Case Digest: COLEGIO DE SAN JUAN DE LETRAN vs. ASSOCIATION OF EMPLOYEES AND FACULTIES OF LETRAN and ELEONOR AMBAS

G.R. No. 141471.              September 18, 2000

Facts:

During the renegotiation of the respondent unions Collective Bargaining Agreement with the petitioner, Eleonor Ambas emerged as the newly elected President of the union. Ambas wanted to continue the renegotiation of the CBA but petitioner, through Fr. Edwin Lao, claimed that the CBA was already prepared for signing by the parties. However, the union members rejected the said CBA.  Thereafter, petitioner accused the union officers of bargaining in bad faith before the NLRC. The Labor Arbiter decided in favor of the petitioner.  This decision was reversed on appeal with the NLRC.

The parties later agreed to disregard the unsigned CBA and to start negotiation on new five-year CBA. During the pendency of approval of proposals, Ambas was informed that her work schedule was being changed.  Ambas protested and requested management to submit the issue to a grievance machinery under the old CBA. 

After the petitioner’s inaction on the CBA, the union filed a notice to strike.  After meeting with the NCMB to discuss the ground rules for renegotiation, Ambas received a letter dismissing her for alleged insubordination.  The petitioner then ceased negotiations when it received news that another labor organization had filed a petition for certification.

The union finally struck, but the Secretary of Labor and Employment ordered them to return to work and for petitioner to accept them back.  The Secretary of Labor and Employment later rendered judgement that the petitioner had been guilty of unfair labor practice. The Court of Appeals affirmed the findings of the former.

Issue(s):

1. Whether petitioner is guilty of unfair labor practice by refusing to bargain with the union when it unilaterally suspended the ongoing negotiations for a new CBA; and
2. Whether the termination of the union president amounts to an interference of the employees’ right to self-organization.

Held:

The Supreme Court found the petition unmeritorious.

1. The petitioner’s failure to act upon the submitted CBA proposal within the ten-day period exemplified in Article 250 of the Labor Code is a clear violation of the governing procedure of collective bargaining.  As the Court has held in Kiok Loy vs. NLRC, the company’s refusal to make counter-proposal to the union’s proposed CBA is an indication of bad faith.  Moreover, the succeeding events are obvious signs that the petitioner had merely been employing delaying tactics to the passage of the proposed CBA.  Moreover, in order to allow the employer to validly suspend the bargaining process, there must be a valid petition for certification election raising a legitimate representation issue.  Hence, the mere filing of a petition for certification election does not ipso facto justify the suspension of negotiation by the employer.
2. The factual backdrop of the termination of Ambas led the Court to no other conclusion that she was dismissed in order to strip the union of a leader who would fight for the right of her co-workers in the bargaining table.  While the Court recognizes the right of the employer to terminate the services of an employee for a just or authorized cause, nevertheless, the dismissal of employees must be made within the parameters of aw and pursuant to the tenets of equity and fair play.  Even assuming arguendo that Ambas was guilty of insubordination, such disobedience was not a valid ground to terminate her employment.  When the exercise of the management to discipline its employees tends to interfere with the employees’ right to self-organization, it amounts to union-busting and is therefore a prohibited act.

Case Digest: Mylene Carvajal vs. Luzon Development Bank and/or Oscar Ramirez

G.R. No. 186169                01 August 2012

FACTS:

Carvajal was employed as a trainee-teller by Luzon Development Bank (Bank) under a six-month probationary employment contract.  Ramirez is the President and CEO of the Bank.  A month into her employment, she was send a Memorandum directing her to explain in writing why she should not be subjected to disciplinary action for her eight tardiness on November 2003.  A second Memorandum was sent to her on January for her again chronic tardiness on December 2003.  She submitted her written explanations for both events and manifested her acceptance of the consequences of her actions.  She was terminated for three days effective 21 January 2004.  However, on 22 January, her termination was lifted but at the same time, her services were terminated.  In the respondents’ position paper to the LA, they explained that the reasons for her absence are chronic tardiness, absenteeism and failure to perform satisfactorily as a probationary employee.

