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Facts: Carlos Gsell is engaged in the manufacture of umbrellas, matches and hats; Anselmo Ferrazzini was employed by Gsell as foreman in the umbrella factory; o At some point, he was discharged by Gsell so he filed this case to recover damages for an alleged wrongful discharge;
Gsell, for his part admitted he discharged Ferrazzini without written advice of six months in advance as provided in the contract; o But, he says the discharge was lawful on account of absence, unfaithfulness, and disobedience of orders; He also sought a counterclaim for further alleged breach by Ferrazzini after his discharge (that he cannot enter into employment of any enterprise in the Philippines, during his employment and within 5 years after termination except when given written permission; if he does, he will pay Gsell P10k; Gsell was employed in cement industry);
o Gsell he directed the manager to discontinue the habit of during; Bender he expressly told Ferrazini not to go out without permission; 2. For his unfaithfulness: o Ferrazzini he admitted saying to persons at supper in the mess hall that Gsell measured the cloth for the umbrellas, that it is his idea that Gsell has no confidence in his employees; but he testified that he did not remember saying that Specht, the foreman, was not receiving sufficient salary; o Specht and another coworker, however, testified
Trial court favoured Ferrazzini and declined to consider the counterclaim, so Gsell appealed. Issues:
positively to what he said about Specht; c. All the foregoing shows a conduct on the part of Ferrazzini inconsistent with the due and faithful performance of his duties as an employee of Gsell; former is at times a foreman and at times in charge of important departments of the factory wherein four hundred employees work, Gsell did only had the right to prohibit the drinking but also his duty for his own interests and the safety of his other employees; d. Although, in the record, Gsell terminated Ferrazzini on account of the conversation at the mess, he, at the time of the discharge, was authorized to take into consideration the latters whole course of conduct in determining whether the contract of employment should be terminated; 2. The stipulation is unlawful for being against public policy;
d. Two principal grounds why a contract in restraint of trade is void as against public policy: 1. Injury to the public by being deprived of the restricted partys industry; and 2. The injury to the party himself by being precluded from pursuing his occupation, and thus being prevented from supporting himself and his family; e. Contract under consideration is clearly one in undue or unreasonable restraint of trade and therefore against public policy: 1. It is limited to time and space but not as to trade;