VALENTINO S.

LINGAT AND APRONIANO

ALTOVEROS, petitioners, vs. COCA-COLA BOTTLERS
PHILIPPINES, INC., MONTE DAPPLES TRADING, AND DAVID
LYONS, ***** respondents.

DECISION

DEL CASTILLO, *** J  : p

This Petition for Review on Certiorari assails the July 4, 2012

Decision 1 of the Court of Appeals (CA) in CA-G.R. SP No. 112829, which
modified the July 7, 2009 Decision 2 of the National Labor Relations
Commission (NLRC) in NLRC LAC No. 03-000855-09. Also challenged is the
January 16, 2013 CA Resolution 3 which denied petitioners Valentino S.
Lingat (Lingat) and Aproniano Altoveros' (Altoveros) (petitioners) Motion for
Reconsideration.  HTcADC

Factual Antecedents

On May 5, 2008, petitioners filed a Complaint 4 for illegal dismissal,

moral and exemplary damages, and attorney's fees against Coca-Cola
Bottlers Phils., Inc. (CCBPI), Monte Dapples Trading Corp. (MDTC), and
David Lyons (Lyons) (respondents).
Petitioners averred in their Position Paper 5 and Reply 6 that, in August
1993 and January 1996, CCBPI employed Lingat and Altoveros as plant
driver and forklift operator, and segregator/mixer respectively. They added
that they had continually worked for CCBPI until their illegal dismissal in April
2005 (Lingat) and December 2005 (Altoveros).
According to petitioners, they were regular employees of CCBPI
because it engaged them to perform tasks necessary and desirable in its
business or trade. They explained that CCBPI made them part of its
operations, and without them its products would not reach its clients. They
asserted that their work was the link between CCBPI and its sales force.
Petitioners alleged that CCBPI engaged Lingat primarily as a plant
driver but he also worked as forklift operator. In particular, he drove CCBPI's
truck loaded with softdrinks and its other products, and thereafter, returned
the empty bottles as well as the unsold softdrinks back to the plant of CCBPI.
On the other hand, as segregator/mixer of softdrinks, Altoveros was required
to segregate softdrinks based on the orders of the customers. Altoveros
declared, that when a customer needed cases of softdrinks, such need was
relayed to him since no sales personnel was allowed in the loading area.
Petitioners further stated, that after becoming regular employees (as
they had been employed for more than a year), and by way of a modus
operandi, CCBPI transferred them from one agency to another. These
agencies included Lipercon Services, Inc., People Services, Inc., Interserve
Management and Manpower Resources, Inc. The latest agency to where they
were transferred was MDTC. They claimed that such transfer was a scheme
to avoid their regularization in CCBPI.
In addition, petitioners stressed that the aforesaid agencies were labor-
only contractors which did not have any equipment, machinery, and work
premises for warehousing purposes. They insisted that CCBPI owned the
warehouse where they worked; the supervisors thereat were CCBPI's
employees; and, petitioners themselves worked for CCBPI, not for any
agency. In fine, they maintained that they were regular employees of CCBPI
because:
[Petitioners] worked within the premises of [CCBPI,] use the
equipment, the facilities, cater on [its] products, [and served] the Sales
Forces x x x. In other words, while at work, [petitioners] were under the
direction, control and supervision of respondent Coca-Cola's regular
employees. The situation calls for the over-all control of the operations
by Coca-Cola employees as [petitioners] perform[ed] their work with x
x x Coca-Cola and [its] premises. x x x 7
Finally, petitioners argued that CCBPI dismissed them after it found out
that they were "overstaying." As such, they posited that they were illegally
dismissed as their termination was without cause and due process of law.
For their part, CCBPI and Lyons, its President/Chief Executive Officer,
countered in their Position Paper 8 and Reply 9 that this case must be
dismissed because the Labor Arbiter (LA) lacked jurisdiction, there being no
employer-employee relationship between the parties.
CCBPI and Lyons declared that CCBPI was engaged in the business of
manufacturing, distributing, and marketing of softdrinks and other beverage
products. By reason of its business, CCBPI entered into a Warehousing
Management Agreement 10 with MDTC for the latter to perform warehousing
and inventory functions for the former.
CCBPI and Lyons insisted that MDTC was a legitimate and
independent contractor, which only assigned petitioners at CCBPI's plant in
Otis, Manila. They posited that MDTC carried on a distinct and independent
business; catered to other clients, aside from CCBPI; and possessed
sufficient capital and investment in machinery and equipment for the conduct
of its business as well as an office building.
CCBPI and Lyons likewise stressed that petitioners were employees of
MDTC, not CCBPI. They averred that MDTC was the one who engaged
petitioners and paid their salaries. They also claimed that CCBPI only
coordinated with the Operations Manager of MDTC in order to monitor the
end results of the services rendered by the employees of MDTC. They added
that it was MDTC which imposed corrective action upon its employees when
disciplinary matters arose. aScITE

Finally, CCBPI and Lyons averred that when the Warehousing

Management Agreement between CCBPI and MDTC expired, the parties no
longer renewed the same. Consequently, it came as a surprise to CCBPI that
petitioners filed this complaint considering that CCBPI was not their employer,
but MDTC.
Meanwhile, LA Catalino R. Laderas declared that despite notice, MDTC
failed to file its position paper on this case. 11
Ruling of the Labor Arbiter

On December 9, 2008, the LA ruled for the petitioners, the dispositive

portion of his Decision reads:
WHEREFORE, premised on the foregoing considerations[,]
judgment is hereby rendered declaring that complainants were
ILLEGALLY DISMISSED from their employment.
Respondent CCBPI is hereby ordered, viz.:
1. To reinstate complainants to their former positions without
loss of seniority rights and privileges and to pay complainants
backwages from the time they were illegally dismissed up to the time of
this decision.
The computation unit of this Office is hereby directed to
compute the monetary award of the complainant[s] which forms part of
this decision.
Other claims are DISMISSED for lack of merit.
SO ORDERED. 12
The LA ruled that respondents failed to refute that petitioners were
employees of CCBPI and the latter undermined their regular status by
transferring them to an agency. The LA decreed that, per the identification
cards (IDs) of petitioners, CCBPI hired Lingat in 1993, and Altoveros in 1996.
Moreover, as plant driver, and segregator/mixer, petitioners performed
activities necessary in the usual business or trade of CCBPI; and, their
continued employment for more than one year proved that they were regular
employees of CCBPI.
The LA likewise ratiocinated that the contracts of employment which
petitioners may have entered with CCBPI's contractors could not undermine
their (petitioners) tenure arising from their regular status with CCBPI.
In sum, the LA decreed that, since respondents failed to debunk the
allegations raised by petitioners, then judgment must be rendered in favor of
petitioners.
Ruling of the National Labor Relations Commission

On appeal, the NLRC dismissed the illegal dismissal case. It,

nonetheless, ordered MDTC to pay Altoveros separation pay amounting to
P10,725.00.
According to the NLRC, Lingat stated that CCBPI illegally dismissed
him in April 2005. However, he only filed his complaint for illegal dismissal on
May 5, 2008, which was beyond three years from his dismissal. Thus, Lingat's
complaint must be dismissed on the ground of prescription.
Also, the NLRC decreed that the complaint of Altoveros was bereft of
merit. It explained that per Altoveros' ID, CCBPI employed him in January
1996 until September 19, 1996; thereafter, he was employed by Genesis
Logistics and Warehouse Corporation; and, on April 7, 2003, MDTC hired him
and assigned him as loader/mixer at CCBPI's warehouse in Paco, Manila until
December 2005 when MDTC's contract with CCBPI expired.
In ruling that Altoveros was an employee of MDTC, the NLRC gave
credence to the Warehousing Management Agreement between MDTC and
CCBPI as well as to MDTC's Amended Articles of Incorporation. It held that
MDTC did not appear to be a mere agent of CCBPI but was one that provided
stock handling and storage services to CCBPI. It held that, considering MDTC
was the employer of Altoveros, then it must pay him separation pay of 1/2
month pay for every year of his service.
On November 4, 2009, the NLRC denied 13 petitioners' Motion for
Reconsideration prompting them to file a Petition for Certiorari with the CA.
Ruling of the Court of Appeals

On July 4, 2012, the CA modified the NLRC Decision in that it ordered

MDTC to pay separation pay to both petitioners.  HEITAD

Contrary to the finding of the NLRC, the CA found that the illegal
dismissal case filed by Lingat had not yet prescribed. It held that, aside from
money claims, Lingat prayed for reinstatement, as such, pursuant to Article
1146 of the Civil Code, Lingat had four years within which to file his case. It
noted that Lingat filed this suit on May 5, 2008 or only three years and one
day from his alleged illegal dismissal; thus, he timely filed his case against
respondents.
Nevertheless, the CA agreed with the NLRC that MDTC was an
independent contractor and the employer of petitioners. It gave weight to
petitioners' latest IDs, which were issued by MDTC as well as to the Articles of
Incorporation of MDTC, which indicated that its secondary purpose was "to
engage in the business of land transportation" and "the business of
warehousing services." It further ruled that MDTC had substantial capital
stock, as well as properties and equipment, which supported the conclusion
that MDTC was a legitimate labor contractor.
On January 16, 2013, the CA denied the Motion for Reconsideration on
the assailed Decision.

Issues

Undaunted, petitioners filed this Petition raising these issues:

1. Whether or not there exists [an] employer-employ[ee] relationship
between Petitioners and Respondent CCBPI;
2. Whether or not Petitioner Lingat's complaint is barred by prescription;
3. Whether or not the Court of Appeals gravely erred in declaring [that]
Petitioners [were] not regular employees of Respondent CCBPI;
4. Whether or not Petitioners were dismissed without cause and due
process;
5. Whether or not moral and exemplary damages lie; and
6. Whether or not the Petitioners are entitled to attorney's fees. 14
Petitioners maintain that they were regular employees of CCBPI. They
insist that their engagement by CCBPI in 1993 (Lingat) and 1996 (Altoveros)
proved that they were its employees from the beginning. They also aver that
they worked at CCBPI's warehouse, wore its uniforms, operated its
machinery, and were under the direct control and supervision of CCBPI. They
likewise contend that CCBPI illegally dismissed them from work. On this, they
insist that respondents themselves admitted that petitioners' employment
contract expired; and thereafter, they were no longer given any new
assignments. They remain firm that such termination of contract was not a
valid cause for their dismissal from work.
CCBPI and Lyons, for their part, counter that this Petition was not a
proper recourse because petitioners seek a recalibration of facts and
evidence which is not within the scope of the Petition because only pure
questions of law may be raised herein. They add that MDTC was a legitimate
and independent job contractor and was the employer of petitioners, not
CCBPI.

Our Ruling

The Petition is impressed with merit.

As a rule, the determination of whether an employer-employee
relationship exists between the parties involves factual matters that are
generally beyond the ambit of this Petition as only questions of law may be
raised in a petition for review on certiorari. However, this rule allows certain
exceptions, which include an instance where the factual findings of the courts
or tribunals below are conflicting. Given the situation here where the factual
findings of the NLRC and the CA are divergent from those of the LA, the Court
deems it proper to re-assess and review these findings in order to arrive at a
just resolution of the issues on hand. 15
Moreover, pursuant to Article 295 of the Labor Code, as amended and
renumbered, a regular employee is a) one that has been engaged to perform
tasks usually necessary or desirable in the employer's usual business or trade
— without falling within the category of either a fixed or a project or a
seasonal employee; or b) one that has been engaged for a least one year,
whether his or her service is continuous or not, with respect to such activity he
or she is engaged, and the work of the employee remains while such activity
exists.
In this case, petitioners described their respective duties at CCBPI in
this manner:
x x x I, V. Lingat, x x x was also engaged as forklift operator
[but] my main work as plant driver [required me] to take out truck
loaded with softdrinks/Coca-Cola products after the same has been
checked by the checker area; [I also] drive back Coca-Cola trucks
loaded with empty bottles or sometimes x x x unsold softdrinks x x x
This represented [my] daily chores while employed at Coca-Cola[.]  ATICcS

