G.R. No. L-2179; April 12, 1949
MANILA TRADING & SUPPLY COMPANY, petitioner, vs. MANILA TRADING LABORERS’ ASSOCIATION, respondent.

FACTS

Vicente Fortich, the branch manager of Manila Trading & Supply Company in San Pablo City, was also a member of the respondent labor union. On April 16, 1947, he used a company demonstration truck to attend a union meeting in Manila, after which a strike was declared. The following day, he telegraphed an order to close the branch office without prior authority from or notification to the main office. He retained possession of the truck until May 9, 1947, using it for demonstrations during the strike period, even outside his assigned territory. The company dismissed him for these acts. The Court of Industrial Relations ordered his reinstatement, considering his nearly nine-month layoff as sufficient punishment, despite finding he had “violated his trust as branch manager.”

ISSUE

Whether the Court of Industrial Relations erred in ordering the reinstatement of Vicente Fortich despite finding he committed a breach of trust.

RULING

Yes. The Supreme Court reversed the decision of the Court of Industrial Relations. The relationship between the company and Fortich was one of principal and agent, based on trust. Under Article 300 of the Code of Commerce, a merchant may dismiss an employee for “fraud or breach of trust.” The Court held that the finding of a breach of trust constituted a legal cause for dismissal. The company could not be compelled to reinstate an agent in whom it had lost confidence, as his continuance would be patently inimical to its interests. The question was one of law, not merely an industrial discretion, making the decision appealable by certiorari.

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