G. R. No. L-3587. December 21, 1951
TIONG KING PETITIONER VS. COURT OF INDUSTRUIAL RELATIONS AND THE NATIONAL TAILOR’S ASSOCIATION, RESPONDENTS.
PARAS, C.J.:
as the Army Shirt Factory, located in his own house at Nos. 231-245
Soler Street, Manila. In January, 1948, he had a labor dispute with his
personnel and, pending the case in the Court of Industrial Relations,
Gaw Pun So, irked and worried by the incidents of litigation, thought
of dis solving the business and selling the sewing machines. Aware of
the plan of Gaw Pun So, Tiong King offered to take over the business by
leasing the place and the sewing machines. The transfer was put in
writing. Tiong King continued the Army Shirt Factory from the month of
February with the same employees had by Gaw Pun So. This transfer was
known to the personnel, so much so that the latter, as petitioner in
the pending dispute in the Court of Industrial Relations, Case No.
117-V, entitled national Tailors Association vs. Army Shirt
Factory et al., prayed that Tiond King be included as a respondent. In
due time, the National Tailors Association entered into an agreement
with Tiong King alone, to the effect that all cases were terminated
against the respondents. This agreement was duly approved by the Court
of Industrial Relations.
Tiong King put up a capital of P7,000.00. On April 27, 1948,
Tiong King filed a petition in the Court of Industrial Relations Case
No. 117-V-3, alleging that since he operated his shop in February,
1948, he had continually suffered losses; that as there remained only
very little of the capital originally invested, Tiong King thought it
advisable to close the business fooaveid ftirther irreparable losses;
and that he was definitely closing the shop on May 30, 19k8. Tiong King
. accordingly prayed that he be allowed to close his tailor shop and
business from six o’clock in the afternoon of May 29, 1948. On the same
date, April 27, 19W, Tiong King gave out a notice of the projected
closing of the Army Shirt Factory, with the announcement that his
personnel would be paid their salaries and wages on May 29, 1948, at
six o’clock in the afternoon. On May 29, 1948, Presiding Judge Arsenio
C. Roldan of the Court of Industrial Relations issued an order
enjoining Tiong King not to close his factory and not to dismiss,
suspend or lay off any laborer or employee without previous authority
of said court.
After hearing, Presiding Judge Roldan
rendered a decision dated January 13, 1949, dismissing the petition of
Tiong King.and ordering him to pay his personnel from the last week of
May, 1948, up to the date of the decision, at the rates specified
therein.
Upon petition for reconsideration filed by counsel
for Tiong King, the Court of Industrial Relations promulgated a
resolution dated May 27, 19J49, allowing Tiong King to close Ms
business and shop, subject to the condition that, upon reopening the
same, his former personnel would be taken “Stack. This resolution was
concurred in by Judges Jose S. Bautista, Modesto Castillo and Juan L.
Lantin. Presiding Judge Arsenio C. Roldan and Judge Vicente Jimenez
Yanson dissented in a separate opinion dated June 30, 1949.
Upon motion for reconsideration filed by counsel for the National
Tailors Association, the Court of Industrial Relations, thru Presiding
Judge Roldan and Judges Castillo and Yanson, promulgated a resolution
dated October 31, 1949, reaffirming their stand on the resolution of
the Court of Industrial Relations under date of July 1, 1949. Judges
Lantin and Bautista dissented in a separate opinion dated November 10,
1949.
The present appeal by certiorari was taken by Tiong King against the last resolution of the Court of Industrial Relations.
The principal ground invoked by Presiding Judge Roldan in his decision
dated January 13, 1949, dismissing the petition of Tiong King and
ordering hin to pay the salaries and wages of his personnel, is that
Tiong King was not in fact the lessee, much less the true owner, of the
Array Shirt Factory, and that the alleged transfer of the business to
Tiong King was a mere device to ease out the workers of Gaw Pun So. As
a matter of fact, in the dissenting opinion dated June 30, 1949,
obviously referred to in the appealed resolution of the Court of
Industrial Relations dated October 31, 1949, Presiding Judge Roldan and
Judge Yanson stated as follows: “It is regretted that the majority
opinion failed to note that the trial court never denied the right of
any party to file a petition to close its business. What the Court has
maintained was that, said petition should be made, following certain
fundamental rules of procedure (Rule 3, sec. 2, Rules of Court), in the
name of the real owner, who could be affected by whatever decision the
court may render in the case at bar, and not by any person whose claim
is a mere pretension that could cast doubt regarding the veracity of his fictitious rights.
