral to call a s&ecial election for the &osition of munici&al &resident in the town of )ilay" 7egros Occidental# )&ea<ing for this Court" !r# 9ustice rant 2# 2rent said3 :e are therefore of the o&inion that the weight of authority su&&orts the &ro&osition that the relator is a &ro&er &arty to &roceedings of this character when a &ublic right is sought to be enforced# If the general rule in America were otherwise" we thin< that it would not be a&&licable to the case at bar for the reason Nthat it is always dangerous to a&&ly a general rule to a &articular case without <ee&ing in mind the reason for the rule" because" if under the &articular circumstances the reason for the rule does not e4ist" the rule itself is not a&&licable and reliance u&on the rule may well lead to errorN 7o reason e4ists in the case at bar for a&&lying the general rule insisted u&on by counsel for the res&ondent# 2he circumstances which surround this case are different from those in the 'nited )tates" inasmuch as if the relator is not a &ro&er &arty to these &roceedings no other &erson could be" as we have seen that it is not the duty of the law officer of the overnment to a&&ear and re&resent the &eo&le in cases of this character# 2he reasons given by the Court in recogniCing a &rivate citiCenNs legal &ersonality in the aforementioned case a&&ly sHuarely to the &resent &etition# Clearly" the right sought to be enforced by &etitioners herein is a &ublic right recogniCed by no less than the fundamental law of the land# If &etitioners were not allowed to institute this &roceeding" it would indeed be difficult to conceive of any other &erson to initiate the same" considering that the )olicitor eneral" the government officer generally em&owered to re&resent the &eo&le" has entered his a&&earance for res&ondents in this case# Res&ondents further contend that &ublication in the Official aCette is not a sine Hua non reHuirement for the effectivity of laws where the laws themselves &rovide for their own effectivity dates# It is thus submitted that since the &residential issuances in Huestion contain s&ecial &rovisions as to the date they are to ta<e effect" &ublication in the Official aCette is not indis&ensable for their effectivity# 2he &oint stressed is anchored on Article 6 of the Civil Code3 Art# 6# *aws shall ta<e effect after fifteen days following the com&letion of their &ublication in the Official aCette" unless it is otherwise &rovided" ### 2he inter&retation given by res&ondent is in accord with this CourtNs construction of said article# In a long line of decisions" ( this Court has ruled that &ublication in the Official aCette is necessary in those cases where the legislation itself does not &rovide for its effectivity date8for then the date of &ublication is material for determining its date of effectivity" which is the fifteenth day following its &ublication8but not when the law itself &rovides for the date when it goes into effect# Res&ondentsN argument" however" is logically correct only insofar as it eHuates the effectivity of laws with the fact of &ublication# Considered in the light of other statutes a&&licable to the issue at hand" the conclusion is easily reached that said Article 6 does not &reclude the reHuirement of &ublication in the Official aCette" even if the law itself &rovides for the date of its effectivity# 2hus" )ection , of Commonwealth Act 61. &rovides as follows3 )ection ,# 2here shall be &ublished in the Official aCette >,? all im&ortant legisiative acts and resolutions of a &ublic nature of the" Congress of the Phili&&ines; >6? all e4ecutive and administrative orders and &roclamations" e4ce&t such as have no general a&&licability; >1? decisions or abstracts of decisions of the )u&reme Court and the Court of A&&eals as may be deemed by said courts of sufficient im&ortance to be so &ublished; >/? such documents or classes of documents as may be reHuired so to be &ublished by law; and >5? such documents or classes of documents as the President of the Phili&&ines shall determine from time to time to have general a&&licability and legal effect" or which he may authoriCe so to be &ublished# ### 2he clear object of the above8Huoted &rovision is to give the general &ublic adeHuate notice of the various laws which are to regulate their actions and conduct as citiCens# :ithout such notice and &ublication" there would be no basis for the a&&lication of the ma4im Mignorantia legis non e4cusat#M It would be the height of injustice to &unish or otherwise burden a citiCen for the transgression of a law of which he had no notice whatsoever" not even a constructive one# Perha&s at no time since the establishment of the Phili&&ine Re&ublic has the &ublication of laws ta<en so vital significance that at this time when the &eo&le have bestowed u&on the President a &ower heretofore enjoyed solely by the legislature# :hile the &eo&le are <e&t abreast by the mass media of the debates and deliberations in the Batasan PambansaLand for the diligent ones" ready access to the legislative recordsLno such &ublicity accom&anies the law8ma<ing &rocess of the President# 2hus" without &ublication" the &eo&le have no means of <nowing what

&residential decrees have actually been &romulgated" much less a definite way of informing themselves of the s&ecific contents and te4ts of such decrees# As the )u&reme Court of )&ain ruled3 MBajo la denominacion generica de leyes" se com&renden tambien los reglamentos" Reales decretos" Instrucciones" Circulares y Reales ordines dictadas de conformidad con las mismas &or el obierno en uso de su &otestad# < 2he very first clause of )ection I of Commonwealth Act 61. reads3 M2here shall be &ublished in the Official aCette ### #M 2he word MshallM used therein im&oses u&on res&ondent officials an im&erative duty# 2hat duty must be enforced if the Constitutional right of the &eo&le to be informed on matters of &ublic concern is to be given substance and reality# 2he law itself ma<es a list of what should be &ublished in the Official aCette# )uch listing" to our mind" leaves res&ondents with no discretion whatsoever as to what must be included or e4cluded from such &ublication# 2he &ublication of all &residential issuances Mof a &ublic natureM or Mof general a&&licabilityM is mandated by law# Obviously" &residential decrees that &rovide for fines" forfeitures or &enalties for their violation or otherwise im&ose a burden or# the &eo&le" such as ta4 and revenue measures" fall within this category# Other &residential issuances which a&&ly only to &articular &ersons or class of &ersons such as administrative and e4ecutive orders need not be &ublished on the assum&tion that they have been circulariCed to all concerned# 6 It is needless to add that the &ublication of &residential issuances Mof a &ublic natureM or Mof general a&&licabilityM is a reHuirement of due &rocess# It is a rule of law that before a &erson may be bound by law" he must first be officially and s&ecifically informed of its contents# As 9ustice Claudio 2eehan<ee said in 1era"ta vs$ COME(EC )3 In a time of &roliferating decrees" orders and letters of instructions which all form &art of the law of the land" the reHuirement of due &rocess and the Rule of *aw demand that the Official aCette as the official government re&ository &romulgate and &ublish the te4ts of all such decrees" orders and instructions so that the &eo&le may <now where to obtain their official and s&ecific contents# 2he Court therefore declares that &residential issuances of general a&&lication" which have not been &ublished" shall have no force and effect# )ome members of the Court" Huite a&&rehensive about the &ossible unsettling effect this decision might have on acts done in reliance of the validity of those &residential decrees which were &ublished only during the &endency of this &etition" have &ut the Huestion as to whether the CourtNs declaration of invalidity a&&ly to P#(#s which had been enforced or im&lemented &rior to their &ublication# 2he answer is all too familiar# In similar situations in the &ast this Court had ta<en the &ragmatic and realistic course set forth in Chicot Co nty *raina#e *istrict vs$ Ba@ter Ban8 8 to wit3 2he courts below have &roceeded on the theory that the Act of Congress" having been found to be unconstitutional" was not a law; that it was ino&erative" conferring no rights and im&osing no duties" and hence affording no basis for the challenged decree# 7orton v# )helby County" ,,. '#)# /65" //6; Chicago" ,# R *# Ry# Co# v# Gac<ett" 66. '#)# 55-" 566# It is Huite clear" however" that such broad statements as to the effect of a determination of unconstitutionality must be ta<en with Hualifications# 2he actual e4istence of a statute" &rior to such a determination" is an o&erative fact and may have conseHuences which cannot justly be ignored# 2he &ast cannot always be erased by a new judicial declaration# 2he effect of the subseHuent ruling as to invalidity may have to be considered in various as&ects8with res&ect to &articular conduct" &rivate and official# Kuestions of rights claimed to have become vested" of status" of &rior determinations deemed to have finality and acted u&on accordingly" of &ublic &olicy in the light of the nature both of the statute and of its &revious a&&lication" demand e4amination# 2hese Huestions are among the most difficult of those which have engaged the attention of courts" state and federal and it is manifest from numerous decisions that an all8inclusive statement of a &rinci&le of absolute retroactive invalidity cannot be justified# Consistently with the above &rinci&le" this Court in R tter vs$ Esteban 9 sustained the right of a &arty under the !oratorium *aw" albeit said right had accrued in his favor before said law was declared unconstitutional by this Court# )imilarly" the im&lementationAenforcement of &residential decrees &rior to their &ublication in the Official aCette is Man o&erative fact which may have conseHuences which cannot be justly ignored# 2he &ast cannot always be erased by a new judicial declaration ### that an all8inclusive statement of a &rinci&le of absolute retroactive invalidity cannot be justified#M 0rom the re&ort submitted to the Court by the Cler< of Court" it a&&ears that of the &residential decrees sought by &etitioners to be &ublished in the Official aCette" only Presidential (ecrees 7os# ,@,- to ,@1@" inclusive" ,65." and ,-15 to ,-1-" inclusive" have not been so &ublished# 1' 7either the subject matters nor the te4ts of these P(s can be ascertained since no co&ies thereof are available# But whatever their subject matter may be" it is undis&uted that none of these un&ublished P(s has ever been im&lemented or enforced by the government# In1esi#an vs$ ,n#e"es" 11 the Court" through 9ustice Ramon AHuino" ruled that M&ublication is necessary to a&&rise the &ublic of the contents of >&enal? regulations and ma<e the said &enalties binding on the &ersons affected thereby# M 2he cogency of this holding is a&&arently recogniCed by res&ondent officials considering the manifestation in their comment that Mthe government" as a matter of &olicy" refrains from &rosecuting violations of criminal laws until the same shall have been &ublished in the Official aCette or in some other &ublication" even though some criminal laws &rovide that they shall ta<e effect immediately# :G+R+0OR+" the Court hereby orders res&ondents to &ublish in the Official aCette all un&ublished &residential issuances which are of general a&&lication" and unless so &ublished" they shall have no binding force and effect# )O OR(+R+(# G.R. No. 1'1&)9 August 6, 199& !HILI!!INE ASSO IATION O" SERAI E EI!ORTERS, IN ., &etitioner" vs# HON. RUBEN D. TORRES, 2s S/40/t20; o7 t6/ D/520t8/-t o7 L29o0 D E85.o;8/-t, 2-1 BOSE N. SARMIENTO, 2s A18,-,st02to0 o7 t6/ !HILI!!INE OAERSEAS EM!LOYMENT ADMINISTRATION,res&ondents# *e G Dman, Meneses I ,ssociates for petitioner$ GRIGO%A#UINO, J.& 2his &etition for &rohibition with tem&orary restraining order was filed by the Phili&&ine Association of )ervice +4&orters $PA)+I" for short%" to &rohibit and enjoin the )ecretary of the (e&artment of *abor and +m&loyment $(O*+% and the Administrator of the Phili&&ine Overseas +m&loyment Administration $or PO+A% from enforcing and im&lementing (O*+ (e&artment Order 7o# ,6" )eries of ,--, and PO+A !emorandum Circulars 7os# 1@ and 15" )eries of ,--," tem&orarily sus&ending the recruitment by &rivate em&loyment agencies of 0ili&ino domestic hel&ers for Gong Jong and vesting in the (O*+" through the facilities of the PO+A" the tas< of &rocessing and de&loying such wor<ers#

