Millare vs. Hernando (151 SCRA 484)

Millare vs. Hernando (151 SCRA 484)

GR No. L-555480, 6/30/1987

Feliciano, J.:

Facts:

A five-year Contract of Lease was executed between Millare as lessor and the Spouses Co as lessee. They agreed on a monthly rental rate of P350 of the “People’s Restaurant” until May 31, 1980.

During the last week of May 1980, Millare informed the Co spouses that they could continue leasing the property so long as they were amenable to paying P1,200 a month. The Spouses Co counter-offered with P700 a month. At this point, Millare allegedly stated that the amount of monthly rentals could be resolved at a later time since “the matter is simple among us”, which alleged remark was supposedly taken by the spouses Co to mean that the Contract of Lease had been renewed, prompting them to continue occupying the subject premises and to forego their search for a substitute place to rent. In contrast, the lessor flatly denied ever having considered, much less offered, a renewal of the Contract of Lease.

On July 22 and 28, 1980, Millare sent demand letters requesting them to vacate as she had no intention of renewing the Contract of Lease, which had expired. The spouses Co signified their intention to deposit the P700 monthly rental in court, in view of Mrs. Millare’s refusal to accept their counter-offer.

As the parties were filing suits against each other in court, the trial judge rendered a “Judgment by Default” dated 26 November 1980 ordering the renewal of the lease contract for a term of 5 years counted from the expiration date of the original lease contract, and fixing monthly rentals thereunder at P700.00 a month, payable in arrears.

Issue:

Whether the court may order the renewal of the Contract of Lease for another five-year term at P700 a month

Held:

No, it cannot order the renewal of the Contract of Lease.

The respondent judge cited Articles 1197 and 1670 of the Civil Code to sustain the “Judgment by Default” by which he ordered the renewal of the lease for another term of five years and fixed monthly rentals thereunder at P700.00 a month. Article 1197 of the Civil Code provides as follows:

“If the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof.

The courts shall also fix the duration of the period when it depends upon the will of the debtor.

In every case, the courts shall determine such period as may, under the circumstances, have been probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them.” (Italics supplied.)

The first paragraph of Article 1197 is clearly inapplicable, since the Contract of Lease did in fact fix an original period of five years, which had expired. It is also clear from paragraph 13 of the Contract of Lease that the parties reserved to themselves the faculty of agreeing upon the period of the renewal contract. The second paragraph of Article 1197 is equally clearly inapplicable since the duration of the renewal period was not left to the will of the lessee alone, but rather to the will of both the lessor and the lessee. Most importantly, Article 1197 applies only where a contract of lease clearly exists. Here, the contract was not renewed at all, there was in fact no contract at all the period of which could have been fixed.

Article 1670 of the Civil Code reads thus:

“If at the end of the contract the lessee should continue enjoying the thing left for 15 days with the acquiescence of the lessor and unless a notice to the contrary by either party has previously been given. It is understood that there is an implied new lease, not for the period of the original contract, but for the time established in Articles 1682 and 1687. The other terms of the original contract shall be revived.” (Italics supplied.)

The parties do not pretend that the continued occupancy of the leased premises after 31 May 1980, the date of expiration of the contract, was with the acquiescence of the lessor. The implied new lease could not possibly have a period of five years, but rather would have been a month-to-month lease since the rentals (under the original contract) were payable on a monthly basis. At the latest, an implied new lease (had one arisen) would have expired as of the end of July 1980 in view of the written demands served by the petitioner upon the private respondents to vacate the previously leased premises,

It follows that the respondent judge’s decision requiring renewal of the lease has no basis in law or in fact. Save in the limited and exceptional situations envisaged in Articles 1197 and 1670 of the Civil Code, which do not obtain here, courts have no authority to prescribe the terms and conditions of a contract for the parties. As pointed out by Mr. Justice J.B.L. Reyes in Republic vs. Philippine Long Distance Telephone, Co.,

“[P]arties cannot be coerced to enter into a contract where no agreement is had between them as to the principal terms and conditions of the contract. Freedom to stipulate such terms and conditions is of the essence of our contractual system, and by express provision of the statute, a contract may be annulled if tainted by violence, intimidation or undue influence (Article 1306, 1336, 1337, Civil Code of the Philippines).