x x x I, A. Altoveros, was with the latest work as

segregator/mixer of softdrinks according to the demands of the
customers, that is, when a customer needed ten (10) cases of Royal
Tru-Orange or five (5) cases of Coke Sakto, the same is relayed to me
in the loading area (as no sales personnel is allowed therein)[.] I have
to segregate softdrinks accordingly to fill up the order of [the]
customer. 16
 To ascertain if one is a regular employee, it is primordial to determine
the reasonable connection between the activity he or she performs and its
relation to the trade or business of the supposed employer. 17
Relating petitioners' tasks to the nature of the business of CCBPI —
which involved the manufacture, distribution, and sale of soft drinks and other
beverages — it cannot be denied that mixing and segregating as well as
loading and bringing of CCBPI's products to its customers involved distribution
and sale of these items. Simply put, petitioners' duties were reasonably
connected to the very business of CCBPI. They were indispensable to such
business because without them the products of CCBPI would not reach its
customers.
Interestingly, in Coca-Cola Bottlers Philippines, Inc. v. Agito, 18 the
Court held that respondents salesmen therein were regular employees of
CCBPI as their work constituted distribution and sale of its products. The
Court also stressed in Agito that the repeated rehiring of those salesmen
bolstered the indispensability of their work to the business of CCBPI.
Similarly, herein petitioners have worked for CCBPI since 1993 (Lingat)
and 1996 (Altoveros) until the non-renewal of their contracts in 2005. Aside
from the fact that their work involved the distribution and sale of the products
of CCBPI, they remained to be working for CCBPI despite having been
transferred from one agency to another. Hence, such repeated re-hiring of
petitioners, and the performance of the same tasks for CCBPI established the
necessity and the indispensability of their activities in its business.
In addition, in Pacquing v. Coca-Cola Philippines, Inc., 19 the Court
ruled that the sales route helpers of CCBPI were its regular employees. In this
case, petitioners had similarly undertook to bring CCBPI's products to its
customers at their delivery points. In Pacquing, it was even stated that therein
sales route helpers "were part of a complement of three personnel comprised
of a driver, a salesman and a regular route helper, for every delivery
truck." 20 As such, it would be absurd for the Court to hold those helpers as
regular employees of CCBPI without giving the same status to its plant driver,
including its segregator of softdrinks, whose work also had reasonable
connection to CCBPI's business of distribution and sale of soft drinks and
other beverage products.
Furthermore, in Quintanar v. Coca-Cola Bottlers, Philippines,
Inc., 21 therein route helpers, like petitioners, were tasked to distribute
CCBPI's products and were likewise successively transferred to agencies
after having been initially employed by CCBPI. The Court decreed therein that
said helpers were regular employees of CCBPI notwithstanding the fact that
they were transferred to agencies while working for CCBPI. In the same vein,
the transfer of herein petitioners from one agency to another did not adversely
affect their regular employment status. Such was the case because they
continued to perform the same tasks for CCBPI even if they were placed
under certain agencies, the last of which was MDTC.
Moreover, CCBPI and Lyons' contention that MDTC was a legitimate
labor contractor and was the actual employer of petitioners does not hold
water.
A labor-only contractor is one who enters into an agreement with the
principal employer to act as the agent in the recruitment, supply, or placement
of workers for the latter. A labor-only contractor 1) does not have substantial
capital or investment in tools, equipment, work premises, among
others, and the recruited employees perform tasks necessary to the main
business of the principal; or 2) does not exercise any right of control anent the
performance of the contractual employee. In such case, where a labor-only
contracting exists, the principal shall be deemed the employer of the
contractual employee; and the principal and the labor-only contractor shall be
solidarily liable for any violation of the Labor Code. On the other hand, a
legitimate job contractor enters into an agreement with the employer for the
supply of workers for the latter but the "employer-employee relationship
between the employer and the contractor's employees [is] only for a limited
purpose, i.e., to ensure that the employees are paid their wages." 22
In Diamond Farms, Inc. v. Southern Philippines Federation of Labor
(SPFL)-Workers Solidarity of DARBMUPCO/Diamond-SPFL, 23 the Court
distinguished a labor-only contractor and a legitimate job contractor in this
wise:
The Omnibus Rules Implementing the Labor Code distinguishes
between permissible job contracting (or independent contractorship)
and labor-only contracting. Job contracting is permissible under the
Code if the following conditions are met: 
TIADCc

(a) The contractor carries on an independent

business and undertakes the contract work on his own
account under his own responsibility according to his own
manner and method, free from the control and direction
of his employer or principal in all matters connected with
the performance of the work except as to the results
thereof; and
(b) The contractor has substantial capital or
investment in the form of tools, equipment, machineries,
work premises, and other materials which are necessary
in the conduct of his business.
 In contrast, job contracting shall be deemed as labor-only
contracting, an arrangement prohibited by law, if a person who
undertakes to supply workers to an employer:
(1) Does not have substantial capital or investment
in the form of tools, equipment, machineries, work
premises and other materials; and
(2) The workers recruited and placed by such
person are performing activities which are directly related
to the principal business or operations of the employer in
which workers are habitually employed.
Here, based on their Warehousing Management Agreement, CCBPI
hired MDTC to perform warehousing management services, which it claimed
did not directly relate to its (CCBPI's) manufacturing operations. 24 However, it
must be stressed that CCBPI's business not only involved the manufacture of
its products but also included their distribution and sale. Thus, CCBPI's
argument that petitioners were employees of MDTC because they performed
tasks directly related to "warehousing management services," lacks merit. On
the contrary, records show that petitioners were performing tasks directly
related to CCBPI's distribution and sale aspects of its business.
To reiterate, CCBPI is engaged in the manufacture, distribution, and
sale of its products; in turn, as plant driver and segregator/mixer of soft drinks,
petitioners were engaged to perform tasks relevant to the distribution and sale
of CCBPI's products, which relate to the core business of CCBPI, not to the
supposed warehousing service being rendered by MDTC to CCBPI.
Petitioners' work were directly connected to the achievement of the purposes
for which CCBPI was incorporated. Certainly, they were regular employees of
CCBPI.
Moreover, we disagree with the CA when it heavily relied on MDTC's
alleged substantial capital in order to conclude that it was an independent
labor contractor.
To note, in Quintanar v. Coca-Cola Bottlers, Philippines, Inc., 25 the
Court ruled that "the possession of substantial capital is only one
element." 26 To determine whether a person or entity is indeed a legitimate
labor contractor, it is necessary to prove not only substantial capital or
investment in tools, equipment, work premises, among others, but also that
the work of the employee is directly related to the work that contractor is
required to perform for the principal. 27 Evidently, the latter requirement is
wanting in the case at bench.
Finally, as regular employees, petitioners may be dismissed only for
cause and with due process. These requirements were not complied with
here.
 It was not disputed that petitioners ceased to perform their work when
they were no longer given any new assignment upon the alleged termination
of the Warehousing Management Agreement between CCBPI and MDTC.
However, this is not a just or authorized cause to terminate petitioners'
services. Otherwise stated, the contract expiration was not a valid basis to
dismiss petitioners from service. At the same time, there was no clear
showing that petitioners were afforded due process when they were
terminated. Therefore, their dismissal was without valid cause and due
process of law; as such, the same was illegal.
Considering that petitioners were illegally terminated, CCBPI and
MDTC are solidarily liable for the rightful claims of petitioners. 28
Moreover, by reason of the lapse of more than 10 years since the
inception of this case on May 5, 2008, the Court deems it more practical and
would serve the best interest of the parties to award separation pay to
petitioners, in lieu of reinstatement. 29 Finally, since petitioners were
compelled to litigate to protect their rights and interests, attorney's fees of
10% of the monetary award is given them. The legal interest of 6% per
annum shall be imposed on all the monetary grants from the finality of the
Decision until paid in full. 30 
AIDSTE

WHEREFORE, the Petition is GRANTED. The July 4, 2012 Decision

and January 16, 2013 Resolution of the Court of Appeals in CA-G.R. SP No.
112829 are REVERSED and SET ASIDE. Accordingly, the December 9,
2008 Decision of the Labor Arbiter is REINSTATED WITH
MODIFICATIONS in that separation pay, in lieu of reinstatement, and
attorney's fees equivalent to 10% of the monetary grants are awarded to
petitioners. All monetary awards shall earn interest at the legal rate of 6% per
annum from the finality of this Decision until fully paid.
SO ORDERED.
|||  (Lingat v. Coca-Cola Bottlers Philippines, Inc., G.R. No. 205688, [July 4, 2018])

DAI-CHI ELECTRONICS MANUFACTURING

CORPORATION, petitioner, vs. HON. MARTIN S. VILLARAMA,
JR., Presiding Judge, Regional Trial Court, Branch 156, Pasig,
Metro Manila and ADONIS C. LIMJUCO, respondents.

SYLLABUS
 1. REMEDIAL LAW; CIVIL ACTIONS; WHERE CAUSE OF ACTION
REFERS TO BREACH OF CONTRACTUAL OBLIGATION ON POST-
EMPLOYMENT RELATIONS OF THE PARTIES, JURISDICTION BELONGS
TO REGULAR COURTS. — Petitioner does not ask for any relief under
the Labor Code of the Philippines. It seeks to recover damages agreed upon
in the contract as redress for private respondent's breach of his contractual
obligation to its "damage and prejudice". Such cause of action is within the
realm of Civil Law, and jurisdiction over the controversy belongs to the regular
courts. More so when we consider that the stipulation refers to the post-
employment relations of the parties.
2. LABOR AND SOCIAL LEGISLATION; LABOR CODE; CLAIMS FOR
DAMAGES MUST HAVE A REASONABLE CAUSAL CONNECTION WITH
ANY OF THE CLAIMS PROVIDED FOR IN ARTICLE 217. — Jurisprudence
has evolved the rule that claims for damages under paragraph 4 of Article
217, to be cognizable by the Labor Arbiter, must have a reasonable causal
connection with any of the claims provided for in that article. Only if there is
such a connection with the other claims can the claim for damages be
considered as arising from employer-employee relations.
3. ID.; ID.; ID.; RATIONALE. — The rationale behind the holdings in
San Miguel Corporation v. NLRC, 161 SCRA 719 (1988) and in Pepsi-Cola
Distributors of the Phil., Inc. v. Gallang, 201 SCRA 695 (1991) is that the
complaint for damages was anchored not on the termination of the
employee's services per se, but rather on the manner and consequent effects
of such termination.
4. REMEDIAL LAW; CIVIL ACTIONS; FORUM SHOPPING; NEGATED
WHERE PARTY DISCLOSED A PENDING LABOR CASE BETWEEN THEM
AND SET UP ITS COUNTERCLAIM FOR LIQUIDATED DAMAGES MERELY
AS A DEFENSE. — Private respondent also raises the issue of forum
shopping. He asserts that the petition should be dismissed pursuant to
Circular No. 28-91 because petitioner merely "mentioned in passing a labor
case between petitioner and private respondent which is being handled by
petitioner's other counsel". Private respondent is referring to NLRC NCR Case
No. 00-11-0689493 filed by him on November 8, 1993. Petitioner asserts that
the case before the Labor Arbiter was filed by private respondent against
petitioner for alleged illegal dismissal, underpayment of wages and non-
payment of overtime and premium pay with prayer for moral and exemplary
damages, to which petitioner, through its other counsel, "logically raised as
one of its several counterclaims against private respondent the liquidated
damages mentioned in the contract of employment between the parties."
Petitioner did not fail to disclose the pending labor case in the certification
required under Circular No. 28-91. Thus, petitioner cannot be considered to
have submitted a false certification warranting summary dismissal of the
petition (Par. 3[a] of Circular No. 28-91). Petitioner did not commit forum
shopping. It set up its counterclaim for liquidated damages merely as a
defense against private respondent's complaint before the Labor Arbiter.

DECISION

QUIASON, J  : p

This is a petition for review on certiorari under Rule 45 of the Revised

Rules of Court in relation to R.A. No. 5440 and Circular No. 2-90 of the
following orders of the Regional Trial Court, Branch 156, Pasig, Metro Manila,
in Civil Case No. 63448: 1) Order dated September 20, 1993, dismissing the
complaint of petitioner on the ground of lack of jurisdiction over the subject
matter of the controversy; and 2) Order dated November 29, 1993, denying
petitioner's motion for reconsideration.
I
On July 29, 1993, petitioner filed a complaint for damages with the
Regional Trial Court, Branch 156, Pasig, Metro Manila, against private
respondent, a former employee.  llcd

Petitioner alleged that private respondent violated paragraph five of

their Contract of Employment dated August 27, 1990, which provides:
"That for a period of two (2) years after termination of service from
EMPLOYER, EMPLOYEE shall not in any manner be connected, and/or
employed, be a consultant and/or be an informative body directly or
indirectly, with any business firm, entity or undertaking engaged in a
business similar to or in competition with that of the EMPLOYER" (Rollo,
p. 24).
Petitioner claimed that private respondent became an employee of
Angel Sound Philippines Corporation, a corporation engaged in the same line
of business as that of petitioner, within two years from January 30, 1992, the
date of private respondent's resignation from petitioner's employ. Petitioner
further alleged that private respondent is holding the position of Head of the
Material Management Control Department, the same position he held while in
the employ of petitioner.  prcd

