THE AGRICULTURAL CREDIT and order to discourage the members of the

COOPERATIVE FINANCING Unions in the exercise of their right to self-

ADMINISTRATION (ACCFA), petitioner, organization, discrimination against said
vs. members in the matter of promotions, and
ACCFA SUPERVISORS' ASSOCIATION, ACCFA refusal to bargain. The ACCFA denied the
WORKERS' ASSOCIATION, and THE COURT charges and interposed as affirmative and
OF INDUSTRIAL RELATIONS, respondents. special defenses lack of jurisdiction of the CIR
over the case, illegality of the bargaining
These are two separate appeals by certiorari contract, expiration of said contract and lack
from the decision dated March 25, 1963 (G.R. of approval by the office of the President of
No. L-21484) and the order dated May 21, 1964 the fringe benefits provided for therein.
(G.R. No. L-23605) as affirmed by the Brushing aside the foregoing defenses, the CIR
resolutions en banc, of the Court of Industrial in its decision dated March 25, 1963 ordered
Relations, in Cases Nos. 3450-ULP and 1327- the ACCFA:
MC, respectively. The parties, except the
Confederation of Unions in Government 1. To cease and desist from committing
Corporations and Offices (CUGCO), being further acts tending to discourage the
practically the same and the principal issues members of complainant unions in the
involved related, only one decision is now exercise of their right to self-
rendered in these two cases. organization;

The Agricultural Credit and Cooperative 2. To comply with and implement the
Financing Administration (ACCFA) was a provision of the collective bargaining
government agency created under Republic contract executed on September 4,
Act No. 821, as amended. Its administrative 1961, including the payment of P30.00
machinery was reorganized and its name a month living allowance;
changed to Agricultural Credit Administration
(ACA) under the Land Reform Code (Republic 3. To bargain in good faith and
Act No. 3844). On the other hand, the ACCFA expeditiously with the herein
Supervisors' Association (ASA) and the ACCFA complainants.
Workers' Association (AWA), hereinafter
referred to as the Unions, are labor The ACCFA moved to reconsider but was
organizations composed of the supervisors turned down in a resolution dated April 25,
and the rank-and-file employees, respectively, 1963 of the CIR en banc. Thereupon it brought
in the ACCFA (now ACA). this appeal by certiorari.

G.R. No. L-21484 The ACCFA raises the following issues in its
petition, to wit:
On September 4, 1961 a collective bargaining
agreement, which was to be effective for a 1. Whether or not the respondent court
period of one (1) year from July 1, 1961, was has jurisdiction over this case, which in
entered into by and between the Unions and turn depends on whether or not ACCFA
the ACCFA. A few months thereafter, the exercised governmental or proprietary
Unions started protesting against alleged functions.
violations and non-implementation of said
agreement. Finally, on October 25, 1962 the
2. Whether or not the collective
Unions declared a strike, which was ended
bargaining agreement between the
when the strikers voluntarily returned to work
petitioner and the respondent union is
on November 26, 1962.
valid; if valid, whether or not it has
already lapsed; and if not, whether or
On October 30, 1962 the Unions, together with not its (sic) fringe benefits are already
its mother union, the Confederation of Unions enforceable.
in Government Corporations and Offices
(CUGCO), filed a complaint with the Court of
3. Whether or not there is a legal and/or
Industrial Relations against the ACCFA (Case
factual basis for the finding of the
No. 3450-ULP) for having allegedly committed
respondent court that the petitioner
acts of unfair labor practice, namely: violation
had committed acts of unfair labor
of the collective bargaining agreement in
practice.
 4. Whether or not it is within the and exclusive bargaining representatives of
competence of the court to enforce the the rank-and-file employees and supervisors,
collective bargaining agreement respectively, of the Agricultural Credit
between the petitioner and the Administration." Said order was affirmed by
respondent unions, the same having the CIR en banc in its resolution dated August
already expired. 24, 1964.

G.R. No. L-23605 On October 2, 1964 the ACA filed in this Court
a petition for certiorari with urgent motion to
During the pendency of the above mentioned stay the CIR order of May 21, 1964. In a
case (G.R. No. L-21484), specifically on August resolution dated October 6, 1964, this Court
8, 1963, the President of the Philippines dismissed the petition for "lack of adequate
signed into law the Agricultural Land Reform allegations," but the dismissal was later
Code (Republic Act No. 3844), which among reconsidered when the ACA complied with the
other things required the reorganization of the formal requirement stated in said resolution.
administrative machinery of the Agricultural As prayed for, this Court ordered the CIR to
Credit and Cooperative Financing stay the execution of its order of May 21, 1964.
Administration (ACCFA) and changed its name
to Agricultural Credit Administration (ACA). In this appeal, the ACA in effect challenges the
On March 17, 1964 the ACCFA Supervisors' jurisdiction of the CIR to entertain the petition
Association and the ACCFA Workers' of the Unions for certification election on the
Association filed a petition for certification ground that it (ACA) is engaged in
election with the Court of Industrial Relations governmental functions. The Unions join the
(Case No. 1327-MC) praying that they be issue on this single point, contending that the
certified as the exclusive bargaining agents for ACA forms proprietary functions.