LA Decision: The petitioner was illegally dismissed because she was not afforded the notice in writing informing her of what the Bank would like to bring out to her for the latter to answer in writing.

NLRC Decision: NLRC affirmed the decision of the LA.

CA Decision: The CA found that the petitioner was not entitled to backwages because she was rightfully dismissed for failure to meet the employment standards.

ISSUE:

Whether the petitioner can be considered a regular employee at the time of her dismissal.

HELD:

No. Carvajal’s appointment letter reads that “Possible extension of this contract will depend on the job requirements of the Bank and your overall performance.  Performance review will be conducted before possible renewal can take effect.”  Therefore, petitioner knew, at the time of her engagement, that she must comply with the standards set forth by respondent and perform satisfactorily in order to attain regular status.  Even the NLRC upheld the petitoner’s probationary status, stating that reinstatement is not synonymous to regularization.

Although probationary employees also enjoy security of tenure, he may still be terminated because of just and authorized causes of termination and the additional ground under Article 281 of the Labor Code, i.e. the probationary employee may also be terminated for failure to qualify as a regular employee in accordance to the reasonable standards set by the employer.  Punctuality is a reasonable standard imposed on every employee, whether in government or private sector.  This, together with absenteeism, underperformance and mistake in clearing a check are infractions that cannot be tantamount to satisfactory standards.

In addition to the abovementioned, it has been previously held in PDI vs. Magtibay, Jr., that the second requirement under Article 281 does not require notice and hearing.  Due process of law for this second ground consists of making the reasonable standards expected of the employee during his probationary period known to him at the time of his engagement.  By the very nature of probationary employment, the employee knows from the very start that he will be under close observation and continuous scrutiny by his supervisors.  If termination is for cause, it may be done at anytime during the probation. 

Case Digest: Sehwani, Incorporated and/or Benita’s Fries, Inc. vs. In-n-out Burger, Inc.

Petitioner’s Claims:

Petitioners alleged that the Respondent lack the legal capacity to sue because it was not doing business in the Philippines and that it has no cause of action because its mark is not registered or used in the Philippines.  Sehwani, Inc. also claimed that as the registered owner of the “IN N OUT” mark, it enjoys the presumption that the same was validly acquired and that it has the exclusive right to use the mark.  Moreover, petitioners argued that other than the bare allegation of fraud in the registration of the mark, respondent failed to show the existence of any grounds of cancellation thereof under Section 151 of the IP Code of the Philippines.  It also alleged that the action is barred by laches.

Respondent’s Claims:

Respondent, In-n-out Burger, Inc.,  alleged that it is the owner of the tradename “IN-N-OUT” and trademarks “IN-N-OUT,” “IN-N-OUT Burger & Arrow Design” and “IN-N-OUT Burger Logo” which are used in its business since 1948 up to the present.  These tradename and trademarks were registered in the United States as well as in other parts of the world.  Petitioner Sehwani allegedly had obtained a trademark registration for the mark “IN N OUT” (with the inside letter O formed like a star) without its authority.

Issue/s:

• Whether or not the Respondent has the legal capacity to sue for the protection of its trademarks albeit it is not doing business in the Philippines
• Whether or not a ground exists for the cancellation of the Petitioners’ registration

Ruling:

•  Yes. Section 160 RA No. 8293 provides for the right of foreign corporations to sue in trademark or service mark enforcement action, provided that it meets the requirements under Section 3 thereof, which are:

a.       Any convention, treaty or agreement relation to intellectual property right or the repression of unfair competition wherein Philippines is also a party; and

b.      An extension therein of reciprocal rights.

