UNILAB, INC. vs. ERNESTO ISIP and/or SHALIMAR PHILIPPINES

G.R. No. 163858

June 28, 2005

FACTS:

UNILAB hired a private investigator to investigate a place purported to be manufacturing fake UNILAB products, especially Revicon multivitamins. The agent took some photographs where the clandestine manufacturing operation was taking place. UNILAB then sought the help of the NBI, which thereafter filed an application for the issuance of search warrant in the RTC of Manila. After finding probable cause, the court issued a search warrant directing the police to seize “finished or unfinished products of UNILAB, particularly REVICON multivitamins.” No fake Revicon was however found; instead, sealed boxes where seized, which, when opened contained 60 ml bottles of Disudrin and 200mg tablets of Inoflox, both were brands used by UNILAB. NBI prayed that some of the sized items be turned over to the custody of the Bureau of Food and Drugs (BFAD) for examination. The court granted the motion. The respondents then filed a motion to quash the search warrant or to suppress evidence, alleging that the seized items are considered to be fruit of a poisonous tree, and therefore inadmissible for any purpose in any proceeding, which the petitioners opposed alleging that the boxes of Disudrin and Inoflox were seized under the plain view doctrine. The court, however, granted the motion of the respondents. 

ISSUE: 

Whether or not the seizure of the sealed boxes which, when opened, contained Disudrin syrup and Inoflox, were valid under the plain view doctrine. 

HELD:

It is true that things not described in the warrant may be seized under the plain view doctrine. However, seized things not described in the warrant cannot be presumed as plain view. The State must adduce evidence to prove that the elements for the doctrine to apply are present, namely: (a) the executing law enforcement officer has a prior justification for an initial intrusion or otherwise properly in a position from which he can view a particular order; (b) the officer must discover incriminating evidence inadvertently; and (c) it must be immediately apparent to the police that the items they observe may be evidence of a crime, contraband, or otherwise subject to seizure It was thus incumbent on the NBI and the petitioner to prove that the items were seized on plain view. It is not enough that the sealed boxes were in the plain view of the NBI agents. However, the NBI failed to present any of officers who were present when the warrant was enforced to prove that the the sealed boxes was discovered inadvertently, and that such boxes and their contents were incriminating and immediately apparent. It must be stressed that only the enforcing officers had personal knowledge whether the sealed boxes and their contents thereof were incriminating and that they were immediately apparent. There is even no showing that the NBI agents knew the contents of the sealed boxes before they were opened. In sum then, the petitioner and the NBI failed to prove that the plain view doctrine applies to the seized items.

Valenzuela vs. CA

GRN 131175

August 28, 2001

FACTS:

Private respondent de Guia spouses filed a complaint for specific performance against herein petitioner for the latter to execute a deed of sale in favor of the former. Valenzuela had sold the property to Quiason spouses thus, de Guia amended the complaint impleading the Quiason as defendant including other parties who may have acquired rights or interest in said property. RTC denied for its inclusion thus this petition for Certiorari.

ISSUE:

Whether or not an amendment be allowed in as much as it radically and substantially change the cause of action and theory of the case.

HELD:

Under Section 3, Rule 10 is not under the new rule that “the amendment may (now) substantially alter the cause of action or defense.” This should only be true when despite a substantial change or alteration in the cause of action or defense, the amendments sought to be made shall serve the higher interests of substantial justice, and prevent delay and equally promote the landable objectives of the rules which is to secure a just, speedy and inexpensive disposition of every action and proceeding.

33 Pick-up Lines from Digesting Cases

National Power Corporation vs. City of Cabanatuan

GR. No. 149110

April 9, 2003

FACTS:

NAPOCOR, the petitioner, is a government-owed and controlled corporation created under Commonwealth Act 120. It is tasked to undertake the “development of hydroelectric generations of power and the production of electricity from nuclear, geothermal, and other sources, as well as, the transmission of electric power on a nationwide basis.”

For many years now, NAPOCOR sells electric power to the resident Cabanatuan City, posting a gross income of P107,814,187.96 in 1992. Pursuant to Sec. 37 of Ordinance No. 165-92, the respondent assessed the petitioner a franchise tax amounting to P808,606.41, representing 75% of 1% of the former’s gross receipts for the preceding year.

Petitioner, whose capital stock was subscribed and wholly paid by the Philippine Government, refused to pay the tax assessment. It argued that the respondent has no authority to impose tax on government entities. Petitioner also contend that as a non-profit organization, it is exempted from the payment of all forms of taxes, charges, duties or fees in accordance with Sec. 13 of RA 6395, as amended.

