Case no. 1
The People of the Philippine Islands vs Julio Pomar
FACTS:
1. Julio Pomar, being the manager and person in charge of La Flor de
la Isabela, a tobacco factory pertaining to La Campania General de
Tabacos de Filipinas.
2. Under his term, a woman by the name of Macaria Fajardo whom
he granted a vacation leave by reason of pregnancy however Julio
Pomar refused to pay the woman to which she was entitled regular
wages.
3. The defendant demurred the complaint, alleging that the facts
stated therein did not constitute an offense. Furthermore, the
defendant contented that the provisions of said Act no. 3071,
which was the basis of the complaint, was illegal, unconstitutional
and void.
4. Sec 13 of Act no 3071 provides:
Every person, firm, or corporation owning or managing a factory,
shop or place of labor of any description shall be obliged to grant
to any woman employed by it as laborer who may be pregnant,
thirty days vacation with pay before and another thirty days after
confinement: Provided, that the employer shall not discharge such
laborer without just cause, under the penalty of being required to
pay to her wages equivalent to the total of two months counted
from the day of her discharge.
5. Said act was enacted by the Legislature of the Philippine Islands in
the exercise of its supposed police power, with the praiseworthy
purpose of safeguarding the health of pregnant women laborers in
“factory, shop or place of labor of any description, and of insuring
to them to a certain extent, reasonable support for one month
before and one month after their delivery.
ISSUE: W/N the said act has been adopted in the reasonable and lawful
exercise of police power of the state
RULING:
No, the said act is unreasonable and unlawful exercise of police power.
The court ruled that the statute in question, is exactly analogous to the
“Minimum Wage Act” referred to above. In Section 13, it will be seen that
no person, firm, or corporation, owning or managing a factory, shop or
place of labor of any description, can make a contract with a woman
without incurring the obligation, whatever the contract of employment
might be, unless he also promise to pay to such woman employed as a
laborer, who may become pregnant, her wages for thirty days before and
thirty days after confinement.
In other words as the Court explained, said section creates a term or
condition in every contract made by every person, firm, or corporation with
any woman who may, during the course of her employment, become
pregnant and a failure to include in said contract the terms fixed to a fine
and imprisonment. Clearly therefore the law has deprived, every person,
firm, or corporation owning or managing a factory, shop or place of labor of
any description within the Philippine Islands, of his right to enter into
contracts of employment upon such terms as he and the employee may
agree. The law creates a term in every such contract, without the consent of
the parties. Such persons are, therefore, deprived of their liberty to contract.
The constitution of the Philippine Islands guarantees to every citizen his
liberty and one of his liberties is the liberty to contract.
It is believed and confidently asserted that no case can be found, in civilized
society and well-organized governments, where individuals have been
deprived of their property, under the police power of the state, without
compensation, except in cases where the property in question was used for
the purpose of violating some legally adopted, or constitutes a nuisance.
Among such cases may be mentioned: Apparatus used in counterfeiting the
money of the state; firearms illegally possessed; opium possessed in
violation of law; apparatus used for gambling in violation of law; buildings
and property used for the purpose of violating laws prohibiting the
manufacture and sale of intoxicating liquors; and all cases in which the
property itself has become a nuisance and dangerous and detrimental to the
public health, morals and general welfare of the state. In all of such cases,
and in many more which might be cited, the destruction of the property is
permitted in the exercise of the police power of the state. But it must first be
established that such property was used as the instrument for the violation
of a valid existing law.
Without further attempting to define what are the peculiar subjects or limits
of the police power, it may safely be affirmed, that every law for the
restraint and punishment of crimes, for the preservation of the public peace,
health, and morals, must come within this category. But the state, when
providing by legislation for the protection of the public health, the public
morals, or the public safety, is subject to and is controlled by the paramount
authority of the constitution of the state, and will not be permitted to violate
rights secured or guaranteed by that instrument or interfere with the
execution of the powers and rights guaranteed to the people under their law
— the constitution. (Mugler vs. Kansas, 123 U. S., 623.)
liberty of the individual, protected by the "due process of law" clause of the
constitution.
The rule in this jurisdiction is, that the contracting parties may establish any
agreements, terms, and conditions they may deem advisable, provided they
are not contrary to law, morals or public policy. (Art. 1255, Civil Code.)
For all of the foregoing reasons, we are fully persuaded, under the facts and
the law, that the provisions of section 13, of Act No. 3071 of the Philippine
Legislature, are unconstitutional and void, in that they violate and are
contrary to the provisions of the first paragraph of section 3 of the Act of
Congress of the United States of August 29, 1916.

