G.R. No. L-9350. May 20, 1957

The present appeal is from a decision of the Court  of First Instance of Cebu, Civil Case No. R-3272, to the Court of Appeals which the latter Court certified to Us pursuant to Section 17(3) of the Judiciary Act of 1948,  on the ground that it  involves a  question of  jurisdiction.   The facts of the  case may be summarized as follows:

On September 12, 1953, the Cebu Port Labor Union, a duly  registered  labor association,  represented by its  pres- ident, Aiejo Cababajay, filed a petition with the Court  of First Instance  of  Cebu for  “recognition of  stevedoring service  and injunction” against the States Marine  Corporation, Nicasio Pansacala, Andres Tura, Alfonso Villajas, and  Perpetuo Regis.  It  alleged,  among others, that the States Marine Corporation is a corporation  duly organized and  existing under the laws of the Philippines and  could be served with summons through Mr. J. Gotianuy, whereas the other respondents are “capataces” of a group of laborers  and/or  stevedores;  that  petitioning Union  was awarded a contract for the exclusive right of loading and unloading of the cargoes of the vessel M/V Bisayas formerly owned by Elizalde &  Co., though at the  time of the filing of the petition it was owned and operated  by the States Marine Corporation; that said  vessel would  soon resume  its voyage and it came to the  knowledge  of said petitioner that the stevedoring work will be given by the respondent corporation to the other respondents in violation  of  the agreement and/or understanding had between the Manager of the  respondent corporation and the President of the petitioner Union; that said act would  deprive petitioner of its  right of loading and unloading the  cargoes of said boat  and will cause said petitioner  irreparable loss  and  injury.  The  Union,  therefore,  prayed  that  a writ  of  preliminary  injunction  be  issued  enjoining the States Marine Corporation from giving the work of  loading and unloading the cargoes  of  the vessel M/V Bisayas to its corespondents or their representatives or agents or Cebu Port Labor Union vs. States Marine Co., et al. to any other person, and further enjoining the respondents from molesting and preventing the  petitioner  from peace fully doing said  loading  and unloading work; that after hearing, the injunction be made permanent; that the petitioner be  declared  with the  right to load and unload  the cargoes of the M/V Bisayas, thereby respecting the contract entered  into  by petitioner and Elizalde  & Co. and subsequently enforced  and  continued  by the  respondent States Marine Corporation, and for such other relief consistent with law and equity.

The Court of First Instance of  Cebu,  upon  receipt of the petition and considering  it to be well-founded,  ordered ex parte the issuance of the writ of  preliminary injunction upon petitioner’s filing a bond in the sum of P1,000, which writ  was  actually  issued on  September  14,  1953.  The Sheriff’s return of service of the writ of injunction showed that respondents Alfonso Villajas,  Perpetuo Regis, Nicasio Par.sacala and  Andres  Tura were personally served with said  order.   On the left  part of said return there was a note of this  tenor: “States  Marine Corp. was  dissolve on Oct. 17, 1952” followed by an illegible countersign.

On September  22, 1953, respondents Nicasio Pansacala, Andres Tura, Alfonso Villajas and Perpetuo Regis,  through counsel, filed  an ex-parte motion for  dissolution  (of  the writ of preliminary  injunction),   alleging among other things, that said  writ would  cause great damage to  the respondents since the defunct  States Marine  Corporation never  awarded any  contract to petitioner and that  likewise the present owners of the  vessel (M/V Bisayas) never entered into a contract  with  said  petitioner  relative to stevedoring work; that the allegations of the petition were insufficient since the respondent corporation was no longer existing; that granting that Eliaalde & Co.  and petitioner had a contract regarding the loading and unloading of the cargoes of the M/V Bisayas, it cannot be maintained that said petitioner had any right to follow this vessel to whomsoever it may belong; and that they were willing to post a counterbond in the sum of P2,000 for the dissolution of the  writ  of preliminary  injunction.  This  motion  was granted by the Court on September 22, 1953.

