NAME: De Jesus, Darid Jienne B.

Date: November 20,

2021
SECTION: BSA26 B-LAW211
CHARACTERISTICS
i. Obligatory force
ii. Mutuality
Cases:

GSIS V. CA 228 SCRA 183, and PIA Corp. V. Ople 190 SCRA 90.)

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), petitioner,

vs.
HONORABLE COURT OF APPEALS and SPOUSES RAUL and ESPERANZA
LEUTERIO, respondents.

FACT:
On December 18, 1963, the petitioner GSIS conducted a lottery draw for house
and lot allocation in Project 8-C of GSIS Village. In 1965, the parties entered into a
Deed of Conditional Sale evidencing the conveyance of the subject property and 
improvements to the Leuterio spouses for the price of P19,740.00 with terms. 
In the event the project fulfills its roles, petitioner's Board of Trustees increased
the purchase price indicated in the Deed of Conditional Sale Resolving this factual
issue, Meanwhile, 
The instant case was initiated on May 20, 1984 in the RTC of Manila, Br. 11, with
the filing of a Complaint for Specific Performance With Damages to compel petitioner to
execute in private respondents' favor, the final Deed of Sale over the subject property. 
The trial court found for the Leuterios. On January 24, 1992, the Court of
Appeals, in its impugned Decision, upheld the trial court solely on the basis of estoppel.
It held that petitioner cannot increase the price of the subject house and lot after it
failed, through the years, to protest against private respondents' P200.00-amortization
or to require the payment by them of bigger monthly installments.

PETITIONER’s/PLAINTIFF’s claim/s (no more than 3 sentences):

GSIS conducted a house and lot allocation lottery, when Leuterio spouses won,
petitioner increased the purchase price and claims respondent to pay in kind (new price
was based on the alleged final cost of construction of the GSIS Village). Petitioner
alleged that it was in the notation signed by respondent. In 1965, the parties entered
into a Deed of Conditional Sale evidencing the conveyance of the subject property and  
improvements to the Leuterio spouses for the price of P19,740.00 with terms. 
RESPONDENT’s/DEFENDANT’s claim/s (no more than 3 sentences):

Private respondent Esperanza Leuterio won and was issued Certificate of

Acknowledgment to purchase the house and lot on December 27, 1963. The petitioner
increased purchase price without consent of respondents, the Leuterio spouses alleged
that this notation was not in the Deed when they signed the same in 1965. 
 After the Leuterio Spouses has completed payment for monthly amortizations
and real estate taxes on the subject property, the private respondents spouses informed
petitioner that the payments for the property had been completed, and hence, the
execution of an absolute deed of sale in their favor was in order however, no action on
the matter was taken by petitioner.

DECISION OF THE LOWER COURTS: 

The Court of Appeals, in its impugned Decision, upheld the trial court solely on
the basis of estoppel. It held that petitioner cannot increase the price of the subject
house and lot after it failed, through the years, to protest against private respondents'
P200.00-amortization or to require the payment by them of bigger monthly installments.

ISSUE:
Whether or not the spouses Leuterio agreed to the notation "subject to
adjustment pending approval of the Board of Trustees" appearing on the margin of the
parties' Conditional Deed of Sale. 

HELD:
DISPOSITION OF THE CASE

IN VIEW WHEREOF, the petition for review on certiorari is DISMISSED. Costs

against petitioner.

DICTUM (no more than 5 sentences)

Quite clearly, therefore, the purchase price mutually agreed upon by the parties
was P19,740.00, which strongly implies the spouses Leuterio did not give their consent
for petitioner to make a unilateral upward adjustment of this purchase price depending
on the final cost of construction of the subject house and lot, and it is illegal for petitioner
to claim this prerogative, for Article 1473 of the Civil Code provides that "the fixing of the
price can never be left to the discretion of one of the contracting parties. . . ."
The pleadings do not demonstrate that the trial court grossly erred when it found that
the purchase price agreed upon by the parties was P19,740.00 and this agreement was
not made subject to any posterior event or condition. This finding of fact was based on
the explicit testimony of private respondent Raul Leuterio that when he and his wife
signed the Deed of Conditional Sale in 1965, the notation "subject to adjustment
pending approval of the Board of Trustees" was not in the Deed.