the supervisors and rank-and-file employees,
respectively, in the ACA. The trial Court in its Under Section 3 of the Agricultural Land
order dated March 30, 1964 directed the Reform Code the ACA was established, among
Manager or Officer-in-Charge of the ACA to other governmental agencies,1 to extend credit
allow the posting of said order "for the and similar assistance to agriculture, in
information of all employees and workers pursuance of the policy enunciated in Section
thereof," and to answer the petition. In 2 as follows:
compliance therewith, the ACA, while
admitting most of the allegations in the SEC. 2. Declaration of Policy. It is the
petition, denied that the Unions represented policy of the State:
the majority of the supervisors and rank-and-
file workers, respectively, in the ACA. It
(1) To establish owner-cultivatorships
further alleged that the petition was
and the economic family-size farm as
premature, that the ACA was not the proper
the basis of Philippine agriculture and,
party to be notified and to answer the petition,
as a consequence, divert landlord
and that the employees and supervisors could
capital in agriculture to industrial
not lawfully become members of the Unions,
development;
nor be represented by them. However, in a
joint manifestation of the Unions dated May 7,
1964, with the conformity of the ACA (2) To achieve a dignified existence for
Administrator and of the Agrarian Counsel in the small farmers free from pernicious
his capacity as such and as counsel for the institutional restraints and practices;
National Land Reform Council, it was agreed
"that the union petitioners in this case (3) To create a truly viable social and
represent the majority of the employees in economic structure in agriculture
their respective bargaining units" and that conducive to greater productivity and
only the legal issues raised would be higher farm incomes;
submitted for the resolution of the trial Court.
(4) To apply all labor laws equally and
Finding the remaining grounds for ACA's without discrimination to both
opposition to the petition to be without merit, industrial and agricultural wage
the trial Court in its order dated May 21, 1964 earners;
certified "the ACCFA Workers' Association and
the ACCFA Supervisors' Association as the sole
 (5) To provide a more vigorous and person who, without lawful cause, fails
systematic land resettlement program to obey such subpoena or subpoena
and public land distribution; and duces tecum shall, upon application of
the head of Agricultural Credit
(6) To make the small farmers more Administration with the proper court,
independent, self-reliant and be liable to punishment for contempt
responsible citizens, and a source of in the manner provided by law and if
genuine strength in our democratic he is an officer of the Association, to
society. suspension or removal from office.

The implementation of the policy thus SEC. 114. Prosecution of officials. The
enunciated, insofar as the role of the ACA Agricultural Credit Administration,
therein is concerned, is spelled out in Sections through the appropriate provincial or
110 to 118, inclusive, of the Land Reform city fiscal, shall have the power to file
Code. Section 110 provides that "the and prosecute any and all actions
administrative machinery of the ACCFA shall which it may have against any and all
be reorganized to enable it to align its officials or employees of farmers'
activities with the requirements and objective cooperatives arising from misfeasance
of this Code and shall be known as the or malfeasance in office.
Agricultural Credit Administration." Under
Section 112 the sum of P150,000,000 was SEC. 115. Free Notarial Service. Any
appropriated out of national funds to finance justice of the peace, in his capacity as
the additional credit functions of the ACA as a notary ex-officio, shall render service
result of the land reform program laid down in free of charge to any person applying
the Code. Section 103 grants the ACA the for a loan under this Code either in
privilege of rediscounting with the Central administering the oath or in the
Bank, the Development Bank of the Philippines acknowledgment of instruments
and the Philippine National Bank. Section 105 relating to such loan.
directs the loaning activities of the ACA "to
stimulate the development of farmers' SEC. 116. Free Registration of Deeds.
cooperatives," including those "relating to the Any register of deeds shall accept for
production and marketing of agricultural registration, free of charge any
products and those formed to manage and/or instrument relative to a loan made
own, on a cooperative basis, services and under this Code.
facilities, such as irrigation and transport
systems, established to support production SEC. 117. Writing-off Unsecured and
and/or marketing of agricultural products." Outstanding Loans. Subject to the
Section 106 deals with the extension by ACA approval of the President upon
of credit to small farmers in order to stimulate recommendation of the Auditor
agricultural production. Sections 107 to 112 General, the Agricultural Credit
lay down certain guidelines to be followed in Administration may write-off from its
connection with the granting of loans, such as books, unsecured and outstanding
security, interest and supervision of credit. loans and accounts receivable which
Sections 113 to 118, inclusive, invest the ACA may become uncollectible by reason of
with certain rights and powers not accorded to the death or disappearance of the
non-governmental entities, thus: debtor, should there be no visible
means of collecting the same in the
SEC. 113. Auditing of Operations. For foreseeable future, or where the debtor
the effective supervision of farmers' has been verified to have no income or
cooperatives, the head of the property whatsoever with which to
Agricultural Credit Administration effect payment. In all cases, the
shall have the power to audit their writing-off shall be after five years
operations, records and books of from the date the debtor defaults.
account and to issue subpoena and
subpoena duces tecum to compel the SEC. 118. Exemption from Duties, Taxes
attendance of witnesses and the and Levies. The Agricultural Credit
production of books, documents and Administration is hereby exempted
records in the conduct of such audit or from the payment of all duties, taxes,
of any inquiry into their affairs. Any
 levies, and fees, including docket and individuals in one member agency
sheriff's fees, of whatever nature or must be considered in considering
kind, in the performance of its promotion to higher positions in
functions and in the exercise of its another member agency.
powers hereunder.
The implementation of the land reform
The power to audit the operations of farmers' program of the government according to
cooperatives and otherwise inquire into their Republic Act No. 3844 is most certainly a
affairs, as given by Section 113, is in the governmental, not a proprietary, function; and
nature of the visitorial power of the sovereign, for that purpose Executive Order No. 75 has
which only a government agency specially placed the ACA under the Land Reform Project
delegated to do so by the Congress may legally Administration together with the other
exercise. member agencies, the personnel complement
of all of which are placed in one single pool
On March 19, 1964 Executive Order No. 75 was and made available for assignment from one
promulgated. It is entitled: "Rendering in Full agency to another, subject only to Civil Service
Force and Effect the Plan of Reorganization laws, rules and regulations, position
Proposed by the Special Committee on classification and wage structures.
