Rizal Memorial Colleges – School of Law

1st Semester SY 2020 – 2021

Law 205
AGRARIAN LAW AND SOCIAL LEGISLATION
Professor: Atty. Marcelino C. Rongo

I. INTRODUCTION TO AGRARIAN REFORM LAW

I. 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. [Calalang v. Williams et al. G.R. No. 47800. December
2, 1940.]

II. General Concepts of Agrarian Reform

 Agrarian Reform means redistribution of lands, regardless of crops or fruits produced, to

farmers and regular farm workers who are landless, irrespective of tenurial arrangement, to
include the totality of factors and support services designed to lift the economic status of the
beneficiaries and all other arrangements alternative to the physical redistribution of lands,
such as production or profit-sharing, labor administration, and the distribution of shares of
stocks, which will allow beneficiaries to receive a just share of the fruits of the lands they
work. (RA 6657 - The Comprehensive Agrarian Reform Law, June 10, 1988).

 Land Reform

o Reform implies the existence of defects that something is malformed and does not
suit to existing conditions. Land reform refers to the full range of measures that may
or should be taken to improve or remedy the defects in the relations among me with
respect to their rights in the land.

III, Historical and Legal Backdrop

A. Historical Background

 Dimensions of agrarian reform problem:

 Land (agricultural productivity)

 People (social aspects and human rights)

 Agricultural Development

 Nearly half of the world’s population is underfed or otherwise undernourished.

Malnutrition and disease kill a high proportion of the people. The first necessity is to
develop more and better food. Much will depend upon agriculture.

 Importance of Agricultural Development

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 The Philippines depends on its farms, forests, rivers, lakes and seas. Consequently on
their production depends the strength and weakness of our national economy. The
problem of agriculture is the problem of the Filipino nation as a whole. Agricultural
development involves many issues other than the volume of food production.

 Program of Agricultural Development

a) To produce adequate basic food requirement of the people

b) To produce raw materials which we used to import
c) To produce raw materials not only for domestic market but also for the exportation to the
world market

 Importance of Agriculture

a) Sources of Raw Materials

b) Consumer of Industrial Products
c) Provide Employment
d) Sources of Dollars

 Major Problems of Agriculture

a) Low Agricultural Productivity

b) Price Instability
c) Marketing of Farm Products
d) Soil Erosion
e) Vagaries of Weather
f) Lack of Capital
g) Lack of Genuine Implementation of Land Reform

 History of Agrarian Reform in the Philippines

 Spanish Period
Pre-Spanish society can be characterized as feudalistic, communal, and single
proprietorship.

 American Period
Measures were undertaken to improve land tenure

Macapagal’s Land Reform (RA 3844)

o A land reform code that was passed in 1963 during the term of Diosdado Macapagal
ensuring more transition from tenancy to owner-operated farms.

Marcos Land Reform

o In 1972, Pres. Ferdinand Marcos instituted a more aggressive agrarian reform which
was provided in P.D. no. 27.

Existing Land Reform

o The 1987 Land Reform Act is comprehensive in its coverage as compared to the
previous land reforms the government had implemented.

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o Comprehensive Agrarian Reform Program

o President Corazon Aquino signed on July 22, 1987 instituting a Comprehensive

Agrarian Reform Program (CARP) and Executive Order no. 229 providing the
mechanism needed initially to implement the program. With the enactment of
Republic Act no. 6657, the Comprehensive Agrarian Reform Law (CARL), signed
by the President on June 10, 1988, all matters involving the implementation of
agrarian are now governed by the said act.

o Scope of the Program

1. General:
o The CARL covers all public and private agricultural land.
2. Particular:
1. All alienable and disposable lands suitable for agriculture
2. All lands of public domain
3. All lands owned by the government suitable for agriculture
3. Implementation:
o The distribution shall be implemented immediately and completed within 10
years from the effectivity thereof.
4. Retention Limits:
o 3 hectare may be awarded to each child of the landowner.
5. Exception:
a) Landowners whose have been covered by the P.D. no. 27 shall be allowed to
keep the are originally by them
b) Original homestead grantees who still owned the original homestead at the
time of the approval of the act shat retain the same areas as long as they
continue to cultivate said homestead.

IV. Calalang v. Williams et al. G.R. No. 47800

[G.R. No. 47800. December 2, 1940.]

MAXIMO CALALANG, Petitioner, v. A. D. WILLIAMS, ET AL., Respondents.
Maximo Calalang in his own behalf.
Solicitor General Ozaeta and Assistant Solicitor General Amparo for respondents Williams,
Fragante and Bayan
City Fiscal Mabanag for the other respondents.