Petitioner sought to recover liquidated damages in the amount of One

Hundred Thousand Pesos (P100,000.00), as provided for in paragraph seven
of the contract, which provides:
"That a violation of the conditions set forth in provisions Nos. (2)
and (5) of this contract shall entitle the EMPLOYER to collect from the
 EMPLOYEE the sum of ONE HUNDRED THOUSAND PESOS
(P100,000.00) by way of liquidated damages and likewise to adopt
appropriate legal measures to prevent the EMPLOYEE from accepting
employment and/or engaging, directly or indirectly, in a business similar
to or in competition with that of the EMPLOYER, before the lapse of the
aforesaid period of TWO (2) YEARS from date of termination of service
from EMPLOYER" (Rollo, p. 25).
Respondent court, in its Order dated September 20, 1993, ruled that it
had no jurisdiction over the subject matter of the controversy because the
complaint was for damages arising from employer-employee relations. Citing
Article 217(4) of the Labor Code of the Philippines, as amended by R.A. No.
6715, respondent court stated that it is the Labor Arbiter which had original
and exclusive jurisdiction over the subject matter of the case (Rollo, pp. 28-
32).
In this petition, petitioner asks for the reversal of respondent court's
dismissal of the civil case, contending that the case is cognizable by the
regular courts. It argues that the cause of action did not arise from employer-
employee relations, even though the claim is based on a provision in the
employment contract.  LLpr

II
This issue is: Is petitioner's claim for damages one arising from
employer-employee relations?
We answer in the negative.
Article 217, as amended by Section 9 of R.A. No. 6715, provides as
follows:
"Jurisdiction of Labor Arbiters and the Commission. — (a) Except
as otherwise provided under this Code, the Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide, within thirty (30)
calendar days after the submission of the case by the parties for
decision without extension, even in the absence of stenographic notes,
the following cases involving all workers, whether agricultural or non-
agricultural:
xxx xxx xxx
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;" (Emphasis
supplied)
xxx xxx xxx
Petitioner does not ask for any relief under the Labor Code of the
Philippines. It seeks to recover damages agreed upon in the contract as
redress for private respondent's breach of his contractual obligation to its
"damage and prejudice" (Rollo, p. 57). Such cause of action is within the
realm of Civil Law, and jurisdiction over the controversy belongs to the regular
courts. More so when we consider that the stipulation refers to the post-
employment relations of the parties.
A case in point is Singapore Airlines Limited v. Paño, 122 SCRA 671
(1983), which also dealt with the employee's breach of an obligation
embodied in a written employment agreement. Singapore Airlines filed a
complaint in the trial court for damages against its employee for "wanton
failure and refusal" without just cause to report to duty and for having
"maliciously and with bad faith" violated the terms and conditions of its
"Agreement for a Course of Conversion Training at the Expense of Singapore
Airlines Limited." This agreement provided that the employee shall agree to
remain in the service of the employer for a period of five years from the date
of the commencement of the training program. The trial court dismissed the
complaint on the grounds that it did not have jurisdiction over the subject
matter of the controversy.
On appeal to this court, we held that jurisdiction over the controversy
belongs to the civil courts. We stated that the action was for breach of a
contractual obligation, which is intrinsically a civil dispute. We further stated
that while seemingly the cause of action arose from employer-employee
relations, the employer's claim for damages is grounded on "wanton failure
and refusal" without just cause to report to duty coupled with the averment
that the employee "maliciously and with bad faith" violated the terms and
conditions of the contract to the damage of the employer. Such averments
removed the controversy from the coverage of the Labor Code of the
Philippines and brought it within the purview of Civil Law.
Jurisprudence has evolved the rule that claims for damages under
paragraph 4 of Article 217, to be cognizable by the Labor Arbiter, must have a
reasonable causal connection with any of the claims provided for in that
article. Only if there is such a connection with the other claims can the claim
for damages be considered as arising from employer-employee relations.  prcd

In San Miguel Corporation v. National Labor Relations Commission,

161 SCRA 719 (1988), we had occasion to construe Article 217, as amended
by B.P. Blg. 227. Article 217 then provided that the Labor Arbiter had
jurisdiction over all money claims of workers, but the phrase "arising from
employer-employee relation" was deleted. We ruled thus:
"While paragraph 3 above refers to 'all money claims of workers,'
it is not necessary to suppose that the entire universe of money claims
that might be asserted by workers against their employers has been
absorbed into the original and exclusive jurisdiction of Labor Arbiters. In
the first place, paragraph 3 should be read not in isolation from but
rather within the context formed by paragraph 1 (relating to unfair labor
 practices), paragraph 2 (relating to claims concerning terms and
conditions of employment), paragraph 4 (claims relating to household
services, a particular species of employer-employee relations), and
paragraph 5 (relating to certain activities prohibited to employees or to
employers). It is evident that there is a unifying element which runs
through paragraphs 1 to 5 and that is, that they all refer to cases or
disputes arising out of or in connection with an employer-employee
relationship. This is, in other words, a situation where the rule of noscitur
a sociis may be usefully invoked in clarifying the scope of paragraph 3,
and any other paragraph of Article 217 of the Labor Code, as amended.
We reach the above conclusion from an examination of the terms
themselves of Article 217, as last amended by B.P Blg. 227, and even
though earlier versions of Article 217 of the Labor Code expressly
brought within the jurisdiction of the Labor Arbiters and the NLRC 'cases
arising from employer-employee relations,' which clause was not
expressly carried over, in printer's ink, in Article 217 as it exists today.
For it cannot be presumed that money claims of workers which do not
arise out of or in connection with their employer-employee relationship,
and which would therefore fall within the general jurisdiction of regular
courts of justice, were intended by the legislative authority to be taken
away from the jurisdiction of the courts and lodged with Labor Arbiters
on an exclusive basis. The Court, therefore, believes and so holds that
the 'money claims of workers' referred to in paragraph 3 of Article 217
embraces money claims which arise out of or in connection with the
employer-employee relationship or some aspect or incident of some
relationship. Put a little differently, that money claims of workers which
now fall within the original and exclusive jurisdiction of Labor Arbiters are
those money claims which have some reasonable causal
connection with the employer-employee relationship" (Emphasis
supplied).
San Miguel was cited in Ocheda v. Court of Appeals, 214 SCRA 629
(1992), where we held that when the cause of action is based on a quasi-
delict or tort, which has no reasonable causal connection with any of the
claims provided for in Article 217, jurisdiction over the action is with the
regular courts.
We also applied the "reasonable causal connection rule" in Pepsi-Cola
Distributors of the Philippines, Inc. v. Gallang, 201 SCRA 695 (1991), where
we held that an action filed by employees against an employer for damages
for the latter's malicious filing of a criminal complaint for falsification of private
documents against them came under the jurisdiction of the regular courts
(See also Honiron Philippines, Inc. v. Intermediate Appellate Court, G.R. No.
66929, August 13, 1990 and Abejaron v. Court of Appeals, 208 SCRA 899
[1992]).
 The rationale behind the holdings in these cases is that the complaint
for damages was anchored not on the termination of the employee's services
per se, but rather on the manner and consequent effects of such termination.
Cases decided under earlier versions of Article 217 were consistent
also in that intrinsically civil disputes, even if these involve an employer and
his employee, are cognizable by the regular courts. In Medina vs. Castro-
Bartolome, 116 SCRA 597 (1982), a civil complaint for damages against the
employer for slanderous remarks made against them, we upheld the regular
court's jurisdiction after finding that the plaintiffs did not allege any unfair labor
practice, their complaint being a simple action for damages for tortious acts
allegedly committed by the defendants. In Molave Sales, Inc. v. Laron, 129
SCRA 485 (1984), we held that the claim of the plaintiff against its sales
manager for payment of certain accounts and cash advances was properly
cognizable by the regular courts because "although a controversy is between
an employer and an employee, the Labor Arbiters have no jurisdiction if
the Labor Code is not involved."  prLL

Private respondent also raises the issue of forum shopping. He asserts

that the petition should be dismissed pursuant to Circular No. 28-91 because
petitioner merely "mentioned in passing a labor case between petitioner and
private respondent which is being handled by petitioner's other counsel"
(Rollo, p. 42). Private respondent is referring to NLRC NCR Case No. 00-11-
0689493 filed by him on November 8, 1993.
Petitioner asserts that the case before the Labor Arbiter was filed by
private respondent against petitioner for alleged illegal dismissal,
underpayment of wages and non-payment of overtime and premium pay with
prayer for moral and exemplary damages, to which petitioner, through its
other counsel, "logically raised as one of its several counterclaims against
private respondent the liquidated damages mentioned in the contract of
employment between the parties" (Rollo, p. 69).
Petitioner did not fail to disclose the pending labor case in the
certification required under Circular No. 28-91. Thus, petitioner cannot be
considered to have submitted a false certification warranting summary
dismissal of the petition (par. 3[a] of Circular No. 28-91).
Petitioner did not commit forum shopping. It set up its counterclaim for
liquidated damages merely as a defense against private respondent's
complaint before the Labor Arbiter.  llcd

ACCORDINGLY, the Orders of the Regional Trial Court dated

September 20, 1993 and November 29, 1993 are SET ASIDE. The trial court
is ORDERED to continue with the proceedings in Civil Case No. 63448.
SO ORDERED.
  (Dai-Chi Electronics Manufacturing Corp. v. Villarama, Jr., G.R. No. 112940,
|||

[November 21, 1994], 308 PHIL 287-295)

GEORG GROTJAHN GMBH & CO., petitioner, vs. HON. LUCIA

VIOLAGO ISNANI, Presiding Judge, Regional Trial Court,
Makati, Br. 59; ROMANA R. LANCHINEBRE; and TEOFILO A.
LANCHINEBRE, respondents.

SYLLABUS

1. LABOR LAW; LABOR RELATIONS; LABOR ARBITERS AND THE

NLRC; JURISDICTION; LIMITED TO DISPUTES ARISING FROM EMPLOYER-
EMPLOYEE RELATIONSHIP; CASE AT BAR. — Not every dispute between an
employer and employee involves matters that only labor arbiters and the NLRC
can resolve in the exercise of their adjudicatory or quasi-judicial powers. The
jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is
limited to disputes arising from an employer-employee relationship which can
only be resolved by reference to the Labor Code, other labor statutes, or their
collective bargaining agreement. Civil Case No. 92-2486 is a simple collection of
a sum of money brought by petitioner, as creditor, against private respondent
Romana Lanchinebre, as debtor. The fact that they were employer and employee
at the time of the transaction does not negate the civil jurisdiction of the trial
court. The case does not involve adjudication of a labor dispute but recovery of a
sum of money based on our civil laws on obligation and contract.
2. COMMERCIAL LAW; CORPORATIONS; CAPACITY TO SUE;
FOREIGN, CORPORATIONS DOING BUSINESS IN THE PHILIPPINES,
ELABORATED. — The trial court erred in holding that petitioner does not have
capacity to sue in the Philippines. It is clear that petitioner is a foreign corporation
doing business in the Philippines. Petitioner is covered by the Omnibus
Investment Code of 1987. There is no general rule or governing principle as to
what constitutes "doing" or "engaging in" or "transacting" business in the
Philippines. Each case must be judged in the light of its peculiar
circumstances. In the case at bench, petitioner does not engage in commercial
dealings or activities in the country because it is precluded from doing so by P.D.
No. 218, under which it was established. Nonetheless, it has been continuously,
since 1983, acting as a supervision, communications and coordination center for
its home office's affiliates in Singapore, and in the process has named its local
agent and has employed Philippine nationals like private respondent Romana
Lanchinebre. From this uninterrupted performance by petitioner of acts pursuant
to its primary purposes and functions as a regional/area headquarters for its
home office, it is clear that petitioner is doing business in the country.
 3. ID.; ID.; DOCTRINE OF ESTOPPEL TO DENY CORPORATE
EXISTENCE; APPLIED. — Private respondents are estopped from assailing the
personality of petitioner. So we held in Merrill Lynch Futures, Inc. vs. Court of
Appeals, 211 SCRA 824, 837 (1992): "The rule is that a party is estopped to
challenge the personality of a corporation after having acknowledged the same
by entering into a contract with it. And the 'doctrine of estoppel to deny corporate
existence applies to foreign as well as to domestic corporations;' 'one who has
dealt with a corporation of foreign origin as a corporate existence and capacity.'
The principle 'will be applied to prevent a person contracting with a foreign
corporation from later taking advantage of its noncompliance with the statutes
chiefly in cases where such person has received the benefits of the
contract, . . . .'"
4. REMEDIAL LAW; CIVIL PROCEDURE; DISMISSAL OF ACTIONS;
GROUNDS; MISJOINDER OF PARTIES, NOT INCLUDED. — It is a basic rule
that "(m)isjoinder or parties is not ground for dismissal of an action."  Moreover,
the Order of the trial court is based on Section 4(h), Rule 3 of the Revised Rules
of Court, which provides: "A married woman may not . . . be sued alone without
joining her husband, except . . . if the litigation is incidental to the profession,
occupation or business in which she is engaged," Whether or not the subject loan
was incurred by private respondent as an incident to her profession, occupation
or business is a question of fact. In the absence of relevant evidence, the issue
cannot be resolved in a motion to dismiss.

