Philippine Supreme Court Jurisprudence

After defendants-appellees were adjudged guilty of unfair labor practices and ordered to reinstate plaintiffs-appellants with back wages in labor case No. 3335-ULP, the latter filed in the Court of First Instance an action to recover moral and exemplary damages resulting from said unfair labor practices with prayer for attorney’s fees. However, the trial court dismissed the action on the ground of res judicata and for want of jurisdiction to entertain the claim since the damages were merely incidents of a labor dispute which must be ventilated in the Court of Industrial Relations during its resolution of the unfair labor practices case. Plaintiffs-appellants appealed from said decision contending that their action for damages is based on Articles 20, 21 and 2176 of the Civil code and that the Court of Industrial Relations being of limited jurisdiction cannot award moral and exemplary damages.

The Supreme Court ruled that the Court of Industrial Relation is competent to make an award for damages resulting from acts connected with labor and affirmed the trial court’s order of dismissal with costs against the plaintiffs-appellants.

1. COURTS; APPEALS; APPEALS ON QUESTION OF LAW DIRECT TO THE SUPREME COURT. — Appeals involving legal question as to whether the Court of first Instance has jurisdiction to entertain actions for damages arising from unfair labor practices, should be made direct to the Supreme Court.

2. ID.; JURISDICTION; COURT OF FIRST INSTANCE LACKS JURISDICTION TO ENTERTAIN CLAIMS FOR DAMAGES ARISING FROM LABOR DISPUTES. — The claim for moral and exemplary damages allegedly caused by unfair labor practices committed by the employer and the union which had a collective bargaining agreement, should be ventilated in the unfair labor practice filed in the Court of Industrial Relations which is vested with jurisdiction to determine and make an award for damages for acts which arose out of, or connected with, an industrial dispute to the exclusion of the regular courts.

3. ID.; ID.; ID.; SPLITTING COURT’S JURISDICTION NOT ALLOWED. — When the cause of an action arose out of, or is necessarily entertwined with an unfair labor practice, jurisdiction properly lies in the Court of Industrial Relations and to hold that the demand for damages resulting from said unfair labor practices can be passed upon by the regular courts independently and separately from the unfair labor practice accusation is to sanction split jurisdiction which is prejudicial to the orderly administration of justice.

4. ID.; ID.; ID.; ID.; ALL CAUSES OF ACTION MUST BE RESOLVED IN A SINGLE PROCEEDING. — Where the complaint prays for reinstatement with back wages, differential pay, and moral and exemplary damages suffered by the dismissed employees, the Court of Industrial Relations should take cognizance and hear all those causes of action and strive to settle the entire controversy in a single proceeding leaving no root or branch to bear the seeds of future litigation.

5. JUDGMENT; RES JUDICATA; FINAL JUDGMENT OF THE COURT OF INDUSTRIAL RELATIONS BARS ACTION FOR DAMAGES. — A prior and final judgment in an unfair labor practice case where no award for damages was made by the Court of Industrial Relations bars actions for the recovery of damages subsequently instituted in the Court of First Instance.

Eddie del Castillo and his fifteen co-plaintiffs together with the Associated Labor Union appealed from the decision of the Court of First Instance of Cebu, dismissing their complaint for the recovery of moral and exemplary damages amounting to P160,000 and attorney’s fees of P10,000 allegedly resulting from the unfair labor practices committed by the Central Azucarera de la Carlota and the National Sugar Workers’ Union (Paflu) (Civil Case No. R-8756).

The appeal was made direct to this Court because it involves only the legal question of whether the Court of First Instance has jurisdiction to entertain a complaint for damages arising from alleged unfair labor practices or whether such a claim should have been ventilated in the case decided by the Court of Industrial Relations (CIR) wherein it was held that defendants were guilty of unfair labor practices (Case No. 3385-ULP-Iloilo).

According to the complaint, the sixteen individual plaintiffs, who worked as laborers for defendant Central, were members of the National Sugar Workers’ Union prior to July 24, 1962. In April or May, 1962 the Associated Labor Union, with which some of the other laborers in the Central were affiliated, submitted to the Central proposals for a collective bargaining agreement. After the Central refused to accept the said proposals, the Associated Labor Union filed petitions for a certification election with the CIR Branch Office in Iloilo City, the cases being docketed as Nos. 57-MC-Iloilo and 58-MC-Iloilo. Because of those cases, Simplicio Lopez, Jr., a signatory in the petitions, was suspended by the Central. The sixteen individual plaintiffs before and after resigning from the National Sugar Workers’ Union campaigned actively for the Associated Labor Union among the employees of the Central.

