political law compilation of case digests - sec. 8 and 10, art. iii, 1987 constitution

7/27/2019 Political Law Compilation of Case Digests - Sec. 8 and 10, Art. III, 1987 Constitution

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FREEDOM OF ASSOCIATION

Case Digests

PEOPLE VS. FERRER [48 SCRA 382; NOS.L-32613-14; 27 DEC 1972]

Facts: Hon. Judge Simeon Ferrer is the Tarlac trialcourt judge that declared RA1700 or the Anti-Subversive Act of 1957 as a bill of attainder. Thus,dismissing the information of subversion against thefollowing: 1.) Feliciano Co for being an officer/leader ofthe Communist Party of the Philippines (CPP)aggravated by circumstances of contempt and insult topublic officers, subversion by a band and aid of armedmen to afford impunity. 2.) Nilo Tayag and 5 others, forbeing members/leaders of the NPA, inciting, instigatingpeople to unite and overthrow the PhilippineGovernment. Attended by Aggravating Circumstancesof Aid or Armed Men, Craft, and Fraud. The trial court isof opinion that 1.) The Congress usurped the powers ofthe judge 2.) Assumed judicial magistracy bypronouncing the guilt of the CPP without any forms of

safeguard of a judicial trial. 3.) It created apresumption of organizational guilt by being membersof the CPP regardless of voluntariness.

The Anti Subversive Act of 1957 was approved20June1957. It is an act to outlaw the CPP and similarassociations penalizing membership therein, and forother purposes. It defined the Communist Party beingalthough a political party is in fact an organizedconspiracy to overthrow the Government, not only byforce and violence but also by deceit, subversion andother illegal means. It declares that the CPP is a clearand present danger to the security of the Philippines.Section 4 provided that affiliation with full knowledgeof the illegal acts of the CPP is punishable. Section 5states that due investigation by a designatedprosecutor by the Secretary of Justice be made prior tofiling of information in court. Section 6 provides forpenalty for furnishing false evidence. Section 7provides for 2 witnesses in open court for actspenalized by prision mayor to death. Section 8 allowsthe renunciation of membership to the CCP throughwriting under oath. Section 9 declares theconstitutionality of the statute and its valid exerciseunder freedom if thought, assembly and association.

Issues:

(1) Whether or not RA1700 is a bill of attainder/ ex postfacto law.

(2) Whether or Not RA1700 violates freedom ofexpression.

Held:The court holds the VALIDITY Of the Anti-Subversion Act of 1957.

A bill of attainder is solely a legislative act. It punisheswithout the benefit of the trial. It is the substitution ofjudicial determination to a legislative determination ofguilt. In order for a statute be measured as a bill of

attainder, the following requisites must be present: 1.)The statute specifies persons, groups. 2.) the statute isapplied retroactively and reach past conduct. (A bill ofattainder relatively is also an ex post facto law.)

In the case at bar, the statute simply declares the CPPas an organized conspiracy for the overthrow of theGovernment for purposes of example of SECTION 4 ofthe Act. The Act applies not only to the CPP but also toother organizations having the same purpose and theirsuccessors. The Acts focus is on the conduct notperson.

Membership to this organizations, to be UNLAWFUL, itmust be shown that membership was acquired with theintent to further the goals of the organization by overtacts. This is the element of MEMBERSHIP withKNOWLEDGE that is punishable. This is the requiredproof of a members direct participation. Why ismembership punished. Membership renders aid andencouragement to the organization. Membershipmakes himself party to its unlawful acts.

Furthermore, the statute is PROSPECTIVE in nature.Section 4 prohibits acts committed after approval of

the act. The members of the subversive organizationsbefore the passing of this Act is given an opportunity toescape liability by renouncing membership inaccordance with Section 8. The statute applies theprinciple of mutatis mutandis or that the necessarychanges having been made.

The declaration of that the CPP is an organizedconspiracy to overthrow the Philippine Governmentshould not be the basis of guilt. This declaration is onlya basis of Section 4 of the Act. The EXISTENCE OFSUBSTANTIVE EVIL justifies the limitation to theexercise of Freedom of Expression and Association inthis matter. Before the enactment of the statute andstatements in the preamble, careful investigations by

the Congress were done. The court further stressesthat whatever interest in freedom of speech andassociation is excluded in the prohibition ofmembership in the CPP are weak consideringNATIONAL SECURITY and PRESERVATION ofDEMOCRACY.

The court set basic guidelines to be observed in theprosecution under RA1700. In addition to provingcircumstances/ evidences of subversion, the followingelements must also be established:

1. Subversive Organizations besides the CPP, it mustbe proven that the organization purpose is to

overthrow the present Government of the Philippinesand establish a domination of a FOREIGN POWER.Membership is willfully and knowingly done by overtacts.2. In case of CPP, the continued pursuance of itssubversive purpose. Membership is willfully andknowingly done by overt acts.

The court did not make any judgment on the crimes ofthe accused under the Act. The Supreme Court setaside the resolution of the TRIAL COURT.
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UNITED PEPSI-COLA SUPERVISORY UNION(UPSU),vs.HON. BIENVENIDO E. LAGUESMA

FACTS: Petitioner is a union of supervisory employees.It appears that on March 20, 1995 the union filedapetition for certification election on behalf of the routemanagers at Pepsi-Cola Products Philippines,Inc.However, its petition was denied by themed-arbiter and, on appeal, by the Secretary ofLabor andEmployment, on the ground that the routemanagers are managerial employees and, therefore,ineligible for union membership under the firstsentence of Art. 245 of the Labor Code, which provides:

Ineligibility of managerial employees to joinany labor organization; right of supervisoryemployees.Managerial employees are not eligible to join, assist orform any labor organization. Supervisory employeesshall not be eligible for membership in a labororganization of the rank-and-file employees but mayjoin, assist or form separatelabor organizations of their

own.

Petitioner filed a motion for reconsideration, pressingfor resolution its contention that the first sentenceof Art. 245 of the Labor Code, so far as it declaresmanagerial employees to be ineligible to form, assistor join unions, contravenes Art. III, Sec. 8 of theConstitution which provides: The right of thepeop le, in cl ud ing those emplo yed in th e pu bl icand private sectors, to form unions, associations,or societies for purposes not contrary to law shall notbe abridged.

ISSUES:1) whether or not the route managers at Pepsi-Cola

Products Philippines, Inc. are managerial employeesand2) whether or not Art. 245, insofar as it prohibitsmanagerial employees from forming, joining orassisting labor unions, violates Art. III, 8 of theConstitution.

RULING:1) YES. The rout e managers cannot thuspossibly be classified as mere supervisorsbecause their work does not only involve, but goesfar beyond, the simple direction or supervision ofoperating employees to accomplish objectives set bythose above them. They are not mere functionaries

with simple oversight functions but businessadministrators in their own right. Superv isoryemployees are those who, in the interest of theemployer, effectively recommend such managerialactions if the exercise of such authority is not merelyroutinary or clerical in nature but requires the use ofindependent judgment." Thus, their only poweris to recommend. Certainly, the route managersin this case more than merely recommend effectivemanagement action. They perform operational, humanresource, financial and marketing functions for thecompany, all of which involve the laying down ofoperating policies for themselves and their teams. Theterm "manager" generally refers to "anyone

who is responsible for subordinates andother organizational resources." Managers constitutethree levels of a pyramid:

FIRST-LINE MANAGERS: The lowest level in anorganization at which individuals are responsible forthe work of others is calledfirst-line or first-level management. First-line managersdirect operating employees only; they do not superviseother managersMIDDLE MANAGERS: Middle managers direct theactivities of other managers and sometimes also thoseof operating employees. Middle managers' principalresponsibilities are to direct the activities thatimplement their organizations' policies and tobalance the demands of their superiors with thecapacities of their subordinates

TOP MANAGERS: Composed of a comparat ivel ysmall group of executives, top management isresponsible for the overall management of theorganization. It establishes operating policies andguides the organization's interactions with itsenvironment. In the Case, entitled Worker's

Alliance Trade Union (WATU) v. Pepsi-ColaProducts Philippines, Inc., dec ided o n N ove m ber1 3 , 1 9 9 1 , t he Se c r e t a r y o f L a bo r f o und :w e f i nd t ha t o n l y t ho s e e m p l o y e e soccupying the position of route manager andaccounting manager are managerial employees.2)NO. The real intent of Art. III, 8 is evident inLerums proposal. The Commission intended theabsolute right to organize of government workers,supervisory employees, and security guards to beconstitutionally guaranteed. By implication, no similarabsolute constitutional right to organize for laborpurposes should be deemed to have been granted totop-level and middle managers. Nor is theguarantee of organizational right in Art. III, 8

infringed by a ban against managerialemployees forming a union. The right guaranteed inArt. III, 8 is s ubject to the condition that i tsexercise should be for purposes "not contrary to law."In the case of Art. 245, there is a rational basis forprohibiting managerial employees from forming orjoining labor organizations. In Bulletin PublishingCo., Inc. v. Hon. AugustoSanchez, this Court elaborated on this rationale, thus:The r a t i o na l e f o r t h i s i nh ib i t i on has be ensta ted to be , b eca us e i f t he se managerialemployees would belong to or be affiliated with aUnion, the latter might not be assured of their loyaltyto the Union in view of evident conflict of interests. The

Union can also become company-dominated with thepresence of managerial employees in Unionmembership.

