GSISEA & GSISSU vs. Alvendia

A petition for declaratory relief does not lie when the controversy has already been settled by the Supreme Court, when the statute whose construction is sought has already been breached, or when a co‑pending case before an agency with exclusive jurisdiction involves the same issues and acts. In such circumstances, the declaratory relief action is either moot or improperly seeks an advisory opinion, and the trial court lacks jurisdiction to entertain the petition or issue provisional injunctive relief.

The Government Service Insurance System (GSIS) and the unions representing its employees — GSIS Employees’ Association (GSISEA) and GSIS Supervisors’ Union (GSISSU) — were embroiled in a labor dispute over the terms and conditions of employment. After union members declared a strike on May 18, 1959 (and returned four days later), GSIS filed a petition for declaratory relief in the Court of First Instance of Manila on May 29, 1959, seeking a judicial declaration on three questions: (1) whether GSIS exercises governmental or proprietary functions; (2) whether its employees, governed by the Civil Service Law, could compel it to enter a collective bargaining agreement; and (3) whether those employees could lawfully strike. The petition alleged that a judicial declaration was necessary because of the pending labor dispute.

• Nature of the Action: GSIS filed a petition for declaratory relief in the CFI of Manila, naming its employees’ unions (GSISEA and GSISSU) as respondents, seeking a judicial resolution on whether GSIS exercises governmental or proprietary functions, whether its employees can compel collective bargaining, and whether they may lawfully strike. The petition was filed eleven days after the first strike and alleged that a declaration was necessary due to the ongoing labor dispute.

• Motions and Subsequent Events: The unions moved to dismiss for lack of cause of action, lack of jurisdiction, and impropriety. During the pendency of the motion, a second strike occurred on June 23, 1959, prompting GSIS to amend its petition to include a prayer for a preliminary injunction against the strikers. Meanwhile, the unions had filed an unfair labor practice complaint with the Court of Industrial Relations; a formal complaint was lodged by a CIR prosecutor on July 1, 1959, covering the same acts. GSIS’s answer in the CIR admitted the strikes but raised the affirmative defenses that it exercised governmental functions and that the strikes were illegal under Section 11 of Republic Act No. 875.

• CFI Orders: On July 2, 1959, the unions filed a motion and manifestation in the CFI, explicitly advising the court of the pending CIR cases, including CIR Case No. 896-V which had been pending long before the declaratory relief petition was filed. Despite this, respondent Judge Alvendia denied the motion to dismiss and granted the writ of preliminary injunction on July 7, 1959.

• Supreme Court Intervention: The unions thereupon filed the original action for certiorari and prohibition before the Supreme Court, alleging that the CFI judge acted in excess of jurisdiction and with grave abuse of discretion. The Supreme Court granted due course and issued a writ of preliminary injunction upon the petitioners’ posting of a P200.00 bond.

• Res Judicata / Settled Question: Petitioners argued that the declaratory relief petition stated no cause of action because the questions presented had already been conclusively settled by the Supreme Court in prior decisions, particularly GSIS vs. Castillo, where the GSIS was a party, rendering the petition an improper request for an advisory opinion.

• Lack of Jurisdiction: Petitioners maintained that the CFI had no jurisdiction over the subject matter because an unfair labor practice case involving the same parties and the same acts was pending before the Court of Industrial Relations, which has exclusive jurisdiction over such disputes.

• Impropriety of Declaratory Relief: Petitioners contended that declaratory relief was unnecessary and improper because the statute whose construction was sought had already been breached by the strikes, and the petition was essentially an attempt to prejudge the pending CIR case and multiply suits.

• Nature of GSIS Functions: Respondent GSIS maintained that it exercises governmental functions, that its employees are governed by the Civil Service Law, and that they therefore cannot compel GSIS to enter into a collective bargaining agreement or lawfully declare a strike.

• Necessity of Judicial Declaration: GSIS argued that a judicial declaration on the identified questions was necessary to resolve the existing labor dispute between it and the respondent unions.

• Propriety of Injunction: GSIS contended that the preliminary injunction was warranted to restrain illegal acts of the striking union members, which were allegedly in violation of Republic Act No. 875.

• Propriety of Declaratory Relief — Settled Issue: Whether the petition for declaratory relief stated a cause of action despite the Supreme Court having already determined that GSIS performs proprietary functions in prior, final decisions in which GSIS itself was a party.

• Propriety of Declaratory Relief — Breach of Statute: Whether a declaratory relief petition could properly be filed after the strike — the act whose legality was in question — had already occurred, thus seeking construction of a statute after its alleged breach.

• Jurisdiction Over the Subject Matter: Whether the CFI had jurisdiction to entertain the declaratory relief petition and issue an injunction when an unfair labor practice case involving the same parties and acts was pending before the Court of Industrial Relations, which possessed exclusive jurisdiction under Republic Act No. 875.