Reorganization of Agencies for Land Reform
for the Administrative Machinery of the The appointing authority in respect of the
Agricultural Land Reform Code," and contains officials and employees of the ACA is the
the following pertinent provisions: President of the Philippines, as stated in a 1st
indorsement by his office to the Chairman of
Section 3. The Land Reform Project the National Reform Council dated May 22,
Administration2 shall be considered a 1964, as follows:
single organization and the personnel
complement of the member agencies Appointments of officials and
including the legal officers of the employees of the National Land Reform
Office of the Agrarian Counsel which Council and its agencies may be made
shall provide legal services to the LRPA only by the President, pursuant to the
shall be regarded as one personnel provisions of Section 79(D) of the
pool from which the requirements of Revised Administrative Code. In
the operations shall be drawn and accordance with the policy and
subject only to the civil service laws, practice, such appointments should be
rules and regulations, persons from prepared for the signature of the
one agency may be freely assigned to Executive Secretary, "By Authority
positions in another agency within the ofthe President".3
LRPA when the interest of the service
so demands. When the Agricultural Reform Code was being
considered by the Congress, the nature of the
Section 4. The Land Reform Project ACA was the subject of the following
Administration shall be considered as exposition on the Senate floor:
one organization with respect to the
standardization of job descriptions Senator Tolentino: . . . . "The ACA is not
position classification and wage and going to be a profit making institution.
salary structures to the end that It is supposed to be a public service of
positions involving the same or the government to the lessees and
equivalent qualifications and equal farmer-owners of the lands that may be
responsibilities and effort shall have bought after expropriation from
the same remuneration. owners. It is the government here that
is the lender. The government should
Section 5. The Civil Service laws, rules not exact a higher interest than what
and regulations with respect to we are telling a private landowner now
promotions, particularly in the in his relation to his tenants if we give
consideration of person next in rank, to their farmers a higher rate of
shall be made applicable to the Land interest . . . ." (pp. 17 & 18, Senate
Reform Project Administration as a Journal No. 16, July 3, 1963)
single agency so that qualified
The reason is obvious, to pinpoint classification, such constituent functions are
responsibility for many losses in the exercised by the State as attributes of
government, in order to avoid irresponsible sovereignty, and not merely to promote the
lending of government money to pinpoint welfare, progress and prosperity of the people
responsibility for many losses . . . . these letter functions being ministrant he
exercise of which is optional on the part of the
Senator Manglapus: ". . . But assuming government.
that hypothesis, that is the reason why
we are appropriating P150,000,000.00 The growing complexities of modern society,
for the Agricultural Credit however, have rendered this traditional
Administration which will go to classification of the functions of government
intensified credit operations on the quite unrealistic, not to say obsolete. The
barrio level . . ." (p. 3, Senate Journal areas which used to be left to private
No. 7). enterprise and initiative and which the
government was called upon to enter
That it is the reason why we are providing for optionally, and only "because it was better
the expansion of the ACCFA and the weeding equipped to administer for the public welfare
out of the cooperative activity of the ACCFA than is any private individual or group of
and turning this over to the Agricultural individuals,"5 continue to lose their well-
Productivity Commission, so that the defined boundaries and to be absorbed within
Agricultural Credit Administration will activities that the government must undertake
concentrate entirely on the facilitation of in its sovereign capacity if it is to meet the
credit on the barrio level with the massive increasing social challenges of the times. Here
support of 150 million provided by the as almost everywhere else the tendency is
government. . . . (pp. 4 & 5 of Senate Journal undoubtedly towards a greater socialization
No. 7, July 3, 1963) of economic forces. Here of course this
development was envisioned, indeed adopted
. . . But by releasing them from this situation, as a national policy, by the Constitution itself
we feel that we are putting them in a much in its declaration of principle concerning the
better condition than that in which they are promotion of social justice.
found by providing them with a business-like
way of obtaining credit, not depending on a It was in furtherance of such policy that the
paternalistic system but one which is Land Reform Code was enacted and the
business-like that is to say, a government various agencies, the ACA among them,
office, which on the barrio level will provide established to carry out its purposes. There
them that credit directly . . . . (p. 40, Senate can be no dispute as to the fact that the land
Journal No. 7, July 3, 1963) (emphasis reform program contemplated in the said
supplied). Code is beyond the capabilities of any private
enterprise to translate into reality. It is a
The considerations set forth above militate purely governmental function, no less than,
quite strongly against the recognition of say, the establishment and maintenance of
collective bargaining powers in the public schools and public hospitals. And
respondent Unions within the context of when, aside from the governmental objectives
Republic Act No. 875, and hence against the of the ACA, geared as they are to the
grant of their basic petition for certification implementation of the land reform program of
election as proper bargaining units. The ACA the State, the law itself declares that the ACA
is a government office or agency engaged in is a government office, with the formulation
governmental, not proprietary functions. of policies, plans and programs vested no
These functions may not be strictly what longer in a Board of Governors, as in the case
President Wilson described as "constituent" (as of the ACCFA, but in the National Land Reform
distinguished from "ministrant"),4 such as Council, itself a government instrumentality;
those relating to the maintenance of peace and and that its personnel are subject to Civil
the prevention of crime, those regulating Service laws and to rules of standardization
property and property rights, those relating to with respect to positions and salaries, any
the administration of justice and the vestige of doubt as to the governmental
determination of political duties of citizens, character of its functions disappears.
and those relating to national defense and
foreign relations. Under this traditional In view of the foregoing premises, we hold
that the respondent Unions are not entitled to
the certification election sought in the Court It is to be listed that under Section 3, Article
below. Such certification is admittedly for XIV, of the agreement, the same "shall not
purposes of bargaining in behalf of the become effective unless and until the same is
employees with respect to terms and duly ratified by the Board of Governors of the
conditions of employment, including the right Administration." Such approval was given
to strike as a coercive economic weapon, as in even before the formal execution of the
fact the said unions did strike in 1962 against agreement, by virtue of "Resolution No. 67,
the ACCFA (G.R. No. L-21824).6 This is contrary Regular Meeting No. 7, FY 1960-61, held on
to Section 11 of Republic Act No. 875, which August 17, 1961," but with the proviso that
provides: "the fringe benefits contained therein shall
take effect only if approved by the office of
SEC. 11. Prohibition Against Strike in the President." The condition is, therefore,
the Government The terms and deemed to be incorporated into the agreement
conditions of employment in the by reference.
