Case Digest: Sterling v. KMM-Katipunan and Esponga

STERLING PAPER PRODUCTS ENTERPRISES, INC., Petitioner  v.   KMM-KATIPUNAN AND RAYMOND Z. ESPONGA, Respondents.

G.R. No. 221493, 2 August 2017.

Mendoza, J.:

Petitioner Sterling averred that on June 26, 2010, their supervisor Mercy Vinoya (Vinoya), found Respondent Raymond Esponga and his co-employees about to take a nap on the sheeter machine. She called their attention and prohibited them from taking a nap thereon for safety reasons.

Esponga and his co-employees then transferred to the mango tree near the staff house. When Vinoya passed by the staff house, she heard Esponga utter, "Huwag maingay, puro bawal. " She then confronted Esponga, who responded in a loud and disrespectful tone, "Puro kayo bawal, bakit bawal ba magpahinga?”

When Vinoya turned away, Esponga gave her the "dirty finger" sign in front of his co-employees and said "Wala ka pala eh, puro ka dakdak. Baka pag ako nagsalita hindi mo kayanin. "

After being served a notice to explain and several hearings, Sterling dismissed Esponga for gross and serious misconduct.

In the illegal dismissal case filed by Esponga, the Labor Arbiter ruled in favor of Esponga, stating that Sterling failed to discharge the burden of proof. NLRC reversed the ruling, stating that the acts of Esponga were all violations of the Company Code of Conduct. On appeal, the Court of Appeals reversed NLRC’s ruling, stating that the utterances and gesture did not constitute gross misconduct.

ISSUE: Whether the cause of Esponga’s dismissal amounts to serious misconduct.

RULING: Yes.

Under Article 282 (a) of the Labor Code, serious misconduct by the employee justifies the employer in terminating his or her employment.

For misconduct or improper behavior to be a just cause for dismissal, the following elements must concur: (a) the misconduct must be serious; (b) it must relate to the performance of the employee's duties showing that the employee has become unfit to continue working for the employer; and (c) it must have been performed with wrongful intent.

Primarily, the utterance of obscene, insulting or offensive words against a superior is not only destructive of the morale of his co-employees and a violation of the company rules and regulations, but also constitutes gross misconduct.

Further, Esponga's assailed conduct was related to his work. Vinoya did not prohibit him from taking a nap. She merely reminded him that he could not do so on the sheeter machine for safety reasons. Esponga's acts reflect an unwillingness to comply with reasonable management directives.

Finally, Esponga was motivated by wrongful intent. He committed the acts in front of his co-employees, which evidently showed that he intended to disrespect and humiliate his supervisor.

Marawi City and Martial Law

It is heartbreaking to see the siege of Marawi City. Thousands of residents were affected by the terroristic acts of the Maute Group, which has allied itself with the ISIS, another terrorist group which sows nothing but misguided hate.

It was understandable, then, for the president to take control of the situation, and a tool for doing so is by imposing martial law.

Section 18, Article VII of the 1987 Constitution states that:

 "In case of invasion or rebellion, when the public safety requires it, he may, for a period not exceeding sixty days, suspend the privilege of the writ of habeas corpus or place the Philippines or any part thereof under martial law. Within forty-eight hours from the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus, the President shall submit a report in person or in writing to the Congress. The Congress, voting jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke such proclamation or suspension, which revocation shall not be set aside by the President. Upon the initiative of the President, the Congress may, in the same manner, extend such proclamation or suspension for a period to be determined by the Congress, if the invasion or rebellion shall persist and public safety requires it.

"The Congress, if not in session, shall, within twenty-four hours following such proclamation or suspension, convene in accordance with its rules without any need of a call.

"The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the factual basis of the proclamation of martial law or the suspension of the privilege of the writ or the extension thereof, and must promulgate its decision thereon within thirty days from its filing."

This is not the Marcos Martial Law, in which the president preempted everyone from reacting adversely, cutting the voice of the legislature and cowing the Judiciary into falling in line.

In the present constitution, the Congress shall convene and may revoke or approve or extend the proclamation. The Supreme Court, in turn, may review the the proclamation.

