162 MSF Tire and Rubber v. CA

MSF Tire and Rubber, Inc. v. CA G.R. No.
128632
AUGUST 5, 1999 Mendoza, J.
TOPIC IN SYLLABUS: Strikes, Lockouts, Picketing
SUMMARY: A labor dispute between Philtread and the Union arose, prompting both parties to file notices of lockout and
strike, respectively. The Union members then picketed outside the plant’s gate. SOLE assumed jurisdiction and certified
the same for compulsory arbitration. Thereafter, Philtread executed a MOA with Siam, selling the plant and its
equipment to a new corporation, MSF, which is owned by Siam and Philtread, 80-20. MSF then asked the union members
to desist from picketing. The union refused, prompting MSF to file a complaint for injunction. The Union questioned the
jurisdiction of the RTC, alleging the existence of a labor dispute between the parties, since MSF was a mere alter ego of
Philtread; hence, not an innocent bystander. RTC initially denied the same, but later on granted it. Thus, the Union filed
a petition before the CA, which the latter granted. SC held that MSF is too closely connected to Philtread for it to be
entitled to an injunctive writ, ruling that it was not an innocent bystander.
FACTS:
 A dispute arose between Philtread Tire and Rubber Corp. and Philtread Tire Workers’ Union, prompting the latter
to file a notice of strike in the NCMB charging the former with ULP for engaging in union busting for violating
provisions of the CBA. Subsequenty, the Union picketed and held assemblies outside Philtread’s plant in
Muntinlupa. Philtread, on its part, filed a notice of lockout.
 SOLE Confesor assumed jurisdiction over the dispute and certified it for compulsory arbitration, enjoining the
Union from striking and Philtread from locking out union members.
 During the pendency of the dispute, Philtread entered into a MOA with Siam Tire, a subsidiary of Siam Cement,
selling the former’s plant and equipment to a new company, MSF Tire and Rubber (Siam 80%, Philtread 20%),
as well as the land to Sucat Land Corp. (Siam 40%, Phitread 60%).
 MSF then informed the union members of the purchase and asked them to desist from picketing outside its plant
and to remove the banners, streamers and tent that they placed outside the plant. The Union refused, prompting
MSF to file a complaint for injunction with damages against the Union and its officers and directors before the
RTC of Makati.
 The Union filed a MTD based on lack of jurisdiction, alleging the involvement of a labor dispute and that MSF, as
a mere alter ego of Philtread, was not an innocent bystander. RTC initially denied the injunction, but upon MR,
granted it. The Union filed a petition for certiorari and prohibition before the CA, which granted the same and
ordered the RTC to dismiss the civil case for lack of jurisdiction.
ISSUES:
1. WoN MSF has shown a clear legal right to the issuance of a writ of injunction under the “innocent bystander”
rule.
2. WoN the Union’s failure to disclose the pendency of the proceeding before the NCMB in its CNFS and its
failure to file a MR of the RTC’s order is fatal to its petition before the CA.
HELD:
1. No.
 MSF was a party to the proceedings before the NCMB. Moreover, it was MSF which initiated the action for
injunction before the RTC. The Union was only forced to file a petition for review before the CA because of MSF’s
action in seeking an injunction from the RTC, when it could have obtained the same relief from the SOLE. In fact,
MSF’s complaint before the RTC suffers from the same omission. It is not in keeping with the requirements of
fairness for MSF to demand strict application of the prohibition against forum-shopping, when it too, is guilty of
the same omission.
2. s
 In the case of PAFLU v. Cloribel, SC stated that the right to picket as a means of communicating the facts of a
labor dispute is a phase of the freedom of speech guaranteed by the Constitution, which, if peacefully carried
out, cannot be curtailed even in the absence of EER. This right, however, is not absolute.
DIGEST MAKER’S NAME CASE #XX

 While peaceful picketing is entitled to protection as an exercise of free speech, we believe the courts are not
without power to confine or localize the sphere of communication or the demonstration to the parties to the
labor dispute, including those with related interest, and to insulate establishments or persons with no industrial
connection or having interest totally foreign to the context of the dispute. Thus the right may be regulated at
the instance of third parties or “innocent bystanders” if it appears that the inevitable result of its exercise is
to create an impression that a labor dispute with which they have no connection or interest exists between
them and the picketing union or constitute an invasion of their rights.
 Thus, an “innocent bystander,” who seeks to enjoin a labor strike, must satisfy the court that aside from the
grounds specified in Rule 58 of the Rules of Court, it is entirely different from, without any connection
whatsoever to, either party to the dispute and, therefore, its interests are totally foreign to the context
thereof.
 CAB: MSF cannot be said not to have such connection to the dispute. Philtread remains as 20% owner of MSF
and 60% owner of Sucat Land, which was likewise incorporated in accordance with Siam Tire. This, together with
the fact that MSF uses the same plant, machinery, tools, and equipment, substantially the same working
conditions, and manufacture the same products as Philtread, the Court concluded that MSF’s personality is so
closely linked to Philtread as to bar its entitlement to an injunctive writ. Thus, MSF has no clear and unmistakable
right to entitle it to the writ of preliminary injunction.
 SC further stated that, although the corporate veil may be pierced if the corporate fiction is used to defeat public
convenience, justify a wrong, protect fraud, defend crime, or where the corporation is a mere alter-ego or
business conduit, it is not these standards but those of the “innocent bystander” rule which govern WoN
petitioner is entitled to an injunctive writ.
DIGEST MAKER’S NAME CASE #XX

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MSF Tire and Rubber, Inc. v. CA G.R. No.

DIGEST MAKER’S NAME CASE #XX

DIGEST MAKER’S NAME CASE #XX

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