Government, including any political
subdivision or instrumentality thereof, On October 23, 1962 the Office of the
are governed by law and it is declared President, in a letter signed by the Executive
to be the policy of this Act that Secretary, expressed its approval of the
employees therein shall not strike for bargaining contract "provided the salaries and
the purposes of securing changes or benefits therein fixed are not in conflict with
modification in their terms and applicable laws and regulations, are believed
conditions of employment. Such to be reasonable considering the exigencies of
employees may belong to any labor the service and the welfare of the employees,
organization which does not impose and are well within the financial ability of the
the obligation to strike or to join in particular corporation to bear."
strike: Provided, However, that this
section shall apply only to employees On July 1, 1963 the ACCFA management and
employed in governmental functions the Unions entered into an agreement for the
of the Government including but not implementation of the decision of the
limited to governmental corporations.7 respondent Court concerning the fringe
benefits, thus:
With the reorganization of the ACCFA and its
conversion into the ACA under the Land In the meantime, only Cost of Living
Reform Code and in view of our ruling as to Adjustment, Longevity Pay, and Night
the governmental character of the functions of Differential Benefits accruing from July
the ACA, the decision of the respondent Court 1, 1961 to June 30, 1963 shall be paid
dated March 25, 1963, and the resolution en to all employees entitled thereto, in the
banc affirming it, in the unfair labor practice following manner:
case filed by the ACCFA, which decision is the
subject of the present review in G. R. No. L- A) The sum of P180,000 shall be set
21484, has become moot and academic, aside for the payment of:
particularly insofar as the order to bargain
collectively with the respondent Unions is
concerned. 1) Night differential benefits for
Security Guards.
What remains to be resolved is the question of
2) Cost of Living Adjustment and
fringe benefits provided for in the collective
Longevity Pay.
bargaining contract of September 4, 1961. The
position of the ACCFA in this regard is that the
said fringe benefits have not become 3) The unpaid balance due employees
enforceable because the condition that they on Item A (1) and (2) this paragraph
should first be approved by the Office of the shall be paid in monthly installments
President has not been complied with. The as finances permit but not beyond
Unions, on the other hand, contend that no December 20, 1963.
such condition existed in the bargaining
contract, and the respondent Court upheld 3. All benefits accruing after July 1,
this contention in its decision. 1963, shall be allowed to accumulate
but payable only after all benefits
accruing up to June 30, 1963, as per
 CIR decision hereinabove referred to Makalintal, characterized with vigor, clarity
shall have been settled in full; and precision, represents what for me is a
provided, however, that commencing clear tendency not to be necessarily bound by
July 1, 1963 and for a period of only our previous pronouncements on what
two (2) months thereafter (during activities partake of a nature that is
which period the ACCFA and the governmental.1 Of even greater significance,
Unions shall negotiate a new Collective there is a definite rejection of the "constituent-
Bargaining Agreement) the provisions ministrant" criterion of governmental
of the September 4, 1961 Collective functions, followed in Bacani v. National
Bargaining Agreement shall be Coconut Corporation.2 That indeed is cause
temporarily suspended, except as to for gratification. For me at least, there is again
Cost of Living Adjustment and full adherence to the basic philosophy of the
"political" or non-economic privileges Constitution as to the extensive and vast
and benefits thereunder. power lodged in our government to cope with
the social and economic problems that even
On July 24, 1963 the ACCFA Board of now sorely beset us. There is therefore full
Governors ratified the agreement thus entered concurrence on my part to the opinion of the
into, pursuant to the provision thereof Court, distinguished by its high quality of
requiring such ratification, but with the juristic craftsmanship. I feel however that the
express qualification that the same was matter is of such vital importance that a
"without prejudice to the pending appeal in separate concurring opinion is not
the Supreme Court . . . in Case No. 3450-ULP." inappropriate. It will also serve to give
The payment of the fringe benefits agreed expression to my view, which is that of the
upon, to our mind, shows that the same were Court likewise, that our decision today does
within the financial capability of the ACCFA not pass upon the rights of labor employed in
then, and hence justifies the conclusion that instrumentalities of the state discharging
this particular condition imposed by the governmental functions.
Office of the President in its approval of the
bargaining contract was satisfied. 1. In the above Bacani decision, governmental
functions are classified into constituent and
We hold, therefore, that insofar as the fringe ministrant. "The former are those which
benefits already paid are concerned, there is constitute the very bonds of society and are
no reason to set aside the decision of the compulsory in nature; the latter are those that
respondent Court, but that since the are undertaken only by way of advancing the
respondent Unions have no right to the general interests of society, and are merely
certification election sought by them nor, optional. President Wilson enumerates the
consequently, to bargain collectively with the constituent functions as follows: '(1) The
petitioner, no further fringe benefits may be keeping of order and providing for the
demanded on the basis of any collective protection of persons and property from
bargaining agreement. violence and robbery. (2) The fixing of the
legal relations between man and wife and
The decisions and orders appealed from are between parents and children. (3) The
set aside and/or modified in accordance with regulation of the holding, transmission, and
the foregoing pronouncements. No costs. interchange of property, and the
determination of its liabilities for debt or for
crime. (4) The determination of contract rights
Concepcion, C.J., Reyes, J.B.L., Dizon, Sanchez,
between individuals. (5) The definition and
Castro, Teehankee and Barredo, JJ., concur.
