G.R. No. L-27828 February 27, 1970
THE SAN MIGUEL CORPORATION (Formerly San Miguel Brewery, Inc.), petitioner, vs. MACARIO CRUZ and the COURT OF INDUSTRIAL RELATIONS, respondents.

FACTS

Sometime in October 1957, the labor union “Pagkakaisa Samahang Manggagawa sa S.M.B. (Paflu)” staged a strike against San Miguel Corporation. After the strike, Macario Cruz, a driver-employee and union member, was called by a company official, Mr. Camahort, who showed him a newspaper clipping depicting Cruz as a striker and allegedly told him he would be dismissed if he did not desist from union activities. On March 17, 1958, Cruz was advised of the company’s decision to retire him effective March 31, 1958, for physical disability. On March 15, 1958, Cruz wrote the company requesting his retirement benefits be given in one lump sum. On April 10, 1958, Cruz received checks from the company as “full and complete payment” of all his retirement benefits. On June 12, 1958, Cruz filed an application for disability benefits with the Social Security System, affirming his retirement on March 31, 1958, but his claim was denied. Three years later, on May 27, 1961, Cruz charged San Miguel Corporation before the Court of Industrial Relations with unfair labor practices, alleging his 1958 dismissal was due to union activities. The Court of Industrial Relations found the company guilty and ordered Cruz’s reinstatement with back wages, deducting the retirement benefits received. The company’s motion for reconsideration was denied, prompting this petition for review.

ISSUE

Whether a former employee who has accepted retirement benefits may still contest the regularity and validity of his retirement three years thereafter.

RULING

No. The Supreme Court reversed the decision of the Court of Industrial Relations and dismissed the complaint for unfair labor practices. The Court held that Cruz’s acceptance of all retirement benefits, with full knowledge of the facts, and his application for disability benefits, without protest or demand for reinstatement for over three years, amounted to a waiver of his right to contest the validity of his retirement. The principle of estoppel applied, as Cruz’s conduct showed agreement or acquiescence to the retirement. Furthermore, the defense of laches was applicable. All elements of laches were present: (a) the company’s act of retiring Cruz; (b) an unexplained and unreasonable delay of three years in asserting his right; (c) lack of notice to the company that Cruz would assert such a right; and (d) injury or prejudice to the company if relief were granted. Laches, being a question of inequity due to delay rather than a fixed statutory period, barred Cruz’s stale claim. The case of Cariño vs. Agricultural Credit and Cooperative Financing Administration was distinguished, as in that case the petitioners persistently asserted the illegality of their dismissal, whereas Cruz did not.