DECISION

PUNO, J  :p

Petitioner impugns the dismissal of its Complaint for a sum of money by

the respondent judge for lack of jurisdiction and lack of capacity to sue.
The records show that petitioner is a multinational company organized and
existing under the laws of the Federal Republic of Germany. On July 6, 1983,
petitioner filed an application, dated July 2, 1983, 1 with the Securities and
Exchange Commission (SEC) for the establishment of a regional or area
headquarters in the Philippines, pursuant to Presidential Decree No. 218. The
application was approved by the Board of Investments (BOI) on September 6,
1983. Consequently, on September 20, 1983, the SEC issued a Certificate of
Registration and License to petitioner. 2
Private respondent Romana R. Lanchinebre was a sales representative of
petitioner from 1983 to mid-1992. On March 12, 1992, she secured a loan of
twenty-five thousand pesos (P25,000.00) from petitioner. On March 26 of June
10, 1992, she made additional cash advances in the sum of ten thousand pesos
(P10,000.00). Of the total amount, twelve thousand one hundred seventy pesos
and thirty-seven centavos (P12,170.37) remained unpaid. Despite demand,
private respondent Romana failed to settle her obligation with petitioner.
On July 22, 1992, private respondent Romana Lanchinebre filed with the
Arbitration Branch of the National Labor Relations Commission (NLRC) in
Manila, a Complaint for illegal suspension, dismissal and non-payment of
commissions against petitioner. On August 18, 1992, petitioner in turn filed
against private respondent a Complaint for damages amounting to one hundred
twenty thousand pesos (P120,000.00) also with the NLRC Arbitration Branch
(Manila). 3 The two cases were consolidated.
On September 2, 1992, petitioner filed another Complaint for collection of
sum of money against private respondents spouses Roman and Teofilo
Lanchinebre which was docketed as Civil Case No. 92-2486 and raffled to the
sala of respondent judge. Instead of filing their Answer, private respondents
moved to dismiss the Complaint. This was opposed by petitioner.
On December 21, 1992, respondent judge issued the first impugned Order,
granting the motion to dismiss. She held, viz:
"Jurisdiction over the subject matter or nature of the action is
conferred by law and not subject to the whims and caprices of the
parties.
"Under Article 217 of the Labor Code of the Philippines, the Labor
Arbiters shall have original and exclusive jurisdiction to hear and decide,
within thirty (30) calendar days after the submission of the case by the
parties for decision, the following cases involving all workers, whether
agricultural or non-agricultural:
'(4) claims for actual, moral, exemplary and other forms of
damages arising from an employer-employee relations.
xxx xxx xxx
(6) Except claims for employees compensation, social
security, medicare and maternity benefits, all other claims arising
from employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding
five thousand pesos (P5,000.00) regardless of whether or not
accompanied with a claim for reinstatement.'
"In its complaint, the plaintiff (petitioner herein) seeks to recover
alleged cash advances made by defendant (private respondent herein)
Romana Lanchinebre while the latter was in the employ of the former.
Obviously the said cash advances were made pursuant to the employer-
 employee relationship between the (petitioner) and the said (private
respondent) and as such, within the original and exclusive jurisdiction of
the National Labor Relations Commission.
"Again, it is not disputed that the Certificate of Registration and
License issued to the (petitioner) by the Securities and Exchange
Commission was merely 'for the establishment of a regional or area
headquarters in the Philippines, pursuant to Presidential Decree No.
218 and its implementing rules and regulations.' It does not include a
license to do business in the Philippines. There is no allegation in the
complaint moreover that (petitioner) is suing under an isolated
transaction. It must be considered that under Section 4, Rule 8 of the
Revised Rules of Court, facts showing the capacity of a party to sue or
be sued or the authority of a party to sue or be sued in a representative
capacity or the legal existence of an organized association of persons
that is made a party must be averred. There is no averment in the
complaint regarding (petitioner's) capacity to sue or be sued.
"Finally, (petitioner's) claim being clearly incidental to the
occupation or exercise of (respondent) Romana Lachinebre's profession,
(respondent) husband should not be joined as party defendant." 4
On March 8, 1993, the respondent judge issued a minute Order denying
petitioner's Motion for Reconsideration.
Petitioner now raises the following assignments of errors:
"I
THE TRIAL COURT GRAVELY ERRED IN HOLDING THAT THE
REGULAR COURTS HAVE NO JURISDICTION OVER DISPUTES
BETWEEN AN EMPLOYER AND AN EMPLOYEE INVOLVING
THE APPLICATION PURELY OF THE GENERAL CIVIL LAW.
"II
THE TRIAL COURT GRAVELY ERRED IN HOLDING THAT
PETITIONERS HAS NO CAPACITY TO SUE AND BE SUED IN
THE PHILIPPINES DESPITE THE FACT THAT PETITIONER IS
DULY LICENSED BY THE SECURITIES AND EXCHANGE
COMMISSION TO SET UP AND OPERATE A REGIONAL OR
AREA HEADQUARTERS IN THE COUNTRY AND THAT IT HAS
CONTINUOUSLY OPERATED AS SUCH FOR THE LAST NINE
(9) YEARS.
"III
THE TRIAL COURT GRAVELY ERRED IN HOLDING THAT THE
ERRONEOUS INCLUSION OF THE HUSBAND IN A COMPLAINT
IS A FATAL DEFECT THAT SHALL RESULT IN THE OUTRIGHT
DISMISSAL OF THE COMPLAINT.
 "IV
THE TRIAL COURT GRAVELY ERRED IN HOLDING THAT THE
HUSBAND IS NOT REQUIRED BY THE RULES TO BE JOINED
AS A DEFENDANT IN A COMPLAINT AGAINST THE WIFE."
There is merit to the petition.
Firstly, the trial court should not have held itself without jurisdiction over
Civil Case No. 92-2486. It is true that the loan and cash advances sought to be
recovered by petitioner were contracted by private respondent Romana
Lanchinebre while she was still in the employ of petitioner. Nonetheless, it does
not follow that Article 217 of the Labor Code covers their relationship.
Not every dispute between an employer and employee involves matters
that only labor arbiters and the NLRC can resolve in the exercise of their
adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters and the
NLRC under Article 217 of the Labor Code is limited to disputes arising from an
employer-employee relationship which can only be resolved by reference to the
Labor Code, other labor statutes, or their collective bargaining agreement. In this
regard, we held in the earlier case of Molave Motor Sales, Inc. vs. Laron, 129
SCRA 485 (1984), viz:
"Before the enactment of BP Blg. 227 on June 1, 1982, Labor
Arbiters, under paragraph 5 of Article 217 of the Labor Code had
jurisdiction over "all other cases arising from employer-employee
relation, unless expressly excluded by this Code." Even then, the
principle followed by this Court was that, although a controversy is
between an employer and an employee, the Labor Arbiters have no
jurisdiction if the Labor Code is not involved. In Media vs. Castro-
Bartolome, 116 SCRA 597, 604 in negating jurisdiction of the Labor
Arbiter, although the parties were an employer and two employees, Mr.
Justice Abad Santos stated:
'The pivotal question to Our mind is whether or not the
Labor Code has any relevance to the reliefs sought by plaintiffs.
For if the Labor Code has no relevance, any discussion
concerning the statutes amending it and whether or not they have
retroactive effect is unnecessary.
xxx xxx xxx
"And in Singapore Airlines Limited vs. Pano, 122 SCRA 671, 677,
the following was said:
'Stated differently, petitioner seeks protection under the
civil laws and claims no benefits under the Labor Code. The
primary relief sought is for liquidated damages for breach of a
contractual obligation. The other items demanded are not labor
benefits demanded by workers generally taken cognizance of in
 labor disputes, such as payment of wages, overtime
compensation or separation pay. The items claimed are the
natural consequences flowing from breach of an obligation,
intrinsically a civil dispute.'
"xxx xxx xxx"
In San Miguel Corporation vs. NLRC, 161 SCRA 719 (1988), we crystallized
the doctrines set forth in the Medina, Singapore Airlines, and Molave
Motors cases, thus:
". . . The important principle that runs through these three (3)
cases is that where the claim to the principal relief sought is to be
resolved not by reference to the Labor Code or other labor relations
statute or a collective bargaining agreement but by the general civil law,
the jurisdiction over the dispute belongs to the regular courts of justice
and not to the Labor Arbiter and the NLRC. In such situations,
resolutions of the dispute requires expertise, not in labor management
relations nor in wage structures and other terms and conditions of
employment, but rather in the application of the general civil law. Clearly,
such claims fall outside the area of competence or expertise ordinarily
ascribed to Labor Arbiters and the NLRC and the rationale for granting
jurisdiction over such claims to these agencies disappears."
Civil Case No. 92-2486 is a simple collection of a sum of money brought
by petitioner, as creditor, against private respondent Romana Lanchinebre, as
debtor. The fact that they were employer and employee at the time of the
transaction does not negate the civil jurisdiction of the trial court. The case does
not involve adjudication of a labor dispute but recovery of a sum of money based
on our civil laws on obligation and contract.
Secondly, the trial court erred in holding that petitioner does not have
capacity to sue in the Philippines. It is clear that petitioner is a foreign corporation
doing business in the Philippines. Petitioner is covered by the Omnibus
Investment Code of 1987. Said law defines "doing business," as follows:
". . . shall include soliciting orders, purchases, service contracts,
opening offices, whether called 'liaison' offices or branches; appointing
representatives or distributors who are domiciled in the Philippines or
who in any calendar year stay in the Philippines for a period or periods
totalling one hundred eighty (180) days or more; participating in the
management, supervision or control of any domestic business firm,
entity or corporation in the Philippines, and any other act or acts that
imply a continuity of commercial dealings or arrangements and
contemplate to that extent the performance of acts or works, or the
exercise of some of the functions normally incident to, and in progressive
prosecution of, commercial gain or of the purpose and object of the
business organization." 5
 There is no general rule or governing principle as to what constitutes
"doing" or "engaging in" or "transacting" business in the Philippines. Each case
must be judged in the light of its peculiar circumstances. 6 In the case at bench,
petitioner does not engage in commercial dealings or activities in the country
because it is precluded from doing so by P.D. No. 218, under which it was
established. 7 Nonetheless, it has been continuously, since 1983, acting as a
supervision, communications and coordination center for its home office's
affiliates in Singapore, and in the process has named its local agent and has
employed Philippine nationals like private respondent Romana Lanchinebre.
From this uninterrupted performance by petitioner of acts pursuant to its primary
purposes and functions as a regional/area headquarters for its home office, it is
clear that petitioner is doing business in the country. Moreover, private
respondents are estopped from assailing the personality of petitioner. So we held
in Merrill Lynch Futures, Inc. vs. Court of Appeals, 211 SCRA 824, 837 (1992):
"The rule is that a party is estopped to challenge the personality
of a corporation after having acknowledged the same by entering into a
contract with it. And the 'doctrine of estoppel to deny corporate existence
applies to foreign as well as to domestic corporations;' 'one who has
dealt with a corporation of foreign origin as a corporate existence and
capacity.' The principle 'will be applied to prevent a person contracting
with a foreign corporation from later taking advantage of its
noncompliance with the statutes chiefly in cases where such person has
received the benefits of the contract, . . . .'" (Emphasis omitted.)
Finally, the trial court erred when it dismissed Civil No. 92-2486 on what it
found to be the misjoinder of private respondent Teofilo Lanchinebre as party
defendant. It is a basic rule that "(m)isjoinder or parties is not ground for
dismissal of an action." 8 Moreover, the Order of the trial court is based
on Section 4(h), Rule 3 of the Revised Rules of Court, which provides:
"A married woman may not . . . be sued alone without joining her
husband, except . . . if the litigation is incidental to the profession,
occupation or business in which she is engaged,"
Whether or not the subject loan was incurred by private respondent as an
incident to her profession, occupation or business is a question of fact. In the
absence of relevant evidence, the issue cannot be resolved in a motion to
dismiss.
IN VIEW WHEREOF, the instant Petition is GRANTED. The Orders, dated
December 21, 1992 and March 8, 1993, in Civil Case No. 92-2486 are
REVERSED AND SET ASIDE. The RTC of Makati, Br. 59, is hereby ordered to
hear the reinstated case on its merits. No costs.
SO ORDERED.
|||  (Georg Grotjahn GMBH & Co. v. Isnani, G.R. No. 109272, [August 10, 1994])

DOROTEO OCHEDA, petitioner, vs. THE HONORABLE COURT

OF APPEALS and THE HEIRS OF EDUARDO
SANTOS, respondents.

Angara, Abello, Concepcion, Regala & Cruz Law Offices for Fujitec, Inc.
Eufemio Law Offices for C.E. Construction Corp. Inc.