Chaves vs. Gonzales (32 SCRA 547)

Chaves vs. Gonzales (32 SCRA 547)

GR No. 27454, April 30, 1970

Reyes, JBL, J.:

Facts:

Chaves delivered his portable typewriter for routine cleaning and servicing to Gonzales. Gonzales was not able to finish the job despite repeated reminders from Chaves. Gonzales asked for P6 for the purchase of spare parts, but he was still not able to repair the typewriter. Exasperated with Gonzales’ delay, Chaves asked for the return of the typewriter, whose parts were not complete anymore upon being returned to Chaves. Chaves sues for breach, but Gonzales argues that he is not liable for costs and damages because their contract did not contain a period within which to perform his obligation. He avers that Chaves should have first filed a petition for the court to fix the period before he could be held liable for breach of contract.

Issue:

Whether a period must be set by the court first before one could sue for a breach

Held:

No, one could sue for a breach even without asking the court to set a period within which to perform the obligation.

The inferences derivable from these findings of fact are that Chaves and Gonzales had a perfected contract for cleaning and servicing a typewriter; that they intended that Gonzales was to finish it at some future time although such time was not specified; and that such time had passed without the work having been accomplished, for Gonzales returned the typewriter cannibalized and unrepaired, which in itself is a breach of his obligation, without demanding that he should be given more time to finish the job, or compensation for the work he had already done. The time for compliance having evidently expired, and there being a breach of contract by non-performance, it was academic for Chaves to have first petitioned the court to fix a period for the performance of the contract before filing his complaint in this case. Gonzales cannot invoke Article 1197 of the Civil Code for he virtually admitted non-performance by returning the typewriter that he was obliged to repair in a nonworking condition, with essential parts missing. The fixing of a period would thus be a mere formality and would serve no purpose than to delay (cf. Tiglao, et al. v. Manila Railroad Co., 98 Phil. 181).

It is clear that the Gonzales contravened the tenor of his obligation because he not only did not repair the typewriter but returned it “in shambles”, according to the appealed decision. For such contravention, as Chaves contends, he is liable under Article 1167 of the Civil Code, for the cost of executing the obligation in a proper manner. The cost of the execution of the obligation in this case should be the cost of the labor or service expended in the repair of the typewriter, which is in the amount of P58.75 because the obligation or contract was to repair it.

Malayan Insurance vs. CA (165 SCRA 536)

Malayan Insurance vs. CA (165 SCRA 536)
GR No. L-36413, 9/26/2016
Padilla, J.:

Facts:
Malayan Insurance issued a Private Car Policy in favor of Sio Choy covering a Willys jeep for third-party liability for P20,000. The insured jeep, while being driven by Campollo, an employee of San Leon, collided with a PANTRANCO passenger bus causing damage to the jeep and injuries to its driver and to its passenger, Vallejos.

Vallejos filed an action for damages against Sio Choy, Malayan Insurance Co., Inc. and the PANTRANCO.

Sio Choy, however, later filed a separate answer with a cross-claim against Malayan wherein he alleged that he had actually paid Vallejos the amount of P5,000.00 for hospitalization and other expenses, and, in his cross-claim against Malayan, he alleged that the Malayan had issued in his favor a private car comprehensive policy wherein the insurance company obligated itself to indemnify Sio Choy, as insured, for the damage to his motor vehicle, as well as for any liability to third persons arising out of any accident during the effectivity of such insurance contract. He prayed that he be reimbursed by the insurance company for the amount that he may be ordered to pay.

Also later, Malayan sought, and was granted, leave to file a third-party complaint against the San Leon because the person driving the jeep of Sio Choy, at the time of the accident, was an employee of San Leon, performing his duties within the scope of his assigned task, and not an employee of Sio Choy; and that, as San Leon is the employer of the deceased driver, Campollo, it should be liable for the acts of its employee, pursuant to Art. 2180 of the Civil Code. Malayan prayed that judgment be rendered against San Leon, making it liable for the amounts claimed by Vallejos and/or ordering said San Leon to reimburse and indemnify the Malayan for any sum that it may be ordered to pay Vallejos.

Malayan prays that San Leon be ordered to reimburse Malayan any amount, in excess of one-half (1/2) of the entire amount of damages, because it is jointly and severally liable with Sio Choy.

Issue:Whether Malayan was solidarily liable with Sio Choy and San Leon for damages to Vallejos

Held:No, Malayan is liable to Vallejos, but is NOT solidarily liable with Sio Choy and San Leon.Sio Choy is made liable to said plaintiff as owner of the ill-fated Willys jeep, pursuant to Article 2184 of the Civil Code which provides:

Art. 2184. In motor vehicle mishaps, the owner is solidarily liable with his driver, if the former, who was in the vehicle, could have, by the use of due diligence, prevented the misfortune it is disputably presumed that a driver was negligent, if he had been found guilty of reckless driving or violating traffic regulations at least twice within the next preceding two months.