PA)+I is the largest national organiCation of &rivate em&loyment and recruitment agencies duly licensed and authoriCed by the PO+A" to engaged in the business of obtaining overseas em&loyment for 0ili&ino landbased wor<ers" including domestic hel&ers# On 9une ," ,--," as a result of &ublished stories regarding the abuses suffered by 0ili&ino housemaids em&loyed in Gong Jong" (O*+ )ecretary Ruben (# 2orres issued (e&artment Order 7o# ,6" )eries of ,--," tem&orarily sus&ending the recruitment by &rivate em&loyment agencies of M0ili&ino domestic hel&ers going to Gong JongM $&# 1@" Ro""o%# 2he (O*+ itself" through the PO+A too< over the business of de&loying such Gong Jong8bound wor<ers# In view of the need to establish mechanisms that will enhance the protection for Fi"ipino domestic he"pers #oin# to Hon# Oon#, the recruitment of the same by &rivate em&loyment agencies is hereby temporari"y s spended effective , 9uly ,--,# As such" the (O*+ through the facilities of the Phili&&ine Overseas +m&loyment Administration shall ta<e over the &rocessing and de&loyment of household wor<ers bound for Gong Jong" subject to guidelines to be issued for said &ur&ose# In su&&ort of this &olicy" all (O*+ Regional (irectors and the Bureau of *ocal +m&loymentNs regional offices are li<ewise directed to coordinate with the PO+A in maintaining a man&ower &ool of &ros&ective domestic hel&ers to Gong Jong on a regional basis# 0or com&liance# $+m&hasis ours; &# 1@" Ro""o#% Pursuant to the above (O*+ circular" the PO+A issued !emorandum Circular 7o# 1@" )eries of ,--," dated 9uly ,@" ,--," &roviding 'I(+*I7+) on the overnment &rocessing and de&loyment of 0ili&ino domestic hel&ers to Gong Jong and the accreditation of Gong Jong recruitment agencies intending to hire 0ili&ino domestic hel&ers# )ubject3 uidelines on the 2em&orary overnment Processing and (e&loyment of (omestic Gel&ers to Gong Jong# Pursuant to (e&artment Order 7o# ,6" series of ,--, and in order to o&erationaliCe the tem&orary government &rocessing and de&loyment of domestic hel&ers $(Gs% to Gong Jong resulting from the tem&orary sus&ension of recruitment by &rivate em&loyment agencies for said s<ill and host mar<et" the following guidelines and mechanisms shall govern the im&lementation of said &olicy# I# Creation of a joint PO+A8O::A Gousehold :or<ers Placement 'nit $G:P'% An ad hoc" one sto& Gousehold :or<ers Placement 'nit >or G:P'? under the su&ervision of the PO+A shall ta<e charge of the various o&erations involved in the Gong Jong8(G industry segment3 2he G:P' shall have the following functions in coordination with a&&ro&riate units and other entities concerned3 ,# 7egotiations with and Accreditation of Gong Jong Recruitment Agencies 6# !an&ower Pooling 1# :or<er 2raining and Briefing /# Processing and (e&loyment 5# :elfare Programs II# (ocumentary ReHuirements and Other Conditions for Accreditation of Gong Jong Recruitment Agencies or Princi&als Recruitment agencies in Gong Jong intending to hire 0ili&ino (Gs for their em&loyers may negotiate with the G:P' in !anila directly or through the Phili&&ine *abor AttacheNs Office in Gong Jong# 444 444 444 P# Interim Arrangement All contracts stam&ed in Gong Jong as of 9une 1@ shall continue to be &rocessed by PO+A until 1, 9uly ,--, under the name of the Phili&&ine agencies concerned# 2hereafter" all contracts shall be &rocessed with the G:P'# Recruitment agencies in Gong Jong shall submit to the Phili&&ine Consulate eneral in Gong <ong a list of their acce&ted a&&licants in their &ool within the last wee< of 9uly# 2he last day of acce&tance shall be 9uly 1, which shall then be the basis of G:P' in acce&ting contracts for &rocessing# After the e4haustion of their res&ective &ools the only source of a&&licants will be the PO+A man&ower &ool# 0or strict com&liance of all concerned# $&&# 1,815" Ro""o#% On August ," ,--," the PO+A Administrator also issued !emorandum Circular 7o# 15" )eries of ,--," on the &rocessing of em&loyment contracts of domestic wor<ers for Gong Jong# 2O3 All Phili&&ine and Gong Jong Agencies engaged in the recruitment of (omestic hel&ers for Gong Jong 0urther to !emorandum Circular 7o# 1@" series of ,--, &ertaining to the government &rocessing and de&loyment of domestic hel&ers $(Gs% to Gong Jong" processin# of emp"oyment contracts which have been attested by the Gong Jong Commissioner of *abor u& to 1@ 9une ,--, shall be &rocessed by the PO+A +m&loyment Contracts Processing Branch u& to ,5 August ,--, only# +ffective ,6 August ,--," all Gong Jong recruitment agentAs hiring (Gs from the Phili&&ines shall recruit under the new scheme which reHuires &rior accreditation which the PO+A# Recruitment agencies in Gong Jong may a&&ly for accreditation at the Office of the *abor Attache" Phili&&ine Consulate eneral where a PO+A team is &osted until 1, August ,--,# 2hereafter" those who failed to have themselves accredited in Gong Jong may &roceed to the PO+A8O::A Gousehold :or<ers Placement 'nit in !anila for accreditation before their recruitment and &rocessing of (Gs shall be allowed# Recruitment agencies in Gong Jong who have some acce&ted a&&licants in their &ool after the cut8off &eriod shall submit this list of wor<ers u&on accreditation# Only those (Gs in said list will be allowed &rocessing outside of the G:P' man&ower &ool# 0or strict com&liance of all concerned# $+m&hasis su&&lied" &# 16" Ro""o#% On )e&tember 6" ,--," the &etitioner" PA)+I" filed this &etition for &rohibition to annul the aforementioned (O*+ and PO+A circulars and to &rohibit their im&lementation for the following reasons3 ,# that the res&ondents acted with grave abuse of discretion andAor in e4cess of their rule8ma<ing authority in issuing said circulars; 6# that the assailed (O*+ and PO+A circulars are contrary to the Constitution" are unreasonable" unfair and o&&ressive; and 1# that the reHuirements of &ublication and filing with the Office of the 7ational Administrative Register were not com&lied with# 2here is no merit in the first and second grounds of the &etition# Article 16 of the *abor Code grants the *abor )ecretary the &ower to restrict and regulate recruitment and &lacement activities# Art# 16# Re# "atory 1o!er# L 2he )ecretary of *abor shall have the &ower to restrict and re# "ate the recruitment and &lacement activities of all agencies within the coverage of this title >Regulation of Recruitment and Placement Activities? and is hereby a thoriDed to iss e orders and prom "#ate r "es and re# "ations to carry o t the obFectives and imp"ement the provisions of this tit"e # $+m&hasis ours#%

On the other hand" the sco&e of the regulatory authority of the PO+A" which was created by +4ecutive Order 7o# 5-5 on !ay ," ,-.6 to ta<e over the functions of the Overseas +m&loyment (evelo&ment Board" the 7ational )eamen Board" and the overseas em&loyment functions of the Bureau of +m&loyment )ervices" is broad and far8ranging for3 ,# Among the functions inherited by the PO+A from the defunct Bureau of +m&loyment )ervices was the &ower and duty3 M6# 2o establish and maintain a registration andAor licensing system to re# "ate private sector participation in the recr itment and p"acement of !or8ers, "oca""y and overseas" # # #M $Art# ,5" *abor Code" +m&hasis su&&lied%# $&# ,1" Ro""o#% 6# It assumed from the defunct Overseas +m&loyment (evelo&ment Board the &ower and duty3 1# 2o recruit and &lace wor<ers for overseas em&loyment of 0ili&ino contract wor<ers on a government to government arrangement and in such other sectors as &olicy may dictate # # # $Art# ,5" *abor Code#% $&# ,1" Ro""o#% 1# 0rom the 7ational )eamen Board" the PO+A too< over3 6# 2o regulate and su&ervise the activities of agents or re&resentatives of shi&&ing com&anies in the hiring of seamen for overseas em&loyment; and secure the best &ossible terms of em&loyment for contract seamen wor<ers and secure com&liance therewith# $Art# 6@" *abor Code#% 2he vesture of Huasi8legislative and Huasi8judicial &owers in administrative bodies is not unconstitutional" unreasonable and o&&ressive# It has been necessitated by Mthe growing com&le4ity of the modern societyM $)olid Gomes" Inc# vs# Payawal" ,55 )CRA 56" 5-%# !ore and more administrative bodies are necessary to hel& in the regulation of societyNs ramified activities# M)&ecialiCed in the &articular field assigned to them" they can deal with the &roblems thereof with more e4&ertise and dis&atch than can be e4&ected from the legislature or the courts of justiceM $Ibid#%# It is noteworthy that the assailed circulars do not &rohibit the &etitioner from engaging in the recruitment and de&loyment of 0ili&ino landbased wor<ers for overseas em&loyment# A careful reading of the challenged administrative issuances discloses that the same fall within the Madministrative and &olicing &owers e4&ressly or by necessary im&lication conferredM u&on the res&ondents $Peo&le vs# !aceren" 5- )CRA /5@%# 2he &ower to Mrestrict and regulate conferred by Article 16 of the *abor Code involves a grant of &olice &ower $City of 7aga vs# Court of A&&eals" 6/ )CRA .-.%# 2o MrestrictM means Mto confine" limit or sto&M $&# 66" Ro""o% and whereas the &ower to MregulateM means Mthe &ower to &rotect" foster" &romote" &reserve" and control with due regard for the interests" first and foremost" of the &ublic" then of the utility and of its &atronsM $Phili&&ine Communications )atellite Cor&oration vs# AlcuaC" ,.@ )CRA 6,.%# 2he )olicitor eneral" in his Comment" a&tly observed3 # # # )aid Administrative Order >i$e$" (O*+ Administrative Order 7o# ,6? merely restricted the sco&e or area of &etitionerNs business o&erations by e4cluding therefrom recruitment and de&loyment of domestic hel&ers for Gong Jong till after the establishment of the MmechanismsM that will enhance the &rotection of 0ili&ino domestic hel&ers going to Gong Jong# In fine" other than the recr itment and dep"oyment of Fi"ipino domestic he"pers for Hon#8on#, petitioner may sti"" dep"oy other c"ass of Fi"ipino !or8ers either for Gong<ong and other countries and all other classes of 0ili&ino wor<ers for other countries# )aid administrative issuances" intended to curtail" if not to end" ram&ant violations of the rule against e4cessive collections of &lacement and documentation fees" travel fees and other charges committed by &rivate em&loyment agencies recruiting and de&loying domestic hel&ers to Gong<ong# P&hey are reasonab"e, va"id and F stified nder the #enera" !e"fare c"a se of the Constit tion, since the recr itment and dep"oyment b siness, as it is cond cted today, is affected !ith p b"ic interest$ 444 444 444 2he alleged ta<eover >of the business of recruiting and &lacing 0ili&ino domestic hel&ers in Gong<ong? is merely a remedial measure" and e4&ires after its &ur&ose shall have been attained# 2his is evident from the tenor of Administrative Order 7o# ,6 that recruitment of 0ili&ino domestic hel&ers going to Gong<ong by &rivate em&loyment agencies are hereby M temporari"y s spended effective 9uly ," ,--,#M 2he alleged ta<eover is limited in sco&e" being confined to recruitment of domestic hel&ers going to Gong<ong only# 444 444 444 # # # the justification for the ta<eover of the &rocessing and de&loying of domestic hel&ers for Gong<ong resulting from the restriction of the sco&e of &etitionerNs business is confined solely to the unscru&ulous &ractice of &rivate em&loyment agencies victimiCing a&&licants for em&loyment as domestic hel&ers for Gong<ong and not the whole recruitment business in the Phili&&ines# $&&# 66865" Ro""o#% 2he Huestioned circulars are therefore a valid e4ercise of the &olice &ower as delegated to the e4ecutive branch of overnment# 7evertheless" they are legally invalid" defective and unenforceable for lac< of &ower &ublication and filing in the Office of the 7ational Administrative Register as reHuired in Article 6 of the Civil Code" Article 5 of the *abor Code and )ections 1$,% and /" Cha&ter 6" Boo< DII of the Administrative Code of ,-.5 which &rovide3 Art# 6# *aws shall ta<e effect after fifteen $,5% days following the com&letion of their &ublication in the Official aCatte" unless it is otherwise &rovided# # # # $Civil Code#% Art# 5# R "es and Re# "ations# L 2he (e&artment of *abor and other government agencies charged with the administration and enforcement of this Code or any of its &arts shall &romulgate the necessary im&lementing rules and regulations# )uch rules and regulations shall become effective fifteen $,5% days after anno ncement of their adoption in news&a&ers of general circulation# $+m&hasis su&&lied" *abor Code" as amended#% )ec# 1# Fi"in## L $,% Every a#ency sha"" fi"e !ith the 'niversity of the 1hi"ippines (a! Center, three =<> certified copies of every r "e adopted by it# Rules in force on the date of effectivity of this Code which are not filed within three $1% months shall not thereafter be the basis of any sanction against any &arty or &ersons# $+m&hasis su&&lied" Cha&ter 6" Boo< DII of the Administrative Code of ,-.5#% )ec# /# Effectivity# L In addition to other r "e/ma8in# reC irements provided by "a! not inconsistent !ith this Boo8, each r "e sha"" become effective fifteen =4;> days from the date of fi"in# as above provided unless a different date is fi4ed by law" or s&ecified in the rule in cases of imminent danger to &ublic health" safety and welfare" the e4istence of which must be e4&ressed in a statement accom&anying the rule# 2he agency shall ta<e a&&ro&riate measures to ma<e emergency rules <nown to &ersons who may be affected by them# $+m&hasis su&&lied" Cha&ter 6" Boo< DII of the Administrative Code of ,-.5%# Once" more we advert to our ruling in &aQada vs$ & vera" ,/6 )CRA //6 that3 # # # Administrative rules and regulations must also be &ublished if their &ur&ose is to enforce or im&lement e4isting law &ursuant also to a valid delegation# $&# //5#%