SYLLABUS

1. REMEDIAL LAW; APPEALS; FINDINGS OF FACT OF THE COURT

OF APPEALS ARE BINDING UPON THE SUPREME COURT. — We find no
cogent reason to disturb the factual findings of both the trial and respondent
courts. Petitioner does not even attempt to show that this case falls under any
of the accepted exceptions to the well-settled and oft-repeated rule that
findings of facts of the Court of Appeals are binding upon this Court.
2. ID.; CIVIL PROCEDURE; JURISDICTION; EXCEPTION TO THE
RULE THAT JURISDICTION OVER THE SUBJECT MATTER MAY BE
RAISED AT ANY STATE OF THE PROCEEDING; ESTOPPEL; CASE AT
BAR. — While it is true that jurisdiction over the subject matter of a case may
be raised at any stage of the proceedings as the same is conferred by law, it
is nevertheless settled that a party may be barred from raising it on the
ground of estoppel. In the first place, he did not raise in his answer that
defense with respect to the claim for damages arising from a quasi-delict. His
affirmative defense of lack of jurisdiction specifically refers to the allegation in
paragraph 8 of the complaint concerning the SSS, Medicare, Workmen's
Compensation and insurance benefits the award of which, according to him,
falls within the competence and jurisdiction of other administrative or quasi-
judicial bodies. In fact, he even considers such allegation to be non-essential
to the complaint's cause of action — the negligent operation of the elevator. In
the second place, during the pre-trial conference, petitioner failed to raise the
issue of jurisdiction. He instead harped on the lack of a cause of action — his
first affirmative defense — which was based on the theory that the proximate
cause of Eduardo's death was the negligence of the elevator boy who was an
employee of CECCI; in fact, it was against the latter that he filed a cross-
claim. In the third place, petitioner openly and unqualifiedly invoked and
submitted to the jurisdiction of the trial court by setting up counterclaim,
asking for relief in the concept of attorney's fees and expenses of litigation
against the private respondents and filing a cross-claim against CECCI, whom
 he alleged to be the employer of the elevator boy. Finally, he presented
evidence to prove that the proximate cause of the accident and resulting
death of Eduardo was the negligence of the elevator boy. He concludes that
as employer of the said boy, CECCI is solely liable to the private respondents
for the damages claimed by the latter. Petitioner was, therefore, effectively
estopped from raising the issue of jurisdiction with respect to the damages
arising from a quasi-delict.
3. ID.; ID.; ID.; ID.; ID.; REASON FOR THE RULE ESTOPPING
PLAINTIFF FROM RAISING THE ISSUE OF JURISDICTION. — The reason
for this is that after voluntarily submitting a cause and encountering an
adverse decision on the merits, it would be improper and too late, to say the
least, for the loser to question the jurisdiction or power of the court. It is not
correct for a party who has invoked the jurisdiction of a court in a particular
matter to secure affirmative relief, to afterwards deny that very jurisdiction to
escape penalty.
4. LABOR AND SOCIAL LEGISLATION; LABOR CODE; ART. 217
THEREOF; JURISDICTION OF LABOR ARBITERS OVER MONEY CLAIMS;
NECESSITY OF SOME REASONABLE CAUSAL CONNECTION OF MONEY
CLAIMS WITH THE EMPLOYER-EMPLOYEE RELATIONSHIP; CASE AT
BAR. — Damages arising out of a quasi-delict, may not be awarded in
accordance with Section 217 of the Labor Code, as amended, for there is no
reasonable causal connection with the employer-employee relationship. At the
time the cause of action accrued, Article 217 of the Labor Code required that
in order that the Labor Arbiter may adjudicate claims not included in the other
paragraphs, the same must arise out of employer-employee relations. In the
instant case, the source of the obligation upon which the private respondents'
cause of action is based is a quasi-delict or tort which has no reasonable
connection with any of the claims provided for in the aforesaid Article 217 of
the Labor Code.It would have been entirely different if the claim for damages
arose out of, for instance, the illegal dismissal of Eduardo, in which case the
Labor Arbiter would have exclusive jurisdiction thereon.

DECISION

DAVIDE, JR., J  :
p

The trial court's jurisdiction over an action for damages arising from a
quasi-delict which resulted in the death of an employee while in the
performance of his duty is challenged in this case.
 The late Eduardo Santos was, at the time of his death, employed as a
painter by the petitioner who was a sub-contractor for the painting job on M.J.
Building then being constructed along Salcedo Street, Makati, Metro Manila.
The C.E. Construction Corporation, Inc. (CECCI) was the principal contractor
thereof by virtue of a contract it entered into with M.J. Development
Corporation, the owner of the building. Another corporation, Fujitec
Philippines Industrial Company, Inc. (FUJITEC), was contracted by M.J.
Development Corporation to install two (2) standard scenic elevator units in
the building.)
 cdrep

When the painting job was almost complete, i.e., all that remained to be
painted was the wall of the shaft for the second elevator, the petitioner
trimmed his work force to two (2) employees, Hernani Gozun and Eduardo
Santos; these employees were tasked to finish the painting. On 5 February
1981, they started work on the inner wall of the elevator shaft; to paint the
same, they had to stand on top of the elevator which was then on the second
floor of the building. After they finished, they called on the boy operating the
elevator to ask him to bring the same down to the first floor. Instead of
lowering the elevator, however, the boy brought it up to the sixth floor. The
sudden upward movement caused the elevator to jerk and the two (2) painters
to lose their balance. Hernani was able to cling to the cable but Eduardo fell
off the top, found himself pinned between the shaft and the elevator as the
latter was moving upward and then fell to the ground when the elevator finally
stopped on the sixth floor. Hernani rushed to Eduardo upon hearing the
latter's cry for help. The former lifted Eduardo in his arms and with the help of
another man, brought him to the Makati Medical Center where he later died.
While the elevator boy was never identified, it is alleged that he worked for
CECCI.
On 11 September 1981, the spouses Catalino and Ester Santos,
together with Wilma Palabasan Santos, parents and widow, respectively, of
Eduardo, filed a Complaint 1 for damages against Doroteo Ocheda and
CECCI before the then Court of First Instance (now Regional Trial Court) of
Pampanga. The case was docketed as Civil Case No. 6263 and was
assigned to Branch 42 thereof. The complaint alleges the foregoing facts and,
in addition, specifically states that while Eduardo was employed by the
petitioner in 1979 and received a daily wage of P35.00, the petitioner did not
place him within "any SSS, Medicare and Workmen's Compensation
coverage." It is further averred that the elevator boy was inexperienced for the
work assigned to him. They then asked for judgment ordering the defendants,
jointly and severally, to pay P10,000.00 as burial expenses, P30,000.00 as
moral damages, attorney's fees and compensatory damages as may be
proved at the trial and costs.
 Petitioner filed an Answer with a Counterclaim against the plaintiff, and
a Cross-Claim against CECCI. 2 He alleges therein that Eduardo was
employed by him only a week before the accident and purely on a casual
basis for the particular painting job. As affirmative defense, he avers that
Eduardo's death was due to the negligence and carelessness of the elevator
boy, an employee of CECCI. Thus, the latter is solely liable for the said death
and no cause of action exists against him. Moreover, it is postulated that the
trial court has no jurisdiction over claims involving SSS, Medicare, Workmen's
Compensation and insurance benefits. Such jurisdiction is vested in other
administrative or quasi-judicial bodies; furthermore, he avers that the
allegation concerning such claims (paragraph 8 of the complaint) is not
essential to the plaintiffs' cause of action which is the negligent operation of
the elevator. In his counterclaim, petitioner asks for an award of attorney's
fees in the amount of P10,000.00, and the expenses of litigation.  Cdpr

In due course, CECCI likewise filed its Answer with a Third-Party

Complaint 3 against FUJITEC which it alleged to be liable, being the employer
of the elevator boy. FUJITEC filed its Answer to the said Third-Party
Complaint 4 denying the allegations made therein and asserting that the
operation of the elevator was turned over to the building owner long before
the fatal accident.
Pre-trial was conducted on 23 September 1983. The pre-trial order
issued by the trial court embodies the respective positions of the parties. As to
herein petitioners, the Pre-trial order summarized his stand as follows:
"2. Defendant Ocheda's Case:
Defendant Doroteo Ocheda denies liability. He claims that the complaint
states no cause of action against him; that the death of the deceased
Eduardo Santos resulted from the operation of the elevator at the
construction site; that he had nothing to do with the operation, or control,
or management of the elevator in question, hence, the death of Eduardo
Santos is not attributable to him; that his participation in the construction
of the building was limited solely to painting specific portions thereof; that
he filed a cross-claim against defendant C.E. Construction Corp.
because the said corporation was the general contractor of the building,
operator/maintainer of the elevator, and employer of the elevator boy." 5
 
During the trial of the case on the merits, petitioner presented two (2)
witnesses — Josefino Rivera and himself. 6
On 24 February 1986, the trial court rendered its decision 7 finding both
the petitioner and CECCI liable for the death of Eduardo. The dispositive
portion of the decision reads as follows:
"WHEREFORE, in view of the foregoing considerations, judgment is
hereby rendered as follows:
1. The defendant (sic) Doroteo Ocheda and C.E. Construction
Corporation, Inc. are ordered to pay jointly and severally the plaintiffs the
following amounts:
a) Seven Thousand Three Hundred Fifty Pesos
(P7,350.00) as burial expenses;
b) Thirty Thousand Pesos (P30,000.00) as moral
damages;
c) Five Thousand Pesos (P5,000.00) as attorney's fees;
and
d) Costs of suit.
2. The third-party complaint is hereby dismissed and the third-party
plaintiff C.E. Construction Corporation, Inc. is ordered to pay the third-
party defendant Fujitec the sum of Fifteen Thousand Pesos
(P15,000.00) as attorney's fees, plus the cost of suit;
3. The cross-claim and counterclaim of defendant Ocheda and the
counterclaim of defendant C.E. Construction are hereby dismissed.
SO ORDERED." 8
This determination of liability is based on the trial court's findings that:
"It has been sufficiently established that it was defendant Ocheda who
caused the accident to happen. It was defendant Ocheda who ordered
the late Eduardo Santos and Hernani Gozun to use the top of the
elevator as stepping board while painting the wall of the elevator shaft.
And defendant Ocheda failed to exercise the diligence of a good father
of a family in the supervision of his employees.  LLphil

It has likewise been shown that C.E. Construction was, at the time of the
incident in question, in full control of the building since the same was not
yet accepted by the owner thereof. C.E. Construction was the general
contractor of the building, hence, it was in full management and control
of the elevator because the same was already turned over to and
accepted by the building owner from Fujitec. As such, C.E. Construction
should have guarded against the unauthorized use of the elevator by
people working in the building. At the time of the incident, the late
Eduardo Santos was an employee of defendant Ocheda, a sub-
contractor of C.E. Construction. In view of all these, C.E. Construction is
equally liable with defendant Ocheda pursuant to Article 2180, in
conjunction with Article 2176 of the Civil Code.The elevator which
caused the injury and subsequent death of Eduardo Santos was under
the management and control of C E. Construction. Consequently, had
C.E. Construction used proper care in the management and operation of
 the elevator, and had it exercised the diligence of a good father of a
family in the supervision of its employees, then, the fatal incident would
not have happened." 9
Petitioner and CECCI appealed this adverse decision to the respondent
Court of Appeals which docketed the case as C.A.-G.R. CV No. 09574. In the
Brief he submitted, petitioner made the following assignment of errors:
"I
THE LOWER COURT ERRED IN HOLDING THAT THE REGIONAL
TRIAL COURT HAD JURISDICTION OVER THE COMPLAINT FILED;
II
THE LOWER COURT ERRED IN HOLDING THAT OCHEDA WAS
GUILTY OF NEGLIGENCE FOR THE DEATH OF SANTOS;
III
THE LOWER COURT ERRED IN APPLYING ARTICLE 2180 OF
THE NEW CIVIL CODE TO OCHEDA;
IV
THE LOWER COURT ERRED IN HOLDING OCHEDA JOINTLY AND
SEVERALLY LIABLE WITH C.E. CONSTRUCTION CORP. TO THE
PLAINTIFFS FOR DAMAGES." 10
On the other hand, CECCI, in its Brief, contended that the trial court
gravely erred in finding it solidarily liable with the herein petitioner for the
death of Eduardo, in awarding moral damages, in dismissing the third-party
complaint and in not holding the plaintiffs therein liable for damages,
attorney's fees and costs of the suit. 11
On 1 September 1988, the respondent Court promulgated its decision
12 upholding the findings of the trial court but reducing the amount of
damages; it likewise eliminated the grant of attorney's fees in favor of
FUJITEC. Thus:
"WHEREFORE, the decision appealed from is hereby AFFIRMED in all
respects, except as modified herein by reducing the award for actual or
compensatory damages to only P5,880.00; reducing the damage caused
by death to only P24,000.00; and eliminating the award of P15,000.00
attorney's fees to third party defendant Fujitec. No costs.
SO ORDERED." 13
The reduction in the award of damages was based on the respondent
Court's finding of contributory negligence on the part of Eduardo Santos when
he failed to heed the order to tie a rope around his waist while working.
 As to the issue of lack of jurisdiction on the part of the trial court, the
respondent Court held:
"The case at bar is being prosecuted in behalf of a deceased, not
dismissed, employee for damages arising from the death of the
employee based on quasi-delict founded on an undoubted principle of
justice recognized by all legislations that every injury, loss or damage
which a person receives in his right (sic), be it by act or by omission,
creates a juridical relation from which is derived the right which the
aggrieved party has to be indemnified and the consequent obligation by
the other party:
In the recent case of Floresca vs. Philex Mining Corporation, 136 SCRA
141, the Supreme Court ruled that recovery under the new Civil Code for
damages arising from negligence is not barred by Article 173 of the New
Labor Code. In this case, it was further held that an ordinary court has
jurisdiction over complaints for damages filed by heirs of mining
employees against the mining corporation for the death of the former
allegedly caused by the negligence of their employer." 14
His motion to reconsider the decision having been denied in the
resolution of the respondent Court dated 18 October 1988, 15 petitioner took
this recourse under Rule 45 of the Rules of Court. He reiterates in the instant
petition for review the assignment of errors submitted before the respondent
Court. cdphil

