01) Naguiat vs. NLRC (CFTI)) Petitioner/s: Petitioner/s: Sergio F. Naguiat & Clark Field Taxi Inc. (CFTI Respondent/s: Respondent/s: NLRC, National Labor of Workingmen (NOWM (NOWM), ), Leonardo T. Galang Doctrine: Our jurisprudence is wanting as to the definite scope of "corporate tort." Essentially, Definition of “Tort”: Consists in the violation of a right given or the omission of a duty imposed by law. Simply stated, tort is a breach of a legal duty.
hired by CFTI, and military bases agreement. c. That NAGUIAT ENT. thence b. Admitted that CFTI had agreed with managed, controlled and supervised the driver’s union to grant separation their employment. employment. pay d. They were entitled to separation pay based on their latest daily earnings of US$15.00 for working 16 days/month.
GR: Stockholders who are actively engaged in the management or operation of the business and affairs of a close corporation shall be pers onally liable for corpor ate torts E: unless the corporation has obtained reasonably adequate liability insurance
7.
Facts : 1. Petitioner (CFTI) CFTI) held a concessionaire’s contract with the Army Air Force Exchange Services (AAFES (AAFES)) for the operation of taxi services within Clark Air Base. SERGIO NAGUIAT was CFTI’s president and ANTOLIN NAGUIAT was the VP. Both Sergio F. Naguiat Enterprises, Incorporated (NAGUIAT (NAGUIAT ENTERPRISES ), a trading firm, and CFTI were family-owned corporations . 2. Individual Respondents (IR) were previously employed by CFTI as taxicab drivers and, during their employment:
they were required to pay a daily “boundary fee”1
All incidental expenses for maintenance of vehicles they were driving, even gas, were accounted against them Drivers worked 3-4x a week depending on the availability of the taxicabs Earned not less than $15/day; in excess of which, drivers were required to make cash deposits to the company which they could withdraw every 15 days 3. AAFES was dissolved because of the phase-out of the US military bases in the PH. Services of the IR were officially terminated on November 26, 1991. 4. AAFES Taxi Drivers Association (Driver’s Union) and CFTI held negotiations with regard to the s eparation benefits that should be awarded. It was agreed that the drivers will be given P500/year of service as severance pay. Most drivers accepted but IR refused to accept. 5. IR disaffiliated themselves from Driver’s Union and, through NOWM, filed a
complaint against Naguiat Enterprises, AAFES, and the Driver’s Union for
payment of separation pay due to termination/phase-out. 6. Claims Individual Complainants Petitioners a. They were regular employees of a. The cessation of business of CFTI NAGUIAT ENT. Although their was due to “great financial losses and individual applications for employment lost business opportunity” resulting were approved by CFTI from the phase-out of Clark Air Base b. Claimed to have been assigned to brought about by the Mt. Pinatubo NAGUIAT ENT. after having been eruption and expiration of the RP-US 1
$26.50 (1:00am-12:00 nn) and $27 (12:00 nn-12mn)
Labor Arbiter ruling: Individual complainants are regular workers of CFTI
Ordered
consideration2” Set aside the 500/year of service agreement
Rejected CFTI’s allegation that it was forced to close business due to great
8.
CFTI
to
pay
P1,200/year
of
service
for
“humanitarian
financial losses as the time it ceased operations, CFTI was profitably earning Cessation of business was actually due to the untimely closure of Clark Air Base NLRC ruling: Petitoner’s MR denied. Modified LA’s decision Granted separation pay
Issue: W/N Naguiat Ent. is a separate and distinct juridical entity which cannot be held jointly and severally liable for the obligations of CFTI Held : Petition is partially meritorious.3 Ruling : 1. Naguiat Ent. NOT liable Legal Basis: Articles 106, 107 and 109 of the Labor Code SC affirmed the decision of the LA which found that individual respondents were regular employees of CFTI who received wages on a boundary/commission basis Petitioners submitted documents such as the drivers' applications for employment with CFTI and social sec urity remittances and payroll of Naguiat Enterprises showing that none of the individual respondents were its employees. Moreover, in the contract between CFTI and AAFES, CFTI, as concessionaire, agreed to purchase from AAFES for a certain amount within a specified period a fleet of vehicles to be "ke(pt) on the road" by CFTI, pursuant to their concessionaire's contract. This indicates that CFTI
2 "To allow respondents exemption exemption from its obligation to pay separation pay would be inhuman to complainants but complainants but to impose a monetary obligation to an employer whose profitable business was abruptly shot down by force majeure would be unfair and unjust to say the least. 3 (1) Petitioner Clark Field Taxi, Incorporated, and Sergio F. Naguiat, president and co-owner thereof, are ORDEREDto pay, jointly and severally, the individual respondents their separation pay computed at US$120.00 for every year of service, or its peso equivalent at the time of payment or satisfaction of the judgment; (2) Petitioner Sergio F. Naguiat Enterprises, Incorporated, Incorporated, and Antolin T. Naguiat are ABSOLVED from liability in the payment of separation pay to individual respondents.
