G.R. No. 84502. June 30, 1989.*FIRST DIVISION.
CHRISTIAN CHILDREN’S FUND, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, LABOR ARBITER RICARDO OLAIREZ, ELIZABETH SALAO, FELISA
MAMARIL, FELIPA PITOK, JOY GONSODEN and ELENA ECLARINO, respondents.
Labor; Employer-employee relationship; The Cristo Regis Center is not an agent of the
petitioner, they are independent of one another.—A close scrutiny of this contract shows that the
petitioner financially supports the charitable program undertaken by the Cristo Regis Center;
there is no formal legal relationship between petitioner and the
Cristo Regis Center (Project); the Cristo Regis Center is not an agent of the petitioner; the
petitioner and the Cristo Regis Center (Project) are independent of one another; and the Cristo
Regis Center (Project) has no authority to, and can not and will not enter into any agreement on
behalf of the petitioner or bind it or pledge credit in any way. Same; Same; Same; Private
respondents were under the supervision and control of the Cristo Regis Center not the
petitioner.—The management of the Cristo Regis Center was entrusted to the Benedictine
Sisters. The Benedictine Sisters eventually ceased management operations and withdrew from
said project of the Cristo Regis Center in 1984. Thus, the petitioner had no alternative but to
engage another Organization aside from the Cristo Regis Center, to pursue the program.
Obviously, the petitioner is not the employer of the private respondents. The funds of petitioner
are different and distinct from the Cristo Regis Center. Each entity has its own separate
organizational set-up. They operate independently of each other. The private respondents were
under the supervision and control of the Cristo Regis Center, not the petitioner.
Same; Same; Same; Same; Contention that Cristo Regis Center not being a duly organized
corporation listed in the Securities and Exchange Commission, cannot be liable for contracts
entered into by it is not tenable.—Since the petitioner is not the employer of private respondents,
it logically follows that the Cristo Regis Center, the entity that hired them, must be their
employer. Their contention that Cristo Regis Center, not being a duly organized corporation
listed in the Securities and Exchange Commission, cannot be liable for contracts entered into by
it, is not tenable.
PETITION to review the resolutions of the National Labor Relations Commission.
The facts are stated in the opinion of the Court.
GANCAYCO, J .:
The principal issue in this case is whether or not the petitioner Christian Children’s Fund is the
real employer of the private respondents, and not the Cristo Regis Center, an organization that is
not incorporated.
The secondary issues are whether or not the respondent Commission committed a grave abuse of
discretion in dismissing the petitioner’s appeal on the ground that the same had been filed
beyond the reglementary period and whether or not there was illegal dismissal of the private
respondents by their employer.
The petitioner questions the resolution of the Fifth Division of the National Labor Relations
Commission (NLRC) in NLRC Case No. RABI-0035-85 dated January 29, 1988, dismissing its
appeal on the ground that the same was filed beyond the ten-day reglementary period.1Pages 17
to 19, Rollo; Presiding Commissioner Lourdes C. Javier wrote the resolution. Commissioners
Danilo Lorredo and Nestor C. Lim concurred in the same. Petitioner’s motion for reconsideration
thereof was likewise denied on April 18, 1988.2Page 20, Rollo.
In the decision of Labor Arbiter Ricardo N. Olairez dated April 30, 1986, which was considered
final and executory by the NLRC, the dispositive portion reads as follows:
“WHEREFORE, in the light of the foregoing considerations, therespondent Christian Children’s
Fund, Inc. is hereby ordered to paycomplainants, as follows:
1. ELIZABETH SALAO:
P25,446.00—One year full backwages
8,717.00—Separation pay, one-half month pay of basic rate, 11 years service.
P34,163.00
2. FELISA MAMARIL:
P24,306.00—one year full backwages
5,960.00—separation pay, one-half month pay of basic rate, 8 years service.
P30,266.00
3. FELIPA PITOK:
P24,306.00—One year full backwages.
5,215.00—Separation pay, one-half month pay of basic rate, 7 years service.
P29,521.00
4. ELENA ECLARINO:
P23,l06.00—One year full backwages.
4,170.00—Separation pay, one-half month pay of basic rate, 6 years service.
P27,276.00
5. JOY GONSODEN:
P22,266.00—One year full backwages.
2,640.00—Separation pay, one-half month pay of basic rate, 4 years service.
P24,906.00
amounting to a total of ONE HUNDRED FORTY SIX THOUSAND ONE HUNDRED
THIRTY TWO and 50/100 (P146,132.50), plus ten (10%) percent attorney’s fees (P14,613.25)
of the total amount granted or a grand total of P160,745.74 award.