G.R. No. L-18467 September 30, 1963

VICTORIAS MILLING CO., INC., petitioner,vs.VICTORIAS-MANAPLA WORKERS ORGANIZATION -PAFLU, FREE VISAYAN WORKERS (FFW), ET AL.,respondents.


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The above-entitled cases originated from acomplaint for unfair labor practice against the VictoriasMilling Company, Inc., filed by the acting prosecutor ofthe Court of Industrial Relations on March 2, 1960. Atthe hearing of the charges the parties entered into astipulation of facts, the most important provisions ofwhich are as follows: On April 6, 1957, the VictoriasMilling Company, Inc. and the Free Visayan Workersentered into a collective bargaining agreement whichwas to expire on December 31, 1959. The agreementcontains an automatic renewal clause after December31. 1959. The duration of the agreement and theautomatic renewal clause are contained in thefollowing paragraphs of the agreement:

DURATION OF AGREEMENT

This agreement shall remain in full forceand effect until midnight of December 31,1959, continuing, from year to year from thedate of the signing hereof, unless either partygives written notice by registered mail no morethan seventy (75) days nor less than thirty (30)days prior to December 31, 1959, or eachsubsequent renewal anniversary date the afterto the effect that said party shall modify orterminate the entire agreement, in which eventthis agreement shall considered terminated oropen for negotiation.

If the notice sent in accordance with theabove paragraph affects a portion or portionsof the agreement, the portion portions notaffected shall remain in force during therenewal period.

Twenty (20) days after receipt of thenotice of modification or termination, the

parties shall meet for the purpose bargainingwith respect to the provisions of thisagreement parts thereof which have beenterminated by either party.

Sometime in October, 1957, a petition forcertification of elections in the Victories MillingCompany, Inc. filed by Victorina A. Combate and 318others. In this case before the Industrial Court in May,1959, the Philippine Association of Free Labor Unions(PAFLU) intervened. And on August 12, 1960, the Courtof Industrial Relations in the case for certification ofelections order the holding of a certification ofelections. It does not appear from the record that theelection has already been made. Neither does theresult thereof appear.

On October 26, 1959 Vicente Convito, Presidentof the Victorias-Manapla Workers Organization (PAFLU)wrote a communication to the respondent VictoriasMilling Company, Inc., requesting that the companydesist from entering into anew agreement with anyunion until the question of representation has beendetermined by the court; that the majority of theworkers of the Victorias Milling Company, Inc. havejoined the said organization (PAFLU). Again on October29, 1959, Vicente Convito representing the samePhilippine Association of Free Labor Unions wrote a

letter to the respondent company alleging that in viewof the affiliation of the workers and laborers with theFree Visayan Workers and in view of the fact thatlatter's agreement with the respondent company isbound to expire, certain proposals be taken up for thepurpose of collective bargaining. In answer to theabove two communications sent by the President ofthe PAFLU, the respondent company wrote therepresentative of the PAFLU as follows: That in view ofthe fact that the petition for the certification ofelections is still pending and the issue of the majorityrepresentation has not been resolved yet, therespondent company could not take action on therequest for collective bargaining presented by thePAFLU.

The complaint for unfair labor practice arosefrom the dismissal of 10 employees, namely, FelinoDalipe, Donato Anazarias, Prudencio Parcon, CelestinoBernila, Remegio Seballos, Belarmino Bartico, AgustinDulano, Ignacio Lozano, Loreto Undar, and WilliamCevero. These employees were on or before December31, 1959 members of the Free Farmers Union or theFederation of Free Workers.

On January 11, 1960, a supplemental agreementhaving been entered into by the Victorias MillingCompany, Inc. and the Free Visayan Workers ofproviding for wage increases, the above-named tendismissed employees had received increases in theirpay. But on February 10, 1960, they resigned orseparated from the Free Farmers or Workers Union andjoined the Philippine Association of Free labor Unions(PAFLU). In view of this change in their affiliation fromthe Free Farmers Union to the Philippine Association ofFree Labor Unions (PAFLU),which change becameknown to the respondent company, an investigation oftheir membership and change in membership wasmade. The Free Visayan Workers Union conducted an

investigation of the 10 dismissed employees prior totheir expulsion from the respondent union and itsrecommendation was for their dismissal. In thisinvestigation it was found out that they received thewage increases on January 14, 1960, but changed theiraffiliation on February 10, 1960 (from the Free VisayanUnion to the Philippine Association of Free Labor(PAFLU). Consequently, with this finding of the changein their membership and in view of the following of theexisting agreement between the Free Farmers Unionand the respondent Company:

Section 5(a). All employees who arecovered by this agreement as provided for in

Section 4 hereof, who, at the date of thesigning of the agreement, are Members of theunion, shall members in good standing as acondition of continued employment. Thosecovered employees who, at the date of thesigning of this agreement, are not members ofthe Union, shall be rendered to join and remainmembers of the Union in good standing as acondition of continued employment....

Any laborer or employee who shall jointhe union in pursuance of the aboverequirement and who thereafter shall from theunion or is expelled therefrom for any act


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contrary to the by-laws, rules and regulationsof the Union, shall upon advise of the Union tothe management of the company be dismissedfrom his employment. It is to be understood,however, that the company reserves it's rightto look into the merits the expulsion of thelaborer or employee concerned wheredismissal from the Company is sought by theUnion....

which agreement is a closed-shop agreement,the respondent company, upon advice of the FreeFarmers Union dismissed the above-mentioned 10employees. Their dismissal is the subject of thecomplaint for unfair labor practice filed by theprosecutor of the Court of Industrial Relations in thesetwo cases now before the Court.1awphl.nt

The facts found by the hearing officer regardingprevious affiliation of the above-mentioned tendismissed employees are as follows:

With respect to the individualcomplainants, except Santiago Palomo and

Pedro Moran, the charges in regard to saidpersons having been withdrawn (t.s.n. pp. 68-69), all former members of the respondentunion. On February 1, 1960, they severed theiraffiliation with respondent union (Exhibits "M"to M-9). Immediately thereafter theinvestigating committee of the Victorias MillingCompany Unit of the respondent union startedan investigation and its finding forwarded tothe Central Board of said respondent union.(Exhibit P). The latter accepted the resignationof the complainants and recommended theirdismissal. (Exhibit G). The respondentcompany in similarly worded letters dismissedthe said complainants based upon on the union

security provisions of the Collective Bargainingagreement in question (Exhibits B to B-9), afterproper investigation. (Stipulation No. 9)

It must be noted that the circumstancesmentioned in the preceding paragraphoccurred after the execution of thesupplementary agreement and after the periodof the modification and/or termination of theagreement has expired.

It is also a fact that the hereincomplainants before their dismissal weremembers of the respondent union.

The hearing officer in arriving at itsrecommendation to the court reasoned as follows:

There reasons for those expressprohibitions are apparent. Should the closedshop provisions for a collective bargainingagreement given absolute effect, it willmaintain any labor to organization inperpetuity despite the manifest wishes of theemployees concerned, which is contrary to theletter and spirit the of Republic Act No. 875.Just as our very own system of life guarantees

a periodical gauge to determine the people'sfree wishes in those they have elected togovern them through a system of politicalelection, so must the bargaining representativeof the employees be equally determined at anappropriate time and the Court of IndustrialRelations by law is the agency charged withsuch function, and the exercise of such choiceshould likewise be free from discrimination.

While this Court is fully aware of thepossible levelling of the accusation that wemust not interfere with the closed shopprovisions of any validly entered collectivebargaining as the same might constituteinternal union matters, yet such matters doconstitute relations going deeply into the rootsof the right to self-organization which thisCourt is duty bound by law to Protect anduphold.

We do not agree with the court below in itsruling that the recognition and enforcement of theclosed-shop agreement between the Free FarmersUnion and the Victorias Milling Company, Inc. wouldtend to perpetuate the labor organization whichsecured it. This claim cannot be true because theclosed-shop agreement is to be enforced afterDecember 31, 1959 only and up to the time that a newagreement can be entered into.

The ruling of the court below suspending theoperation of the agreement automatically renewed,would produce as a result a period of interregnum inwhich no agreement would govern at all. There wouldbe a void if we do not authorize enforcement of theautomatic clause adopted in the agreement. Such asituation no agreement is in force to govern therelations be laborers and capitalists is unwise, as it

would give party an opportunity to commit a breach ofthe law.

Another reason for enforcing the closed-shop a isthe principle of sanctity or inviolability of contractsguaranteed by the Constitution. As a matter ofprinciple the provision of the Industrial Peace Actgranting dom to employees to organize themselvesand select representative for entering into bargainingagreement should be subordinated to theconstitutional provision protecting the sanctity ofcontracts. We can not conceive how freedom tocontract, which should be allowed to exercised withoutlimitation may be subordinated to freedom of laborers

to choose the organization they desire to representthem. And even if the legislature had intended to do soand made such freedom of the laborer paramount tothe sanctity of obligation of contracts, such attempt tooverride the constitutional provision would necessarilyand ipso facto be null and void.