It is thus imperative for these two branches to not just meekly dance to the tune of the executive and check the propriety and legality of the martial law declaration.

Martial law is not inherently evil. If it were, the framers of the 1987 Constitution would have removed such power entirely, especially considering the country's wounds from the tyranny of martial law were still fresh then.  It is a necessary tool for extreme situations such as invasion or rebellion, which is, depending on your viewpoint, is happening now.

On the part of all the people, and not just the Congress and Judiciary, we have to remain extra vigilant in order that the depth, breadth, and duration of the martial law are just enough to restore order in Marawi City.

Case Digest: Asian Construction and Development Corporation v. Mendoza

ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner, v. LOURDES K. MENDOZA, Respondent.

G.R. No. 176949, 27 June 2012.

DEL CASTILLO, J.:

Lourdes K. Mendoza (Mendoza), sole proprietor of Highett Steel Fabricators (Highett), a Complaint for a sum of money against Asian Construction and Development Corporation (ACDC), a duly registered domestic corporation.

Mendoza alleged that ACDC purchased from Highett various fabricated steel materials and supplies amounting to P1,206,177.00, exclusive of interests; that despite demand, ACDC failed and/or refused to pay.

Petitioner moved for a bill of particulars on the ground that no copies of the purchase orders and invoices were attached to the complaint to enable petitioner to prepare a responsive pleading to the complaint, which motion was denied by the court. Accordingly, ACDC filed its Answer with Counterclaim denying liability for the claims and interposing the defense of lack of cause of action.

Mendoza presented the testimonies her salesman Artemio Tejero who confirmed the delivery of the supplies and materials to ACDC.

The presentation of evidence for petitioner, however, was deemed waived and terminated due to the repeated non-appearance of ACDC and counsel.

The Court ruled in favor of Mendoza, finding ACDC liable for purchase price of the materials it ordered.

On appeal before the Supreme Court, ACDC argues that a charge or sales invoice is not an actionable document; thus, its failure to deny under oath its genuineness and due execution does not constitute an admission thereof. ACDC likewise insists that respondent was not able to prove her claim as the invoices offered as evidence were not properly authenticated by her witnesses.

ISSUE: W/N ACDC is liable for the materials ordered.

RULING: Yes.

A document is actionable when an action or defense is grounded upon such written instrument or document. In the instant case, the Charge Invoices are not actionable documents per se as these only provide details on the alleged transactions. These documents need not be attached to or stated in the complaint as these are evidentiary in nature. In fact, Mendoza’s cause of action is not based on these documents but on the contract of sale between the parties.

Although the Charge Invoices are not actionable documents, these, along with the Purchase Orders, are sufficient to prove that ACDC indeed ordered supplies and materials from Highett and that these were duly delivered.

Moreover, contrary to the claim of ACDC, the Charge Invoices were properly identified and authenticated by witness Tejero who was present when the supplies and materials were delivered to ACDC and when the invoices were stamped received by its employee.

Case Digest: Adriano v. Lasala

JAIME P. ADRIANO and LEGASPI TOWERS 300, INC., Petitioners, vs. ALBERTO LASALA and LOURDES LASALA, Respondents.

G.R. No. 197842               October 9, 2013

Mendoza, J.: 

On September 25, 1992, Legaspi Towers 300 (LT300) entered a security service contract with Alberto and Lourdes Lasala (the Lasalas), the owners of Thunder Security and Investigation Agency, for a period of one year.

On October 18, 1992, the Lasalas received a letter signed by Building Administrator Jaime P. Adriano (Adriano), reminding them of their non-compliance with the security services agreement, among which were the failure to assign security guards with the required height and educational attainment, and the failure to provide the agreed service vehicle. In compliance, respondents relieved and replaced the unqualified personnel with Adriano’s recommendees. A Ford Fiera was also produced although parked in a nearby area as no space in the building was available. The Lasalas received another letter 3 days later, reiterating the same instances of non-compliance. This prompted them to talk to Adriano.