Respondent CCF, Inc. is finally ordered to present proof of compliance with this Order within
(10) days from receipt of this decision in order to obviate the issuance of a Writ of Execution.
SO ORDERED.”3Pages 29-30, Rollo. The computation should have read P160,745.20.
The petitioner, through counsel, received notice of the decision of the labor arbiter on May 15,
1986. Pursuant to the ten-day reglementary period prescribed by law, the petitioner had until
May 25, 1986 to file an appeal to the NLRC. The record discloses that the petitioner posted its
Memorandum of Appeal and Motion for Reconsideration by way of registered mail on May 24,
1986 as shown by the registry receipts.4Annexes M and M-1 to Petition. Considering that the
date of mailing is deemed to be the date of filing,5Section 2, Rule 13, Rules of Court. the
inevitable conclusion is that the petitioner filed the Memoran-
________________
3 Pages 29-30, Rollo. The computation should have read P160,745.20.
4 Annexes M and M-1 to Petition.
5 Section 2, Rule 13, Rules of Court.
dum of Appeal and Motion for Reconsideration within the reglementary period for doing so.
Thus, the questioned resolutions of public respondent NLRC dismissing the appeal are without
merit. It determined the date of receipt of the memorandum of appeal stamped thereon which is
May 30, 1986 to be the date of filing when petitioner emphasized it was filed by sending the
same through registered mail. The NLRC should have verified the letter envelope which should
be attached to the records of the case as it reflects the date of its mailing. In failing to do so it
committed a grave abuse of discretion.
The petitioner now assails the labor arbiter’s decision alleging that it is not the employer of the
private respondents, they being employees of the separate entity Cristo Regis Center; that the
Cristo Regis Center is not an agent of the petitioner; and that the private respondents were never
illegally dismissed by the petitioner, so it cannot be liable for their money claims.
On August 31, 1988, this Court issued a temporary restraining order. The petitioner was required
to file a bond in the amount of P25,000.00.6Pages 104 to 108, Rollo.
The petition is meritorious.
Although this case could have been remanded to the NLRC for further proceedings, the Court
resolved to entertain the case to avoid multiplicity of suits.
To determine whether or not the petitioner is the real employer of private respondents, We must
examine the contract between the petitioner and the Cristo Regis Center. The contract is
reproduced in its entirety:
AGREEMENT BETWEEN THE MANILA FIELD OFFICE OF CHRISTIAN CHILDREN’S
FUND, INC., AND CRISTO REGIS CENTER, FMP
PREAMBLE
Christian Children’s Fund, Inc. (hereafter called CCF), and Cristo Regis Center, FMP (hereafter
called the Project), desire to enter into an agreement under which CCF will offer support to the
project as long as it is programmatically and financially capable and as described and limited in
this Agreement. There is no formal legal relationship between CCF and the Project except the
Agreement. The project is not an agent of CCF. CCF and the Project are independent of one
another. The Project has no authority to, and can not and will not enter into any agreement on
behalf of CCF or bind CCF or pledge credit in any way.
THE PROJECT AGREES TO
1. Utilize CCF support for direct service to the child and his family. Administrative and capital
expenses may not be funded by CCF unless agreed upon by the CCF field office.
2. Develop and utilize support sources in addition to CCF support.
3. Become knowledgeable of CCF program goals and meet, within an agreed period of time,
CCF’s criteria for the type of services this project seeks to offer.
4. In agreement with CCF set, with the intent of accomplishing, annual objectives which are
geared to the improvement of all project services and functions.
5. Participate in CCF conferences, workshops or seminars conducted for the purpose of training
and enrichment.
6. Keep adequate records on the admission and dismissal of children in a project.
7. Develop with the assistance of CCF a supportive and constructive relationship for the child
with the sponsor.
8. Submit to CCF for agreement, the criteria to be used in determining eligibility for CCF
assistance.
9. Furnish to CCF needed child information for sponsor assignment, needed correspondence to
maintain sponsor relationships and needed information when a child’s status changes within the
period of time set by the CCF field office.
10. Conduct all contact with CCF sponsors through the CCF field office and not establish direct
relationships or communications with sponsors. The child-sponsor relationship should be
considered confidential at all times.
11. Provide special grants to help fund approved requests for specific, short-term plans which
augment the regular longterm program goals of Project.