The decisive question before us, therefore, is not whether Tiong King
had no more capital with which to continue the Army Shirt Factory, but
whether he was the owner or operator thereof and had the right to file
the petition in the Court of Industrial Relations to close the same.
Upon this point, it is only sufficient to recall that the National
Tailors Association entered into a stipulation with Tiong King alone
whereby they agreed that all cases against the former owners of the
business were terminated. As correctly observed in the resolution of
the Court of Industrial Relations dated May 27, 1949, granting the
petition of Tiong King, “Este traspaso del negocio a favor de Tiong
King no se hizo a escondidas. Lo sabia la misma peticionaria; de ahi
que esta pidio prirnero al Tribunal que se la incluyera a aquel como
uno de los recurridos en estas actuaciones.” That fiong King was
conceded to be the owner,1 and operator of the Army Shirt Factory at
the time his petition to close it was filed, is conclusively borne out
by the fact that Presiding Judge Roldan in his decision of January 13,
1949, ordered Tiong King, and not Gaw Pun So, to pay the salaries and
wages of the personnel.
It is contended, however, that “If
at all the Court has approved of the agreement between the National
Tailors1 Association and Mr. Tiong King it was because ‘this
arrangement is a very good solution to the present conflict as it is
advantageous not only to the union but also the management, and, is in
consonance with the contract entered into between the management and
the new workers.'” This contention is followed with the remark that
the approval of said agreement did not include a finding that Tiong
King was either the owner or the lessee of the Army Shirt Factory. We
are unable to agree. In entering into the agreement with the National
Tailors Association, Tiong King acted in his own behalf, regardless of
the former owners of the business. Indeed, it was covenanted that all
the cases against the lat$er were deemed terminated. Considerations of
fair play and justice demand that Tiong King be given the full legal
effect of said agreement which bore the sanction of the Court of
Industrial Relations.
On the surface it may be argued that
we have reversed, in violation of section 2, Rule 44, of the Rules of
Court, the Court of Industrial Relations on its finding of fact that
Tiong King was neither the owner nor the lessee of the business in
question. At bottom, however, the argument must fall because,
regardless of said result, we have merely passed upon and determined
the legal effect of the agreement entered into between the National
Tailors Association and Tiong King, tp4the complete exclusion of the
former owners, and duly approved by the Court of Industrial Relations.
In other words, we have in essence only held that the Court of
Industrial Relations erred in construing the legal implications of said
agreement.
There being no question that Tiong King’s capital
invested in the Army Shirt Factory was almost exhausted at the time of
the filing of his petition to close it, said petition must necessarily
be granted. It is admitted by all the Judges of the Court of Industrial
Relations that an employee may close his business, provided the same is
done in good faith and is due to causes beyond his control. To rule
otherwise, would be oppressive and inhuman.
Wherefore,
reversing the resolution of the Court of Industrial Relations dated
October 31, 1949 we hereby affirm the resolution of said court dated
Hay 27, So ordered without costs.
Bengzon, Montemayor, Jugo, and Bautista Angelo, JJ., concur.
Reyes, J., concurs in the result.
DISSENTING
FERIA, J.,
I
dissent from the decision of the majority because it is absolutely
wrong from the beginning to the end. It begins by declaring as a matter
of fact that the petitoner Tiong King was the owner and operator of the
Army Shirt Factory, contrary to the finding of fact of the Court of
Industrial Relations to the effect that, according to the evidence,
“Tiong Bang is not a lessee, as claimed, muoh less the true and real
owner of the tailorshop the closing of which is being sought in the
present proceeding, but Gaw Fun So, and that all contraots executed
between Gaw pun So and his wife Ng Ki on one side and Tiong King on the
other, were pure and simple devise to indirectly compel the members of
the petitioning association to abandon the work and be dismissed from
the service.” And the decision ends by reversing the resolution of the
Court of Industrial Relations dated October 31, 1949, and affirming the
resolution of said Coulrt dated May 27, 1949, signed then by Judges
Bautista, lantin and Castillo, which beoame functus officio
not only because, upon a motion for reconsideration thereof, Judge
Castillo withdrew his conformity therewith by concurring in the
dissenting resolution of Judges Roldan and Jimenez of June 30, 1949,
which was converted into a majority resolution by resolution of October
31, 1949; but Judges lantin and Bautista abandoned said resolution of
May 27, 1949, by writing a separate dissenting opinion dated November
10, 1949.
