CONSTI 1 - CASE # 26

PLDT vs. NLRC G.R. No. 80609 August 23, 1988

Facts:
Abucay, a traffic operator of the PLDT, was accused by two
complainants of having demanded and received from them
the total amount of P3,800.00 in consideration of her promise
to facilitate approval of their applications for telephone
installation. Investigated and heard, she was found guilty as
charged and accordingly separated from the service.
She went to the Ministry of Labor and Employment claiming
she had been illegally removed. After consideration of the
evidence and arguments of the parties, the company was
sustained and the complaint was dismissed for lack of merit.
Nevertheless, the dispositive portion of labor arbiters
decision declared:
WHEREFORE, the instant complaint is dismissed for lack of
merit.
Considering that Dr. Bangayan and Mrs. Martinez are not
totally blameless in the light of the fact that the deal
happened outhide the premises of respondent company and
that their act of giving P3,800.00 without any receipt is
tantamount to corruption of public officers, complainant must
be given one month pay for every year of service as financial
assistance.

In the case of the private respondent, she has been awarded

financial assistance equivalent to ten months pay
corresponding to her 10 year service in the company despite
her removal for cause. She is, therefore, in effect rewarded
rather than punished for her dishonesty, and without any
legal authorization or justification.
The award is made on the ground of equity and compassion,
which cannot be a substitute for law. Moreover, such award
puts a premium on dishonesty and encourages instead of
deterring corruption.
For its part, the public respondent claims that the employee
is sufficiently punished with her dismissal. The grant of
financial assistance is not intended as a reward for her
offense but merely to help her for the loss of her employment
after working faithfully with the company for ten years.
In support of this position, the Solicitor General cites the
cases of Firestone Tire and Rubber Company of the
Philippines v. Lariosa and Soco v. Mercantile Corporation of
Davao, where the employees were dismissed for cause but
were nevertheless allowed separation pay on grounds of
social and compassionate justice.
Issue: WON Separation pay is proper.

Both the petitioner and the private respondent appealed to

the National Labor Relations Board, which upheld the said
decision in toto and dismissed the appeals. The private
respondent took no further action, thereby impliedly
accepting the validity of her dismissal. The petitioner,
however, is now before us to question the affirmance of the
above- quoted award as having been made with grave abuse
of discretion.
The position of the petitioner is simply stated: It is conceded
that an employee illegally dismissed is entitled to
reinstatement and backwages as required by the labor laws.
However, an employee dismissed for cause is entitled to
neither reinstatement nor backwages and is not allowed any
relief at all because his dismissal is in accordance with law.

Held:
We hold that henceforth separation pay shall be allowed as a
measure of social justice only in those instances where the
employee is validly dismissed for causes other than serious
misconduct or those reflecting on his moral character. Where
the reason for the valid dismissal is, for example, habitual
intoxication or an offense involving moral turpitude, like theft
or illicit sexual relations with a fellow worker, the employer
may not be required to give the dismissed employee
separation pay, or financial assistance, or whatever other
name it is called, on the ground of social justice.
A contrary rule would, as the petitioner correctly argues,
have the effect, of rewarding rather than punishing the erring

employee for his offense. And we do not agree that the

punishment is his dismissal only and that the separation pay
has nothing to do with the wrong he has committed. Of
course it has.
Indeed, if the employee who steals from the company is
granted separation pay even as he is validly dismissed, it is
not unlikely that he will commit a similar offense in his next
employment because he thinks he can expect a like leniency
if he is again found out. This kind of misplaced compassion is
not going to do labor in general any good as it will encourage
the infiltration of its ranks by those who do not deserve the
protection and concern of the Constitution.
The policy of social justice is not intended to countenance
wrongdoing simply because it is committed by the
underprivileged. At best it may mitigate the penalty but it
certainly will not condone the offense. Compassion for the
poor is an imperative of every humane society but only when
the recipient is not a rascal claiming an undeserved privilege.
Social justice cannot be permitted to be refuge of scoundrels
any more than can equity be an impediment to the
punishment of the guilty. Those who invoke social justice may
do so only if their hands are clean and their motives
blameless and not simply because they happen to be poor.
This great policy of our Constitution is not meant for the
protection of those who have proved they are not worthy of
it, like the workers who have tainted the cause of labor with
the blemishes of their own character.
Applying the above considerations, we hold that the grant of
separation pay in the case at bar is unjustified. The private
respondent has been dismissed for dishonesty, as found by
the labor arbiter and affirmed by the NLRC and as she herself
has impliedly admitted.
The fact that she has worked with the PLDT for more than a
decade, if it is to be considered at all, should be taken
against her as it reflects a regrettable lack of loyalty that she
should have strengthened instead of betraying during all of