Inter&retative regulations and those merely internal in nature" that is" regulating only the &ersonnel of the administrative agency and not the &ublic" need not be &ublished# 7either is &ublication reHuired of the so8called letters of instructions issued by administrative su&eriors concerning the rules or guidelines to be followed by their subordinates in the &erformance of their duties# $&# //.#% :e agree that &ublication must be in full or it is no &ublication at all since its &ur&ose is to inform the &ublic of the content of the laws# $&# //.#% 0or lac< of &ro&er &ublication" the administrative circulars in Huestion may not be enforced and im&lemented# :G+R+0OR+" the writ of &rohibition is RA72+(# 2he im&lementation of (O*+ (e&artment Order 7o# ,6" )eries of ,--," and PO+A !emorandum Circulars 7os# 1@ and 15" )eries of ,--," by the &ublic res&ondents is hereby )')P+7(+( &ending com&liance with the statutory reHuirements of &ublication and filing under the aforementioned laws of the land# )O OR(+R+(# AMELIA B. DELOS SANTOS, !/t,t,o-/0, G.R. No. 1<(18< Present3 PA7 A7IBA7" A$, Chairman )A7(ODA*8 '2I+RR+I" CORO7A" CARPIO !ORA*+)" and ARCIA" AA$ Promulgated3 BEBSEN MARITIME, IN ., R/s5o-1/-t. 7ovember 66" 6@@5

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48888888888888888888888888888888888888888888888888888888888888888888888888888888884 DE ISION

GAR IA, J.+

Petitioner Amelia 9# (elos )antos see<s in this &etition for review on certiorari under Rule /5 of the Rules of Court to nullify and set aside the decision and resolution dated 6, !arch 6@@6>,? and @1 9uly 6@@6>6?" res&ectively" of the Court of A&&eals in C,/G$R$ +1 )o$ 6:::9$ 0rom the &etition and its anne4es" the res&ondentBs comment thereto" and the &artiesB res&ective memoranda" the Court gathers the following factual antecedents3 On ,@ August ,--5" or thereabout" herein res&ondent 9ebsen !aritime" Inc#" for and in behalf of AboitiC )hi&&ing Co# $AboitiC )hi&&ing" for short%" hired &etitionerBs husband" il R# (elos )antos $hereinafter" (elos )antos% as third engineer of !D Wi"d Iris# 2he corres&onding contract of em&loyment" as a&&roved by the Phili&&ine Overseas +m&loyment Administration $PO+A%" was for a fi4ed &eriod of one $,% month and for a s&ecific underta<ing of conducting said vessel to and from 9a&an# It Huoted (elos )antosB basic monthly salary and other monetary benefits in ') currency# 'nder PO+A rules" all em&loyers and &rinci&als are reHuired to ado&t the PO+A 8 standard em&loyment contract $PO+A8)+C% without &rejudice to their ado&tion of terms and conditions over and above the minimum &rescribed by that agency# >1? On the vesselBs return to the Phili&&ines a month after" (elos )antos remained on board" res&ondent having o&ted to retain his services while the vessel underwent re&airs in Cebu# After its re&air" !D Wi"d Iris, this time renamedAregistered as !D + per RoRo 477" sailed within domestic waters" having been meanwhile issued by the !aritime Industry Authority a Certificate of Dessel Registry and a &ermit to engage in coastwise trade on the !anila8Cebu8!anila8Iamboanga8 eneral )antos8!anila route# >/? (uring this &eriod of em&loyment" (elos )antos was &aid by and received from res&ondent his salary in Phili&&ine &eso thru a &ayroll8de&osit arrangement with the Phili&&ine Commercial R Industrial Ban<#>5? )ome five months into the vesselBs inter8island voyages" (elos )antos e4&erienced e&isodes of chest &ain" numbness and body wea<ness which eventually left him tem&orarily &aralyCed# On ,5 0ebruary ,--6" he was brought to the Mani"a *octor%s Hospita" Z a duly accredited hos&ital of res&ondent 8 where he underwent a s&inal column o&eration# Res&ondent shouldered all o&eration8related e4&enses" inclusive of his &ost o&eration confinement# As narrated in the assailed decision of the Court of A&&eals" the following events ne4t trans&ired3 ,# After his discharge from the !anila (octorBs" (elos )antos was made to undergo &hysical thera&y sessions at the same hos&ital" which com&elled the Batangas8based (elos )antoses to rent a room near the hos&ital at P1"@@@#@@ a month;

6# (elos )antos underwent a second s&inal o&eration at the non8accredited (o rdes Hospita" at the cost of P,,-" 516#@@; and 1# After (o rdes" (elos )antos was confined in a clinic in )an 9uan" Batangas where P6@"@@@#@@ in hos&italiCation e4&enses was incurred# It would a&&ear that the s&ouses (elos )antos &aid all the e4&enses attendant the second s&inal o&eration as well as for the subseHuent medical treatment# PetitionerBs demand for reimbursement of these e4&enses was rejected by res&ondent for the reason that all the sic<ness benefits of (elos )antos under the )ocial )ecurity )ystem $)))% *aw had already been &aid# 2hus" on 65 9anuary ,--5" &etitioner filed a com&laint >6? with the Arbitration Branch of the 7ational *abor Relations Commission $7*RC% against res&ondent and AboitiC )hi&&ing for recovery of disability benefits" and sic< wage allowance and reimbursement of hos&ital and medical e4&enses# )he also sought &ayment of moral damages and attorneyBs fees# After due &roceedings" the labor arbiter rendered" on @. 9anuary ,---" >5? judgment finding for &etitioner and ordering res&ondent and AboitiC )hi&&ing to jointly and severally &ay the former the following3 $,% $6% $1% $/% $5% $6% $5% P,,-"516#@," re&resenting reimbursement of medical" surgical and hos&ital e4&enses; P-"@@@" re&resenting reasonable cost of board and lodging; P5@@"@@@" re&resenting moral damages; ')T6@"@@@" re&resenting disability benefits corres&onding to 2otal Permanent (isability; ')T6"/56" re&resenting )ic< :age allowance; P66".51#6@" re&resenting attorneyBs fees; and" ')T6"6/5#6@" also re&resenting attorneyBs fees#

On a&&eal" the 7*RC" in a decision>.? dated 6- August 6@@@" modified that of the labor arbiter" as follows3 :G+R+0OR+" the decision a&&ealed from is !O(I0I+( to the e4tent that res&ondents 9ebsen !aritime" Inc#" and AboitiC )hi&&ing Com&any are hereby ordered jointly and severally liable to &ay il delos )antos through Amelia delos )antos the Phili&&ine &eso eHuivalent at the time of actual &ayment of ') (O**AR) )IP2O 2GO')A7( $')T6@"@@@#@@% and ') (O**AR) 2:O 2GO')A7( 0O'R G'7(R( $sic% 0I02O 2:O $')T6"/56#@@% re&resenting total disability com&ensation benefits and sic<ness wages" and the amount of O7+ G'7(R+( 2GR++ 2GO')A7( + G2 $ sic% G'7(R+( 0O'R A7( .5A,@@ PGI*IPPI7+ P+)O) $P,@1".@/#.5% re&resenting reimbursement of surgical" medical and hos&ital e4&enses" &lus the eHuivalent of five &ercent $5U% of the aggregate award as and for attorneyBs fees# All other dis&ositions are )+2 A)I(+# )O OR(+R+(# *i<e the labor arbiter" the 7*RC &redicated its ruling mainly on the theory that the PO+A8a&&roved contract of em&loyment continued to govern (elos )antosB em&loyment when he contracted his illness# In s&ecific terms" the 7*RC states that the same contract was still effective when (elos )antos fell ill" thus entitling him to the &ayment of disability and li<e benefits &rovided in and reHuired under the PO+A8)+C# 0ollowing the denial of its motion for reconsideration &er 7*RC Resolution >-? of 1, October 6@@@" res&ondent went to the Court of A&&eals on a &etition for certiorari" thereat doc<eted as C,/G$R$ )o$ 6:::9" im&uting on the 7*RC grave abuse of discretion# In its &etition" res&ondent scored the 7*RC for" among other things" e4tending the a&&lication of the e4&ired PO+A8a&&roved em&loyment contract beyond the one8month limit sti&ulated therein# On 6, !arch 6@@6" the Court of A&&eals rendered judgment >,@?" modifying the 7*RCBs decision by deleting altogether the award of disability com&ensation benefits" sic<ness wages and attorneyBs fees" thus3 :G+R+0OR+" &remises considered" the instant &etition for certiorari is hereby (+7I+(" finding no grave abuse of discretion on the &art of the 7*RC# 2he (ecision of the 7ational *abor Relations Commission $7*RC% dated August 6-" 6@@@ and

the Resolution of October 1," 6@@@ denying &etitionerBs !otion for Reconsideration are hereby A00IR!+( with !O(I0ICA2IO7" that the disability com&ensation benefits of ')T6@"@@@#@@ and the sic<ness wages of ')T6"/56#@@ are hereby deleted" without &rejudice to claiming the same from the &ro&er government agency# 2he award of attorneyBs fees is li<ewise deleted#

In time" &etitioner moved for reconsideration" but the a&&ellate court denied the motion &er its resolution of @1 9uly 6@@6# >,,? Gence" &etitionerBs &resent recourse on the grounds that the Court of A&&eals seriously erred3 >,6? I I7 (+*+2I7 2G+ A:AR( O0 ')T6@"@@@#@@ R+PR+)+72I7 2G+ !API!'! (I)ABI*I2O B+7+0I2) APP*OI7 PRODI)IO7) O0 2G+ PO+A )2A7(AR( +!P*OO!+72 CO72RAC2# 2G+