On October 2, 1953,  respondents filed  a  motion to dismiss based on the following grounds: (1) That the Court has  no jurisdiction over the parties affected  and  the subject matter of  the action.  It  is  respondents’ contention that the case involves an action of a labor union against management and therefore falls within the exclusive jurisdiction  of the  Court of  Industrial Relations.  (2)  That the complaint (petition)  states no cause of action.  It is alleged  that the  petition mentions  the  exclusive  right granted by Elizalde & Co. to petitioning  Union, but  there was no  showing that in the transaction  between  Elizalde &  Co. and the  States Marine Corporation the contractual obligation of the former  to the Union was considered in order that same may deserve the respect of the new owner of the vessel.   (3)  That respondent corporation has  no legal capacity to sue  or be sued, it having been dissolved on October 17, 1952, and therefore has no personality to enter or refuse to, enter  into any contract, much less of threatening the  petitioner as alleged in the petition.  Petitioner filed on October 5,  1953,  its opposition refuting the grounds  of  the  motion to dismiss, to which  respondents replied denying  some of the averments of the petition and admitting some of them,  and at  the same time  filing a counterclaim charging  the President of  the petitioning Union, Alejo Cababajay, with bad  faith;  that  due to their malicious inclusion as’  respondents, they suffered mental anguish  and anxiety and prayed   that  they  be  awarded p40,000.00 as  moral damages,  P10,000.00  as corrective damages and P10,000.00 for attorney’s fees.

After the Union filed its answer  to the counterclaim and the  motion to   dismiss was  heard,  the  Court issued  an order denying  the  respondents’  motion to  dismiss and ruled that it had jurisdiction over the case.  The  case was then set for trial and  after the parties  had  rested  their case, the  Court rendered decision  on December  11,  1953, finding that Mr. Joseph  Gotianuy,  President of the Royal Lines (which is the company operating the M/V Melliza, formerly  the M/V Bisayas)  agreed verbally to award the stevedoring work to the union headed by Alejo Cababajay; that such agreement was made orally because it was not the practice to put such kind  of  agreement  in  writing; that although respondent offered in evidence a  certification purportedly made by Joseph Gotianuy to the effect that the stevedoring job of  loading and  unloading of cargoes on the M/V Melliza was awarded to the group of laborers headed by Andres Tura, said certification was made only after the  filing of the present petition thereby strengthen- ing the allegation that  respondents’  groups tried to  grab from petitioner the work  already  given  to them by said Gotianuy; that the preponderance  of  evidence  militates in favor of  petitioner, and declared:

“In view thereof, this Court hereby  renders  judgment recognizing  petitioner Labor Union under Alejo  Cababajay  as  the  party with authority to render such services of loading and unloading the cargoes  on  the M/V Melliza while in the port of Cebu, orders the issuance of a permanent writ of injunction prohibiting respondent’s laborers from molesting petitioner’s laborers therein and respondents to reimburse  said, petitioners  the corresponding  wages  that they failed to earn, with the  costs against the respondents.”

Respondents’ petition to  set aside judgment and for new trial dated  December 16, 1953, and  their motion to stay execution  of judgment  dated December 18,  1953, having been denied on December  19, 1953,  respondents  appealed therefrom ascribing to the lower Court the commission of the following errors, to wit:

    
1. 1. Tn holding that it had jurisdiction over this  case which involves n  labor-management dispute;
   2. Tn  declaring defendant States Marine Corporation in default for failing  lo answer or  appear within  the  statutory period;
   3. In  refusing to  grant a new trial requested by  the appellants in order to present a material witness Joseph Gotianuy whose tes- timony could not be had during the hearing- for  reasons  beyond the control of the respondents,
    4.  In  holding that the owner of the M/V Melliza had verbally agreed to  recognize the petitioner Cebu  Port Labor  Union as the party who should undertake the loading- and unloading- of cargoes .611 the said vessel while in the port of Cebu;
    5.  In allowing the petitioner to undertake  or perform indefinitely the stevedoring work on the M/V Melliza;
    6.  In not holding that the men under appellant Andres  Tura are the proper and rightful group to undertake the loading and  unloading of the cargoes on the M/V Melliza; and
    7.  In condemning the respondents to reimburse the petitioner the wages that its members allegedly failed to earn.
        