The respondent filed a collection suit in the RTC of Cabanatuan City, demanding that petitioner pay the assessed tax, plus surcharge equivalent to 25% of the amount of tax and 2% monthly interest. Respondent alleged that petitioner’s exemption from local taxes has been repealed by Sec. 193 of RA 7160 (Local Government Code). The trial court issued an order dismissing the case. On appeal, the Court of Appeals reversed the decision of the RTC and ordered the petitioner to pay the city government the tax assessment.

ISSUES:

(1) Is the NAPOCOR excluded from the coverage of the franchise tax simply because its stocks are wholly owned by the National Government and its charter characterized is as a ‘non-profit organization’?

(2) Is the NAPOCOR’s exemption from all forms of taxes repealed by the provisions of the Local Government Code (LGC)?

HELD:

(1) NO. To stress, a franchise tax is imposed based not on the ownership but on the exercise by the corporation of a privilege to do business. The taxable entity is the corporation which exercises the franchise, and not the individual stockholders. By virtue of its charter, petitioner was created as a separate and distinct entity from the National Government. It can sue and be sued under its own name, and can exercise all the powers of a corporation under the Corporation Code.

To be sure, the ownership by the National Government of its entire capital stock does not necessarily imply that petitioner is no engage din business.

(2) YES. One of the most significant provisions of the LGC is the removal of the blanket exclusion of instrumentalities and agencies of the National Government from the coverage of local taxation. Although as a general rule, LGUs cannot impose taxes, fees, or charges of any kind on the National Government, its agencies and instrumentalities, this rule now admits an exception, i.e. when specific provisions of the LGC authorize the LGUs to impose taxes, fees, or charges on the aforementioned entities. The legislative purpose to withdraw tax privileges enjoyed under existing laws or charter is clearly manifested by the language used on Sec. 137 and 193 categorically withdrawing such exemption subject only to the exceptions enumerated. Since it would be tedious and impractical to attempt to enumerate all the existing statutes providing for special tax exemptions or privileges, the LGC provided for an express, albeit general, withdrawal of such exemptions or privileges. No more unequivocal language could have been used.

Abella vs. NLRC

G.R. No. 71813

July 20, 1987

FACTS: 

Ricardo Dionele, Sr. (private respondent) has been a regular farm worker since 1949 in Hacienda Danao-Ramona located in Ponteverde, Negros Occidential. Said farm land was leased to Rosalina Abella (petitioner) for a period of ten (10) years, renewable for another ten years.Upon the expiration of her leasehold rights, petitioner dismissed Ricardo and another co-employee. Private respondents filed a complaint against the petitioner at the Ministry of Labor and Employment for overtime pay, illegal dismissal and reinstatement with backwages. After presenting their respective evidence, the Labor Arbiter ruled that the dismissal is warranted by the cessation of business, but granted the private respondents’ separation pay.Petitioner filed a motion for reconsideration but the same was denied. Hence, the present petition.

ISSUE:

Whether or not private respondents are entitled to separation pay.

HELD:

The petition is devoid of merit.Article 284 of the Labor code provides that “the employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this title, by serving a written notice on the workers and the Ministry of Labor and Employment at least month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one month pay or to at least one month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one month pay or at least one-half month pay for every year of service whichever is higher. A fraction of at least six months shall be considered one whole year."The purpose of the said article is obvious: the protection of the workers whose employment is terminated because of the closure of establishment and reduction of personnel. Without said law, employees like private respondents in the case at bar will lose the benefits to which they are entitled for the number of years served. Although they were absorbed by the new management of the hacienda, in the absence of any showing that the latter has assumed the responsibilities of the former employer, they will be considered as new employees and the years of service behind them would amount to nothing. In any event, it is well-settled that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingman’s welfare should be the primordial and paramount consideration.

The instant petition is hereby dismissed and the decision of the Labor Arbiter and the Resolutionof the Ministry of Labor and Employment are hereby affirmed.

Republic vs. Mambulao Lumber

GR L-17725

28 February 1962

FACTS: 

Mambulao Lumber Company paid the Government a total of P9,127.50 as reforestation charges. Having found liable for an aggregate amount of P4,802.37 for forest charges, it contended that since the Republic (Government) has not made use of the reforestation charges for reforesting the denuded area of the land covered by the company’s license, the Republic should refund said amount or, if it cannot be refunded, at least the company should be compensated with what it owed the Republic for reforestation charges.

