G.R. No. L-6111 October 22, 1953
VISAYAN TRANSPORTATION CO., INC., petitioner, vs. PABLO JAVA, respondent.

FACTS

On October 11, 1950, the labor union Katubusan sa Mamumuo and Pablo Java filed a petition with the Court of Industrial Relations (CIR) against Southern Lines, Inc. and Olizen Shipping, praying for a writ of preliminary injunction to restrain them from wresting from the petitioners the right to load and unload cargo on the boat Governor Smith and other Southern Lines boats docking at Cebu City. The CIR granted the writ on November 18, 1950. Later, Katubusan sa Mamumuo was allowed to withdraw from the case, leaving Pablo Java as the sole petitioner. Subsequently, without informing the CIR, Southern Lines sold the boat Governor Smith to Philippine Steam Navigation Co., Inc. on November 9, 1951, which in turn sold it to Visayan Transportation Co., Inc. on December 28, 1951. When the new owner, Visayan Transportation Co., Inc., attempted to take over the stevedoring work from Pablo Java and his men, Java prayed for and obtained an order from the CIR on January 14, 1952, enjoining Visayan Transportation Co., Inc. and its agent, Aboitiz & Co., Inc., from molesting Java and his men in their work on the boat Governor Smith pending the main case. Visayan Transportation Co., Inc. moved for reconsideration, arguing it acquired the boat for valuable consideration and was not a party to the case, but the CIR, in a split decision, denied the motion.

ISSUE

Whether the Court of Industrial Relations erred in enjoining Visayan Transportation Co., Inc. from wresting from Pablo Java and his men the work of loading and unloading cargo on the boat Governor Smith, notwithstanding that ownership of the boat had been validly transferred to said company.

RULING

Yes, the CIR erred. The Supreme Court set aside the appealed order. The Court found that the transfers of ownership of the boat Governor Smith from Southern Lines, Inc. to Philippine Steam Navigation Co., Inc., and then to Visayan Transportation Co., Inc., were not shown to be fraudulent or fictitious, nor was there evidence that their purpose was to circumvent any order in the main case. The mere fact that the transfers occurred during the pendency of the case does not imply such a purpose. Since Visayan Transportation Co., Inc. is the actual owner, it is only bound to respect Pablo Java’s labor contract if that right was included as a condition in the deeds of sale. There was no showing that this was the case. A labor contract creates an action in personam, not a real right binding on third parties. Pablo Java’s recourse is against his original employer, Southern Lines, Inc., not against the new owner. The constitutional right of an employer to select employees can only be restricted by law through police power, which was not applicable here.