Moreoever, Article 6bis of The Paris Convention, which governs the protection of well-known trademarks, is a self-executing provision and does not require legislative enactment to give it effect in the member country.  The essential requirement therein is that the trademark must be well-known in the country where protection is sought.  In this case, Director Beltran-Abelardo found that In-n-out Burger and Arrow Design is an internationally well0known mark as evidenced by its trademark registrations around the world and its comprehensive advertisements therein.

• Yes. Section 151(b) of RA 8293 provides that a petition to cancel a registration of a mark may be filed with the Bureau of Legal Affairs by any person who believes that he is or will be damaged by the registration of a mark at any time, if the registered mark becomes the generic name for the goods or services, or a portion thereof, for which it is registered, or has been abandoned, or its registration was fraudulently or contrary to the provisions of this Act, or if the registered mark is being used by or with the permission of, the registrant so as to misrepresent the source of goods or services on or in connection with which the mark is used.  The evidence showed that not only did the petitioners use the IN-N-OUT Burger trademark for the name of their restaurant, but they also used identical or confusingly similar mark for their hamburger wrappers and French-fries receptacles, thereby effectively misrepresenting the source of the goods and services.

Case Digest: Lung Center of the Philippines vs. Quezon City and Constantino Rosas

G.R. No. 144104             June 29, 2004

FACTS:

The Petitioner is a non-stock, non-profit entity which owns a parcel of land in Quezon City.  Erected in the middle of the aforesaid lot is a hospital known as the Lung Center of the Philippines.  The ground floor is being leased to a canteen, medical professionals whom use the same as their private clinics, as well as to other private parties.  The right portion of the lot is being leased for commercial purposes to the Elliptical Orchids and Garden Center.  The petitioner accepts paying and non-paying patients. It also renders medical services to out-patients, both paying and non-paying. Aside from its income from paying patients, the petitioner receives annual subsidies from the government.

Petitioner filed a Claim for Exemption from realty taxes amounting to about Php4.5 million, predicating its claim as a charitable institution. The city assessor denied the Claim.  When appealed to the QC-Local Board of Assessment, the same was dismissed.  The decision of the QC-LBAA was affirmed by the Central Board of Assessment Appeals, despite the Petitioners claim that 60% of its hospital beds are used exclusively for charity.

ISSUE:

Whether or not the Petitioner is entitled to exemption from realty taxes notwithstanding the fact that it admits paying clients and leases out a portion of its property for commercial purposes.

HELD:

The Court held that the petitioner is indeed a charitable institution based on its charter and articles of incorporation.  As a general principle, a charitable institution does not lose its character as such and its exemption from taxes simply because it derives income from paying patients, whether out-patient or confined in the hospital, or receives subsidies from the government, so long as the money received is devoted or used altogether to the charitable object which it is intended to achieve; and no money inures to the private benefit of the persons managing or operating the institution.

Despite this, the Court held that the portions of real property that are leased to private entities are not exempt from real property taxes as these are not actually, directly and exclusively used for charitable purposes.  (strictissimi juris) Moreover, P.D. No. 1823 only speaks of tax exemptions as regards to:

•         income and gift taxes for all donations, contributions, endowments and equipment and supplies to be imported by authorized entities or persons and by the Board of Trustees of the Lung Center of the Philippines for the actual use and benefit of the Lung Center; and
•          taxes, charges and fees imposed by the Government or any political subdivision or instrumentality thereof with respect to equipment purchases (expression unius est exclusion alterius/expressium facit cessare tacitum).

Case Digest: Compania General de Tabacos de Filipinas and La Flor de la Isabela, Inc. vs. Hon. Virgilio A. Sevandal, et al.