Section 2 of Rule 44,
relating to appeal from an award, order or decision of the Court of
Industrial Relations to the Supreme Court, provides that only question
of law may be raised on appeal by certiorari, and this Court has also
so ruled in several oases among them in case of Leyte Land
Transportation Co., Inc. vs. Leyte Laborers Union,[1]
G. R. No. L-1377, promulgated on May 20, 1930. In accordance therewith,
attorney for the petitioner Tiong King did not assign in his petit ion
for certiorari as erroneous the finding of the Court of Industrial
Relations “that Tiong King is not a lessee much less the true owner or
operator of the tailorshop sought to be olosed in the present
proceeding, and that all contracts executed between Gaw Pun So and his
wife on one side and Tiong King on the other were pure and simple
devise to indirectly compel the members of the respondent National
Tailors Association to abandon the work or to be dismissed from the
service.11 The resolution appealed from does not declare Gaw Pun So and
Ng Qui jointly liable with Tiong King for the payment of the
petitioners’ salaries and wages; and therefore the only questions
raised in the petition are the following:
“(1) That herein petitioner Tiong King could not legally close his
tailor shop or tailoring business, from May 30, 1948, notwithstanding
the fact that his P7,000.00 working capital had become exhausted;“(2) That petitioner Tions King was under obligation to pay the wages
of his laborers and seamstresses, alleged members of the National
Tailors’ Association, numbering more than forty (40), from May 30,
1948, in the amount of over 540,000.00, ¦which Tiong King did not
have;” (Petition for certiorari, p. 10)
This case was set for hearing on September 18, 1950. On September 16
attorney for the petitioner-appellant moved that he be given 10 days
with/which to submit a brief memorandum in lieu of oral argument; and
the attorney for the respondent also prayed that he be given 10 days
from receipt of the memorandum for the petitioner to make/reply
thereto. Both petitions were granted; but neither the
petitioner appellant nor the respondent appellee filed their memoranda.
“What the petitioner filed is a constancia whioh reads as’ follows;
“NOW COMES the undersigned attorney for the petitioner Tiong King, and
before this Honorable Supreme Court respectfully makes of record the
following:“1. That after a careful study and examination
of the memorandum brief filed by the respondents, it is deemed
unnecessary to file any extensive memorandum of oral argument, in reply
thereto, and submits the case for decision.“2. And that
petitioner merely reiterates his contention that no person can be
compelled to continue in business and pay his laborers, once his
capital has been exhausted, as shewn in the authority s cited in our
memorandum dated April 12, 1950, filed in this case.”“So
this case was submitted for decision and the only question raised or
reiterated by the petitioner-appellant is his contention that “no
person can be compelled to continue in business and pay his laborers,
once his capital has been exhausted.”
No
question is raised or may be raised in this appeal by certiorari that
Tiong King is not the owner or operator as lessee of the Army Shirt
Factory, because that is a question of fact decided conclusively by the
lower court against the appellant. But the majority decision, contrary
to what appears in the record, says the following:
“The decisive question before us, therefore, is not whether Tiong King
had no more capital with which to continue the Army Shirt Factory, but
whether he was the owner or operator thereof and had the right to file
the petition in the Court of Industrial Relations to close the same.
Upon this point, it is only sufficient to recall that the National
Tailors Association entered into a stipulation with Tiong King alone
whereby they agreed that all cases against the former owners ot the
business were terminated. As correctly observed in the resolution of
the Court of Industrial Halations dated Lay 27, 1949,. granting the
petition of Tiong King, ‘3ste traspaso del negoeio a favor de Tiong
King.no se hizo a escondidas. Lo sabia la misma peticionaria; de alii
qua esta pidio primero al Tribunal que se la incluyera a aquel como uno
de los recurridos en estas actuaciones.’ That Tiong King vias conceded
to be the owner and operator of the Army Shirt Factory at the time his
petition to close it was filed, is conclusively borne out by the fact
that Presiding Judge Roldan in his decision of January 15, 1949,
ordered Tiong King, and not Gaw Pun So, to pay the salaries and wages
of the personnel.”