SYLLABUS

1. CONSTITUTIONAL LAW; CONSTITUTIONALITY OF COMMONWEALTH ACT No. 648; DELEGATION

OF LEGISLATIVE POWER; AUTHORITY OF DIRECTOR OF PUBLIC WORKS AND SECRETARY OF
PUBLIC WORKS AND COMMUNICATIONS TO PROMULGATE RULES AND REGULATIONS. — The
provisions of section 1 of Commonwealth Act No. 648 do not confer legislative power upon the Director of
Public Works and the Secretary of Public Works and Communications. The authority therein conferred
upon them and under which they promulgated the rules and regulations now complained of is not to
determine what public policy demands but merely to carry out the legislative policy laid down by the
National Assembly in said Act, to wit, "to promote safe transit upon, and avoid obstructions on, roads and
streets designated as national roads by acts of the National Assembly or by executive orders of the
President of the Philippines" and to close them temporarily to any or all classes of traffic "whenever the

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condition of the road or the traffic thereon makes such action necessary or advisable in the public
convenience and interest." The delegated power, if at all, therefore, is not the determination of what the law
shall be, but merely the ascertainment of the facts and circumstances upon which the application of said
law is to be predicated. To promulgate rules and regulations on the use of national roads and to determine
when and how long a national road should be closed to traffic, in view of the condition of the road or the
traffic thereon and the requirements of public convenience and interest, is an administrative function which
cannot be directly discharged by the National Assembly. It must depend on the discretion of some other
government official to whom is confided the duty of determining whether the proper occasion exists for
executing the law. But it cannot be said that the exercise of such discretion is the making of the law.

2. ID.; ID.; POLICE POWER; PERSONAL LIBERTY; GOVERNMENTAL AUTHORITY. — Commonwealth

Act No. 548 was passed by the National Assembly in the exercise of the paramount police power of the
state. Said Act, by virtue of which the rules and regulations complained of were promulgated, aims to
promote safe transit upon and avoid obstructions on national roads, in the interest and convenience of the
public. In enacting said law, therefore, the National Assembly was prompted by considerations of public
convenience and welfare. It was inspired by a desire to relieve congestion of traffic, which is, to say the
least, a menace to public safety. Public welfare, then, lies at the bottom of the enactment of said law, and
the state in order to promote the general welfare may interfere with personal liberty, with property, and with
business and occupations. Persons and property may be subjected to all kinds of restraints and burdens, in
order to secure the general comfort, health, and prosperity of the state (U.S. v. Gomer Jesus, 31 Phil.,
218). To this fundamental aim of our Government the rights of the individual are subordinated. Liberty is a
blessing, without which life is a misery, but liberty should not be made to prevail over authority because
then society will fall into anarchy. Neither should authority be made to prevail over liberty because then the
individual will fall into slavery. The citizen should achieve the required balance of liberty and authority in his
mind through education and, personal discipline, so that there may be established the resultant equilibrium,
which means peace and order and happiness for all. The moment greater authority is conferred upon the
government, logically so much is withdrawn from the residuum of liberty which resides in the people. The
paradox lies in the fact that the apparent curtailment of liberty is precisely the very means of insuring its
preservation.

3. ID.; ID.; SOCIAL JUSTICE. — 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 extra-constitutionally, 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."

DECISION

LAUREL, J.:

Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before this court
this petition for a writ of prohibition against the respondents, 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.

It is alleged in the petition that the National Traffic Commission, in its resolution of July 17, 1940, resolved

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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 Dasmariñas 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; that the
Chairman of the National Traffic Commission, on July 18, 1940 recommended to the Director of Public
Works the adoption of the measure proposed in the resolution aforementioned, in pursuance of the
provisions of Commonwealth Act No. 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; that on August 2, 1940, the Director of Public Works, in his
first endorsement 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 as aforesaid,
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; that on August
10, 1940, the Secretary of Public Works and Communications, in his second endorsement 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 above indicated,
for a period of one year from the date of the opening of the Colgante Bridge to traffic; that 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; that as a consequence of such enforcement, all animal-drawn vehicles are not
allowed to pass and pick up passengers in the places above-mentioned to the detriment not only of their
owners but of the riding public as well.

It is contended by the petitioner that Commonwealth Act No. 548 by which the Director of Public Works,
with the approval of the Secretary of Public Works and Communications, is authorized to promulgate rules
and regulations for the regulation and control of the use of and traffic on national roads and streets is
unconstitutional because it constitutes an undue delegation of legislative power. This contention is
untenable. As was observed by this court in Rubi v. Provincial Board of Mindoro (39 Phil, 660, 700), "The
rule has nowhere been better stated than in the early Ohio case decided by Judge Ranney, and since
followed in a multitude of cases, namely: ’The true distinction therefore is between the delegation of power
to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority
or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be
done; to the latter no valid objection can be made.’ (Cincinnati, W. & Z. R. Co. v. Comm’rs. Clinton County,
1 Ohio St., 88.) Discretion, as held by Chief Justice Marshall in Wayman v. Southard (10 Wheat. 1) may be
committed by the Legislature to an executive department or official. The Legislature may make decisions of
executive departments or subordinate officials thereof, to whom it has committed the execution of certain
acts, final on questions of fact. (U.S. v. Kinkead, 248 Fed., 141.) The growing tendency in the decisions is
to give prominence to the ’necessity’ of the case."

