CITIZENS’ LEAGUE OF FREEWORKERS AND/OR BALBINO EPIS, NICOLAS ROJO, ET AL., PETITIONERS, VS. HON. MACAPANTON ABBAS, JUDGE OF THE COURT OF FIRST INSTANCE OF DAVAO AND TEOFILO GERO…

Citizens' League of Freeworkers versus Abbas

The Case

This is a petition for certiorari with a prayer for a writ of preliminary injunction, brought by the Citizens' League of Freeworkers, a legitimate labor organization, together with its members, against Judge Macapanton Abbas of the Court of First Instance of Davao and the spouses Teofilo Geronimo and Emerita Mendez. The Union asks the Supreme Court to set aside the writ of preliminary injunction issued by the respondent judge in the civil case for damages and restraint filed by the spouses, and to restrain him from proceeding further, on the ground that the controversy is a labor dispute and therefore falls within the exclusive jurisdiction of the Court of Industrial Relations. The case matters because it fixes the jurisdictional line between the regular courts and the labor court in disputes arising from the boundary system of compensation, and because it tells us when a labor injunction issued by a regular court must fall.

Procedural History

The spouses Geronimo and Mendez, owners and operators of auto-calesas in Davao City, filed a complaint for injunction and damages with the Court of First Instance of Davao against the Union and its member drivers. On the same day, the respondent judge granted the writ of preliminary injunction prayed for, while deferring action on the petitioners' motion to dissolve it. The petitioners then filed a complaint for unfair labor practice with the Court of Industrial Relations. They later moved to declare the writ of preliminary injunction void on the ground that it had expired under Section 9(d) of Republic Act 875, the Industrial Peace Act. The respondent judge denied the motion, holding that there was no employer-employee relationship between the spouses and the individual petitioners, and that consequently the Rules of Court, and not Republic Act 875, governed the matter of injunction. The petitioners then came to the Supreme Court by petition for certiorari.

Facts

The spouses Geronimo and Mendez owned and operated auto-calesas in Davao City. The drivers who worked these vehicles used to lease them from the spouses on a daily rental basis, paying a fixed amount for the use of the vehicle and keeping whatever they earned beyond it. The Union sought recognition of the drivers as employees rather than lessees, and sought to bargain with the spouses on that basis. The spouses refused.

On the twentieth of February, nineteen hundred sixty-three, the Union declared a strike. The spouses alleged that from then on their business operations were paralyzed through threats, intimidation, and violence. On the eleventh of March, nineteen hundred sixty-three, the spouses filed their complaint with the Court of First Instance of Davao, praying for a writ of preliminary injunction to restrain the drivers from these acts and to recover damages. The respondent judge granted the writ that same day.

The next day, the twelfth of March, the petitioners filed a complaint for unfair labor practice against the spouses with the Court of Industrial Relations, grounded among others on the refusal to bargain. When the petitioners moved to declare the writ void as having expired under Republic Act 875, the respondent judge denied the motion, reasoning that no employer-employee relationship existed and that the Rules of Court therefore applied. Hence this petition.

Issues

• Whether or not an employer-employee relationship existed between the spouses and the drivers working under the boundary or daily rental system, such that the controversy is a labor dispute.
• Whether or not the writ of preliminary injunction issued by the Court of First Instance of Davao should be set aside, the respondent court having denied the motion to dissolve it on the ground that Republic Act 875 did not apply.
• Whether or not the filing of the unfair labor practice case with the Court of Industrial Relations vested that court with complete jurisdiction over the labor dispute, to the exclusion of proceedings in the civil case.

Applicable Provisions

Section 9(d) of Republic Act 875, the Industrial Peace Act, as invoked by the petitioners, provides:

No preliminary injunction shall be issued by any court, except in cases where the same is authorized by law, without notice to the adverse party and without giving the latter an opportunity to be heard.

The provision bears on the case because the petitioners argued that the writ had expired by its terms, and the respondent judge refused to apply it on the mistaken premise that no labor dispute existed.

Ruling

On the first issue, the Court held that a driver who operates a vehicle under the boundary system is an employee within the meaning of the law, and that the case therefore comes under the jurisdiction of the Court of Industrial Relations. Relying on its earlier ruling in the National Labor Union case, quoted through the Doce decision, the Court explained that the absence of a fixed wage, the driver's compensation being the excess of fares over the amount agreed upon, and the driver's bearing the cost of gasoline, are not sufficient to withdraw the relationship from that of employer and employee. The drivers invested nothing in the acquisition of the vehicles and took no part in management; their service as drivers was their only contribution to the business. The relationship of lessor and lessee, therefore, cannot be sustained. There was a labor dispute between the parties from the beginning.

On the second issue, the Court held that even assuming the respondent court had jurisdiction to issue the writ at the time it was issued, it erred in denying the motion to set aside the writ upon the expiration of the period of thirty days from its issuance, and it erred upon the wrong ground that there was no labor dispute and that Republic Act 875 did not apply.

On the third issue, the Court held that upon the filing of the unfair labor practice case on the twelfth of March, nineteen hundred sixty-three, the Court of Industrial Relations acquired complete jurisdiction over the labor dispute, and the least that could be done in the civil case was either to dismiss it or to suspend proceedings therein until the final resolution of the unfair labor practice case.

Doctrine

A driver who operates a vehicle under the boundary system is an employee of the owner-operator, not a lessee. The absence of a fixed wage, the driver's compensation being the excess of fares over the boundary, and the driver's bearing the cost of gasoline do not convert the relationship into one of lease. Where such a relationship exists and a labor dispute arises, jurisdiction lies with the Court of Industrial Relations, and a writ of preliminary injunction issued by a regular court under Republic Act 875 cannot stand beyond the period fixed by Section 9(d), nor can the regular court proceed once the labor court has acquired complete jurisdiction over the dispute.

Disposition

The Supreme Court set aside the writ of preliminary injunction issued by the respondent judge in the civil case, with costs. The Union prevailed.

Remember This

Memorize this line: a boundary driver is an employee, not a lessee, and the labor court, not the regular court, has jurisdiction over the dispute. Examiners use this case to test the employer-employee test under the boundary system and the rule that a regular court must dismiss or suspend its proceedings once the Court of Industrial Relations acquires jurisdiction over a labor dispute.