THE SAN MIGUEL CORPORATION (FORMERLY SAN MIGUEL BREWERY, INC.), PETITIONER, VS. MACARIO CRUZ AND THE COURT OF INDUSTRIAL RELATIONS, RESPONDENTS.

Petition filed by the San Miguel Corporation (formerly San Miguel Brewery, Inc.) for review of the decision of the Court of Industrial
Relations (in Case No.
2870-ULP), finding it guilty of unfair labor practices and ordering the
reinstatement with back wages of complainant Macario Cruz.

The records of the case show that so the time in October, 1957
the “Pagkakaisa Samahang
Manggagawa sa
S.M.B. (Paflu)”, a labor organization in the San
Miguel corporation, staged a strike against the latter.  After said strike ended and the strikers
resumed their work, Macario Cruz, a driver-employee
and member of the Union, was called by one Mr. Camahort, a company official, and was shown a newspaper clipping carrying a picture depicting
him (Cruz) as one of the strikers. 
According to Cruz, he was told by Camahort
that he would be dismissed if he would not desist from union activities.  A few months thereafter, or on 17 March
1958, Cruz was
advised of the company’s decision to retire him from the service for physical
disability, effective 11 March
1958.^[1]
Cruz must have already received
information thereof before it could be sent by the company because under date
of 15 March 1958 said
employee wrote the company re­questing that the benefits due him on account of
his retirement be given in only one installment.^[2]
Accordingly, on 10 April 1958,
Cruz received from the company HSBC Checks Nos. K905357 and K905358 in the
total sum of P3,019.46 as “full and complete
payment of all my (his) retirement benefits”.^[3]

On 12 June 1958,
Cruz also filed with the Social Security System an application for disability
benefit,^[4]
wherein he affirmed having retired
from employment on 31 March 1958.  This claim, however, was denied for the
reason that the case properly falls under sickness bene­fits, to which claimant
was not yet entitled, he having been a member of the System for less than one
year.^[5]

Three years after he was
retired, on 27 May 1961, Macario Cruz charged
the San Miguel Company before the Court of Industrial Relations with unfair
labor practices for his dismissal in 1958, allegedly for union activities.  The formal complaint against the company was filed by the Acting Prosecutor of the Court
on 12 October 1961
(Case
No. 2870-ULP).  After hearing, the
trial Judge rendered decision sustaining
the charges and ordering therein respondent Company to reinstate the complainant with back
wages, but deducting therefrom the amounts already
received by him as retirement benefits. 
The company
sought reconsideration thereof before the court en banc, and when
the same was denied on 5 June 1967
(with two judges dissenting) the present
petition for review was filed.

The primary question posed in this proceeding is whether or not a former employee who has
accepted retirement benefits may still
contest the regularity and validity of his retirement 3 years
thereafter.

In disposing of the company’s defense of estoppel
and ruling that the acceptance
by complainant of retirement benefits did not preclude the latter from
assailing the validity of the termination of his employment, the respondent
Court cited the case of Cariño vs.
Agricultural Credit and Cooperative Financing Administration,^[6]
wherein we said:

“Acceptance of those benefits (separation pay and terminal
leave benefits) would not amount to estoppel.  The reason is plain.  Em­ployer and employee, obviously, do not
stand on the same footing.  The employer
drove the employee to the wall.  The latter must have to get hold of money. 
Because, out of job, he had to face the harsh
necessities of life.  He thus
found himself in no position to resist money proferred.  His, then, is a case of adherence, not of
choice.  One thing sure, however, is that
petitioners did not relent on their claim. 
They pressed it.  They are deemed
not to have waived any of their rights.”

