GOVERNMENT SERVICE INSURANCE SYSTEM EMPLOYEES ASSOCIATION (GSISEA) AND GOVERNMENT SERVICE INSURANCE SYSTEM SUPERVISORS UNION (GSISSU), PETITIONERS, VS. HON JUDGE CARMELINO ALVEN…

GSIS Employees Association versus Alvendia

The Case

This is a petition for certiorari and prohibition brought by the Government Service Insurance System Employees Association and the Government Service Insurance System Supervisors Union against Judge Carmelino Alvendia. The unions ask the Supreme Court to annul the trial court's refusal to dismiss, and its grant of a preliminary injunction in, a petition for declaratory relief filed by the Government Service Insurance System. The case matters because it fixes three rules a reviewee must carry into the bar: the Government Service Insurance System performs a proprietary, not a governmental, function; declaratory relief will not lie to settle a question already decided or already breached; and a labor dispute falling within the exclusive jurisdiction of the Court of Industrial Relations cannot be reached by a declaratory relief action in the regular courts.

Procedural History

The Government Service Insurance System filed a petition for declaratory relief in the Court of First Instance of Manila, joining the two unions as respondents. The unions moved to dismiss on the grounds that the petition stated no cause of action for declaratory relief, that the court had no jurisdiction over the subject matter, and that any declaration would be unnecessary and improper. After the unions struck again, the System filed an amended petition praying for a preliminary injunction. The respondent judge denied the motion to dismiss and granted the writ of preliminary injunction. The unions then came to the Supreme Court on certiorari and prohibition with preliminary injunction, alleging that the judge acted in excess of jurisdiction and with grave abuse of discretion. The Supreme Court gave due course and issued its own preliminary injunction upon the filing of a bond.

Facts

The Government Service Insurance System filed its petition for declaratory relief on May 29, 1959, eleven days after members of the Employees Association had declared a strike. The strikers were prevailed upon to return to work four days later. The petition asked the court to declare whether the System exercises governmental or proprietary functions, whether its employees, who are governed by the Civil Service Law, may compel it to enter into a collective bargaining agreement on the terms and conditions of employment, and whether those employees may declare a strike.

On June 12, 1959, the unions moved to dismiss. On June 23, 1959, the employees struck again, alleging unfair labor practices on the part of the System. The next day the System filed an amended petition praying for a preliminary injunction against the alleged illegal acts. Meanwhile the unions had filed a complaint with the Court of Industrial Relations, and on July 1, 1959 a prosecutor of that court filed a complaint for unfair labor practices. The System answered, denying the charge and alleging that its functions are principally governmental, that its employees are prohibited from striking, and that the strikes of May 18 and June 23, 1959 were illegal.

On July 2, 1959, the unions filed a motion and manifestation calling the trial court's attention to the pendency of the unfair labor practice case and of an earlier case before the Court of Industrial Relations. On July 7, 1959, the respondent judge denied the motion and granted the preliminary injunction. Hence the petition before the Supreme Court.

Issues

• Whether or not the trial court may entertain a petition for declaratory relief seeking a declaration on whether the Government Service Insurance System performs governmental or proprietary functions, when that question has already been settled by the Supreme Court in a case to which the System itself was a party.
• Whether or not declaratory relief will prosper when the petition seeks a declaration on whether the employees may strike, after the strike has already been declared.
• Whether or not the trial court has jurisdiction over a petition for declaratory relief that is closely interwoven with an unfair labor practice case pending in the Court of Industrial Relations.

Applicable Provisions

Section 2 of Rule 66 of the Rules of Court, on the requisites of declaratory relief, provides:

A complaint for declaratory relief will not prosper if filed after a contract or statute, the construction of which is sought, has already been breached.

This rule defeats the petition, because the strike the System sought to have declared illegal had already been carried out before the petition was filed.

Section 11 of Republic Act Number 875, the Industrial Peace Act, on the prohibition against strikes in the government, provides:

Employees of the Government, including its instrumentalities and political subdivisions, shall not strike.

The System invoked this provision in its answer before the Court of Industrial Relations, and it frames the labor question that belongs to that court and not to the trial court.

Ruling

On the first issue, the Court held that the question of the System's functions had already been decided. In the earlier case of Government Service Insurance System versus Castillo, the Court had ruled that the business of insurance is not inherently or exclusively a governmental function but is, in essence and practice, of a private nature and interest. That ruling was reiterated in Boy Scouts of the Philippines versus Araos, where the Court observed that the System invests the contributions of government employees at substantial interest and profit, distributes part of those profits as dividends among its insured, and does not operate for charity but for gain. Since the very question had been settled in a case to which the System was itself a party, the petition could not be justified. Declaratory relief is improper where another action involving the same issue is pending or where a more effective relief exists; with more reason is it improper where the case is moot, seeking judgment on a pretended controversy when in reality there is none. The petition, the Court said, was no more than a request for an advisory opinion.

On the second issue, the Court held that the petition would not prosper because it was filed after the strike had actually been declared. Under Section 2 of Rule 66, a complaint for declaratory relief will not prosper if filed after the contract or statute sought to be construed has already been breached. To rule otherwise would prejudge a pending case and encourage multiplicity of suits.

On the third issue, the Court held that the trial court had no jurisdiction. An unfair labor practice case involving the same acts sought to be enjoined was already pending in the Court of Industrial Relations, which has exclusive jurisdiction over it. The declaratory relief proceedings being closely interwoven with, if not actually arising out of, that case, the court below had clearly no jurisdiction to entertain the petition, much less to issue the restraining order prayed for.

Doctrine

First, the Government Service Insurance System performs a proprietary function. Its insurance business is not inherently or exclusively governmental but is, in essence and practice, of a private nature and interest, operated for gain for the benefit of those insured.

Second, declaratory relief is improper where the question raised has already been decided by the Supreme Court, where another action involving the same issue is pending, where a more effective relief is available, or where the case is moot and amounts to no more than a request for an advisory opinion.

Third, declaratory relief will not prosper if filed after the contract or statute sought to be construed has already been breached, as where the strike is declared before the petition is filed.

Fourth, where the declaratory relief action is closely interwoven with an unfair labor practice case within the exclusive jurisdiction of the Court of Industrial Relations, the regular court has no jurisdiction to entertain it.

Disposition

The petition for certiorari and prohibition was granted, the writ of preliminary injunction was made permanent, and costs were taxed against the Government Service Insurance System.

Remember This

Memorize the line that the business of insurance is not inherently or exclusively a governmental function but is, in essence and practice, of a private nature and interest. Examiners use this case to test the governmental versus proprietary distinction as applied to the Government Service Insurance System, and the requisites and limits of declaratory relief, especially the bar against a petition filed after the act sought to be construed has already been done.