Section 1 of Commonwealth Act No. 548 reads as follows:

"SECTION 1. To promote safe transit upon, and avoid obstructions on, roads and streets designated as
national roads by acts of the National Assembly or by executive orders of the President of the Philippines,
the Director of Public Works, with the approval of the Secretary of Public Works and Communications, shall
promulgate the necessary rules and regulations to regulate and control the use of and traffic on such roads
and streets. Such rules and regulations, with the approval of the President, may contain provisions
controlling or regulating the construction of buildings or other structures within a reasonable distance from
along the national roads. Such roads may be temporarily closed to any or all classes of traffic by the
Director of Public Works and his duly authorized representatives whenever the condition of the road or the
traffic thereon makes such action necessary or advisable in the public convenience and interest, or for a
specified period, with the approval of the Secretary of Public Works and Communications."

The above provisions of law do not confer legislative power upon the Director of Public Works and the
Secretary of Public Works and Communications. The authority therein conferred upon them and under
which they promulgated the rules and regulations now complained of is not to determine what public policy

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demands but merely to carry out the legislative policy laid down by the National Assembly in said Act, to
wit, "to promote safe transit upon and avoid obstructions on, roads and streets designated as national
roads by acts of the National Assembly or by executive orders of the President of the Philippines" and to
close them temporarily to any or all classes of traffic "whenever the condition of the road or the traffic
makes such action necessary or advisable in the public convenience and interest." The delegated power, if
at all, therefore, is not the determination of what the law shall be, but merely the ascertainment of the facts
and circumstances upon which the application of said law is to be predicated. To promulgate rules and
regulations on the use of national roads and to determine when and how long a national road should be
closed to traffic, in view of the condition of the road or the traffic thereon and the requirements of public
convenience and interest, is an administrative function which cannot be directly discharged by the National
Assembly. It must depend on the discretion of some other government official to whom is confided the duty
of determining whether the proper occasion exists for executing the law. But it cannot be said that the
exercise of such discretion is the making of the law. As was said in Locke’s Appeal (72 Pa. 491): "To assert
that a law is less than a law, because it is made to depend on a future event or act, is to rob the Legislature
of the power to act wisely for the public welfare whenever a law is passed relating to a state of affairs not
yet developed, or to things future and impossible to fully know." The proper distinction the court said was
this: "The Legislature cannot delegate its power to make the law; but it can make a law to delegate a power
to determine some fact or state of things upon which the law makes, or intends to make, its own action
depend. To deny this would be to stop the wheels of government. There are many things upon which wise
and useful legislation must depend which cannot be known to the law-making power, and, must, therefore,
be a subject of inquiry and determination outside of the halls of legislation." (Field v. Clark, 143 U. S. 649,
694; 36 L. Ed. 294.)

In the case of People v. Rosenthal and Osmeña, G.R. Nos. 46076 and 46077, promulgated June 12, 1939,
and in Pangasinan Transportation v. The Public Service Commission, G.R. No. 47065, promulgated June
26, 1940, this Court had occasion to observe that the principle of separation of powers has been made to
adapt itself to the complexities of modern governments, giving rise to the adoption, within certain limits, of
the principle of "subordinate legislation," not only in the United States and England but in practically all
modern governments. Accordingly, with the growing complexity of modern life, the multiplication of the
subjects of governmental regulations, and the increased difficulty of administering the laws, the rigidity of
the theory of separation of governmental powers has, to a large extent, been relaxed by permitting the
delegation of greater powers by the legislative and vesting a larger amount of discretion in administrative
and executive officials, not only in the execution of the laws, but also in the promulgation of certain rules
and regulations calculated to promote public interest.

The petitioner further contends that the rules and regulations promulgated by the respondents pursuant to
the provisions of Commonwealth Act No. 548 constitute an unlawful interference with legitimate business or
trade and abridge the right to personal liberty and freedom of locomotion. Commonwealth Act No. 548 was
passed by the National Assembly in the exercise of the paramount police power of the state.

