314 SUPREME COURT REPORTS ANNOTATED

Philippine Commercial & Industrial Bank vs. Philnabank

Employees' Association

No. L-29630. July 2, 1981.

PHILIPPINE COMMERCIAL & INDUSTRIAL BAN� plaintiff­

appellant, vs. PHILNABANK EMPLOYEES' ASSOCIATION,
ROMEO G. ROY, DALUYONG GABRIEL, BAYANI A.
BAUTISTA, DOMINGO VILLANUEVA, ALEJANDRO
RICARDO, JESUS MANAHAN, MANUEL JACINTO, ERNESTO
BATAC, LEONIDO CASPE, PATRICIA GRANADOS, and
PANTALEON BERNARDO, defendants-appellees.

Criminal Law; Labor Law; Peaceful picketing is part of the freedom of

speech. That the language employed by the picketers is far from being
courteous and polite does not give rise to a cause for libel and damages.­
The latest case in point where such a principle was reaffirmed expressly is
Associated Labor Union v. Gomez, a 1980 decision. There is no mention of
the other placards but it is not unlikely that to bolster its claim, mention was
likewise made and in bold letters at that of such alleged failing of its
management. That was the aim and intent as found by the lower court. That
could not very well be disputed by plaintiff-appellant. Unfortunately, the
offending imputation, but in the form of a question, was included. It was due
to a former official of plaintiff-appellant's bank who was thereafter named as
President of the Philippine National Bank. Should there be an automatic
attitude of condemnation for such incident? If the realistic observation of
Justice Frankfurter in Milk Wagon Drivers Union of Chicago v.
Meadowmoor Dairies be heeded that labor disputes give rise to strong
emotional response, then the decision reached by the lower court becomes
even more acceptable. It is a fact of industrial life, both in the Philippines as
in the United States, that in the continuing confrontation between labor and
management, it is far from likely that the language employed would be both
courteous and polite. Such being the case, there is no affront either to reason
or to the law in the complaint for libel being dismissed. In placing reliance
on the constitutional right of freedom of expression, this Court once again
makes manifest its adherence to the principle first announced by Justice
Malcolm as ponente in the leading case of United States v. Bustos. In no
uncertain terms, it made clear that the judiciary, in deciding suits for libel,
must ascer-

• SECOND DIVISION

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VOL. 105, JULY 2, 1981 315

Philippine Commercial & Iruiustrial Bank vs. Philnabank Employees'

Association

tain whether or not the alleged offending words may be embraced by the
guarantees of free speech and free press. It cannot be too often said that
Bustos was promulgated as far back as March 8, 1918. A doctrine analogous
in character was enunciated by the United States Supreme Court only thirty­
six years later in New York Times Co. v. Sullivan.

FERNANDO, C.J.:

There is a unique aspect to this action for libel against the Philippine
1

National Bank Employees' Association. It was filed by plaintiff

Philippine Commercial and Industrial Bank as a result of placards
and signboards along the Philippine National Bank building in
Escolta, Manila, containing the following: "PCIB BAD
ACCOUNTS TRANSFERRED TO PNBNIDC?" Plaintiff
considered the above "defamatory and libelous per se" for "at the
very least [it] amounts to an 'act * * * tending to cause dishonor,
2

discredit, or contempt of a * * * juridical person.' " The allegation

of its being libelous was denied by defendants on the ground that
such placards "containing the alleged writing were displayed during
the strike on April 3 and April 4, 1967 as a fair, legal labor strategy
denouncing the lack of business foresight, incompetence,
mismanagement, arbitrary and despotic acts of the Management to
heed the legal and legitimate demands of the defendants, as a
striking union, and against whom a strike was declared against the
3

management of the Philippine National Bank" and that moreover,

"defendants, during the strike on April 3 to April 4, 1967, against
the management of the Philippine National Bank, were only moved
by good intention and justifiable motives and did not intend to injure
4

any party not connected with the strike;" constituting part "of their
legal and fair

l The officers of Philnabank: Employees' Association were included as defendants.

They were Romeo G. Roy, Daluyong Gabriel, Bayani A Bautista, Domingo
Villanueva, Alejandro Ricardo, Jesus Manahan, Manuel Jacinto, Ernesto Batac,
Leonido Caspe, Patricia Granados, and Pantaleon Bernardo.
2 Complaint, Record on Appeal, par. 5.
3 Answer, Record on Appeal, par. 5.
4 Ibid, par. 6.