In the meeting, Adriano mentioned that the differences could only be settled by cooperating with each other. He then requested from respondents the payment of P18,000.00, of which P5,000 would be given to the LT300 President; P3,000.00 to Captain Perez; and the rest to Adriano himself. These payments were requested in return for acting as the bridge in resolving the issues. The Lasalas paid, but the Mr. Adriano demanded another equivalent amount in another meeting in November.

Thereafter, a series of correspondence between the parties took place, with LT300 constantly reiterating the alleged violations of the service contract. In the last letter, LT300 added another grievance – non- payment of the minimum wage. To finally settle the issues, respondents sought audience before the LT300 Board but to no avail. Instead, the Board terminated the contract.

The Lasalas filed a complaint for damages alleging that LT300 and Adriano illegally terminated their services.

In its defense, LT300 said that the Lasalas breached the contract by employing personnel who failed to meet the minimum qualifications of at least 2nd year of college and 5’6" in height (note, however, that the unqualified employees were absorbed by the Lasalas due to the recommendation of LT300). LT300 also argued that the Lasalas failed to provide a service vehicle and pay minimum wage to the security guards.

The RTC ruled in favor of the Lasalas, and the CA affirmed the decision (with modification on damages).

ISSUE: W/N LT300 and Adriano are liable to the Lasalas for illegal pretermination of the contract.

RULING: YES.

LT300 has no basis in attributing breach of contract on the part of the Lasalas. As to the absorbed employees, it is ridiculous and unfair to allow the LT300 to cite lack of qualifications when they were active participants in the selection and hiring process. As to the non-provision of service vehicle and non-payment of minimum wage, the same are groundless and flimsy.

In fact, LT300 was the one that committed the breach by its abrupt and groundless termination of the agreement. Although pre-termination was allowed under the contract, LT300 could not just invoke and exercise the same without a valid and legal ground.

The LT300 is reminded that "every person must, in the exercise of his right and in the performance of his duty, act with justice, give everyone his due, and observe honesty and good faith." The Lasalas clearly complied with their part of the obligation under the security services agreement but it appeared that whatever they did, the LT300 was bent on ending it.

As such, the award of moral damages was proper since the termination was effected without valid reason, in addition to the inappropriate dealings of Adriano to acquire financial gain at the expense of the Lasalas manifested LT300’s malicious and unjust intent to do away with the Lasalas’ services.

As regards exemplary damages, the same is proper as bad faith attended the termination of the service contract agreement.

On temperate damages, the Lasalas suffered pecuniary loss because of the untimely termination of their services for no cause at all. As there is no proof capable of ascertaining the actual loss, the same is proper in lieu of actual damages.

As to attorney's fees, suffice it to say that because the Lasalas were constrained to litigate to protect their interests, the award was proper.

Case Digest: ALPS Transportation v. Rodriguez

ALPS TRANSPORTATION and/or ALFREDO E. PEREZ, Petitioners, vs. ELPIDIO M. RODRIGUEZ, Respondent.

G.R. No. 186732               June 13, 2013

SERENO, CJ.:

Respondent Elpidio Rodriguez (Rodriguez) was previously employed as a bus conductor. He entered into an employment contract with Contact Tours Manpower and was assigned to work with the bus company ALPS Transportation, owned by Alfredo Perez as a sole proprietor.

During the course of his employment, Rodriguez was found to have committed irregularities on 26 April 2003, 12 October 2003, and 26 January 2005. The latest irregularity report dated 26 January 2005 stated that he had collected bus fares without issuing corresponding tickets to passengers. The report was annotated with the word "Terminate."

Rodriguez alleged that he was dismissed from his employment on 27 January 2005, or the day after the issuance of the last irregularity report. However, he did not receive any written notice of termination. He went back to the bus company a number of times, but it refused to readmit him.

Rodriguez then filed before the labor arbiter a complaint for illegal dismissal.

In response to the complaint, ALPS and Perez stated that they did not have any prerogative to dismiss Rodriguez, as he was not their employee, but that of Contact Tours.