her 10 years of service with the company. If regarded as a

justification for moderating the penalty of dismissal, it will
actually become a prize for disloyalty, perverting the
meaning of social justice and undermining the efforts of labor
to cleanse its ranks of all undesirables.
Petition granted.
CASE # 27
Calalang vs Williams GR 47800 December 2, 1940
Social Justice as the aim of Labor Laws
CRUZ, J.:
Facts:
The National Traffic Commission, in its resolution of 17 July
1940, resolved to recommend to the Director of Public Works
and to the Secretary of Public Works and Communications
that animal-drawn vehicles be prohibited from passing along
Rosario Street extending from Plaza Calderon de la Barca to
Dasmarias Street, from 7:30 a.m. to 12:30 p.m. and from
1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending
from the railroad crossing at Antipolo Street to Echague
Street, from 7 a.m. to 11 p.m., from a period of one year from
the date of the opening of the Colgante Bridge to traffic.
The Chairman of the National Traffic Commission, on 18 July
1940, recommended to the Director of Public Works the
adoption of the measure proposed in the resolution, in
pursuance of the provisions of Commonwealth Act 548, which
authorizes said Director of Public Works, with the approval of
the Secretary of Public Works and Communications, to
promulgate rules and regulations to regulate and control the
use of and traffic on national roads.
On 2 August 1940, the Director of Public Works, in his first
indorsement to the Secretary of Public Works and
Communications, recommended to the latter the approval of
the recommendation made by the Chairman of the National
Traffic Commission, with the modification that the closing of
Rizal Avenue to traffic to animal-drawn vehicles be limited to

the portion thereof extending from the railroad crossing at

Antipolo
Street
to
Azcarraga
Street.
On 10 August 1940, the Secretary of Public Works and
Communications, in his second indorsement addressed to the
Director of Public Works, approved the recommendation of
the latter that Rosario Street and Rizal Avenue be closed to
traffic of animal-drawn vehicles, between the points and
during the hours as indicated, for a period of 1 year from the
date of the opening of the Colgante Bridge to traffic.
The Mayor of Manila and the Acting Chief of Police of Manila
have enforced and caused to be enforced the rules and
regulations thus adopted.
Maximo Calalang, in his capacity as a private citizen and as a
taxpayer of Manila, brought before the Supreme court the
petition for a writ of prohibition against A. D. Williams, as
Chairman of the National Traffic Commission; Vicente
Fragante, as Director of Public Works; Sergio Bayan, as Acting
Secretary of Public Works and Communications; Eulogio
Rodriguez, as Mayor of the City of Manila; and Juan
Dominguez, as Acting Chief of Police of Manila.
Issue:
Whether the rules and regulations promulgated by the
Director of Public Works infringe upon the constitutional
precept regarding the promotion of social justice to insure
the well-being and economic security of all the people.
Held:
The promotion of social justice is to be achieved not through
a mistaken sympathy towards any given group. Social justice
is
"neither communism, nor despotism, nor atomism, nor
anarchy," but the humanization of laws and the equalization
of social and economic forces by the State so that justice in
its rational and objectively secular conception may at least
be approximated. Social justice means the promotion of the
welfare of all the people, the adoption by the Government of

