[Nos. L-14785 and L-14923.

November 29, 1960]

[With resolution of February 27, 1961]

FELIX ABE, ET AL., plaintiffs and appellees vs. FOSTER

WHEELER CORPORATION and CALTEX (PHIL.) INC.,
defendants and appellants. FELIX ABE, ET AL., plaintiffs
and appellants, vs. FOSTER WHEELER CORPORATION
and CALTEX (PHIL.) INC., defendants and appellees.

1. OBLIGATIONS AND CONTRACTS; EXTENT OF

FREEDOM OF CONTRACT.—The freedom of contract
under our system of government is not meant to be
absolute. It is understood to be subject to reasonable
legislative regulations aimed at the promotion of public
health, moral, safety and welfare. (St. Louis, etc. R. Co. vs.
Paul, 173 US 404, 43 L ed. 746; 19 Sup Ct Rep 419, and
others, cited in II Cooley's Constitutional Limitations, p.
1236.)

2. EMPLOYER AND EMPLOYEE; EMPLOYMENT

WITHOUT FIXED PERIOD; RlGHT TO NOTICE
BEFORE TERMINATION OF EMPLOYMENT T NOT
SUBSTANTIVE.—Republic Act 1051 prescribes the
manner of terminating employment without a fixed or
definite period by requiring the employer or employee,
before terminating such employment, to notify the other
party of such fact. Evidently, the purpose of the regulation
is to give the other party opportunity to find replacement
or substitute, in the case of the employer, and other place
of employment or source of livelihood, in the case of the
employee. The right to be thus notified can hardlly be
considered substantive, nor does the provision requiring
the employer to give the employee dismissed without such
advance notification, the equivalent salary of the latter for
one month, bestow upon said employee any substan

199

VOL. 110, NOVEMBER 29, 1960 199

Abe vs. Foster Wheeler Corporation

 tive right or interest immediately upon execution of the
contract of employment.

3. COMPLAINTS; WHEN DEEMED SUFFICIENT;

RECOURSE WHEN ALLEGATIONS ARE VAGUE OR
INDEFINITE.—A complaint is sufficient if it contains
sufficient notice of the cause of action even if the
allegations may be vague or indefinite or in the form of
conclusions in which event, the proper recourse would be,
not a motion to dismiss, but a motion for bill of
particulars. (I Moran, Comments on the Rules of Court,
1957 Ed., p. 111.)

4. PLEADING AND PRACTICE; MOTION FOR

EXTENSION OF TIME TO FILE RECORD ON APPEAL
AND PAY APPEAL BOND; DUTY OF COUNSEL.—The
granting or denial of a motion for extension of the period
within which to file a record on appeal and to pay the
appeal bond is discretionary upon the court. The counsel
should not presume that the motion will be granted, but
should take upon himself the duty to inquire, before the
original period has elapsed what action the court has
taken on his motion.

APPEAL from a judgment of the Court of First Instance of

Manila. Gatmaitan, J.
The facts are stated in the opinion of the Court.
          Ross, Selph & Carrascoso for appellant Foster
Wheeler Corp.
     Salvador H. Laurel for appellant Caltex (Phil.) Inc.
     Nicetas A. Suanes for appellees F. Abe, et al.

BARRERA, J.:

In a complaint, twice amended and supplemented, filed

against Foster Wheeler Corporation and Caltex (Phil.) Inc.,
in the Municipal Court of Manila (Civil Case No. 40789),
Felix Abe and 393 others (pp. 97-111; 118-120, Record on
Appeal) claiming to have been employed by the named
defendants on various occasions from 1952 to 1954 in the
"Batangas Refinery Construction Project" at Danglaya,
Bauan, Batangas, and discharged from employment in
1954 without notice, each demanded recovery of separation
pay, value of sick and vacation leaves, and overtime
compensation, allegedly due them, computed at
200
200 PHILIPPINE REPORTS ANNOTATED
Abe vs. Foster Wheeler Corporation

