Aguirre, Nolaida 2011-0087

PEOPLE VS POMAR (Police Power as the basis of Labor Laws) G.R. No. L-22008 Date: November 3, 1924 Plaintiff- appellee: The People of the Philippine Islands Defendant-appellant: Julio Pomar Ponente: Johnson, J.

FACTS: The defendant is the manager and person in charge of La Flor de la Isabel, a tobacco factory pertaining to the La Compania General de Tobaos de Filipinas. An employee by the name of Macaria Fajardo was granted a vacation leave by the defendant which began on July 16, 1923, by the reason of her pregnancy. Said manager failed and refused to ar Fajardo the sum of 80.00 to which she was entitled as her regular wages corresponding to 30 days before and 30 days after the delivery and confinement pursuant to Sec. 13 of Act No. 3071, which took place on August 12, 1923 Fajardo filed a complaint against the defendant. The defendant demurred, alleging that the facts therein contained did not constitute an offense. The demurrer was overruled, whereupon the defendant answered and admitted at the trial all the allegations contained in the complaint, he contended that the provisions of Sec. 15 of Act. No. 3017 upon which the complaint was based was illegal, unconstitutional, and void. The defendant was found guilty of the allege offense described in the complaint and sentenced him to pay a fine of 50.00 or to suffer a subsidiary imprisonment in case of insolvency, and to pat the cost in accordance with the provisions of Sec. 15 of said Act.

ISSUE: Whether or not the provisions of sections 13 and 15 of Act No. 3071 are a reasonable and lawful exercise of the police power of the state?

HELD: Yes. We are fully persuaded, under the facts and the law, that the provisions of section 13, of Act No. 3071 of the Philippine Legislature, are unconstitutional and void, in that they violate and are contrary to the provisions of the first paragraph of section 3 of the Act of Congress of the United States of August 29, 1916. (Vol. 12, Public Laws, p. 238.) Therefore, the sentence of the lower court is hereby revoked, the complaint is hereby dismissed, and the defendant is hereby discharged from the custody of the law, with costs de oficio.

RATIO DECIDENDI: The statute now under consideration is attacked upon the ground that it authorizes an unconstitutional interference with the freedom of contract including within the guarantees of the due process clause of the 5th Amendment. That the right to contract about one's affairs is a part of the liberty of the individual protected by this clause is settled by the decision of this court, and is no longer open to question. Within this liberty are contracts of employment of labor. In making such contracts, generally speaking, the parties have an equal right to obtain from each other the best terms they can as the result of private bargaining. (Allgeyer vs. Louisiana, 165 U. S., 578; 591; Adair vs. United States, 208 U. S., 161; Muller vs. Oregon, 208 U. S., 412, 421.) xxxxxxxxx The law takes account of the necessities of only one party to the contract. It ignores the necessities of the employer by compelling him to pay not less than a certain sum, not only whether the employee is capable of earning it, but irrespective of the ability of his business to sustain the burden, generously leaving him, of course, the privilege of abandoning his business as an alternative for going on at a lossThe law takes no account of periods of distress and business depression, or crippling losses, which may leave the employer himself without adequate means of livelihood. To the extent that the sum fixed exceeds the fair value of the services rendered, it amounts to a compulsory exaction from the employer for the support of a partially indigent person, for whose condition there rests upon him no peculiar responsibility, and therefore, in effect, arbitrarily shifts to his shoulders a burden which, if it belongs to anybody, belongs to society as a whole. The failure of this state which, perhaps more than any other, puts upon it the stamp of invalidity is that it exacts from the employer an arbitrary payment for a purpose and upon a basis having no casual connection with his business, or the contract, or the work the employee engages to do. The declared basis, as already pointed out, is not the value of the service rendered, but the extraneous circumstances that the employee needs to get a prescribed sum of money to insure her subsistence, health and morals. . . . The necessities of the employee are alone considered, and these arise outside of the employment, are the same when there is no employment, and as great in one occupation as in another. . . . In principle, there can be no difference between the case of selling labor and the case of selling goods. If one goes to the butcher, the baker, or grocer to buy food, he is morally entitled to obtain the worth of his money, but he is not entitle to more. If what he gets is worth what he pays, he is not justified in demanding more simply because he needs more; and the shopkeeper, having dealt fairly and honestly in that transaction, is not concerned in any peculiar sense with the question of his customer's necessities. Should a statute undertake to vest in a commission power to determine the quantity of food necessary for individual support, and require the shopkeeper, if he sell to the individual at all, to furnish that quantity at not more than a fixed maximum, it would undoubtedly fall before the constitutional test. The fallacy of any argument in support of the validity of such a statute would be quickly exposed. The argument in support of that now being considered is equally fallacious, though the weakness of it may not be so plain. It has been said that the particular statute before us is required in the interest of social justice for whose end freedom of contract may lawfully be subjected to restraint. The liberty of the individual to do as he pleases, even in innocent matters, is not absolute. That liberty must frequently yield to the common good, and the line beyond which the power of interference may not be pressed is neither definite nor unalterable, may be made to move, within limits not well defined, with changing needs and circumstances.