measures calculated to insure economic stability of all the

competent elements of society, through the maintenance of
a proper economic and social equilibrium in the interrelations
of the members of the community, constitutionally, through
the adoption of measures legally justifiable, or extraconstitutionally, through the exercise of powers underlying
the existence of all governments on the time-honored
principle of salus populi est suprema lex. Social justice,
therefore, must be founded on the recognition of the
necessity of interdependence among divers and diverse units
of a society and of the protection that should be equally and
evenly extended to all groups as a combined force in our
social and economic life, consistent with the fundamental
and paramount objective of the state of promoting the
health, comfort, and quiet of all persons, and of bringing
about "the greatest good to the greatest number."
CASE # 28
Association of Small Landowners in the Philippines vs.
Honorable Secretary of Agrarian Reform
G.R. No. 78742
July 14, 1989
Petitioner: Association of Small Landowners in the
Philippines
Respondent: Honorable Secretary of Agrarian Reform
FACTS:
These are consolidated cases involving common legal
questions including serious challenges to the constitutionality
of R.A. No. 6657 also known as the "Comprehensive Agrarian
Reform Law of 1988"
In G.R. No. 79777, the petitioners are questioning the P.D No.
27 and E.O Nos. 228 and 229 on the grounds inter alia of
separation of powers, due process, equal protection and the
constitutional limitation that no private property shall be
taken for public use without just compensation.
In G.R. No. 79310, the petitioners in this case claim that the
power to provide for a Comprehensive Agrarian Reform
Program as decreed by the Constitution belongs to the

Congress and not to the President, the also allege that

Proclamation No. 131 and E.O No. 229 should be annulled for
violation
of
the
constitutional
provisions
on
just
compensation, due process and equal protection. They
contended that the taking must be simultaneous with
payment of just compensation which such payment is not
contemplated in Section 5 of the E.O No. 229.
In G.R. No. 79744, the petitioner argues that E.O Nos. 228
and 229 were invalidly issued by the President and that the
said executive orders violate the constitutional provision that
no private property shall be taken without due process or just
compensation which was denied to the petitioners.
In G.R. No 78742 the petitioners claim that they cannot eject
their tenants and so are unable to enjoy their right
of retention because the Department of Agrarian Reform has
so far not issued the implementing rules of the decree. They
therefore ask the Honorable Court for a writ of mandamus to
compel the respondents to issue the said rules.
ISSUE:
Whether or not the laws being challenged is a valid exercise
of Police power or Power of Eminent Domain.
RULING:
Yes. The subject and purpose of agrarian reform have been
laid down by the Constitution itself, which satisfies the first
requirement of the lawful subject.

application of both powers at the same time on the same

subject. Property condemned under the police power is
noxious or intended for a noxious purpose, such as a building
on the verge of collapse, which should be demolished for the
public safety, or obscene materials, which should be
destroyed in the interest of public morals. The confiscation of
such property is not compensable, unlike the taking of
property under the power of expropriation, which requires the
payment of just compensation to the owner.
The cases before us present no knotty complication insofar
as the question of compensable taking is concerned. To the
extent that the measures under challenge merely prescribe
retention limits for landowners, there is an exercise of the
police power for the regulation of private property in
accordance with the Constitution.
But where, to carry out such regulation, it becomes
necessary to deprive such owners of whatever lands they
may own in excess of the maximum area allowed, there is
definitely a taking under the power of eminent domain for
which payment of just compensation is imperative. The
taking contemplated is not a mere limitation of the use of the
land.
What is required is the surrender of the title to and the
physical possession of the said excess and all beneficial
rights accruing to the owner in favor of the farmerbeneficiary. This is definitely an exercise not of the police
power but of the power of eminent domain.

However, objection is raised to the manner fixing the just

compensation, which it is claimed is judicial prerogatives.
However, there is no arbitrariness in the provision as the
determination of just compensation by DAR is only
preliminary unless accepted by all parties concerned.
Otherwise, the courts will still have the right to review with
finality the said determination.