the rate ranging from P4.00 to P16.80 daily, with interest

thereon.
Defendant Foster Wheeler Corporation, in its answer,
alleged among others, that the action was improper for a
class suit, the claim of each plaintiff being separate and
distinct from the others; that under their written contract
of employment, plaintiffs could be separated from the
service without notice or separation pay; that plaintiffs
were f ully compensated for any overtime service rendered;
and that it was not obliged, under the law, to grant
vacation and sick leave privileges to its employees. As
counterclaim, defendant demanded from each of them the
sum of at least P100.00 for attorney's fees and costs. For its
part, Caltex (Phil.) Inc., disclaimed having. anything to do
with the employment of any worker in said project,
although it also advanced the same defenses as those set
up by its co-defendant.
Thereafter, defendants moved for the dismissal of the
complaint for lack of cause of action, it being claimed that
plaintiffs were employed after Article 302 of the Code of
Commerce on "mesada" was repealed, and they were1
separated from the service before Republic Act 1052,
reviving the said privilege, went into effect. It was thus
contended that for the duration of plaintiffs' employment,
there was no law imposing on the employer the duty to give
1-month .advance notice or payment of the separation pay
before terminating the services of an employee. Defendants
also cited the opinion of the Chief of the Wage
Administration Service, dated June 21, 1954, issued in
answer to their query, to the effect that Republic Act 1052
is not applicable to construction workers as the ones
involved herein. These motions were opposed by plaintiffs.
Allegedly for failure to prove their respective allegations,
the Municipal Court dismissed plaintiffs' complaint as well
as defendants' counterclaim. Plaintiffs appealed

_______________

1 Approved on June 12, 1954.

201

VOL. 110, NOVEMBER 29, 1960 201

Abe vs. Foster Wheeler Corporation
to the Court of First Instance of Manila (Civil Case No.
34601), wherein both parties reiterated their respective
allegations presented in the inferior court.
In its decision of September 11, 1958, copy of which was
received by counsel for plaintiffs on September 15, 1958,
the court said.

"* * * What the Court has found very difficult to resolve is the
debate on the termination pay. All the contracts were executed
prior to June 12, 1954, when Republic Act 1052 was approved;
and by decision of the Supreme Court in the case of Lara vs. Del
Rosario, 94 Phil., 778; 50 Off. Gaz., 1975, which was promulgated
less than two months before the approval of that law, it was held
that the right of employees to the Mesáda provided by Article 302
of the Code of Commerce had been repealed by the New Civil
Code; and as the New Civil Code became effective on August 30,
1950, technically from August 30, 1950, up to June 12, 1954, there
was no law on mesada existing in the Philippines; * * *. It is
contended for the defendants that since all the contracts entered
into with plaintiffs were executed before June 12, 1954, when
Republic Act 1052 became effective, said Act cannot be given such
effect as to make it applicable even to contracts already existing
upon its approval as were the contracts here for if that were the
case, the law would become unconstitutional under the rule
prohibiting impairment of contracts. The trouble, however, is that
the law, Republic Act 1052, makes it clearly effective beginning
June 12, 1954; that was an indication of the Legislative will that
it was to be made effective even as to contracts executed before
but not yet terminated at the time of its approval; and the
presumption is always in favor of constitutionality."

And holding that plaintiffs' employment was 2

not for a
definite period, the court declared them entitled to
separation pay on the basis of their daily salaries,
computed at 26 working days a month, plus interest
thereon from the date of the filing of the complaint, and
costs. Defendants Foster Wheeler Corporation and Caltex
(Phil.) Inc. perfected an appeal to this Court, docketed as
G. R.

________________

2 With the exception of the employees, numbering 20, who, the Court
found, have already been given their corresponding 1-month separation
pay.

