KAPISANAN NG MGA MANGGAGAWA SA MANILA RAILROAD COMPANY, PETITIONER, VS. RAFAEL HERNANDEZ, ET AL., RESPONDENTS.

Appeal by certiorari to review the resolution en banc
of the Court of Industrial Relations in Case No. 2585-ULP,
dated April 26, 1962.

On December 12, 1960 Rafael S. Hernandez and some four hundred
members of Kapisanan Ng Mga Manggagawa sa Manila Railroad Company, thru the
Acting Prosecutor of the CIR, filed a complaint against the aforementioned
union and its incumbent officers and members of the board of directors,
charging them with violation of Section 17, subsections (c), (f), (h), (j), and
(l) of Republic Act No. 875, by passing resolutions directing an assessment of
P5.00 monthly from everyone of
the members without their authority and consent; appropriating five thousand
pesos from the forced savings of the union to cover attorney’s fees;
appropriating the amount of P15,000.00 to cover respondent Vicente K. Olazo’s^[1] trip abroad; increasing the monthly salaries
of union officers without the approval of the general membership; authorizing
the expenditure of P5,000.00 from the strike fund; abuse in the use of the union car, failure of Olazo to
render an accounting of his trip abroad and refusal of Olazo
to let complainant Hernandez inspect the books of accounts of
the union.

After the hearing before
the court below was closed but before its decision was rendered, a
certification was submitted to it by respondents there
(petitioner here), to the effect that in a convention held on March 23,
24 and 25, 1961 the members of the union passed several resolutions, as
follows:

“1. The majority of the members of said convention has
ratified the collection of five pesos (P5.00) monthly as special assessment
from the members of the union to cover the deficit for the retirement benefits;

2. The majority ratified all union expenditures for the year
1959-1960 and all resolutions passed in the year 1959-1960 which resolutions
and expenditures are questioned in Case No. 2585-ULP in the Court of Industrial
Relations; and

3. That during said convention, the union president rendered an accounting
of his trip abroad and his report has been approved by the majority of the
members of the convention.” (Annex C)

The above-mentioned
certification was made part of the record of the case.

On July 27,
1961, the trial
court (Judge Jose S. Bautista) rendered the following judgment:

“IN VIEW WHEREOF, except for paragraph 9 of the complaint, all
other charges contained therein are hereby
dismissed.  Respondents are hereby
declared guilty of unfair labor practice pursuant to sub-paragraph
(1), Section 17 of Republic Act
975; are directed to cease and desist from further committing such unfair labor
practice complained of; and are also ordered to allow complainant Rafael
Hernandez to inspect the books of accounts, and other pertinent documents of
respondent union.”

The complainants filed a
motion for reconsideration and on April 26, 1962 the lower court en banc
issued the following resolution, with Judges Jose S. Bautista and Baltazar M. Vil­lanueva dissenting and voting for the affirmance of the original decision:

“IN VIEW OF THESE CIRCUMSTANCES, we are forced to vote for the
allowance of the motion for reconsideration of the aforesaid decision, and in
its stead we issue an order directing the respondents to cease and desist from
further committing the unfair labor practice acts described
in the complaint; and in order to make effective the policies of the Industrial
Peace Act, respondents are hereby ordered to stop the monthly collection of
five pesos (P5.00) from the members of the respondent union; that respondents
are hereby ordered to render an accounting of all expenses incurred by respondent
Olazo in his last trip abroad in July, 1960 and to
reimburse to the union all expenditures and increases in salaries which were
not properly authorized under the union’s constitution and by-laws; and that
respondents are further ordered to post a copy of this resolution in two
conspicuous places in the premises of the business establishment of the Manila
Railroad Company and to report to this Court within thirty (30) days their compliance
of this resolution.”

Respondents below filed
the instant petition for review and raise the following issues:

(1)  
Whether or not the CIR has the
power under Section 17 of Republic Act 875 to declare a union assessment
excessive and unjustified where the necessity for the same is admitted by the
respondents themselves;

(2)  
Whether or not the CIR may
interfere with the internal labor organization procedures of the union where
the evidence shows that redress to the highest union governing body has not
been availed of;

(3)  
Whether or not in unfair labor
proceedings the CIR is limited to evidence presented during the hearing; and

(4)  
Whether or not the 10% requirement
under Section 17 of Republic Act 875 is complied with where the union members
involved are not properly identified.