2. ?
    

 
 

 
 As we  have stated at  the beginning of this decision, this case was  originally appealed to the Court of Appeals which Court certified the same to us on the ground that it involves a  question  of jurisdiction.  This question, however,  en- folds two counts, i.e., the jurisdiction of  the lower  court (a)  to take cognizance of the case, and (6) over the person of  the respondent States  Marine Corporation which, according to  the records,  appeared  to  be non-existent at the time of the institution  of  the petition herein, and for the further reason  that it was never summoned in this  case.
 
 The  question of  jurisdiction of the  lower Court to take cognizance of  this case  was put  in issue not only in the appeal but likewise in the motion to dismiss presented by herein appellants in the lower court.  It was maintained by respondents-appellants that paragraphs 4 and  5 of the petition speak of an alleged agreement between the management of the States Marine Corporation and the President of the  petitioning Union and, therefore, that it falls within the  jurisdiction of the  Court of  Industrial  Relations.  In support  of  such contention appellants cited Section  1 of Commonwealth Act No, 103, which states the following:
 

 “Section 1.—-Jurisdiction—Judges.—There is created a Court of Industrial Relations, hereinafter called the Court, which  shall have jurisdiction over the entire  Philippines, to consider, investigate, decide  and  settle. all questions, matters,  controversies,  or disputes arising”  between,  and/or  affecting employers   and  employees or laborers, and landlords and tenants or farm-laborers, and regulate the  relations between  them, subject to the provisions of this Act.

 
 And  to  substantiate  their  claim that the  controversy in the instant  case  is a dispute between employer  and  employees,  respondents mentioned the case of Pambujan  Sur United Mine Workers vs.  Samar Mining Co., Inc.*  G. R.  No.   L-5694, promulgated  May  12,  1954, wherein  this Court held that the  refusal  of  the company to  abide by the terms  of the contract in  spite of the repeated written demands of  the  plaintiff  for compliance  therewith is a dispute  and therefore falls within the broad jurisdiction of the Court of Industrial Relations.  However,  this pro- vision (Sec.  1  of Com. Act  No.  103)  granting  “broad” jurisdiction  to  the  Court of Industrial  Relations  was curtailed by the passage of. Republic Act No. 875, known as the Industrial  Peace Act  and  approved  on  June  17, 1953,  so as  to  limit the jurisdiction  of  the said  Court to certain specific cases  to the exclusion of the others.   This matter was  squarely  passed  upon in recent cases decided by this  Court wherein it was stated that:
 
 

 ” * * by the passage  of Republic Act  No. 875, the jurisdiction of the Court of Industrial Relations  has been limited to the following cases;:  (1) when  the labor dispute affects an industry  which, is indispensable to the national interest and is so certified by  the President to the  industrial court (Section  10, Republic Act 876);  (2) when the  controversy refers to minimum wage under the Minimum Wagc  Law  (Republic Act No. 602); (3) when it  involves hours of employment  under the Eight-Hour Labor Law (Commonwealth Act A’ii) ;  and (4)  when it involves an  unfair labor  practice (Section 5 (a), Republic Act 875)”—Philippine Association of Free Labor Lemons (PAFLU) et al. vs. Hon. Eienvenido A. Tan et al., G. R. No. L-9115, promulgated Auk. 31, 1966; Apolonia Reyes et al. vs.  Hon. Bienvenido Tan ct al., 99 Phil., 880. 

It appearing that the  present controversy is  not one of the cases  enumerated above  which this Court  held  to be cognizable by the Court of  Industrial Relations, the  lower Court acted  rightly in maintaining  that it had jurisdiction to try and decide this case.