202

202 PHILIPPINE REPORTS ANNOTATED

 Abe vs. Foster Wheeler Corporation

No. L-14785. On the other hand, the twenty (20) plaintiffs

excluded from the decision for having, according to the trial
judge, been already paid their "mesada", likewise,
interposed an appeal docketed as G. R. No. L-14923.
Prior to August 30, 1950 ³ the workers' right to
separation pay or "mesada" was secured by Article 302 of
the Code of Commerce. However, in a decision promulgated
on April 20, 1954, this Court declared:

"As to the month's pay (mesada) under Article 302 of the Code of
Commerce, Article 2270 of the new Civil Code (Republic Act 386)
appears to have repealed said Code of Commerce governing
Agency. This repeal took place on August 30, 1950, when the new
Civil Code went into effect, that is, one year after its publication
in the Official Gazette."
4
As a consequence thereof, the legislature enacted Republic
Act 1052 which, in full, reads:
"AN ACT TO PROVIDE FOR THE MANNER OF
TERMINATING EMPLOYMENT WITHOUT A
DEFINITE PERIOD IN A COMMERCIAL,
INDUSTRIAL, OR AGRICULTURAL
ESTABLISHMENT OR ENTERPRISE.

     *      *      *      *      *      *      *

"SECTION 1. In cases of employment, without a definite
period, in a commercial, industrial or agricultural establishment
or enterprise, neither the employer nor the employee shall
terminate the employment without serving notice on the other at
least one month in advance.
"The employee, upon whom no such notice was served, shall be
entitled to one month's compensation from the date of termination
of his employment.
"SEC. 2. Any contract or agreement contrary to the provisions
of section one of this Act shall be null and void.
"SEC. 3. This Act shall take effect upon its approval.
"Approved, June 12, 1954."

________________

3 Date of effectivity of the New Civil Code.

4 In the language of the sponsor of Senate Bill No. 17, series of 1954,
that ultimately became Republic Act 1052, the same was proposed to "fill
the void left by the enforcement of the aforesaid (Civil) Code."

203
 VOL. 110, NOVEMBER 29, 1960 203
Abe vs. Foster Wheeler Corporation

There is no controversy as to the fact that herein appellees

were employed after the repeal of Article 302 of the Code of
Commerce and before the effectivity of Republic Act 1052.
But, it is not also denied that they were separated from the
service (with the exception of a few) after said Act went
into operation. Appellants, however, in contesting the
decision of the lower court ordering them to give the
employees separation pay, contend that as the contracts of
employment were entered into at a time when there was no
law granting the workers said right, the application as to
them of the subsequent enactment restoring the same right
constitutes an impairment of their contractual obligations.
We incline to the contrary view.
The freedom of contract, under our system of
government, is not meant to be absolute. 5 The same is
understood to be subject to reasonable legislative
regulation aimed at the promotion of public health, moral,
safety and welfare 6. In other words, the constitutional
guaranty of non-impairment of obligations of contract is
limited by the exercise of the police power of the State, in
the interest of public health, safety, moral and general
welfare.
By its very nature, Republic Act 1052 is a measure
intended to provide protection to the workingmen, and, in a
way, the employers as well, specifically in cases of
employments with indefinite period or duration, by
requiring the employer or employee, as the case may be,
before terminating the employment, to give unto the other
notice thereof 30 days in advance, non-observance of which
by the employer, subjects him to payment (to the employee
concerned) of a sum equivalent to the latter's compensation
for one month. The logical question that may be

_______________

5 " "Art. 1700. The relations between capital and labor are not merely
contractual. They are so impressed with public interest that labor
contracts must yield to the common good. * * *." (New Civil Code)
6 St. etc. R. Co. vs. Paul, 173 US 404, 43 L ed 746; 19 Sup Ct Rep 419,
and others, cited in II Cooley's Constitutional Limitations, p. 1236.