This Court gave due course to the petition and required the parties to
submit their respective Memoranda 16 after the submission of the Comment to
the petition by the private respondents, the Reply thereto by the petitioner and
the Rejoinder to the latter by the private respondents.
We find no merit in the petition.
Regarding the issue of the factual findings upon which the second, third
and fourth assigned errors are based, We find no cogent reason to disturb
such findings of both the trial and respondent courts. Petitioner does not even
attempt to show that this case falls under any of the accepted exceptions to
the well-settled and oft-repeated rule that findings of facts of the Court of
Appeals are binding upon this Court. 17
Anent the alleged lack of jurisdiction, on the part of the trial court,
petitioner admits that the private respondents' cause of action, as expressed
in the complaint, is based on a quasi-delict. The former submits, however, that
since the monetary award is sought in connection with the employer-
employee relationship which existed between him and the late Eduardo
Santos, only Labor Arbiters, pursuant to Article 217 of the Labor Code of the
Philippines as it was then worded, 18 have original and exclusive jurisdiction
over them. Under the said provision, "all money claims of workers" and "all
other claims arising from employer-employee relations" are exclusively
cognizable by Labor Arbiters. We ruled in Getz Corp. vs. Court of
Appeals  19 that pursuant to P.D. No. 1691, such claims include moral and
exemplary damages. Petitioner further contends that Floresca vs. Philex
Mining Corp.,  20 which the respondent Court relied upon, is not applicable
because the cause of action involved therein accrued on 28 June 1967, or
before the enactment of the Labor Code and P.D. No. 1691; he assert that the
decision therein constituted "judicial legislation".
Petitioner's unusual patience and tenacity on the first assigned error
merits him no reward. In the first place, he did not raise in his answer that
defense with respect to the claim for damages arising from a quasi-delict. His
affirmative defense of lack of jurisdiction specifically refers to the allegation in
paragraph 8 of the complaint concerning the SSS, Medicare, Workmen's
Compensation and insurance benefits the award of which, according to him,
falls within the competence and jurisdiction of other administrative or quasi-
judicial bodies. In fact, he even considers such allegation to be non-essential
to the complaint's cause of action — the negligent operation of the elevator.
This is how he worded that particular affirmative defense:
"SECOND AFFIRMATIVE DEFENSE
12. He need not deny nor (sic) admit the allegations in paragraph 8
regarding the alleged SSS, Medicare, Workmen's Compensation, and
insurance coverage since this Honorable Court has no jurisdiction over
disputes involving cases of these sorts, jurisdiction thereof being vested
in other administrative or quasi-judicial bodies. Furthermore, the
allegations in said paragraph 8 of the complaint is (sic) not essential to
plaintiff's cause of action which is the negligent operation of the elevator
resulting in the death of Eduardo (sic) Santos." 21
Obviously, he did not even have Labor Arbiters in mind for such cases.
He knew, or at least ought to have known, that expressly excepted from the
broad jurisdiction of Labor Arbiters in Article 217 of the Labor Code are
"claims for employees compensation, social security, medicare and maternity
benefits." LLjur

In the second place, during the pre-trial conference, petitioner failed to

raise the issue of jurisdiction. He instead harped on the lack of a cause of
action — his first affirmative defense — which was based on the theory that
the proximate cause of Eduardo's death was the negligence of the elevator
boy who was an employee of CECCI; in fact, it was against the latter that he
filed a cross-claim.
In the third place, petitioner openly and unqualifiedly invoked and
submitted to the jurisdiction of the trial court by setting up a counterclaim,
asking for relief in the concept of attorney's fees and expenses of litigation
against the private respondents and filing a cross-claim against CECCI, whom
he alleges to be the employer of the elevator boy.
Finally, he presented evidence to prove that the proximate cause of the
accident and resulting death of Eduardo was the negligence of the elevator
boy. He concludes that as employer of the said boy, CECCI is solely liable to
the private respondents for the damages claimed by the latter.
Petitioner was, therefore, effectively estopped from raising the issue of
jurisdiction with respect to the damages arising from a quasi-delict. While it is
true that jurisdiction over the subject matter of a case may be raised at any
stage of the proceedings as the same is conferred by law, 22 it is nevertheless
settled that a party may be barred from raising it on the ground of
estoppel. 23 The reason for this is that after voluntarily submitting a cause and
encountering an adverse decision on the merits, it would be improper and too
late, to say the least, for the loser to question the jurisdiction or power of the
court. It is not correct for a party who has invoked the jurisdiction of a court in
a particular matter to secure affirmative relief, to afterwards deny that very
jurisdiction to escape penalty.  cdrep

And even granting, for the sake, of argument, that the issue of
jurisdiction can still be raised in connection with its specific reference to the
damages arising out of a quasi-delict, petitioner's thesis would still fail. Such
damages may not be awarded in accordance with Article 217 of the Labor
Code, as amended, for there is no reasonable causal connection with the
employer-employee relationship. At the time the cause of action accrued,
Article 217 of the Labor Code required that in order that the Labor Arbiter may
adjudicate claims not included in the other paragraphs, the same must arise
out of employer-employee relations.
In San Miguel Corporation vs. National Labor Relations
Commission,  24 this Court ruled, with respect to Article 217, as amended
by B.P. Blg. 227:
"While paragraph 3 above refers to all money claims of workers,' it is not
necessary to suppose that the entire universe of money claims that
might be asserted by workers against their employers has been
absorbed into the original and exclusive jurisdiction of Labor Arbiters. In
the first place, paragraph 3 should be read not in isolation from but
rather within the context formed by paragraph (relating to unfair labor
practices), paragraph 2 ( relating to claims concerning terms and
conditions of employment), paragraph 4 (claims relating to household
services, a particular species of employer-employee relations), and
paragraph 5 (relating to certain activities prohibited to employees or to
employers). It is evident that there is a unifying element which runs
through paragraphs 1 to 5 and that is, that they all refer to cases or
disputes arising out of or in connection with an employer-employee
relationship. This is, in other words, a situation where the rule of noscitur
a sociis may be usefully invoked in clarifying the scope of paragraph 3,
and any other paragraph of Article 217 of the Labor Code, as amended.
We reach the above conclusion from an examination of the terms
themselves of Article 217, as last amended by B.P. Blg. 227, and even
though earlier versions of Article 217 of the Labor Code expressly
brought within the jurisdiction of the Labor Arbiters and the NLRC cases
arising from employer-employee relations, which clause was not
expressly carried over, in printer's ink, in Article 217 as it exists today.
For it cannot be presumed that money claims of workers which do not
arise out of or in connection with their employer-employee relationship,
and which would therefore fall within the general jurisdiction of the
regular courts of justice, were intended by the legislative authority to be
taken away from the jurisdiction of the courts and lodged with Labor
Arbiters on an exclusive basis. The Court, therefore believes and so
holds that the 'money claims of workers' referred to in paragraph 3 of
Article 217 embraces money claims which arise out of or in connection
with the employer-employee relationship, or some aspect or incident of
such relationship. Put a little differently, that money claims of workers
which now fall within the original and exclusive jurisdiction of Labor
Arbiters are those money claims which have some reasonable causal
connection with the employer-employee relationship."  LLphil

Said article presently reads as follows: 25

"ARTICLE 217. Jurisdiction of Labor Arbiters and the Commission. — (a)
Except as otherwise provided under this Code, the Labor Arbiters shall
have original and exclusive jurisdiction to hear and decide, within thirty
(30) calendar days after the submission of the case by the parties for
decision without extension, even in the absence of stenographic notes,
the following cases involving all workers, whether agricultural or non-
cultural:
1. Unfair labor practice cases;
2. Termination of disputes;
3. If accompanied with a claim for reinstatement, those
cases that workers may file involving wages, rates of pay, hours
of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this
Code, including questions involving the legality of strike and
lockouts; and
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other claims, arising
 from employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding
five thousand pesos (P5,000.00) regardless of whether
accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all
cases decided by Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective
bargaining agreement and those arising from the interpretation or
enforcement of company personnel policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitration as may be provided in said agreements."
In the instant case, the source of the obligation upon which the private
respondents' cause of action is based is a quasi-delict or tort which has no
reasonable connection with any of the claims provided for in the aforesaid
Article 217 of the Labor Code.It would have been entirely different if the claim
for damages arose out of, for instance, the illegal dismissal of Eduardo, in
which case the Labor Arbiter would have exclusive jurisdiction thereon. 26
It would have also been different if the petitioner had grounded his
claim of lack of jurisdiction on the basis of the Workmen's Compensation Law.
Unfortunately, he adroitly avoided this issue from the very beginning not only
because of his claim that the allegation on this matter is irrelevant to the
private respondents' theory but, and more importantly, he did not, as revealed
by the latter, register Eduardo with the Social Security System pursuant to the
Amended Rules on Employees Compensation in relation to Chapter II, Title II,
Book IV of the Labor Code of the Philippines (P.D. No. 442), as amended. To
avoid possible liability thereunder, and more particularly the criminal and civil
sanctions under Section 4, Rule II of said Rules which reads:
"SECTION 4. Penalty. — Any violation of this Rule shall be penalized as
follows:
 Cdpr

(1) In case of failure or refusal to register employees, the

employer or responsible official who committed the violation shall
be punished with a fine of not less than P1,000 nor more than
P10,000 and/or imprisonment for the duration of the violation or
non-compliance or until such time that rectification of the violation
has been made, at the discretion of the court.
(2) In case a compensable contingency occurs after 30
days from employment and before the System receives any report
for coverage about the employee or EC contribution on his behalf,
his employer shall be liable to the System for, the lump sum
equivalent to the benefits to which he or his dependents may be
entitled."
 petitioner unabashedly asserted in his Answer that the late Eduardo Santos
was his employee for barely a week and that he was hired on a casual
basis only for the particular painting job on the M.J. Building. Having done so,
he cannot now be heard to make a strained and tenuous analysis of Floresca
vs. Philex Mining Corporation. 27
WHEREFORE, for lack of merit, the instant petition is DENIED with
costs against the petitioner.
SO ORDERED.
 (Ocheda v. Court of Appeals, G.R. No. 85517, [October 16, 1992], 289 PHIL
|||

241-256)

PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC.,

represented by its Plant General Manager ANTHONY B. SIAN,
ELEAZAR LIMBAB, IRENEO BALTAZAR & JORGE
HERAYA, petitioners, vs. HON. LOLITA O. GAL-LANG,
SALVADOR NOVILLA, ALEJANDRO OLIVA, WILFREDO
CABAÑAS & FULGENCIO LEGO, respondents.

Aurelio D. Menzon for petitioners.

Mario P. Nicolasora co-counsel for petitioners.
Papiano L. Santo for private respondents.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR ARBITER; SCOPE

OF POWER; RULE. — It must be stressed that not every controversy
involving workers and their employers can be resolved only by the labor
arbiters. This will be so only if there is a "reasonable causal connection"
between the claim asserted and employee-employer relations to put the case
under the provisions of Article 217. Absent such a link, the complaint will be
cognizable by the regular courts of justice in the exercise of their civil and
criminal jurisdiction.
2. REMEDIAL LAW; CIVIL PROCEDURE; COMPLAINT FOR DAMAGE
FOR MALICIOUS PROSECUTION FILED BY EMPLOYEES AGAINST
EMPLOYERS; COGNIZABLE BY REGULAR COURTS OF JUSTICE; CASE
AT BAR. — The case now before the Court involves a complaint for damages
for malicious prosecution which was filed with the Regional Trial Court of
Leyte by the employees of the defendant company. It does not appear that
there is a "reasonable causal connection" between the complaint and the
relations of the parties as employer and employees. The complaint did not
arise from such relations and in fact could have arisen independently of an
employment relationship between the parties. No such relationship or any
unfair labor practice is asserted. What the employees are alleging is that the
petitioners acted with bad faith when they filed the criminal complaint which
the Municipal Trial Court said was intended "to harass the poor employee"
and the dismissal of which was affirmed by the Provincial Prosecutor "for lack
of evidence to establish even a slightest probability that all the respondents
herein have committed the crime imputed against them." This is a matter
which the labor arbiter has no competence to resolve as the applicable law is
not the Labor Code but the Revised Penal Code.