As to the question of
fact whether or not Tiong King was the owner and operator of the Army
Shirt Factory, the Court of Industrial Relations in its resolution
appealed from, found as already stated above, “that Tiong King is not a
lessee much less the true owner or operator of the tailor shop sought
to be closed in the present proceeding”, and therefore that question can not be
raised on appeal by certiorari in this Supreme Court in accordance with
the provision of Section 2 of Rule 44. Besides, the fact that the
resolution of the trial Judge Roldan of January 17, 1949, affirmed by
the Court of Industrial Relations in bane in its resolutions of June 30
and October 31, 1949,”ordered Tiong to pay the salaries and wages
of-the personnel,” does not prove that he is the true owner or operator
of the factory, because Tiong King is liable for the payment of said
salaries and wages for having acted in collusion with. Gaw Pun
So”according to the finding of fact of court below. If the lower court
did not declare Gaw Pun So jointly and severally liable with Tiong
King for the payment of said salaries and wages, it is because the
former was not a party in this proceeding.
But the decision
of the majority in order to circumvent the provisions of section 2 of
Rule 44, adds; “On the surface it may be argued that vie have reversed,
in violation of section 2, Rule 44, of the Rules of Court, the Court of
Industrial Relations on its finding of fact that Tiong King -was
neither the owner nor the lessee of the business in question. At
bottom, however, the argument must fall because, regardless of said
result, vie have merely passed upon and determined the legal effect of
the agreement entered into between the National Tailors Association and
Tiong King, to the complete exclusion of the former owners, and duly
approved by the Court of Industrial Relations. In other words, we have
in essence only held that the Court of Industrial Relations erred in
construing the legal implications of said agreement.”
There is nothing in the record to show what were the facts in
controversy which were the object of the agreement (approved by the
lower court on February 17, 1948) entered iiito between the petitioner
National Tailors Assooiation and Tions King in which it was stipulated
that “This agreement is between the National Tailors Association and
Tiong King, and all oases are terminated” (against, Gaw Pun So and his
wife Ng Ki), except what appears in the resolution appealed from,
-which says the following:
“Said
agreement only referred to the demands appearing in the petition of the
National Tailors’ Association subject of Case No. 117-7, as there was
then no other case or ca’ses pending between the petitioner National
Tailors’ Association and tha respondents.Tiong King, and Gaw Pun So.
Cases No. 117-7(1), 117-7(2) and 117-V(3) which are incidents of Case
No. 117-7 were filed with this Court, as the records show, after said
agreement has been signed.
“It is true as a part of the quoted order, it was stated that the
agreement was between National Tailors’ Association and Mr. Tiong King.
There was no finding of the Court, however, that Mr. Tiong King was the
owner, neither a finding that he was the lessee. * * *
* * * * * * *
“Further more, although it is true that the agreement between the
National Tailors’ Association and respondents Gaw Pun So and Tiong King
in Case No. 117-7 which was recognized by the Court on February 17,
1948, absolved Gaw Pun So ana Tiong King of whatever responsibility
they might have in connection with the case, it did not contemplate to
relieve Gaw Pun So or any obligation that might be the result of his
later acts, as that created by collusion between him and Tiong King.”
This findings of fact of the majority of the lower court in its
resolution of June 30, 1949, appealed from is not contradicted but
admitted by the minority, for Judges Lanting and Bautista who abandoned
their resolution of May 27, 1949,” from which the excerpt quoted in the
decision was taken, wrote a dissenting opinion dated Nov. 10, 1949, in
which said judges say” “That the question of ownership of the business
or that of its lease has never bean squarely presented to and decided
by this Court before it is true, but that is no protof at all that
Tiong King is not the right party to represent the respondent Army
Shirt Factory. Not even in the instant incidental case has that issue
been squarely presented by the petitioner. It was only in the decision
of Jan. 13, 1949, that the trial judge concluded that there was
collusion between Tiong King and Gaw Pun So and that the former is
neither the owner of the business nor the lessee of its premises and
the sewing machines used in connection therewith.”