A case brought on a writ of certiorari to theSupreme Court of the United States presented thesame problem that we now have before us, namely,the effectivity of a closed-shop agreement as againstthe freedom of the laborers or employees to choosethe labor organization they want to affiliate with. There


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it was said that the granting the employer andemployees the privilege to enter into a closed-shopagreement, also recognized the right the workers tochoose their union, but that said right choose a laborunion is limited by the proviso authorizing parties toenter into a closed-shop agreement. Herein low is asummary of the facts involved in said case and thereasons adduced by the court in arriving at itsconclusion:

Petitioner was engaged in producingglycerin for war purposes. Its employees wereat first represented by a union affiliated withthe American Federation of Labor. In 1938 theInternational Longshoremen's andWarehousemen's Union, affiliated with theCongress of Industrial Organizations, becamethe representative of petitioner's employees.On July 9, 1941, the C.I.O. entered into acollective bargaining contract with petitionerwhich contained a closed-shop provision to theeffect that new employees shall be hiredthrough the offices of the Union, provided thelatter shall be able to furnish competentworkers for the work required; otherwise, the

employer may hire from outside sources,provided that employees so hired shall makeapplication for membership in the Union within15 days of their employment; and thatemployees covered by the agreement shall bemembers in good standing of the Union. Thiscontract was entered in good faith by theparties and was of indefinite duration.

On July 24, 1945, the C.I.O. andpetitioner entered into a supplementalagreement that their contract of July 9, 1941,shall remain in full force and effect pendingapproval of certain agreed-upon items, other

than the closed-shop provision, by the WarLabor Board. Shortly after the making of thesupplemental agreement, open agitation for achange of a bargaining representative beganat a period during which the National LaborRelations believed was appropriate to seek are-determination of representatives. On July 31an authorized strike occurred which lasted twoand one-half days, although the C.I.O. hadpledged its membership not to strike duringwar-time. A group of employees formed anindependent organization which later sought toaffiliate with the American Federation of Labor.Because they were unmindful of the warningsissued by the C. I. O. that disciplinary actionagainst members would be taken for rivalunion activity, some 37 employees weresuspended and expelled by the C. I. O. anddischarged by petitioner upon demand by theC. I. O., on the ground that they were no longermembers in good standing of the C. I. O. asrequired by the closed-shop contract.

Petitioner was charged with violation ofDec. 8(1) and Sec. 8(3) of the National LaborRelations Act and found by the National LaborRelations Board guilty thereof and ordered toreinstate the discharged employees. The Court

of Appeals having entered a decree enforcingthe Board's order, a petition for a writ ofcertiorari against the judgment of said courtwas brought before the Supreme Court of theUnited States.

Sec. 8(3) referred to above considers asunfair labor practice for an employer todiscriminate in regard to hire or tenure ofemployment to encourage or discourage

membership in any labor organization, butdoes not prelude an employer from making anagreement with labor organization to requireas a condition of employment membershiptherein, if such labor organ the representativeof the employees.

Recognizing that the discharges had theeffect of interfering with the employees' rightgiven by Sec. 7 of the National Labor RelationsAct to self-organization and to bargainingthrough representatives of their own choosing,that the discharges had the effect ofdiscriminating, contrary to the Prohibition ofSec. 8(3) of said Act, the Supreme Courtnevertheless found that a closed-shopagreement was valid under California law, andthe California Supreme Court, in the case ofJames v. Marinship (155 P2d 32), explicitly thata union may expel persons who have interestto the union because of the right of the unionto reject or expel persons who refuse to abideby any reasonable regulation or lawful policyadopted by the union. Citing the case of Davisv. International Alliance 141 P2d 486, it statedthat under California law, "an organization hasthe natural right of self-preservation, and maywith propriety expel hers who show theirdisloyalty by joining a rival organization." The

contract was held to be valid under the Act andunder state law.

Upholding the validity of closed-shopagreements the Supreme Court further heldthat such agreements protect the interest ofthe union and Provides stability to laborrelations, to achieve which was the primaryobjective of Congress in enacting the NationalLabor Relations Act. Congress knew that a shopagreement would interfere with freedom ofemployment organize in another union andwould, if used, lead inevitably to discriminationin tenure of employment. Nevertheless,

Congress inserted the proviso of Sec. 8(3)allowing closed-shop contracts with fullrealization that it would be a limitation on Sec.7 granting employees the right to self-organization collective bargaining. (Colgate-Palmolive Peet Co. v. Nat. Labor Relations Bd.,et. al., 338 U.S. 355-365, 94 L. ed. 161).

The above U.S. Supreme Court decision clearedan employer which discharged employees expelledfrom the union because of activities for a rival union,from charges of unfair labor practice, where its actionwas based on a closed-shop contract, with a bona fide


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labor union entered into and performed in good faithand valid in the state where made.

Returning now to the case at bar, as we havefound that the dismissal of the employees by therespondent Victorias Milling Company, Inc. was inpursuance of a clause of a agreement between saidcompany and the Free Farmers Union, whichagreement became automatically renewed upon itsexpiration on December 31, 1959, and before a new

bargaining agreement could be arrived at, the action ofthe respondent company in enforcing the terms of theclosed-shop agreement is a valid exercise for its rightsand obligations under the contract. The dismissal byvirtue of thereof cannot constitute an unfair laborpractice, as it was in pursuance of an agreement thathas been found to be regular and of a closed-shopagreement which under our laws is valid and binding.

The decision of the lower court declaring that therespondent company was guilty of unfair labor practiceshould therefore, be set aside and the complaint forthe said unfair labor practice dismissed.

The Victorias-Manapla Organization (PAFLU) hadalso appealed from the decision of the court below forthe reason that it did not grant them pay during theperiod of the dismissal of the laborers in question. Inview of our ruling that the dismissal was valid, theappeal for back wages must also be denied. Withoutcosts. So ordered.

Victoriano vs Elizalde Rope Workers Union

On December 5, 2011

Political Law Primacy of the Constitution overContractual Rights

Victoriano, an Iglesia ni Cristo member, has been anemployee of the Elizalde Rope Factory since 1958. Hewas also a member of the EPWU. Under the CBAbetween ERF and EPWU, a close shop agreement isbeing enforced which means that employment in thefactory relies on the membership in the EPWU; that inorder to retain employment in the said factory onemust be a member of the said Union. In 1962,Victoriano tendered his resignation from EPWUclaiming that as per RA 3350 he is an exemption to theclose shop agreement by virtue of his being a member

of the INC because apparently in the INC, one isforbidden from being a member of any labor union. Itwas only in 1974 that his resignation from the Unionwas acted upon by EPWU which notified ERF about it.ERF then moved to terminate Victoriano due to hisnon-membership from the EPWU. EPWU and ERFreiterated that he is not exempt from the close shopagreement because RA 3350 is unconstitutional andthat said law violates the EPWUs and ERFslegal/contractual rights.

ISSUE: Whether or not RA 3350 is unconstitutional.

HELD:The right to religion prevails over contractual orlegal rights. As such, an INC member may refuse to joina labor union and despite the fact that there is a closeshop agreement in the factory where he wasemployed, his employment could not be validlyterminated for his non-membership in the majoritytherein. Further, the right to join a union includes theright not to join a union. The law is notunconstitutional. It recognizes both the rights of unionsand employers to enforce terms of contracts and at thesame time it recognizes the workers right to join or notto join union. But the RA recognizes as well theprimacy of a constitutional right over a contractualright.

Victoriano v Elizalde Rope Workers Union 59SCRA 54 (1974)

Facts: Plaintiff is a member of the Elizalde RopeWorkers Union who later resigned from his affiliation tothe said union by reason of the prohibition of hisreligion for its members to become affiliated with anylabor organization. The union has subsisting closedshop agreement in their collective bargainingagreement with their employer that all permanentemployees of the company must be a member of theunion and later was amended by Republic Act No. 3350with the provision stating "but such agreement shallnot cover members of any religious sects whichprohibit affiliation of their members in any such labororganization".. By his resignation, the union wrote aletter to the company to separate the plaintiff from theservice after which he was informed by the companythat unless he makes a satisfactory arrangement withthe union he will be dismissed from the service. Theunion contends that RA 3350 impairs obligation ofcontract stipulated in their CBA and discriminatorilyfavors religious sects in providing exemption to beaffiliated with any labor unions.

Issue: WON RA 3350 impairs the right to formassociation.

Held: The court held that what the Constitution and theIndustrial Peace Act recognize and guarantee is the"right" to form or join associations which involves twobroad notions, namely: first, liberty or freedom, i.e.,the absence of legal restraint, whereby an employeemay act for himself without being prevented by law;and second, power, whereby an employee may join orrefrain from joining an association. Therefore the rightto join a union includes the right to abstain from joiningany union. The exceptions provided by the assailedRepublic Act is that members of said religious sectscannot be compelled or coerced to join labor unionseven when said unions have closed shop agreementswith the employers; that in spite of any closed shopagreement, members of said religious sects cannot berefused employment or dismissed from their jobs onthe sole ground that they are not members of thecollective bargaining union. Thus this exception doesnot infringe upon the constitutional provision onfreedom of association but instead reinforces it.


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In re Edilion

In the Matter of the IBP Membership Dues Delinquencyof Atty. MARCIAL A. EDILIONA.M. No. 1928 August 3, 1978

Facts: The respondent Marcial A. Edillon is a dulylicensed practicing attorney in the Philippines. The IBPBoard of Governors recommended to the Court theremoval of the name of the respondent from its Roll ofAttorneys for stubborn refusal to pay his membershipdues to the IBP since the latters constitutionnotwithstanding due notice.