CASE # 29
UNITED CHURCH OF CHRIST IN THE PHILIPPINES, INC.
petitioner
vs
BRADFORDUNITED CHURCH OF CHRIST, INC., et al,
respondents
.G.R. No. 171905. June 20, 2012

There are traditional distinctions between the police power

and the power of eminent domain that logically preclude the

FACTS:

In 1989, Bradford United Church of Christ, Inc. (BUCCI) built a

fence that said to encroached the right of way allocated by
United Church of Christ in the Philippines (UCCP) to the Cebu
Conference Inc. (CCI). UCCP favored CCI and the series of
events then followed led to the breakup of BUCCI from UCCP.
BUCCI then disaffiliated itself from UCCP and filed
its Amended Articles of Incorporation and By-Laws which
provided for and effected its disaffiliation from UCCP. SEC
approved it on 2 July 1993.

a juridical entity separate and distinct from UCCP, possesses

the freedom to determine its steps.

UCCP filed a complaint for rejection of decision, alleging that

separate incorporation and registration of BUCCI is not
allowed under the UCCP Constitution and By-laws. SEC
dismissed UCCP's petition and defended the right of BUCCI to
disassociate itself from UCCP in recognition of its
constitutional freedom to associate and disassociate.

This is a petition to nullify the sale of shares of stock of

Philippine Telecommunications Investment Corporation (PTIC)
by the government of the Republic of the Philippines, acting
through the Inter-Agency Privatization Council (IPC), to Metro
Pacific Assets Holdings, Inc. (MPAH), an affiliate of First Pacific
Company Limited (First Pacific), a Hong Kong-based
investment management and holding company and a
shareholder of the Philippine Long Distance Telephone
Company (PLDT).

On appeal, CA affirmed previous decision of SEC. Before this

court, UCCP maintains that it has the sole power to decide
whether BUCCI could disaffiliate from it as this involves a
purely ecclesiastical affair.
ISSUE:
Whether or not the determination of the validity of
disaffiliation of respondents is purely an ecclesiastical affair.
HELD:
No. The issue is not a purely ecclesiastical affair. An
ecclesiastical affair is one that concerns doctrine, creed or
form of worship of the church, or the adoption and
enforcement within a religious association of needful laws
and regulations for the government of the membership, and
the power of excluding from such associations those deemed
unworthy of membership. UCCP and BUCCI, being corporate
entities and grantees of primary franchises, are subject to
the jurisdiction of the SEC. Section 3 of Presidential Decree
No. 902-A provides that SEC shall have absolute jurisdiction,
supervision and control over all corporations.
Even with their religious nature, SEC may exercise jurisdiction
over them in matters that are legal andcorporate. BUCCI, as

CASE # 30
Wilson P. Gamboa v. Finance Secretary Margarito
Teves, et al.,
G.R. No. 176579, June 28, 2011
FACTS:

The petitioner questioned the sale on the ground that it also

involved an indirect sale of 12 million shares (or about 6.3
percent of the outstanding common shares) of PLDT owned
by PTIC to First Pacific.
With the this sale, First Pacifics common shareholdings in
PLDT increased from 30.7 percent to 37 percent, thereby
increasing the total common shareholdings of foreigners in
PLDT to about 81.47%. This, according to the petitioner,
violates Section 11, Article XII of the 1987 Philippine
Constitution, which limits foreign ownership of the capital of
a public utility to not more than 40%, thus:
Section 11. No franchise, certificate, or any other form
of authorization for the operation of a public utility
shall be granted except to citizens of the Philippines
or to corporations or associations organized under the
laws of the Philippines, at least sixty per centum of
whose capital is owned by such citizens; nor shall such
franchise, certificate, or authorization be exclusive in
character or for a longer period than fifty years.