204

204 PHILIPPINE REPORTS ANNOTATED

Abe vs. Foster Wheeler Corporation
raised concerns the nature of Republic Act 1052, i.e.,
whether it is a regulatory measure, not a substantive law
so that its enactment may properly be considered a valid
exercise of the police power of the State. The answer is in
the affirmative.
It may be observed that the Act prescribes the manner
of terminating employment without a fixed or definite
period, by requiring the employer or employee, before
terminating such employment, to notify the other party of
such fact. Evidently, the purpose of the regulation is to give
the other party opportunity to find replacement or
substitute, in the case of the employer, and other place of
employment or source of livelihood, in the case of the
employee. The right to be thus notified can hardly- be
considered substantive, nor does the provision requiring
the employer to give the employee, dismissed without such
advance notification, the equivalent salary of the latter for
1 month, bestow upon said employee any substantive right
or interest immediately upon execution of the contract of
employment. Actually, the enactment of the law merely
makes an employment subject to the requirement that the
same would not be terminated without notifying the other
party of the impending termination, 30 days in advance.
And, in case of non-compliance therewith, the employer
shall be liable for payment to the employee of an amount
equivalent to the latter's compensation for 1 month. It is
clear therefrom that this provision on payment may only be
availed of in case of failure to comply with the regulation
on the giving of 30 day advance notice; that it partakes
more of a penalty for violation of the requirement which is
within the power of the legislature to impose (See Thorpe
vs. Ruthland & Burlington R.R. Co., 27 Vt. 140). The
.application, therefore, of Republic Act 1052, which was
enacted in the exercise of the police power of the State, to
dismissal effected after June 12, 1954, is with legal
sanction.
205

VOL. 110, NOVEMBER 29, 1960 205

Abe vs. Foster Wheeler Corporation

Neither can it be successfully argued that the herein

involved workers do not fall within the ambit of operation
of the law (Rep. Act 1052) in view of the condition
contained in their contract, thus worded:
 The refinery construction is a project of temporary
"2.
duration and, hence your employment term shall
also be temporary dependent upon the needs and
requirements, as determined by this Company, of
the particular phase of the construction work to
which you may presently or hereafter be assigned.
The necessary consequences of your temporary
employment term are:

"(a) Your employment may be terminated at any time

without obligation to the Company, upon payment
of wages earned through the date of such
termination."

As observed by the trial court, it appears from the

stipulation of facts entered into between the parties that
almost all of the employees hired under the uniform
contract containing the above condition, were employed in
1952 and worked continuously until their dismissal in
1954. The work can not thus be considered of temporary
duration, but more or less permanent. It would not then be
difficult for the employers (herein appellants) to know the
approximate date when the services of the employees
would no longer be necessary for the purpose of giving
them the necessary 30 day advance notice of dismissal.
Under the circumstances, the aforequoted condition in the
contract, while probably proper when the contract was
executed, became, nevertheless, inoperative upon the
enactment of Republic Act 1052.
Defendants-appellants similarly raise the jurisdictional
question regarding the sufficiency of the allegations of the
complaint to vest original jurisdiction in the Municipal
Court and appellate jurisdiction in the Court of First
Instance. The pertinent part of the second amended
complaint (R. A. p. 55) states:

"3-a. That a substantial compliance with the desire of this

Honorable Court, as can be gleaned from the order of dismissal,
plaintiffs hereby attached Annex 'A'; and made an integral part of
this second amended complaint, showing the dates plaintiffs were
hired, the dates they were discharged without previous notice, the

206

206 PHILIPPINE REPORTS ANNOTATED

Abe vs. Foster Wheeler Corporation
agreed salary computed so much daily; and that the separation
pay. amounting to one month or thirty-days at least together with
the claims for vacation and sick leaves and overtime as the case
may be. of each and every one mentioned in Annex 'A', and which
each and every one claims, will not exceed ranging front P120.00
to P1500.00. * * *." (Italics supplied.)