If the owner was not in the motor vehicle, the provisions of article 2180 are applicable.

On the other hand, the basis of liability of San Leon to Vallejos, the former being the employer of the driver of the Willys jeep at the time of the motor vehicle mishap, is Article 2180 of the Civil Code:

Art. 2180. The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible.
xxx xxx xxx
Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged ill any business or industry.
xxx xxx xxx
The responsibility treated in this article shall cease when the persons herein mentioned proved that they observed all the diligence of a good father of a family to prevent damage.

It thus appears that respondents Sio Choy and San Leon Rice Mill, Inc. are the principal tortfeasors who are primarily liable to respondent Vallejos. The law states that the responsibility of two or more persons who are liable for a quasi-delict is solidarily.

On the other hand, the basis of Malayan's liability is its insurance contract with respondent Sio Choy. If petitioner is adjudged to pay respondent Vallejos in the amount of not more than P20,000.00, this is on account of its being the insurer of respondent Sio Choy under the third party liability clause included in the private car comprehensive policy existing between petitioner and respondent Sio Choy at the time of the complained vehicular accident.

While it is true that where the insurance contract provides for indemnity against liability to third persons, such third persons can directly sue the insurer, however, the direct liability of the insurer under indemnity contracts against third party liability does not mean that the insurer can be held solidarily liable with the insured and/or the other parties found at fault. The liability of the insurer is based on contract; that of the insured is based on tort.

In the case at bar, Malayan as insurer of Sio Choy, is liable to Vallejos, but it cannot be made "solidarily" liable with the two principal tortfeasors namely Sio Choy and San Leon. For if Malayan were solidarily liable with said two (2) respondents by reason of the indemnity contract against third party liability-under which an insurer can be directly sued by a third party — this will result in a violation of the principles underlying solidary obligation and insurance contracts.

In solidary obligation, the creditor may enforce the entire obligation against one of the solidary debtors.

In the case at bar, the trial court held Malayan, Sio Choy and San Leon solidarily liable to respondent Vallejos for a total amount of P29,103.00, but  Malayan's liability is only up to P20,000.00. In the context of a solidary obligation, Malayan may be compelled by Vallejos to pay the entire obligation of P29,013.00, notwithstanding the qualification made by the trial court. But Malayan cannot be obliged to pay the entire obligation when the amount stated in its insurance policy with respondent Sio Choy for indemnity against third party liability is only P20,000.00. Moreover, the qualification made in the decision of the trial court to the effect that petitioner is sentenced to pay up to P20,000.00 only when the obligation to pay P29,103.00 is made solidary, is an evident breach of the concept of a solidary obligation. Thus, We hold that the trial court, as upheld by the Court of Appeals, erred in holding Malayan as solidarily liable with respondents Sio Choy and San Leon to Vallejos.

Fadriquelan vs. Monterey

Fadriquelan vs. Monterey

GR 178409, June 8, 2011

Facts:

The negotiations for the CBA between the Union and the Company reached a deadlock and led to the filing of the Union for a notice of strike. After the holding of a strike was enjoined by the DOLE, the Union filed a second notice of strike, alleging that the Company committed unfair labor practice. The Company sent first and second notices to the Union officers for intentional acts of slowdown and to inform them of their termination from work, respectively. The third notice of strike filed by the Union alleged that the Company had engaged in union busting and illegal dismissal of Union officers.

Issue:

Whether the dismissal of all 17 Union officers was justified

Held: No, it was not.

A distinction exists between the ordinary workers’ liability for illegal strike and that of the union officers who participated in it. The ordinary worker cannot be terminated for merely participating in the strike. There must be proof that he committed illegal acts during its conduct. On the other hand, a union officer can be terminated upon mere proof that he knowingly participated in the illegal strike.

But, the participation of the union officers has to be properly established. The CA held that the Company illegally terminated some union officers, there being no substantial evidence that would connect them to the slowdown.

In termination cases, the dismissed employee is not required to prove his innocence of the charges against him. The burden of proof rests upon the employer to show that the employee’s dismissal was for just cause. The employer’s failure to do so means that the dismissal was not justified.¹⁶ Here, the company failed to show that all 17 union officers deserved to be dismissed.

