G.R. No.
L-19937 February 19, 1979 maximum actual production of which exceed nine hundred thousand
ASSOCIACION DE AGRICULTURES DE TALISAY-SILAY, INC., v
TALISAY-SILAY MILLING CO., INC
Facts:
A class suit was filed by ASSOCIACION DE AGRICULTURES DE
TALISAY-SILAY, INC sugarcane planters (PLANTERS) against
TALISAY-SILAY MILLING CO (CENTRAL) requesting to apply the
sharing prescribed by Section 1 of Republic Act 809, which states:
In the absence of written milling agreements between the majority of
planters and the millers of sugarcane in any milling district in the
Philippines, the unrefined sugar produced in that district from the
mining by any sugar central of the sugar-cane of any sugar-cane
planter or plantation owner, as well as all by products and derivatives
thereof, shall be divided between them as follows:
Sixty per centum for the planter, and forty per centum for the central
in any milling district the maximum actual production of which is not
more than four hundred thousand piculs: Provided, That the
provisions of this section shag not apply to sugar centrals with an
actual production of less than one hundred fifty thousand piculs.
Sixty-two and one-half per centum for the planter, and thirty-seven
and one-half per centum for the central in any milling district the
maximum actual production of which exceeds four hundred thousand
piculs but does not ex six hundred thousand piculs;
Sixty-five per centum for the planter, and thirty-five per centum for
the central in any milling district the maximum actual production of
which exceeds six hundred thousand piculs but does not exceed
nine hundred thousand piculs;
Sixty-seven and one-half per centum for the planter, and thirty-two
and one-half per centum for the central in any mining district the
piculs but does not exceed one million two hundred thousand piculs;
Seventy per centum for the planter, and thirty per centum for the
central in any milling district the maximum actual production of which
exceeds one on two hundred thousand piculs.
Defendant CENTRAL filed its respective answers to the amended
complaint and the supplements thereto. In said answers, the
CENTRAL alleged in substance the following defenses: (1) that
Republic Act 809 is invalid and unconstitutional; (2) that even if said
Act were valid, it is not applicable to the Talisay-Silay milling district
because the majority of the planters had written milling contracts with
the CENTRAL at the time said Act went into effect.
Issue:
Whether or not R.A. 809 is unconstitutional and violates the
constitutional guarantee on freedom of contracts and the non-
impairment clause of the Constitution.
Held:
No, REPUBLIC ACT 809 CONSITUTIONAL AND IS A SOCIAL
JUSTICE AND POLICE POWER MEASURE FOR THE
PROMOTION OF LABOR CONDITIONS IN SUGAR
PLANTATIONS, HENCE WHATEVER RATIONAL DEGREE OF
CONSTRAINT IT EXERTS ON FREEDOM OF CONTRACT AND
EXISTING CONTRACTUAL OBLIGATIONS IS
CONSTITUTIONALLY PERMISSIBLE.
Republic Act 809 was conceived and enacted as a social legislation
designed primarily to ameliorate the condition of the laborers in the
sugar plantations, and the fact that at the same time the planters
would also be benefited by it does not detract from if it does not add
to such basic purpose of the Act.
Police Power
The Court recognized the propriety of exercising police power when
it is needed to do so in order that our sugar industry may be
stabilized, and to that end, it was held that the legislature could
provide that the distribution of benefits from the proceeds of sugar be
readjusted among the components of the industry to enable it to
resist the added strain of the increase in taxes that it had to sustain
then. With at least equal persuasiveness must such reasoning obtain
when the re-adjustment of the distribution of proceeds is impelled by
the need to render social justice among all the participants in the
industry, specially the laborers.
True it is that, as counsel for the centrals contend, police power
cannot be resorted to just any time the legislature wishes, but it is not
correct to say that it is indispensable that exceptional circumstances
must exist before police power can be exercised. The Court find all
the provisions of the impugned act to be germane to the end being
pursued.
Social justice
But it is not police power alone that sustains the validity of the
statutory provision in dispute. Having in view its primary objective to
promote the interests of labor, it can never be possible that the State
would be bereft of constitutional authority to enact legislations of its
kind. Here, in the Philippines, whenever any government measure
designed for the advancement of the working class is impugned on
constitutional grounds and shadows of doubt are cast over the scope
of the State's prerogative in respect thereto, the imperious mandate
of the social justice Ideal consecrated in our fundamental laws, both
the old and the new asserts its majesty, upon the courts to accord
utmost consideration to the spirit animating the act assailed, not just
for the sake of enforcing the explicit social justice provisions of the
article on "Declaration of Principles and State Policies", but more
fundamentally, to serve the sacred cause of human dignity, which is
actually what lies at the core of those constitutional precepts as it is
also the decisive element always in the determination of any
controversy between capital and labor.
Thus, Section 5 of Article II of the Constitution of 1935, under the
aegis of which the law in question was enacted, made it one of the
declared principles to which the people committed themselves that
"the promotion of social justice to insure the well being and economic
dc security of all the people should be the concern of the State."
More specifically in regard to labor, there was also Section 6 of
Article XIX, to the effect that "the State shall afford protection to labor
... and shall regulate the relation between . . . labor and capital in
industry and in agriculture. It is difficult to conceive of any legislation
more aptly rooted in the declared principle and the plain injunction of
the old Constitution just quoted than the Act under discussion which
is a law to regulate the relations between the centrals and the
planters with the primordial objective of protecting and promoting the
interests of labor. In regard then to the arguments of the centrals
relative to due process and the sanctity of contractual obligations as
well as the freedom of contract, We hold that more cogently than in
regard to the exertion of police power as discussed above, the
criterion for determining whether or not social justice has been over-
extended in any given case is nothing more than the economic
viability or feasibility of the proposed law in favor of labor, and
certainly not the existence of exceptional circumstances. In other
words, as long as capital in industry or agriculture will not be fatally
prejudiced to the extent of incurring losses as a result of its
enforcement, any legislation to improve labor conditions would be
valid, provided the assailed legislation is more or less demanded as
a measure to improve the situation in which the workers and laborers
are actually found And in the case at bar, there is not even a
pretension that the finances of the centrals would be anywhere in the
red as a result of the enforcement of Republic Act 809.
In the light of the foregoing considerations, We do not find the
position of the Central that Section I of Republic Act 809 interferes
unconstitutionally with existing contracts and the freedom of all the
parties concerned in entering into new ones to be sufficiently
persuasive.