punishment of crime. (6) The administration
Zaldivar, J., concurs in the result.
of justice in civil cases. (7) The determination
of the political duties, privileges, and relations
of citizens. (8) Dealings of the state with
foreign powers: the preservation of the state
from external danger or encroachment and the
Separate Opinions advancement of its international interests.' "3

FERNANDO, J., concurring: The ministrant functions were then

enumerated, followed by a statement of the
The decision reached by this Court so ably basis that would justify engaging in such
given expression in the opinion of Justice activities. Thus: "The most important of the
ministrant functions are: public works, public enshrining as it did the liberty of contract. To
education, public charity, health and safety cite only one instance, the limitation of
regulations, and regulations of trade and employment in bakeries to sixty hours a week
industry. The principles determining whether and ten hours a day under a New York statute
or not a government shall exercise certain of was stricken down for being tainted with a due
these optional functions are: (1) that a process objection in Lochner v. New York.8 It
government should do for the public welfare provoked one of the most vigorous dissents of
those things which private capital would not Justice Holmes, who was opposed to the view
naturally undertake and (2) that a government that the United States Constitution did
should do these things which by its very embody laissez-faire. Thus: "General
nature it is better equipped to administer for propositions do not decide concrete cases.
the public welfare than is any private The decision will depend on a judgment or
individual or group of individuals."4 intuition more subtle than any articulate
major premise. But I think that the proposition
Reference is made in the Bacani decision to the just stated, if it is accepted, will carry us far
first of the many publications of Justice toward the end. Every opinion tends to
Malcolm on the Philippine government, which become a law. I think that the word 'liberty,' in
appeared in 1916,5 adopting the formulation the 14th Amendment, is perverted when it is
of the then Professor, later President, held to prevent the natural outcome of a
Woodrow Wilson of the United States, in a dominant opinion, unless it can be said that a
textbook on political science the first edition rational and fair man necessarily would admit
of which was published in 1898. The Wilson that the statute proposed would infringe
classification reflected the primacy of the fundamental principles as they have been
dominant laissez-faire concept carried into understood by the traditions of our people
the sphere of government. and our law. It does not need research to show
that no such sweeping condemnation can be
A most spirited defense of such a view was passed upon the statute before us. A
given by former President Hadley of Yale in a reasonable man might think it a proper
series of three lectures delivered at Oxford measure on the score of health. Men whom I
University in 1914. According to President certainly could not pronounce unreasonable
Hadley: "I shall begin with a proposition which would uphold it as a first installment of a
may sound somewhat startling, but which I general regulation of the hours of work.
believe to be literally true. The whole Whether in the latter aspect it would be open
American political and social system is based to the charge of inequality I think it
on industrial property right, far more unnecessary to discuss." It was not until 1908,
completely than has ever been the case in any in Muller v. Oregon,9 that the American
European country. In every nation of Europe Supreme Court held valid a ten-hour maximum
there has been a certain amount of traditional for women workers in laundries and not until
opposition between the government and the 1917 in Bunting v. Oregon10 that such a
industrial classes. In the United States no such regulatory ten-hour law applied to men and
tradition exists. In the public law of European women passed the constitutional test.
communities industrial freeholding is a
comparatively recent development. In the Similarly, state legislation fixing minimum
United States, on the contrary, industrial wages was deemed offensive to the due
freeholding is the foundation on which the process clause in a 1923 decision in Adkins v.
whole social order has been established and Children's Hospital.11 Only in 1937, in the
built up."6 leading case of West Coast Hotel v.
Parrish,12 was the Adkins case overruled and a
The view is widely accepted that such a minimum wage law New York statute upheld.
fundamental postulate did influence American The same unsympathetic attitude arising from
court decisions on constitutional law. As was the laissez-faire concept was manifest in
explicitly stated by Justice Cardozo, speaking decisions during such period, there being the
of that era: "Laissez-faire was not only a finely-spun distinctions in the Wolff Packing
counsel of caution which statesmen would do Co. v. Court of Industrial Relations13 decision,
well to heed. It was a categorical imperative as to when certain businesses could be
which statesmen as well as judges, must classified as affected with public interest to
obey."7 For a long time, legislation tending to justify state regulation as to prices. After
reduce economic inequality foundered on the eleven years, in 1934, in Nebbia v. New
rock that was the due process clause, York,14 the air of unreality was swept away by
this explicit pronouncement from the United liberal and conservative supporters of our
States Supreme Court: "The phrase 'affected large-scale business under private ownership
with a public interest' can, in the nature of advocate or concede the amounts and kinds of
things, mean no more than that an industry, governmental limitation and aid which they
for adequate reason, is subject to control for regard as necessary to make the system work
the public good." efficiently and humanely. Sooner or later, they
are willing to have government intervene for
It is thus apparent that until the the purpose of preventing the system from
administration of President Roosevelt, being too oppressive to the masses of the
the laissez-faire principle resulted in the people, protecting it from its self-destructive
contraction of the sphere where governmental errors, and coming to its help in other ways
entry was permissible. The object was to when it appears not to be able to take care of
protect property even if thereby the needs of itself."18
the general public would be left unsatisfied.