Said Act, by virtue of which the rules and regulations complained of were promulgated, aims to promote
safe transit upon and avoid obstructions on national roads, in the interest and convenience of the public. In
enacting said law, therefore, the National Assembly was prompted by considerations of public convenience
and welfare. It was inspired by a desire to relieve congestion of traffic. Which is, to say the least, a menace
to public safety? Public welfare, then, lies at the bottom of the enactment of said law, and the state in order
to promote the general welfare may interfere with personal liberty, with property, and with business and
occupations. Persons and property may be subjected to all kinds of restraints and burdens, in order to
secure the general comfort, health, and prosperity of the state (U.S. v. Gomez Jesus, 31 Phil., 218). To this
fundamental aim of our Government the rights of the individual are subordinated. Liberty is a blessing,
without which life is a misery, but liberty should not be made to prevail over authority because then society
will fall into anarchy. Neither should authority be made to prevail over liberty because then the individual will
fall into slavery. The citizen should achieve the required balance of liberty and authority in his mind through
education and personal discipline, so that there may be established the resultant equilibrium, which means
peace and order and happiness for all. The moment greater authority is conferred upon the government,

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 Rizal Memorial Colleges – School of Law
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logically so much is withdrawn from the residuum of liberty which resides in the people. The paradox lies in
the fact that the apparent curtailment of liberty is precisely the very means of insuring its preservation.

The scope of police power keeps expanding as civilization advances. As was said in the case of Dobbins v.
Los Angeles (195 U.S. 223, 238; 49 L. ed. 169), "the right to exercise the police power is a continuing one,
and a business lawful today may in the future, because of the changed situation, the growth of population
or other causes, become a menace to the public health and welfare, and be required to yield to the public
good." And in People v. Pomar (46 Phil., 440), it was observed that "advancing civilization is bringing within
the police power of the state today things which were not thought of as being within such power yesterday.
The development of civilization, the rapidly increasing population, the growth of public opinion, with an
increasing desire on the part of the masses and of the government to look after and care for the interests of
the individuals of the state, have brought within the police power many questions for regulation which
formerly were not so considered."

The petitioner finally avers that the rules and regulations complained of infringe upon the constitutional
precept regarding the promotion of social justice to insure the well-being and economic security of all the
people. The promotion of social justice, however, 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 force 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 extra-constitutionally, 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."

In view of the foregoing, the writ of prohibition prayed for is hereby denied, with costs against the petitioner.
So ordered.

Avanceña, C.J., Imperial, Diaz. and Horrilleno. JJ. Concur.

CASE DIGEST

Facts:

The National Traffic Commission, in its resolution of July 17, 1940, resolved to recommend to the
Director of the Public Works and to the Secretary of Public Works and Communications that
animal-drawn vehicles be prohibited from passing along the following for a period of one year from
the date of the opening of the Colgante Bridge to traffic:

1) Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas

Street from 7:30Am to 12:30 pm and from 1:30 pm to 530 pm; and

2) Along Rizal Avenue extending from the railroad crossing at Antipolo Street to

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Echague Street from 7 am to 11pm

The Chairman of the National Traffic Commission on July 18, 1940 recommended to the Director
of Public Works with the approval of the Secretary of Public Works the adoption of the measure
proposed in the resolution aforementioned in pursuance of the provisions of the Commonwealth
Act No. 548 which authorizes said Director with the approval from the Secretary of the Public
Works and Communication to promulgate rules and regulations to regulate and control the use of
and traffic on national roads.

On August 2, 1940, the Director recommended to the Secretary the approval of the
recommendations made by the Chairman of the National Traffic Commission with modifications.
The Secretary of Public Works approved the recommendations on August 10, 1940. The Mayor of
Manila and the Acting Chief of Police of Manila have enforced and caused to be enforced the rules
and regulation. As a consequence, all animal-drawn vehicles are not allowed to pass and pick up
passengers in the places above mentioned to the detriment not only of their owners but of the
riding public as well.

Issues:

1) Whether the rules and regulations promulgated by the respondents pursuant to the provisions
of Commonwealth Act NO. 548 constitute an unlawful inference with legitimate business or trade
and abridged the right to personal liberty and freedom of locomotion?

2) Whether the rules and regulations complained of infringe upon the constitutional precept
regarding the promotion of social justice to insure the well-being and economic security of all the
people?

Held:

1) No. The promulgation of the Act aims to promote safe transit upon and avoid obstructions on
national roads in the interest and convenience of the public. In enacting said law, the National
Assembly was prompted by considerations of public convenience and welfare. It was inspired by
the desire to relieve congestion of traffic, which is a menace to the public safety. Public welfare
lies at the bottom of the promulgation of the said law and the state in order to promote the general
welfare may interfere with personal liberty, with property, and with business and occupations.
Persons and property may be subject to all kinds of restraints and burdens in order to secure the
general comfort, health, and prosperity of the State. To this fundamental aims of the government,
the rights of the individual are subordinated. Liberty is a blessing which should not be made to
prevail over authority because society will fall into anarchy. Neither should authority be made to
prevail over liberty because then the individual will fall into slavery. The paradox lies in the fact that
the apparent curtailment of liberty is precisely the very means of insuring its preserving.