ISSUE:

Whether taxes may be subject of set-off or compensation.

HELD:

Internal revenue taxes, such as forest charges, cannot be the subject of set-off or compensation. A claim for taxes is not such a debt, demand, contract or judgment as is allowed to be set-off under the statutes of set-off, which are construed uniformly, in the light of public policy, to exclude the remedy in an action or any indebtedness of the State or municipality to one who is liable to the State or municipality for taxes. Neither are they subject of recoupment since they do not arise out of the contract or transaction sued on.

Taxes are not in the nature of contracts between the parties but grow out of a duty to, and are the positive acts of the government, to the making and enforcing of which, the personal consent of individual taxpayers is not required. 

Domingo vs. Garlitos

GR L-18993

29 June 1963

FACTS:

In Domingo vs. Moscoso (106 PHIL 1138), the Supreme Court declared as final and executory the order of the Court of First Instance of Leyte for the payment of estate and inheritance taxes, charges and penalties amounting to P40,058.55 by the Estate of the late Walter Scott Price. The petition for execution filed by the fiscal, however, was denied by the lower court. The Court held that the execution is unjustified as the Government itself is indebted to the Estate for 262,200; and ordered the amount of inheritance taxes be deducted from the Government’s indebtedness to the Estate.

ISSUE:

Whether a tax and a debt may be compensated.

HELD:

The court having jurisdiction of the Estate had found that the claim of the Estate against the Government has been recognized and an amount of P262,200 has already been appropriated by a corresponding law (RA 2700). Under the circumstances, both the claim of the Government for inheritance taxes and the claim of the intestate for services rendered have already become overdue and demandable as well as fully liquidated. Compensation, therefore, takes place by operation of law, in accordance with Article 1279 and 1290 of the Civil Code, and both debts are extinguished to the concurrent amount. 

Lutz vs. Araneta

GR L-7859

22 December 1955

FACTS: 

AWalter Lutz, as Judicial Administrator of the Intestate Estate of Antonio Jayme Ledesma, sought to recover the sum of P14,6666.40 paid by the estate as taxes from the Commissioner under Section e of Commonwealth Act 567 (the Sugar Adjustment Act), alleging that such tax is unconstitutional as it levied for the aid and support of the sugar industry exclusively, which is in his opinion not a public purpose.

ISSUE:

Whether the tax is valid in supporting an industry.

HELD:

The tax is levied with a regulatory prupose, i.e. to provide means for the rehabilitation and stabilization of the threatened sugar industry. The act is primarily an exercise of police power, and is not a pure exercise of taxing power. As sugar production is one of the great industries of the Philippines; and that its promotion, protection and advancement redounds greatly to the general welfare, the legislature found that the general welfare demanded that the industry should be stabilized, and provided that the distribution of benefits therefrom be readjusted among its component to enable it to resist the added strain of the increase in tax that it had to sustain. Further, it cannot be said that the devotion of tax money to experimental stations to seek increase of efficiency in sugar production, utilization of by-products, etc., as well as to the improvement of living and working conditions in sugar mills and plantations, without any part of such money being channeled diectly to private persons, constitute expenditure of tax money for private purposes.

The tax is valid. 

ESTATE OF THE LATE JULIANA DIEZ VDA. DE GABRIEL vs. CIR

GR. No. 155541

January 27, 2004

FACTS:

During the lifetime of the decedent Juliana vda. De Gabriel, her business affairs were managed by the Philippine Trust Company (PhilTrust). The decedent died on April 3, 1979 but two days after her death, PhilTrust filed her income tax return for 1978 not indicating that the decedent had died. The BIR conducted an administrative investigation of the decedent’s tax liability and found a deficiency income tax for the year 1997 in the amount of P318,233.93. Thus, in November 18, 1982, the BIR sent by registered mail a demand letter and assessment notice addressed to the decedent “c/o PhilTrust, Sta. Cruz, Manila, which was the address stated in her 1978 income tax return. On June 18, 1984, respondent Commissioner of Internal Revenue issued warrants of distraint and levy to enforce the collection of decedent’s deficiency income tax liability and serve the same upon her heir, Francisco Gabriel. On November 22, 1984, Commissioner filed a motion to allow his claim with probate court for the deficiency tax. The Court denied BIR’s claim against the estate on the ground that no proper notice of the tax assessment was made on the proper party. On appeal, the CA held that BIR’s service on PhilTrust of the notice of assessment was binding on the estate as PhilTrust failed in its legal duty to inform the respondent of antecedent’s death. Consequently, as the estate failed to question the assessment within the statutory period of thirty days, the assessment became final, executory, and incontestable.