ALPAP vs. PAL

AIRLINE PILOTS ASSOCIATION OF THE PHILIPPINES (ALPAP) vs. PHILIPPINE AIRLINES, INC. (PAL)

GR 168382, June 6, 2011

Facts:

Claiming that PAL committed unfair labor practice, ALPAP filed a notice of strike against PAL. Despite reminders to the parties prohibiting all strikes and lockouts at PAL, ALPAP went on strike on June 5, 1998. The DOLE issued a return-to-work order on June 7, 1998. However it was only on June 26, 1998 when ALPAP officers and members reported back to work as shown in a logbook signed by each of them. As a consequence, PAL refused to accept the returning pilots for their failure to comply immediately with the return-to-work order. On June 29, 1998, ALPAP files a complaint for illegal lockout. On June 1, 1999, the DOLE Resolution declared the June 5, 1998 strike as illegal and pronounced the loss of employment status of ALPAP’s officers and members who participated in the strike in defiance of the June 7, 1998 return-to-work order.

Issue:

Whether all of ALPAP’s officers and members are bound by the June 1, 1999 DOLE Resolution for participating in an illegal strike and for defying the DOLE return-to-work order

Held: No, only the returning pilots are bound by the June 1, 1999 DOLE Resolution.

A review of the records reveals that the DOLE Secretary declared the ALPAP officers and members to have lost their employment status based on either of two grounds, viz: their participation in the illegal strike on June 5, 1998 or their defiance of the return-to-work order of the DOLE Secretary. The records of the case unveil the names of each of these returning pilots. The logbook with the heading "Return To Work Compliance/ Returnees" bears their individual signature signifying their conformity that they were among those workers who returned to work only on June 26, 1998 or after the deadline imposed by DOLE. From this crucial and vital piece of evidence, it is apparent that each of these pilots is bound by the judgment. Besides, the complaint for illegal lockout was filed on behalf of all these returnees. Thus, a finding that there was no illegal lockout would be enforceable against them. In fine, only those returning pilots, irrespective of whether they comprise the entire membership of ALPAP, are bound by the June 1, 1999 DOLE Resolution.

GENERAL MILLING CORP. - INDEPENDENT LABOR UNION (GMC-ILU) vs. GENERAL MILLING CORPORATION

G.R. No. 183122, June 15, 2011

Facts:

On 28 April 1989, GMC and the Union entered into a collective bargaining agreement (CBA) which provided, among other terms, the latter’s representation of the collective bargaining unit for a three-year term made to retroact to 1 December 1988. On 29 November 1991 or one day before the expiration of the subject CBA, the Union sent a draft CBA proposal to GMC, with a request for counter-proposals from the latter. In view of GMC’s failure to comply with said request, the Union commenced the complaint for unfair labor practice which was dismissed for lack of merit. On appeal, said dismissal was reversed and set aside in the 30 January 1998 decision rendered by the NLRC, the dispositive portion of which states:

WHEREFORE, premises considered, the instant appeal is hereby GRANTED. The Decision dated December 21, 1993 is hereby VACATED and SET ASIDE and a new one issued ordering the imposition upon the respondent company of the complainant union[‘s] draft CBA proposal for the remaining two years duration of the original CBA which is from December 1, 1991 to November 30, 1993…

SO ORDERED.

Since the abovementioned decision was reconsidered and set aside by the NLRC, the Union filed the petitions for certiorari before the CA, which in turn reversed and set aside the NLRC’s resolution and reinstated the aforesaid 30 January 1998 decision. Aggrieved by the CA’s resolution denying its motion for reconsideration, GMC elevated the case to this Court via the petition for review on certiorari. In a decision dated 11 February 2004 rendered by the Court’s then Second Division, the CA’s 30 January 1998 decision and 26 October 2000 resolution were affirmed,¹² upon the following findings and conclusions, to wit:

GMC’s failure to make a timely reply to the proposals presented by the union is indicative of its utter lack of interest in bargaining with the union. Its excuse that it felt the union no longer represented the worker, was mainly dilatory as it turned out to be utterly baseless.

We hold that GMC’s refusal to make a counter proposal to the union’s proposal for CBA negotiation is an indication of its bad faith. Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there is a clear evasion of the duty to bargain collectively.