2) No. Social justice is “neither communism, nor despotism, nor atomism, nor anarchy,” but the
humanization of laws and the equalization of social and economic force 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 extra-

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 Rizal Memorial Colleges – School of Law
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constitutionally, through the exercise of powers underlying the existence of all governments on the
time-honored principles of salus populi est suprema lex.

Social justice 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 health, comfort and quiet of all
persons, and of bringing about “the greatest good to the greatest number.”

V. Sosito vs. Aguinaldo Development Corp. 156 SCRA 392

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-48926 December 14, 1987
MANUEL SOSITO, petitioner,
vs.
AGUINALDO DEVELOPMENT CORPORATION, respondent.

CRUZ, J.:

We gave due course to this petition and required the parties to file simultaneous memoranda on the sole question of
whether or not the petitioner is entitled to separation pay under the retrenchment program of the private respondent.

The facts are as follows:

Petitioner Manuel Sosito was employed in 1964 by the private respondent, a logging company, and was in charge of
logging importation, with a monthly salary of P675.00, 1 when he went on indefinite leave with the consent of the
company on January 16, 1976. 2 On July 20, 1976, the private respondent, through its president, announced a
retrenchment program and offered separation pay to employees in the active service as of June 30, 1976, who would
tender their resignations not later than July 31, 1976. The petitioner decided to accept this offer and so submitted his
resignation on July 29, 1976, "to avail himself of the gratuity benefits" promised. 3 However, his resignation was not
acted upon and he was never given the separation pay he expected. The petitioner complained to the Department of
Labor, where he was sustained by the labor arbiter. 4 The company was ordered to pay Sosito the sum of P 4,387.50,
representing his salary for six and a half months. On appeal to the National Labor Relations Commission, this decision
was reversed and it was held that the petitioner was not covered by the retrenchment program. 5 The petitioner then
came to us.

For a better understanding of this case, the memorandum of the private respondent on its retrenchment program is
reproduced in full as follows:
J
Memorandum To: ALL EMPLOYEES

Re: RETRENCHMENT PROGRAM

As you are all aware, the operations of wood-based industries in the Philippines for the last two (2)
years were adversely affected by the worldwide decline in the demand for and prices of logs and
wood products. Our company was no exception to this general decline in the market, and has suffered
tremendous losses. In 1975 alone, such losses amounted to nearly P20, 000,000.00.

The company has made a general review of its operations and has come to the unhappy decision of
the need to make adjustments in its manpower strength if it is to survive. This is indeed an unfortunate
and painful decision to make, but it leaves the company no alternative but to reduce its tremendous
and excessive overhead expense in order to prevent an ultimate closure.

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Although the law allows the Company, in a situation such as this, to drastically reduce it manpower
strength without any obligation to pay separation benefits, we recognize the need to provide our
employees some financial assistance while they are looking for other jobs.

The Company therefore is adopting a retrenchment program whereby employees who are in the
active service as of June 30, 1976 will be paid separation benefits in an amount equivalent to the
employee's one-half (1/2) month's basic salary multiplied by his/her years of service with the
Company. Employees interested in availing of the separation benefits offered by the Company must
manifest such intention by submitting written letters of resignation to the Management not later than
July 31, 1976. Those whose resignations are accepted shall be informed accordingly and shall be
paid their separation benefits.

After July 31, 1976, this offer of payment of separation benefits will no longer be available. Thereafter,
the Company shall apply for a clearance to terminate the services of such number of employees as
may be necessary in order to reduce the manpower strength to such desired level as to prevent
further losses.

(SGD.) JOSE G. RICAFORT

President
N.B.
For additional information
and/or resignation forms,
please see Mr. Vic Maceda
or Atty. Ben Aritao. 6

It is clear from the memorandum that the offer of separation pay was extended only to those who were in the active
service of the company as of June 30, 1976. It is equally clear that the petitioner was not eligible for the promised
gratuity as he was not actually working with the company as of the said date. Being on indefinite leave, he was not in
the active service of the private respondent although, if one were to be technical, he was still in its employ. Even so,
during the period of indefinite leave, he was not entitled to receive any salary or to enjoy any other benefits available
to those in the active service.

It seems to us that the petitioner wants to enjoy the best of two worlds at the expense of the private respondent. He
has insulated himself from the insecurities of the floundering firm but at the same time would demand the benefits it
offers. Being on indefinite leave from the company, he could seek and try other employment and remain there if he
should find it acceptable; but if not, he could go back to his former work and argue that he still had the right to return
as he was only on leave.