DECISION

CRUZ, J  :
p

The question now before us has been categorically resolved in earlier

decisions of the Court that a little more diligent research would have disclosed
to the petitioners. On the basis of those cases and the facts now before us,
the petition must be denied. prLL

The private respondents were employees of the petitioner who were

suspected of complicity in the irregular disposition of empty Pepsi Cola
bottles. On July 16, 1987, the petitioners filed a criminal complaint for theft
against them but this was later withdrawn and substituted with a criminal
complaint for falsification of private documents. On November 26, 1987, after
a preliminary investigation conducted by the Municipal Trial Court of Tanauan,
Leyte, the complaint was dismissed. The dismissal was affirmed on April 8,
1988, by the Office of the Provincial Prosecutor.
Meantime, allegedly after an administrative investigation, the private
respondents were dismissed by the petitioner company on November 23,
1987. As a result, they lodged a complaint for illegal dismissal with the
Regional Arbitration Branch of the NLRC in Tacloban City on December 1,
1987, and demanded reinstatement with damages. In addition, they instituted
in the Regional Trial Court of Leyte, on April 1988, a separate civil complaint
against the petitioners for damages arising from what they claimed to be their
malicious prosecution.
The petitioners moved to dismiss the civil complaint on the ground that
the trial court had no jurisdiction over the case because it involved employee-
employer relations that were exclusively cognizable by the labor arbiter. The
motion was granted on February 6, 1989. On July 6, 1989, however, the
respondent judge, acting on the motion for reconsideration, reinstated the
complaint, saying it was "distinct from the labor case for damages now
pending before the labor courts." The petitioners then came to this Court for
relief.
The petitioners invoke Article 217 of the Labor Code and a number of
decisions of this Court to support their position that the private respondents'
civil complaint for damages falls under the jurisdiction of the labor arbiter.
They particularly cite the case of Getz Corporation v. Court of
Appeals, 1 where it was held that a court of first instance had no jurisdiction
over the complaint filed by a dismissed employee "for unpaid salary and other
employment benefits, termination pay and moral and exemplary damages."
We hold at the outset that the case is not in point because what was
involved there was a claim arising from the alleged illegal dismissal of an
employee, who chose to complain to the regular court and not to the labor
arbiter. Obviously, the claim arose from employee-employer relations and so
came under Article 217 of the Labor Code which then provided as follows:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. —
(a) The Labor Arbiters shall have the original and exclusive jurisdiction
to hear and decide within thirty (30) working days after submission of
the case by the parties for decision, the following cases involving all
workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work
and other terms and conditions of employment;
3. All money claims of workers, including those based on non-
payment or underpayment of wages, overtime compensation,
separation pay and other benefits provided by law or appropriate
agreement, except claims for employees' compensation, social
security, medicare and maternity benefits;
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this Code,
including questions involving the legality of strikes and lockouts.
(b) The Commission shall have exclusive appellate jurisdiction
over all cases decided by Labor Arbiters. 2
It must be stressed that not every controversy involving workers and
their employers can be resolved only by the labor arbiters. This will be so only
if there is a "reasonable causal connection" between the claim asserted and
employee-employer relations to put the case under the provisions of Article
217. Absent such a link, the complaint will be cognizable by the regular courts
of justice in the exercise of their civil and criminal jurisdiction.
In Medina v. Castro-Bartolome, 3 two employees filed in the Court of
First Instance of Rizal a civil complaint for damages against their employer for
slanderous remarks made against them by the company president. On the
order dismissing the case because it came under the jurisdiction of the labor
arbiters, Justice Vicente Abad Santos said for the Court:
It is obvious from the complaint that the plaintiffs have not
alleged any unfair labor practice. Theirs is a simple action for damages
for tortuous acts allegedly committed by the defendants. Such being
the case, the governing statute is the Civil Code and not the Labor
Code. It results that the orders under review are based on a wrong
premise.  prLL

In Singapore Airlines Ltd. v. Paño, 4 where the plaintiff was suing for

damages for alleged violation by the defendant of an "Agreement for a Course
of Conversion Training at the Expense of Singapore Airlines Limited," the
jurisdiction of the Court of First Instance of Rizal over the case was
questioned. The Court, citing the earlier case of Quisaba v. Sta. Ines Melale
Veneer and Plywood, Inc., 5 declared through Justice Herrera:
Stated differently, petitioner seeks protection under the civil laws
and claims no benefits under the Labor Code. The primary relief
sought is for liquidated damages for breach of a contractual obligation.
The other items demanded are not labor benefits demanded by
workers generally taken cognizance of in labor disputes, such as
payment of wages, overtime compensation or separation pay. The
items claimed are the natural consequences flowing from breach of an
obligation, intrinsically a civil dispute.
In Molave Sales, Inc. v. Laron, 6 the same Justice held for the Court that
the claim of the plaintiff against its sales manager for payment of certain
accounts pertaining to his purchase of vehicles and automotive parts, repairs
of such vehicles, and cash advances from the corporation was properly
cognizable by the Regional Trial Court of Dagupan City and not the labor
arbiter, because "although a controversy is between an employer and an
employee, the Labor Arbiters have no jurisdiction if the Labor Code is not
involved."
The latest ruling on this issue is found in San Miguel Corporation v.
NLRC, 7 where the above cases are cited and the changes in Article 217 are
recounted. That case involved a claim of an employee for a P60,000.00 prize
for a proposal made by him which he alleged had been accepted and
implemented by the defendant corporation in the processing of one of its beer
products. The claim was filed with the labor arbiter, who dismissed it for lack
of jurisdiction but was reversed by the NLRC on appeal. In setting aside the
appealed decision and dismissing the complaint, the Court observed through
Justice Feliciano:
It is the character of the principal relief sought that appears
essential, in this connection. Where such principal relief is to be
granted under labor legislation or a collective bargaining agreement,
the case should fall within the jurisdiction of the Labor Arbiter and the
NLRC, even though a claim for damages might be asserted as an
incident to such claim.
xxx xxx xxx
Where the claim to the principal relief sought is to be resolved
not by reference to the Labor Code or other labor relations statute or a
collective bargaining agreement but by the general civil law, the
jurisdiction over the dispute belongs to the regular courts of justice and
not to the Labor Arbiter and the NLRC. In such situations, resolution of
the dispute requires expertise, not in labor management relations nor
in wage structures and other terms and conditions of employment, but
rather in the application of the general civil law. Clearly, such claims
fall outside the area of competence or expertise ordinarily ascribed to
Labor Arbiters and the NLRC and the rationale for granting jurisdiction
over such claims to these agencies disappears.
 
xxx xxx xxx
While paragraph 3 above refers to "all money claims of
workers," it is not necessary to suppose that the entire universe of
money claims that might be asserted by workers against their
employers has been absorbed into the original and exclusive
jurisdiction of Labor Arbiters.
xxx xxx xxx
For it cannot be presumed that money claims of workers which
do not arise out of or in connection with their employer-employee
relationship, and which would therefore fall within the general
jurisdiction of the regular courts of justice, were intended by the
legislative authority to be taken away from the jurisdiction of the courts
and lodged with Labor Arbiters on an exclusive basis. The Court,
therefore, believes and so holds that the "money claims of workers"
referred to in paragraph 3 of Article 217 embraces money claims which
arise out of or in connection with the employer-employee relationship,
or some aspect or incident of such relationship. Put a little differently,
that money claims of workers which now fall within the original and
exclusive jurisdiction of Labor Arbiters are those money claims which
 have some reasonable causal connection with the employer-employee
relationship (Ibid.).
The case now before the Court involves a complaint for damages for
malicious prosecution which was filed with the Regional Trial Court of Leyte
by the employees of the defendant company. It does not appear that there is
a "reasonable causal connection" between the complaint and the relations of
the parties as employer and employees. The complaint did not arise from
such relations and in fact could have arisen independently of an employment
relationship between the parties. No such relationship or any unfair labor
practice is asserted. What the employees are alleging is that the petitioners
acted with bad faith when they filed the criminal complaint which the Municipal
Trial Court said was intended "to harass the poor employees" and the
dismissal of which was affirmed by the Provincial Prosecutor "for lack of
evidence to establish even a slightest probability that all the respondents
herein have committed the crime imputed against them." This is a matter
which the labor arbiter has no competence to resolve as the applicable law is
not the Labor Code but the Revised Penal Code.  llcd

"Talents differ, all is well and wisely put," so observed the

philosopher-poet. 8 So it must be in the case we here decide.
WHEREFORE, the order dated July 6, 1989, is AFFIRMED and the
petition DENIED, with costs against the petitioner.
SO ORDERED.
 (Pepsi Cola Distributors of the Philippines, Inc. v. Gal-lang, G.R. No. 89621,
|||

[September 24, 1991], 278 PHIL 708-715)

BEBIANO M. BAÑEZ, petitioner, vs. HON. DOWNEY C.

VALDEVILLA and ORO MARKETING, INC., respondents.

Gregorio A. Pizarro for petitioner.

The Solicitor General for public respondent.
Recto P. Achas for private respondent.

SYNOPSIS

After the NLRC ruling that petitioner was illegally dismissed by his
employer, Oro Marketing, Inc. became final, Oro Marketing, Inc. filed a complaint
for damages against petitioner in the RTC. Petitioner moved for the dismissal of
the same alleging that the action was within the jurisdiction of the NLRC, having
arisen from an employer-employee relationship. The RTC, however, declared
that it has jurisdiction over the subject matter of the instant controversy. Hence,
this petition.
Art. 217(a) of the Labor Code bestows upon the Labor Arbiter original and
exclusive jurisdiction over ALL claims for damages arising from employer-
employee relations. This means the Labor Arbiter has jurisdiction to award not
only the reliefs provided by labor laws, but also damages governed by the Civil
Code. This includes the claim of an employer for actual damages against its
dismissed employee, where the basis for the claim is necessarily connected with
the fact of termination. Hence, the claim should have been entered as a
counterclaim in the illegal dismissal case and not subject of a separate action for
damages. Appeal from the Labor Arbiter's decision should have been the proper
remedy, but the same is no longer available with the finality of the decision of the
NLRC. The petition was granted, and the complaint before the trial court against
petitioner was dismissed.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; JURISDICTION OF LABOR

ARBITERS AND NLRC; CLAIMS FOR ALL DAMAGES ARISING FROM
EMPLOYER-EMPLOYEE RELATIONS, DISCUSSED. — Article 217(a),
paragraph 4 of the Labor Code, which provides for the jurisdiction of Labor
Arbiters and the Commission, states: Claims for actual, moral, exemplary and
other forms of damages arising from the employer-employee relations. . . ." This
jurisdiction of Labor Arbiters and the NLRC in Article 217 is comprehensive
enough to include claims for all forms of damages "arising from the employer-
employee relations." The Labor Arbiter has jurisdiction to award not only the
reliefs provided by labor laws, but also damages governed by the Civil Code.
Whereas this Court in a number of occasions had applied the jurisdictional
provisions of Article 217 to claims for damages filed by employees, we hold that
by the designating clause "arising from the employer-employee relations" Article
217 should apply with equal force to the claim of an employer for actual damages
against its dismissed employee, where the basis for the claim arises from or is
necessarily connected with the fact of termination, and should be entered as a
counterclaim in the illegal dismissal case. Even under Republic Act No. 875 (the
"Industrial Peace Act," now completely superseded by the Labor Code),
jurisprudence was settled that where the plaintiff's cause of action for damages
arose out of, or was necessarily intertwined with, an alleged unfair labor practice
committed by the union, the jurisdiction is exclusively with the (now defunct)
Court of Industrial Relations, and the assumption of jurisdiction of regular courts
over the same is a nullity. To allow otherwise would be "to sanction split
jurisdiction, which is prejudicial to the orderly administration of justice." Thus,
even after the enactment of the Labor Code, where the damages separately
claimed by the employer were allegedly incurred as a consequence of strike or
picketing of the union, such complaint for damages is deeply rooted from the
labor dispute between the parties, and should be dismissed by ordinary courts for
lack of jurisdiction.
2. REMEDIAL LAW; REGULAR COURTS; JURISDICTION; DAMAGES
WHERE EMPLOYER-EMPLOYEE RELATIONSHIP IS MERELY INCIDENTAL
AND PROCEEDS FROM A DIFFERENT CAUSE OF ACTION. — The provision
in Art. 217(a) should be distinguished from cases of actions for damages where
the employer-employee relationship is merely incidental and the cause of action
proceeds from a different source of obligation. Thus, the jurisdiction of regular
courts was upheld where the damages claimed for were based on tort, malicious
prosecution, or breach of contract, as when the claimant seeks to recover a debt
from a former employee or seeks liquidated damages in enforcement of a prior
employment contract.