There is no question that a complaint must contain the

ultimate facts constituting plaintiff's cause or causes of
action (Sec. 1, Rule 6, Rules of Court). For purposes of said
Rule, however, it was said that a complaint would be
sufficient if it contains sufficient notice of the cause of
action even though the allegations may be vague or
indefinite or in the form of conclusions, in which event, the
proper recourse would be, not a 7motion to dismiss, but a
motion for a bill of particulars. In the case at bar, the
allegations of the complaint, taken with Annex "A", to our
mind, give the necessary information sufficient enough to
enable defendants to plead and prepare for trial,
considering that they are the ones keeping record of the
facts of the appellees' employment and are in the best
position to know the extent of the latter's claims. And, even
assuming that they have no such records, defendants
should have moved for a bill of particulars. Failing to do so,
they can not now be heard to complain against the alleged
insufficiency or ambiguity of the complaint. G. R. No. L-
14923
With respect to the appeal of the twenty (20) employees
who were excluded from the judgment, it is contended that
the lower court gravely abused its discretion in
disapproving their record on appeal and denying their
motion for relief. The facts regarding this incident are not
disputed.
Herein appellants received copy of the decision on
September 15, 1958. Their motion for partial
reconsideration of the decision, praying for their inclusion
therein and filed on October 9, was denied on October 18, of
which counsel for plaintiffs was notified on October 21.
From September

_______________

7 I Moran. Comments on the Rules of Court, 1957 Ed., p. 111.

207

VOL. 110, NOVEMBER 29, 1960 207

Abe vs. Foster Wheeler Corporation
15 to October 9, 24 days had elapsed. The remaining 6 days
started to run again from October 21 and would end on
October 27, when the decision should become final.
On October 24, counsel for plaintiffs filed a motion for
extension of time within which to perfect an appeal,
mentioning therein the fact that they were still trying to
raise the necessary amount to cover the appeal bond and
incidental expenses. By order of October 25, 1958, copy of
which was received by plaintiffs on October 31 (after the
30-day period had already expired on October 27), the court
granted them up to November 8, 1958, within which to file
the record on appeal only, but denied the extension with
respect to the filing of the bond. Although the said record
on appeal as well as the bond were actually filed on
November 7, the lower court, nonetheless, disapproved the
appeal in its order of November 12, 1958, by reason of their
alleged failure to pay the appeal bond on time. Plaintiffs
did not appeal from this order of denial. However, on
November 25, 1958, counsel for plaintiffs filed a motion for
relief from the judgment, under Rule 38, which was denied.
It is this order, as well as that disapproving their appeal,
that plaintiffs-appellants want us to nullify and set aside.
We see nothing abusive or irregular in the actions taken
by the lower court. It is true that the motion for extension
of time to perfect the appeal was filed before the expiration
of the reglementary period, and that, although the order
extending the period to file the record on appeal was issued
on October 25, copy thereof was received by counsel for the
plaintiffs only on October 31, or after the original period
had already lapsed. However, we can not subscribe to the
proposition that the payment of the appeal bond on
November 7 constitutes substantial compliance with the
Rules.
Admittedly, the granting or denial of a motion for
extension of time is discretionary on the court. Counsel for
the plaintiffs, therefore, should not have presumed
208