It was further alleged in the complaint that during the pendency of the petitions for a certification election the Central, at the instance of the National Sugar Workers’ Union, dismissed the individual plaintiffs because they had resigned from that Union and joined the Associated Labor Union. As a consequence of the dismissal, the plaintiffs and their families allegedly suffered untold privations. And by reason of that dismissal, the plaintiffs filed with the CIR against the Central and the National Sugar Workers’ Union a complaint for unfair labor practice, Case No. 3385-ULP-Iloilo. The CIR in that case found the defendants guilty of unfair labor practices and ordered the Central to pay the wages of Lopez, Jr. during the time of his suspension and to reinstate the other plaintiffs to their respective jobs "with all the rights and appertaining thereto." That CIR decision became final and executory. As a result of the said unfair labor practices the plaintiffs allegedly suffered the aforementioned moral and exemplary damages and incurred attorney’s fees and litigation expenses in the CIR case and in the instant case.

The Central filed a motion to dismiss the complaint on the ground of (a) lack of jurisdiction; (b) lack of cause of action and (c) res judicata.

The plaintiffs countered that their action was based on the tortious acts perpetrated by the Central and the National Sugar Workers’ Union and, therefore, the CIR decision was not a bar to their action for damages based on quasi-delict.

The National Sugar Workers’ Union in its answer alleged that the sixteen plaintiffs were dismissed because of the disloyalty to the union and because their employment in the company under the collective bargaining agreement was contingent on their remaining as members in good standing of the union. Defendant (now respondent) National Sugar Workers’ Union pleaded the defenses that the venue was improperly laid in Cebu, that the action was barred by the prior CIR judgment in the unfair labor practice case, that since the plaintiffs had instituted criminal actions their civil action should be suspended, and that the union acted in good faith in asking the Central to dismiss the sixteen plaintiffs.

The lower court sustained the motion to dismiss on the ground of res judicata. It assumed that the claim for damages was merely an incident in the unfair labor practice case and that the CIR presumably passed upon the said claim and concluded that it was not justified.

The plaintiffs in this appeal contend that their action for damages is based on articles 20, 21 and 2176 of the Civil Code. They argue that the CIR could not award damages since it is a court of limited jurisdiction.

We are of the opinion that plaintiffs’ claim for moral and exemplary damages, allegedly caused by the unfair labor practices committed by the Central and the Union, with which it had a collective bargaining agreement, should have been ventilated in the unfair labor practice case filed in the CIR, Case No. 3385-ULP-Iloilo.

Inasmuch as the CIR did not award such damages in its decision dated May 5, 1964, the action instituted on February 22, 1965 by the plaintiffs in the Court of First Instance of Cebu for the recovery of such damages was not in order. It was barred by the CIR’s aforementioned prior judgment in the unfair labor practice case. (See sec. 49[b], Rule 39, Rules of Court. Compare with Valencia v. Cebu Portland Cement Co., 106 Phil. 732 where the CIR’s judgment ordering the reinstatement of a dismissed employee barred his subsequent action in the Court of First Instance for the recovery of damages due to the dismissal).

Thus, it was held that a question of "damages for acts which arose out of, or were connected with, an industrial dispute should be determined by the Industrial Court to the exclusion of the regular Courts of First Instance" (Cebu Portland Cement Company v. Cement Workers’ Union, L-30174, 146 Phil. 750, 45 SCRA 337, apparently overruling Bugay v. Kapisanan ng Mga Manggagawa sa Manila Railroad Company, 114 Phil. 396 which held that the CIR had no jurisdiction to grant moral damages in an unfair labor practice case).

Where "plaintiff’s cause of action arose out of, or is necessarily intertwined with, the alleged unfair labor practice committed by the defendants, jurisdiction properly lies in the CIR." "To hold that the demand for damages is to be passed upon by the regular courts independently or separately from the unfair labor practice accusation would be to sanction split jurisdiction, which is prejudicial to the orderly administration of justice" (Progressive Labor Association v. Atlas Consolidated Mining and Development Corporation, L-27585, May 29, 1970, 33 SCRA 349).

The CIR was held to have jurisdiction over a case where the prayer was for reinstatement with back wages, differential pay, and moral and exemplary damages allegedly suffered by the dismissed employees. In such a case, it is preferable that all the causes of action should be cognizable and heard only by one court: the CIR (Rheem of the Philippines, Inc. v. Ferrer, L-22979, January 27, 1967, 19 SCRA 130. See Quisaba v. Sta. Ines-Melale Veneer & Plywood, Inc., L-38088, August 30, 1974, 58 SCRA 771).

"It is a cherished rule of procedure that a court should always strive to settle the entire controversy in a single proceeding leaving no root or branch to bear the seeds of future litigation" (Moran, J., in Marquez v. Marquez, 73 Phil. 74, 78).

Whether an unfair labor practice constitutes a quasi-delict or is an act falling under articles 20 and 21 of the Civil Code which may be the basis of an action for moral and exemplary damages is a point which is not decided in this case.

Finding no error in the trial court’s order of dismissal, the same is affirmed with costs against the plaintiffs-appellants.

SO ORDERED.

Fernando (Chairman), Barredo, Antonio and Concepcion, Jr., JJ., concur.