Anent the question of jurisdiction over the person of respondent States Marine Corporation, the following can be ” 94 Phil.,  932  said:  there is no  denial that the  vessel M/V Bisaxas, formerly  owned by Elizalde  & Co. or its subsidiary the Manila Steamship  Co.,  was  sold  to the States  Marine Corporation and later purchased by the Royal Lines, Inc., which renamed it  the M/V  Melliza.   It  is not disputed either that Joseph Gotianuy  who was the President and General Manager of the States Marine Corporation is the same Joseph Gotianuy, who is presently the General Manager of the Royal  Lines, Inc.  But there is no showing whatsoever that the Royal Lines, Inc. has anything to do or  any connection  with the  States Marine  Corporation. Petitioner’s witnesses were unanimous in their testimonies that Joseph Gotianuy awarded the stevedoring jobs on the M/V  Melliza to the labor  group headed  by Alejo Cababajay  sometime in May, 1953,  and when they received information that the work would  be  given to another labor group  they filed a petition  in court against the  States Marine Corporation and the  four  “capataees” to  compel the corporation to  respect their  agreement and  to enjoin the other respondents, from  taking away  their  job.  Re- spondents, however, were  able  to  present a certification from the Securities and Exchange Commission to the effect that on October 17, 1052, a resolution dissolving the States Marine Corporation was duly registered in said Office, so that when the petition against said corporation  was filed on  September 12,  1953, the  States Marine  Corporation was no longer in existence.

Sections 1 and 2, Rule 3 of the Rules of Court provide the following: “

Section 1. WHO MAY BE PARTIES.—Only natural or juridical persons may be parties in a  civil action.”

“Sec. 2. PARTIES IN  INTEREST.—Every  action must be prosecuted in the name of the real party in  interest.”

From the prayer in the petition filed with  the lower Court, it was clear  that the  petitioning Union,  appellee  herein, seeks  to  enforce the  agreement entered  into by  Joseph Gotianuy  and Alejo   Cababajay, the  President  of said Cebu Port Labor Union vs. States Marine Co., et al. Union.   Despite the fact that  counsel for the other  re- spondents  called already the attention of the Court that the States Marine Corporation  was non-existing and sug- gested that proper substitution  or amendment of the peti- tion be  made, petitioner-appellee relied on the  provision of Section  77 of the Corporation Law in its stand to include the saidcorporation as party respondent.   Said Section 77 of the  Corporation  Law  reads  as  follows:

“Sec.  77.  Every  corporation whose charter expires by its own limitation or is annulled by forfeiture or  otherwise, or whose cor- porate existence for other purposes is terminated in any other man- ner, shall nevertheless be continued  as a  body  corporate for three years after  the time when it would have been so dissolved,  for the purpose  of prosecuting and defending suits by or against it and of enabling it gradually to settle and close its affairs, to dispose of and convey its property and to divide its capital stock,  but not for the purpose  of continuing  the business for which it was established.”

Even  a  cursory  reading  of the above-quoted  provision would convey the idea clearly manifested  in the limitation “but  not for the purpose  of continuing  the  business for which it was established”, that the  3-year period  allowed by the  corporation  law  is only for the purpose of wmding up its  affairs.   Petitioner-appellee prayed that it be declared to have the right to the stevedoring  work in question “thereby respecting the contract entered into by petitioner and the Blizalde  &  Co.  and subsequently  enforced and continued  by the respondent States  Marine  Corporation”. It  appearing that the said States Marine  Corporation was already dissolved at the time said petition was  filed, and the vessel  subject of the agreement having changed hands, it cannot be compelled now to respect such agreement specially considering the fact that it cannot even be made a party to this suit (Sec. 1, Eule 3, of the Rules of Court).