ISSUES:

1. Whether Rodriguez was illegally dismissed;

2. Assuming Rodriguez was illegally dismissed, whether ALPS Transportation and/or Alfredo E. Perez is liable for the dismissal.

RULING:

1.     Yes

2.     Yes.

For a dismissal to be valid, the rule is that the employer must comply with both substantive and procedural due process requirements. Substantive due process requires that the dismissal must be pursuant to either a just or an authorized cause under the Labor Code. Procedural due process, on the other hand, mandates that the employer must observe the twin requirements of notice and hearing before a dismissal can be effected.

Evidence must, therefore, be substantial and not based on mere surmises or conjectures for to allow an employer to terminate the employment of a worker based on mere allegations places the latter in an uncertain situation and at the sole mercy of the employer. An accusation that is not substantiated will not ripen into a holding that there is just cause for dismissal. A mere accusation of wrongdoing or a mere pronouncement of lack of confidence is not sufficient cause for a valid dismissal of an employee. Thus, the failure of the petitioners to convincingly show that the respondent misappropriated the bus fares renders the dismissal to be without a valid cause. If doubt exists between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter.

Turning to the issue of procedural due process, both parties agree that Rodriguez was not given a written notice specifying the grounds for his termination and giving him a reasonable opportunity to explain his side.

As to the contention of ALPS that Rodriguez is an employee of Contact Tours, the presumption is that a contractor is a labor-only contractor unless he overcomes the burden of proving that it has substantial capital, investment, tools, and the like. While ALPS Transportation is not the contractor itself, since it is invoking Contact Tours status as a legitimate job contractor in order to avoid liability, it bears the burden of proving that Contact Tours is an independent contractor.

However, aside from making bare assertions and offering the Kasunduan between Rodriguez and Contact Tours in evidence, ALPS Transportation has failed to present any proof to substantiate the former's status as a legitimate job contractor. Hence, the legal presumption that Contact Tours is a labor-only contractor has not been overcome.

As a labor-only contractor, therefore, Contact Tours is deemed to be an agent of ALPS Transportation. Thus, the latter is responsible to Contact Tours' employees in the same manner and to the same extent as if they were directly employed by the bus company.

Finally, since ALPS Transportation is a sole proprietorship owned by Perez, it is he who must be held liable for the payment of backwages to Rodriguez. A sole proprietorship does not possess a juridical personality separate and distinct from that of the owner of the enterprise. Thus, the owner has unlimited personal liability for all the debts and obligations of the business, and it is against him that a decision for illegal dismissal is to be enforced.

Case Digest: Mangila v. Guina

ANITA MANGILA, petitioner, vs. COURT OF APPEALS and LORETA GUINA, respondents.

G.R. No. 125027. August 12, 2002

CARPIO, J.:

Petitioner Anita Mangila, a resident of Pampanga, is a single proprietor exporting sea foods and doing business under the name and style of Seafoods Products. Private respondent Loreta Guina is single proprietor providing freight forwarding service doing business as Air Swift International, with office address in Pasay.

Mangila contracted the freight forwarding services of Guina for shipment of sea food products to Guam where Mangila maintains an outlet. Mangila agreed to pay Guina cash on delivery. 

On the first shipment, Mangila requested for seven days within which to pay Guina. However, for the next three shipments, Mangila failed to pay Guina the shipping charges.

Despite several demands, Mangila never paid Guina. Thus, Guina filed before the Regional Trial Court of Pasay City a case for collection of sum of money.

Mangila filed a Motion to Dismiss on the ground of improper venue. Guina’s invoice for the freight forwarding service stipulates that if court litigation becomes necessary to enforce collection, the agreed venue for such action is Makati.

Guina filed an Opposition asserting that although Makati appears as the stipulated venue, the same was merely an inadvertence by the printing press. Moreover, Guina claimed that Mangila knew that Guina was holding office in Pasay City and not in Makati.

The trial court, finding credence in private respondents assertion, denied the Motion to Dismiss and allowed the case to proceed.

The trial court thereafter ruled in favor of Guina, ordering Mangila to pay her outstanding balance.

ISSUE: W/N there was improper venue.

RULING: Yes.

