Ansay v. Board of Directors of National Development Company
REITERATIONFacts
The Antecedents: Appellants filed a complaint against appellees praying for a 20% Christmas bonus for the years 1954 and 1955. Procedural History: The Court of First Instance of Manila, upon appellees' motion to dismiss, issued an order dismissing the complaint. The court reasoned that a bonus is an act of liberality, not within judicial power to command, and that petitioners admitted no legal duty on the part of respondents to give such bonus, only a moral obligation which the court cannot compel. A motion for reconsideration was denied. The Petition: Appellants appealed the dismissal, contending that their claim rests on moral grounds or what is defined by law as a natural obligation.
Issue(s)
Whether the appellants have a cause of action to compel the appellees to declare a Christmas bonus. Whether a bonus, not being a legal or contractual obligation, can be demanded by employees.
Ruling
The order appealed from is affirmed. The Supreme Court ruled that a bonus is an act of liberality and not a demandable obligation, and courts cannot compel its payment based on moral or natural obligation.
Ratio Decidendi
On whether the appellants have a cause of action to compel the appellees to declare a Christmas bonus: The Court affirmed the dismissal, holding that a bonus is an act of liberality. It is not within the judicial power to command respondents to be liberal. The appellants admitted that the respondents were not under a legal duty to give the bonus, but only asked that it be given because of a moral obligation. The Court reiterated that it has no power to compel a party to comply with a moral obligation. On whether a bonus, not being a legal or contractual obligation, can be demanded by employees: The Court clarified the nature of obligations under Article 1423 of the New Civil Code, distinguishing between civil and natural obligations. Civil obligations grant a right of action to compel performance, while natural obligations, based on equity and natural law, do not grant such a right of action but authorize the retention of what has been voluntarily fulfilled. Since the appellants admitted no legal duty and sought to compel performance based on moral obligation, which falls under natural obligations, and there had been no voluntary fulfillment, the court could not compel the grant of the bonus. The Court cited its ruling in Philippine Education Co. vs. CIR and the Union of Philippine Education Co. Employees (NUL), stating that from a legal point of view, a bonus is not a demandable and enforceable obligation unless it is made a part of the wage or salary compensation. While the case of H. E. Heacock vs. National Labor Union, et al. mentioned granting a bonus on equitable consideration, the facts in that case were not the same as in the instant one, thus the ruling could not be applied.
Main Doctrine
A bonus is an act of liberality and not a demandable or enforceable obligation unless it is made a part of the wage or salary compensation. While it may be granted on equitable considerations, courts cannot compel an employer to grant a bonus based solely on moral or natural obligation, as these do not grant a right of action to enforce performance.