G.R. No. L-28999 - Compania Maritima vs. Allied Free Workers Union

Case Digest (G.R. No. L-28999)
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Facts:

Parties and contract formation

Compania Maritima and Allied Free Workers Union entered into a written arrastre and stevedoring contract dated August 11, 1952, effective August 12, 1952 for one month (Exh. J).
The contract stipulated that the company could revoke the contract before expiration if the union failed to render proper service and that the compensation for arrastre and stevedoring work would be paid by the owners and consignees of the cargoes as “has been the practice in the port of Iligan City” (Par. 2, Exh. J).
At execution the union was newly organized and desired work for its members; it agreed to the stipulation that the company would not be liable for payment of loading, unloading and delivery services.

Nature of the services and dispute over payment

Arrastre was defined as hauling of cargo on the wharf or between consignee’s establishment and ship’s tackle; stevedoring as handling cargo in the holds between ship’s tackle and holds.
Shippers and consignees paid only for arrastre and refused to pay for stevedoring, asserting shipowners were liable under the bill of lading (Exh. 1).
The company refused to pay for stevedoring relying on the contract (Exh. J) which shifted payment to shippers and consignees; a sore point of contention developed over whether the company should pay for stevedoring.

Renewal, union demands, and termination

The one-month contract was verbally renewed and the union continued performing arrastre and stevedoring work.
On July 23, 1954 the union requested recognition as the exclusive bargaining unit; the company ignored the demand.
On August 6, 1954 the union filed a certification petition in the Court of Industrial Relations (CIR); on August 26, 1954 the union filed charges of unfair labor practice in the CIR.
On August 24, 1954 the company served written notice terminating the 1952 contract effective August 31, 1954 (paragraph 4, Exh. J).
On August 31, 1954 the company entered into a new contract with the Iligan Stevedoring Association.

Picketing, litigation and preliminary injunctions

On September 1, 1954 union members picketed the wharf and prevented Iligan Stevedoring Association from performing arrastre and stevedoring work; picketing lasted nine days.
On September 8, 1954 Compania Maritima sued Allied Free Workers Union and its officers in the Court of First Instance of Lanao for rescission of the 1952 contract, injunction against interference, and recovery of damages.
On September 9, 1954 the lower court issued ex parte a writ of preliminary injunction after the company posted bond of P20,000; the union later filed a counterbond and the injunction was lifted.
The union challenged jurisdiction in this Court in Allied Free Workers Union v. Judge Apostol, 102 Phil. 292; the majority held the lower court had jurisdiction but that the ex parte injunction was void for failure to follow Sec. 9(d), Republic Act No. 875 procedure.

Trial court judgment and post-judgment orders

After trial the lower court rendered decision dated December 5, 1960, amended January 11, 1961, (a) declaring the arrastre and stevedoring contract terminated on August 31, 1954, (b) dismissing the union’s counterclaim, (c) ordering union and its officers to pay solidarily P520,000 damages with six percent interest from September 9, 1954, (d) permanently enjoining the union from performing arrastre and stevedoring work for the company at Iligan City, and (e) requiring posting of a supersedeas bond of P520,000 to stay execution.
The union perfected an appeal on January 6, 1961 from the original decision but did not appeal from the amended decision.
On March 24, 1962 the lower court declared its amended decision final and executory for lack of appeal therefrom and directed issuance of a writ of execution; the union filed certiorari in this Court and a preliminary injunction was issued to restrain execution.

Subsequent Supreme Court proceedings and restitution request

On May 16, 1962 this Court dissolved the injunction at the instance of the company which had filed a counterbond; the union’s 225 members thereafter lost their jobs to workers contracted by the company.
This Court decided the certiorari incident on June 30, 1966, held that the amended decision corrected non-substantial errors and allowed the union’s appeal to proceed subject to amendment of the record on appeal; the Court reserved to the union the right to seek restitution under sections 2 and 5, Rule 39, Rules of Court (Allied Free Workers Union v. Estipona, L-19651, June 30, 1966, 17 SCRA 513).
Pursuant thereto the union on December 16, 1966 filed a motion for restitution seeking restoration of its 225 members and damages of P1,620,000 for lost earnings from May 8, 1962 to May 8, 1966.
The company on January 18, 1967 renewed its motion for execution of the P520,000 damages and the permanent injunction.

Related Supreme Court labor rulings and lower court orders

This Court’s January 31, 1967 decision affirmed the CIR holding that the company did not commit unfair labor practice and reversed the CIR’s directive for a certification election, ruling the union was an independent contractor and its members were not employees (Allied Free Workers Union v. Compania Maritima, L-22951-2 and L-22971, 19 SCRA 258).
The lower court on April 25, 1967 denied the union’s restitution motion and required filing of a supersedeas bond of P100,000 which was reduced to P50,000 by order of August 16, 1967; the union posted the bond on August 24, 1967.
The lower court approved the union’s amended record on appeal on October 6, 1967; the union appealed directly to this Court as amount exceeded P200,000.

Plaintiff’s pleadings and supplemental causes of action

The company’s original complaint sought P15,000 for failure to load/unload Sept. 1–8, 1954; P50,000 for inefficiency during the contract’s later period; P50,000 as moral and exemplary damages (not alleged in the body of the complaint) and P5,000 attorney’s fees (Record on Appeal).
On September 15, 1954 the company alleged additional losses of P10,000 for lost freight and passenger charges for September 9–10, 1954; on November 2, 1954 it att...(Subscriber-Only)

Issues:

Primary contested issues on appeal

Whether the trial court erred in awarding actual damages of P450,000 based upon auditors’ reports and other summaries introduced by Compania Maritima.
Whether the trial court erred in awarding moral damages of P50,000 and attorney’s fees of P20,000 to Compania Maritima.
Whether the trial court erred in holding the four officers of Allied Free Workers Union solidarily liable for the damages awarded.

Issues relating to evidentiary sufficiency and admissibility

Whether the auditors’ reports and accountants’ summaries (Exh. A, E–I, B, K) were admissible under Sec. 2[e], Rule 130, Rules of Court or whether they were hearsay and not the best evidence.
Whether the company made the preliminary showing required to dispense with production of voluminous originals and to make underlying records accessible for cross-examination.
Whether statements prepared by non-testifying employees, notably Magante’s Exhibit B, may be proved by accountancy testimony of Jayme in substitution.

Issues of substantive relief and counterclaims

Whether the lower court properly rescinded the 1952 arrastre and stevedoring contract and permanently enjoined the union from performing arrastre and stevedoring work for the company.
Whether the dismissal of the union’s counterclaims for stevedoring compensation and damages was erroneous.
Whether Sec. 9(d), Republic Act No. 875 (Magna Carta of Labor) limited the trial court’s power to issu...(Subscriber-Only)

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