[G.R. NO. 148599. March 14, 2005]

PROFESSIONAL ACADEMIC PLANS, INC., FRANCISCO COLAYCO and

BENJAMIN DINO, Petitioners, v. DINNAH L. CRISOSTOMO, Respondents.

- FACTS:
Petitioner’s claims
On May 17, 1988, the petitioner Professional Academic Plans, Inc, (PAPI)
offered President of the Armed Forces of the Philippines Savings and Loan Association,
Inc. (AFPSLAI), Crisostomo initiated negotiations for the sale of pre-need educational
plans under the program and AFPSLAI agreed to the proposal and in November 9,
1988, they executed a Memorandum of Agreement which at a later date was revised
due to AFPLASI decision to review and therefore was revised and amended in April
1992. 
In January 1991, petitioner PAPI again asked for a final reduction of the
commission to 2% to which respondent Crisostomo agreed, on the condition that it be
reduced into writing. On July 6, 1992, respondent Crisostomo sent a demand letter to
petitioner PAPI. PAPI told Crisostomo that they refused her demand for the reasons
stated in the new and revised Inter-Office Memorandum dated June 1, 1992.
The petitioners averred in their answer to Crisostomo’s complaint that she was
not entitled to the franchise commission because she did not participate in the execution
of the 1988 MOA, they incurred that under the December 1989 company guidelines, a
franchise holder shall be maintained only when 100 new paid plans are completed on a
month-to-month basis and since respondent Crisostomo was unable to meet this
requirement for the period of November 1991 to May 1992, her franchise was
terminated which therein they maintained that under the new MOA, no one is entitled to
a franchise, much less respondent Crisostomo. 

Respondent’s claims
The defendant Dinnah Crisostomo works for Professional Academic Plans, Inc
as District Manager and did not have a salary but was entitled to a 10% franchise
commission equivalent on the remittance on payments of clients, she continued to
receive the 10% commission from December 1988 until April 1989. In January 1988,
her 10% franchise commission equivalent was gradually reduced to a 2% franchise
commission with various reasons to do so wherein she agreed to accept through a
written agreement. 
On June 1, 1992, she was not paid for the commission with the petitioner PAPI
reasoning out that is not stated in the revised Memorandum of Agreement however she
still insisted by writing Col Colayco a letter that they give her 2% as agreed upon and in
failure to do so, she filed a complaint for sum of money and damages against petitioners
PAPI, Colayco and Dino as she proclaims that she is entitled to 2% of PAPI’s sales of
pre-need plans.

Decisions of the lower courts

The trial court rendered a Decision on November 20, 1997, the dispositive
portion of which reads:
Premises considered judgment is hereby rendered in favor of the plaintiff and as
against defendants. Wherefore, defendants are hereby ordered to release to plaintiff:

 the sum of one hundred eighty-three thousand eight hundred sixty-seven

thousand and twenty-five centavos (P183,867.25) which constitutes her
commission from the AFPSLAI contract as of October 1992, and the sum
equivalent to 2% of all future remittances by AFPSLAI to defendant PAPI;
 moral damages in the amount of P200,000.00;
  exemplary [damages] of P50,000.00;
 attorney's fees of P50,000.00;
 cost of suit.

- ISSUE:
The issue to be addressed is a) whether or not the old memorandum of
agreement had been cancelled and rescinded by AFPSLAI; b) whether or not
respondent is entitled to the franchise fee or commission under the new memorandum
of agreement under which she had no participation whatsoever in the negotiation and
execution; c) whether or not petitioners, in denying respondent's claim, have committed
acts that render them legally liable for moral and exemplary damages and attorney's
fees and cost of suit.

