NATIONAL BREWERY AND ALLIED INDUSTRIES LABOR UNION OF THE PHILIPPINES (PAFLU), PLAINTIFF AND APPELLANT, VS. SAN MIGUEL BREWERY, INC., DEFENDANT AND APPELLEE.

On November 25, 1960, the National Brewery
and Allied Industries Labor Union of the Philippines (PAFLU) filed before the
Court of First Instance of Manila against the San Miguel Brewery, Inc. a
complaint alleging, among others, that said union and the company entered into
a collective bargaining agreement on October 2, 1959 effective for a period of
three years ending on June 30, 1962, Section 7, Article VII of which provides:
“The Company agrees to pay the basic daily rates of those workers within
the bargaining unit who may participate in the Labor Day parade held on May 1st
of every year; “that plaintiff’s mother union decided to hold its Labor Day
parade in the morning of May 1, 1960 at the Balintawak Monument at Grace Park,
Caloocan, Rizal; that about 600 members of ,the union joined and participated
in said parade whose total basic daily wage amounts to P3,900.00; that the
company knew that the members of the union participated in the parade and so
the union demanded the payment to said members of their basic wage for that
day; that the company refused to honor its obligation in bad faith and because
of such refusal the union is entitled to collect from the company actual or
compensatory damages, as well as moral and exemplary damages. Hence, the union
prayed that judgment be rendered against said company for the payment of (a)
the sum of P3,900.00, with legal interest thereon,
from May 1, 1961; (b) the sum of P3,900.00 as actual and compensatory damages;
(c) the sum of P100,000.00 as moral damages; (d) exemplary or corrective
damages in the discretion of the court; and (e) the sum of P6,000.00 as
attorney’s fees.

The company in its answer set up
special and affirmative defenses. Among the latter, the company alleged that
(a) the union has no cause of action against the company, and (b) the court has
no jurisdiction over the subject matter of the action. With regard to the first
ground, the company contends that the union is not the real party in interest
but the individual members whose right to recover the one day’s wage is
persona] to them. As regards the question of jurisdiction, the company argues
that not one of the employees to whom the cause of action belongs receives a
daily wage of more than P5,000.00, and hence the
jurisdiction of the case is determinable on the basis of the total claim of
each employee, which does not lie with the court of first instance. And on the
basis of the total amount of P113,800.00 claimed in
the complaint as damages, and on the allegation that 600 union members had
joined the parade, the amount pertaining to each would be only about P189.66,
which is still below the jurisdictional sum cognizable by the lower court.

After the parties had submitted
memoranda in support of their respective contentions, the court a quo issued an
order requiring the complaint to be amended by including as parties plaintiffs
the real parties in interest and the amount due to each one of them giving the
plaintiff for that purpose ten days to comply with the order. The union
submitted a motion for reconsideration. The company in turn moved for outright
dismissal of the complaint on the plea that lack of
cause of action is not correctible by amendment. The court a quo denied both
motions, but after the company had sought a reconsideration
on the ground that the union failed to amend the complaint despite the lapse of
the 10-day period given to it to do so, the court a quo issued another order
dismissing the complaint without prejudice and with costs against the
plaintiff.

Hence the present appeal.

The order of the court a quo dated April
13, 1961
which requires appellant to amend its complaint by including as parties
plaintiffs each and every one of the 600 members of the union to which they
belong and to state the individual amounts due each of them is predicated on
the following findings:

“What is alleged to have been
violated by defendant is the contract of defendant with each and everyone of its employees, individually. That being the
case, the real party in interest is the employee who has the right to receive
the salary corresponding to one day. Inasmuch as the employees concerned are
not made party plaintiffs, there is a defect of the parties
plaintiff. More- over, the amount to which each employee is entitled should he
stated to determine whether this Court has jurisdiction to try the case.”

Appellant disagrees with the above
finding for it contends that the basis of its complaint is not the individual
contracts of employment which its members had entered into with the company but
the collective bargaining agreement that was concluded between the union and
the company insofar as their participation in the Labor Day parade held on May
1, 1960 is concerned wherein it was agreed that those members who should so
participate ‘would be paid their daily basic wage. And this is so because, it
contends, before the conclusion of said collective bargaining agreement the
members of the union did not enjoy the benefit of the provision of the Labor
Day parade contained therein and, in fact, if not because of that agreement
they would not now be entitled to such basic daily wage even if they had
participated in such Labor Day parade.

On the other hand, the company is
of the view that since the provision regarding payment of the basic daily wage
to the members of the union contained in the collective bargaining agreement
runs to the benefit of the members concerned, not to the union, said provision
confers a right which is unique and personal to the employees with the result
that they are the ones who are the real parties in interest with regard to the
collection of their individual basic wages. And to bolster up this contention,
the company cites several cases decided in the United States.

We are of the opinion that the
complaint filed by the union comes under the jurisdiction of the court a Quo
for the same is based upon the collective bargaining agreement concluded
between the union and the company. Before the conclusion of said agreement, the
members of the union, and for that matter any employee of the company, did not
enjoy the benefit of payment of their basic daily wage even if they should
attend or participate in a Labor Day parade held on Labor Day, since this right
was only recognized when that agreement was concluded. The basis of the right
which is sought to be enforced is the agreement itself and not the wages to be
collected. The situation would be different if the purpose of the action were
merely to collect wages that ordinarily accrue to members of the union because
of work or services rendered in connection with their employment where the
union to which the members belong would have no personality to sue for said
services in their behalf because in that case the real parties in interest
would be the laborers or employees themselves. Not so when the wages accrue
mainly on the strength of an agreement entered into between the union and the
company, as is the instant case. The action then may be brought in the name of
the union that has obliged itself to secure those wages for its members. In
this sense, the cases cited by the company are inapplicable.

In this respect, we find pertinent
Section 3, Rule 3 of our Rules of Court, wherein it is provided, among others,
that a party with whom or in whose name a contract has been made for the
benefit of another may sue or be sued without joining the party for whose
benefit the action is presented or defended, even if the court may at its
discretion order such beneficiary to be made also a party. This provision
fittingly applies to this case. The union is the party with whom or in whose name
the collective bargaining agreement in question has been entered into for the
benefit for its members and, in line with the above rule, the union may sue
thereon without joining the members for whose benefit the action has been
presented. This is especially so when to join said members would be cumbersome
because they amount to more than 600. Verily, the court a quo erred in ordering
the dismissal of the complaint on the grounds invoked by the company.

Wherefore, the orders appealed from are set aside. The case is remanded to the court a quo for further proceedings. No costs.

Bengzon, C.J., Labrador, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.