Edilion contends that the provision providing for theIBP dues constitute an invasion of his constitutionalrights in the sense that he is being compelled, as a pre-condition to maintaining his status as a lawyer in goodstanding, to be a member of the IBP and to pay thecorresponding dues, and that as a consequence of thiscompelled financial support of the said organization towhich he is admittedly personally antagonistic, he is

being deprived of the rights to liberty and propertyguaranteed to him by the Constitution. Hence, therespondent concludes, the above provisions of theCourt Rule and of the IBP By-Laws are void and of nolegal force and effect.

Issue: WON the payment of IBP dues suffersconstitutional infirmity? NO

Held: All legislation directing the integration of the Barhave been uniformly and universally sustained as avalid exercise of the police power over an importantprofession.

The practice of law is not a vested right but a privilege,a privilege moreover clothed with public interestbecause a lawyer owes substantial duties not only tohis client, but also to his brethren in the profession, tothe courts, and to the nation, and takes part in one ofthe most important functions of the State theadministration of justice as an officer of the court.

When the respondent Edillon entered upon the legalprofession, his practice of law and his exercise of thesaid profession, which affect the society at large, were(and are) subject to the power of the body politic torequire him to conform to such regulations as might beestablished by the proper authorities for the commongood, even to the extent of interfering with some of hisliberties. If he did not wish to submit himself to suchreasonable interference and regulation, he should nothave clothed the public with an interest in hisconcerns.

To compel a lawyer to be a member of the IntegratedBar is not violative of his constitutional freedom toassociate. 6

Bar integration does not compel the lawyer toassociate with anyone. He is free to attend or notattend the meetings of his Integrated Bar Chapter or

vote or refuse to vote in its elections as he chooses.The only compulsion to which he is subjected is thepayment of annual dues. The Supreme Court, in orderto further the States legitimate interest in elevatingthe quality of professional legal services, may requirethat the cost of improving the profession in this fashionbe shared by the subjects and beneficiaries of theregulatory program the lawyers.

Such compulsion is justified as an exercise of the police

power of the State. Why? The right to practise lawbefore the courts of this country should be and is amatter subject to regulation and inquiry. And, if thepower to impose the fee as a regulatory measure isrecognize, then a penalty designed to enforce itspayment, which penalty may be avoided altogether bypayment, is not void as unreasonable or arbitrary.

Padcom Condominium Corporation vs. OrtigasCenter Association Case Digest

Padcom Condominium Corporation vs. Ortigas

Center Association[GR 146807, 9 May 2002]

Facts: Padcom Condominium Corporation (PADCOMowns and manages the Padilla Office CondominiumBuilding (PADCOM Building) located at EmeraldAvenue, Ortigas Center, Pasig City. The land on whichthe building stands was originally acquired from theOrtigas & Company, Limited Partnership (OCLP), byTierra Development Corporation (TDC) under a Deed ofSale dated 4 September 1974. Among the terms andconditions in the deed of sale was the requirement thatthe transferee and its successor-in-interest mustbecome members of an association for realty owners

and long-term lessees in the area later known as theOrtigas Center. Subsequently, the said lot, togethewith improvements thereon, was conveyed by TDC infavor of PADCOM in a Deed of Transfer dated 25February 1975. In 1982, Ortigas Center AssociationInc. was organized to advance the interests andpromote the general welfare of the real estate ownersand long-term lessees of lots in the Ortigas Center. Itsought the collection of membership dues in theamount of P2,724.40 per month from PADCOM. Thecorporate books showed that PADCOM owed theAssociation P639,961.47, representing membershipdues, interests and penalty charges from April 1983 toJune 1993.

The letters exchanged between the parties through theyears showed repeated demands for paymentrequests for extensions of payment, and even asettlement scheme proposed by PADCOM in Septembe1990. In view of PADCOM's failure and refusal to pay itsarrears in monthly dues, including interests andpenalties thereon, the Association filed a complaint forcollection of sum of money before the Regional TriaCourt of Pasig City, Branch 264 (Civil Case No. 63801)The Association averred that purchasers of lands withinthe Ortigas Center complex from OCLP are obligatedunder their contracts of sale to become members ofthe Association, and that this obligation was allegedlypassed on to PADCOM when it bought the lot from TDC


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its predecessor-in-interest. In its answer, PADCOMcontended that it is a non-stock, non-profit association,and for it to become a special member of theAssociation, it should first apply for and be acceptedfor membership by the latter's Board of Directors; thatno automatic membership was apparentlycontemplated in the Association's By-laws. PADCOMadded that it could not be compelled to become amember without violating its right to freedom ofassociation; and that since it was not a member of theAssociation, it was not liable for membership dues,interests and penalties.

On 1 September 1997, the trial court rendered adecision dismissing the complaint. The Associationappealed the case to the Court of Appeals (CA-GR CV60099). In its decision of 30 June 2000, the Court ofAppeals reversed and set aside the trial court'sdecision, and entered a new one ordering PADCOM topay the Association (1) P639,961.47 as and formembership dues in arrears inclusive of earnedinterests and penalties; and (2) P25,000.00 as and forattorney's fees; with costs against PADCOM; on theground that PADCOM automatically became a memberof the Association when the land was sold to TDC; and

that the intent to pass the obligation to prospectivetransferees was evident from the annotation of thesame clause at the back of the Transfer Certificate ofTitle covering the lot. The appellate court held thatdespite disavowal of membership, PADCOM'smembership in the Association was evident from thesefacts: (1) PADCOM was included in the Association's listof bona fide members as of 30 March 1995; (2) NarcisoPadilla, PADCOM's President, was one of theAssociation's incorporators; and (3) having receivedthe demands for payment, PADCOM not onlyacknowledged them, but asked for and was grantedrepeated extensions, and even proposed a scheme forthe settlement of its obligation. PADCOM filed thepetition for review.

Issue: Whether PADCOM can be compelled to join theassociation pursuant to the provision on automaticmembership appearing as a condition in the Deed ofSale of 4 September 1974 and the annotation thereofon Transfer Certificate of Title 457308.

Held: When the land in question was bought byPADCOM's predecessor-in-interest, TDC, from OCLP,the sale bound TDC to comply with panragraph (G) ofthe covenants, conditions and restrictions of the Deedof Sale. It was agreed by the parties that dues shall becollected from an automatic member and such fees orassessments shall be a lien on the property. The

stipulation was likewise annotated at the back ofTransfer Certificate of Title 457308 issued to TDC.When the latter sold the lot to PADCOM on 25 February1975, the Deed of Transfer expressly stated that "forand in consideration of the foregoing premises, theDEVELOPER, by these presents, cedes, transfers andconveys unto the CORPORATION the above-describedparcel of land evidenced by Transfer Certificate of Title457308, as well as the Common and Limited CommonAreas of the Condominium project mentioned anddescribed in the Master Deed with Declaration ofRestrictions, free from all liens and encumbrances,except those already annotated at the back of saidTransfer Certificate of Title 457308." As the provision

on automatic membership was annotated in theCertificate of Title and made a condition in the Deed ofTransfer in favor of PADCOM; consequently, PADCOM isbound by and must comply with the covenantMoreover, Article 1311 of the Civil Code provides thatcontracts take effect between the parties, their assignsand heirs. Since PADCOM is the successor-in-interest ofTDC, it follows that the stipulation on automaticmembership with the Association is also binding on theformer. Further, as lot owner, PADCOM is a regulamember of the Association. No application fomembership is necessary. If at all, acceptance by theBoard of Directors is a ministerial function consideringthat PADCOM is deemed to be a regular member uponthe acquisition of the lot pursuant to the automaticmembership clause annotated in the Certificate of Titleof the property and the Deed of Transfer. Furthermore,the automatic membership clause is not a violation ofits freedom of association. PADCOM was never forcedto join the association. It could have avoided suchmembership by not buying the land from TDC. Nobodyforced it to buy the land when it bought the buildingwith the annotation of the condition or lien on theCertificate of Title thereof and accepted the DeedPADCOM voluntarily agreed to be bound by and

respect the condition, and thus to join the AssociationLastly, under the principle of estoppel, from the factsor circumstances it enumerated in the appellate court'sdecision, PADCOM is barred from disclaimingmembership in the Association.

Padcom Condominium Corporation vs. OrtigasCenter Association, Inc.

G.R. No. 146807. May 9, 2002.

Facts:Petitioner Padcom Condominium Corporation

(PADCOM) owns and manages the Padilla OfficeCondominium Building (PADCOM BUILDING). The landon which the building stands was originally acquired

from the Ortigas & Company, Limited Partnership, byTierra Development Corporation (TDC) under a Deed ofSale with a condition that the transferee and itssuccessor-in-interest must become members of anassociation for realty owners and long-term lessees inthe area later known as the Ortigas Center.Subsequently, the said lot, together with theimprovements thereon, was conveyed by TDC in favorof PADCOM in a Deed of Transfer.

Thereafter, respondent Ortigas CenterAssociation, Inc. (ASSOCIATION) was organized toadvance the interests and promote the general welfareof the real estate owners and long-term lessees of the

lots in the Ortigas Center and sought the collection ofmembership dues from PADCOM. In view of PADCOM'Sfailure and refusal to pay its arrears in monthly dues,the Association filed a complaint for collection of sumof money before the trial court, but the same wasdismissed. On appeal, the Court of Appeals reversedand set aside the trial court's dismissal. Hence, thispetition.

Issue:Whether or not PADCOM is unjustly enriched by

the improvements made by the Association, thusrequiring the former to pay dues to the latter.