- HELD:
Disposition of the case
The court ruled the petition that a) old memorandum of agreement was not
rescinded but only modified the acceptance of new applications and a thorough review
of the terms and conditions of the old MOA by a letter written by PFSLAI; b)
Respondent Crisostomo was entitled to receive such reduced commission as long as
she was connected with the petitioner corporation in whatever capacity. Moreover,
assuming that such condition was still in effect, its non-fulfillment from November 1991
to May 1992 could not be imputed to the respondent since it was brought about by Col.
Punzalan's order to suspend the acceptance of plan applications pending a review of
the first MOA. c) PAPI was found that the award of moral and exemplary damages,
attorney's fees and the costs of the suit, in favor of the respondent, was fully supported
by the evidence on record and was justified, in light of the petitioner corporation's
wanton disregard of respondent's claim for her franchise commission.
Dictum
According to Art. 1308. The contract must bind both contracting parties, its
validity or compliance cannot be left to the will of one of them. 
Based upon their written agreement, she is still entitled to the 2% commission on
the sales regardless of the new MOA executed in 1992. The non-participation of
Crisostomo in the negotiations is immaterial because the commission was granted as
an incentive to the one who initiated and successfully negotiated the contract given that
the agent remains connected with PAPI and that the commission was non-transferable.
The contract cannot be decided just by one party since they both agreed upon its
validity, they should come to a settlement if any changes may arise contrary to their
agreement. Therefore, Crisostomo’s right to entitlement is valid and petitioner PAPI
responded in bad faith to their agreement. 

iii. Relativity
[G.R. No. 118248]
DKC Holdings Corporation v Court of Appeals 329 SCRA 666 

Facts
1. Petitioner’s Claim/Argument

Petitioner filed a complaint for specific performance and damages against

defendant Victor. Petitioner performed all of their obligations and responsibilities as
stipulated in the contract of lease, even after the demise of Encarnacion, Petitioner
continued to diligently pay rental fees, they even served a formal notice of exercising
their option to purchase the property to the sole heir of Encarnacion, Victor Bartolome.

2. Defendant’s Claim/Argument

The only claim or argument stated in the case sourced from lawphil.net is that
defendant refused to accept any payments, tendered rental fees and to surrender
possession of the property. No other argument or counterclaim was stated.

3. Decisions of the lower courts

The lower courts and Court of Appeals held that the contract of lease with option
to buy between Petitioner and deceased Encarnacion was terminated at the time of her
death, and this contract did not bind the sole heir Victor for the reason that he was not a
party of the contract.

Issue/s

The issue to be addressed is whether or not the Contract of Lease with Option to
buy between DKC Holdings Corp and Encarnacion Bartolome was terminated upon her
death and whether this contract binds her sole heir Victor, even after her death.

Held

Disposition of the Case

Upon reassessing the object of the contract which is a property and the desire of
the petitioner to purchase the property and its rights the court ordered defendant Victor
Bartolome to surrender and deliver possession of that parcel of land covered by a TCT
to petitioner, surrender and deliver his copy of TCT, and pay costs of th.0e suit.

Dictum

Article 1311 states the Contracts take effect only between parties, their assigns,
and heirs, except in case where the rights and obligation arising from the contract are
untransmissible by their nature, stipulation or by provision of law, the heir is not liable
beyond the value of the property they received from the decedent. In relation to the
case, the object of the contract is the property and its rights which is transmissible, there
was also no stipulations nor legal provisions making the object of the contract not
transmissible. In addition, as to with other cases the death of a party does not excuse
nonperformance of a contract that involves property right.

