CONSOLIDATED WORKERS UNION, PETITIONER, VS. COURT OF INDUSTRIAL RELATIONS, ET AL., RESPONDENTS.

The herein respondent, Coto Labor
Union, composed of workers in the mines operated by the Benguet
Consolidated, Inc., in Coto, Masinloc,
Zambales, filed with the Court of Industrial
Relations on 3 March 1964 a complaint for unfair labor practice against the
said company and the herein petitioner, Consolidated Workers Union, a
registered labor union whose members are also workers of the company, as well
as certain officers of respondent entities,alleging inter
alia the following:

“1.  That complainant is
a labor organization duly registered with the Department of Labor under Reg.
No. 1450-IP ………………………………;

“2. 
…………………………………………..;

“3. 
…………………………………………..;

“4.  That on several
occasions in July, 1963 and before August 11, 1963 respondent Norberto Corpus
(liaison officer of the company), told Marciano Cruz,
then a candidate for president of complainant union, not to proceed with the
complainant union’s election on August 11, 1963, join the res­pondent union and
not to run against Juan Calbone of respondent union
and promised special benefits and privileges to Marciano
Cruz if the latter will agree;

“5.  That during the second
and third week of September, October and November, 1963 and, again, on the
third week of December, 1963 respondent Nor­berto Corpus uttered in front of
many workers that the complainant union is not recognized by the company and
that the union compensation will be turned over to the respondent union,^[1]
causing by such ut­terances, the members to be disgusted with complainant
union, making many of them willing and did join the res­pondent union and thus
helping said union;

“6.  That on several
instances in July, August, September, October and November, 1963 respondent
Pablo Pabilona (department supervisor of the company)
asked Marciano Cruz to stop the latter’s union activi­ties
with a promise of giving special benefits and privi­leges as that granted by
respondent company to Juan Calbone of respondent
union;

“7.  That since the election
of Marciano Cruz on August 11, 1963 as union
president respondent company, thru Leon E. Charlot
(the company’s general superin­tendent), refused, in spite of demands, to
deliver union compensation to the complainant union in violation of the
existing collective bargaining agreement and instead, since the third week of
December, 1963 turned over said amounts to the respondent union thereby
assisting the same and in order to discourage membership to the com­plainant
union;

“8.  That respondent Rodrigo Ebuengan (the company’s treasurer), upon the instruction of
Leon E. Charlot and Juan Calbone
refused, in spite of demands, to turn over to the complainant union the union
properties and records in his possession;

“9.  That on or after August
16, 1963 Leon E. Charlot threatened Marciano Cruz with dismissal because the latter asked why
the former interfered with union matters by instructing Rodrigo Ebuengan not to turn over the union properties to
complainant union and on the same occasion respondent Norberto Corpus told Mar­ciano Cruz to stop his union activities in order to be
steady in his job.”

and praying that the respondents therein
be declared guilty of unfair labor practice; that the Consolidated Workers
Union be ordered dis-established, as
company-dominated, and ordering delivery of union properties and records to the
complainant union.       

The respondents moved to dismiss on the ground of lack of legal
capacity to sue; upon denial thereof, they filed their answers.

Almost a year after the filing of the complaint, complainant Coto Labor Union filed, on 27 February 1965, an urgent
motion for preliminary injunction to enjoin Benguet
Consolidated Inc., and Consolidated Workers Union from negotiating and
concluding, between themselves, a new collective bargaining agreement; to
enjoin the corporation from turning over to the latter union, and for the
latter to receive from the former, the dues collected from the workers, and
from disbursing said dues; and for the deposit into court of all dues col­lected
or which may thereafter be collected.  In
the said motion, complainant – movant union alleged
its willingness and ability to post a bond therefor.

At the scheduled hearing of the motion for preliminary injunction
on 16 March 1965, movant Coto
Labor Union failed to appear and adduce evidence; whereupon, Consolidated
Workers Union moved that the motion for preliminary injunction be considered as
submitted for resolution, with reservation to file certain documents in support
of its opposition: it also informed the court that a new collective bargaining
agreement between it and the company had been signed on 12 March 1965.

On 19 March 1965, Consolidated Workers Union filed, in accordance
with its reservation, a Supplementary Agreement, dated 15 April 1964, entered
into between the company and the said union, purporting to be “formerly
the Coto Labor Union”, and the agreement being
one to supplement the collective bargaining agreement then existing between Coto Labor Union and the company since 8 April 1959 and
containing a check-off provision in favor of Coto Labor
Union.  This supplementary agreement
provided, among other stipulations, that the employees who have been paying
union compensation through payroll de­ductions on the date of effectivity of said agreement “shall be considered as
having authorized the COMPANY to pay the said amount to the CONSOLIDATED
WORKERS UNION (formerly Coto Labor Union) as Union
Dues”.  The Consolidated Workers
Union also filed a Consent Election Agreement executed on 28 Sept­ember 1964
(after the initial charge was filed) by and between Coto
Labor Union, Consolidated Workers Union and Benguet
Consolidated, Inc., providing for the holding of an election, under the
supervision of the Bureau of Labor Relations, to determine the sole collective
bargaining agent of the workers, together with the minutes and tally sheet of
the election thus held on 3 October 1964, showing that the majority of the
votes cast by secret ballot favored the petitioner, Consolidated Workers Union.

Acting on the motion for preliminary injunction, the court a
quo, in an order of 29 July 1965, refused to restrain the company and
the herein petitioner, Consolidated Workers Union, from negotiating and
concluding a new collective bargaining agreement, but ordered the said union to
deposit in court the full amount of union dues it has received from the company
“pursuant to the previous agreement (and) supplemental agreement, and for
respondent company to simultaneously submit the two (2) accountings referred to
above”.

