G.R. No.

L-29630 July 2, 1981

PHILIPPINE COMMERCIAL & INDUSTRIAL BANK, plaintiff-appellant,

vs.
PHILNABANK EMPLOYEES' ASSOCIATION, ROMEO G. ROY, DALUYONG GABRIEL, BAYANI A.
BAUTISTA, DOMINGO VILLANUEVA, ALEJANDRO RICARDO, JESUS MANAHAN, MANUEL JACINTO,
ERNESTO BATAC, LEONIDO CASPE PATRICIA GRANADOS and PANTALEON BERNARDO, defendants-
appellees.

Facts:

Philippine Commercial Bank filed an action for libel against the union Philippine National Bank
Employees' Association. They claimed that the union used libelous placards which displayed the text “PCIB BAD
ACCOUNTS TRANSFERRED TO PNB-NIDC?”. Plaintiff considered the above "defamatory and libelous per se
for at the very least [it] amounts to an "act tending to cause dishonor, discredit, or contempt of a juridical person.”
Defendant claims that it a fair, legal labor strategy denouncing the lack of business foresight, incompetence,
mismanagement, arbitrary and despotic acts of the Management to heed the legal and legitimate demands of
the defendants, as a striking union, and against whom a strike was declared against the management of the
Philippine National Bank".

The lower courts ruled in favor of the union. They found that the imputations were not libelous and that
the company was not able to prove the damages sustained by them by reason of the statements of the union.

Issue:

Whether or not the placards can be considered libelous

Held:

No. Aside from the failure to prove that the statements caused direct damage to the reputation of the
company, it must be kept in mind that these statements are part of a labor strike. The Labor Union was making
use of its constitutional right to picket which is a part of their right to freedom of speech.

It is a fact of industrial life that in the continuing confrontation between labor and management, it is far
from likely that the language employed would be both courteous and polite. Such being the case, there is no
affront either to reason or to the law in the complaint for libel being dismissed.

In no uncertain terms, it made clear that the judiciary, in deciding suits for libel, must ascertain whether
or not the alleged offending words may be embraced by the guarantees of free speech and free press.
NESTLÉ PHILIPPINES, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, EUGENIA C. NUNEZ, LIZA T. VILLANUEVA, EMMANUEL
S. VILLENA, RUDOLPH C. ARMAS, RODOLFO M. KUA and RODOLFO A. SOLIDUM, respondents.

Facts:

The Private Respondents were employed by Nestle as sales or medical representatives. With this, they
were allowed to avail of the company’s car loan policy. Through the loan, the company will deduct monthly
amounts from the salary of the employee concerned. Ownership is transferred only upon complete payment of
the purchase price.

The employees, however, were dismissed due to their participation in an illegal strike. They were asked
through the dismissal notice to either pay for the remaining balance of the car or return such to the company.
The employees chose neither option.

The company responded by filing a suit in the RTC to recover the cars. Employees chose to ask the
NLRC, where their illegal dismissal case was pending, for a TRO to stop the cancellation of the car loans.

The NLRC ordered the TRO, hence this current petition by the company.

Issue:

Whether or not the NLRC has jurisdiction to order a labor injunction when the case on the car is a civil case for
recovery

- Was there a Labor Dispute to justify the order of the NLRC?

Held:

No. The NLRC’s power to enjoin or restrain prohibited or unlawful acts can only be exercised in the
existence of a labor dispute. Article 212 of the Labor Code defines Labor Dispute as:

"Labor dispute" includes any controversy or matters concerning terms or conditions of employment or the
association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and
conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and
employee.

Nestlé's demand for payment of the private respondents' amortizations on their car loans, or, in the alternative,
the return of the cars to the company, is not a labor, but a civil, dispute. It involves debtor-creditor relations,
rather than employee-employer relations. The company is merely asking the employees to pay the amount or
return the car; such questions do not involve the relevance of the employment status of the employees.
G.R. No. L-29630 July 2, 1981

PHILIPPINE COMMERCIAL & INDUSTRIAL BANK, plaintiff-appellant,

vs.
PHILNABANK EMPLOYEES' ASSOCIATION, ROMEO G. ROY, DALUYONG GABRIEL, BAYANI A.
BAUTISTA, DOMINGO VILLANUEVA, ALEJANDRO RICARDO, JESUS MANAHAN, MANUEL JACINTO,
ERNESTO BATAC, LEONIDO CASPE PATRICIA GRANADOS and PANTALEON BERNARDO, defendants-
appellees.