There is no claim that the petitioner was temporarily laid off or forced to go on leave; on the contrary, the record shows
that he voluntarily sought the indefinite leave which the private respondent granted. It is strange that the company
should agree to such an open-ended arrangement, which is obviously one-sided. The company would not be free to
replace the petitioner but the petitioner would have a right to resume his work as and when he saw fit.

We note that under the law then in force the private respondent could have validly reduced its work force because of
its financial reverses without the obligation to grant separation pay. This was permitted under the original Article
272(a), of the Labor Code, 7 which was in force at the time. To its credit, however, the company voluntarily offered
gratuities to those who would agree to be phased out pursuant to the terms and conditions of its retrenchment
program, in recognition of their loyalty and to tide them over their own financial difficulties. The Court feels that such
compassionate measure deserves commendation and support but at the same time rules that it should be available
only to those who are qualified therefore. We hold that the petitioner is not one of them.

While the Constitution is committed to the policy of social justice and the protection of the working class, it should not
be supposed that every labor dispute will be automatically decided in favor of labor. Management also has its own
rights which, as such, are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for
those with fewer privileges in life, this Court has inclined more often than not toward the worker and upheld his cause
in his conflicts with the employer. Such favoritism, however, has not blinded us to the rule that justice is in every case
for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine.

WHEREFORE, the petition is DISMISSED and the challenged decision AFFIRMED, with costs against the petitioner.

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SO ORDERED.

Teehankee, C.J., Narvasa, Paras and Gancayco, JJ., concurs.

CASE DIGEST:

SOSITO VS. AGUINALDO DEVELOPMENT CORPORATION

G.R. No. L-48926 DECEMBER 14, 1987

Facts:

Petitioner Manuel Sosito filed for an indefinite leave from the company on January 16, 1976.
Months later, the company underwent a retrenchment program but offered separation pay to those
who had been in the active service as of June 30, 1976 and had tendered their resignation not
later than July 31, 1976. Petitioner, to avail of the benefits, submitted his resignation. The
company denied him the benefits.

Issue:

Whether or not petitioner was entitled to the benefits?

Held:

The Court held that the petitioner was not qualified to avail of the benefits because at the time he
submitted his resignation, he was not in the active service, having been on voluntary indefinite
leave. The petitioner cannot just do as he please to the detriment of the company.

The Court expressed that labor disputes aren’t necessarily immediately tipped in favor of labor.
The Management also has its own rights, which must also be afforded the same protection as that
of labor. The Court held “that justice is in every case for the deserving, to be dispensed in the light
of the established facts and the applicable law and doctrine.

VI. Ondoy v. Ignacio, 97 SCRA 61

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-47178 May 16, 1980
ESTRELLA B. ONDOY, petitioner,
vs.
VIRGILIO IGNACIO, Proprietor M/B LADY ESTRELLITA and/or IMPERIAL FISHING ENTERPRISES
and/or THE SECRETARY OF LABOR and/or THE COMPENSATION APPEALS AND REVIEW STAFF,
Department of Labor, respondents.
Fernardo R. Moreno for petitioner.
Feliciano Tumale for private respondents.
E. V. Espanol for public respondent.

FERNANDO, C.J.: têñ. £îhqwâ£

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The undisputed facts argue strongly for the granting of the claim for compensation filed by petitioner, the
mother of one Jose Ondoy, who was drowned while in the employ of private respondent, Virgilio Ignacio.
Whatever be the cause for the failure to do so, it is admitted that there was no contraversion. Such
omission, fatal in character, was sought to be minimized by the filing of a motion to dismiss based on the
alleged absence of an employment relationship. What cannot be ignored, however, is that subsequently, in
the hearing of such claim private respondent submitted affidavits executed by the chief engineer and oiler
of the fishing vessel that the deceased a fisherman, was in that ship, undeniably a member of the working
force, but after being invited by friends to a drinking spree, left the vessel, and thereafter was found dead.
The referee summarily ignored the affidavit of the chief-mate of respondent employer to the effect "that
sometime in October, 1968, while Jose Ondoy, my co-worker, was in the actual performance of his work
with said fishing enterprises, he was drowned and died on October 22, 1968. That the deceased died in line
of Duty." 1 the hearing officer or referee dismissed the claim for lack of merit. 2 A motion for reconsideration
was duly filed, but in an order dated August 29, 1977, the then Secretary of Labor, now Minister Blas F.
Ople, denied such motion for reconsideration for lack of merit. 3 Hence this petition for review.