$A% PRIOR 2O GI) ACCI(+72" 2G+ +!P*OO!+72 CO72RAC2 O0 )+A0AR+R (+*O) )A72O) GA) 7O2 O+2 B++7 2+R!I7A2+(" I7 R+*A2IO7 2O )+C2IO7 6" PARA RAPG) $A% A7( $B% A7( )+C2IO7 ,. $A%" PO+A )2A7(AR( +!P*OO!+72 CO72RAC2# $B% 2G+ CO72RAC2 O0 +!P*OO!+72 A2 2G+ 2I!+ O0 )+A0AR+R (+*O) )A72O)B ACCI(+72 GA) 7O2 O+2 +PPIR+( B+CA')+ I2 :A) !'2'A**O +P2+7(+( BO 2G+ PAR2I+) :G+7 (+*O) )A72O) :A) 7O2 )I 7+( O00 A7( R+PA2RIA2+( PRIOR 2O )AI( ACCI(+72# II I7 CO7C*'(I7 2GA2 7O2:I2G)2A7(I7 2G+ CO72I7'A2IO7 O0 (+*O) )A72O)B +!P*OO!+72 O7 BOAR( 2G+ )A!+ D+))+* A7( '7(+R 2G+ )A!+ CO72RAC2" I2 I) 2G+ PRODI)IO7) O0 2G+ *ABOR CO(+" A) A!+7(+(" 2GA2 )GA** OD+R7 GI) +!P*OO!+72 R+*A2IO7)# III I7 (+*+2I7 2G+ A:AR( O0 )ICJ7+)) A**O:A7C+ I7 2G+ A!O'72 O0 ')T6"/56#@@# $A% 2G+R+ I) 7O BA)I) I7 2G+ (+*+2IO7 O0 2G+ A:AR( O0 )ICJ7+)) A*O:A7C+ $ sic% )I7C+ PAO!+72 O0 )OCIA* )+C'RI2O )O)2+! )ICJ *+AD+ B+7+0I2 I) I7(+P+7(+72" )+PARA2+ A7( (I)2I7C2 0RO! 2G+ )ICJ7+)) A**O:A7C+ PRODI(+( 0OR '7(+R 2G+ PO+A )2A7(AR( +!P*OO!+72 CO72RAC2# 2he &etition is devoid of merit# As a rule" sti&ulations in an em&loyment contract not contrary to statutes" &ublic &olicy" &ublic order or morals have the force of law between the contracting &arties# >,1? An em&loyment with a &eriod is generally valid" unless the term was &ur&osely intended to circumvent the em&loyeeBs right to his security of tenure# >,/? Absent a covering s&ecific agreement and unless otherwise &rovided by law" the terms and conditions of em&loyment of all em&loyees in the &rivate sector shall be governed by the *abor Code >,5? and such rules and regulations as may be issued by the (e&artment of *abor and +m&loyment and such agencies charged with the administration and enforcement of the Code# 2he differing conclusions arrived at by the 7*RC" finding for the herein &etitioner" and the Court of A&&eals" siding in &art with the herein res&ondent" on (elos )antosB entitlement to disability benefits and sic<ness allowance are veritably attributable to the Huestion of a&&licability" under the &remises" of the PO+A8)+C# 2he &rinci&al issue to be resolved here" therefore" boils down to3 which" between the PO+A8)+C and the *abor Code" governs the em&loyer8em&loyee relationshi& between (elos )antos and res&ondent after !D Wi"d Iris, as later renamed + per RoRo 477, returned to the country from its one8month conduction voyage to and from 9a&an# 2he Court of A&&eals ruled against the governing a&&licability of the PO+A8)+C and" on that basis" deleted the 7*RCBs award of ')T6@"@@@#@@ and ')T6"/56#@@ by way of disability benefits and sic<ness allowance" res&ectively# An e4cer&t of the a&&ellate courtBs e4&lanation3 444 Both &arties do not dis&ute the e4istence of the PO+A a&&roved contract signed by the &arties# 2he said contract is the law between the contracting &arties and absent any showing that its &rovisions are wholly or in &art contrary to law" morals" good &olicy" it shall be enforced to the letter by the contracting &arties =Metropo"itan Ban8 and &r st Co$ vs$ Won#, G$R$ )o$ 4:73;9, A ne :6, :774># 2he contract in Huestion is for a duration of one $,% month# Being a valid contract between (elos )antos and the >res&ondent?" the &rovisions thereof" s&ecifically with res&ect to the one $,% month &eriod of em&loyment has the force of law between them =*$M$ Cons nFi vs$ )(RC, G$R$ )o$ 446;5:, *ecember 43, :777> # Perforce" the said contract has already e4&ired and is no longer in effect# 2he fact that (elos )antos continued to wor< in the same vessel which sailed within Phili&&ine waters does not mean that the PO+A standard em&loyment contract continues to be enforced between the &arties# 2he em&loyment of (elos )antos is within the

Phili&&ines" and not on a foreign shore# As correctly &ointed out by >res&ondent?" the &rovisions of the *abor Code shall govern their em&loyer8em&loyee relationshi&# 444# $:ords in brac<et added#%

2he Court agrees with the conclusion of the Court of A&&eals for two $6% main reasons# 0irst" we the start with something elementary" i$e$" PO+A was created &rimarily to underta<e a systematic &rogram for overseas em&loyment of 0ili&ino wor<ers and to &rotect their rights to fair and eHuitable em&loyment &ractices# >,6? And to ensure that overseas wor<ers" including seafarers on board ocean8going vessels" are am&ly &rotected" the PO+A is authoriCed to formulate em&loyment standards in accordance with welfare objectives of the overseas em&loyment &rogram#>,5? iven this consideration" the Court is at a loss to understand why the PO+A8)+C should be made to continue to a&&ly to domestic em&loyment" as here" involving a 0ili&ino seaman on board an inter8island vessel# 9ust as basic as the first reason is the fact that (elos )antosB PO+A8a&&roved em&loyment contract was for a definite term of one $,% month only" doubtless fi4ed to coincide with the &re8determined one8month long Phili&&ines89a&an8Phili&&ines conduction8voyage run# After the la&se of the said &eriod" his em&loyment under the PO+A8a&&roved contract may be deemed as f nct s oficio and (elos )antosB em&loyment &ursuant thereto considered automatically terminated" there being no mutually8agreed renewal or e4tension of the e4&ired contract# >,.? 2his is as it should be# 0or" as we have held in the landmar< case of Mi""ares v$ )ationa" (abor Re"ations CommissionN>,-? 0rom the foregoing cases" it is clear that seafarers are considered contractual em&loyees# [ 2heir em&loyment is governed by the contracts they sign every time they are rehired and their em&loyment is terminated when the contract e4&ires# 2heir em&loyment is contractually fi4ed for a certain &eriod of time# 2hey fall under the e4ce&tion of Article 6.@ >of the *abor Code? whose em&loyment has been fi4ed for a s&ecific &roject or underta<ing # # # :e need not de&art from the rulings of the Court in the two aforementioned cases which indeed constitute stare decisis with res&ect to the em&loyment status of seafarers# $'nderscoring and words in brac<et added% PetitionerBs &osture" citing )ection 6 $A% >6@? in relation to )ection ,.>6,? of the PO+A8)+C about the PO+A a&&roved contract still subsisting since (elos )antos was never signed off from the vessel and re&atriated to !anila" the &oint of hire" is untenable# :ith the view we have of things" (elos )antos is deemed to have been signed off when he acceded to a new em&loyment arrangement offered by the res&ondent# A seaman need not &hysically disembar<ed from a vessel at the e4&iration of his em&loyment contract to have such contract considered terminated# And the re&atriation as&ect of the contract assumes significance only where the vessel remains in a foreign &ort# 0or" re&atriation &resu&&oses a return to oneBs country of origin or citiCenshi&# >66? In the case at bar" however" there can be Huibbling that !D Wi"d Iris returned to the &ort of Cebu with (elos )antos on board# Parenthetically" while the &arties are agreed that their underlying contract was e4ecuted in the country" the records do not indicate what city or &rovince of the Phili&&ines is the s&ecific &oint of hire# :hile &etitioner says it is !anila" she did not bother to attach to her &etition a co&y of the contract of em&loyment in Huestion# Petitioner ne4t submits" echoing the 7*RCBs holding" that the PO+A8a&&roved contract remained in full force and effect even after the e4&iry thereof owing to the inter&lay of the following circumstances3 ,% (elos )antos" after such contract e4&iration" did not conclude another contract of em&loyment with res&ondent" but was as<ed to remain and wor< on board the same vessel just the same; and 6% If the &arties intended their em&loyer8em&loyee relationshi& to be under the aegis of a new contract" such intention should have been embodied in a new agreement# Contract e4tension or continuation by mutual consent a&&ears to be &etitionerBs thesis# :e are not &ersuaded# 2he fact that res&ondent retained (elos )antos and allowed him to remain on board the vessel cannot &lausibly be inter&reted" in conte4t" as evidencing an intention on its &art to continue with the PO+A8)+C# In the &ractical view&oint" there could have been no sense in consenting to renewal since the rationale for the e4ecution of the PO+A8a&&roved contract had already been served and achieved# At any rate" factors obtain arguing against the notion that res&ondent consented to contract e4tension under the same terms and conditions &revailing when the original contract e4&ired# )tated a bit differently" there are com&elling reasons to believe that res&ondent retained the services of the acceding (elos )antos" as the Court of A&&eals a&tly observed" but under domestic terms and conditions# :e refer first to the reduced salary of (elos )antos &ayable in Phili&&ine &eso >61? which" significantly enough" he received without so much of a &rotest# As res&ondent stated in its Comment, without any controverting res&onse from &etitioner" (elos )antos" for the &eriod ending October 1," ,--5" was drawing a salary at the rate of P."/55#@@ a month" whereas the com&ensation &ac<age sti&ulated under the PO+A8a&&roved contract &rovided for a ')T6,1 basic monthly salary and a ')T,./ fi4ed monthly overtime &ay# And secondly" !D + per RoRo 477 was no longer engaged in foreign trading as it was no longer intended as an ocean8going shi&# Accordingly" it does not ma<e sense why a seafarer of goodwill or a manning agency of the same dis&osition would insist on being regulated by an overseas em&loyment agency under its standard em&loyment contract" which governs em&loyment of 0ili&ino seamen on board ocean8going vessels# >6/? PetitionerBs submission about the &arties not having entered into another em&loyment contract after the e4&iration of the PO+A8a&&roved em&loyment contract" er#o, the e4tension of the e4&ired agreement" is flawed by the logic holding it together# 0or" it &resu&&oses that an agreement to do or to give does not bind" unless it is embodied in a written instrument# It is elementary" however" that" save in very rare instances where certain formal reHuisites go into its validity" a contract" to be valid and binding between the &arties" need not be in writing# A

contract is &erfected when the contracting minds agree on the object and cause thereof# >65? And" as earlier discussed" several circumstantial indicia tended to &rove that a new arrangement under domestic terms was agreed u&on by the &rinci&al &layers to govern the em&loyment of (elos )antos after the return of !D Wi"d Iris to the country to engage in coastwise trading# iven the foregoing &ers&ective" the disallowance under the decision subject of review of the &etitionerBs claim for ma4imum disability benefits and sic<ness allowance is legally correct# As it were" (elos )antosB right to such benefits is &redicated on the continued enforceability of PO+A8)+C when he contracted his illness" which" needless to stress" was not the case# *i<ewise legally correct is the deletion of the award of attorneyBs fees" the 7*RC having failed to e4&lain &etitionerBs entitlement thereto# As a matter of sound &olicy" an award of attorneyBs fee remains the e4ce&tion rather than the rule# It must be stressed" as a&tly observed by the a&&ellate court" that it is necessary for the trial court" the 7*RC in this case" to ma<e e4&ress findings of facts and law that would bring the case within the e4ce&tion# In fine" the factual" legal or eHuitable justification for the award must be set forth in the te4t of the decision# >66? 2he matter of attorneyBs fees cannot be touched once and only in the fa""o of the decision" else" the award should be thrown out for being s&eculative and conjectural#>65? In the absence of a sti&ulation" attorneyBs fees are ordinarily not recoverable; otherwise a &remium shall be &laced on the right to litigate#>6.? 2hey are not awarded every time a &arty wins a suit# >HERE"ORE" the &etition is DENIED and the assailed (ecision and Resolution of the Court of A&&ealsA""IRMED# 7o &ronouncement as to costs# SO ORDERED. DUTY "REE !HILI!!INES, Petitioner" Present3 8 versus 8 Car&io" and ACcuna" AA$ ROSSANO B. MOBI A, Res&ondent# (avide" 9r#" C$A# $Chairman%" Kuisumbing" Onares8)antiago" #R# 7o# ,66165

Promulgated3

)e&tember 1@" 6@@5 4 8888888888888888888888888888888888888888888888888888888888888888888888888888888888888888 4 '#(I I)* YNARES%SANTIAGO, J#3 2his &etition for review on certiorari>,? under Rule /5 of the Rules of Court see<s to annul and set aside the August 1," 6@@/ (ecision >6? of the Court of A&&eals in CA8 #R# )P 7o# 56--5" and its (ecember ,1" 6@@/ Resolution >1? denying the motion for reconsideration# 2he antecedent facts show that on 7ovember 6." ,--5" the (isci&line Committee of (uty 0ree Phili&&ines $(0P% rendered a decision >/? in (I)CO! Case 7o# -58@65 finding )toc< Cler< Rossano A# !ojica guilty of 7eglect of (uty by causing considerable damage to or loss of materials" assets and &ro&erty of (0P# 2hus" !ojica was considered forcibly resigned from the service with forfeiture of all benefits e4ce&t his salary and the monetary value of the accrued leave credits# >5? !ojica was formally informed of his forced resignation on 9anuary ,/" ,--.# 2hereu&on" he filed a com&laint for illegal dismissal with &rayer for reinstatement" &ayment of full bac< wages" damages" and attorneyBs fees" against (0P before the 7ational *abor Relations Commission $7*RC%# On 0ebruary 6" 6@@@" *abor Arbiter 0acundo *# *eda rendered a (ecision finding that !ojica was illegally dismissed# 2he dis&ositive &ortion of the (ecision reads3 :G+R+0OR+" decision is hereby rendered declaring the dismissal of com&lainant Rossano 9# !ojica to be illegal such that res&ondent (uty 0ree Phili&&ines is directed to reinstate him to his former or substantially eHuivalent &osition without loss of seniority rights and other &rivileges and to &ay him the amount of 2:O G'7(R+( 0I02O 7I7+ 2GO')A7( )+D+72++7 P+)O) R @.A,@@ $P65-"@,5#@.% re&resenting his bac<wages and attorneyBs fees" both awards being subject to further com&utation until actual reinstatement# )O OR(+R+(#>6?

