G.R. No. L-26998 June 3, 1977
CONSOLIDATED PHILIPPINES, INC., petitioner-appellant, vs. DARIMICO EMPLOYEES UNION-FUR, respondent-appellee.

FACTS

Consolidated Philippines, Inc. appealed a decision from the Court of First Instance of Rizal. The lower court ruled that the Christmas bonus stipulated in the collective bargaining agreement (CBA) between the corporation and the Darimico Employees Union-FUR must be spread across all twelve months of the calendar year for the purpose of computing the employees’ overtime pay. The appeal, grounded on undisputed facts in an action for declaratory relief concerning the interpretation of specific CBA articles, presented a pure question of law.
The corporation contested this interpretation, arguing the thirty-day Christmas bonus should only factor into overtime computations for the month of December. It based this on three points: the bonus is paid in December, wage laws and the CBA require payment at least twice monthly (not yearly), and adopting the union’s view would impose a substantial financial burden for overtime pay. The union, conversely, successfully argued in the trial court that the bonus constituted part of regular wages and should be proportionally added to monthly compensation for overtime calculation.

ISSUE

Whether the Christmas bonus provided in the CBA should be spread over the entire year or allocated only to December for computing overtime pay.

RULING

The Supreme Court dismissed the appeal as moot and academic, rendering no ruling on the substantive legal issue. The resolution notes supervening events that eliminated the actual controversy. Pursuant to a court resolution, the appellant corporation filed a manifestation dated May 5, 1977, disclosing two critical facts: first, from 1965 to 1976, the corporation had in practice already spread the Christmas bonus through the twelve months for overtime computation, and second, the corporation was dissolved on November 16, 1976, having ceased operations with all employees receiving separation pay. The appellee union’s counsel did not file any opposition or brief. The Court, citing Velasco vs. Rosenberg, held that these circumstances—specifically the corporation’s dissolution and the implementation of the contested practice for over a decade—had rendered the live dispute between the parties nonexistent. Consequently, a decision on the merits would be without practical legal effect. The case was dismissed without costs.