Unable to secure from the court en banc a reconsideration
of the foregoing order, the Consolidated Workers Union interposed the present
petition for review with this Court, on the matter of the union dues that it
was ordered to deposit.

The theory of the petitioner is that it is the successor of the Coto Labor Union, whose registration was cancelled by the
Department of Labor on 22 Nov­ember 1963; that, as such successor, it had the
right or, at least, a color of right, to all the rights and interests of its
predecessor, including that of re­ceiving from the employer the payroll
deductions; that there was no evidence to support the motion for preliminary
injunction, more particularly, no evidence to show that wages of employees who
were not members of the Consolidated Workers Union were deducted nor evidence
of any protest from any member of the Coto Labor
Union against the deductions, nor evidence of revocation of the authority therefor, nor of fraud or intimidation in the procurement
of such author­izations, even after the company had turned over the deductions
to the Consolidated.  Workers Union, as
the movant union did not appear during the hearing;
that the order to deposit the full amount of the union dues received from the
company constitutes a grave abuse of discretion and deprived it of its property
without due process of law; and lastly, that the court erred in not requiring
the movant union to post an injunction bond, as
provided for in Section 4 of Rule 58 of the Rules of Court.

The petitioner’s claim to succession to the Coto
Labor Union is not indubitable, for it has not spelled out what proceedings
were undertaken to effect the alleged change of name, and under what authority
and in what manner the cancellation of the permit of the Coto
Labor Union made the petitioner an heir to the union dues.  On the other hand, the petitioner does not
deny, as it asserts, that it secured its own registration as a labor
organization on 20 August 1963,
while the registration of the Coto Labor Union was
cancelled only on 22 November 1963.  So that between these two dates, both unions
were simultaneously existing, precluding the idea of one union being the
successor of the other and, further­more, the Consolidated Workers Union would
not have entered into a consent election agreement with the Coto
Labor Union, as it did on 28 September 1964, if it did not recognize the
existence of the Coto union with whom it had
contracted.

The motion for preliminary injunction makes out a prima facie
showing of a right to the final relief which is necessary to preserve the right
asserted by the movant (v. Commentaries and
Jurisprudence on Injunction, Laureta & Nalledo page 20), and herein petitioner Consolidated
Workers Union admitted in its answer in the main case that deductions made
pursuant to the previous agreement between the company and the Coto Labor Union were subsequently turned over to the
Consolidated Workers Union from the time the company learned about the
cancellation of the registration permit of the Coto
Labor Union (Order, page 24).  Hence, the
lower court, even without the evidence alluded to by the petitioner as
necessary, had sufficient basis on record to support its order. The court acted
reasonably, and with fairness to the parties, and not abusively as charged, in
adopting the remedial measure of ordering the deposit of the union dues which
were turned over to the herein petitioner, con­sidering that the complaint
(Petition, Annex A) asked the Industrial Court to declare that the Consolidated
Workers’ Union, petitioner herein, was either a company union or was company
dominated.

There is no merit to the argument of herein petitioner that the
order deprives it of property without due process of law, for it assumes that
the union dues ordered to be deposited are its property, which is precisely in
issue in the main case. Moreover, as pointed out in the appealed order, if the
Industrial Court, after hearing, should ultimately find that the Consolidated
Workers Union is company dominated or is a company union and order it
disestablished, the result would be that petitioner would have to return all
moneys and dues collected by it from the workers, since the union would have
had no authority to represent the workers. Because the moneys collected might
be improperly spent by the time the disestablishment order is made, it was
logical for the court below to order that such moneys be deposited in the
meantime.

If the petitioner should need any funds to continue its existence
and operations until judgment on the disestablishment issue is rendered, its
remedy would lie in applying to the Industrial Court to release, after due
hearing, so much of the impounded funds as may be strictly necessary for the
purpose, and not to seek the invalidation of the appealed order.

It was error for the labor court not to require the complainant-movant, Coto Labor Union (herein
respondent), to file a bond for the issuance of preliminary injunction. The
posting of a bond under Section 4 of Rule 58 of the Rules of Court is a
condition sine qua non in order that the writ of
preliminary injunction may issue (Siva, et al. vs. Reyes, et al., 83 Phil. 416;
Villarosa vs. Teodoro, 100
Phil. 24).

“The justice of this requirement of bond as a condition to the
issuance of the ‘preliminary injunction is beyond question and the Rules of
Court makes its compliance necessary whether the injunction sought is the main
objective or merely an auxiliary thereto. 
It has been said that, an undertaking is the price of injunction and in
the case of Tucker v. New Brunswick Trading Co., 44 Ch.
D. 249, 253, it was held that ‘if a man gets the injunction he must pay the
price.'” (Commentaries & Jurisprudence on Injunction, Laureta & Nolledo, pages
58-59)

Considering the conclusions we have reached, however, this error
caused no substantial prejudice warranting reversal.

FOR THE FOREGOING REASONS, the order under review is
hereby affirmed, with the modification that a bond, in such amount as shall be
deter­mined to be proper by the court a quo, shall be required
for the maintenance of the injunctive writ. 
No pronouncement as to costs.

Concepcion, C.J., Dizon,
Makalintal, Zaldivar,
Sanchez, Ruiz Castro, Fernando, Capistrano, Teehankee,
and Barredo,
JJ., concur.

^[1]
Consolidated Workers Union.