2he 7*RC reversed the ruling of the arbiter# It found that the dismissal was valid and with just cause# !ojicaBs motion for reconsideration was denied" >5? hence he filed a Petition for Certiorari under Rule 65 of the Rules of Court before the Court of A&&eals" doc<eted as CA8 #R# )P 7o# 56--5# 2he a&&ellate court agreed with the arbiter that !ojica was not guilty of gross or habitual negligence that would warrant his dismissal# It found that there was no convincing evidence to &rove that !ojica connived with other &ersonnel in &ilfering the stoc<s of (0P# Gence" this &etition# Res&ondent !ojica is a civil service em&loyee; therefore" jurisdiction is lodged not with the 7*RC" but with the Civil )ervice Commission# (0P was created under +4ecutive Order $+O% 7o# /6 >.? on )e&tember /" ,-.6 &rimarily to augment the service facilities for tourists and to generate foreign e4change and revenue for the government# In order for the government to e4ercise direct and effective control and regulation over the ta4 and duty free sho&s" their establishment and o&eration was vested in the !inistry" now (e&artment of 2ourism $(O2%" through its im&lementing arm" the Phili&&ine 2ourism Authority $P2A%# >-? All the net &rofits from the merchandising o&erations of the sho&s accrued to the (O2# As &rovided under Presidential (ecree $P(% 7o# 56/" >,@? P2A is a cor&orate body attached to the (O2# As an attached agency" the recruitment" transfer" &romotion and dismissal of all its &ersonnel was governed by a merit system established in accordance with the civil service rules#>,,? In fact" all P2A officials and em&loyees are subject to the Civil )ervice rules and regulations# >,6? Accordingly" since (0P is under the e4clusive authority of the P2A" it follows that its officials and em&loyees are li<ewise subject to the Civil )ervice rules and regulations# Clearly then" !ojicaBs recourse to the *abor Arbiter was not &ro&er# Ge should have followed the &rocedure laid down in (0PBs merit system and the Civil )ervice rules and regulations# P( 7o# .@5 or &he Civi" +ervice *ecree of the 1hi"ippines >,1? declared that the Civil )ervice Commission shall be the central &ersonnel agency to set standards and to enforce the laws governing the disci&line of civil servants# >,/? It categorically described the sco&e of Civil )ervice as embracing every branch" agency" subdivision" and instrumentality of the government" including every government8owned or controlled cor&oration whether &erforming governmental or &ro&rietary function# >,5? It construed an agency to mean any bureau" office" commission" administration" board" committee" institute" cor&oration" whether &erforming governmental or &ro&rietary function" or any other unit of the 7ational overnment" as well as &rovincial" city or munici&al government" e4ce&t as otherwise &rovided#>,6? )ubseHuently" +O 7o# ,.@>,5? defined Egovernment em&loyeesF as all em&loyees of all branches" subdivisions" instrumentalities" and agencies" of the overnment" including government8owned or controlled cor&orations with original charters# >,.? It &rovided that the Civil )ervice and labor laws shall be followed in the resolution of com&laints" grievances and cases involving government em&loyees# >,-? +O 7o# 6-6 or &he ,dministrative Code of 4935 em&owered the Civil )ervice Commission to hear and decide administrative cases instituted by or brought before it directly or on a&&eal" including contested a&&ointments" and review decisions and actions of its offices and of the agencies attached to it#>6@? 2hus" we held in Bamboan#a City Water *istrict v$ B at>6,? that3 2here is no dis&ute that &etitioner" a water district with an original charter" is a government8owned and controlled cor&oration# 2he established rule is that the hiring and firing of em&loyees of government8owned and controlled cor&orations are governed by &rovisions of the Civil )ervice *aw and Civil )ervice Rules and Regulations# 9urisdiction over the stri<e and the dismissal of &rivate res&ondents is therefore lodged not with the 7*RC but with the Civil )ervice Commission# $Citations omitted% In 1hi"ippine ,m sement and Gamin# Corp$ v$ Co rt of ,ppea"s>66? we also held that3 It is now settled that" conformably to Article IP8B" )ection 6$,%" >of the ,-.5 Constitution? government8owned or controlled cor&orations shall be considered &art of the Civil )ervice only if they have original charters" as distinguished from those created under general law# PA COR belongs to the Civil )ervice because it was created directly by P( ,.6- on 9uly ,," ,-.1# ConseHuently" controversies concerning the relations of the em&loyee with the management of PA COR should come under the jurisdiction of the !erit )ystem Protection Board and the Civil )ervice Commission" conformably to the Administrative Code of ,-.5# )ection ,6$6% of the said Code vest in the !erit )ystem Protection Board the &ower inter a"ia to3 a% Gear and decide on a&&eal administrative cases involving officials and em&loyees of the Civil )ervice# Its decision shall be final e4ce&t those involving dismissal or se&aration from the service which may be a&&ealed to the Commission#

A&&lying this rule" we have u&held the jurisdiction of Civil )ervice Authorities" as against that of the labor authorities" in controversies involving the terms of em&loyment" and other related issues" of the Civil )ervice official and em&loyees### +O 7o# 6-6 &rovided that civil service em&loyees have the right to &resent their com&laints or grievances to management and have them adjudicated as e4&editiously as &ossible in the best interest of the agency" the government as a whole" and the em&loyee concerned# )uch com&laint or grievances shall be resolved at the lowest &ossible level in the de&artment or agency" as the case may be" and the em&loyee shall have the right to a&&eal such decision to higher authorities# In case any dis&ute remains unresolved after e4hausting all the available remedies under e4isting laws and &rocedure" the &arties may jointly refer the dis&ute in the Public )ector *abor !anagement Council for a&&ro&riate action#>61? In sum" the labor arbiter and the 7*RC erred in ta<ing cogniCance of the com&laint as jurisdiction over the com&laint for illegal dismissal is lodged with the Civil )ervice Commission# 2he Court of A&&eals li<ewise erred in sustaining the labor arbiter# >HERE"ORE" the August 1," 6@@/ (ecision of the Court of A&&eals in CA8 #R# )P 7o# 56--5; and its (ecember ,1" 6@@/ Resolution" are ANNULLED and SET ASIDE# 2he com&laint for illegal dismissal with &rayer for reinstatement" &ayment of bac<wages and attorneyBs fees" is DISMISSED# SO ORDERED. G.R. No. 8<&)9 Bu.; &8, 1989 SO IAL SE URITY SYSTEM EM!LOYEES ASSO IATION ?SSSEA@, DIONISION T. BAYLON, RAMON MODESTO, BUANITO MADURA, REUBEN EAMORA, AIRGILIO DE ALDAY, SERGIO ARANETA, !LA IDO AGUSTIN, AIRGILIO MAG!AYO, &etitioner" vs# THE OURT O" A!!EALS, SO IAL SE URITY SYSTEM ?SSS@, HON. EEAR . !ERALEBO, RT , BRAN H 98, #UEEON ITY, res&ondents# -icente &$ Ocampo I ,ssociates for petitioners$ ORTES, J& Primarily" the issue raised in this &etition is whether or not the Regional 2rial Court can enjoin the )ocial )ecurity )ystem +m&loyees Association $)))+A% from stri<ing and order the stri<ing em&loyees to return to wor<# Collaterally" it is whether or not em&loyees of the )ocial )ecurity )ystem $)))% have the right to stri<e# 2he antecedents are as follows3 On 9une ,," ,-.5" the ))) filed with the Regional 2rial Court of KueCon City a com&laint for damages with a &rayer for a writ of &reliminary injunction against &etitioners" alleging that on 9une -" ,-.5" the officers and members of )))+A staged an illegal stri<e and baricaded the entrances to the ))) Building" &reventing non8stri<ing em&loyees from re&orting for wor< and ))) members from transacting business with the ))); that the stri<e was re&orted to the Public )ector *abor 8 !anagement Council" which ordered the stri<ers to return to wor<; that the stri<ers refused to return to wor<; and that the ))) suffered damages as a result of the stri<e# 2he com&laint &rayed that a writ of &reliminary injunction be issued to enjoin the stri<e and that the stri<ers be ordered to return to wor<; that the defendants $&etitioners herein% be ordered to &ay damages; and that the stri<e be declared illegal# It a&&ears that the )))+A went on stri<e after the ))) failed to act on the unionNs demands" which included3 im&lementation of the &rovisions of the old )))8)))+A collective bargaining agreement $CBA% on chec<8off of union dues; &ayment of accrued overtime &ay" night differential &ay and holiday &ay; conversion of tem&orary or contractual em&loyees with si4 $6% months or more of service into regular and &ermanent em&loyees and their entitlement to the same salaries" allowances and benefits given to other regular em&loyees of the ))); and &ayment of the childrenNs allowance of P1@#@@" and after the ))) deducted certain amounts from the salaries of the em&loyees and allegedly committed acts of discrimination and unfair labor &ractices >Rollo" &&# 6,86/,?# 2he court a C o" on 9une ,," ,-.5" issued a tem&orary restraining order &ending resolution of the a&&lication for a writ of &reliminary injunction >Rollo" &# 5,#? In the meantime" &etitioners filed a motion to dismiss alleging the trial courtNs lac< of jurisdiction over the subject matter >Rollo" &&# 568.6#? 2o this motion" the ))) filed an o&&osition" reiterating its &rayer for the issuance of a writ of injunction >Rollo" &&# 6@-8666?# On 9uly 66",-.5" in a four8&age order" the court a Huo denied the motion to dismiss and converted the restraining order into an injunction u&on &osting of a bond" after finding that the stri<e was illegal >Rollo" &&# .18 .6?# As &etitionersN motion for the reconsideration of the aforesaid order was also denied on August ,/" ,-.. >Rollo" &# -/?" &etitioners filed a &etition for certiorari and &rohibition with &reliminary injunction before this Court# 2heir &etition was doc<eted as #R# 7o# 5-555# In a resolution dated October 6," ,-.5" the Court" through the 2hird (ivision" resolved to refer the case to the Court of A&&eals# Petitioners filed a motion for reconsideration thereof" but during its &endency the Court of A&&eals on !arch -",-.. &romulgated its decision on the referred case >Rollo" &&# ,1@8,15?# Petitioners moved to recall the Court of A&&ealsN decision# In the meantime" the Court on 9une 6-",-.. denied the motion for reconsideration in #R# 7o# -5555 for being moot and academic# PetitionersN motion to recall the decision of the Court of A&&eals was also denied in view of this CourtNs denial of the motion for reconsideration >Rollo" &&# ,/,8 ,/1?# Gence" the instant &etition to review the decision of the Court of A&&eals >Rollo" &&# ,6815?# '&on motion of the ))) on 0ebruary 6",-.-" the Court issued a tem&orary restraining order enjoining the &etitioners from staging another stri<e or from &ursuing the notice of stri<e they filed with the (e&artment of *abor and +m&loyment on 9anuary 65" ,-.- and to maintain the stat s C o >Rollo" &&# ,5,8,56?# 2he Court" ta<ing the comment as answer" and noting the re&ly and su&&lemental re&ly filed by &etitioners" considered the issues joined and the case submitted for decision#