Exceptions to principle of relativity:

obligations not transmissible by nature, stipulation, law
b. stipulation pour autrui

Case:

Florentino vs. Encarnacion Sr. 79 SCRA 195

FACTS OF THE CASE

Petitioner’s Claims

On May 22, 1964, Both appellants and the appellees filed an application for the
registration of a parcel of agricultural land in Ilocos Sur. In the deed of extrajudicial
partition there is a stipulation marked Exhibit O-1 that states that the fruits of the said
land should be used to defray the expenses of the Church. One of the appellants
Applicant Miguel Florentino asked the court to include the same as an encumbrance on
the land sought to be registered and cause the entry of the same on the face of the title
that will finally be issued.

Respondent’s Claims

Salvador Encarnacion, Sr., Salvador Encarnacion, Jr., and Angel Encarnacion opposed
to its entry on the title as an encumbrance. The petitioners-appellees filed a
manifestation seeking to withdraw their application on their respective shares of the land
sought to be registered.

Decision of the Lower Courts

The court of first instance denied the petitioners-appellee motion to withdraw for lack of
merit and rendered a decision confirming the title of the land in favor of all the applicants
with their respective shares.

The Motion for Reconsideration and of New Trial was denied but the court modified its
earlier decision.

ISSUE

Whether or not the stipulation embodied in Exhibit O-1 on religious expenses is just an
arrangement stipulation or grant revocable at the unilateral option of the co-owners.

HELD

Disposition of the Case

The decision of the CFI is affirmed but modified to allow the annotation of Exhibit O-1 as
an encumbrance on the face of the title to be finally issued in favor of all the
applications.
Dictum

No. In this case the stipulation in question is a stipulation pour autrui. As mentioned in
the second paragraph of article 1311 “If a contract should contain a stipulation in favor
of a third person, he may demand its fulfillment provided he communicated his
acceptance to the obligor before its revocation. A mere incidental benefit or interest of a
person is not sufficient. The contracting parties must have clearly and deliberately
conferred a favor upon a third person.” In order to constitute a valid stipulation pour
autrui, it must be the purpose and intent of the stipulating parties to benefit the third
person, and it is not sufficient that the third person may be incidentally benefited by the
stipulation. Here, we find that the Church had been enjoying the benefits flowing
therefrom for almost seventeen years already without any complaints. Because of that,
it can be construed that the Church made an implied acceptance to the stipulation pour
autrui.

c. third person induces another to violation his contract under Art. 1314
Cases:
So Ping Bun vs. Court of Appeals 314 SCRA 751 

So Ping Bun v Court of Appeals 314 SCRA 751 G.R. No. 120554

1.       Facts

Petitioner’s Claim/Argument

Petitioner So Ping Bun claimed that after the death of managing partner of Tek
Hua Enterprises So Pek Giok, his grandfather, he had been occupying the
property for his textile business and had been religiously paying rent and
requested DCCSI formal contracts in favor of Trendsetter Marketing.

Defendant’s Claim/Argument

Private respondent/defendant Manuel C. Tiong a partner at Tek Hua Enterprises,

claimed he had only allowed So Ping Bun to temporarily occupy the property of
Tek Hua Enterprises, and now Manuel C. Tiong needs the property for his
business’s stocks.

Decisions of the Lower Court

The trial court ruled the annulment of the four contracts of lease, ordering So
Ping Bun to pay for attorney fees, and the costs of lawsuit.

Issue/s

-          Whether So Ping Bun is guilty of tortuous interference or not.

Held
Disposition of the Case

The court ruled the petition that the appellate court erred in the decision that the
petitioner was guilty of tortuous interference was denied, with modification of
attorney’s fees was reduced.

Dictum

Article 1314 is the any third person who induces another to violate his contract
shall be liable for damages to the other contracting party, also known as tortuous
interference. In this case the contract of lease is only between Tek Hua
Enterprises and DCCSI, meaning that So Ping Bun is the third party. So Ping
Bun induced DCCSI to breach the contract between DCCSI and Tek Hua
Enterprises by requesting a formal contracts of lease with DCCSI in favor of
Trendsetter Marketing. The elements of Tortuous Interference is there should be
an existing valid contract, the third party has knowledge of the existence of
contract and the third party acted for his own benefit, these elements were
present with So Ping Bun. Thus, making So Ping Bun guilty of tortuous
interference.  