ISSUES:

(1) Whether or not the CA erred in holding that the service of deficiency tax assessment on Juliana through PhilTrust was a valid service as to bind the estate.

(2) Whether or not the CA erred in holding that the tax assessment had become final, executory, and incontestable.

HELD:

(1) Since the relationship between PhilTrust and the decedent was automatically severed the moment of the taxpayer’s death, none of the PhilTrust’s acts or omissions could bind the estate of the taxpayer. Although the administrator of the estate may have been remiss in his legal obligation to inform respondent of the decedent’s death, the consequence thereof merely refer to the imposition of certain penal sanction on the administrator. These do not include the indefinite tolling of the prescriptive period for making deficiency tax assessment or waiver of the notice requirement for such assessment.

(2) The assessment was served not even on an heir or the estate but on a completely disinterested party. This improper service was clearly not binding on the petitioner. The most crucial point to be remembered is that PhilTust had absolutely no legal relationship with the deceased or to her Estate. There was therefore no assessment served on the estate as to the alleged underpayment of tax. Absent this assessment, no proceeding could be initiated in court for collection of said tax; therefore, it could not have become final, executory and incontestable. Respondent’s claim for collection filed with the court only on November 22, 1984 was barred for having been made beyond the five-year prescriptive period set by law.

Succession Audio Reviewer

Mercidar Fishing Corporation vs. NLRC & Fermin Agao, Jr.

G.R. No. 1112574

October 8, 1998

FACTS:

This case originated from a complaint filed on September 20, 1990 by private respondent FerminAgao, Jr. against petitioner for illegal dismissal, violation of P.D. No. 851, and non-payment of five days service incentive leave for 1990. Private respondent had been employed as a "bodegero" or ship's quartermaster on February 12, 1988. He complained that he had been constructively dismissed by petitioner when the latter refused him assignments aboard its boats after he had reported to work on May 28, 1990. Private respondent alleged that he had been sick and thus allowed to go on leave without pay for one month from April 28, 1990 but that when he reported to work at the end of such period with a health clearance, he was told to come back another time as he could not be reinstated immediately. Thereafter, petitioner refused to give him work. For this reason, private respondent asked for a certificate of employment from petitioner on September 6, 1990. However, when he came back for the certificate on September 10, petitioner refused to issue the certificate unless he submitted his resignation. Since private respondent refused to submit such letter unless he was given separation pay, petitioner prevented him from entering the premises. Petitioner, on the other hand, alleged that it was private respondent who actually abandoned his work.

ISSUE:

Whether or not the fishing crew members are considered field personnel as classified in Art. 82 of the Labor Code.

HELD:

Art. 82 of the Labor Code provides: “The provisions of this title [Working Conditions and Rest Periods] shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.” "Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. In contrast, in the case at bar, during the entire course of their fishing voyage, fishermen employed by petitioner have no choice but to remain on board its vessel. Although they perform non-agricultural work away from petitioner's business offices, the fact remains that throughout the duration of their work they are under the effective control and supervision of petitioner through the vessel's patron or master.

My Favorite Movies (Law Related)

Legally Blonde

When a blonde sorority queen is dumped by her boyfriend, she decides to follow him to law school to get him back and, once there, learns she has more legal savvy than she ever imagined.

Legally Blonde 2: Red, White & Blonde

Reese Witherspoon is back as Elle Woods in Legally Blonde 2: Red, White & Blonde. Now Elle is juggling a demanding career as a rising young lawyer as well as preparations for her wedding to the man of her dreams. But when she stands up for the rights of the other guy in her life - Bruiser, her chihuahua - Elle is fired from her job. She's devastated, but you can't keep an optimist down. Ms. Woods goes to Washington to take matters into her own well-manicured hands. Trying to learn the political ropes and win over self-serving politicians, Elle faces a formidable challenge. But with her clever and sassy signature blend of determination and intelligence, she bucks the system the Elle Woods way, inspiring those around her to find a voice of their own.

Of All The Things
This is a story involving Emil (Aga Muhlach), an intellectual going through a tough time and Berna (Regine Velasquez), an overly ambitious woman who finds herself in trouble. 

