G.R. No. L-24711, April 30, 1968
BENGUET CONSOLIDATED, INC., plaintiff-appellant, vs. BCI EMPLOYEES and WORKERS UNION-PAFLU, PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS, CIPRIANO CID and JUANITO GARCIA, defendants-appellees.

FACTS

On June 23, 1959, Benguet Consolidated, Inc. (“BENGUET”) entered into a Collective Bargaining Contract (“CONTRACT”) with the Benguet-Balatoc Workers Union (“BBWU”), containing a No-Strike, No-Lockout clause, effective for four and a half years until December 23, 1963. On April 6, 1962, a certification election was conducted, and the BCI Employees & Workers Union (“UNION”) was certified as the new sole and exclusive collective bargaining agent on August 18, 1962, replacing BBWU. Subsequently, UNION members approved a resolution to strike, and a strike commenced on March 2, 1963. The strike involved picketing with alleged threats, intimidation, force, and violence, preventing non-strikers from working and causing a complete work stoppage. The strike ended on May 2, 1963, with a return-to-work agreement. BENGUET sued UNION, PAFLU, and their presidents to recover damages amounting to P1,911,363.83, claiming the strike breached the No-Strike clause in the CONTRACT executed by BBWU. Defendants argued they were not bound by the CONTRACT, the strike was due to unfair labor practices, and it was lawful under Republic Act 875. The trial court dismissed the complaint, ruling the CONTRACT did not bind defendants.

ISSUE

1. Did the Collective Bargaining Contract executed between BENGUET and BBWU automatically bind UNION-PAFLU upon its certification as the new bargaining agent?
2. Are defendants liable for the illegal acts committed by some union members during the strike and picketing?
3. Are defendants liable to pay the damages claimed by BENGUET?

RULING

1. No. The Collective Bargaining Contract did not automatically bind UNION-PAFLU. The “Doctrine of Substitution” cited by BENGUET from General Maritime Stevedores’ Union v. South Sea Shipping Lines was obiter dictum and not applicable. The principle only means that employees, through their new agent, cannot renege on the economic terms of the contract but does not mean the new agent automatically assumes all personal undertakings (like a no-strike clause) of the deposed union. UNION, possessing a distinct personality from BBWU, was not a party to the CONTRACT and was not contractually bound by its no-strike stipulation. There was no showing UNION formally adopted the CONTRACT prior to the strike. BENGUET’s estoppel argument, based on a motion filed by UNION in another case, was rejected as the motion did not constitute an unequivocal adoption of the CONTRACT.
2. No. Defendants were not liable for the illegal acts of some union members. The complaint alleged defendants “ordered, caused and directed” the strikers to commit illegal acts, but defendants’ answer specifically denied these allegations, stating the strike was peaceful and lawful. Under the Rules of Court, a general denial is sufficient if it sets forth matters relied upon. The answer, while not a model pleading, sufficiently denied the allegations, and pleadings should be liberally construed. Therefore, defendants were not proven to have authorized or ratified the illegal acts.
3. No. Defendants were not liable to pay damages. Since UNION was not contractually bound by the no-strike clause in the CONTRACT, there was no breach of contract. The strike, absent a contractual prohibition binding on UNION, was not inherently illegal. The claim for damages was based solely on the alleged breach of contract, which did not exist. The judgment of the lower court dismissing the complaint was affirmed. No costs.