208 PHILIPPINE REPORTS ANNOTATED

Abe vs. Foster Wheeler Corporation

that his motion for extension of the period to file the record
on appeal and pay the appeal bond would be granted, but
should have taken upon himself the duty to inquire, before
the original period has lapsed, what action the court took
on his said motion. In this case, the order partly denying
the requested extension was issued on October 25, or the
day after the motion was filed. Counsel could have easily
informed himself of such fact, had he only tried to do so,
considering that his office (in the Doña Mercedes building,
Plaza Miranda, Quiapo, Manila) is practically only a few
blocks away from where the court is housed. This he could
have done before the deadline, October 27. Instead, he
waited for the delivery of the notice to him on October 31,
which is too late. Even then, it took him another seven (7)
days before he filed his appeal bond on November 7.
There is, similarly, no basis for the granting of the relief
prayed for by the plaintiffs-appellants. The motion for relief
was based on the alleged excusable negligence of counsel,
consisting of the latter's failure to know of the existence of
the Opinion of the Secretary of Justice, dated July 28, 1958
(Op. No. 149, series of 1958), interpreting the 1-month
salary provided under Republic Act 1052 to mean 30
working days. The finding of the aforecited Opinion by
chance, to our mind, does not partake of the nature of
"discovery" of evidence as contemplated under Rule 38 of
the Rules of Court. It must be remembered that aside from
the acknowledged doctrine that the Opinion of the
Secretary of Justice is not binding upon the courts, the
matters expressed therein are not evidentiary facts, but
dissertations or discussion of the nature, extent and effect
of a given legal issue.
Wherefore, the main decision, insofar as it relates to
those of the plaintiffs-employees who were dismissed after
June 12, 1954, is hereby affirmed, as well as the orders of
November 12, and 27, 1958, appealed from. Costs are taxed
in G.R. No. L-14785 against appellants Foster
209

VOL. 110, NOVEMBER 29, 1960 209

Abe vs. Foster Wheeler Corporation

Wheeler Corporation and Caltex (Phil.) Inc., and in G.R.

No. L-14923, against appellants Felix Abe, et al. So
ordered.

          Parás, C. J., Bengzon, Labrador, Reyes, J. B. L.,

Paredes, and Dizon, JJ., concur.

Judgment affirmed.

____________
RESOLUTION

February 27, 1961     

BARRERA, J.:

In case G.R. No. L-14785 (Felix Abe, et al vs. Foster

Wheeler Corp., et al.), defendants-appellants filed separate
motions for reconsiderations of the decision herein
rendered, on the ground that (1) the employment of the
workers involved in this case was for a definite period, and
(2) Republic Act No. 1052 should not be given retroactive
effect.
There is no question that the Batangas Refinery Project
is for a specific duration, which is, until it is completed.
Too, the different phases of the construction work, e.g.,
masonry, painting, plumbing, etc., may also be considered
with definite duration, which is, until they are finished.
Still under the terms of the contract entered into by the
workers, the period or duration of their employment was
indefinite. As far as pertinent, the contract provides:

"2. The refinery construction is a project of temporary

duration and hence, your employment terms shall
also be temporary dependent upon the needs and
requirements, as determined by this Company, of
the particular phase of the construction work to
which you may be presently or hereafter be
assigned . . ."

Under the aforequoted provision of the contract, the

worker's term of employment is made subject to two
conditions: (1) upon the needs and requirements (not
duration) of the particular work to which he (the worker) is
assigned and (2) that such needs and requirements are to
be as so determined by the employer. In other words,
209
210

210 PHILIPPINE REPORTS ANNOTATED

Vda. de Alburo vs. Vda. de Umbao

the duration of the employment of a worker assigned to a

particular kind of work is not necessarily co-existent with
the duration of such work, because the employer could, at
 any stage of the work, determine whether his services are
needed or not. Likewise, the employer could, even after the
termination of a particular work, assign the employee to
another phase of the construction work, if the employer
determines that the needs of the work so require. Clearly,
the worker is without any means to know when his services
would be considered by his employer still necessary or not.
As to the other ground relied upon in the motion, the
same was already fully discussed in the decision.
Plaintiff's-appellants In case G. R. No. L-14923 (Abe, et al.
vs. Foster Wheeler Corp., et al.,) also filed a motion for
reconsideration raising issues which are already fully
considered in the decision.
The motions filed in both cases are, therefore, denied for
lack of merit.

          Bengzon, Bautista Angelo, Labrador, Concepción,

Reyes, J. B. L., Paredes and Dizon, JJ., concur.

Motions denied.

______________

© Copyright 2020 Central Book Supply, Inc. All rights reserved.