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316 SUPREME COURT REPORTS ANNOTATED

Philippine Commercial & Industrial Bank vs. Philnabank

Employees' Association

labor strategy to enforce their demands" and to bolster their

imputation of incompetence and arbitrariness of the Philippine
s

National Bank management, The lower court sustained such a

defense and dismissed the complaint. Hence this appeal.
The decision of the then Judge Conrado Vasquez was to dismiss
the complaint. He could not discern any libelous imputation in the
alleged offending words. Such a ruling finds additional support in
the sympathetic approach followed by courts to inaccuracies and
imprecision in language in the use of placards as part of peaceful
picketing in labor controversies.
The facts as found by the lower court, admitted by plaintiff­
appellant as correct, follow: "On April 3, 1967, defendant
Philnabank Employees' Association (PEMA), a labor organization
composed of the rank and file employees of the Philippine National
Bank, declared a strike. During the said strike, which lasted up to the
following day, members of the PEMA paraded and displayed
placards in front of the PNB building tit Escolta, Manila, one of
which contained the following words: 'PCIB BAD ACCOUNTS
TRANSFERRED TO PNB-NIDC?' It is an admitted fact that PCIB
stands for plaintiff Philippine Commercial and Industrial Bank,
while PNB refers to Philippine National Bank, and NIDC stands for
National Investment Development Corporation, a subsidiary of the
6
PNB." To prove its claim for the recovery of damages both actual
and exemplary, as well as for attorney's fees, plaintiff-appellant, as
noted in the appealed decision, contended "that the writing on the
placard in question is a baseless and malicious aspersion that the
plaintiff was a party to a fraud, in that it was able to recoup on bad
debts or other uncollected accounts by fraudulent, questionable and
7

immoral transfer thereof to the PNB or NIDC." Malice was likewise

attributed to defendant labor union and its officers. Then the
decision went on to state: "Plaintiff presented evidence to show that
it is the largest 100% Filipino commercial bank in

5 Ibid, par. 7.
6 Decision, Record on Appeal, 6-7.
?Ibid, 7.

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VOL. 105,JULY2, 1981 317

Philippine Commercial & Industrial Bank vs. Philnabank

Employees' Association

the Philippines; that at the time of the filing of the complaint, it had
twenty-seven (27) branches all over the country and with foreign
correspondent banks throughout the world; that the assets of the
plaintiff amounted to P333,417,445.05 and it handles a quarterly
volume of business amounting to P l l 0,000,000.00; that it has
several big companies among its clients; and that it has a reputation
for honesty, reliability and trustworthiness, and has enjoyed
8

domestic and international prominence and goodwill." On that

point, the lower court ruled: "The plaintiff has also miserably failed
to prove any damage caused to it by the supposed libelous placard
subject matter of this action. Plaintiff has admitted that its twenty­
seven branches at the time of the filing of the complaint (May 6,
1967) increased to twenty-nine branches in August of 1967. The
defendants have shown that the number further increased to thirty­
three branches as of September, 1967. Plaintiff's networth likewise
increased from P46,000,000.00 in March, 1967 to P53,000,000.00 in
August, 1967. Although plaintiff's witness Jovino Valenzuela
testified that, after the display of the questioned placard, the deposits
of the plaintiff bank decreased, no record was presented to sustain
this claim, which is even inconsistent with the admission of the same
witness that the Bank's networth increased since that time and has
continued to increase up to the time he testified. The same thing is
true with the testimony of plaintiff's witness Edmundo Ledesma to
the effect that due to the placard in question his confidence in the
plaintiff was shaken, thereby causing him to deposit P50,000.00
with other banks instead of with the PCIB. He admitted moreover
that, as an exporter, it was safer to be opening accounts in several
 9

banks instead of in only one."

As noted earlier, the decision must be affirmed.
1. The brief presented by the San Juan, Africa, Gonzales and San
Agustin Law Offices is noted for its exhaustive and scholarly
discussion of the law on libel relying on both the

slbid.
91bid, 8-9.

318

318 SUPREME COURT REPORTS ANNOTATED

Philippine Commercial & Industrial Bank vs. Philnabank

Employees' Association

Philippine and American authorities. If the matter were viewed

solely from what appeared in the placard, there is an element of
plausibility in the assertion that while it was aimed at the Philippine
National Bank, the way it was worded could reflect on a stranger to
the controversy, plaintiff Philippine Commercial and Industrial
Bank. It is understandable if there were an affront to the sensibilities
of its officials. They were right to guard its reputation earned after
many years of laudable and creditable performance in the field of
banking. It is, however, precisely because of its well-deserved
reputation that what could at first glance be for the most fastidious
hurtful to its prestige could, if viewed with calmness and objectivity,
be considered, as it was characterized in the appealed decision, as
lacking in "libelous imputation."
2. There is, as already indicated, another reinforcement to such a
mode of appraising the matter. There was a labor controversy
resulting in a strike, fortunately lasting only for one day. The labor
union made use of its constitutional right to picket. From the time of
10

Mortera v. Court of Industrial Relations, a 1947 decision, this

Court has been committed to the view that peaceful picketing is part
of the freedom of speech guarantee of the Constitution. The latest
case in point where such a princiP,le was reaffrrmed expressly is
11