Neither shall any such franchise or right be granted except

under the condition that it shall be subject to amendment,
alteration, or repeal by the Congress when the common good
so requires. The State shall encourage equity participation in
public utilities by the general public. The participation of
foreign investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in its
capital, and all the executive and managing officers of such
corporation or association must be citizens of the Philippines.
(Emphasis supplied)
ISSUE:
Does the term capital in Section 11, Article XII of the
Constitution refer to the total common shares only, or to the
total outstanding capital stock (combined total of common
and non-voting preferred shares) of PLDT, a public utility?
To construe broadly the term capital as the total
outstanding capital stock, including both common and nonvoting preferred shares, grossly contravenes the intent and
letter of the Constitution that the State shall develop a selfreliant and independent national economy effectively
controlled by Filipinos. A broad definition unjustifiably
disregards who owns the all-important voting stock, which
necessarily equates to control of the public utility.
Holders of PLDT preferred shares are explicitly denied of the
right to vote in the election of directors. PLDTs Articles of
Incorporation expressly state that the holders of Serial
Preferred Stock shall not be entitled to vote at any
meeting of the stockholders for the election of
directors or for any other purpose or otherwise
participate in any action taken by the corporation or its
stockholders, or to receive notice of any meeting of
stockholders.
On the other hand, holders of common shares are granted
the exclusive right to vote in the election of directors. PLDTs
Articles of Incorporation state that each holder of Common
Capital Stock shall have one vote in respect of each share of
such stock held by him on all matters voted upon by the

stockholders, and the holders of Common Capital Stock

shall have the exclusive right to vote for the election
of directors and for all other purposes.
It must be stressed, and respondents do not dispute, that
foreigners hold a majority of the common shares of PLDT. In
fact, based on PLDTs 2010 General Information Sheet
(GIS), which is a document required to be submitted annually
to the Securities and Exchange Commission, foreigners hold
120,046,690 common shares of PLDT whereas Filipinos hold
only 66,750,622 common shares. In other words, foreigners
hold 64.27% of the total number of PLDTs common shares,
while Filipinos hold only 35.73%.
Since holding a majority of the common shares equates to
control, it is clear that foreigners exercise control over PLDT.
Such amount of control unmistakably exceeds the allowable
40 percent limit on foreign ownership of public utilities
expressly mandated in Section 11, Article XII of the
Constitution.
As shown in PLDTs 2010 GIS, as submitted to the SEC, the
par value of PLDT common shares is P5.00 per share,
whereas the par value of preferred shares is P10.00 per
share. In other words, preferred shares have twice the par
value of common shares but cannot elect directors and have
only 1/70 of the dividends of common shares.
Moreover, Filipinos own 99.44% of the preferred shares while
foreigners own only a minuscule 0.56% of the preferred
shares. Worse, preferred shares constitute 77.85% of the
authorized capital stock of PLDT while common shares
constitute only 22.15%. This undeniably shows that beneficial
interest in PLDT is not with the non-voting preferred shares
but with the common shares, blatantly violating the
constitutional requirement of 60 percent Filipino control and
Filipino beneficial ownership in a public utility.
In short, Filipinos hold less than 60 percent of the voting
stock, and earn less than 60 percent of the dividends, of
PLDT. This directly contravenes the express command in
Section 11, Article XII of the Constitution that [n]o franchise,

certificate, or any other form of authorization for the

operation of a public utility shall be granted except to x x x
corporations x x x organized under the laws of the
Philippines, at least sixty per centum of whose capital is
owned by such citizens x x x.
To repeat,
(1) foreigners own 64.27% of the common shares of PLDT,
which class of shares exercises the sole right to vote in the
election of directors, and thus exercise control over PLDT;
(2) Filipinos own only 35.73% of PLDTs common shares,
constituting a minority of the voting stock, and thus do not
exercise control over PLDT;
(3) Preferred shares, 99.44% owned by Filipinos, have no
voting rights;
(4) Preferred shares earn only 1/70 of the dividends that
common shares earn;
(5) Preferred shares have twice the par value of common
shares; and
(6) Preferred shares constitute 77.85% of the authorized
capital stock of PLDT and common shares only 22.15%. This

kind of ownership and control of a public utility is a mockery

of the Constitution.
[Thus, the Respondent Chairperson of the Securities and
Exchange Commission was DIRECTED by the Court to apply
the foregoing definition of the term capital in determining
the extent of allowable foreign ownership in respondent
Philippine Long Distance Telephone Company, and if there is
a violation of Section 11, Article XII of the Constitution, to
impose the appropriate sanctions under the law.]