The case should be dismissed for improper venue, but not for the reason stated by Mangila.

Mangila raised the issue of improper venue due to the stipulation in the invoice that any litigation’s agreed venue is Makati. However,  the stipulation does not limit the venue exclusively to Makati.

Nevertheless, Pasay is not the proper venue for this case.

Under the Rules of Court, venue in personal actions is where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff. The exception to this rule is when the parties agree on an exclusive venue other than the places mentioned in the rules. But, as discussed, this exception is not applicable in this case. Hence, following the general rule, the case may be brought in the place of residence of the plaintiff or defendant, at the election of the plaintiff.

In the instant case, the residence of Guina was not alleged in the complaint. Rather, what was alleged was the postal address of her sole proprietorship, Air Swift International. It was only during trial that she mentioned her residence to be in Paranaque City.  

In the instant case, it was established in the lower court that petitioner resides in San Fernando, Pampanga while private respondent resides in Paranaque City. However, this case was brought in Pasay City, where the business of Guina is found. This would have been permissible had Guina’s business been a corporation. However, as Guina admitted in her Complaint in the trial court, her business is a sole proprietorship, and as such, does not have a separate juridical personality that could enable it to file a suit in court. In fact, there is no law authorizing sole proprietorships to file a suit in court.

A sole proprietorship does not possess a juridical personality separate and distinct from the personality of the owner of the enterprise. The law merely recognizes the existence of a sole proprietorship as a form of business organization conducted for profit by a single individual and requires its proprietor or owner to secure licenses and permits, register its business name, and pay taxes to the national government. The law does not vest a separate legal personality on the sole proprietorship or empower it to file or defend an action in court.^[42]

Thus, not being vested with legal personality to file this case, Air Swift International is not the plaintiff in this case but rather Loreta Guina in her personal capacity.

Case Digest: S.C. Megaworld v. Parada

S.C. MEGAWORLD CONSTRUCTION and DEVELOPMENT CORPORATION, Petitioner,  vs. ENGR. LUIS U. PARADA, represented by ENGR. LEONARDO A. PARADA of GENLITE INDUSTRIES, Respondent.

G.R. No. 183804               September 11, 2013

REYES, J.:

S.C. Megaworld Construction and Development Corporation (Megaworld) bought electrical lighting materials from Gentile Industries, a sole proprietorship owned by Engineer Luis U. Parada. Megaworld was unable to pay for the above purchase on due date, but blamed it on its failure to collect under its sub-contract with the Enviro KleenTechnologies, Inc. (Enviro Kleen). It was however able to persuade Enviro Kleen to agree to settle its above purchase, but after paying the respondent P250,000.00 once, Enviro Kleen stopped making further payments, leaving an outstanding balance of P816,627.00. It also ignored the various demands of the Parada, who then filed a suit in the RTC, to collect from the petitioner the said balance, plus damages, costs and expenses.

Megaworld denied liability by saying that it was released from its indebtedness to the Parada due to the novation of their contract, which. There was allegedly novation when the Parada accepted the partial payment of Enviro Kleen in its behalf, and thereby acquiesced to the substitution of Enviro Kleen as the new debtor in Megaworld’s place. 

The Regional Trial Court ruled in favor of Parada.

On appeal, Megaworld argued that the trial court should have dismissed the complaint for failure of the respondent to implead Genlite Industries as "a proper party in interest."

The sales invoices and receipts show that the respondent is the sole proprietor of Genlite Industries, and therefore the real party.

On the issue of novation, the Court of Appeals ruled that by retaining his option to seek satisfaction from the petitioner, any acquiescence which the respondent had made was limited to merely accepting Enviro Kleen as an additional debtor from whom he could demand payment, but without releasing the petitioner as the principal debtor from its debt to him.

ISSUE: W/N Genlite Industries should have been impleaded as a party-plaintiff.

RULING: No.

Only natural or juridical persons or entities authorized by law may be parties in a civil case.

A sole proprietorship has no juridical personality separate and distinct from that of its owner, and need not be impleaded as a party-plaintiff in a civil case.