Appellee,  however, contends  that  it seeks  the enforce- ment of the agreement entered into by  Joseph Gotianuy as manager of  the Royal Lines, Inc.  If this is so,  We must bear in mind the. provision of  Section  7 of Rule 3, regarding  indispensable parties, and that the Royal Lines, Cebu Port Labor Union vs. States Marin e Co., et al. Inc., has not been made a party to this case.  The decision making the award  in  favor  of the  petitioner-appellee  en- forceable against the  States Marine  Corporation cannot now be altered to suit  appellee’s defense by interpreting it to include those who should  have been the real parties in interest, after its attention was called by none other than counsel for respondents.   Moreover,  as stated before, when the Sheriff  tried to serve the summons and the writ of preliminary injunction on respondent States Marine Corporation, he found out that this corporation was no longer in existence, a  fact which was made to appear on the left side of the Sheriff’s return of service of the writ, followed by  an  illegible countersign  which  is not  even  that  of Joseph  Gotianuy, as stated by Tomas  Cabrera, the person in charge of the wharf department of the Royal Lines, Inc. This being so,  We  fail to understand how the  Sheriff of Cebu  could  have stated  in  his return of service of said writ that the States Marine  Corporation was served copy of the writ  and instructed them (all  the respondents) to avoid molesting  the herein  petitioner on their work  of loading and unloading  of  cargoes  from M/V  Bisayas, unless the Sheriff  believed  that service of  the  writ  on Pansacala, Tura, Villajas and Regis constituted  service thereof on the States Marine Corporation, which is evidently erroneous.  The  Sheriff  must have  served  the summons and the writ of preliminary injunction  at the same time upon the respondents and if the writ was not accepted and duly receipted  by  said  respondent  Corporation,  We  can reasonably infer that the  summons  on the latter was likewise not properly  served  on said  party.  That is undoubtedly the reason why it did not appear or take part in this controversy and, therefore, it cannot be legally declared  in default for lack of appearance as the trial Judge wrongly did  in this case.

After We have come to the  foregoing conclusions there seems  to  be  no need for the  determination of the other matters raised  by appellants. Cebu Port Labor Union vs. States Marine Co., et al.

RECAPITULATION—From the foregoing considerations, it appears that the alleged verbal contract between the peti- tioning Union and  Elizalde & Co. for the exclusive right of loading and  unloading the cargo  of  the vessel  M/V BlSAYAS even if really entered into  by said  parties, could not give the  petitioner any right to  exercise the award of said job after the  M/V Bisayas was bought by the respondent States Marine Corporation which by no means can be compelled to fulfill the part of said company’s contracted obligation to the petitioner.  The reasons are obvious, to wit:  (a)  because  there  is  no  sufficient and  competent evidence on record to  show  the  life and other conditions of the  alleged verbal  contract  entered  into  between the petitioner and Elizalde & Co.,  nor the authority of the latter’s representative to  bind  his principal; (b) because the  States Marine Corporation  is  not and was not in existence at  the time of the institution of this case and has  no personality  herein, for it has  not  and could not have been duly and  properly   summoned;  (c)  because the M/V Bisayas was not,  at the time of the  institution of this case, the property  of  the respondent States Marine Corporation but of the Royal Lines, Inc., which  changed the  name of “Bisayas” to  that of “Melliza”; and  (d) because the bare testimony  of the  members of the petitioning Union given in this case  cannot overcome the certification of Joseph Gotianuy, General Manager of the Royal  Lines, Inc., that  the  job  of  loading  and unloading the cargo of M/V Melliza waa  awarded to the group of laborers  headed by respondent  Andres Tura.

Now, if  petitioner’s complaint has  to  be dismissed as against respondent  States Marine Corporation  because it has not been summoned in this case, it has no legal existence nor capacity to sue and be sued, and for lack of evidence to substantiate that it contracted  any obligation towards the petitioner, We do not see  how the respondent laborers can  be  compelled to decline or refuse  the award that Gotianuy, the  General Manager of the Royal Lines, Pangasinati Trans. Co., Inc. et al. vs. Court of Industrial Relations, et al. Inc.,  granted them in connection with the job  of  loading and unloading the cargo of the M/V Melliza as shown by the former’s certification, and much  less to reimburse the members of the petitioning Union  the corresponding wages that they would have failed to earn.

Wherefore,  the  decision  appealed  from and the  permanent  writ of injunction  ordered to  be issued are set aside  and judgment  is  hereby rendered  dismissing the petition  that gave rise to this  action, with  costs against the petitioner in both instances.  It is so ordered.

Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo, Labrador, Conception, Reyes, J. B. L., and Endencia, JJ., concur.