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Held:Yes. The Supreme Court held that as resident

and lot owner in the Ortigas area, PADCOM wasdefinitely benefited by the Association's acts andactivities to promote the interests and welfare of thosewho acquire property therein or benefit from the actsor activities of the Association.

Generally, it may be said that a quasi-contractis based on the presumed will or intent of the obligordictated by equity and by the principles of absolutejustice. Examples of these principles are: (1) it ispresumed that a person agrees to that which willbenefit him; (2) nobody wants to enrich himselfunjustly at the expense of another; or (3) one must dounto others what he would want others to do unto himunder the same circumstances.

Finally, PADCOM's argument that the collectionof monthly dues has no basis since there was no boardresolution defining how much fees are to be imposeddeserves scant consideration. Suffice it is to say thatPADCOM never protested upon receipt of the earlierdemands for payment of membership dues. In fact, byproposing a scheme to pay its obligation, PADCOM

cannot belatedly question the Association's authorityto assess and collect the fees in accordance with thetotal land area owned or occupied by the members,which finds support in a resolution dated 6 November1982 of the Association's incorporating directors andSection 2 of its By-laws.

Sta. Clara Homeowners' Association vs. SpousesGaston Case Digest

Sta. Clara Homeowners' Association vs. SpousesGaston

[GR 141961, 23 January 2002]

Facts: Spouses Victor Ma. Gaston and Lydia M. Gastonwere residents of San Jose Avenue, Sta. ClaraSubdivision, Mandalagan, Bacolod City. Theypurchased their lots in the said subdivision sometimein 1974, and at the time of purchase, there was nomention or requirement of membership in anyhomeowners' association. From that time on, they haveremained non-members of SCHA. They also stated thatan arrangement was made wherein homeowners whowere non-members of the association were issued"non-member" gatepass stickers for their vehicles foridentification by the security guards manning the

subdivision's entrances and exits. This arrangementremained undisturbed until sometime in the middle ofMarch 1998, when SCHA disseminated a boardresolution which decreed that only its members ingood standing were to be issued stickers for use intheir vehicles. Thereafter, on three separate incidents,Victor M. Gaston, the son of the spouses Gaston wholives with them, was required by the guards on dutyemployed by SCHA to show his driver's license as aprerequisite to his entrance to the subdivision and tohis residence therein despite their knowing himpersonally and the exact location of his residence.

On 29 March 1998, Victor Ma. Gaston was himselprevented from entering the subdivision andproceeding to his residential abode when securityguards Roger Capillo and a "John Doe" lowered thesteel bar of the KAMETAL gate of the subdivision anddemanded from him his driver's license foidentification. On 1 April 1998, Spouses Victor MaGaston and Lydia M. Gaston filed a complaint fodamages with preliminary injunction/preliminarymandatory injunction and temporary restraining ordebefore the Regional Trial Court in Negros Occidental atBacolod City against Santa Clara HomeownersAssociation (SCHA) thru its Board of Directors, namelyArneil Chua, Luis Sarrosa, Jocelyn Garcia, Ma. MilagrosVargas, Lorenzo Lacson, Ernesto Piccio, Dindo IlaganDanilo Gamboa, Jr., Rizza de la Rama and SecurityGuard Capillo and 'John Doe', and Santa Clara Estate,Incorporated (Civil Case 98-10217, RTC-Branch 49Bacolod City); alleging that the acts of SCHA, et al.done in the presence of other subdivision owners hadcaused the spouses Gaston to suffer moral damage. On8 April 1998, SCHA, et al. filed a motion to dismissarguing that the trial court had no jurisdiction over thecase as it involved an intra-corporate dispute betweenSCHA and its members pursuant to Republic Act 580

as amended by Executive Orders 535 and 90, muchless, to declare as null and void the subject resolutionof the board of directors of SCHA, the proper forumbeing the Home insurance and Guaranty Corporation(HIGC). To support their claim of intra-corporatecontroversy, SCHA, et al. stated that the Articles oIncorporation of SCHA, which was duly approved by theSecurities and Exchange Commission (SEC) on 4October 1973, provides "that the association shall be anon-stock corporation with all homeowners of StaClara constituting its membership"; and that its by-lawscontains a provision that "all real estate owners in Sta.Clara Subdivision automatically become members othe association"; among others. On 6 July 1998, thelower court resolved to deny SCHA et al.'s motion to

dismiss, finding that there existed no intra-corporatecontroversy since the Spouses Gaston alleged thatthey had never joined the association.

On 18 July 1998, SCHA, et al. submitted a Motion forReconsideration, adding lack of cause of action asground for the dismissal of the case. On 17 August1998, the trial court denied the said motion withouthowever ruling on the additional ground of lack ocause of action. On 18 August 1998, SCHA, et al. filed amotion to resolve its motion to dismiss on ground olack of cause of action. On 8 September 1998, the triacourt issued an order denying the motion. On 24September 1998, SCHA. et al. elevated the matter to

the Court of Appeals via a Petition for Certiorari. On 31August 1999, the Court of Appeals dismissed thePetition and ruled that the RTC had jurisdiction overthe dispute. The appellate court likewise denied SCHAet al.'s motion for reconsideration in a resolution dated11 February 2000. SCHA, et al. filed the petition forreview.

Issue: Whether the Spouses Gaston are members ofthe SCHA.

Held: The constitutionally guaranteed freedom oassociation includes the freedom not to associate. Theright to choose with whom one will associate oneself is


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the very foundation and essence of that partnership.Further, the Spouses Gaston cannot be compelled tobecome members of the SCHA by the simple expedientof including them in its Articles of Incorporation andBy-laws without their express or implied consent. True,it may be to the mutual advantage of lot owners in asubdivision to band themselves together to promotetheir common welfare, but that is possible only if theowners voluntarily agree, directly or indirectly, tobecome members of the association. True also,memberships in homeowners' associations may beacquired in various ways often through deeds ofsale, Torrens certificates or other forms of evidence ofproperty ownership. Herein, however, other than thesaid Articles of Incorporation and By-laws, there is noshowing that the Spouses Gaston have agreed to beSCHA members. The approval by the SEC of the saiddocuments is not an operative act which bestowsmembership on the Spouses Gaston because the rightto associate partakes of the nature of freedom ofcontract which can be exercised by and between thehomeowners amongst themselves, the homeowners'association and a homeowner, and the subdivisionowner and a homeowner/lot buyer. Clearly, there is noprivity of contract exists between SCHA and Spouses

Gaston. When the Spouses Gaston purchased theirproperty in 1974 and obtained Transfer Certificates ofTitles T-126542 and T-127462 for Lots 11 and 12 ofBlock 37 along San Jose Avenue in Sta. ClaraSubdivision, there was no annotation showing theirautomatic membership in the SCHA. Furthermore, therecords are bereft of any evidence that would indicatethat the Spouses Gaston intended to become membersof the SCHA. Prior to the implementation of theaforesaid Resolution, they and the other homeownerswho were not members of the association were issuednon-member gate pass stickers for their vehicles; afact not disputed by SCHA. Thus, the SCHA recognizedthat there were subdivision landowners who were notmembers thereof, notwithstanding the provisions of its

Articles of Incorporation and By-laws.

STA CLARA HOA VS GASTON JAN. 23, 2002 (CASEDIGEST)

Facts: Spouses Victor Ma. Gaston and Lydia Gaston,the private respondents, filed a complaint for damageswith preliminary injunction/preliminary mandatoryinjunction and temporary restraining order before theRegional Trial Court against petitioners Sta ClaraHomeowners Association (SCHA).

The complaint alleged that the privaterespondents purchased their lots in Sta. ClaraSubdivision and at the time of the purchase, there wasno mention or requirement of membership in anyhomeowners association. From that time on, theyhave remained non-members of the SCHA. They alsostated that an arrangement was made whereinhomeowners who were non-members of theassociation were issued non-member gate passstickers for their vehicles for identification by thesecurity guards manning the subdivisions entrancesand exits. This arrangement remained undisturbeduntil sometime in the middle of March 1998, whenSCHA disseminated a board resolution which decreed

that only its members in good standing were to beissued stickers for use in their vehicles.

Petitioners filed a motion to dismiss arguingthat the trial court had no jurisdiction over the case asit involved an intra-corporate dispute between SCHAand its members. The proper forum must be the HomeInsurance and Guarantee Corporation (HIGC). Theystated that that the Articles of Incorporation of SCHAwhich was duly approved by the Securities andExchange Commission , provides that the associationshall be a non-tock corporation with all thehomeowners of Sta. Clara constituting its membershipIts by-laws also contains a provision that all real estateowners automatically become members of theassociation. Moreover, the private respondentsallegedly enjoyed the privileges of membership andabided by the rules of the association, and evenattended the general special meeting of theassociation members.

Issue: Whether or not the private respondents aremembers of SCHA

Ruling: The constitutionally guaranteed freedom o

association includes the freedom not to associate. Theright to choose with whom one will associate oneself isthe very foundation and essence of the partnership. Itshould be noted that the provision guarantees the righto form an association. It does not compel others toform or join one.

