Scribd Logo
Upload

Welcome to Scribd!

  • 309 views

    Group 3 - Mendiola Vs Court of Appeals 497 SCRA 346

    Uploaded by

    jhammy
    This document summarizes a Supreme Court case regarding whether an employer-employee relationship existed between Arsenio Mendiola and Pacific Forest Resources Philippines, Inc. Pacfor. The Supreme Court granted Mendiola's petition, annulling the Court of Appeals and NLRC decisions that found no employer-employee relationship. The Supreme Court found that Mendiola was an employee of Pacfor, as there was no partnership established between them due to the lack of common ownership of partnership property. As a corporation, Pacfor also could not become a member of a partnership without express authorization.

    Copyright:

    © All Rights Reserved

    Group 3 - Mendiola Vs Court of Appeals 497 SCRA 346

    Uploaded by

    jhammy
    309 views4 pages
    This document summarizes a Supreme Court case regarding whether an employer-employee relationship existed between Arsenio Mendiola and Pacific Forest Resources Philippines, Inc. Pacfor. The Supreme Court granted Mendiola's petition, annulling the Court of Appeals and NLRC decisions that found no employer-employee relationship. The Supreme Court found that Mendiola was an employee of Pacfor, as there was no partnership established between them due to the lack of common ownership of partnership property. As a corporation, Pacfor also could not become a member of a partnership without express authorization.

    Original Description:

    Original Title

    Group 3 - Mendiola vs Court of Appeals 497 SCRA 346

    Copyright

    © © All Rights Reserved

    Did you find this document useful?

    Is this content inappropriate?

    This document summarizes a Supreme Court case regarding whether an employer-employee relationship existed between Arsenio Mendiola and Pacific Forest Resources Philippines, Inc. Pacfor. The Supreme Court granted Mendiola's petition, annulling the Court of Appeals and NLRC decisions that found no employer-employee relationship. The Supreme Court found that Mendiola was an employee of Pacfor, as there was no partnership established between them due to the lack of common ownership of partnership property. As a corporation, Pacfor also could not become a member of a partnership without express authorization.

    Copyright:

    © All Rights Reserved
    309 views4 pages

    Group 3 - Mendiola Vs Court of Appeals 497 SCRA 346

    Uploaded by

    jhammy
    This document summarizes a Supreme Court case regarding whether an employer-employee relationship existed between Arsenio Mendiola and Pacific Forest Resources Philippines, Inc. Pacfor. The Supreme Court granted Mendiola's petition, annulling the Court of Appeals and NLRC decisions that found no employer-employee relationship. The Supreme Court found that Mendiola was an employee of Pacfor, as there was no partnership established between them due to the lack of common ownership of partnership property. As a corporation, Pacfor also could not become a member of a partnership without express authorization.

    Copyright:

    © All Rights Reserved
    of 4

    CORPORATION LAW: CASE DIGESTS

    ARSENIO T. MENDIOLA, petitioner,

    vs.

    COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, PACIFIC

    FOREST RESOURCES, PHILS., INC. and/or CELLMARK AB, respondents.