Associated Labor Union v. Gomez, a 1980 decision. There is no

mention of the other placards but it is not unlikely that to bolster its
claim, mention was likewise made and in bold letters at that of such
alleged failing of its management. That was the aim and intent as
found by the lower court. That could not very well be disputed by
plaintiff-appellant. Unfortunately, the offending imputation, but in
the form of a question, was included. It was due to a former official
of plaintiff-appellant's bank who was thereafter named as President
of the Philippine National Bank. Should there be an automatic
attitude of condemnation for such incident? If the realistic
observation of Justice

10 79 Phil. 345.
11 L-27743, March 28, 1980, 96 SCRA 551. In addition to Mortera, eleven other
decisions were cited

319

VOL. 105, JULY 2, 1981 319

Philippine Commercial & Industrial Bank vs. Philnabank

Employees' Association

Frankfurter in Milk Wagon Drivers Union of Chicago v.

12

Meadowmoor Dairies be heeded that labor disputes give rise to

strong emotional response, then the decision reached by the lower
court becomes even more acceptable. It is a fact of industrial life,
both in the Philippines as in the United States, that in the continuing
confrontation between labor and management, it is far from likely
that the language employed would be both courteous and polite.
Such being the case, there is no affront either to reason or to the law
in the complaint for libel being dismissed. In placing reliance on the
1
constitutional right of freedom of expression, this Court once again
makes manifest its adherence to the principle first announced by
Justice Malcolm as ponente in the leading case of United States v.
14

Bustos. In no uncertain terms, it made clear that the judiciary, in

deciding suits for libel, must ascertain whether or not the alleged
offending words may be embraced by the guarantees of free speech
and free press. It cannot be too often said that Bustos was
promulgated as far back as March 8, 1918. A doctrine analogous in
character was enunciated by the United States Supreme Court only
IS

thirty-six years later in New York Times Co. v. Sullivan.

WHEREFORE, the appealed decision is affirmed. No costs.

Barredo, Aquino, Abad Santos and De Castro, JJ., concur.

Decision affirmed.

Notes.-A decision of the labor tribunal does not become

dorman even after the lapse of 5 years from the time it became
 12 312 us 287 (1940).
13 According to Article N, Section 9 of the Constitution: "No law shall be passed
abridging the freedom of speech, or of the press, or the right of the people peacebly to
assemble and petition the Government for redress of grievances."
14 37 Phil. 731.
15 376 us 254.

320

320 SUPREME COURT REPORTS ANNOTATED

Philippine Commercial & Industrial Bank vs. Philnabank

Employees' Association

executory when there are motions remaining unresolved by the labor

tribunal. (Lao Oh Kim vs. NLRC, 81 SCRA 650).
The dismissal of a union president without prior notice and/or
investigation is an unfair labor practice. The declaration of a strike
by the union to protest the dismissal of their president is thus legal.
(Philippine Metal Foundries, Inc. vs. C.I.R., 90 SCRA 135).
An employer which unlawfully connives with a labor union to
dismiss some of its employees is solidarity liable with the union for
damages. (Liberty Cotton Mills Workers Union vs. Liberty Cotton
Mills, Inc., 90 SCRA 687).
The complainant has the burden to prove his side of the
controversy. Failure to do so means that the NLRC could rely on the
evidence offered by the other party. (Montemayor vs. Secretary of
Labor, 80 SCRA 692).
The statutory remedy requiring reinstatement of employees
dismissed due to employer ULP is not unconstitutional. (Bradman
Company, Inc. vs. Court ofAppeals, 18 SCRA 10).
It does not admit of doubt tha� as noted in the petitio� in
addition to the failure to observe the mandatory requirements for the
issuance of a preliminary injunction under the Industrial Peace Act,
the orders complained of were fatally defective, suffering as it did
from the infirmity that peaceful picketing was enjoined. That would
be violative of the freedom of speech clause of the Constitution.
(Associated Labor Union vs. Gomez, 96 SCRA 551).
To be lawful, a strike must be preceded by the required notice of
intention to strike. It should have a lawful purpose and it should be
executed through lawful means. (COP-CCP Workers Union vs.
Court ofIndustrial Relations, 93 SCRA 116).
Employees who went on strike on false belief that their employer
committed an unfair labor practice and who were ordered reinstated
 may be required by the employer as a condition for reinstatement
that they submit proof of physical fitness to work. The Industrial
Court is not authorized to re-

321

VOL. 105, illLY 9, 1981 321

Cononizado vs. Ordonez-Benitez

quire employer to give separation pay to the strikers who could not
be reinstated on disability. (Jackbilt Concrete Block Co., Inc. vs.
Norton & Harrison Co., 71 SCRA44).
Officers and members of a union who stage in an illegal strike
may be ordered dismissed from employment. (Maria Cristina
Fertilizer Plant Employees Association vs. Ta1Uiayag, 83 SCRA56).

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