G.R. No. L-6128 February 25, 1954
ALLIED WORKERS ASSOCIATION OF THE PHILIPPINES, petitioners, vs. INSULAR LUMBER COMPANY, respondent.

FACTS

The respondent Insular Lumber Company is a domestic corporation engaged in the lumber business in Negros Occidental. Its laborers belong either to the petitioner Allied Workers Association of the Philippines or to a rival union, the United Labor Union, led by Catalino de los Santos. On April 18, 1952, the petitioner union presented three demands to the company: (1) the immediate dismissal of foreman Catalino de los Santos for alleged unfair labor practices; (2) the standardization of salaries based on job classification; and (3) a general daily wage increase of P2. The company, claiming neutrality between the two unions, did not dismiss de los Santos but offered to investigate if proof was provided. Convinced the company refused its demands, the petitioner union declared a strike on June 7, 1952. The company sought the intervention of the Court of Industrial Relations (CIR). On June 17, 1952, the CIR ordered the strikers to return to work pending resolution of the case. The petitioner union then filed a specification of charges against de los Santos, alleging he used his position as foreman to coerce laborers into joining his union, extorted money, and threatened them with dismissal. The company filed a motion with the CIR, arguing the charges were motivated by union rivalry, did not relate to de los Santos’s duties as an employee, and did not involve the company, and thus the company should be relieved of any obligation to defend him. Associate Judge Jose S. Bautista issued an order on June 28, 1952, agreeing that the charges were against de los Santos as president of a rival union and did not affect the company, but the CIR would investigate the charges while relieving the company of the duty to defend de los Santos. The petitioner union’s motion for reconsideration was denied by the CIR in banc, with Presiding Judge Roldan and Associate Judge Lanting dissenting. The petitioner union appealed to the Supreme Court.

ISSUE

Whether the charges of unfair labor practices against Catalino de los Santos, in his capacity as foreman of the respondent company, affect and involve the Insular Lumber Company such that the company should have a direct interest in the investigation conducted by the Court of Industrial Relations.

RULING

Yes. The Supreme Court held that the charges against Catalino de los Santos did affect and involve the Insular Lumber Company. The Court disagreed with the CIR order stating that the charges were solely against de los Santos as a rival union president and did not affect the company. It emphasized that de los Santos allegedly committed the acts while exercising his functions and authority as foreman, an important official of the company. If he acted with the company’s knowledge or consent, the company could be implicated. The Court agreed with the dissenting CIR judges that the company’s good name was involved, de los Santos’s continued employment would not resolve the industrial conflict, and as a foreman with supervisory or managerial functions, his acts could be considered acts of his principal, the company. The company had the burden to show it was not to blame. The Court concluded that while the company could not be compelled to defend de los Santos, it should be vitally interested in the investigation and would be bound by the CIR’s findings. The appealed order was affirmed with this modification. No costs.