became the owner of the taxicabs which became the principal investment and asset of the company . Private respondents failed to substantiate their claim that Naguiat Enterprises managed, supervised and controlled their employment as the personalities of Sergio Naguiat as an individual who was the president of CFTI, and Sergio F. Naguiat Enterprises, Inc., as a separate corporate entity with a separate business. Sergio, in supervising the-taxi drivers and determining their employment terms, was rather carrying out his responsibilities as president of CFTI . Hence, Naguiat Enterprises as a separate corporation does not appear to be involved at all in the taxi business. The drivers also admitted that they received salary from the office of CFTI
The constitution of the driver’s union, which was the union of the drivers in
management or operation of the business should be held personally liable. In posting the s urety bond required by this Court for the issuance of a TRO enjoining the execution of the assailed NLRC Resolutions, only Sergio, in his individual and personal capacity, principally bound himself to comply with the obligation, i.e., "to guarantee the payment to private respondents of any damages which they may incur by reason of the issuance of a temporary restraining order sought, if it should be finally
adjudged that said principals were not entitled thereto.”
The Court here finds no application to the rule that a corporate officer cannot be held solidarily liable with a corporation in the absence of evidence that he had acted in bad faith or with malice.[39] In the present case, Sergio Naguiat is held solidarily liable for corporate tort because he had actively engaged in the management and operation of CFTI, a close corporation.
question, states that members thereof are the employees of CFTI and "(f)or collective bargaining purposes, the definite employer is the Clark Field Taxi Inc." 2.
CFTI Preseident Solidarily liable4 Sergio and Antolin Naguiat averred that they were denied due process as they were not parties to the complaint. SC held that in the broader interest of justice, Segio, in his capacity as president of the CFTI, CANNOT be exonerated from joint and several liability in the payment of separation pay to individual respondents.5 SERGIO was the President of CFTI who actively managed the business. Applying A. C. Ransom, he falls within the meaning of an "employer" as contemplated by the Labor Code, who may be held jointly and severally liable for the obligations of the corporation to its dismissed employees. CFTI and Naguiat Ent. were “close family corporations” owned by the Naguiats.(See doctrine for GR and E and definition of corporate tort) Nothing in the records show whether CFTI obtained reasonably adequate liability insurance; thus, the question is w/n there was a corporate tort Article 283 of the Labor Code mandates the employer to g rant s eparation pay to employees in cas e of clos ure or ces s ation of operations of establishment or undertaking not due to serious business loss es or financial reverses, which is the condition obtaining at bar. CFTI failed to comply with this law-imposed duty or obligation. Consequently, its stockholder who was actively engaged in the
3.
Antolin Naguiat not personally liable Although he carried the title of "general manager" as well, it had not been shown that he had acted in such capacity. Furthermore, no evidence on the extent of his participation in the management or operation of the business was proffered. In this light, he cannot be held solidarily liable for the obligations of CFTI and Sergio to the private respondents.
A dditional Notes : MAM Realty Development vs. NLRC ,[37] the Court recognized that a director or
officer may still be held solidarily liable with a corporation by specific provision of law. Thus:
"x x x A corporation, being a juridical entity, may act only through its directors, officers and employees. Obligations incurred by them, acting as such corporate agents, are not theirs but the direct accountabilities of the corporation they represent. True, solidary liabilities may at times be incurred but only when exceptional circumstances warrant such as, generally, in the following cases:
4
See additional notes for more cases Jurisprudence: A. C. R ansom L abor Union -CC LU vs . NL R C : (d) The record does not clearly identify 'the officer or officers' of RANSOM directly responsible for failure to pay the back wages of the 22 strikers. In the absence of definite proof in that regard, we believe it should be presumed that the responsible officer is the President of the corporation who can be deemed the chief operation officer thereof. Thus, in RA 602, criminal responsibility is with the 'Manager or in his default, the person acting as such.' In RANSOM, the President appears to be the Manager." 5
4. When a director, trustee or officer is made, by specific provis ion of law, personally liable for his corporate action." (footnotes omitted)
