G.R. No. L-21212 September 23, 1966
CITIZENS’ LEAGUE OF FREEWORKERS AND/OR BALBINO EPIS, NICOLAS ROJO, ET AL., petitioners, vs. HON. MACAPANTON ABBAS, Judge of the Court of First Instance of Davao and TEOFILO GERONIMO and EMERITA MENDEZ, respondents.

FACTS

Respondents-spouses Teofilo Geronimo and Emerita Mendez, owners and operators of auto-calesas in Davao City, filed a complaint (Civil Case No. 3966) in the Court of First Instance of Davao against the Citizens’ League of Freeworkers (the Union) and its members, who were drivers in their business. The complaint alleged that the drivers used to lease the auto-calesas on a daily rental basis, and when the spouses refused to recognize them as employees and bargain with the Union, the Union declared a strike on February 20, 1963, paralyzing the business through threats, intimidation, and violence. The spouses prayed for a writ of preliminary injunction to restrain these acts. On March 11, 1963, respondent Judge Macapanton Abbas granted the writ ex-parte. Petitioners filed a motion to dissolve the writ. Meanwhile, on March 12, 1963, petitioners filed an unfair labor practice case against the spouses with the Court of Industrial Relations (CIR) for refusal to bargain. On March 18, 1963, petitioners moved to declare the writ void, arguing it had expired under Section 9(d) of Republic Act No. 875 (the Industrial Peace Act). The respondent judge denied the motion on March 21, 1963, ruling that no employer-employee relationship existed between the parties, making the Rules of Court, not Republic Act No. 875 , applicable.

ISSUE

Whether the respondent judge erred in denying the motion to set aside the writ of preliminary injunction on the ground that there was no employer-employee relationship and, consequently, no labor dispute under Republic Act No. 875 .

RULING

Yes. The Supreme Court set aside the writ of preliminary injunction. The Court held that the relationship between the auto-calesa owners and the drivers operating under the “boundary system” is that of employer-employee, not lessor-lessee, as established in the analogous case of National Labor Union v. Dinglasan. The drivers had no investment in the business and no role in its management; their only contribution was their labor. Therefore, a labor dispute existed from the beginning. Even assuming the CFI initially had jurisdiction to issue the writ, it erred in denying the motion to set it aside after thirty days upon the wrong ground that no labor dispute existed. Furthermore, upon the filing of the unfair labor practice case with the CIR on March 12, 1963, the CIR acquired complete jurisdiction over the labor dispute. The proper course for the CFI was to either dismiss Civil Case No. 3966 or suspend proceedings pending the CIR’s final resolution.