FERNANDO, C.J.:

There is a unique aspect to this action for libel against the Philippine National Bank Employees' Association.   It 1

was filed by plaintiff Philippine Commercial and Industrial Bank as a result of placards and signboards along the
Philippine National Bank building in Escolta, Manila, containing the following: "PCIB BAD ACCOUNTS
TRANSFERRED TO PNB-NIDC?" Plaintiff considered the above "defamatory and libelous per se for at the very
least [it] amounts to an "act tending to cause dishonor, discredit, or contempt of a juridical person."   The
2

allegation of its being libelous was denied by defendants on the ground that such placards "containing the
alleged writing were displayed during the strike on April 3 and April 4,1967 as a fair, legal labor strategy
denouncing the lack of business foresight, incompetence, mismanagement, arbitrary and despotic acts of the
Management to heed the legal and legitimate demands of the defendants, as a striking union, and against whom
a strike was declared against the management of the Philippine National Bank"   and that moreover,
3

"defendants, during the strike on April 3 to April 4, 1967, against the management of the Philippine National
Bank, were only moved by good intention and justifiable motives and did not intend to injure any party not
connected with the strike;"   constituting part "of their legal and fair labor strategy to enforce their demands" and
4

to bolster their imputation of incompetence and arbitrariness of the Philippine National Bank management.   The 5

lower court sustained such a defense and dismissed the complaint. Hence this appeal.

The decision of the then Judge Conrado Vasquez was to dismiss the complaint. He could not discern any
libelous imputation in the alleged offending words. Such a ruling finds additional support in the sympathetic
approach followed by courts to inaccuracies and imprecision in language in the use of placards as part of
peaceful picketing in labor controversies.

The facts as found by the lower court, admitted by plaintiff-appellant as correct, follow: "On April 3, 1967,
defendant Philnabank Employees' Association (PEMA), a labor organization composed of the rank and file
employees of the Philippine National Bank, declared a strike. During the said strike, which lasted up to the
following day, members of the (PEMA) paraded and displayed placards in front of the PNB building at Escolta,
Manila, one of which contained the following words: "PCIB BAD ACCOUNTS TRANSFERRED TO PNB-NIDC?"
It is an admitted fact that PCIB stands for plaintiff Philippine Commercial and Industrial Bank, while PNB refers to
Philippine National Bank, and NIDC stands for National Investment Development Corporation, a subsidiary of
the PNB."   To prove its claim for the recovery of damages both actual and exemplary, as well as for attorney's
6

fees, plaintiff-appellant, as noted in the appealed decision, contended "that the writing on the placard in question
is a baseless and malicious aspersion that the plaintiff was a party to a fraud, in that it was able to recoup on bad
debts or other uncollected accounts by fraudulent, questionable and immoral transfer thereof to the PNB or
NIDC.   Malice was likewise at- tributed to defendant labor union and its officers. Then the decision went on to
7

state: "Plaintiff presented evidence to show that it is the largest 100% Filipino commercial bank in the
Philippines; that at the time of the filing of the complaint, it had twenty-seven (27) branches all over the country
and with foreign correspondent banks throughout the world; that the assets of the plaintiff amounted to
P333,417,445.05 and it handles a quarterly volume of business amounting to P110,000,000.00; that it has
several big companies among its clients; and that it has a reputation for honesty, reliability and trustworthiness,
and has enjoyed domestic and international prominence and goodwill."   On that point, the lower court ruled:
8

"The plaintiff has also miserably failed to prove any damage caused to it by the supposed libelous placard
subject matter of this action. Plaintiff has admitted that its twenty-seven branches at the time of the filing of the
complaint (May 6, 1967) increased to twenty-nine branches in August of 1967. The defendants have shown that
the number further increased to thirty-three branches as of September, 1967. Plaintiff's networth likewise
increased from P46,000,000.00 in March, 1967 to P53,000,000.00 in August, 1967. Although plaintiff's witness
Jovino Valenzuela testified that. after the display of the questioned placard, the deposits of the plaintiff bank
decreased, no record was presented to sustain this claim, which is even inconsistent with the admission of the
same witness that the Bank's networth increased since that time and has continued to increase up to the time he
testified. The same thing is true with the testimony of plaintiff's witness Edmundo Ledesma to the effect that due
to the placard in question his confidence in the plaintiff was shaken, thereby causing him to deposit P50,000.00
with other banks instead of with the PCIB. He admmitted moreover that, as an exporter, it was safer to be
opening accounts in several banks instead of in only one."  9

As noted earlier, the decision must be affirmed.