The above pronouncement relied upon by the Industrial
Court is not controlling in the present case.  In the first place, as distinctly stated in
the Cariño case, therein petitioners were improperly
dismissed and never relented in their efforts to assert the illegality of their
separa­tion from employment and to demand reinstatement.  By contrast, the herein complainant not only
specified, and obtained, payment of retirement gratuities due him in a lump sum
but even applied for disability benefits with the Social Security
System.  Moreover, he never protested his
alleged illegal dismissal nor demanded reinstatement.  It took him more than 3 years to question the
validity of his said retirement.  The
original posture taken by the complainant, indeed, can be nothing but an
agreement, or at least acquiescence, to the decision of the company to have him
retired for physical disability.  Thus,
even assuming that there was ground to declare his separation from the service
invalid, complainant’s receipt of all the benefits arising therefrom,
with full knowledge of all the facts surrounding the same, amounts to waiver of
the right to contest the validity of the company’s act.^[7]

Secondly, the petitioner company’s cause is not only premised on estoppel, but also on complainant’s right having lapsed
into a stale demand.  For, truly, all the
elements for the operation of the principle of laches
are here present:  (a) conduct on the
part of the employer that gave rise to the situation on which the complaint is
made, which is the retirement of the complainant for physical disability; (b)
delay in the assertion of complainant’s right — the lapsing of a period of 3
years which is neither explained nor justified; (c) lack of knowledge or notice
on the part of the respondent employer that the complainant would assert the
right on which the present suit is based; and (d) injury or prejudice to the
employer in the event relief is awarded to the complainant.^[8]

Herein private respondent tries to remove this case from the
opera­tion of the laches principle by alleging that
the matter of unfair labor practice involves public interest, and that the
Industrial Peace Act (Republic Act 875) did not prescribe any period within
which a right provided thereunder may be
enforced.  There can be no quarrel on
this point;
but it must be realized that, unlike prescription, the defense of laches is not dependent on the existence of a statutory period of limitation.  It can be invoked without reckoning any
specific or fixed period; it is sufficient that there be an unreasonable
and unexplained delay in bringing the action that its maintenance would already constitute inequity or injustice to the party claiming
it.  As this Court succinctly declared in previous cases:

“- – – – -.  Laches is different from the statute of limitations.  Prescription is con­cerned with the fact of
delay, whereas laches is concerned with the effect of
delay.  Prescription is a matter of time; laches
is principally a question of inequity of permitting a claim to be enforced,
this inequity being founded on some change in the condition of the property or the relation of the
parties.  Prescription is statutory; laches is not.  Laches applies in equity, whereas prescription applies at
law.  Prescription is based on fixed
time; laches is not.” (Nielson & Co., Inc. vs. Lepanto
Consolidated Mining Co., L-21601, 17 December 1966).^[9]

“Laches in a general sense, is failure or
neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due
diligence, could or should have been done earlier, it is negligence or omission
to assert a right within a reasonable time, warranting a presumption that the
party entitled to assert it either has abandoned it or declined to assert it.

“The doctrine of laches or of ‘stale
demands’ is based upon grounds of public policy which requires, for the peace
of society, the discouragement of stale claims, and unlike the statute of
limitations, is not a mere question of time but is principally a question of the inequity or unfairness of permitting a
right or claim to be enforced’ or asserted.” (Tijam vs. Sibonghanoy, L-21450, 15 April 1968).^[10]

WHEREFORE, the decision of the Court of In­dustrial Relations under review is
hereby reversed, and the complaint for unfair labor practices against herein petitioner,
dismissed.  No pronouncement as to costs.

Concepcion, C.J., Dizon,
Makalintal, Zaldivar,
Ruiz Castro, Teehankee, Barredo,
and Villamor, JJ., concur.

Fernando, J., did not take
part.

^[1]
Exhibit “G”, page 84, CIR record.

^[2]
Exhibit “2”, page 116, CIR record.

^[3]
Exhibit “1”, page 115, id.

^[4]
Exhibit “5”, page 87, CIR record.

^[5]
Exhibit “7”, page 83, id.

^[6]
G.R. No. L-19808, 29 September 1966, 18 SCRA 183.

^[7]
Misa vs. National Marketing Corporation,
L-20701, 27 April 1967, 19 SCRA 1017, Lopez vs. Board of
Directors, 101 Phil. 349.

^[8]
Go Chi Gun, et al. vs. Go Cho, et al., 96 Phil. 622.

^[9]
18 SCRA 1040.

^[10]
23 SCRA 29; also Z. E. Lotho, Inc. vs. Ice and Cold Storage Industries of
the Philippines, L-16563, 28 December 1961, 3 S. C. R. A., 744.