MANILA RAILROAD COMPANY, PETITIONER, VS. UNION DE MAQUINISTAS, POGONEROS Y MOTORMEN; UNION DE EMPLEADOS DE TRENES; STATION EMPLOYEES UNION MRR YARD CREW UNION; KAPISANANG LIBERA…

MAKALINTAL, J.:

This case is before us on petition for review of the order of respondent
Court of Industrial Relations dated February 17, 1961 In two cases before it:
Nos. 17-IPA (6), Union de Maquinistas, Pogoneros y Motormen vs. M.R.R.,
and 18-IPA (6), Union de Empleados de Trenes vs. M.R.R., the dispositive
portion of which order is as follows:

“In view of all the foregoing, the Chief Examiner or any of his assistants is
hereby directed to proceed to the premises of the respondent and compute the 5
percent, 10 percent and 15 percent salary reductions imposed on the members of
the petitioner and intervenors corresponding to the period from January 1, 1951
to June 30, 1954, and to submit a report thereof to the Court for its further
disposition in order that it may determine whether or not the finances of the
company have improved to warrant the payment of the above monetary claims of the
members of the petitioner and intervenors.”

On January 9, 1951 the Board of Directors of the Petitioner, the Manila
Railroad Company, passed resolution No. 437 providing for graduated reductions
in the salaries of its employees, to wit: 5% with respect to salaries ranging
from P121.00 to P160.00 per month; 10% respect to those ranging from P161.00 to
P500.00; 15% with respect to those ranging from P501.00 to P833.33; and 20% with
respect to salaries above P833.33. The resolution contained the following
condition: “that the above economy measures be, and they hereby are, considered
temporary and that the reduction of salaries be returned immediately as the
finances of the Manila Railroad Company improve, beginning from the lower
bracket up.”

The resolution was made effective as of January 1,1951. Subsequently, as the
finances of the Company improved, the reductions were gradually set aside and
the rates of salaries previously existing were restored, as follows: P150.00 per
month and below, on November 16, 1957; P151 to P160, on March 1, 1952; P161 to
P300, on May 1, 1952; P301 to P500, on May 1, 1952; and all others, on July,
1954. In other words on the date last mentioned all the salaries had been
restored as they were prior to the passage of the resolution in question.

On April 30, 1960 herein respondents filed a petition, as an incident in two
cases before the Court of Industrial Relations (No. 17-IPA and No. 18-IPA)
asking for the refund of all the amounts deducted pursuant to said resolution
until the respective dates of restoration as above stated. The Company moved to
dismiss on. the ground of lack of jurisdiction, alleging that the claim for
refund was not among the unsettled demands of the employees when Case Nos. 17
and 18-IPA were certified by the President to the Court of Industrial Relations
and therefore should not be treated as an incident therein but as a new and
separate case. The motion was denied, and the Company filed its answer wherein,
after raising anew the question of jurisdiction, it challenged the right of
herein respondents to the refund claimed.

The principal issue here, as in the Court below, revolves around the
interpretation of Resolution No. 437, particularly that portion thereof which
states that “the above economy measures are considered as temporary and that the
reduction of salaries he returned immediately as the finances of the Company
improves. . .” Petitioner contends that the reductions should merely be set
aside and the former rates of salaries restored; respondents answer that the
amounts themselves that had been deducted should be refunded.

We agree with respondent Court that the language of the resolution is not
clear, that its literal sense can not be taken as guide and therefore resort
must be had to contemporaneous circumstances in order to discover the intention
of the parties. These circumstances, enumerated m the order appealed from, are
as follows:

“1. That the P30.00 monthly flat allowances of the train and engine crews
corresponding to the period from December, 1949 to April, 1951, which were
previously deducted, were already refund- ed to them;

2. That the respondent’s general manager promised orally that said reductions
were merely temporary and pledged to refund the same while campaigning among the
employees;

3. That the respondent did not set up in its accounting books an accounts
payable to cover said salary reduction although accounts payable were not also
set up by the respondent to cover the P30.00 monthly flat allowances, unenjoyed
rest days or franco, P15,00 monthly increases, P35.00 monthly increases of the
motormen, 25 per cent nighttime differentials;

4. That the appointments of the employees subjected to said salary reductions
were not altered to show said reductions;

5. That the finances of the respondent have improved as evidenced by the
P3500 monthly increase of the motormen, P35.00 monthly general increase of all
employees, payment of 25 per cent nighttime differentials, and payment of
unenjoyed rest days;

6. That a literal interpretation of the pertinent provision of Resolution No.
437 would not resolve the issue; and,

7. That Article 1702 of the Civil Code provides, “in case of doubt, all labor
legislations and all labor contracts shall be construed in favor of the safety
and decent living of the laborer.”

Of the circumstances above mentioned, the first two emphasizing. The P30.00
monthly allowances of the train and engine crews were not paid from December
1949 to April 1951 by virtue of another resolution (No. 226) of petitioner’s
Board of Directors, but were later on re- funded in accordance with an order of
respondent Court issued on September 5, 1959, which states; “considering that
the Company, since September 15, 1956, has been paying by installment its
accrued obligations to the workers, the Court believes that it is now
appropriate time to pay also the P30.00 flat allowances which were not paid
prior to April 1, 1951.” Respondent Court considered the refund of said
allowances as in pari materia with the refund herein claimed, and
petitioner has not indicated why the same procedure should not have been
followed.

As to the second circumstance, respondent Court found as a fact that the
General Manager of the Company, together with the Presidents of the different
unions concerned, campaigned among the employees to get them to agree to a
reduction in their salaries and that in the course of that campaign the General
Manager pledged to refund the deductions as soon as the finances of the Company
improved. In view of this, and of the fact that the resolution was drafted by
the Company’s Board of Directors, it must be construed in the light of that
pledge and any doubt must bf resolved in favor of the employees.

On the question of jurisdiction, petitioner maintains that the claim for
refund should not be treated as an incident in the two cases (17 and 18-IPA)
which had been certified by the President to respondent Court inasmuch as said
claim was not one of the unsettled demands of the employees at the time of such
certification on October 7, 1957, after the Union de Maquinistas, Fogoneros, y
Motormen, and the Union de Empleados de Trenes, both respondents herein, went on
strike on October 6, and 7, 1957. It appears, however, that one of the demands
of the Union de Empleados de Trenes embodied in its letter dated February 19,
1957, precisely referred to the refund of the amounts de- ducted under
resolution No. 437. And as stated by the lower court in its order denying the
motion to dismiss filed by herein petitioner, the non-payment of said amounts
was one of the motivating factors that led the petitioner below in Case No.
18-1PA (16), now respondent Union tie Empleados de Trenes, to declare a strike.
The conclusion of said court, therefore, that the claim for refund is
necessarily connected with the main case and may be treated as an incident
therein, is correct.

The order appealed from is affirmed, with costs.

Bautista Angelo, Concepcion, Reyes, J. B. L., Barrera, Parades, Dizon,
Regala, Bengzon, J. P. and Zatdivar, JJ. concur.