The police power of the state is a growing and expanding power. As

civilization develops and public conscience becomes awakened, the police
power may be extended, as has been demonstrated in the growth of public
sentiment with reference to the manufacture and sale of intoxicating liquors.
But that power cannot grow faster than the fundamental law of the state, nor
transcend or violate the express inhibition of the people's law — the
constitution. If the people desire to have the police power extended and
applied to conditions and things prohibited by the organic law, they must
first amend that law.

It will also be noted from an examination of said section 13, that it takes no
account of contracts for the employment of women by the day nor by the
piece. The law is equally applicable to each case. It will hardly be
contended that the person, firm or corporation owning or managing a
factory, shop or place of labor, who employs women by the day or by the
piece, could be compelled under the law to pay for sixty days during which
no services were rendered.

It has been decided in a long line of decisions of the Supreme Court of the
United States, that the right to contract about one's affairs is a part of the
Case no. 3
Agricultural Credit and Cooperative Financing Administration (ACCFA)
vs. ASA, AWA and the CIR (Nov 29, 1969)
FACTS:
1. ACCFA was a government agency. Its administrative machinery
was reorganized and its name was changed to Agricultural Credit
Administration (ACA) under the Land Reform Code.
2. ASA AND AWA are referred to as the Unions, labor organizations
composed of the supervisors and the rank and file employees in
ACCFA (now ACA).
3. In 1962, the unions together with its mother union CUGCO filed a
complaint with the Court of Industrial Relations against ACCFA
for having allegedly committed acts of unfair labor practice.
4. Accfa on the other hand denied the allegations and stated that CIR
has no jurisdictions over the case, illegality of the contract and
expiration of said contract.
5. CIR decided in favor of the unions which prompted ACCFA to file
a motion for reconsideration.
6. During the pendency of the case, the President of the Philippines
signed into law the Agricultural Land Reform Code which required
the reorganization of the administrative machinery of the ACCFA
and changed its name to ACA.
7. In 1964, ASA AND AWA filed a petition for certification election
with CIR praying that they be certified as the exclusive bargaining
agents for the supervisors and rank and file employees in ACA.
8. The trial court allowed such petition.
9. Trial court certified ASA AND AWA as the sole exclusive
bargaining representatives of the rank and file employees and
supervisors.
10. ACA filed a petition to stay the order of CIR.
11. ACA now challenges the jurisdiction of CIR to entertain the
petition of the Unions for certification on the ground that it (ACA)
is engaged in governmental functions.
ISSUE: W/N ACA is a governmental entity thus certification needed by
ACA and AWA cannot prosper
RULING: Yes ACA is a governmental entity
Court held that ACA was reorganized and the implementation of the land
reform program of the government according to RA 4833 is most certainly a
governmental not a proprietary action function.
One of the many reasons that the court considered is Senator Tolentino’s
exposition on the subject: Senator Tolentino: . . . . "The ACA is not going to
be a profit making institution. It is supposed to be a public service of the
government to the lessees and farmer-owners of the lands that may be
bought after expropriation from owners. It is the government here that is
the lender. The government should not exact a higher interest than what we
are telling a private landowner now in his relation to his tenants if we give
to their farmers a higher rate of interest . . . ." (pp. 17 & 18, Senate Journal
No. 16, July 3, 1963)
That it is the reason why we are providing for the expansion of the ACCFA
and the weeding out of the cooperative activity of the ACCFA and turning
this over to the Agricultural Productivity Commission, so that the
Agricultural Credit Administration will concentrate entirely on the
facilitation of credit on the barrio level with the massive support of 150
million provided by the government. . . . (pp. 4 & 5 of Senate Journal No. 7,
July 3, 1963)
. . . But by releasing them from this situation, we feel that we are putting
them in a much better condition than that in which they are found by
providing them with a business-like way of obtaining credit, not depending
on a paternalistic system but one which is business-like — that is to say, a
government office, which on the barrio level will provide them that credit
directly . . . . (p. 40, Senate Journal No. 7, July 3, 1963) (emphasis
supplied).
The considerations set forth above militate quite strongly against the
recognition of collective bargaining powers in the respondent Unions within
the context of Republic Act No. 875, and hence against the grant of their
basic petition for certification election as proper bargaining units. The ACA
is a government office or agency engaged in governmental, not proprietary
functions. These functions may not be strictly what President Wilson
described as "constituent" (as distinguished from "ministrant"), 4 such as
those relating to the maintenance of peace and the prevention of crime,
those regulating property and property rights, those relating to the
With the reorganization of the ACCFA and its conversion into the ACA
under the Land Reform Code and in view of our ruling as to the
governmental character of the functions of the ACA, the decision of the
respondent Court dated March 25, 1963, and the resolution en banc
affirming it, in the unfair labor practice case filed by the ACCFA, which
decision is the subject of the present review in G. R. No. L-21484, has
become moot and academic, particularly insofar as the order to bargain
collectively with the respondent Unions is concerned.