2he &osition of the &etitioners is that the Regional 2rial Court had no jurisdiction to hear the case initiated by the ))) and to issue the restraining order and the writ of &reliminary injunction" as jurisdiction lay with the (e&artment of *abor and +m&loyment or the 7ational *abor Relations Commission" since the case involves a labor dis&ute# On the other hand" the ))) advances the contrary view" on the ground that the em&loyees of the ))) are covered by civil service laws and rules and regulations" not the *abor Code" therefore they do not have the right to stri<e# )ince neither the (O*+ nor the 7*RC has jurisdiction over the dis&ute" the Regional 2rial Court may enjoin the em&loyees from stri<ing# In dismissing the &etition for certiorari and &rohibition with &reliminary injunction filed by &etitioners" the Court of A&&eals held that since the em&loyees of the )))" are government em&loyees" they are not allowed to stri<e" and may be enjoined by the Regional 2rial Court" which had jurisdiction over the )))N com&laint for damages" from continuing with their stri<e# 2hus" the seHuential Huestions to be resolved by the Court in deciding whether or not the Court of A&&eals erred in finding that the Regional 2rial Court did not act without or in e4cess of jurisdiction when it too< cogniCance of the case and enjoined the stri<e are as follows3 ,# (o the em&loyees of the ))) have the right to stri<eS 6# (oes the Regional 2rial Court have jurisdiction to hear the case initiated by the ))) and to enjoin the stri<ers from continuing with the stri<e and to order them to return to wor<S 2hese shall be discussed and resolved seriatim I 2he ,-.5 Constitution" in the Article on )ocial 9ustice and Guman Rights" &rovides that the )tate Mshall guarantee the rights of all wor<ers to self8organiCation" collective bargaining and negotiations" and &eaceful concerted activities" including the right to stri<e in accordance with lawM >Art# PIII" )ec# 1,?# By itself" this &rovision would seem to recogniCe the right of all wor<ers and em&loyees" including those in the &ublic sector" to stri<e# But the Constitution itself fails to e4&ressly confirm this im&ression" for in the )ub8Article on the Civil )ervice Commission" it &rovides" after defining the sco&e of the civil service as Mall branches" subdivisions" instrumentalities" and agencies of the overnment" including government8owned or controlled cor&orations with original charters"M that M>t?he right to self8organiCation shall not be denied to government em&loyeesM >Art# IP$B%" )ec# 6$l% and $5@%?# Parenthetically" the Bill of Rights also &rovides that M>tlhe right of the &eo&le" including those em&loyed in the &ublic and &rivate sectors" to form unions" associations" or societies for &ur&oses not contrary to law shall not abridgedM >Art# III" )ec# .?# 2hus" while there is no Huestion that the Constitution recogniCes the right of government em&loyees to organiCe" it is silent as to whether such recognition also includes the right to stri<e# Resort to the intent of the framers of the organic law becomes hel&ful in understanding the meaning of these &rovisions# A reading of the &roceedings of the Constitutional Commission that drafted the ,-.5 Constitution would show that in recogniCing the right of government em&loyees to organiCe" the commissioners intended to limit the right to the formation of unions or associations only" without including the right to stri<e# 2hus" Commissioner +ulogio R# *erum" one of the s&onsors of the &rovision that M>tlhe right to self8organiCation shall not be denied to government em&loyeesM >Art# IP$B%" )ec# 6$5%?" in answer to the a&&rehensions e4&ressed by Commissioner Ambrosio B# Padilla" Dice8 President of the Commission" e4&lained3 !R# *+R'!# I thin< what I will try to say will not ta<e that long# :hen we &ro&osed this amendment &roviding for self8organiCation of government em&loyees" it does not mean that because they have the right to organiCe" they also have the right to stri<e# 2hat is a different matter# :e are only tal<ing about organiCing" uniting as a union# :ith regard to the right to stri<e" everyone will remember that in the Bill of Rights" there is a &rovision that the right to form associations or societies whose &ur&ose is not contrary to law shall not be abridged# 7ow then" if the &ur&ose of the state is to &rohibit the stri<es coming from em&loyees e4ercising government functions" that could be done because the moment that is &rohibited" then the union which will go on stri<e will be an illegal union# And that &rovision is carried in Re&ublic Act .55# In Re&ublic Act .55" wor<ers" including those from the government8owned and controlled" are allowed to organiCe but they are &rohibited from stri<ing# )o" the fear of our honorable Dice8 President is unfounded# It does not mean that because we a&&rove this resolution" it carries with it the right to stri<e# 2hat is a different matter# As a matter of fact" that subject is now being discussed in the Committee on )ocial 9ustice because we are trying to find a solution to this &roblem# :e <now that this &roblem e4ist; that the moment we allow anybody in the government to stri<e" then what will ha&&en if the members of the Armed 0orces will go on stri<eS :hat will ha&&en to those &eo&le trying to &rotect usS )o that is a matter of discussion in the Committee on )ocial 9ustice# But" I re&eat" the right to form an organiCation does not carry with it the right to stri<e# >Record of the Constitutional Commission" vol# ," &# 56-?# It will be recalled that the Industrial Peace Act $R#A# 7o# .55%" which was re&ealed by the *abor Code $P#(# //6% in ,-5/" e4&ressly banned stri<es by em&loyees in the overnment" including instrumentalities e4ercising governmental functions" but e4cluding entities entrusted with &ro&rietary functions3 #)ec# ,,# 1rohibition ,#ainst +tri8es in the Government$ R 2he terms and conditions of em&loyment in the overnment" including any &olitical subdivision or instrumentality thereof" are governed by law and it is declared to be the &olicy of this Act that em&loyees therein shall not stri<e for the &ur&ose of securing changes or modification in their terms and conditions of em&loyment# )uch em&loyees may belong to any labor organiCation which does not im&ose the obligation to stri<e or to join in stri<e3 1rovided, ho!ever" 2hat this section shall a&&ly only to em&loyees em&loyed in governmental functions and not those em&loyed in &ro&rietary functions of the overnment including but not limited to governmental cor&orations# 7o similar &rovision is found in the *abor Code" although at one time it recogniCed the right of em&loyees of government cor&orations established under the Cor&oration Code to organiCe and bargain collectively and those in the civil service to Mform organiCations for &ur&oses not contrary to lawM >Art# 6//" before its amendment by B#P# Blg# 5@ in ,-.@?" in the same breath it &rovided that M>t?he terms and conditions of em&loyment of all government em&loyees" including em&loyees of government owned and controlled cor&orations" shall be governed by the Civil )ervice *aw" rules and regulationsM >now Art# 656?# 'nderstandably" the *abor Code is silent as to whether or not government em&loyees may stri<e" for such are e4cluded from its coverage >Ibid?# But then the Civil )ervice (ecree >P#(# 7o# .@5?" is eHually silent on the matter# On 9une ," ,-.5" to im&lement the constitutional guarantee of the right of government em&loyees to organiCe" the President issued +#O# 7o# ,.@ which &rovides guidelines for the e4ercise of the right to organiCe of government em&loyees# In )ection ,/ thereof" it is &rovided that M>t?he Civil )ervice law and rules governing concerted activities and stri<es in the government service shall be observed" subject to any legislation that

may be enacted by Congress#M 2he President was a&&arently referring to !emorandum Circular 7o# 6" s# ,-.5 of the Civil )ervice Commission under date A&ril 6," ,-.5 which" M&rior to the enactment by Congress of a&&licable laws concerning stri<e by government em&loyees ### enjoins under &ain of administrative sanctions" all government officers and em&loyees from staging stri<es" demonstrations" mass leaves" wal<8outs and other forms of mass action which will result in tem&orary sto&&age or disru&tion of &ublic service#M 2he air was thus cleared of the confusion# At &resent" in the absence of any legislation allowing government em&loyees to stri<e" recogniCing their right to do so" or regulating the e4ercise of the right" they are &rohibited from stri<ing" by e4&ress &rovision of !emorandum Circular 7o# 6 and as im&lied in +#O# 7o# ,.@# >At this juncture" it must be stated that the validity of !emorandum Circular 7o# 6 is not at issue?# But are em&loyees of the ))) covered by the &rohibition against stri<esS 2he Court is of the considered view that they are# Considering that under the ,-.5 Constitution M>t?he civil service embraces all branches" subdivisions" instrumentalities" and agencies of the overnment" including government8owned or controlled cor&orations with original chartersM >Art# IP$B%" )ec# #6$l% see also )ec# , of +#O# 7o# ,.@ where the em&loyees in the civil service are denominated as Mgovernment em&loyeesM? and that the ))) is one such government8controlled cor&oration with an original charter" having been created under R#A# 7o# ,,6," its em&loyees are &art of the civil service >7A)+CO v# 7*RC" #R# 7os# 6-.5@ R 5@6-5" 7ovember 6/",-..? and are covered by the Civil )ervice CommissionNs memorandum &rohibiting stri<es# 2his being the case" the stri<e staged by the em&loyees of the ))) was illegal# 2he statement of the Court in ,""iance of Government Wor8ers v$ Minister of (abor and Emp"oyment > #R# 7o# 6@/@1" August 1" ,3-.1" ,6/ )CRA ,, is relevant as it furnishes the rationale for distinguishing between wor<ers in the &rivate sector and government em&loyees with regard to the right to stri<e3 2he general rule in the &ast and u& to the &resent is that Nthe terms and conditions of em&loyment in the overnment" including any &olitical subdivision or instrumentality thereof are governed by lawM $)ection ,," the Industrial Peace Act" R#A# 7o# .55" as amended and Article 655" the *abor Code" P#(# 7o# //6" as amended%# +ince the terms and conditions of #overnment emp"oyment are fi@ed by "a!, #overnment !or8ers cannot se the same !eapons emp"oyed by !or8ers in the private sector to sec re concessions from their emp"oyers$ 2he &rinci&le behind labor unionism in &rivate industry is that industrial &eace cannot be secured through com&ulsion by law# Relations between &rivate em&loyers and their em&loyees rest on an essentially voluntary basis# )ubject to the minimum reHuirements of wage laws and other labor and welfare legislation" the terms and conditions of em&loyment in the unioniCed &rivate sector are settled through the &rocess of collective bargaining# In government em&loyment" however" it is the legislature and" where &ro&erly given delegated &ower" the administrative heads of government which fi4 the terms and conditions of em&loyment# And this is effected through statutes or administrative circulars" rules" and regulations" not through collective bargaining agreements# >At &# ,1; +m&hasis su&&lied?# A&ro&os is the observation of the Acting Commissioner of Civil )ervice" in his &osition &a&er submitted to the ,-5, Constitutional Convention" and Huoted with a&&roval by the Court in ,""iance" to wit3 It is the stand" therefore" of this Commission that by reason of the nature of the &ublic em&loyer and the &eculiar character of the &ublic service" it must necessarily regard the right to stri<e given to unions in &rivate industry as not a&&lying to &ublic em&loyees and civil service em&loyees# It has been stated that the overnment" in contrast to the &rivate em&loyer" &rotects the interest of all &eo&le in the &ublic service" and that accordingly" such conflicting interests as are &resent in &rivate labor relations could not e4ist in the relations between government and those whom they em&loy# >At &&# ,68,5; also Huoted in 7ational Gousing Cor&oration v# 9uco" #R# 7o# 6/1,1" 9anuary ,5",-.5",1/ )CRA ,56",5.8 ,5-?# +#O# 7o# ,.@" which &rovides guidelines for the e4ercise of the right to organiCe of government em&loyees" while clinging to the same &hiloso&hy" has" however" rela4ed the rule to allow negotiation where the terms and conditions of em&loyment involved are not among those fi4ed by law# 2hus3 #)+C2IO7 ,1# 2erms and conditions of em&loyment or im&rovements thereof" e4ce&t those that are fi4ed by law" may be the subject of negotiations between duly recogniCed em&loyeesN organiCations and a&&ro&riate government authorities# 2he same e4ecutive order has also &rovided for the general mechanism for the settlement of labor dis&utes in the &ublic sector to wit3 #)+C2IO7 ,6# 2he Civil )ervice and labor laws and &rocedures" whenever a&&licable" shall be followed in the resolution of com&laints" grievances and cases involving government em&loyees# In case any dis&ute remains unresolved after e4hausting all the available remedies under e4isting laws and &rocedures" the &arties may jointly refer the dis&ute to the >Public )ector *abor8 !anagement? Council for a&&ro&riate action# overnment em&loyees may" therefore" through their unions or associations" either &etition the Congress for the betterment of the terms and conditions of em&loyment which are within the ambit of legislation or negotiate with the a&&ro&riate government agencies for the im&rovement of those which are not fi4ed by law# If there be any unresolved grievances" the dis&ute may be referred to the Public )ector *abor 8 !anagement Council for a&&ro&riate action# But em&loyees in the civil service may not resort to stri<es" wal<8outs and other tem&orary wor< sto&&ages" li<e wor<ers in the &rivate sector" to &ressure the ovemment to accede to their demands# As now &rovided under )ec# /" Rule III of the Rules and Regulations to overn the +4ercise of the Right of overnment8 +m&loyees to )elf8 OrganiCation" which too< effect after the instant dis&ute arose" M>t?he terms and conditions of em&loyment in the government" including any &olitical subdivision or instrumentality thereof and government8 owned and controlled cor&orations with original charters are governed by law and em&loyees therein shall not stri<e for the &ur&ose of securing changes thereof#M II 2he stri<e staged by the em&loyees of the ))) belonging to &etitioner union being &rohibited by law" an injunction may be issued to restrain it# It is futile for the &etitioners to assert that the subject labor dis&ute falls within the e4clusive jurisdiction of the 7*RC and" hence" the Regional 2rial Court had no jurisdiction to issue a writ of injunction enjoining the continuance of the stri<e# 2he *abor Code itself &rovides that terms and conditions of em&loyment of government em&loyees shall be governed by the Civil )ervice *aw" rules and regulations >Art# 656?# !ore im&ortantly" +#O# 7o# ,.@ vests the Public )ector *abor 8 !anagement Council with jurisdiction over unresolved labor dis&utes involving government em&loyees >)ec# ,6?# Clearly" the 7*RC has no jurisdiction over the dis&ute# 2his being the case" the Regional 2rial Court was not &recluded" in the e4ercise of its general jurisdiction under B#P# Blg# ,6-" as amended" from assuming jurisdiction over the )))Ns com&laint for damages and issuing the injunctive writ &rayed for therein# 'nli<e the 7*RC" the Public )ector *abor 8 !anagement Council has not been granted by law authority to issue writs of injunction in labor dis&utes within its jurisdiction# 2hus" since it is the Council" and not the 7*RC" that has jurisdiction over the instant labor dis&ute" resort to the general courts of law for the issuance of a writ of injunction to enjoin the stri<e is a&&ro&riate#