This was emphatically put forth in a work of At any rate, by 1943, the United States was
former Attorney General, later Justice, reconciled to laissez-faire having lost its
Jackson, citing an opinion of Judge Van dominance. In the language of Justice Jackson
Orsdel. Thus: "It should be remembered that in the leading case of West Virginia State Board
of the three fundamental principles which of Education v. Barnette:19 "We must transplant
underlie government, and for which these rights to a soil in which the laissez-faire
government exists, the protection of life, concept or principle of non-interference has
liberty, and property, the chief of these is withered at least as to economic affairs, and
property . . . ."15 The above excerpt from Judge social advancements are increasingly sought
Van Orsdel forms part of his opinion through closer integration of society and
in Children's Hospital v. Adkins, when decided through expanded and strengthened
by the Circuit Court of Appeals.16 governmental controls."

Nonetheless, the social and economic forces at 2. The influence exerted by American
work in the United States to which the new constitutional doctrines unavoidable when the
deal administration of President Roosevelt Philippines was still under American rule
was most responsive did occasion, as of 1937, notwithstanding, an influence that has not
greater receptivity by the American Supreme altogether vanished even after independence,
Court to a philosophy less rigid in its the laissez-faire principle never found full
obeisance to property rights. Earlier acceptance in this jurisdiction, even during
legislation deemed offensive to the laissez- the period of its full flowering in the United
faire concept had met a dismal fate. Their States. Moreover, to erase any doubts, the
nullity during his first term could, more often Constitutional Convention saw to it that our
than not, be expected.17 fundamental law embodies a policy of the
responsibility thrust on government to cope
As a matter of fact, even earlier, in 1935, with social and economic problems and an
Professor Coker of Yale, speaking as a earnest and sincere commitment to the
historian, could already discern a contrary promotion of the general welfare through
drift. Even then he could assert that the range state action. It would thus follow that the force
of governmental activity in the United States of any legal objection to regulatory measures
had indeed expanded. According to him: "Thus adversely affecting property rights or to
both liberals and conservatives approve wide statutes organizing public corporations that
and varied governmental intervention; the may engage in competition with private
latter condemning it, it is true, when the enterprise has been blunted. Unless there be a
former propose it, but endorsing it, after it has clear showing of any invasion of rights
become a fixed part of the status quo, as so guaranteed by the Constitution, their validity
beneficial in its effects that no more of it is is a foregone conclusion. No fear need be
needed. Our history for the last half-century entertained that thereby spheres hitherto
shows that each important governmental deemed outside government domain have
intervention we have adopted has been called been enchroached upon. With our explicit
socialistic or communistic by contemporary disavowal of the "constituent-ministrant" test,
conservatives, and has later been approved by the ghost of the laissez-faire concept no
equally conservative men who now accept it longer stalks the juridical stage.
both for its proved benefits and for the worthy
traditions it has come to represent. Both
As early as 1919, in the leading case of Rubi V. problems they had at that time, may not now
Provincial Board of Mindoro,20 Justice Malcolm be sufficient with the growing and ever-
already had occasion to affirm: "The doctrines widening complexities of social and economic
of laissez-faire and of unrestricted freedom of problems and relations. If the United States of
the individual, as axioms of economic and America were to call a constitutional
political theory, are of the past. The modern convention today to draft a constitution for
period has shown a widespread belief in the the United States, does any one doubt that in
amplest possible demonstration of the provisions of that constitution there will
governmental activity. The Courts be found definite declarations of policy as to
unfortunately have sometimes seemed to trail economic tendencies; that there will be
after the other two branches of the matters which are necessary in accordance
Government in this progressive march." with the experience of the American people
during these years when vast organizations of
It was to be expected then that when he spoke capital and trade have succeeded to a certain
for the Court in Government of the Philippine degree to control the life and destiny of the
Islands v. Springer,21 a 1927 decision, he found American people? If in this constitution the
nothing objectionable in the government itself gentleman will find declarations of economic
organizing and investing public funds in such policy, they are there because they are
corporations as the National Coal Co., the Phil. necessary to safeguard the interests and
National Bank, the National Petroleum Co., the welfare of the Filipino people because we
National Development Co., the National believe that the days have come when in self-
Cement Co. and the National Iron Co. There defense, a nation may provide in its
was not even a hint that thereby the laissez- constitution those safeguards, the patrimony,
faire concept was not honored at all. It is true the freedom to grow, the freedom to develop
that Justice Malcolm concurred with the national aspirations and national interests,
majority in People v. Pomar,22 a 1924 opinion, not to be hampered by the artificial
which held invalid under the due process boundaries which a constitutional provision
clause a provision providing for maternity automatically imposes."25
leave with pay thirty days before and thirty
days after confinement. It could be that he had Delegate Roxas continued further: "The
no other choice as the Philippines was then government is the creature of the people and
under the United States, and only recently the the government exercises its powers and
year before, the above-cited case of Adkins v. functions in accordance with the will and
Children's Hospital,23 in line with the laissez- purposes of the people. That is the first
faire principle, did hold that a statute principle, the most important one underlying
providing for minimum wages was this document. Second, the government
constitutionally infirm on the same ground. established in this document is, in its form, in
our opinion, the most adapted to prevailing
Our constitution which took effect in 1935, conditions, circumstances and the political
upon the inauguration of the Commonwealth outlook of the Filipino people. Rizal said,
of the Philippines, erased whatever doubts 'Every people has the kind of government that
there might be on that score. Its philosophy is they deserve.' That is just another form of
antithetical to the laissez-faire concept. expressing the principle in politics enunciated
Delegate, later President, Manuel Roxas, one of by the French philosophers when they said:
the leading members of the Constitutional 'Every people has the right to establish the
Convention, in answer precisely to an form of government which they believe is
objection of Delegate Jose Reyes of Sorsogon, most conducive to their welfare and their
who noted the "vast extensions in the sphere liberty.' Why have we preferred the
of governmental functions" and the "almost government that is established in this draft?