Lagon vs. Court of Appeals 453 SCRA 616

FACTS OF THE CASE

Petitioner’s Claims

Jose Lagon purchased from the estate of Bai Tonina Sepi two parcels of land located at
Tacurong, Sultan Kudarat. In his answer to the complaint, petitioner denied that he
induced the heirs of Bai Tonina to sell the property to him contending that the heirs were
in dire need of money to pay off the obligations of the deceased. And upon his personal
investigation there was no lease contract covering the property when he purchased it

Respondent’s Claims

Menandro Lapuz filed a complaint for torts and damages against petitioner. He claimed
that he entered into a contract of lease with the late Bai Tonina Sepi Mengelen Guiabar
over three parcels of land. One of the provisions was to put up commercial buildings
and that the rentals would be used to pay for the lease of the land. In 1974, the lease
contract ended but since the construction of the commercial buildings had yet to be
completed, the lease contract was allegedly renewed. When Bai Tonina Sepi died
Lapuz started  remitting  his  rent  to  the  court-appointed  administrator  but  he was
advised  to  stop collecting  rentals.  Lapuz later discovered that Lagon  as  the new
owner of the property had been collecting rentals from the tenants.

Decision of the Lower Courts

The RTC rendered a judgment in favor of Lagon. Petitioner appealed the judgment to
the Court of Appeals. The appellate court modified the assailed judgment of the trial
court. It  held  for  petitioner  liable  for  damages reasoning that he must have been
aware of the contract and acted on bad faith when purchasing the said.

ISSUE

Whether or not the purchase by petitioner of the subject property, during the supposed
existence of private respondent's lease contract with the late Bai Tonina Sepi,
constituted tortuous interference for which petitioner should be held liable for damages.

HELD

Disposition of the Case

WHEREFORE, premises considered, the petition is hereby GRANTED. The assailed

decision of the Court of Appeals is hereby REVERSED and SET ASIDE. No costs.

Dictum

NO. There is no tortuous interference. Assuming ex gratia argumenti that petitioner

knew of the contract, such knowledge alone was not sufficient to make him liable for
tortuous interference. the records do not support the allegation of private respondent
that petitioner induced the heirs of Bai Tonina Sepi to sell the property to him.
Therefore, the claim of tortuous interference was never established. The petitioner's
purchase of the subject property was merely an advancement of his financial or
economic interests, absent any proof that he was enthused by improper motives.

C. PARTIES
i. Auto-contract
ii. Freedom to contract
Cases:

G.R. No. L-15127 May 30, 1961

EMETERIO CUI v. ARELLANO UNIVERSITY 

- FACTS:
Plaintiff's claim/s (no more than 3 sentences)
Emeterio Cui entered a contract of waiver with Arellano University, the former
was granted scholarship however was prohibited to transfer schools, which contract is
prohibited as it is contrary to public order, as according to Memorandum No. 38, series
of 1949, students should be granted scholarship fees as recognition of merit and not for
defendant University’s reputation, good morals, and not generally accepted practices. 
The former was a scholar from in defendant University from the first year to the
first semester of his fourth year when he decided to leave Arellano University to follow
his uncle (former dean of college of law in Arellano University and moved to Abad
Santos University as dean and chancellor) defendant University refused to release his
Transcript of Records as he has to pay the scholarship refund with the sum of
P1,033.87. 
Memorandum No. 38 (August 16, 1949) of the Director of Private Schools
prohibited the refund of scholarship when students transfer to other schools, Bureau of
Private Schools advised defendant University to release Cui’s records without requiring
him to pay the fees where defendant refused so Cui paid under protest in order to take
the bar examinations.