THE PROJECT AND CCF AGREEMENT:
1. If either CCF or the Project establishes that any of the articles of this Agreement have been
contravened, the relationship between CCF and the Project is subject to termination.
2. This Agreement expires 5 year(s) after the date of signature. Prior to the expiration of this
Agreement, representatives of CCF and the Project will review the relationship and cooperation
of the two agencies, the effect of CCF’s assistance, the success of the program, and whether the
need for affiliation continues. If the affiliation is to be extended, another Affiliation Agreement
should be signed for a specific length of time not to exceed five years.
(SGD) Illegible
For the Project’s Governing Body
(SGD.) Illegible
For the Project
June 2, 1983
Date
(SGD.) Illegible
For Christian Children’s
Fund, Inc.”7Pages 160 and 161, Rollo; Italics supplied.
A close scrutiny of this contract shows that the petitioner financially supports the charitable
program undertaken by the Cristo Regis Center; there is no formal legal relationship between
petitioner and the Cristo Regis Center (Project); the Cristo Regis Center is not an agent of the
petitioner; the petitioner and the Cristo Regis Center (Project) are independent of one another;
and the Cristo Regis Center (Project) has no authority to, and can not and will not enter into any
agreement on behalf of the petitioner or bind it or pledge credit in any way.
These are eloquent indicators that the Cristo Regis Center is not an agent of the petitioner. The
above contract was good for five (5) years, and it was renewed three times, before the Cristo
Regis Center ceased to operate. The contract is subject to termination when either the petitioner
or the Cristo Regis Center violates any of its conditions.
The management of the Cristo Regis Center was entrusted to the Benedictine Sisters. The
Benedictine Sisters eventually ceased management operations and withdrew from said project of
the Cristo Regis Center in 1984. Thus, the petitioner had no alternative but to engage another
organization aside from the Cristo Regis Center, to pursue the program. Obviously, the petitioner
is not the employer of the private respondents. The funds of petitioner are different and distinct
from the Cristo Regis Center. Each entity has its own separate organizational set-up. They
operate independently of each other. The private respondents were under the supervision and
control of the Cristo Regis Center, not the petitioner.
The closure of the project was not due to the petitioner’s fault. Indeed, it was because of many
complaints received about anomalies in the project which, therefore, prompted the Paragas
Accounting Firm to conduct an audit of its activities in order to determine the persons
responsible for such anomalies. During the auditing period, work on the project was suspended.
Since the petitioner is not the employer of private respondents, it logically follows that the Cristo
Regis Center, the entity that hired them, must be their employer. Their contention that Cristo
Regis Center, not being a duly organized corporation listed in the Securities and Exchange
Commission, cannot be liable for contracts entered into by it, is not tenable. This organization
was created for a specific charitable objective. As an organization lawfully created, the doctrine
of corporation by estoppel will apply. When a third person has entered into a contract with an
association which represented itself to be a corporation, the association will be estopped from
denying its corporate capacity in a suit against it by such third person. It cannot allege lack of
capacity to be sued to evade responsibility on a contract it had entered into and by virtue of
which it received advantages and benefits.8See Madrigal Shipping Co., Inc. v. Ogilvie, et al.,
104 Phil. 748 (1958). See also Section 21, Corporation Code.
The next vital issue is whether or not the private respondents were illegally dismissed from their
employment.
The closure of the Cristo Regis Center was inevitable. It is a cogent basis for retrenchment or
termination of its employees.9Article 283, Labor Code. Private respondents were thus not
illegally dismissed. Accordingly, the writ of certiorari will issue.
WHEREFORE, the petition is hereby GRANTED. The resolutions of the National Labor
Relations Commission dated January 29, 1988 and April 18, 1988 in NLRC Case No. RAB1-
0035-85 as well as the decision of the labor arbiter of April 30, 1986 are SET ASIDE and the
complaint against the petitioner is ordered dismissed. The temporary restraining order issued on
August 31, 1988 is made permanent. No costs.
SO ORDERED.
Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.
Petition granted. Resolutions and decisions set aside.
Note.—In determining the existence of employer-employee relationship, the following elements
are generally considered, namely: (1) the selection and engagement of the employee, (2) the
payment of wages, (3) the power of dismissal, and (4) the power of control over the employee’s
conduct—although the latter is the most important element. (Shipside, Incorporated vs. NLRC,
118 SCRA 99.)
——o0o—— Christian Children’s Fund vs. NLRC, 174 SCRA 681, G.R. No. 84502 June 30,
1989