unlimited power to interfere in the affairs of Because it is the government with which we
industry and agriculture as well as to compete are familiar. It is the form of government
with existing business" as "reflections of the fundamentally such as it exists today; because
fascination exerted by [the then] current it is the only kind of government that our
tendencies" in other jurisdictions,24 spoke people understand; it is the kind of
thus: "My answer is that this constitution has government we have found to be in
a definite and well defined philosophy, not consonance with our experience, with the
only political but social and economic. A necessary modification, capable of permitting
constitution that in 1776 or in 1789 was a fair play of social forces and allowing the
sufficient in the United States, considering the
people to conduct the affairs of that centavos in the daily wages of an ordinary
government."26 laborer? And yet under our present regime of
social justice, liberty and democracy, these
One of the most prominent delegates, a things are happening; these things, I say, are
leading intellectual, former President Rafael happening. Are those people getting any
Palma of the University of the Philippines, justice? No. They cannot get justice now from
stressed as a fundamental principle in the our courts. For this reason, I say it is necessary
draft of the Constitution the limitation on the that we insert 'social justice' here and that
right to property. He pointed out that the then social justice must be established by law.
prevailing view allowed the accumulation of Proper legal provisions, proper legal facilities
wealth in one family down to the last remote must be provided in order that there be a
descendant, resulting in a grave regime not of justice alone, because we have
disequilibrium and bringing in its wake that now and we are seeing the oppression
extreme misery side by side with conspicuous arising from such a regime. Consequently, we
luxury. He did invite attention to the few must emphasize the term 'social justice'."28
millionaires at one extreme with the vast
masses of Filipinos deprived of the necessities Delegate Ventenilla of Pangasinan reflected
of life at the other. He asked the Convention the attitude of the Convention as to
whether the Filipino people could long remain why laissez-faire was no longer acceptable.
indifferent to such a deplorable situation. For After speaking of times having changed, he
him to speak of a democracy under such proceeded: "Since then new problems have
circumstances would be nothing but an arisen. The spiritual mission of government
illusion. He would thus emphasize the urgent has descended to the level of the material.
need to remedy the grave social injustice that Then its function was primarily to soothe the
had produced such widespread aching spirit. Now, it appears, it must also
impoverishment, thus recognizing the vital appease hunger. Now that we may read history
role of government in this sphere.27 backwards, we know for instance, that the old
theory of 'laissez-faire' has degenerated into
Another delegate, Tomas Confesor of Iloilo, 'big business affairs' which are gradually
was quite emphatic in his assertion for the devouring the rights of the people the same
need of a social justice provision which is a rights intended to be guarded and protected
departure from the laissez-faire principle. by the system of constitutional guaranties.
Thus: "Take the case of the tenancy system in Oh, if the Fathers were now alive to see the
the Philippines. You have a tenant. There are changes that the centuries have wrought in
hundreds of thousands of tenants working day our life! They might contemplate the sad
in and day out, cultivating the fields of their spectacle of organized exploitation greedily
landlords. He puts all his time, all his energy, devouring the previous rights of the
the labor and the assistance of his wife and individual. They might also behold the gradual
children, in cultivating a piece of ground for disintegration of society, the fast
his landlord but when the time comes for the disappearance of the bourgeois the middle
partition of the products of his toil what class, the backbone of the nation and the
happens? If he produces 25 cavanes of rice, he consequent drifting of the classes toward the
gets only perhaps five and the twenty goes to opposite extremes the very rich and the
the landlord. Now can he go to court? Has he a very poor."29
chance to go to court in order to secure his
just share of the products of his toil? No. Shortly after the establishment of the
Under our present regime of law, under our Commonwealth, the then Justice Jose P.
present regime of justice, you do not give that Laurel, himself one of the foremost delegates
to the poor tenant. Gentlemen, you go to the of the Constitutional Convention, in a
Cagayan Valley and see the condition under concurring opinion, later quoted with
which those poor farmers are being exploited approval in the leading case of Antamok
day in and day out. Can they go to court under Goldfields Mining Co. v. Court of Industrial
our present regime of justice, of liberty, or Relations,30 decided in 1940, explained clearly
democracy? The other day, workmen were the need for the repudiation of the laissez-
shot by the police just because they wanted to faire doctrine. Thus: "It should be observed at
increase or they desired that their wages be the outset that our Constitution was adopted
increased from thirty centavos a day to forty in the midst of surging unrest and
or fifty centavos. Is it necessary to spill human dissatisfaction resulting from economic and
blood just to secure an increase of ten social distress which was threatening the
stability of governments the world over. Alive ago, carry greater conviction now. "The life of
to the social and economic forces at work, the the law has not been logic; it has been
framers of our Constitution boldly met the experience. The felt necessities of the time,
problems and difficulties which faced them the prevalent moral and political theories,
and endeavored to crystallize, with more or intuitions of public policy avowed or
less fidelity, the political, social and economic unconscious, even the prejudices which
propositions of their age, and this they did, judges share with their fellow-men, have had
with the consciousness that the political and a good deal more to do than the syllogism in
philosophical aphorism of their generation determining the rules by which men should be
will, in the language of a great jurist, 'be governed."33 Then too, there was the warning
doubted by the next and perhaps entirely of Geny cited by Cardozo that undue stress or
discarded by the third.' . . . Embodying the logic may result in confining the entire system
spirit of the present epoch, general provisions of positive law, "within a limited number of
were inserted in the Constitution which are logical categories, predetermined in essence,
intended to bring about the needed social and immovable in basis, governed by inflexible
economic equilibrium between component dogmas," thus rendering it incapable of
elements of society through the application of responding to the ever varied and changing
what may be termed as the justitia exigencies of life.34,
communis advocated by Grotius and Leibnits
many years ago to be secured through the It is cause enough for concern if the objection
counterbalancing of economic and social to the Bacani decision were to be premised on
forces and opportunities which should be the score alone that perhaps there was fidelity
regulated, if not controlled, by the State or to the requirements of logic and jural
placed, as it were, in custodia societatis. 'The symmetry carried to excess. What appears to
promotion of social justice to insure the well- me much more deplorable is that it did fail to
being and economic security of all the people' recognize that there was a repudiation of
was thus inserted as vital principle in our the laissez-faire concept in the Constitution.