1. The brief presented by the San Juan, Africa, Gonzales and San Agustin Law Offices is noted for its
exhaustive and scholarly discussion of the law on libel relying on both the Philippine and American authorities. If
the matter were viewed solely from what appeared in the placard, there is an element of plausibility in the
assertion that while it was aimed at the Philippine National Bank, the way it was worded could reflect on a
stranger to the controversy, plaintiff Philippine Commercial and Industrial Bank. It is understandable if there were
an affront to the sensibilities of its officials, They were right to guard its reputation earned after many years of
laudable and creditable performance in the field of banking. It is, however, precisely because of its well-deserved
reputation that what could at first glance be for the most fastidious hurtful to its prestige could, if viewed with
calmness and objectivity, be considered, as it was characterized in the appealed decision, as lacking in "libelous
imputation. "

2. There is, as already indicated, another reinforcement to such a mode of appraising the matter. There was a
labor controversy resulting in a strike, fortunately lasting only for one day. The labor union made use of its
constitutional right to picket. From the time of Mortera v. Court of Industrial Relations, a 1947 decision,   this
10

Court has been committed to the view that peaceful picketing is part of the freedom of speech guarantee of the
Constitution. The latest case in point where such a principle was reaffirmed expressly is Associated Labor Union
v. Gomez,   a 1980 decision. There is no mention of the other placards but it is not unlikely that to bolster its
11

claim, mention was likewise made and in bold letters at that of such alleged failing of its management. That was
the aim and intent as found by the lower court. That could not very well be disputed by plaintiff-appellant.
Unfortunately, the offending imputation, but in the form of a question, was included. It was due to a former official
of plaintiff-appellant's bank who was thereafter named as President of the Philippine National Bank. Should
there be an automatic attitude of condemnation for such incident? If the realistic observation of Justice
Frankfurter in Milk Wagon Drivers Union of Chicago v. Meadowmoor Dairies   be heeded that labor disputes
12

give rise to strong emotional response, then the decision reached by the lower court becomes even more
acceptable. It is a fact of industrial life, both in the Philippines as in the United States, that in the continuing
confrontation between labor and management, it is far from likely that the language employed would be both
courteous and polite. Such being the case. there is no affront either to reason or to the law in the complaint for
libel being dismissed. In pricing reliance on the constitutional right of freedom of expression,   this Court once
13

again makes manifest its adherence to the principle first announced by Justice Malcolm as ponente in the
leading case of United States v. Bustos.   In no uncertain terms, it made clear that the judiciary, in deciding suits
14

for libel, must ascertain whether or not the alleged offending words may be embraced by the guarantees of free
speech and free press. It cannot he too often said that Bustos was promulgated as far back as March 8, 1918. A
doctrine analogous in character was enunciated by the United States Supreme Court only thirty-six years later
in New York Times Co. v. Sullivan.  15

WHEREFORE, the appealed decision is affirmed. No costs.

Barredo, Aquino, Abad Santos and De Castro, JJ., concur.

G.R. No. 85197             March 18, 1991

NESTLÉ PHILIPPINES, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, EUGENIA C. NUNEZ, LIZA T. VILLANUEVA, EMMANUEL
S. VILLENA, RUDOLPH C. ARMAS, RODOLFO M. KUA and RODOLFO A. SOLIDUM, respondents.

Siguion Reyna, Montecillo & Ongsiako for petitioner.

Banzuela, Flores, Miralles, Raneses, Sy, Taquio & Associates for private respondents.

GRIÑO-AQUINO, J.:

This petition for certiorari seeks a review of the resolutions dated May 28, 1988 and September 1, 1988 of the
National Labor Relations Commission (NLRC) in Injunction Case No. 1582 granting the injunction prayed for by
the private respondents, to hold in abeyance the cancellation of their car loans and payments of the monthly
amortizations thereon pending the resolution of their complaints for illegal dismissal.

The private respondents were employed by the petitioner either as sales representatives or medical
representatives. By reason of the nature of their work they were each allowed to avail of the company's car loan
policy. Under that policy, the company advances the purchase price of a car to be paid back by the employee
through monthly deductions from his salary, the company retaining the ownership of the motor vehicle until it
shall have been fully paid for. All of the private respondents availed of the petitioner's car loan policy.

On September 14, 1987, private respondents Nuñez, Villanueva, Villena and Armas were dismissed from the
service for having participated in an illegal strike. On December 26, 1987, respondents Kua and Solidum were
also dismissed for certain irregularities. All the private respondents filed complaints for illegal dismissal in the
Arbitration Branch of the NLRC. The Labor Arbiter dismissed their complaints and upheld the legality of their
dismissal. They appealed to the NLRC where their appeals are still pending.

In the Notices of Dismissal which they received from Nestlé, the private respondents had been directed to either
settle the remaining balance of the cost of their respective cars, or return them to the company for proper
disposition.

As they failed and refused to avail of either option, the company filed in the Regional Trial Court of Makati a civil
suit to recover possession of the cars. The Court issued an Order dated March 7, 1988 directing the Deputy
Sheriff to take the motor vehicles into his custody.

