G.R. No. L-19791; May 16, 1967
KAPISANAN NG MGA MANGGAGAWA SA MANILA RAILROAD COMPANY, petitioner, vs. RAFAEL HERNANDEZ, ET AL., respondents.

FACTS

On December 12, 1960, Rafael S. Hernandez and about four hundred members of the Kapisanan Ng Mga Manggagawa sa Manila Railroad Company filed a complaint with the Court of Industrial Relations (CIR) against the union and its incumbent officers, including President Vicente K. Olazo. The complaint charged unfair labor practices under Section 17 of Republic Act No. 875 (the Industrial Peace Act). Specific allegations included: passing resolutions to assess P5.00 monthly from members without their authority; appropriating P5,000 from forced savings for attorney’s fees; appropriating P15,000 for Olazo’s trip abroad; increasing union officers’ salaries without general membership approval; authorizing P5,000 from the strike fund; abuse of the union car; Olazo’s failure to account for his trip; and refusal to let Hernandez inspect the union’s books.
After the hearing was closed but before the decision, the union submitted a certification stating that in a convention held on March 23-25, 1961, the union members passed resolutions ratifying: (1) the P5.00 monthly assessment; (2) all union expenditures and resolutions from 1959-1960 questioned in the case; and (3) Olazo’s accounting of his trip abroad.
On July 27, 1961, the trial court (Judge Jose S. Bautista) dismissed all charges except the refusal to allow inspection of books. It declared the respondents guilty of unfair labor practice under Section 17(1) of RA 875, ordered them to cease and desist, and to allow Hernandez to inspect the books.
Upon motion for reconsideration, the CIR en banc, on April 26, 1962, reversed the trial court. It ordered the respondents to: cease and desist from the unfair labor practices; stop the monthly P5.00 collection; render an accounting of Olazo’s trip abroad and reimburse unauthorized expenditures and salary increases; and post the resolution in the Manila Railroad Company premises. Judges Bautista and Villanueva dissented, favoring affirmance of the original decision.
The union (petitioner) appealed by certiorari, raising issues regarding the CIR’s powers and procedures.

ISSUE

1. Whether the CIR has the power under Section 17 of RA 875 to declare a union assessment excessive and unjustified.
2. Whether the CIR may interfere with internal union procedures where evidence shows redress to the highest union governing body has not been availed of.
3. Whether in unfair labor practice proceedings the CIR is limited to evidence presented during the hearing.
4. Whether the 10% membership requirement under Section 17 of RA 875 was complied with.

RULING

The Supreme Court set aside the CIR en banc resolution and remanded the case for further proceedings.
1. On the CIR’s Power to Declare an Assessment Excessive: The Court clarified that the complainants’ objection was not based on the assessment being excessive per se, but on its being contrary to the union’s constitution and by-laws. Specifically, Article VI, Section 1 of the union’s constitution provided for a P2.00 contribution for retirement benefits. The increased P5.00 assessment, authorized only by a circular from the union president and the board of directors, was in the nature of an amendment to the constitution, which required approval in a union convention. Thus, the CIR’s intervention was justified to address violations of the union’s own internal procedures.
2. On Exhaustion of Internal Union Remedies: The Court held that while Section 17 of RA 875 generally requires exhaustion of procedures under the union’s constitution or by-laws, this requirement is not absolute. In this case, the complaint was filed against the union and its incumbent officers, including board members. The union’s constitution required charges to be filed before the board of directors. However, having the board act as respondent, investigator, and judge would be a farce and deny justice. Where exhaustion would be illusory or vain, particularly when property rights of members are involved, it is not a condition precedent to seeking judicial aid.
3. On Consideration of Evidence After Hearing: The Court ruled that the certification regarding the post-hearing convention resolutions should not have been disregarded outright by the trial court, nor accepted without due process. While Section 5(b) of RA 875 allows the CIR to consider evidence beyond that presented at the hearing, this does not dispense with due process requirements. The respondents had the right to be heard and to cross-examine the certifying officers to test the veracity of the certification. However, since the resolutions may have a material bearing on the case, the ends of justice require that they be properly presented as evidence.
4. On Compliance with the 10% Requirement: The Court upheld the CIR’s factual finding that the 10% membership requirement for filing the complaint was satisfied, finding no reason to disturb this conclusion.
DISPOSITIVE PORTION:
The decision appealed from is set aside. The case is remanded to the lower court for the reception of evidence concerning the resolutions passed at the March 1961 convention and for the rendition of a corresponding judgment thereafter. No costs.