• Propriety of Declaratory Relief — Settled Issue: The petition did not state a valid cause for declaratory relief because the principal question — whether GSIS exercises governmental or proprietary functions — had already been definitively resolved by the Supreme Court. In GSIS vs. Castillo, the Court held that the insurance business of GSIS is “not inherently or exclusively a governmental function; it is on the contrary, in essence and practice, of a private nature and interest.” This was reiterated in Boy Scouts of the Philippines vs. Araos, emphasizing that GSIS operates for profit and benefit of its insured. With the issue already settled by the highest court in a case to which GSIS was a party, the declaratory relief petition presented no actual, justiciable controversy and essentially sought an improper advisory opinion.

• Propriety of Declaratory Relief — Breach of Statute: The petition was filed after union members had already gone on strike — the very act whose legality was in question. Under Section 2, Rule 66 of the Rules of Court, an action for declaratory relief will not prosper if filed after a contract or statute has already been breached. To rule otherwise would be to prejudge a pending case and encourage multiplicity of suits, which is prohibited.

• Jurisdiction Over the Subject Matter: An unfair labor practice case had been filed with the Court of Industrial Relations, involving the same acts of the unions that GSIS sought to enjoin in its declaratory relief petition. The existence of this pending CIR case, over which the Industrial Court had exclusive jurisdiction under Republic Act No. 875, deprived the CFI of jurisdiction to entertain the declaratory relief action and to issue the ancillary writ of preliminary injunction. The Supreme Court’s settled doctrine, as established in a line of decisions from PAFLU vs. Tan to Consolidated Labor Association of the Phil. vs. Caluag, is that courts of first instance have no jurisdiction over matters inextricably interwoven with unfair labor practice cases properly cognizable by the Industrial Court.

• Declaratory Relief — Improper When Issue Settled, Statute Breached, or Exclusive Jurisdiction Elsewhere — An action for declaratory relief under Rule 66 does not lie (a) where the issue has been conclusively settled by the Supreme Court and there is no actual, justiciable controversy; (b) where the statute or contract whose construction is sought has already been breached prior to the filing of the petition; and (c) where there is a pending case before another court or agency with exclusive jurisdiction over the same parties and subject matter. In this case, all three grounds independently barred the petition.

• Nature of GSIS Functions — Proprietary — The Government Service Insurance System, in operating its insurance business, performs functions that are not inherently or exclusively governmental but are essentially proprietary and of a private nature. GSIS invests funds derived from members’ contributions for profit, and insurance is “generally considered and held by the courts to be a business.” Consequently, its employees are not prohibited from organizing, engaging in collective bargaining, or striking, subject to the jurisdiction of the Court of Industrial Relations over unfair labor practice disputes.

• “If declaratory relief is not necessary or not proper where there is already an action pending in another court involving the same issue, or where the plaintiff has another more effective relief … with more reason should it be improper or unnecessary when, as in the instant case, it appears to be a moot case, since it seeks to get a judgment on a pretended controversy, when in reality there is none. Indeed, in its true light, the present petition for declaratory relief seems to be no more than a request for an advisory opinion to which courts in this and other jurisdiction have cast a definite aversion.” — The Court distinguishes a valid declaratory relief action from a moot or advisory proceeding, underscoring the requirement of a genuine, live controversy.

• “We need only add, to show that the petitioner is in error, that its business of insurance is not inherently or exclusively a governmental function; it is on the contrary, in essence and practice, of a private nature and interest.” (quoting GSIS vs. Castillo, 98 Phil. 876) — This excerpt firmly categorizes GSIS’s insurance operations as proprietary, forming the basis for applying ordinary labor law principles to its employees.

• GSIS vs. Castillo, et al., 98 Phil. 876 — Controlling precedent. The Supreme Court relied on this prior case involving the same parties to hold that GSIS performs proprietary functions, thereby foreclosing the need for a new declaratory action on the same question.

• Boy Scouts of the Phil. vs. Araos, 102 Phil. 1080 — Followed. Reiterated and expanded the rationale that GSIS operates a business for profit, not merely a governmental function.

• Samson vs. Andal, 89 Phil. 627 — Applied. Stood for the rule that a complaint for declaratory relief will not prosper if filed after the statute has been breached.

• De Borja vs. Villadolid, 85 Phil. 36 — Applied. Cited to support the principle that entertaining declaratory relief under the circumstances would prejudge a pending case and encourage multiplicity of suits.

• PAFLU vs. Tan, 99 Phil. 864, and companion cases — Applied. Established that the Court of Industrial Relations has exclusive jurisdiction over unfair labor practice cases, and courts of first instance cannot exercise jurisdiction over matters intertwined with such cases.

• Section 2, Rule 66, Rules of Court (now Rule 63, 2019 Rules of Civil Procedure) — The Court applied the rule that an action for declaratory relief does not lie after a contract or statute has already been breached. The petition was filed after the strike occurred, making the remedy unavailable.

• Republic Act No. 875, Section 4(a)(1) and (4) — Identified as the basis for the unfair labor practice charges filed with the Court of Industrial Relations, which gave that court exclusive jurisdiction over the dispute.

• Republic Act No. 875, Section 11 — Cited by GSIS as the provision prohibiting strikes by government employees, though the Court’s resolution rendered it unnecessary to definitively rule on its application to GSIS employees given the jurisdictional defect.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, and Concepcion, JJ., concurred. No separate concurring or dissenting opinions were noted.