The private respondents sought a temporary restraining order in the NLRC to stop the company from cancelling
their car loans and collecting their monthly amortizations pending the final resolution of their appeals in the illegal
dismissal case.

On May 27, 1988, the NLRC en banc, issued a resolution granting their petition for injunction. Its order reads:

Acting on the Urgent Petition for the Issuance of a Temporary Restraining Order, the Commission
sitting en banc after deliberation, Resolved to hold in abeyance the cancellation of the petitioners' car
loans and the payment of the monthly amortizations thereof pending resolution of their illegal dismissal
cases. (p. 5, Rollo.)

The company filed a motion for reconsideration, but it was denied for tardiness. Hence, this petition
for certiorari alleging that the NLRC acted with grave abuse of discretion amounting to lack of jurisdiction when it
issued a labor injunction without legal basis and in the absence of any labor dispute related to the same.

The private respondents, in their comment on the petition, alleged that there is a labor dispute between the
petitioner and the private respondents and that their default in paying the amortizations for their cars was
brought about by their illegal dismissal from work by the petitioner as punishment for their participation in the
illegal strike of the Union of Filipro Employees of which they are members. If they had not participated in the
strike, they would not have been dismissed from work and they would not have defaulted in the payment of their
amortizations. Private respondents admitted their civil obligation to the petitioner.
The Office of the Solicitor General filed a manifestation on June 13, 1989, stating that "after judicious scrutiny of
the records, . . . and in consonance with the applicable law and jurisprudence on the matter, the Office of the
Solicitor General is convinced that it cannot, without violating the law, sustain the findings of the National Labor
Relations Commission in the case at bar. So as not to prejudice NLRC's case, the OSG deems it best to refrain
from filing its Comment, even as it begs leave of the Honorable Court to be excused from further appearing in
behalf of the NLRC in this particular case" (p. 173, Rollo).

Filing its own comment, the NLRC argued that as the illegal dismissal case is a labor dispute which is still
pending resolution before it, "it is clothed with authority to issue the contested resolutions because under the
law, PD 442, otherwise known as the Labor Code of the Philippines as amended, it is vested with the authority to
resolve labor disputes" (p. 252, Rollo).

The power of the NLRC to issue writs of injunction is found in Article 218 of the Labor Code, which provides:

Art. 218 Powers of the Commission. — The Commission shall have the power and authority:

x x x           x x x          x x x

(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or
to require the performance of a particular act in any labor dispute which, if not restrained or performed
forthwith, may cause grave or irreparable damage to any party or render ineffectual any decision in favor
of such party: . . . (Emphasis ours.)

That power, as the statute provides, can only be exercised in a labor dispute. Paragraph (1) of Article 212 of the
Labor Code defines a labor dispute as follows:

(1) "Labor dispute" includes any controversy or matters concerning terms or conditions of employment or
the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the
terms and conditions of employment, regardless of whether the disputants stand in the proximate
relation of employer and employee.

Nestlé's demand for payment of the private respondents' amortizations on their car loans, or, in the alternative,
the return of the cars to the company, is not a labor, but a civil, dispute. It involves debtor-creditor relations,
rather than employee-employer relations.

Petitioner Nestlé Philippines, Inc., correctly pointed out that:

The twin directives contained in petitioner's letters to the private respondents to either (1) settle the
remaining balance on the value of their assigned cars under the company car plan or return the cars to
the company for proper disposition; or (2) to pay all outstanding accountabilities to the company — are
matters related to the enforcement of a civil obligation founded on contract. It is not dependent on or
related to any labor aspect under which a labor injunction can be issued. Whether or not the private
respondents remain as employees of the petitioner, there is no escape from their obligation to pay their
outstanding accountabilities to the petitioner; and if they cannot afford it, to return the cars assigned to
them.

As noted, the options given to the private respondents are civil in nature arising from contractual
obligations. There is no labor aspect involved in the enforcement of those obligations. (p. 7, Rollo.)

The NLRC gravely abused its discretion and exceeded its jurisdiction by issuing the writ of injunction to stop the
company from enforcing the civil obligation of the private respondents under the car loan agreements and from
protecting its interest in the cars which, by the terms of those agreements, belong to it (the company) until their
purchase price shall have been fully paid by the employee. The terms of the car loan agreements are not in
issue in the labor case. The rights and obligations of the parties under those contracts may be enforced by a
separate civil action in the regular courts, not in the NLRC.

WHEREFORE, the petition for certiorari is granted. The questioned resolution dated May 27, 1988 of the NLRC
in Injunction Case No. 1582 (Annex A) is hereby annulled and set aside. Costs against the private respondents.

SO ORDERED.