1. In La Mallorca v. Workmen's Compensation Commission, 4 this Court explicitly held that the failure
to controvert "is fatal to any defense that petitioner could interpose. So we have held in a host of
decisions in compliance with the clear and express language of the Workmen's Compensation Act.
Any Assertion to the contrary is doomed to futility. 5 The opinion noted thirty decisions starting
from Bachrach Motor Co. v. Workmen's Compensation Commission  6 to Northwest Orient Airlines,
Inc. v. Workmen's Compensation Commission. 7 Thereafter, in Regal Auto Works, Inc. v.
Workmen's Compensation Commission, 8 such a doctrine was reaffirmed. It was further noted that
nine more decisions had been rendered by this Court starting from Republic v. Workmen's
Compensation Commission  9 to Abong v. Workmen's Compensation Commission. 10 By the time
respondent secretary of Labor denied the motion for reconsideration, a host of decisions that
speaks to the same effect had been promulgated. 11 It clearly, appears, therefore, that the failure of
the referee to grant the award ought to have been remedied and the motion for reconsideration
granted.

2. The deceased in this case met his death because of drowning. In Camotes Shipping Corporation v.
Otadoy, 12 there was not even any direct testimony that the deceased was drowned while in the
performance of his duty. All that could be alleged was that he "was lost at sea while in the employ of
petitioner. 13 Nonetheless, the award for compensation was sustained. Likewise, the ruling in Caltex
(Phil.) Inc. v. Villanueva  14 was cited with approval. Thus: "The fact that the employee was found
missing while on board the petitioner's vessel MV 'Caltex Mindanao' became known to the captain
of the vessel on 10 October 1956 but it was only on 6 November 1956 when the petitioner
transmitted to the respondent Compensation WCC For in No. 3 stating that the employee was 'Lost
at sea and presumed dead as of October 10, 1956,' and that it was controverting the respondent's
claim. 15 In the present case, there is evidence of the fact of death due to drowning. That was not
controverted. Under the circumstances, the failure to grant the claim finds no justification in law.

3. It bears repeating that there is evidence, direct and categorical, to the effect that the deceased was
drowned while "in the actual performance of his work" with the shipping enterprise of private
respondent. Even without such evidence, the petitioner could have relied on the presumption of
compensability under the Act once it is shown that the death or disability arose in the course of
employment, with the burden of overthrowing it being cast on the person or entity resisting the
claim. Time and time again this Court has stressed such statutory provision. It suffices to mention
cases decided from January to April of this year. 16 An appraisal of the counter-affidavits submitted
by two employees of private respondent and thereafter beholden to him to the effect that the
deceased left the vessel for a drinking spree certainly cannot meet the standard required to negate
the force of the presumption of compensability.

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4. Nor is an affirmance of the finding of the referee adverse to the claim warranted because of the
doctrine that the findings of facts of an administrative agency must be accorded due weight and
consideration. An excerpt from the recent case of Uy v. Workmen's Compensation
Commission  17 finds pertinence: "The claim merits scant consideration for this Court is authorized to
inquire into the facts when the conclusions are not supported by substantial or credible evidence. 18

5. This Court, in recognizing the right of petitioner to the award, merely adheres to the interpretation
uninterruptedly followed by this Court resolving all doubts in favor of the claimant. So it has been
since the first leading case of Francisco v. Conching  19 decided a year after the 1935 Constitution
took effect. What was said in Victorias Milling Co., Inc. v. Workmen's Compensation
Commission  20 is not amiss: "There is need, it seems, even at this late date, for [private respondent]
and other employers to be reminded of the high estate accorded the Workmen's Compensation Act
in the constitutional scheme of social justice and protection to labor. 21 Further: "No other judicial
attitude may be expected in the face of a clearly expressed legislative determination which
antedated the constitutionally avowed concern for social justice and protection to labor. It is easily
understandable why the judiciary frowns on resort to doctrines, which even if deceptively plausible,
would result in frustrating such a national policy. 22 Lastly, to quote from the opinion therein
rendered: "To be more specific, the principle of social justice is in this sphere strengthened and
vitalized. A realistic view is that expressed in Agustin v. Workmen's Compensation Commission: 'As
between a laborer, usually poor and unlettered, and the employer, who has resources to secure
able legal advice, the law has reason to demand from the latter stricter compliance. Social justice in
these cases is not equality but protection.' 23

WHEREFORE, the petition for review is granted and petitioner Estrelita B. Ondoy is awarded the sum of,
P6,000.00 as compensation for the death of her son, Jose Ondoy; P300.00 for burial expenses; and
P600.00 as attorney's fees. This decision is immediately executory. Costs against private respondent
Virgilio Ignacio.

Antonio, Aquino, Concepcion, Jr., Abad Santos and De Castro, JJ., concur.1äwphï1.ñët
Barredo, J., is on leave.