Private respondents cannot be compelled tobecome members of SCHA by the simple expedient ofincluding them in its Articles of Incorporation and By-Laws without their express or implied consent. True, itmay be to the mutual advantage of lot owners in asubdivision to band themselves together to promotetheir common welfare. But that is possible only if theowners voluntarily agree, directly or indirectly, to

become members of the association. True alsomembership in homeowners association may beacquired in various ways often through deeds of saleTorrens certificates or other forms of evidence oproperty ownership. However, when privaterespondents purchased their property and obtainedTransfer Certificates of Title, there was no annotationshowing automatic membership in the SCHA. Thus, noprivity of contract arising from the title certificateexists between petitioners and private respondents.

G.R. No. L- 24548 October 27, 1983

WENCESLAO VlNZONS TAN, THE DIRECTOR OFFORESTRY, APOLONIO THE SECRETARY OFAGRICULTURE AND NATURAL RESOURCES JOSE Y.FELICIANO, respondents-appelllees,vs.THE DIRECTOR OF FORESTRY, APOLONIO RIVERA,THE SECRETARY OF AGRICULTURE AND N ATURALRESOURCES JOSE Y. FELICIANO, respon dents-appellees,RAVAGO COMMERCIAL CO., JORGE LAOHAPPICK and ATANACIO MALLARI, intervenors,


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This is an appeal from the order dated January 20,1965 of the then Court of First Instance of Manila,Branch VII, in Civil Case No. 56813, a petition forcertiorari, prohibition and mandamus with preliminaryprohibitory injunction (p. 2. rec.), which dismissed thepetition of petitioner-appellant Wenceslao Vinzons Tanon the ground that it does not state a sufficient causeof action, and upon the respondents-appellees'(Secretary of Agriculture and Natural resources and theDirector of Forestry) motion to dismiss (p. 28, rec.).

Sometime in April 1961, the Bureau of Forestry issuedNotice No. 2087, advertising for public bidding acertain tract of public forest land situated in Olongapo,Zambales, provided tenders were received on or beforeMay 22, 1961 (p. 15, CFI rec.). This public forest land,consisting of 6,420 hectares, is located within theformer U.S. Naval Reservation comprising 7,252hectares of timberland, which was turned over by theUnited States Government to the PhilippineGovernment (P. 99, CFI rec.).

On May 5, 1961, petitioner-appellant WenceslaoVinzons Tan submitted his application in due form afterpaying the necessary fees and posting tile requiredbond therefor. Nine other applicants submitted theiroffers before the deadline (p. 29, rec.).

Thereafter, questions arose as to the wisdom of havingthe area declared as a forest reserve or allow the sameto be awarded to the most qualified bidder. On June 7,1961, then President Carlos P. Garcia issued a directiveto the Director of the Bureau of Forestry, which read asfollows:

It is desired that the area formerlycovered by the Naval Reservation bemade a forest reserve for watershed

purposes. Prepare and submitimmediately a draft of a proclamationestablishing the said area as awatershed forest reserve for Olongapo,Zambales. It is also desired that thebids received by the Bureau of Forestryfor the issuance of the timber license inthe area during the public biddingconducted last May 22, 1961 berejected in order that the area may bereserved as above stated. ... (pp. 98,CFI rec.).

On August 3, 1961, Secretary Cesar M. Fortich ofAgriculture and Natural Resources sustained thefindings and re comendations of the Director ofForestry who concluded that "it would be beneficial tothe public interest if the area is made available forexploitation under certain conditions," and

We quote:

Respectfully forwarded to thehonorable, the Executive SecretaryMalacanang. Manila inviting particularattention to the comment andrecommendation of the Director ofForestry in the proceeding in

indorsement in which this Of fice fullyconcurs.

The observations of responsible forestofficials are most revealing of their zealto promote forest conservation andwatershed protection especially inOlongapo, Zambales area. Inconvincing fashion, they havedemonstrated that to declare the forest

area involved as a forest reserve ratifythan open it for timber exploitationunder license and regulation would domore harm than of to the publicinterest. To convert the area into aforest reserve without an adequateforest protection force, would make ofit a 'Free Zone and Logging Paradise,'to the ever 'Problem Loggers' ofDinalupihan, Bataan . . . an open targetof timber smugglers, kaingineros andother forms of forest vandals anddespoilers. On the other hand, to awardthe area, as planned, to a reputableand responsible licensee who shall

conduct logging operations thereinunder the selective logging methodand who shall be obliged to employ asufficient number of forest guards topatrol and protect the forestconsecration and watershed protection

Worthy of mention is the fact that theBureau of Forestry had alreadyconducted a public bidding todetermine the most qualified bidder towhom the area advertised should beawarded. Needless to stress, thedecision of the Director of Forestry to

dispose of the area thusly was arrivedat after much thought and deliberationand after having been convinced thatto do so would not adversely affect thewatershed in that sector. The result ofthe bidding only have to be announcedTo be sure, some of the participatingbidders like Mr. Edgardo Pascual, wentto much expense in the hope ofwinning a virgin forest concession. Tosuddenly make a turn about of thisdecision without strong justifiablegrounds, would cause the Bureau ofForestry and this Office no end ofembarrassment.

In view of the foregoing, it is earnestlyurged that the Director of Forestry beallowed to proceed with theannouncement of the results of thebidding for the subject forest area (p.13, CFI rec.).

The Office of the President in its 4th Indorsement datedFebruary 2, 1962, signed by Atty. Juan Cancio, ActingLegal Officer, "respectfully returned to the HonorableSecretary of the Department of Agriculture and NaturalResources for appropriate action," the papers subject


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of Forestry Notice No. 2087 which was referred to theBureau of Forestry for decision (p. 14, CFI rec.).

Finally, of the ten persons who submitted proposed thearea was awarded to herein petitioner-appellantWenceslao Vinzons Tan, on April 15, 1963 by theBureau of Forestry (p. 17, CFI rec.). Against this award,bidders Ravago Commercial Company and Jorge LaoHappick filed motions for reconsideration which weredenied by the Director of Forestry on December 6,

1963.

On May 30, 1963, the Secretary of Agriculture andNatural Resources Benjamin M. Gozon whosucceeded Secretary Cesar M. Fortich in office issued General Memorandum Order No. 46, series of1963, pertinent portions of which state:

xxx xxx xxx

SUBJECT: ... ... ...

(D)elegation of authority to theDirector of Forestry to grant ordinarytimber licenses.

1. ... ... ...

2. The Director of Forestry is herebyauthorized to grant (a) new ordinarytimber licenses where the area coveredthereby is not more than 3,000hectares each; and (be the extensionof ordinary timber licenses for areasnot exceeding 5,000 hectares each;

3. This Order shall take effect

immediately (p. 267, CFI rec.).

Thereafter, Jose Y. Feliciano was appointed as Actingsecretary of Agriculture and Natural Resources,replacing secretary Benjamin M. Gozon. Uponassumption of office he Immediately promulgate onDecember 19, 19b3 General memorandum Order No.60, revoking the authority delegated to the Director ofForestry, under General Memorandum order No. 46, togrant ordinary timber licenses, which order took effecton the same day, December 19, 1963. Pertinentportions of the said Order read as follows:

xxx xxx xxx

SUBJECT: Revocation of GeneralMemorandum Order No 46 dated May30, 1963

1. In order to acquaint the undersignedwith the volume and Nature of thework of the Department, the authoritydelegated to the Director of forestryunder General Memorandum Order No.46, dated May 30, 1963, to grant (a)new ordinary timber licenses where thearea covered thereby is not more than

3,000 hectares each; and (b) theextension of ordinary timber licensesfor areas not exceeding 3,000 hectareseach is hereby revoked. Until furthernotice, the issuance of' new licenses ,including amendments thereto, shallbe signed by the secretary ofAgriculture and Natural Resources.

2. This Order shall take effect

immediately and all other previousorders, directives, circulars,memoranda, rules and regulationsinconsistent with this Order are herebyrevoked (p. 268, CFl rec.; Emphasissupplied).

On the same date that the above-quoted memorandumtook effect, December 19, 1963, Ordinary TimberLicense No. 20-'64 (NEW) dated April 22, 1963, in thename of Wenceslao Vinzons Tan, was signed by thenActing Director of Forestry Estanislao R. Bernal withoutthe approval of the Secretary of Agriculture andNatural Resources. On January 6, 1964, the license wasreleased by the Office of the Director of Forestry (p. 30CFI rec.; p. 77, rec.). It was not signed by the Secretaryof Agriculture and Natural Resources as required byOrder No. 60 aforequoted.

On February 12, 1964, Ravago Commercial Companywrote a letter to the Secretary of Agriculture andNatural Resources shall be considered by tile NaturalResources praying that, pending resolution of theappeal filed by Ravago Commercial Company and JorgeLao Happick from the order of the Director of Forestrydenying their motion for reconsideration, OTI No.20-'64 in the name of Wenceslao V. Tan be cancelledor revoked on the ground that the grant thereof wasirregular, anomalous and contrary to existing forestry

laws, rules and regulations.

On March 9, 1964, acting on the said representationmade by Ravago Commercial Company, the Secretaryof Agriculture and Natural Resources promulgated anorder declaring Ordinary Timber License No. 20-'64issued in the name of Wenceslao Vinzons Tan, ashaving been issued by the Director of Forestry withoutauthority, and is therefore void ab initio. Thedispositive portion of said order reads as follows:

WHEREFORE, premises considered, thisOffice is of the opinion and so holdsthat O.T. License No. 20-'64 in thename of Wenceslao Vinzons Tan shouldbe, as hereby it is, REVOKED ANDDECLARED without force and effectwhatsoever from the issuance thereof.