7either could the court a C o be accused of im&rudence or overCealousness" for in fact it had &roceeded with caution# 2hus" after issuing a writ of injunction enjoining the continuance of the stri<e to &revent any further disru&tion of &ublic service" the res&ondent judge" in the same order" admonished the &arties to refer the unresolved controversies emanating from their em&loyer8 em&loyee relationshi& to the Public )ector *abor 8 !anagement Council for a&&ro&riate action >Rollo" &# .6?# III In their MPetitionAA&&lication for Preliminary and !andatory Injunction"M and reiterated in their re&ly and su&&lemental re&ly" &etitioners allege that the ))) unlawfully withheld bonuses and benefits due the individual &etitioners and they &ray that the Court issue a writ of &reliminary &rohibitive and mandatory injunction to restrain the ))) and its agents from withholding &ayment thereof and to com&el the ))) to &ay them# In their su&&lemental re&ly" &etitioners anne4ed an order of the Civil )ervice Commission" dated !ay 5" ,-.-" which ruled that the officers of the )))+A who are not &reventively sus&ended and who are re&orting for wor< &ending the resolution of the administrative cases against them are entitled to their salaries" year8end bonuses and other fringe benefits and affirmed the &revious order of the !erit )ystems Promotion Board# 2he matter being e4traneous to the issues elevated to this Court" it is Our view that &etitionersN remedy is not to &etition this Court to issue an injunction" but to cause the e4ecution of the aforesaid order" if it has already become final# :G+R+0OR+" no reversible error having been committed by the Court of A&&eals" the instant &etition for review is hereby (+7I+( and the decision of the a&&ellate court dated !arch -" ,-.. in CA8 #R# )P 7o# ,1,-6 is A00IR!+(# PetitionersN MPetitionAA&&lication for Preliminary and !andatory InjunctionM dated (ecember ,1",-.. is (+7I+(# )O OR(+R+(# G.R. No. 8&819 "/90u20; 8, 1989 LUE LUMANTA, ET vs# NATIONAL LABOR RELATIONS OMMISSION 2-1 "OOD TERMINAL, IN ., res&ondents# A$ +$ &orre#oDa and ,ssociates for petitioners$ &he +o"icitor Genera" for p b"ic respondent$ &he Government Corporate Co nse" for Food &ermina", Inc$ R+)O*'2IO7 AL., &etitioners"

"ELI IANO, J.& 2he &resent Petition for certiorari see<s to annul and set aside the (ecision of the 7ational *abor Relations Commission rendered on ,. !arch ,-.. in 7*RC87CR Case 7o# @@8 @1@,@158.5" entitled M*uC *umanta" et al#" versus 0ood 2erminal Incor&orated#M 2he (ecision affirmed an order of the *abor Arbiter dated 1, August ,-.5 dismissing &etitionersN com&laint for lac< of 9urisdiction# On 6@ !arch ,-.5" petitioner *uC *umanta" joined by fifty8four $5/% other retrenched em&loyees" filed a com&laint for un&aid Nd retrenchment or se&aration &ay against &rivate res&ondent 0ood 2erminal" Inc# $M02IM% with the (e&artment of *abor and +m&loyment# 2he com&laint was later amended to include charges of under&ayment of wages and non8&ayment of emergency cost of living allowances $+CO*A%# Private res&ondent 02I moved to dismiss the com&laint on the ground of lac< of jurisdiction# It argued that being a government8owned and controlled cor&oration" its em&loyees are governed by the Civil )ervice *aw not by the *abor Code" and that claims arising from em&loyment fall within the jurisdiction of the Civil )ervice Commission and not the (e&artment of *abor and +m&loyment# 2he &etitioners o&&osed the !otion to (ismiss contending that although 02I is a cor&oration owned and controlled by the government" it has still the mar<s of a &rivate cor&oration3 it directly hires its em&loyees without see<ing a&&roval from the Civil )ervice Commission and its &ersonnel are covered by the )ocial )ecurity )ystem and not the overnment )ervice Insurance )ystem# Petitioners also argued that being a government8owned and controlled cor&oration without original charter" &rivate res&ondent 02l clearly falls outside the sco&e of the civil service as mar<ed out in )ection 6 $,%" Article IP of the ,-.5 Constitution# On 1, August ,-.5" *abor Arbiter Isabel P# Oritiguerra issued an Order" 1 the dis&ositive &art of which read3 On account of the above findings the instant case is governed by the Civil )ervice *aw# 2he case at bar lies outside the jurisdictional com&etence of this Office# :G+R+0OR+" &remises considered this case is hereby directed to be (I)!I))+( for lac< of jurisdiction of this Office to hear and decide the case# )O OR(+R+(# On ,. !arch ,-.." the &ublic res&ondent 7ational *abor Relations Commission affirmed on a&&eal the order of the *abor Arbiter and dismissed the &etitionersN a&&eal for lac< of merit# Gence this Petition for Certiorari# 2he only Huestion raised in the &resent Petition is whether or not a labor law claim against a government8owned and controlled cor&oration" such as &rivate res&ondent 02I" falls within the jurisdiction of the (e&artment of *abor and +m&loyment# In refusing to ta<e cogniCance of &etitionersN com&laint against &rivate res&ondent" the *abor Arbiter and the 7ational *abor Relations Commission relied chiefly on this CourtNs ruling in )ationa" Ho sin# , thority v$ A co, &which held that Mthere should no longer be any Huestion at this time that em&loyees of government8owned or controlled cor&orations are governed by the civil service law and civil service rules and regulations# 9uco was decided under the ,-51 Constitution" Article II8B" )ection , $,% of which &rovided3 2he civil service embraces every branch" agency" subdivision" and instrumentality of the overnment" including every government8owned or controlled cor&oration# 2he ,-.5 Constitution which too< effect on 6 0ebruary ,-.5" has on this &oint a notably different &rovision which reads3 2he civil service embraces all branches" subdivisions" instrumentalities" and agencies of the overnment" including government8owned or controlled cor&orations !ith ori#ina" charter$ $Article IP8B" )ection 6 >,?%# 2he Court" in )ationa" +ervice Corporation =),+ECO> v$ )ationa" (abor Re"ations Commission, G$R$ )o$ 69357, prom "#ated on :9 )ovember 4933, 3 Huoting e4tensively from the deliberations ( of the ,-.6 Constitutional Commission in res&ect of the intent and meaning of

the new &hrase Mwith original charter"M in effect held that government8owned and controlled cor&orations !ith ori#ina" charter refer to cor&orations chartered by specia" "a!as distinguished from cor&orations organiCed under our general incor&oration statute8the Cor&oration Code# In),+ECO" the com&any involved had been organiCed under the general incor&oration statute and was a subsidiary of the 7ational Investment (evelo&ment Cor&oration $7I(C% which in turn was a subsidiary of the Phili&&ine 7ational Ban<" a ban< chartered by a s&ecial statute# 2hus" government8owned or controlled cor&orations li<e 7A)+CO are effectively e4cluded from the sco&e of the Civil )ervice# It is the ,-.5 Constitution" and not the case law embodied in A co, < which a&&lies in the case at bar" under the &rinci&le that jurisdiction is determined as of the time of the filing of the com&laint# 6 At the time the com&laint against &rivate res&ondent 02I was filed $i#e#" 6@ !arch ,-.5%" and at the time the decisions of the res&ondent *abor Arbiter and 7ational *abor Relations Commission were rendered $i#e#" 1, August ,-.5 and ,. !arch ,-.." res&ectively%" the ,-.5 Constitution had already come into effect# latter of Instruction 7o# ,@,1" dated ,- A&ril ,-.@" included 0ood 2erminal" Inc# in the category of Mgovernment8owned or controlled cor&orations#M ) )ince then" 02I served as the mar<eting arm of the 7ational rains Authority $now <nown as the 7ational 0ood Authority%# 2he &leadings show that 02I was &reviously a &rivately owned enter&rise" created and organiCed under the general incor&oration law" with the cor&orate name M reater !anila 0ood 2erminal !ar<et" Inc#M 8 2he record does not indicate the &recise amount of the ca&ital stoc< of 0! that is owned by the government; the &etitionersN claim" and this has not been dis&uted" that 02l is not hundred &ercent $,@@U% government8owned and that it has some &rivate shareholders# :e conclude that because res&ondent 02I is government8owned and controlled cor&oration !itho t ori#ina" charter" it is the (e&artment of *abor and +m&loyment" and not the Civil )ervice Commission" which has jurisdiction over the dis&ute arising from em&loyment of the &etitioners with &rivate res&ondent 02I" and that conseHuently" the terms and conditions of such em&loyment are governed by the *abor Code and not by the Civil )ervice Rules and Regulations# Public res&ondent 7ational *abor Relations Commission acted without or in e4cess of its jurisdiction in dismissing &etitioners com&laint# ACCOR(I7 *O" the Petition for certiorari is hereby RA72+( and the (ecision of &ublic res&ondent *abor Arbiter dated 1, August ,-.5 and the (ecision of &ublic res&ondent Commission dated ,. !arch ,-.." both in 7*RC87CR Case 7o# @@8@18@,@158.5 are hereby )+2 A)I(+# 2he case is hereby R+!A7(+( to the *abor Arbiter for further a&&ro&riate &roceedings# G.R. No. 86))3 "/90u20; 1(, 199& SOUTHEAST ASIAN "ISHERIES DEAELO!MENT ENTER%A#UA ULTURE DE!ARTMENT ?SEA"DE %A#D@, DR. "LOR LA ANILAO ? HIE"@, RU"IL UEAAS ?HEAD, ADMINISTRATIAE DIA.@, BEN DELOS REYES ?"INAN E O""I ER@, &etitioners" vs# NATIONAL LABOR RELATIONS OMMISSION 2-1 BUAENAL LAEAGA, res&ondents# Ramon Encarnacion for petitioners$ Caesar &$ Corp s for private respondent$ NO ON, J.& 2his is a &etition for certiorari to annul and set aside the 9uly 66" ,-.. decision of the 7ational *abor Relations Commission sustaining the labor arbiter" in holding herein &etitioners )outheast Asian 0isheries (evelo&ment Center8AHuaculture (e&artment $)+A0(+C8AK(%" (r# 0lor *acanilao" Rufil Cuevas and Ben de los Reyes liable to &ay &rivate res&ondent 9uvenal *aCaga the amount of P,66"/5.#.- &lus interest thereon com&uted from !ay ,6" ,-.6 until full &ayment thereof is made" as se&aration &ay and other &ost8em&loyment benefits" and the resolution denying the &etitionersN motion for reconsideration of said decision dated 9anuary -" ,-.-# 2he antecedent facts of the case are as follows3 )+A0(+C8AK( is a de&artment of an international organiCation" the )outheast Asian 0isheries (evelo&ment Center" organiCed through an agreement entered into in Bang<o<" 2hailand on (ecember 6." ,-65 by the governments of !alaysia" )inga&ore" 2hailand" Dietnam" Indonesia and the Phili&&ines with 9a&an as the s&onsoring country $Article ," Agreement +stablishing the )+A0(+C%# On A&ril 6@" ,-55" &rivate res&ondent 9uvenal *aCaga was em&loyed as a Research Associate an a &robationary basis by the )+A0(+C8AK( and was a&&ointed )enior +4ternal Affairs Officer on 9anuary 5" ,-.1 with a monthly basic salary of P."@@@#@@ and a monthly allowance of P/"@@@#@@# 2hereafter" he was a&&ointed to the &osition of Professional III and designated as Gead of +4ternal Affairs Office with the same &ay and benefits# On !ay ." ,-.6" &etitioner *acanilao in his ca&acity as Chief of )+A0(+C8AK( sent a notice of termination to &rivate res&ondent informing him that due to the financial constraints being e4&erienced by the de&artment" his services shall be terminated at the close of office hours on !ay ,5" ,-.6 and that he is entitled to se&aration benefits eHuivalent to one $,% month of his basic salary for every year of service &lus other benefits $Ro""o" &# ,51%# '&on &etitioner )+A0(+C8AK(Ns failure to &ay &rivate res&ondent his se&aration &ay" the latter filed on !arch ,." ,-.5 a com&laint against &etitioners for non8&ayment of se&aration benefits &lus moral damages and attorneyNs fees with the Arbitration Branch of the 7*RC $Anne4 MCM of Petition for Certiorari%# Petitioners in their answer with counterclaim alleged that the 7*RC has no jurisdiction over the case inasmuch as the )+A0(+C8AK( is an international organiCation and that &rivate res&ondent must first secure clearances from the &ro&er de&artments for &ro&erty or money accountability before any claim for se&aration &ay will be &aid" and which clearances had not yet been obtained by the &rivate res&ondent# A formal hearing was conducted whereby &rivate res&ondent alleged that the non8issuance of the clearances by the &etitioners was &olitically motivated and in bad faith# On the other hand" &etitioners alleged that &rivate res&ondent has &ro&erty accountability and an outstanding obligation to )+A0(+C8AK( in the amount of P65"516#,,# 0urthermore" &rivate res&ondent is not entitled to accrued sic< leave benefits amounting to P//"@@@#@@ due to his failure to avail of the same during his em&loyment with the )+A0(+C8AK( $Anne4 M(M" Id#%# On 9anuary ,6" ,-.." the labor arbiter rendered a decision" the dis&ositive &ortion of which reads3 :G+R+0OR+" &remises considered" judgment is hereby rendered ordering res&ondents3 ,# 2o &ay com&lainant P,66"/5.#.-" &lus legal interest thereon com&uted from !ay ,6" ,-.6 until full &ayment thereof is made" as se&aration &ay and other &ost8em&loyment benefits; 6# 2o &ay com&lainant actual damages in the amount of P5@"@@@" &lus ,@U attorneyNs fees#