CASE DIGEST:

Ondoy vs. Ignacio et. al. 97 SCRA 252 G.R. No. L-47178 May 16, 1980
[Estrella B. Ondoy, petitioner vs. Virgilio Ignacio, Proprietor M/B Lady Estrellita and/or
Imperial Fishing Enterprises and/or the Secretary of Labor and/or The Compensation
Appeals and Review Staff, Department of Labor, Respondents]

Facts:

The petitioner, Estrella Ondoy, is a mother of one Jose Ondoy, an employee who worked under
Virgilio Ignacio. According to the chief engineer and oiler, Jose Andoy was aboard the ship of the
respondent’s enterprise as part of the workforce. He was invited by friends to a drinking spree, left
the ship and thereafter was found dead due to drowning. Thus the petitioner asked for
compensation, however, the testimonies by the chief engineer was dismissed by the hearing
officer due to lack of merit. Afterwards, a motion for reconsideration was also filed before the
Secretary of Labor, but was denied again due to lack of merit.

Issue:

Whether or not the compensation for Jose’s death is constitutional. Whether or not Social Justice
has a role in this case.
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Ruling:

The Supreme Court granted the petition, granting Estrella Ondoy 6,000 pesos as compensation
for Jose’s death, 300 pesos for burial fees and 600 pesos as attorney’s fee with the costs against
respondent, Ignacio.

Ratio Decidendi: The principle of social justice applied in this case is a matter of protection, and
not equality. The Supreme Court recognized the right of petitioner to claim compensation from the
respondent, as Jose did drown while “in the actual performance of his duty.” To fortify this ruling,
the SC cited cases wherein, with accordance to the constitutional scheme of social justice and
protection to labor, Workmen’s Compensation Act, which dealt with the right of workers for
compensation for personal injury, was applied. Among them is a case where there was no direct
testimony attesting that the deceased drowned while in the performance of his duty, however, the
compensation was sustained. Lastly from another case, the SC quoted that “as between a laborer,
usually poor and unlettered, and the employer, who has resources to secure able legal advice, the
law has reason to demand from the latter strict compliance. Social justice in these cases is not
equality but protection.

VII. Constitutional Basis:

Article II, Section 21.

 The State shall promote comprehensive rural development and agrarian reform.

Article XII, Section 1.

 The goals of the national economy are a more equitable distribution of opportunities,
income, and wealth; a sustained increase in the amount of goods and services produced by
the nation for the benefit of the people; and an expanding productivity as the key to raising
the quality of life for all, especially the underprivileged.

Article XIII, Section 3.

 The State shall afford full protection to labor, local and overseas, organized and unorganized,
and promote full employment and equality of employment opportunities for all.

Article XIII, Section 4.

 The State shall, by law, undertake an agrarian reform program founded on the right of
farmers and regular farm workers who are landless, to own directly or collectively the lands
they till or, in the case of other farm workers, to receive a just share of the fruits thereof. To
this end, the State shall encourage and undertake the just distribution of all agricultural
lands, subject to such priorities and reasonable retention limits as the Congress may
prescribe, taking into account ecological, developmental, or equity considerations, and
subject to the payment of just compensation. In determining retention limits, the State shall
respect the right of small landowners. The State shall further provide incentives for
voluntary land-sharing.

Article XIII, Section 5.

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 The State shall recognize the right of farmers, farm workers, and landowners, as well as
cooperatives, and other independent farmers’ organizations to participate in the planning,
organization, and management of the program, and shall provide support to agriculture
through appropriate technology and research, and adequate financial, production,
marketing, and other support services.

Article XIII, Section 6.

 The State shall apply the principles of agrarian reform or stewardship, whenever applicable
in accordance with law, in the disposition or utilization of other natural resources, including
lands of the public domain under lease or concession suitable to agriculture, subject to prior
rights, homestead rights of small settlers, and the rights of indigenous communities to their
ancestral lands.

 The State may resettle landless farmers and farm workers in its own agricultural estates
which shall be distributed to them in the manner provided by law.

Article XIII, Section 8.

 The State shall provide incentives to landowners to invest the proceeds of the agrarian
reform program to promote industrialization, employment creation, and privatization of
public sector enterprises. Financial instruments used as payment for their lands shall be
honored as equity in enterprises of their choice.

Article II, Section 10

 State shall promote social justice in all phases of national development.

ARTICLE XIII
SOCIAL JUSTICE AND HUMAN RIGHTS

Section 1.

 The Congress shall give highest priority to the enactment of measures that protect and
enhance the right of all the people to human dignity, reduce social, economic, and political
inequalities, and remove cultural inequities by equitably diffusing wealth and political power
for the common good.

 To this end, the State shall regulate the acquisition, ownership, use, and disposition of
property and its increments.

Section 2.

 The promotion of social justice shall include the commitment to create economic
opportunities based on freedom of initiative and self-reliance.

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