The
ownership of the business or that of its lease not having been in
question between the parties, the above mentioned agreement approved by
the lov.er court on February 17, 1948, can not have the legal
implication of recognizing that Tiong King was the lessee much less the
owner or operator of the business, contrary to the findings of fact of
the Court of Industrial Relations. Besides, even assuming that said
agreement had recognized Tiong King as the lessee or operator of the
business and that question became res ajudicata by its
approval by the lower court on February 17, 1948, the legal effect of
such agreement was limited to the question then in controversy before
and up to the tide of approval of the agreement by the court. But the
petitioners, one of the signatory parties were not in estoppel to show
by the subsequent acts of Tiong King and Gaw Pun So, and the Court of
Industrial Relations to declare on Jan. 11, 1949, or about one year
afterwards, that said agreement was entered into and the approval
thereof by the court was obtained through fraud, for Tiong King was a
mere dummy of Gaw Pun So, and “all contracts executed between Gaw
Pun So and his wife Ng Ki on one side, and Tiong King on the other
side, were pure and simple devise to indirectly compel the members of
the petitioning association to abandon the work or to be dismissed from
the service.” And furthermore, even if the legal effect of the
agreement is that Tiong King was the owner, lessee or operator of the
Army Shirt Factory, vafcfl no evidence was presented afterwards to show
the collusion between Tiong King and Gaw Pun So in entering into said
agreement and obtaining the approval of the lower court, and such
question is purely of law, this Supreme Court can not pass upon that
question because it is not raised by the petitioner-appellant as
already shown at the beginning of this opinion.
The
remaining question is, whether Tiong King was neither the owner nor the
lessee or operator of the Army Shirt factory, had the right to close
said factory, for according to the decision of the majority above
quoted, “The decisive question before us, is not whether Tioag King had no more capital with which to continue the Army Shirt Factory, but
whether he was the owner and operator thereof and had the right to file
the petition in the Gourt of Industrial Relations to close the sane.”
But the majority, in discussing and deciding this second question,
forgetting what the decision has previously stated, and we have just copied and underlined, says “There being no question that Tiong King’s
capital invested in the Army Shirt Factory was almost exhausted at the
time of the filing of his petition to close it, said petition must
necessarily be granted. It is admitted by all the Judges of the Court
of Industrial Relations that an employer may close his business,
provided the same is done in good faith and is due to causes beyond his
control. To rule otherwise, would be oppressive and inhuman.”
In reply to the above, it is sufficient to say that, it having been
found by the Court of Industrial Relations in its resolution appealed
from that Tiong King was not the lessee, much less the true owner or
operator of the Army Shirt Factory, but a mere dummy of Gaw Pun So and
his wife, Tiong King cannot be the true owner of the capital invested
in said factory. Therefore the above quoted ruling or conclusion has no
basis on fact or law, and therefore not applicable to the
petitioner appellant Tiong King in the present case.
The
reason why the constant ruling of the Court of Industrial Relations
that “an owner or employer may close his business, provided the same is
done in good faith and.is due to causes beyond his control” has not
been applied to Tiong King in this case, is because he was found by the
lower court to be, not the true owner or operator of a business, but a
dummy of Gaw Pun So. It would be useless or of no effect to permit a
person, who is not the true owner but a dummy for another, to close the
business on the condition, almost always imposed by the Court of
Industrial Relations upon an employer authorized to close his business,
that he should readmit his former laborers and employees should he
reopen his business in the future; because the true ower and not the
dummy is the one who may reopen the business, and the true owner would
not be bound to comply with such condition should he reopen his
business. To authorize Tiong King to close the business in the present
case would be tantamount to giving countenance to the plot devised by
Gaw Pun So and Tiong King to indirectly compel the members of the
Rational Tailors Association to abandon their work or to be dismissed
from the service.
The resolution appealed from should therefore be affirmed.
Padilla and Tuason JJ., concur.
The resolution of the court of Industrial Relations of Oct. 31, 1949 is
reversed and the resolution of May 27, 1949 of the same court is
affirmed.
[1] 80 Phil., 842.