Respondent's/Defendant's claim/s (no more than 3 sentences)

Arellano University entered a contract of waiver with Emeterio Cui to grant him
scholarship in the college of law for the first year until his first semester of fourth year,
Cui transferred to Abad Santos University to finish his studies, defendant prohibited him
to do so. Defendant University refused to release his records because he has to pay the
refund fees worth P1,033.87 which is contrary to public order. According to section 2 of
the Memorandum, the fees should not be charged and scholarships should not be
offered to attract students to the school. Moreover, defendant maintains in its brief that
the aforementioned memorandum of the Director of Private Schools is null and void
because said officer had no authority to issue it, and because it had been neither
approved by the corresponding department head nor published in the official gazette.

Decisions of the lower courts (e.g. RTC, CA)

The lower courts ruled that the Memorandum Agreement No. 38 series of 1949
of the Director of Private Schools under “Scholarships” was not a law but more of an
advisory that private schools, colleges and universities follow but not mandatory. They
also weighed the fact that the plaintiff’s decision to quit defendant university without
good reason is more unethical than the contractual provision.

- ISSUE:
The issue in this case is whether or not the quoted provision of the contract
between plaintiff and the defendant whereby the former waived his right to transfer to
another school without refunding to the latter the equivalent of his scholarships in cash,
is valid or not. 

- HELD:
Disposition of the case (one sentence)
Yes, the stipulation in the contract of waiver is contrary to public policy and
hence, null and void so, therefore, the decision appealed from is hereby reversed, and
another one shall be entered sentencing the defendant to pay to the plaintiff the sum of
P1,033.87, with interest thereon at the legal rate from September 1, 1954, date of the
institution of this case, as well as the costs, and dismissing defendant’s counterclaim.

Dictum (no more than five sentences addressing the issue relevant to the topic under
discussion)
Art. 1306. The contracting parties may establish such stipulations, clauses terms and
conditions as may deem convenient, provided they are not contrary to law, morals, good
customs, public order, or public policy. (1255a)
 In terms of contrary to public policy, if its consideration contravenes the interests
of society and is inconsistent with sound policy and good morals and tends to
undermine the security of individual rights and in terms of contrary to good morals,
those generally accepted principles of morality which have received some kind of social
and practical confirmation. The contract of waiver between Cui and Arellano University,
Arellano University’s seems that their purpose is to utilize Cui’s scholarship as a
business scheme therefore prohibiting him from transferring different schools wherein
as mentioned above is contrary to public order and good morals hence, it is null and
void.

G.R. No. 61594 September 28, 1990

PAKISTAN INTERNATIONAL AIRLINES CORPORATION, petitioner,
vs
HON. BLAS F. OPLE, in his capacity as Minister of Labor; HON. VICENTE
LEOGARDO, JR., in his capacity as Deputy Minister; ETHELYNNE B. FARRALES and
MARIA MOONYEEN MAMASIG, respondents.

FACT:

On 2 December 1978, petitioner Pakistan International Airlines Corporation ("PIA"), a

foreign corporation licensed to do business in the Philippines, executed in Manila two
(2) separate contracts of employment, one with private respondent Ethelynne B.
Farrales and the other with private respondent Ma. M.C. Mamasig. The contracts, which
became effective on 9 January 1979, provided for Pakistan’s Duration of Employment
and Penalty, Termination, and Applicable Law. Respondents trained in Pakistan and
were assigned as flight attendants with base station in Manila and flying assignments to
different parts of the Middle East and Europe.
On 2 August 1980, roughly one (1) year and four (4) months prior to the expiration of
the contracts of employment, PIA through Mr. Oscar Benares, counsel for and official of
the local branch of PIA, sent separate letters both dated 1 August 1980 to private
respondents Farrales and Mamasig advising both that their services as flight
stewardesses would be terminated "effective 1 September 1980, conformably to clause
6 (b) of the employment agreement [they had) executed with [PIA]."
On 9 September 1980, private respondents Farrales and Mamasig jointly instituted a
complaint, docketed as NCR-STF-95151-80, for illegal dismissal and non-payment of
company benefits and bonuses, against PIA with the then Ministry of Labor and
Employment ("MOLE").