After failing his bar exam, would-be lawyer Emil’s life goes downhill. His “private law practice” is really just a service as a notary public and affidavits. He gains the nickname “Umboy” because his office is literally under a multicolored umbrella.

Meanwhile upscale Makati is Berna’s game. Her ‘transactions’ often happen in different offices and hotel lobbies. Her exact job description is vague but she is great at networking and has amassed a number of contacts. It is from hooking up these contacts that she earns her commissions. 

But a sour transaction lands Berns in hot water. She needs to find herself a fake lawyer fast! And this is how Umboy meets Berns! 

What will happen between these two disparate personalities? If friendship seems so unlikely, what chance do they have at falling in love? Find out in this new romantic comedy! 

Villar vs. Inciong

L-50283-84

April 20, 1983

FACTS: 

AEU under FUR attempted to have a certification election but due to the opposition of AEU-PAFLU, the petition was denied by the Med-Arbiter. 

AEU-PAFLU then called a special meeting among members and it was there decided that an investigation of certain people would be held pursuant to the constitution and by-laws of the Federation, of all of the petitioners and one Felipe Manlapao, for "continuously maligning, libelling and slandering not only the incumbent officers but even the union itself and the federation;" spreading 'false propaganda' that the union officers were 'merely appointees of the management', and for causing divisiveness in the union. 

A Trial Committee was then formed to investigate the local union's charges against the petitioners for acts of disloyalty. AEU-PAFLU and the Company concluded a new CBA which, besides granting additional benefits to the workers, also reincorporated the same provisions of the existing CBA, including the union security clause reading, to wit: 

All members of the UNION as of the signing of this Agreement shall remain members thereof in good standing. Therefore, any members who shall resign, be expelled, or shall in any manner cease to be a member of the UNION, shall be dismissed from his employment upon written request of the UNION to the Company.

The petitioners were summoned to appear before the PAFLU Trial Committee for the aforestated investigation of the charges filed against them but they did not attend and instead requested for a "Bill of Particulars" of the charges which had been formalized by the AEU-PAFLU officers; they contend that their actions were merely exercise of the right to freedom of association. 

Not recognizing PAFLU's jurisdiction over their case, petitioners again refused to participate in the investigation rescheduled and conducted. Instead, they merely appeared to file their Answer to the charges and moved for a dismissal. 

Based on the findings and recommendations of the PAFLU trial committee, the PAFLU President found the petitioners guilty of the charges against them and it was requested that they be terminated in conformity with the security clause in the CBA. Meanwhile, they were placed under preventive suspension and denied access to the workplace. 

ISSUE:

Whether or not the Minister acted with grave abuse of discretion when he affirmed the decision of the RO4-Officer-in-Charge allowing the preventive suspension and subsequent dismissal of petitioners by reason of the exercise of their right to freedom of association. 

HELD: 

It is true that disaffiliation from a labor union is not open to legal objection. It is implicit in the freedom of association ordained by the Constitution. However, a closed shop is a valid form of union security, and such provision in a CBA is not a restriction of the right of freedom of association guaranteed by the Constitution. 

Here, the Company and the AEU-PAFLU entered into a CBA with a union security clause and the stipulation for closed-shop is clear and unequivocal and it leaves no room for doubt that the employer is bound, under the collective bargaining agreement, to dismiss the employees, herein petitioners, for non-union membership. 

Petitioners became non-union members upon their expulsion from the general membership of the AEU-PAFLU pursuant to the Decision of the PAFLU national president. 

PAFLU had the authority to investigate petitioners on the charges filed by their co-employees in the local union and after finding them guilty as charged, to expel them from the roll of membership under the constitution of the PAFLU to which the local union was affiliated. 

According to the OIC: dtripped of non-essentials, the basic and fundamental issue in this case tapers down to the determination of WHETHER OR NOT PAFLU HAD THE AUTHORITY TO INVESTIGATE OPPOSITORS AND, THEREAFTER, EXPEL THEM FROM THE ROLL OF MEMBERSHIP OF THE AMIGOEMPLOYEES UNION-PAFLU. 

Recognized and salutary is the principle that when a labor union affiliates with a mother union, it becomes bound by the laws and regulations of the parent organization. 

When a labor union affiliates with a parent organization or mother union, or accepts a charter from a superior body, it becomes subject to the laws of the superior body under whose authority the local union functions. The constitution, by-laws and rules of the parent body, together with the charter it issues pursuant thereto to the subordinate union, constitute an enforceable contract between the parent body and the subordinate union, and between the members of the subordinate union inter se. 