Constitution. ... ."31 In the course of such As was set forth in the preceding pages, the
concurring opinion and after noting the Constitution is distinguished precisely by a
changes that have taken place stressing that contrary philosophy. The regime of liberty if
the policy of laissez-faire had indeed given provided for, with the realization that under
way to the assumption by the government of the then prevalent social and economic
the right to intervene although qualified by conditions, it may be attained only through a
the phrase "to some extent", he made clear that government with its sphere of activity ranging
the doctrine in People v. Pomar no longer far and wide, not excluding matters hitherto
retain, "its virtuality as a living principle."32 left to the operation of free enterprise. As
rightfully stressed in our decision today in
3. It must be made clear that the objection to line with what was earlier expressed by Justice
the "constituent-ministrant" classification of Laurel, the government that we have
governmental functions is not to its established has as a fundamental principle the
formulation as such. From the standpoint of promotion of social justice.35 The same jurist
law as logic, it is not without merit. It has gave it a comprehensive and enduring
neatness and symmetry. There are hardly any definition as the "promotion of the welfare of
loose ends. It has the virtue of clarity. It may all the people, the adoption by the government
be said in its favor likewise that it reflects all- of measures calculated to insure economic
too-faithfully the laissez-faire notion that stability of all the component elements of
government cannot extend its operation society, through the maintenance of a proper
outside the maintenance of peace and order, economic and social equilibrium in the
protection against external security, and the interrelations of the members of the
administration of justice, with private rights, community, constitutionally, through the
especially so in the case of property, being adoption of measures legally justifiable, or
safeguarded and a hint that the general extra-constitutionally, through the exercise of
welfare is not to be entirely ignored. powers underlying the existence of all
governments in the time honored principle
It must not be lost sight of though that logic of salus populi estsuprema lex."36
and jural symmetry while undoubtedly
desirable are not the prime consideration. There is thus from the same distinguished
This is especially so in the field of public law. pen, this time writing for the Court, a
What was said by Holmes, almost nine decades reiteration of the view of the laissez-
faire doctrine being repugnant to the and amplitude or through the undertaking of
fundamental law. It must be added though business activities, would have to face a
that the reference to extra-constitutional searching and rigorous scrutiny. It is clear that
measures being allowable must be understood their legitimacy cannot be challenged on the
in the sense that there is no infringement of ground alone of their being offensive to the
specific constitutional guarantees. Otherwise, implications of the laissez-faire concept.
the judiciary will be hard put to sustain their Unless there be a repugnancy then to the
validity if challenged in an appropriate legal limitations expressly set forth in the
proceeding. Constitution to protect individual rights, the
government enjoys a much wider latitude of
The regime of liberty contemplated in the action as to the means it chooses to cope with
Constitution with social justice as a grave social and economic problems that
fundamental principle to reinforce the pledge urgently press for solution. For me, at least,
in the preamble of promoting the general that is to manifest deference to the philosophy
welfare reflects traditional concepts of a of our fundamental law. Hence my full
democratic policy infused with an awareness concurrence, as announced at the outset.
of the vital and pressing need for the
government to assume a much more active 5. The opinion of Justice Makalintal contains
and vigorous role in the conduct of public this footnote: "It must be stated, however, that
affairs. The framers of our fundamental law we do not here decide the question not at
were as one in their strongly-held belief that issue in this case of whether or not a labor
thereby the grave and serious infirmity then organization composed employees
confronting our body-politic, on the whole discharging governmental functions, which is
still with us now, of great inequality of wealth allowed under the legal provision just quoted,
and mass poverty, with the great bulk of our provided such organization does not impose
people ill-clad, ill-housed, ill-fed, could be the obligation to strike or to join in strike, may
remedied. Nothing else than communal effort, petition for a certification election and compel
massive in extent and earnestly engaged in, the employer to bargain collectively with it for
would suffice. purposes other than to secure changes or
conditions in the terms and conditions of
To paraphrase Laski, with the necessary employment."
modification in line with such worthy
constitutional ends, we look upon the state as With such an affirmation as to the scope of our
an organization to promote the happiness of decision there being no holding on the vexing
individuals, its authority as a power bound by question of the effects on the rights of labor
subordination to that purpose, liberty while to in view of the conclusion reached that the
be viewed negatively as absence of restraint function engaged in is governmental in
impressed with a positive aspect as well to character, I am in full agreement. The answer
assure individual self-fulfillment in the to such a vital query must await another day.
attainment of which greater responsibility is
thrust on government; and rights as boundary
marks defining areas outside its
domain.37 From which it would follow as Laski
so aptly stated that it is the individual's
"happiness and not its well-being [that is] the
criterion by which its behavior [is] to be
judged. His interests, and not its power, set
the limits to the authority it [is] entitled to
exercise."38 We have under such a test enlarged
its field of competence. 4. With the decision
reached by us today, the government is freed
from the compulsion exerted by the Bacani
doctrine of the "constituent-ministrant" test as
a criterion for the type of activity in which it
may engage. Its constricting effect is
consigned to oblivion. No doubts or
misgivings need assail us that governmental
efforts to promote the public weal, whether
through regulatory legislation of vast scope