DECISION

GONZAGA-REYES, J  : p

The orders of respondent judge 1 dated June 20, 1996 and October 16,
1996, taking jurisdiction over an action for damages filed by an employer against
its dismissed employee, are assailed in this petition for certiorari under Rule 65 of
the Rules of Court for having been issued in grave abuse of discretion.
Petitioner was the sales operations manager of private respondent in its
branch in Iligan City. In 1993, private respondent "indefinitely suspended"
petitioner and the latter filed a complaint for illegal dismissal with the National
Labor Relations Commission ("NLRC") in Iligan City. In a decision dated July 7,
1994, Labor Arbiter Nicodemus G. Palangan found petitioner to have been
illegally dismissed and ordered the payment of separation pay in lieu of
reinstatement, and of backwages and attorney's fees. The decision was
appealed to the NLRC, which dismissed the same for having been filed out of
time. 2 Elevated by petition for certiorari before this Court, the case was
dismissed on technical grounds; 3 however, the Court also pointed out that even
if all the procedural requirements for the filing of the petition were met, it would
still be dismissed for failure to show grave abuse of discretion on the part of the
NLRC.  Cdpr
 On November 13, 1995, private respondent filed a complaint for damages
before the Regional Trial Court ("RTC") of Misamis Oriental, docketed as Civil
Case No. 95-554, which prayed for the payment of the following:
a. P709,217.97 plus 12% interest as loss of profit and/or unearned
income of three years;
b. P119,700.00 plus 12% interest as estimated cost of supplies, facilities,
properties, space, etc. for three years;
c. P5,000.00 as initial expenses of litigation; and
d. P25,000.00 as attorney's fees. 4
On January 30, 1996, petitioner filed a motion to dismiss the above
complaint. He interposed in the court below that the action for damages, having
arisen from an employer-employee relationship, was squarely under the
exclusive original jurisdiction of the NLRC under Article 217(a), paragraph 4 of
the Labor Code and is barred by reason of the final judgment in the labor case.
He accused private respondent of splitting causes of action, stating that the latter
could very well have included the instant claim for damages in its counterclaim
before the Labor Arbiter. He also pointed out that the civil action of private
respondent is an act of forum-shopping and was merely resorted to after a failure
to obtain a favorable decision with the NLRC.
Ruling upon the motion to dismiss, respondent judge issued the herein
questioned Order, which summarized the basis for private respondent's action for
damages in this manner:
Paragraph 5 of the complaint alleged that the defendant violated
the plaintiff’s policy re: His business in his branch at Iligan City wherein
defendant was the Sales Operations Manager, and paragraph 7 of the
same complaint briefly narrated the modus operandi of defendant,
quoted herein: Defendant canvassed customers personally or through
salesmen of plaintiff which were hired or recruited by him. If said
customer decided to buy items from plaintiff on installment basis,
defendant, without the knowledge of said customer and plaintiff, would
buy the items on cash basis at ex-factory price, a privilege not given to
customers, and thereafter required the customer to sign promissory
notes and other documents using the name and property of plaintiff,
purporting that said customer purchased the items from plaintiff on
installment basis. Thereafter, defendant collected the installment
payments either personally or through Venus Lozano, a Group Sales
Manager of plaintiff but also utilized by him as secretary in his own
business for collecting and receiving of installments, purportedly for the
plaintiff but in reality on his own account or business. The collection and
receipt of payments were made inside the Iligan City branch using
plaintiff’s facilities, property and manpower. That accordingly plaintiff’s
 sales decreased and reduced to a considerable extent the profits which
it would have earned. 5
In declaring itself as having jurisdiction over the subject matter of the
instant controversy, respondent court stated:
A perusal of the complaint which is for damages does not ask for
any relief under the Labor Code of the Philippines. It seeks to recover
damages as redress for defendant's breach of his contractual obligation
to plaintiff who was damaged and prejudiced. The Court believes such
cause of action is within the realm of civil law, and jurisdiction over the
controversy belongs to the regular courts.
While seemingly the cause of action arose from employer-
employee relations, the employer's claim for damages is grounded on
the nefarious activities of defendant causing damage and prejudice to
plaintiff as alleged in paragraph 7 of the complaint. The Court believes
that there was a breach of a contractual obligation, which is intrinsically a
civil dispute. The averments in the complaint removed the controversy
from the coverage of the Labor Code of the Philippines and brought it
within the purview of civil law. (Singapore Airlines, Ltd. Vs. Paño, 122
SCRA 671.) . . . 6
Petitioner's motion for reconsideration of the above Order was denied for
lack of merit on October 16, 1996. Hence, this petition.
Acting on petitioner's prayer, the Second Division of this Court issued a
Temporary Restraining Order ("TRO") on March 5, 1997, enjoining respondents
from further proceeding with Civil Case No. 95-554 until further orders from the
Court.
By way of assignment of errors, the petition reiterates the grounds raised
in the Motion to Dismiss dated January 30, 1996, namely, lack of jurisdiction over
the subject matter of the action, res judicata, splitting of causes of action, and
forum-shopping. The determining issue, however, is the issue of jurisdiction.
Article 217(a), paragraph 4 of the Labor Code, which was already in effect
at the time of the filing of this case, reads: 
cda

ARTICLE 217. Jurisdiction of Labor Arbiters and the

Commission. — (a) Except as otherwise provided under this Code, the
Labor Arbiters shall have original and exclusive jurisdiction to hear and
decide, within thirty (30) calendar days after the submission of the case
by the parties for decision without extension, even in the absence of
stenographic notes, the following cases involving all workers, whether
agricultural or non-agricultural:
xxx xxx xxx
 4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
xxx xxx xxx
The above provisions are a result of the amendment by Section 9 of
Republic Act ("R.A.") No. 6715, which took effect on March 21, 1989, and which
put to rest the earlier confusion as to who between Labor Arbiters and regular
courts had jurisdiction over claims for damages as between employers and
employees.
It will be recalled that years prior to R.A. 6715, jurisdiction over all money
claims of workers, including claims for damages, was originally lodged with the
Labor Arbiters and the NLRC by Article 217 of the Labor Code. 7 On May 1,
1979, however, Presidential Decree ("P.D.") No. 1367 amended said Article 217
to the effect that "Regional Directors shall not indorse and Labor Arbiters shall
not entertain claims for moral or other forms of damages." 8 This limitation in
jurisdiction, however, lasted only briefly since on May 1, 1980, P.D. No.
1691 nullified P.D. No. 1367 and restored Article 217 of the Labor Code almost to
its original form. Presently, and as amended by R.A. 6715, the jurisdiction of
Labor Arbiters and the NLRC in Article 217 is comprehensive enough to include
claims for all forms of damages "arising from the employer-employee relations".
Whereas this Court in a number of occasions had applied the jurisdictional
provisions of Article 217 to claims for damages filed by employees, 9 we hold that
by the designating clause "arising from the employer-employee relations" Article
217 should apply with equal force to the claim of an employer for actual
damages against its dismissed employee, where the basis for the claim arises
from or is necessarily connected with the fact of termination, and should be
entered as a counterclaim in the illegal dismissal case.
Even under Republic Act No. 875 (the "Industrial Peace Act", now
completely superseded by the Labor Code), jurisprudence was settled that where
the plaintiff's cause of action for damages arose out of, or was necessarily
intertwined with, an alleged unfair labor practice committed by the union, the
jurisdiction is exclusively with the (now defunct) Court of Industrial Relations, and
the assumption of jurisdiction of regular courts over the same is a nullity. 10 To
allow otherwise would be "to sanction split jurisdiction, which is prejudicial to the
orderly administration of justice." 11 Thus, even after the enactment of the Labor
Code, where the damages separately claimed by the employer were allegedly
incurred as a consequence of strike or picketing of the union, such complaint for
damages is deeply rooted from the labor dispute between the parties, and should
be dismissed by ordinary courts for lack of jurisdiction. As held by this Court
in National Federation of Labor vs. Eisma, 127 SCRA 419:
 Certainly, the present Labor Code is even more committed to the
view that on policy grounds, and equally so in the interest of greater
promptness in the disposition of labor matters, a court is spared the
often onerous task of determining what essentially is a factual matter,
namely, the damages that may be incurred by either labor or
management as a result of disputes or controversies arising from
employer-employee relations.
There is no mistaking the fact that in the case before us, private
respondent's claim against petitioner for actual damages arose from a prior
employer-employee relationship. In the first place, private respondent would not
have taken issue with petitioner's "doing business of his own" had the latter not
been concurrently its employee. Thus, the damages alleged in the complaint
below are: first, those amounting to lost profits and earnings due to petitioner's
abandonment or neglect of his duties as sales manager, having been otherwise
preoccupied by his unauthorized installment sale scheme; and second, those
equivalent to the value of private respondent's property and supplies which
petitioner used in conducting his "business".
Second, and more importantly, to allow respondent court to proceed with
the instant action for damages would be to open anew the factual issue of
whether petitioner's installment sale scheme resulted in business losses and the
dissipation of private respondent's property. This issue has been duly raised and
ruled upon in the illegal dismissal case, where private respondent brought up as
a defense the same allegations now embodied in his complaint, and presented
evidence in support thereof. The Labor Arbiter, however, found to the contrary —
that no business losses may be attributed to petitioner as in fact, it was by reason
of petitioner's installment plan that the sales of the Iligan branch of private
respondent (where petitioner was employed) reached its highest record level to
the extent that petitioner was awarded the 1989 Field Sales Achievement Award
in recognition of his exceptional sales performance, and that the installment
scheme was in fact with the knowledge of the management of the Iligan branch
of private respondent. 12 In other words, the issue of actual damages has been
settled in the labor case, which is now final and executory.
Still on the prospect of re-opening factual issues already resolved by the
labor court, it may help to refer to that period from 1979 to 1980 when jurisdiction
over employment-predicated actions for damages vacillated from labor tribunals
to regular courts, and back to labor tribunals. In Ebon vs. de Guzman, 113 SCRA
52, 13 this Court discussed:
The lawmakers in divesting the Labor Arbiters and the NLRC of
jurisdiction to award moral and other forms of damages in labor cases
could have assumed that the Labor Arbiters' position-paper procedure of
ascertaining the facts in dispute might not be an adequate tool for
arriving at a just and accurate assessment of damages, as distinguished
 from backwages and separation pay, and that the trial procedure in the
Court of First Instance would be a more effective means of determining
such damages. . .
Evidently, the lawmaking authority had second thoughts about
depriving the Labor Arbiters and the NLRC of the jurisdiction to award
damages in labor cases because that setup would mean duplicity of
suits, splitting the cause of action and possible conflicting findings and
conclusions by two tribunals on one and the same claim.  LexLib

So, on May 1, 1980, Presidential Decree No. 1691 (which

substantially reenacted Article 217 in its original form)
nullified Presidential Decree No. 1367 and restored to the Labor Arbiter
and the NLRC their jurisdiction to award all kinds of damages in cases
arising from employer-employee relations. . . . (Italics supplied)
Clearly, respondent court's taking jurisdiction over the instant case would
bring about precisely the harm that the lawmakers sought to avoid in amending
the Labor Code to restore jurisdiction over claims for damages of this nature to
the NLRC.
This is, of course, to distinguish from cases of actions for damages where
the employer-employee relationship is merely incidental and the cause of action
proceeds from a different source of obligation. Thus, the jurisdiction of regular
courts was upheld where the damages, claimed for were based on
tort, 14 malicious prosecution, 15 or breach of contract, as when the claimant
seeks to recover a debt from a former employee 16 or seeks liquidated damages
in enforcement of a prior employment contract. 17
Neither can we uphold the reasoning of respondent court that because the
resolution of the issues presented by the complaint does not entail application of
the Labor Code or other labor laws, the dispute is intrinsically civil. Article 217(a)
of the Labor Code, as amended, clearly bestows upon the Labor Arbiter original
and exclusive jurisdiction over claims for damages arising from employer-
employee relations — in other words, the Labor Arbiter has jurisdiction to award
not only the reliefs provided by labor laws, but also damages governed by the
Civil Code. 18
Thus, it is obvious that private respondent's remedy is not in the filing of
this separate action for damages, but in properly perfecting an appeal from the
Labor Arbiter's decision. Having lost the right to appeal on grounds of
untimeliness, the decision in the labor case stands as a final judgment on the
merits, and the instant action for damages cannot take the place of such lost
appeal.
 Respondent court clearly having no jurisdiction over private respondent's
complaint for damages, we will no longer pass upon petitioner's other
assignments of error.
WHEREFORE, the Petition is GRANTED, and the complaint in Civil Case
No. 95-554 before Branch 39 of the Regional Trial Court of Misamis Oriental is
hereby DISMISSED. No pronouncement as to costs.  cdphil

SO ORDERED.
|||  (Bañez v. Valdevilla, G.R. No. 128024, [May 9, 2000], 387 PHIL 601-612)