Administration of justice and the determination of political duties of
citizens, and those relating to national defense and foreign relations. Under
this traditional classification, such constituent functions are exercised by the
State as attributes of sovereignty, and not merely to promote the welfare,
progress and prosperity of the people — these letter functions being
ministrant he exercise of which is optional on the part of the government.
forces. Here of course this development was envisioned, indeed adopted as
a national policy, by the Constitution itself in its declaration of principle
concerning the promotion of social justice.
It was in furtherance of such policy that the Land Reform Code was enacted
and the various agencies, the ACA among them, established to carry out its
purposes. There can be no dispute as to the fact that the land reform
program contemplated in the said Code is beyond the capabilities of any
private enterprise to translate into reality. It is a purely governmental
function, no less than, say, the establishment and maintenance of public
schools and public hospitals. And when, aside from the governmental
objectives of the ACA, geared as they are to the implementation of the land
reform program of the State, the law itself declares that the ACA is a
government office, with the formulation of policies, plans and programs
vested no longer in a Board of Governors, as in the case of the ACCFA, but
in the National Land Reform Council, itself a government instrumentality;
and that its personnel are subject to Civil Service laws and to rules of
standardization with respect to positions and salaries, any vestige of doubt
as to the governmental character of its functions disappears
SEPARATE OPINON OF JUSTICE FERNANDO J.

The growing complexities of modern society, however, have rendered this

traditional classification of the functions of government quite unrealistic,
not to say obsolete. The areas which used to be left to private enterprise and
initiative and which the government was called upon to enter optionally,
and only "because it was better equipped to administer for the public
welfare than is any private individual or group of individuals," 5 continue to
lose their well-defined boundaries and to be absorbed within activities that
the government must undertake in its sovereign capacity if it is to meet the
increasing social challenges of the times. Here as almost everywhere else
the tendency is undoubtedly towards a greater socialization of economic
Case no. 4
Bengzon vs Drilon
FACTS:
1. the petitioners in this case are retired Justices of the Supreme Court
and Court of appeals who are currently receiving monthly pensions
under RA 910 as amended by RA 1797.
2. RA 910 was enacted to provide the retirement pensions of Justices
of the Supreme Court and Court of Appeals who have rendered
atleast 20 years of service either in the Judiciary or in any other
branch of the government or in both. Under this act, the retired
justice shall receive the residue of his natural life the salara which
he was receiving at the time of his retirement or resignation.
3. RA 910 was amended by RA 1797which provides that:
4. Sec. 3-A. In case the salary of Justices of the Supreme Court or of
the Court of Appeals is increased or decreased, such increased or
decreased salary shall, for purposes of this Act, be deemed to be
the salary or the retirement pension which a Justice who as of June
twelve, nineteen hundred fifty-four had ceased to be such to accept
another position in the Government or who retired was receiving at
the time of his cessation in office. Provided, that any benefits that
have already accrued prior to such increase or decrease shall not be
affected thereby”
5. Identical retirement benefits were also given to the members of the
Constitutional Commissions under Republic Act No. 1568, as
amended by Republic Act No. 3595. On November 12, 1974, on
the occasion of the Armed Forces Loyalty Day, President Marcos
signed Presidential Decree 578 which extended similar retirement
benefits to the members of the Armed Forces giving them also the
automatic readjustment features of Republic Act No. 1797 and
Republic Act No. 3595.
6. However President Marcos issued Presidential Decree 644 on
January 25, 1975 repealing Section 3-A of Republic Act No. 1797
and Republic Act No. 3595 (amending Republic Act No. 1568 and
Presidential Decree No. 578) which authorized the adjustment of
the pension of the retired Justices of the Supreme Court, Court of
Appeals, Chairman and members of the Constitutional
Commissions and the officers and enlisted members of the Armed
Forces to the prevailing rates of salaries.
7. Realizing the unfairness of the discrimination against members of
the Judiciary and Constitutional Commissions, Congress approved
in 1990 a bill for reenactment of the repealed provisions of RA
1797.