Genlite Industries is merely the DTI-registered trade name or style of Parada by which he conducted his business. As such, it does not exist as a separate entity apart from its owner, and therefore it has no separate juridical personality to sue or be sued. As the sole proprietor of Genlite Industries, there is no question that the Parada is the real party in interest who stood to be directly benefited or injured by the judgment in the complaint below. There is then no necessity for Genlite Industries to be impleaded as a party-plaintiff, since the complaint was already filed in the name of its proprietor, Engr. Luis U. Parada. To heed the Megaworld’s sophistic reasoning is to permit a dubious technicality to frustrate the ends of substantial justice.

ISSUE: W/N there is novation of the contract.

RULING: None.

Novation is a mode of extinguishing an obligation by changing its objects or principal obligations, by substituting a new debtor in place of the old one, or by subrogating a third person to the rights of the creditor. It is "the substitution of a new contract, debt, or obligation for an existing one between the same or different parties."

The settled rule is that novation is never presumed, but must be clearly and unequivocally shown.  In order for a new agreement to supersede the old one, the parties to a contract must expressly agree that they are abrogating their old contract in favor of a new one.

The trial court found that the respondent never agreed to release the petitioner from its obligation, and this conclusion was upheld by the CA.

Case Digest, Juasing Hardware v. Mendoza

JUASING HARDWARE, petitioner, vs. THE HONORABLE RAFAEL T. MENDOZA, Judge of the Court of First Instance of Cebu, and PILAR DOLLA, respondents.

G.R. No. L-55687 July 30, 1982

GUERRERO, J.:

Juasing Hardware, alleging to be a single proprietorship duly organized and existing under and by virtue of the laws of the Philippines and represented by its manager Ong Bon Yong, filed a complaint for the collection of a sum of money against Pilar Dolla. 

In her Answer, Dolla stated that she has no knowledge about Juasing Hardware's legal personality and capacity to sue as alleged in the complaint. 

After Juasing Hardware had completed the presentation of its evidence and rested its case, Dolla filed a Motion for Dismissal of Action for Juasing Hardware’s lack of legal capacity to sue. Dolla contended that Juasing Hardware is a single proprietorship, not a corporation or a partnership duly registered in accordance with law, and therefore is not a juridical person with legal capacity to bring an action in court. Juasing Hardware filed an opposition and moved for the admission of an Amended Complaint to change the name.

Respondent Judge issued an Order dismissing the case and denying admission of the Amended Complaint.

ISSUE: W/N the Court properly dismissed the case filed by Juasing Hardware.

RULING: No.

Juasing Hardware is definitely not a natural person; nor is it a juridical person as defined in the New Civil Code of the Philippines thus:

Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;

(2) Other corporations, institutions and entities for public interest or purpose, created by law; their personality begins as soon as they have been constituted according to law;

(3) Corporations, partnerships and associations for private interest or purpose to which the law grants a juridical personality, separate and distinct from that of each shareholder, partner or member.

There is no law authorizing sole proprietorships like Juasing Hardware to bring suit in court. The law merely recognizes the existence of a sole proprietorship as a form of business organization conducted for profit by a single individual, and requires the proprietor or owner thereof to secure licenses and permits, register the business name, and pay taxes to the national government. It does not vest juridical or legal personality upon the sole proprietorship nor empower it to file or defend an action in court.

Thus, the complaint in the court should have been filed in the name of the owner of Juasing Hardware. The allegations in the body of the complaint would show that the suit is brought by such person as proprietor or owner of the business conducted under the name and style “Juasing Hardware.” The descriptive words "doing business as Juasing Hardware' " may be added in the title of the case, as is customarily done.

Be that as it may, Juasing Hardware's contention that respondent judge erred in not allowing the amendment of the complaint to correct the designation of the party plaintiff in the lower court, is impressed with merit. The defect of the complaint in the instant case is merely formal, not substantial. Substitution of Juasing Hardware would not constitute a change in the Identity of the parties. No unfairness or surprise to Dolla would result by allowing the amendment, the purpose of which is merely to conform to procedural rules or to correct a technical error.