Davao Stevedores Mutual Benefit Association vs. Compañia Maritima

No law grants laborers of any particular locality exclusive rights to employment in that area, and compelling employers to hire local labor to the exclusion of laborers from other regions violates the equal protection clause and the constitutional right to freedom of contract.

Compañia Maritima and the Manila Steamship Co. own and operate vessels engaged in coastwise shipping between Manila and Davao, with stopovers in Cebu and other way ports. The Katubsanan sa Mamumuo, a labor union headquartered in Cebu, was under contract with both shipping companies to furnish the stevedoring labor aboard their vessels at Cebu and Mindanao ports, dispatching 40 to 60 members to travel with the vessels to the different ports of call. Work on the wharf, including arrastre, was handled by local stevedores at each port.

Compañia Maritima and the Manila Steamship Co. operate vessels engaged in coastwise shipping between Manila and Davao, with stopovers in Cebu and other way ports. To handle stevedoring work aboard these vessels at Cebu and Mindanao ports, both companies maintained a contract with the Katubsanan sa Mamumuo, a Cebu-based labor union, under which 40 to 60 union members would travel with the vessels to the different ports of call. The work on the wharf, including arrastre, was separately handled by local stevedores at each port.

The controversy arose when the Davao Stevedores Mutual Benefit Association proposed to all ship agents in the port of Davao that the association take over the stevedoring work on board their vessels while in that port. The association accompanied this proposal with a threat to carry it out regardless of the ship agents' response. Agents of the Department of Labor attempted to mediate the dispute but failed to effect a settlement, leading the Department to certify the matter to the Court of Industrial Relations as a proper case for adjudication.

At the instance of Compañia Maritima, later joined by the Manila Steamship Co., a writ of preliminary injunction was issued to enjoin the association from carrying out its threat. The case was then heard on the merits with the intervention of the Katubsanan sa Mamumuo. A judge of the Court of Industrial Relations rendered a decision awarding the stevedoring work on board the vessels of the two shipping companies when in the port of Davao to members of the Davao Stevedores Mutual Benefit Association, to the exclusion of the Cebu-based stevedores who were members of the Katubsanan sa Mamumuo. This decision was subsequently revoked by the Court of Industrial Relations sitting en banc, and it is that revoking resolution which the Davao Stevedores brought to the Supreme Court for review.

• Sectional Labor Exclusivity: Petitioner proposed that the Industrial Court cancel the existing contract between the respondent shipping companies and the Katubsanan sa Mamumuo and compel those companies to have the stevedoring work on board their vessels done by stevedores residing in Davao City, to the exclusion of those coming from Cebu.
• Local Unemployment: Petitioner pleaded that there was not enough work for its own members in the port of Davao, on which basis it sought to exclude laborers from other parts from their right to earn their living in that port.

• Freedom of Contract and Equal Protection: Whether the Court of Industrial Relations may cancel an existing labor contract between employers and a Cebu-based union and compel the employers to hire Davao-resident stevedores to the exclusion of Cebu-based stevedores.

• Freedom of Contract and Equal Protection: No. The petitioner's proposal finds no support in law or reason; no law grants laborers of any section exclusive employment rights, and such a measure would violate the equal protection clause and interfere with the constitutional right to freedom of contract.

• Freedom of Contract and Equal Protection: The petitioner's proposal, in effect, asked the Industrial Court to cancel the existing contract between the shipping companies and the Katubsanan sa Mamumuo and compel the companies to replace Cebu-based stevedores with Davao-resident ones. There is no law granting laborers of any section exclusive rights to employment in a particular locality. A measure of that nature would be contrary to public policy as tending to sectionalism and disunity, would conflict with the equal protection clause of the Constitution, and would interfere with the citizen's right to freedom of contract, likewise guaranteed by the Constitution. Relying on Pampanga Bus Company, Inc. vs. Pambusco Employees' Union, Inc., the Court reaffirmed that the general right to make a contract in relation to one's business is an essential part of the liberty of citizens protected by the due-process clause, and that the right of an employer to purchase labor from any person it chooses is the same as the right of a laborer to sell his labor to whomever he chooses. The Court also rejected the petitioner's unemployment argument, characterizing the proposal to solve local unemployment by ousting members of another labor union from their own employment as iniquitous—amounting to nothing more than "robbing Peter to pay Paul."

• Freedom of Contract in Labor Relations — The general right to make a contract in relation to one's business is an essential part of the liberty of citizens protected by the due-process clause of the Constitution. The right of a laborer to sell his labor to such person as he may choose is, in its essence, the same as the right of an employer to purchase labor from any person whom it chooses. Neither party can compel the other against the latter's will; compelling an employee to work against his will is servitude, and compelling an employer to give work against his will is oppression. The Court applied this doctrine to reject the petitioner's attempt to force the shipping companies to hire Davao-based stevedores to the exclusion of Cebu-based ones under an existing contract.

• Prohibition Against Sectional Labor Exclusivity — No law grants laborers of any particular locality exclusive rights to employment in that area. A measure granting such exclusivity would violate the equal protection clause of the Constitution and would be contrary to public policy as tending to sectionalism and disunity. The Court relied on this principle to affirm the en banc resolution of the Court of Industrial Relations revoking the award of stevedoring work to Davao-based laborers.

• "There is no law which grants the laborers of any section." — States the core proposition that no statutory basis exists for sectional labor exclusivity, anchoring the Court's rejection of the petitioner's proposal.

• "The general right to make a contract in relation to one's business is an essential part of the liberty of the citizens protected by the due-process clause of the Constitution. The right of a laborer to sell his labor to such person as he may choose is, in its essence, the same as the right of an employer to purchase labor from any person whom it chooses." — Quoted from Pampanga Bus Company, Inc. vs. Pambusco Employees' Union, Inc., this passage articulates the constitutional symmetry between the employee's and the employer's freedom of contract, frequently cited in later labor jurisprudence.

• "Claiming that its members have a right to live, petitioner would yet deny that same right to others. Petitioner's proposal is iniquitous and amounts to nothing more than robbing Peter to pay Paul." — Captures the Court's moral and legal rejection of the petitioner's argument that local unemployment justifies displacing workers from another region.

• Pampanga Bus Company, Inc. vs. Pambusco Employees' Union, Inc., Phil. 54l, 543 — Controlling precedent cited for the principle that freedom of contract is an essential part of liberty protected by the due-process clause, and that the employer's right to choose labor and the employee's right to choose employment are constitutionally equal. The Court applied this doctrine directly to reject the petitioner's attempt to compel the shipping companies to hire Davao-based stevedores.

• Equal Protection Clause, Philippine Constitution — The Court held that granting laborers of any section exclusive employment rights would conflict with the equal protection guarantee, as it would discriminate against laborers from other regions seeking to earn a living in the same locality.

• Due Process Clause, Philippine Constitution — The Court held that compelling employers to hire local labor against their will and canceling their existing contracts would interfere with the citizens' right to freedom of contract, protected by the due-process clause.

Paras, C.J., Feria, Pablo, Bengzon, Padilla, Tuason, Montemayor, Jugo, and Bautista Angelo, JJ., concurred.