8. President Aquino, however vetoed House Bill No. 16297 on July
11, 1990 on the ground that according to her “it would erode the
very foundation of the Government’s collective effort to adhere
faithfully to and enforce strictly the policy on standardization of
compensation as articulated in Republic Act No. 6758 known as
Compensation and Position Classification Act of 1989.” She
further said that “the Government should not grant distinct
privileges to select group of officials whose retirement benefits
under existing laws already enjoy preferential treatment over those
of the vast majority of our civil service servants.”
ISSUE: W/N the veto of the President deprives the retired Justices of their
rights to pensions due to them
RULING:
Yes!
Court ruled that it cannot be denied that the retired Justices have a vested
right to the accrued pensions due them pursuant to RA 1797.
The right to a public pension is of statutory origin and statutes dealing
with pensions have been enacted by practically all the states in the United
States (State ex rel. Murray v. Riley, 44 Del. 505, 62 A2d 236), and
presumably in most countries of the world. Statutory provisions for the
support of Judges or Justices on retirement are founded on services rendered
to the state. Where a judge has complied with the statutory prerequisite for
retirement with pay, his right to retire and draw salary becomes vested and
may not thereafter, be revoked or impaired. (Gay v. Whitehurst 44 So ad
430)
Thus, in the Philippines, a number of retirement laws have been
enacted, the purpose of which is to entice competent men and women to
enter the government service and to permit them to retire therefrom with
relative security, not only those who have retained their vigor but, more so,
those who have been incapacitated by illness or accident. (In re: Amount of
the Monthly Pension of Judges and Justices Starting From the Sixth Year of
their Retirement and After the Expiration of the Initial Five-year Period of
Retirement, (190 SCRA 315 [1990])
As early as 1953, Rep. Act No. 910 was enacted to grant pensions to
retired Justices of the Supreme Court and Court of Appeals. This was
amended by RA 1797 which provided for an automatic adjustment of the
pension rates. Through the years, laws were enacted and jurisprudence
expounded to afford retirees better benefits. P.D. No. 1438, for one, was
promulgated on June 10, 1978 amending RA 910 providing that the lump
sum of 5 years gratuity to which the retired Justices of the Supreme Court
and Court of Appeals were entitled was to be computed on the basis of the
highest monthly aggregate of transportation, living and representation
allowances each Justice was receiving on the date of his resignation. The
Supreme Court in a resolution dated October 4, 1990, stated that this law on
gratuities covers the monthly pensions of retired Judges and Justices which
should include the highest monthly aggregate of transportation, living and
representation allowances the retiree was receiving on the date of
retirement. (In Re: Amount of the Monthly Pension of Judges and
Justices, supra)
The Court ruled that, the rationale behind the veto which implies that
Justices and Constitutional officers are unduly favored is, again, a
misimpression.
Immediately, we can state that retired Armed Forces officers
and enlisted men number in the tens of thousands while retired Justices are
so few they can be immediately identified. Justices retire at age 70 while
military men retire at a much younger age—some retired Generals left the
military at age 50 or earlier. Yet, the benefits in Rep. Act No. 1797 are
made to apply equally to both groups. Any ideas arising from an alleged
violation of the equal protection clause should first be directed to retirees in
the military or civil service where the reason for the retirement provision is
not based on indubitable and constitutionally sanctioned grounds, not to a
handful of retired Justices whose retirement pensions are founded on
constitutional reasons.
The provisions regarding retirement pensions of Justices arise from the
package of protections given by the Constitution to guarantee and preserve
the independence of the Judiciary.
The Constitution expressly vests the power of judicial review in this
Court. Any institution given the power to declare, in proper cases, that acts
of both the President and Congress are unconstitutional needs a high degree
of independence in the exercise of its functions. Our jurisdiction may not be
reduced by Congress. Neither may it be increased without our advice and
concurrence. Justices may not be removed until they reach age 70 except
through impeachment. All courts and court personnel are under the
administrative supervision of the Supreme Court.
Retirement laws should be interpreted liberally in favor of the retiree
because their intention is to provide for his sustenance, and hopefully even
comfort, when he no longer has the stamina to continue earning his
livelihood. After devoting the best years of his life to the public service, he
deserves the appreciation of a grateful government as best concretely
expressed in a generous retirement gratuity commensurate with the value
and length of his services. That generosity is the least he should expect now
that his work is done and his youth is gone. Even as he feels the weariness
in his bones and glimpses the approach of the lengthening shadows, he
should be able to luxuriate in the thought that he did his task well, and was
rewarded for it.” For as long as these retired Justices are entitled under laws
which continue to be effective, the government can not deprive them of
their vested right to the payment of their pensions.