Case Summary (G.R. No. 155990)
Factual Background
Universal Aquarius, Inc. operated a chemical plant in Antipolo City. Conchita Tan, trading as Marman Trading, maintained a depot adjoining Universal’s plant. Q.C. Human Resources Management Corporation supplied approximately seventy-four temporary workers to Universal for plant operations. On December 13, 2000, Rodolfo Capocyan, claiming leadership of Obrero Pilipino, issued a notice of strike to Universal. On December 19, 2000, Capocyan and thirty-six other officers and members picketed, barricaded and obstructed entry to Universal’s plant and intercepted its delivery trucks, thereby disrupting Universal’s operations; Marman’s premises suffered similar obstruction. Prior to the picketing, Q.C. Human Resources Management Corporation had informed the Regional Office of the Department of Labor and Employment that the officers and members of Obrero Pilipino were its employees.
Complaint and Claim
On December 27, 2000, Universal Aquarius, Inc. and Conchita Tan filed a civil action in the RTC (Civil Case No. 00-6029) against the strikers and Q.C. Human Resources Management Corporation for breach of contract and damages. The complaint alleged that Resources contracted to supply competent temporary workers but instead supplied persons who allowed themselves to be misdirected by Capocyan and who willfully picketed and obstructed the plaintiffs’ premises, paralyzing business operations and causing unearned sales and other damages. The complaint thus pleaded both contractual breach against Resources and tortious damages flowing from the strike.
Events after Filing and Trial Court Disposition
The strike ended when Universal executed an Agreement To End Labor Dispute with Obrero Pilipino on January 3, 2001. Universal thereafter filed a Notice of Dismissal as to the individual strikers. On January 8, 2001, Resources moved to dismiss the complaint on grounds of failure to state a cause of action, loss of cause of action upon dismissal of the case against the individual defendants, and lack of jurisdiction. The Regional Trial Court, Branch 74, Antipolo City denied the motion to dismiss on February 2, 2001, and denied a motion for reconsideration on May 11, 2001.
Proceeding in the Court of Appeals
Q.C. Human Resources Management Corporation petitioned the Court of Appeals for certiorari and prohibition. On August 23, 2002, the Court of Appeals set aside the RTC orders and dismissed the complaint for lack of cause of action. The Court of Appeals reasoned that the plaintiffs’ claims plainly arose from the strike that disrupted their business operations and that Resources was named only as employer of the strikers. The Court of Appeals found that subsequent events, notably Universal’s agreement to end the dispute and the dismissal of the case against the individual strikers, erased plaintiffs’ cause of action; the dismissal of the complaint against the strikers thus, in the Court of Appeals’ view, necessarily warranted dismissal of the complaint against Resources. The Court of Appeals denied reconsideration on October 22, 2002.
Issues Presented to the Supreme Court and Parties’ Contentions
The petition to the Supreme Court under Rule 45 challenged the Court of Appeals’ dismissal for lack of cause of action and its finding that the RTC committed grave abuse of discretion in denying the motion to dismiss. Universal and Tan contended that the complaint stated a cause of action against Resources for breach of contract in supplying temporary workers unfit for Universal’s business. Q.C. Human Resources Management Corporation maintained that the complaint alleged no cause of action against it because it did not participate in the unlawful acts of its employees and, upon dismissal of the strikers, plaintiffs had no remaining claim against the employer.
Supreme Court Ruling
The Supreme Court partly granted the petition. The Court reversed and set aside the Court of Appeals’ decision and resolution insofar as they dismissed Universal Aquarius, Inc.’s cause of action against Q.C. Human Resources Management Corporation. The complaint of Universal against Resources was reinstated, and the RTC, Branch 74, Antipolo City was directed to proceed with the case on that cause of action. The Court affirmed the dismissal of Conchita Tan’s claim against Q.C. Human Resources Management Corporation for lack of cause of action.