All other claims are hereby dismissed# )O OR(+R+(# $Ro""o" &# 5," Anne4 M+M% On 9uly 66" ,-.." said decision was affirmed by the 0ifth (ivision of the 7*RC e4ce&t as to the award of P5@"@@@#@@ as actual damages and attorneyNs fees for being baseless# $Anne4 MAM" &# 6." id#% On )e&tember 1" ,-.." &etitioners filed a !otion for Reconsideration $Anne4 M M" id#% which was denied on 9anuary -" ,-.-# 2hereafter" &etitioners instituted this &etition for certiorari alleging that the 7*RC has no jurisdiction to hear and decide res&ondent *aCagaNs com&laint since )+A0(+C8AK( is immune from suit owing to its international character and the com&laint is in effect a suit against the )tate which cannot be maintained without its consent# 2he &etition is im&ressed with merit# Petitioner )outheast Asian 0isheries (evelo&ment Center8AHuaculture (e&artment $)+A0(+C8AK(% is an international agency beyond the jurisdiction of &ublic res&ondent 7*RC# It was established by the overnments of Burma" Jingdom of Cambodia" Re&ublic of Indonesia" 9a&an" Jingdom of *aos" !alaysia# Re&ublic of the Phili&&ines" Re&ublic of )inga&ore" Jingdom of 2hailand and Re&ublic of Dietnam $Anne4 MGM" Petition%# 2he Re&ublic of the Phili&&ines became a signatory to the Agreement establishing )+A0(+C on 9anuary ,6",-6.# Its &ur&ose is as follows3 2he &ur&ose of the Center is to contribute to the &romotion of the fisheries develo&ment in )outheast Asia by mutual co8o&eration among the member governments of the Center" hereinafter called the M!embersM" and through collaboration with international organiCations and governments e4ternal to the Center# $Agreement +stablishing the )+A0(+C" Art# ,; Anne4 MGM Petition% $&#1,@" Ro""o% )+A0(+C8AK( was organiCed during the )i4th Council !eeting of )+A0(+C on 9uly 185" ,-51 in Juala *um&ur" !alaysia as one of the &rinci&al de&artments of )+A0(+C $Anne4 MIM" id#% to be established in Iloilo for the &romotion of research in aHuaculture# Paragra&h ," Article 6 of the Agreement establishing )+A0(+C mandates3 ,# 2he Council shall be the su&reme organ of the Center and all &owers of the Center shall be vested in the Council# Being an intergovernmental organiCation" )+A0(+C including its (e&artments $AK(%" enjoys functional inde&endence and freedom from control of the state in whose territory its office is located# As )enator 9ovito R# )alonga and 0ormer Chief 9ustice Pedro *# Oa& stated in their boo<" Public International *aw $&# .1" ,-56 ed#%3 Permanent international commissions and administrative bodies have been created by the agreement of a considerable number of )tates for a variety of international &ur&oses" economic or social and mainly non8&olitical# Among the notable instances are the International *abor OrganiCation" the International Institute of Agriculture" the International (anube Commission# In so far as they are autonomous and beyond the control of any one )tate" they have a distinct juridical &ersonality inde&endent of the munici&al law of the )tate where they are situated# As such" according to one leading authority Mthey must be deemed to &ossess a s&ecies of international &ersonality of their own#M $)alonga and Oa&" Public International *aw" .1 >,-56 ed#?% Pursuant to its being a signatory to the Agreement" the Re&ublic of the Phili&&ines agreed to be re&resented by one (irector in the governing )+A0(+C Council $Agreement +stablishing )+A0(+C" Art# 5" Par# ," Anne4 MGM" ibid#% and that its national laws and regulations shall a&&ly only insofar as its contribution to )+A0(+C of Man agreed amount of money" movable and immovable &ro&erty and services necessary for the establishment and o&eration of the CenterM are concerned $Art# ,," ibid#%# It e4&ressly waived the a&&lication of the Phili&&ine laws on the disbursement of funds of &etitioner )+A0(+C8AK( $)ection 6" P#(# 7o# 6-6%# 2he then !inister of 9ustice li<ewise o&ined that Phili&&ine Courts have no jurisdiction over )+A0(+C8AK( in O&inion 7o# ,1-" )eries of ,-./ L /# One of the basic immunities of an international organiCation is immunity from local jurisdiction" i#e#,that it is immune from the legal writs and &rocesses issued by the tribunals of the country where it is found# $ +ee 9en<s" Id#" &&# 158//% 2he obvious reason for this is that the subjection of such an organiCation to the authority of the local courts would afford a convenient medium thru which the host government may interfere in there o&erations or even influence or control its &olicies and decisions of the organiCation; besides" such subjection to local jurisdiction would im&air the ca&acity of such body to discharge its res&onsibilities im&artially on behalf of its member8states# In the case at bar" for instance" the entertainment by the 7ational *abor Relations Commission of !r# !adambaNs reinstatement cases would amount to interference by the Phili&&ine overnment in the management decisions of the )+ARCA governing board; even worse" it could com&romise the desired im&artiality of the organiCation since it will have to suit its actuations to the reHuirements of Phili&&ine law" which may not necessarily coincide with the interests of the other member8states# It is &recisely to forestall these &ossibilities that in cases where the e4tent of the immunity is s&ecified in the enabling instruments of international organiCations" jurisdictional immunity from the host country is invariably among the first accorded# $+ee 9en<s" Id#; +ee a"so Bowett" 2he *aw of International Institutions" &&# 6./8,6.5%# Res&ondent *aCagaNs invocation of esto&&el with res&ect to the issue of jurisdiction is unavailing because esto&&el does not a&&ly to confer jurisdiction to a tribunal that has none over a cause of action# 9urisdiction is conferred by law# :here there is none" no agreement of the &arties can &rovide one# )ettled is the rule that the decision of a tribunal not vested with a&&ro&riate jurisdiction is null and void# 2hus" in Ca"im"im vs# RamireD" this Court held3 A rule" that had been settled by unHuestioned acce&tance and u&held in decisions so numerous to cite is that the jurisdiction of a court over the subject matter of the action is a matter of law and may not be conferred by consent or agreement of the &arties# 2he lac< of jurisdiction of a court may be raised at any stage of the &roceedings" even on a&&eal# 2his doctrine has been Hualified by recent &ronouncements which it stemmed &rinci&ally from the ruling in the cited case of +ibon#hanoy# It is to be regretted" however" that the holding in said case had been a&&lied to situations which were obviously not contem&lated therein# 2he e4ce&tional circumstances involved in +ibon#hanoy which justified the de&arture from the acce&ted conce&t of non8waivability of objection to jurisdiction has been ignored and" instead a blan<et doctrine had been re&eatedly u&held that rendered the su&&osed ruling in +ibon#hanoy not as the e4ce&tion" but rather the general rule" virtually overthrowing altogether the time8honored &rinci&le that the issue of jurisdiction is not lost by waiver or by esto&&el# $Calimlim vs# RamireC" #R# 7o# *8 1/166" ,,. )CRA 1--; >,-.6?% Res&ondent 7*RCN) citation of the ruling of this Court in (acani"ao v# *e (eon $,/5 )CRA 6.6 >,-.5?% to justify its assum&tion of jurisdiction over )+A0(+C is mis&laced# On the contrary" the Court in said case e4&lained why it too< cogniCance of the case# )aid the Court3 :e would note" finally" that the &resent &etition relates to a controversy between two claimants to the same &osition; this is not a controversy bet!een the +E,F*EC on the one hand, and an officer or emp"oyee, or a person c"aimin# to be an officer or emp"oyee, of the +E,F*EC, on

the other hand# 2here is before us no Huestion involving immunity from the jurisdiction of the Court" there being no &lea for such immunity whether by or on behalf of )+A0(+C" or by an official of )+A0(+C with the consent of )+A0(+C $ Id#" at 1@@; em&hasis su&&lied%# :G+R+0OR+" finding )+A0(+C8AK( to be an international agency beyond the jurisdiction of the courts or local agency of the Phili&&ine government" the Huestioned decision and resolution of the 7*RC dated 9uly 66" ,-.. and 9anuary -" ,-.-" res&ectively" are hereby R+D+R)+( and )+2 A)I(+ for having been rendered without jurisdiction# 7o costs# )O OR(+R+(# G.R. No. 8<)<' S/5t/89/0 &8, 199' INTERNATIONAL ATHOLI IMMIGRATION OMMISSION, &etitioner vs HON. !URA ALLEBA IN HER A!A ITY AS DIRE TOR O" THE BUREAU O" LABOR RELATIONS AND TRADE UNIONS O" THE !HILI!!INES AND ALLIED SERAI ES ?TU!AS@ >"TU res&ondents# G.R. No. 89331 S/5t/89/0 &8, 199' CA!ISANAN NG MANGGAGA>A AT TA SA IRRI%ORGANIEED LABOR ASSO IATION IN LINE INDUSTRIES AND AGRI ULTURE, &etitioner" vs SE RETARY O" LABOR AND EM!LOYMENT AND INTERNATIONAL RI E RESEAR H INSTITUTE, IN ., res&ondents# ,ra ""o, Bambrano, Gr ba, Ch a (a! Firm for petitioner in 3;5;7$ *omin# eD, ,rmamento, Cabana I ,ssociates for petitioner in G$R$ )o$ 39<<4