The Director of Forestry is herebydirected to stop the logging operationsof Wenceslao Vinzons Tan, if there beany, in the area in question and shallsee to it that the appellee shall notintroduce any further improvementsthereon pending the disposition of theappeals filed by Ravago Commercial


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Company and Jorge lao Happick in thiscase" (pp. 30-31, CFI rec.).

Petitioner-appellant moved for a reconsideration of theorder, but the Secretary of Agriculture and NaturalResources denied the motion in an Order dated March25, 1964, wherein this paragraph appears:

In this connection, it has beenobserved by the Acting Director of

Forestry in his 2nd indorsement ofFebruary 12, 1964, that the area inquestion composes of water basinoverlooking Olongapo, including theproposed Olongapo watershedReservation; and that the United Statesas well as the Bureau of Forestry hasearmarked this entire watershed for awatershed pilot forest for experimenttreatment Concerning erosion andwater conservation and flood control inrelation to wise utilization of the forest,denudation, shifting cultivation,increase or decrease of crop harvest ofagricultural areas influenced by thewatershed, etc. .... (pp. 3839, CFI rec.;p. 78, rec.).

On April 11, 1964, the Secretary of Agriculture andNatural Resources, acting on the separate appeals filedby Jorge Lao Happick and Ravago CommercialCompany, from the order of the Director of Forestrydated April 15, 1963, awarding to Wenceslao VinzonsTan the area under Notive No. 2087, and rejecting theproposals of the other applicants covering the samearea, promulgated an order commenting that in view ofthe observations of the Director of Forestry justquoted, "to grant the area in question to any of theparties herein, would undoubtedly adversely affect

public interest which is paramount to privateinterests," and concluding that, "for this reason, thisOffice is of the opinion and so holds, that without thenecessity of discussing the appeals of the hereinappellants, the said appeals should be, as hereby theyare, dismissed and this case is considered a closedmatter insofar as this Office is concerned" (p. 78, rec.).

On April 18, 1964, on the basis of the denial of hismotion for reconsideration by the Secretary ofAgriculture and Natural Resources, petitioner-appellantfiled the instant case before tile court a quo (Court ofFirst Instance, Manila), Special Civil Action No. 56813, apetition for certiorari, prohibition and mandamus with

preliminary prohibitory injunction (pp. 1-12, CFI rec.).Petitioner-appellant claims that the respondents-appellees "unlawfully, illegally whimsically, capriciouslyand arbitrarily acted without or in excess of theirjurisdiction, and/or with grave abuse of discretion byrevoking a valid and existing timber license withoutjust cause, by denying petitioner-appellant of the equalprotection of the laws, by depriving him of hisconstitutional right to property without due process oflaw, and in effect, by impairing the obligation ofcontracts" (P. 6, CFI rec.). Petitioner-appellant prayedfor judgment making permanent the writ of preliminaryinjunction against the respondents- appellees;declaring the orders of the Secretary of Agriculture and

Natural Resources dated March 9, March 25, and April11, 1964, as well as all his acts and those of theDirector of Forestry implementing said orders, and allthe proceedings in connection therewith, null and void,unlawful and of no force and effect; ordering theDirector of Forestry to renew OTI No. 20-'64 uponexpiration, and sentencing the respondents, jointly andseverally, to pay the petitioner-appellant the sum ofTwo Hundred Thousand Pesos (P200,000.000) by wayof pecuniary damage, One Hundred Thousand Pesos(P100,000.00) by way of moral and exemplarydamages, and Thirty Thousand Pesos (P30,000-00) asattorney's fees and costs. The respondents-appelleesseparately filed oppositions to the issuance of the writof preliminary injunction, Ravago CommercialCompany, Jorge Lao, Happick and Atanacio Mallari,presented petitions for intervention which weregranted, and they too opposed the writ.

The Director of Forestry in his motion to dismiss datedApril 24, 1964, alleges the following grounds: (1) thatthe court has no jurisdiction; (2) that the respondentsmay not be sued without their consent; (3) that thepetitioner has not exhausted all availableadministrative remedies; (4) that the petition does not

state a cause of action; and (5) that purelyadministrative and discretionary functions ofadministrative officials may not be interfered with bythe courts. The Secretary of Agriculture and NaturalResources joined the motion to dismiss when in hisanswer of May 18, 1964, he avers the following specialand affirmative defenses: (1) that the court has nojurisdiction to entertain the action for certiorari,prohibition and mandamus; (2) that the petitioner hasno cause of action; (3) that venue is improperly laid;(4) that the State is immune from suit without itsconsent; (5) that the court has no power to interfere inpurely administrative functions; and (6) that thecancellation of petitioner's license was dictated by

public policy (pp. 172-177, rec.). Intervenors also filedtheir respective answers in intervention with specialand affirmative defenses (pp. 78-79, rec.). A hearingwas held on the petition for the issuance of writ ofpreliminary injunction, wherein evidence wassubmitted by all the parties including the intervenors,and extensive discussion was held both orally and inwriting.

After the said hearing, on January 20, 1965, the court aquo, from the evidence received, resolved not only thequestion on the issuance of a writ of preliminaryinjunction but also the motion to dismiss, declared thatthe petition did not state a sufficient cause of action,and dismissed the same accordingly. To justify suchaction, the trial court, in its order dismissing thepetition, stated that "the court feels that the evidencepresented and the extensive discussion on theissuance of the writ of preliminary mandatory andprohibitory injunction should also be taken intoconsideration in resolving not only this question butalso the motion to dismiss, because there is no reasonto believe that the parties will change their stand,arguments and evidence" (p. 478, CFI rec.). His motionfor reconsideration having been denied (p. 488, CFIrec.), petitioner-appellant Wenceslao Vinzons Tanappealed directly to this Court.


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I

Petitioner-appellant now comes before this Court,claiming that the trial court erred in:

(1) holding that the petition does notstate a sufficient cause of action: and

(2) dismissing the petition [p.27,rec. ].

He argues that the sole issue in the present case is,whether or not the facts in the petition constitute asufficient cause of action (p. 31, rec.). Petitioner-appellant, in his brief, presented a lengthy discussionon the definition of the term cause of action wherein hecontended that the three essential elements thereon, namely, the legal right of the plaintiff, thecorrelative obligation of the defendants and the act oromission of the defendant in violation of that right are satisfied in the averments of this petition (pp. 31-32, rec.). He invoked the rule that when the ground fordismissal is that the complaint states no cause ofaction, such fact can be determined only from the factsalleged in the complaint and from no other, and the

court cannot consider other matters aliunde He furtherinvoked the rule that in a motion to dismiss based oninsufficiency of cause of action, the facts alleged in thecomplaint are deemed hypothetically admitted for thepurpose of the motion (pp. 32-33, rec.).

A perusal of the records of the case shows thatpetitioner-appellant's contentions are untenable. Asalready observed, this case was presented to the trialcourt upon a motion to dismiss for failure of thepetition to state a claim upon which relief could begranted (Rule 16 [g], Revised Rules of Court), on theground that the timber license relied upon by thepetitioner- appellant in his petition was issued by the

Director of Forestry without authority and is thereforevoid ab initio. This motion supplanted the generaldemurrer in an action at law and, as a rule admits, forthe purpose of the motion, ail facts which are wellpleaded however while the court must accept as trueall well pleaded facts, the motion does not admitallegations of which the court will take judicial noticeare not true, nor does the rule apply to legallyimpossible facts, nor to facts inadmissible in evidence,nor to facts which appear by record or documentincluded in the pleadings to be unfounded (Vol. 1,Moran's Comments on the Rules of Court, 1970 ed., p.505, citing cases).

It must be noted that there was a hearing held in theinstant case wherein answers were interposed andevidence introduced. In the course of the hearing,petitioner-appellant had the opportunity to introduceevidence in support of tile allegations iii his petition,which he readily availed of. Consequently, he isestopped from invoking the rule that to determine thesufficiency of a cause of action on a motion to dismiss,only the facts alleged in the complaint must beconsidered. If there were no hearing held, as in thecase of Cohen vs. U.S. CCA Minn 1942,129 F. 2d 733),"where the case was presented to District Court upon amotion to dismiss because of alleged failure ofcomplaint to state a claim upon which relief could be

granted, and no answer was interposed and noevidence introduced, the only facts which the courtcould properly consider in passing upon the motionwere those facts appearing in the complaint,supplemented be such facts as the court judiciallyknew.

In Llanto vs. Ali Dimaporo, et al. (16 SCRA 601, March31, 1966), this Court, thru Justice Conrado V. Sanchez,held that the trial court can properly dismiss a

complaint on a motion to dismiss due to lack of causeof action even without a hearing, by taking intoconsideration the discussion in said motion and theopposition thereto. Pertinent portion of said decision ishereby quoted:

Respondents moved to dismiss. Groundtherefor is lack of cause of action. TheCourt below granted the motion,dismissed the petition. The motion toreconsider failed. Offshoot is thisappeal.

1. The threshold

questions are these:Was the dismissalorder issued withoutany hearing on themotion to dismiss? Is itvoid?

WE go to the record. The motion todismiss was filed on February 1, 1961and set for hearing on February 10following. On February 8, 1961petitioner's counsel telegraphed thecourt, (r)equest postponement motiondismissal till written opposition filed.'