Petitioners’ Claims:

Petitioners claimed in its Letter-Complaint to the SEC that Tabaqueria, owned by its former General Manager, Gabriel Ripoll, cannot be allowed to continue said name because it will confuse and deceive the public into believing that Tabaqueria is operated and managed by, and part of Tabacalera. Compania General, being a Spain-based company, operated under La Flor de la Isabela in the Philippines. Petitioners filed with the DOJ and the DTI a Complaint for Infringement and Unfair Competition.  Petitioners alleged that Tabaqueria deliberately sought to adopt the Tabacalera trademarks to confuse the public that the Tabaqueria cigars are the same or are somehow connected with the Tabacalera products.  As such, the Petitioners filed for a Motion to grant Cease and Desist Order in order to enjoin Tabaqueria from further producing cigars.

Respondents’ Claims:

Ripoll, now the Directing Manager of Tabaqueria, alleged that there is insufficient evidence to issue a Cease and Desist Order against him on the ground of unfair competition and infringement of trademark.  Moreover, they moved to dismiss the case on the ground of forum shopping.  Further, the Office of Legal Affairs of the DTI ruled that there was no similarity in the general appearance of the products of the parties and consumers would not be misled.  DTI further found that the competing products, in their totality, are easily distinguishable through their brand and logos. “TABACALERA” is the brand of the Tabacalera products, while “FLOR DE MANILA” is the brand of the Petitioners.  In fact, per Certification of BIR in 1994, “Flor de Manila” is the brand registered by the latter with said bureau.  As per inspection, none of their boxes even show the word “TABAQUERIA”.

Issue:

Whether or not there is substantial similarity between the two parties as to amount to unfair competition and trademark infringement, and are therefore entitled to a writ of preliminary injunction.

Ruling:

No.  The Supreme Court upheld the decision of the Court of Appeals and the DTI.  Injunctive relief may only be issued when the right of the complainant is clear and unmistakable; when the invasion of the right sought to be protected is material and substantial; and there is an urgent and paramount necessity for the writ to prevent serious damage.  The Court found that there is no urgent and paramount necessity for the writ.  The Petitioners has not shown, at least tentatively, that there exists a fraudulent and malicious entry into the market and as a result thereby, their sales dropped by 25%.

Case Digest: Caltex (Philippines), Inc. vs. Central Board of Assessment Appeals and City Assessor of Pasay

G.R. No. L-50466               May 31, 1982

FACTS:

Various machines and equipments are loaned by Caltex to gas station operators under an appropriate lease agreement or receipt.  These are underground tanks, gasoline pumps, water pumps, car washer and air compressors, among others. It is stipulated in the lease contract that the operators, upon demand, shall return to Caltex the machines and equipment in good condition as when received. The lessor of the land, where the gas station is located, does not become the owner of the machines and equipment installed therein. Caltex retains the ownership thereof during the term of the lease.  The city assessor of Pasay City characterized the said items of gas station equipment and machinery as taxable realty.  However, the city board of tax appeals ruled that they are personalty.

The City Board of Tax Appeals decided that the definitions of realty and personalty under the Civil Code do not apply in this case.  Instead, the definition under the Real Property Tax Code should be followed.  Thus, the property in controversy are real in nature and subject to realty tax.

ISSUE:

Whether the pieces of gas station equipment and machinery already enumerated are subject to realty tax.

HELD:

The Court held that the said equipment and machinery, as appurtenances to the gas station building or shed owned by Caltex (as to which it is subject to realty tax) and which fixtures are necessary to the operation of the gas station, for without them the gas station would be useless, and which have been attached or affixed permanently to the gas station site or embedded therein, are taxable improvements and machinery within the meaning of the Assessment Law and the Real Property Tax Code.  Under the Real Property Tax Code, “improvements” are defined as “valuable addition made to property or an amelioration in its condition, amounting to more than mere repairs or replacement of waste, costing labor or capital and intended to enhance its value, beauty or utility or to adapt it for new or further purposes.”  On the other hand, “machinery” is embraces “machines, mechanical contrivances, instruments, appliances and apparatus attached to the real estate.”  Improvements on land are commonly taxed as realty even though for some purposes they might be considered personalty.