Failing to comply with the mandatory obligation to submit a reply to the union’s proposals, GMC violated its duty to bargain collectively, making it liable for unfair labor practice. Perforce, the Court of Appeals did not commit grave abuse of discretion amounting to lack or excess of jurisdiction in finding that GMC is, under the circumstances, guilty of unfair labor practice.

x x x x

x x x (I)t would be unfair to the union and its members if the terms and conditions contained in the old CBA would continue to be imposed on GMC’s employees for the remaining two (2) years of the CBA’s duration. We are not inclined to gratify GMC with an extended term of the old CBA after it resorted to delaying tactics to prevent negotiations. Since it was GMC which violated the duty to bargain collectively, it had lost its statutory right to negotiate or renegotiate the terms and conditions of the draft CBA proposed by the union.

x x x x

Under ordinary circumstances, it is not obligatory upon either side of a labor controversy to precipitately accept or agree to the proposals of the other. But an erring party should not be allowed with impunity to schemes feigning negotiations by going through empty gestures. Thus, by imposing on GMC the provisions of the draft CBA proposed by the union, in our view, the interests of equity and fair play were properly served and both the parties regained equal footing, which was lost when GMC thwarted the negotiations for new economic terms of the CBA.

With the ensuing finality of the foregoing decision, the Union filed a motion for issuance of a writ of execution dated 21 March 2005, to enforce the claims of the covered employees which it computed in the sum of P433,786,786.36 and to require GMC to produce said employee’s time cards for the purpose of computing their overtime pay, night shift differentials and labor standard benefits for work rendered on rest days, legal holidays and special holidays. GMC filed a petition for review on certiorari.

Issue:

Whether the imposed CBA has full force and effect considering that it was not agreed upon by the Union and GMC.

Held:

Anent its period of effectivity, Article XIV of the imposed CBA provides that "(t)his Agreement shall be in full force and effect for a period of five (5) years from 1 December 1991, provided that sixty (60) days prior to the lapse of the third year of effectivity hereof, the parties shall open negotiations on economic aspect for the fourth and fifth years effectivity of this Agreement." Considering that no new CBA had been, in the meantime, agreed upon by GMC and the Union, we find that the CA correctly ruled in CA-G.R. CEB-SP No. 02226 that, pursuant to Article 253 of the Labor Code, the provisions of the imposed CBA continues to have full force and effect until a new CBA has been entered into by the parties. Article 253 mandates the parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period prior to the expiration of the old CBA and/or until a new agreement is reached by the parties. In the same manner that it does not provide for any exception nor qualification on which economic provisions of the existing agreement are to retain its force and effect, the law does not distinguish between a CBA duly agreed upon by the parties and an imposed CBA like the one under consideration.

Cruzvale vs. Laguesma

Cruzvale, Inc. vs. Laguesma
GR No. 107610, November 25, 1994

Facts:
Union of Filipino Workers (UFW) filed a petition for certification election (CE) among the rank-and-file workers of Cruzvale. Cruzvale sought for the denial of such petition, alleging among other things, that the Regional Office No. IV of the Department of Labor and Employment has no jurisdiction over the petition since Cruzvale's place of business is at Cubao, Quezon City, which is under the National Capital Region-DOLE's jurisdiction. Petitioner's basis is Section 1, Rule V, book V of the Omnibus Rules Implementing the Labor Code, which states:

Where to file. A petition for certification election shall be filed with the Regional Office which has jurisdiction over the principal office of the Employer. The petition shall be in writing and under oath.

Issue:
Whether the venue of the petition for CE must be where it would be convenient for the worker

Held: Yes, it must.
The word "jurisdiction" as used in said provision refers to the venue where the petition for certification must be filed. Unlike jurisdiction, which implies the power of the court to decide a case, venue merely refers to the place where the action shall be brought. Venue touches more the convenience of the parties rather than the substance of the case.

The mentioned provision refers only to cases where the place of work of the employees and the place of the principal office of the employer are within the same territorial jurisdiction of the Regional Office where the petition for certification election is filed. It does not apply where the place of work of the employees and the place of principal office of the employer are located within the territorial jurisdictions of different regional offices. The Court assumes that in the drafting of the Omnibus Rules, the Secretary of Labor and Employment took into consideration the fact that there are many companies with factories located in places different from places where the corporate offices are located.

The worker, being the economically-disadvantaged party whether as complainant, petitioner or respondent, as the case may be, the nearest governmental machinery to settle a labor dispute must be placed at his immediate disposal and the employer must in no case be allowed a choice in favor of another competent agency sitting in another place to the inconvenience of the worker.

Unlike in the Rules governing the procedure before Regional Offices, the New Rules of Procedure of the National Labor Relations Commission prescribes that all cases in which labor arbiters have jurisdiction should be filed in the branch office which has territorial jurisdiction over the "workplace of the complainant/petitioner" (Rule IV, Sec. 1[a]). The NLRC Rules defines the workplace as follows:

For purposes of venue, workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose. It shall include the place where the employee is supposed to report back after a temporary detail, assignment or travel. . . .