'Due process' simply means that the parties were given the opportunity to be heard. In the instant case, ample and unmistakable evidence exists to show that the oppositors were afforded the opportunity to present their evidence, but they themselves disdained or spurned the said opportunity given to them. 

Inherent in every labor union, or any organization, is the right of self-preservation. When members of a labor union, therefore, sow the seeds of dissension and strife within the union; when they seek the disintegration and destruction of the very union to which they belong, they thereby forfeit their rights to remain as members of the union which they seek to destroy. 

We, therefore, hold and rule that petitioners, although entitled to disaffiliate from their union and form a new organization of their own, must, however, suffer the consequences of their separation from the union under the security clause of the CBA. 

General Milling Corporation vs. Torres

196 SCRA 215 [G.R No. 9366, April 22, 1991]

FACTS:

Earl Timothy Cone is a US citizen, who was hired by General Milling as a sports consultant and assistant coach. He possessed an alien employment permit which was changed to pre-arranged employee by the Board of Special Inquiry of the Commission on Immigration and Deportation. GMC requested that Cone’s employment permit be changed to a full-fledged coach, which was contested by The Basketball Coaches Association of the Philippines. Alleging that GMC failed to show that there is no competent person in the Philippines to do the coaching job. Secretary of Labor cancelled Cone’s employment permit.

ISSUE:

Whether or not the Secretary of Labor act with grave abuse of discretion in revoking Cone’s Alien Employment Permit?

HELD:

The Secretary of Labor did not act with grave abuse of discretion in revoking Cone’s Alien Employment Permit. GMC’s claim that hiring of a foreign coach is an employer’s prerogative has no legal basis. Under Section 40 of the Labor Code, an employer seeking employment of an alien must first obtain an employment permit from the Department of labor.

GMC’s right to choose whom to employ is limited by the statutory requirement of an employment permit. The Labor Code empowers the Labor Secretary to determine as to the availability of the services of a “person in the Philippines who is competent, able and willing at the time of the application to perform the services for which an alien is desired.” DOLE is the agency vested with jurisdiction to determine the question of availability of local workers.

Cybercrime Prevention Act

The Cybercrime Prevention Act of 2012 was signed by Philippine President Benigno Aquino III on September 12, 2012. Senator Edgardo Angara is the main proponent of the law. 

Do you think Philippine officials can implement the new law effectively? Let me know in the comments.

Escario vs. NLRC

G.R. No. 124055

June 8, 2000

FACTS:

Private respondents California Marketing Co., Inc. (CMC) is a domestic corporation principally engaged in themanufacturing of food products and distribution of such products to wholesalers and retailers. Privaterespondent Donna Louis Advertising and Marketing Associates, Inc. is a duly registered promotionalfirm.Petitioners alleged that they were employed by CMC as merchandisers. They alleged that the hiring,control and supervision of workers and the payment of the salaries were all covered by CMC throughits agent D.L Admark in order CMC to avoid its liability under the law. Petitioners filed a case againstCMC before the labor arbiter for regularization of their employment status.During the pendency of the case, D.L Admark terminated the services of the petitioners. Thecomplaint was amended to include alleged dismissal. CMC filed a motion to implead as partydefendantD.L Admark, the latter filed a motion to intervene. Both motions were granted. CMC deniedbeing petitioners employer while D.L Admark asserted it is the employer of the petitioners.The labor arbiter found petitioners as employees of CMC as they were engaged in activities that arenecessary and desirable in the usual business/trade of CMC. On appeal, the NLRC set aside the laborarbiters decision. But ordered the reinstatement of the petitioners in D.L Admark petitioners filed amotion for consideration before the NLRC which was denied for lack of merit. Hence the petition.

ISSUE:

Whether or not D.L Admark is a labor-only contractor or as independent contractor.

HELD:

The Supreme Court denied the petition.

There is labor-only contracting when the contractor or subcontractor merely recruits, supplies orplaces workers to perform a job, work or service for a principal. In labor only contracting, the followingelements are present:

1.       the person supplying workers to an employer does not have substantial capital or investment in theform of tools, equipment, machineries, wok premise, among other tools

2.       the workers recruited and placed by such person performing activities which are directly related to theprincipal business of the employer.