Legal Basis and Reasoning
The Court applied the standards for motions to dismiss under Section 1(g), Rule 16 and the definition of cause of action in Section 2, Rule 2 of the 1997 Rules of Civil Procedure. It reiterated the three essential elements of a cause of action: a right in favor of the plaintiff, an obligation of the defendant not to violate that right, and an act or omission by the defendant violating that right. Relying on Hongkong and Shanghai Banking Corporation Limited v. Catalan, the Court explained that the test for failure to state a cause of action is whether the complaint alleges facts which, if true, would justify the relief demanded; the inquiry is into sufficiency, not veracity, of material allegations. The movant implicitly admits the alleged facts for purposes of the motion, and dismissal is proper only where the claim for relief does not exist on the facts alleged.
Applying that test, the Court found that the complaint sufficiently alleged a contractual relationship between Universal and Resources for the supply of temporary workers and a breach by Resources in supplying unfit or maladjusted individuals who then participated in acts that disrupted Universal’s operations. Given these hypothetically admitted allegations, the Court held that the RTC could exercise its original and exclusive jurisdiction to render judgment on Universal’s contractual claim. Consequently, dismissal for lack of cause of action was unwarranted as to Universal’s claim.
Conversely, the Court concluded that Conchita Tan had no cause of action against Resources.
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Case Syllabus (G.R. No. 155990)
Parties and Posture
- Universal Aquarius, Inc. and Conchita Tan were the petitioners who sought review under Rule 45 of the Rules of Court.
- Q.C. Human Resources Management Corporation was the respondent below and the appellee in the Court of Appeals.
- The petition assailed the Court of Appeals Decision dated August 23, 2002 and the Court of Appeals Resolution dated October 22, 2002.
- The underlying action was Civil Case No. 00-6029 pending before the Regional Trial Court, Branch 74, Antipolo City.
Key Facts
- Universal Aquarius, Inc. operated a chemical plant in Antipolo City and conducted manufacturing and distribution of chemical products.
- Conchita Tan, trading as Marman Trading, operated an adjoining depot in Antipolo City that serviced chemical distribution.
- Q.C. Human Resources Management Corporation supplied about 74 temporary workers to assist Universal in its plant operations.
- On December 13, 2000, Rodolfo Capocyan, claiming to represent the labor organization Obrero Pilipino, sent a Notice of Strike to Universal Aquarius, Inc..
- On the same date, Q.C. Human Resources Management Corporation informed the Regional Office of the Department of Labor and Employment that the officers and members of Obrero Pilipino were its employees.
- On December 19, 2000, Capocyan and 36 other individuals picketed, barricaded, obstructed entry and exit to Universal's plant, and intercepted delivery trucks, thereby disrupting operations.
- Marman Trading suffered parallel obstruction and a consequent paralysis of business operations.
- On January 3, 2001, Universal Aquarius, Inc. entered into an Agreement (To End Labor Dispute) with Obrero Pilipino, after which Universal filed a Notice of Dismissal as against the individual strikers.
Complaint Allegations
- The complaint alleged willful, unlawful and felonious picketing, barricading and obstruction of entry and exit to Universal Aquarius, Inc. and Marman Trading.
- The complaint alleged paralysis of business operations and damages in the form of unearned sales and other losses.
- The complaint alleged that Q.C. Human Resources Management Corporation represented that it could provide competent temporary workers but instead supplied unfit and maladjusted workers who were misdirected by Capocyan.
- The complaint asserted causes of action for breach of contract and damages against the individual strikers and against Q.C. Human Resources Management Corporation.
Procedural History
- Q.C. Human Resources Management Corporation filed a Motion to Dismiss on January 8, 2001 on grounds including that the complaint stated no cause of action and lack of jurisdiction.
- The RTC denied the Motion to Dismiss in an Order dated February 2, 2001 and denied reconsideration in an Order dated May 11, 2001.
- Q.C. Human Resources Management Corporation filed a petition for certiorari and prohibition with the Court of Appeals on July 11, 2001.
- The Court of Appeals, by Decision dated August 23, 2002, set aside the RTC orders and dismissed the complaint for lack of cause of action.
- The Court of Appeals denied reconsideration in a Resolution dated October 22, 2002.
- Petitioners sought review by the Supreme Court by a Petition for Review on