He did not appear at the scheduledhearing. But on March 4, 1961, hefollowed up his wire, with his writtenopposition to the motion to dismiss.Adverting to the 5-page motion todismiss and the 6-page oppositionthereto, We find that the argumentspro and con on the question of theboard's power to abolish petitioner'sposition to discussed the problem saidprofusely cited authorities.The May 151961 8-page court order recited atlength the said arguments andconcluded that petitioner made nocase.

One good reason for the statutoryrequirement of hearing on a motion asto enable the suitors to adduceevidence in support of their opposingclaims. But here the motion to dismissis grounded on lack of cause of action.Existence of a cause of action or lack ofit is determined be a reference to thefacts averred in the challengedpleading. The question raised in themotion is purely one of law. This legalissue was fully discussed in said motion


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and the opposition thereto. In thisposture, oral arguments on the motionare reduced to an unnecessaryceremony and should be overlooked.And, correctly so, because the otherintendment of the law in requiringhearing on a motion, i.e., 'to avoidsurprises upon the opposite party andto give to the latter time to study andmeet the arguments of the motion,'has been sufficiently met. And then,courts do not exalt form oversubstance (Emphasis supplied).

Furthermore even if the complaint stated a valid causeof action, a motion to dismiss for- insufficiency of causeof action will be granted if documentary evidenceadmitted by stipulation disclosing facts sufficient todefeat the claim enabled the court to go beyonddisclosure in the complaint (LOCALS No. 1470, No.1469, and No. 1512 of the InternationalLongshoremen's Association vs. Southern Pacific Co., 6Fed. Rules Service, p. 107; U.S. Circuit Court ofAppeals, Fifth Circuit, Dec. 7, 1952; 131 F. 2d 605).Thus, although the evidence of the parties were

presented on the question of granting or denyingpetitioner-appellant's application for a writ ofpreliminary injunction, the trial court correctly appliedsaid evidence in the resolution of the motion todismiss. Moreover, in applying said evidence in theresolution of the motion to dismiss, the trial court, in itsorder dismissing the petition, pointed out that, "thereis no reason to believe that the parties will changetheir stand, arguments and evidence" (p. 478, CFIrec.). Petitioner-appellant did not interpose anyobjection thereto, nor presented new arguments in hismotion for reconsideration (pp. 482-484, CFI rec.). Thisomission means conformity to said observation, and awaiver of his right to object, estopping him from raising

this question for the first time on appeal. " I questionnot raised in the trial court cannot be raised for thefirst time on appeal" (Matienzo vs. Servidad, Sept. 10,1981, 107 SCRA 276).

Moreover, petitioner-appellant cannot invoke the rulethat, when the ground for asking dismissal is that thecomplaint states no cause of action, its sufficiencymust be determined only from the allegations in thecomplaint. "The rules of procedure are not to beapplied in a very rigid, technical sense; rules ofprocedure are used only to help secure substantialjustice. If a technical and rigid enforcement of the rulesis made, their aim would be defeated. Where the rulesare merely secondary in importance are made tooverride the ends of justice; the technical rules hadbeen misapplied to the prejudice of the substantialright of a party, said rigid application cannot becountenanced" (Vol. 1, Francisco, Civil Procedure, 2ed., 1973, p. 157, citing cases).

What more can be of greater importance than theinterest of the public at large, more particularly thewelfare of the inhabitants of Olongapo City andZambales province, whose lives and properties aredirectly and immediately imperilled by forestdenudation.

The area covered by petitioner-appellant's timberlicense practically comprises the entire Olongapowatershed (p. 265, CFI rec.). It is of public knowledgethat watersheds serves as a defense against soilerosion and guarantees the steady supply of water. Asa matter of general policy, the Philippine Constitutionexpressly mandated the conservation and properutilization of natural resources, which includes thecountry's watershed. Watersheds in the Philippines hadbeen subjected to rampant abusive treatment due tovarious unscientific and destructive land use practices.Once lush watersheds were wantonly deforested due touncontrolled timber cutting by licensedconcessionaries and illegal loggers. This is one reasonwhy, in paragraph 27.of the rules and regulationsincluded in the ordinary timber license it is stated:

The terms and conditions of this licenseare subject to change at the discretionof the Director of Forestry, and thatthis license may be made to expire atan earlier date, when public interestsso require (Exh. D, p. 22, CFI rec.).

Considering the overriding public interest involved inthe instant case, We therefore take judicial notice ofthe fact that, on April 30, 1964, the area covered bypetitioner-appellant's timber license has beenestablished as the Olongapo Watershed Forest Reserveby virtue of Executive Proclamation No. 238 by thenPresident Diosdado Macapagal which in parts read asfollows:

Pursuant to the provisions of Section1824 of the Revised AdministrativeCode, as amended, 1, DiosdadoMacapagal, President of the Philippinesdo hereby withdraw from entry, sale, orsettlement and establish as Olongapo

Watershed Forest Reserve forwatershed, soil protection, and timberproduction purposes, subject to privaterights, if any there be, under theadministration and control of theDirector of Forestry, xx the followingparcels of land of the public domainsituated in the municipality ofOlongapo, province of Zambales,described in the Bureau of Forestrymap No. FR-132, to wit: ... ... (60 O.G.No. 23, 3198).

Petitioner-appellant relies on Ordinary Timber License

No. 20-'64 (NEW) for his alleged right over the timberconcession in question. He argues thus: "The factsalleged in the petition show: (1) the legal right of thepetitioner to log in the area covered by his timberlicense; (2) the legal or corresponding obligation on thepart of the respondents to give effect, recognize andrespect the very timber license they issued to thepetitioner; and (3) the act of the respondents inarbitrarily revoking the timber license of the petitionerwithout giving him his day in court and in preventinghim from using and enjoying the timber license issuedto him in the regular course of official business" (p. 32,rec.).


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In the light of petitioner-appellant's arguments, it isreadily seen that the whole controversy hinges on thevalidity or invalidity of his timber license.

WE fully concur with the findings of the trial court thatpetitioner- appellant's timber license was signed andreleased without authority by then Acting DirectorEstanislao R. Bernal of Forestry, and is therefore voidab initio. WE hereby quote such findings:

In the first place, in generalmemorandum order No. 46 dated May30, 1963, the Director of Forestry wasauthorized to grant a new ordinarytimber license only where the areacovered thereby was not more than3,000 hectares; the tract of publicforest awarded to the petitionercontained 6,420 hectares (Exhs. 2-Aand 2-B Ravago, embodied in Annex B;Exh. B). The petitioner contends thatonly 1,756 hectares of the said areacontain commercial and operableforest; the authority given to theDirector of Forestry to grant a newordinary timber license of not morethan 3,000 hectares does not state thatthe whole area should be commercialand operable forest. It should be takeninto consideration that the 1,756hectares containing commercial andoperable forest must have beendistributed in the whole area of 6,420hectares. Besides the license states,'Please see attached sketch andtechnical description,' gives an area of6,420 hectares and does not statewhat is the area covered ofcommmercial and operable forest (Exh.

Ravago Also Annex B of the petition,which was marked as Exhibit B, states:

Under Notice No. 2087,a tract of public forestcontaining 6,420hectares located inOlongapo, Zambaleswas declared availablefor timber utilizationand development.Pursuant to this Notice,there were received bidproposals from the

following persons: ...

Wherefore, confirming the findings ofsaid Committee, the area described inNotice No. 2087 shall be awarded, as itis hereby awarded to WenceslaoVinzons Tan, subject to the followingconditions: ... ...

In the second place, at the time it wasreleased to the petitioner, the ActingDirector of Forestry had no moreauthority to grant any license. The

license was signed by the ActingDirector of Forestry on December 19,1963, and released to the petitioner onJanuary 6, 1964 (Exh. RavaGo Theauthority delegated to the Director ofForestry to grant a new ordinary timberlicense was contained in generalmemorandum order No. 46 dated May30, 1963. This was revoked by generalmemorandum order No. 60, which waspromulgated on December 19, 1963. Inview thereof, the Director of Forestryhad no longer any authority to releasethe license on January 6, 1964, andsaid license is therefore void ab initio(pp. 479480, CFI rec.).

The release of the license on January 6, 1964, givesrise to the impression that it was ante-dated toDecember 19, 1963 on which date the authority of theDirector of Forestry was revoked. But, what is ofgreatest importance is the date of the release orissuance, and not the date of the signing of the licenseWhile petitioner-appellant's timber license might havebeen signed on December 19, 1963 it was released

only on January 6, 1964. Before its release, no right isacquired by the licensee. As pointed out by the trialcourt, the Director of Forestry had no longer anyauthority to release the license on January 6, 1964.Therefore, petitioner-appellant had not acquired anylegal right under such void license. This is evident onthe face of his petition as supplemented by its annexeswhich includes Ordinary Timber License No. 20-'64(NEW). Thus, in the case of World Wide Insurance &Surety Co., Inc. vs. Macrohon, et al. (105 Phil. 250, Feb.28, 1959), this Court held that if from the face of thecomplaint, as supplemented by its annexes, plaintiff isnot the owner, or entitled to the properties it claims tohave been levied upon and sold at public auction by

the defendants and for which it now seeks indemnity,the said complaint does not give plaintiff any right ofaction against the defendants. In the same case, thisCourt further held that, in acting on a motion todismiss, the court cannot separate the complaint fromits annexes where it clearly appears that the claim ofthe plaintiff to be the A owner of the properties inquestion is predicated on said annexes. Accordingly,petitioner-appellant's petition must be dismisse

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