In contract, there is permissible job contracting when a principal agrees to put out or farm out with acontractor or a subcontractor the performance/completion of a specific job, work or services within adefinite or predetermined period, regardless of whether such job/services is to be performed orcompleted within or outside the premises of the principal. In this arrangement, the followingconditions must concur.

1.       The contractor carries on a distinct and independent business and undertakes the contract work on hisaccount under the responsibility according to his own manual and methods, free from the control anddirection of his employer or principal in all matters connected with the performance of his employerwork except as to the results thereof; and

2.       The contractor has substantial capital / investment which are necessary in the conduct of his business.

The court reiterated that it is not enough to show substantial capitalization on investment. In additionthe following factors need be consideredwhether the contractor is carrying on an independent businessthe nature and extent of the workthe skill requiredthe term and duration of the relationshipthe right to assign the performance of specified pieces of workthe control and supervision of the workersthe power of the employer with respect to the hiring, firing and payment of workers of the contractorthe control of the premises the duty to supply premises, tools, appliances, materials and labormode, manner and terms of payment. Based on the foregoing criteria, the court found that D.L Admark is a legitimate independentcontractor. Applying the four-fold test, D.L Admark was found to be the employer of the petitioners.The Supreme Court affirmed the NLRC’s ruling.

Sosito vs. Aguinaldo Development Corp.

G.R. No. L-48926

December 14, 1987

FACTS:

Petitioner Manuel Sosito was employed in 1964 by the private respondent, a logging company, and was in charge of logging importation, with a monthly salary of P675.00, 1 when he went on indefinite leave with the consent of the company on January 16, 1976. On July 20, 1976, the private respondent, through its president, announced a retrenchment program and offered separation pay to employees in the active service as of June 30, 1976, who would tender their resignations not later than July 31, 1976. The petitioner decided to accept this offer and so submitted his resignation on July 29, 1976, "to avail himself of the gratuity benefits" promised. However, his resignation was not acted upon and he was never given the separation pay he expected. The petitioner complained to the Department of Labor,

where he was sustained by the labor arbiter. The company was ordered to pay Sosito the sum of P 4,387.50, representing his salary for six and a half months. On appeal to the National Labor Relations Commission, this decision was reversed and it was held that the petitioner was not covered by the retrenchment program.

ISSUE:

Whether or not the petitioner is covered by the retrenchment program and thus entitled to separation benefits.

HELD:

It is clear from the memorandum that the offer of separation pay was extended only to those who were in the active service of the company as of June 30, 1976. It is equally clear that the petitioner was not eligible for the promised gratuity as he was not actually working with the company as of the said date. Being on indefinite leave, he was not in the active service of the private respondent although, if one were to be technical, he was still in its employ. Even so, during the period of indefinite leave, he was not entitled to receive any salary or to enjoy any other benefits available to those in the active service. We note that under the law then in force the private respondent could have validly reduced its work force because of its financial reverses without the obligation to grant separation pay. This was permitted under the original Article 272(a), of the Labor Code, which was in force at the time. To its credit, however, the company voluntarily offered gratuities to those who would agree to be phased out pursuant to the terms and conditions of its retrenchment program, in recognition of their loyalty and to tide them over their own financial difficulties. The Court feels that such compassionate measure deserves commendation and support but at the same time rules that it should be available only to those who are qualified therefore. We hold that the petitioner is not one of them. While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor. Management also has its own rights which, as such, are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for those with less privileges in life, this Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded us to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine.

Tanduay Distillery Labor Union vs NLRC

G.R. No. 75037

April 30, 1987

FACTS: 

Private respondents were all employees of Tanduay Distillery, Inc., (TDI) and members of the Tanduay Distillery Labor Union (TDLU), a duly organized and registered labor organization and the exclusive bargaining agent of the rank and file employees of the petitioner company.

A Collective Bargaining Agreement (CBA), was executed between TDI and TDLU. The CBA was duly ratified by a majority of the workers in TDI including herein private respondents and contained a union security clause which provides that “all workers who are or may during the effectivity of the CBA, become members of the Union in accordance with its Constitution and By-Laws shall, as a condition of their continued employment, maintain membership in good standing in the Union for the duration of the agreement.”

While the CBA was in effect and within the contract bar period the private respondents joined another union, the Kaisahan Ng Manggagawang Pilipino (KAMPIL) and organized its local chapter in TDI. KAMPIL filed a petition for certification election to determine union representation in TDI, which development compelled TDI to file a grievance with TDLU.