PETITIONER’s/PLAINTIFF’s claim/s (no more than 3 sentences):

Petitioner claims respondents as habitual absentees; that both were in the habit of
bringing in from abroad sizeable quantities of "personal effects" providing no evidence
of the claims. PIA further claimed that the services of both private respondents were
terminated pursuant to the provisions of the employment contract.

RESPONDENT’s/DEFENDANT’s claim/s (no more than 3 sentences):

Respondents complains for illegal dismissal and non-payment of company benefits and
bonuses, against PIA with the then Ministry of Labor and Employment ("MOLE") 
DECISION OF THE LOWER COURTS:

The Court pointed out that "under Rule 14, Section 2, of the Implementing Rules and
Regulations, the termination of [an employee] which was without previous clearance
from the Ministry of Labor is conclusively presumed to be without [just] cause . . . [a
presumption which] cannot be overturned by any contrary proof however strong."

On appeal, in an Order dated 12 August 1982, Hon. Vicente Leogardo, Jr., Deputy
Minister, MOLE, adopted the findings of fact and conclusions of the Regional Director
and affirmed the latter's award save for the portion thereof giving PIA the option, in lieu
of reinstatement, "to pay each of the complainants [private respondents] their salaries
corresponding to the unexpired portion of the contract[s] [of employment] . . .".

ISSUE:
i. Whether or not the Regional Director, MOLE, had no jurisdiction over the subject
matter of the complaint initiated by private respondents for illegal dismissal, jurisdiction
over the same being lodged in the Arbitration Branch of the National Labor Relations
Commission ("NLRC")

ii. Whether or not the Regional Director had been issued in violation of petitioner's
right to procedural due process

iii. Whether or not the contract of employment’s relationship with the parties was
governed by the provisions of its contract rather than by the general provisions of the
Labor Code.

HELD:

DISPOSITION OF THE CASE

The Petition for Certiorari is hereby DISMISSED for lack of merit, and the Order dated
12 August 1982 of public respondent is hereby AFFIRMED, except that (1) private
respondents are entitled to three (3) years backwages, without deduction or
qualification; and (2) should reinstatement of private respondents to their former
positions or to substantially equivalent positions not be feasible, then petitioner shall, in
lieu thereof, pay to private respondents separation pay amounting to one (1) -  month's
salary for every year of service actually rendered by them and for the three (3) years
putative service by private respondents.  The Temporary Restraining Order issued on
13 September 1982 is hereby LIFTED.  Costs against petitioner.

DICTUM (no more than 5 sentences)

i.) At the time the complaint was initiated in September 1980 and at the time the Orders
assailed were rendered on January 1981 (by Regional Director Francisco L. Estrella)
and August 1982 (by Deputy Minister Vicente Leogardo, Jr.), the Regional Director had
jurisdiction over termination cases. Art. 278 of the Labor Code, as it then existed,
forbade the termination of the services of employees with at least one (1) year of
service without prior clearance from the Department of Labor and Employment.
ii.) No, the petitioner has been given right to provide evidence and their position paper.
iii.) The principle of party autonomy in contracts is not, however, an absolute principle
since the rule in Article 1306, of our Civil Code is that the contracting parties may
establish such stipulations as they may deem convenient, "provided they are not
contrary to law, morals, good customs, public order or public policy." Thus, counter-
balancing the principle of autonomy of contracting parties is the equally general rule that
provisions of applicable law, especially provisions relating to matters affected with public
policy, are deemed written into the contract. Paragraph 5 of that employment contract
was inconsistent with Articles 280 and 281 of the Labor Code as they existed at the time
the contract of employment was entered into, and hence, given no effect.