Judicial interference in internal affairs of a labor union is
sanctioned by Section 17 of Republic Act 875, other­wise known as the
Industrial Peace Act, which provides:

“SEC. 17.  RIGHTS AND CONDITIONS OF
MEMBERSHIP IN LABOR ORGANIZATIONS. – It is hereby declared to be the
public policy of the Philippines
to encourage the following internal labor organization procedures.  A minimum of ten percent of the members of a
labor organization may report an alleged violation of these procedures in their
labor organization to the court.  If the
Court finds, upon investigation, evidence to substantiate the alleged violation
and that efforts to correct the alleged violation through the procedures provided
by the labor organization’s constitution or by-laws have been exhausted the
court shall dispose of the complaint as in ‘unfair labor practice’ cases.”

For the court to
intervene two requirements must be satisfied:  (1) at least 10% of the union membership must
concur to report the alleged violation; and (2) the procedures provided by the union’s constitution or by-laws must first be exhausted.

Petitioner here contends
that the 10% requirement of the law was not satisfied in this case and points
out that the signatures appearing on Annex A to the complaint in the court
below were not properly identified.  The
lower court, however, found that this requirement was complied with, and we
have no reason for disturbing this finding of fact.

It is true that under the
statute redress must first be sought within the organization itself in
accordance with its constitution and by-laws. 
However, it has been held that this requirement is not absolute, but
yields to exceptions under varying circumstances.  In the case at bar, noteworthy is the fact
that the complaint was filed against the union and its incumbent officers, some
of whom were members of the board of directors. 
The constitution and by-laws of the union provide that charges for any
violation thereof shall be filed before the said board.  But as explained by the lower court, if the
complainants had done so the board of directors would in effect be acting as
respondent, investigator and judge at the same time.  To follow the procedure indicated would be a
farce under the circumstances.  Where
exhaustion of remedies within the union itself would practically amount to a
denial of justice, or would be illusory or vain, it will not be insisted upon,
particularly where property rights of the members are involved, as a condition
to the right to invoke the aid of a court.

Going back to the first
issue, petitioner here argues that since the respondents admit the necessity of the assessment of P5.00 upon
each member the court has no power under Section 17 of Republic Act 875 to
declare said assessment excessive and unjustified.  The contention is not correct.  The respondents’ complaint below, as explained by counsel in the course
of the hearing before the trial court, did not touch on the question of whether
such assessment was excessive or unjustified, but rather on the fact that it
was, together with other actuations of the union officers, and board of
directors, contrary to the constitution and by-laws of the said union.  They point out, correctly as we see it, that Section 1, Article VI
of the union’s constitution and by-laws provides for a contribution of P2.00
from each member to cover the retirement benefits due to retiring members; that
the collection of P5.00 was based merely on the circular of the president of
the union, which appears to have been authorized by the board of directors;
that the board alone cannot amend the union’s constitution and by-laws; and
that the increased assessment of P5.00 is in the nature of such an amendment,
and therefore required approval in a convention of the union members.

Petitioner here stresses
the fact that approval by the members was obtained in their convention
held on March 23, 24 and 25, 1961, as shown by the certification to that effect
dated March 27, 1961.  The trial court,
however, disregarded that certification on the ground that it was submitted
after the hearing had been terminated and without the respondents’
having been given the opportunity to cross-examine the certifying
officers.

Section 5(b) of Republic Act 875 provides that the court in
rendering its decisions “shall not be bound solely by the evidence
presented during the hearing but may avail itself of all other means such as
(but not limited to) ocular inspections and questioning of well-informed
persons which results must be made a part of the record.” This provision,
however, is not meant to do away with the requirements of due process.  Respondents had the right to be heard before
the certification was admitted so that it could inquire into and test, by
cross-examination if necessary, the veracity of the facts alleged therein.  Otherwise self-serving evidence could easily
find its way into the record.

On the other hand, we cannot close our eyes to the fact that the
resolutions referred to, apparently passed precisely to meet the objections of
herein respondents as alleged in their complaint below, may
have a material bearing on the issues in this case.  It would therefore serve the ends of truth
and justice to have said resolutions properly presented as evidence so that
they may be considered by the trial court.

WHEREFORE the decision appealed from is set aside and
this case is remanded below for the reception of evidence concerning the
resolutions aforesaid, and for the rendition of the
corresponding judgment thereafter.  No
pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Bengzon, J.P., Zaldivar, Sanchez,
and Castro, JJ.,
concur.

^[1]
Olazo was president of the Union.