TDLU created a committee to investigate its erring members in accordance with its by-laws which are not disputed by the private respondents. Thereafter, TDLU, through the Investigating Committee and approved by TDLU's Board of Directors, expelled the private respondents from TDLU for disloyalty to the Union. By letter, TDLU notified TDI that private respondents had been expelled from TDLU and demanded that TDI terminate the employment of private, respondents because they had lost their membership with TDLU.

The private respondents were later on terminated. In their petition, private respondents contend that their act of organizing a local chapter of KAMPIL and eventual filing of a petition for certification election was pursuant to their constitutional right to self-organization.

ISSUES: 
a) whether or not TDI was justified in terminating private respondents' employment in the company on the basis of TDLU's demand for the enforcement of the Union Security Clause of the CBA between TDI and TDLU; and 
b) whether or not TDI is guilty of unfair labor practice in complying with TDLU's demand for the dismissal of private respondents.

HELD: 

The dismissal of an employee pursuant to a demand of the majority union in accordance with a union security agreement following the loss of seniority rights is valid and privileged and does not constitute an unfair labor practice.

Article 249 (e) of the Labor Code as amended specifically recognizes the closed shop arrangement as a form of union security. The closed shop, the union shop, the maintenance of membership shop, the preferential shop, the maintenance of treasury shop, and check-off provisions are valid forms of union security and strength. They do not constitute unfair labor practice nor are they violations of the freedom of association clause of the Constitution. There is no showing in these petitions of any arbitrariness or a violation of the safeguards enunciated in the decisions of this Court interpreting union security arrangements brought to us for review.

FORMAT OF A CASE DIGEST

TITLE: Include the petitioner and respondents of the case and the reference. Sometimes, students only include the Volume Number of the Supreme Court Reports Annotated (SCRA)/Philippine Reports (Phil) and the first page where the case appeared or written. Others only include the Gazette Record Number together with the Date of the case. Still, others include both. Others even add the ponente or the justice that penned the case.

FACTS: There is no need to include all the facts. Just include those that are relevant to the subject. The contents of the facts must be brief and concise. It must be limited to the main facts of the case which of course should focus on the particular subject assigned.

ISSUES: Include only those that are relevant. Issues are usually framed in the form of questions that are answerable by "yes" or "no," for example, "Is the contract void?" Sometimes, students frame the question by starting it with the word "whether," for example, "Whether the contract is void" or "Whether or not the contract is void." The answer to the question has to be answered in the ruling.Furthermore, the issue must have some bearing on the facts above written. There must be a connection between the facts presented and the issued that must be resolved.

RULING: This usually starts with a "yes" or a "no." This is the answer to the question/s involving the issue. After the categorical yes/no answer, the reason for the decision will be explained. Of course, the ruling must be based on the facts and issues written. Concentrate on how the Supreme Court decided on the facts in question. It is advisable that your digest shows that you understand what the case is all about and that you can elaborate more on the rulings given by the Supreme Court as long as it is within the decision of the case.

CASE DIGEST

Part of studying law is learning how to digest cases. A case digest or a case brief is a written summary of the case. A case sometimes involves several issues. Digesting the same would help the student in separating one issue from another and understanding how the Court resolved the issues in the case. The student does not need to discuss all the issues decided in the case in his case digest. He only needs to focus on the relevant issue or the issue related to the subject that he is taking. 

A case digest may also serve as a useful study aid for class discussions and exams. A student who has a case digest does not need to go back to the case in order to remember what he has read.If you are a first year student, the idea is totally new. You could be surprised of the number of cases that each professor will assign to you.It has been a practice in Law School for Professors to assign numerous cases to students for them to read, understand, and digest. This is very tiring indeed. 

The format of the Case Digest requires that you give the facts of the case, the issues involved, and the ruling of the Supreme Court as to the matter. This is very taxing since you would have to read the cases, understand them, and pinpoint the relevant facts and issues. However, before determining what constitutes the facts, issues and ruling of a case, you must consider what subject you are asked to digest. If your Political Law professor asks you to digest cases, you must focus on the subject that concerns Political Law only. Simply stated, digest a case according to the subject in which you are assigned the case.Then you would have to give the ruling of the Court on such issues that you have pointed out. Also, they say that a good digest would only be one or two pages at most. So, in short, you should cram about 20, more or less, pages of a case into one single paper. And it's not just one case, but it could even reach to about a hundred. Everything should also be handwritten. So prepare your brain, coffee, lots of pen, and a number of notebooks.