    G.R. No. 159333

    July 31, 2006

    Overview
    The Decision and Resolution of the Court of Appeals, dated January 30,
    2003 and July 30, 2003, respectively, in CA-G.R. SP No. 71028, affirming the
    ruling of the National Labor Relations Commission (NLRC), which in turn set
    aside the July 30, 2001 Decision of the labor arbiter. The labor arbiter
    declared illegal the dismissal of petitioner from employment and awarded
    separation pay, moral and exemplary damages, and attorney's fees.
    Factual Background
    Private respondent Pacific Forest Resources, Phils., Inc. (Pacfor) is a
    corporation organized and existing under the laws of California, USA. It is a
    subsidiary of Cellulose Marketing International, a corporation duly
    organized under the laws of Sweden, with principal office in Gothenburg,
    Sweden.
    Private respondent Pacfor entered into a "Side Agreement on
    Representative Office known as Pacific Forest Resources (Phils.), Inc."5 with
    petitioner Arsenio T. Mendiola (ATM), effective May 1, 1995, "assuming
    that Pacfor-Phils. is already approved by the Securities and Exchange
    Commission [SEC] on the said date." The Side Agreement outlines the
    business relationship of the parties with regard to the Philippine operations
    of Pacfor. Private respondent will establish a Pacfor representative office in
    the Philippines, to be known as Pacfor Phils, and petitioner ATM will be its
    President. Petitioner's base salary and the overhead expenditures of the
    1
    company shall be borne by the representative office and funded by
    Pacfor/ATM, since Pacfor Phils. is equally owned on a 50-50 equity by ATM
    and Pacfor-usa.
    In July 2000, petitioner wrote Kevin Daley, Vice President for Asia of Pacfor,
    seeking confirmation of his 50% equity of Pacfor Phils.10 Private
    respondent Pacfor, through William Gleason, its President, replied that
    petitioner is not a part-owner of Pacfor Phils. because the latter is merely
    Pacfor-USA's representative office and not an entity separate and distinct
    from Pacfor-USA. "It's simply a 'theoretical company' with the purpose of
    dividing the income 50-50." Petitioner presumably knew of this
    arrangement from the start, having been the one to propose to private
    respondent Pacfor the setting up of a representative office, and "not a
    branch office" in the Philippines to save on taxes.
    Petitioner claimed that he was all along made to believe that he was in a
    joint venture with them. He alleged he would have been better off
    remaining as an independent agent or representative of Pacfor-USA as ATM
    Marketing Corp. Had he known that no joint venture existed, he would not
    have allowed Pacfor to take the profitable business of his own company,
    ATM Marketing Corp. Petitioner raised other issues, such as the rentals of
    office furniture, salary of the employees, company car, as well as
    commissions allegedly due him. The issues were not resolved, hence, in
    October 2000, petitioner wrote Pacfor-USA demanding payment of unpaid
    commissions and office furniture and equipment rentals, amounting to
    more than one million dollars.
    On the basis of the "Side Agreement," petitioner insisted that he and Pacfor
    equally own Pacfor Phils. Thus, it follows that he and Pacfor likewise own,
    on a 50/50 basis, Pacfor Phils.' office furniture and equipment and the
    service car. He also reiterated his demand for unpaid commissions, and
    proposed to offset these with the remaining Christmas giveaway fund in his
    possession. Furthermore, he did not renew the lease contract with Pulp
    and Paper, Inc., the lessor of the office premises of Pacfor Phils., wherein he
    was the signatory to the lease agreement.
    Private respondent Pacfor appealed to the NLRC which ruled in its favor. On
    December 20, 2001, the NLRC set aside the July 30, 2001 decision of the
    labor arbiter, for lack of jurisdiction and lack of merit. It held there was no
    employer-employee relationship between the parties. Based on the two
    agreements between the parties, it concluded that petitioner is not an
    employee of private respondent Pacfor, but a full co-owner (50/50 equity).
    The NLRC denied petitioner's Motion for Reconsideration.
    Petitioner was not successful on his appeal to the Court of Appeals. The
    appellate court upheld the ruling of the NLRC.

    2
    Issue of the Case
    Whether or not an employer-employee relationship exists between
    petitioner and private respondent Pacfor.
    Ruling of the Supreme Court
    IN VIEW WHEREOF, the petition is GRANTED. The Court of Appeals' January
    30, 2003 Decision in CA-G.R. SP No. 71028 and July 30, 2003 Resolution,
    affirming the December 20, 2001 Decision of the National Labor Relations
    Commission, are ANNULED and SET ASIDE. The July 30, 2001 Decision of the
    Labor Arbiter is REINSTATED with the MODIFICATION that the amount of
    P250,000.00 representing an alleged increase in petitioner's salary shall be
    deducted from the grant of separation pay for lack of evidence.
    There is no partnership between petitioner and respondent because of lack
    of community of interest, or co-ownership of or joint interest in the
    partnership property.
    Ratio Decidendi
    In a partnership, the members become co-owners of what is contributed to
    the firm capital and of all property that may be acquired thereby and
    through the efforts of the members. The property or stock of the
    partnership forms a community of goods, a common fund, in which each
    party has a proprietary interest. Each partner possesses a joint interest in
    the whole of partnership property. If the relation does not have this
    feature, it is not one of partnership.
    This essential element, the community of interest, or co-ownership of, or
    joint interest in partnership property is absent in the relations between
    petitioner and private respondent Pacfor. Petitioner is not a part-owner of
    Pacfor Phils. William Gleason, private respondent Pacfor's President
    established this fact when he said that Pacfor Phils. is simply a "theoretical
    company" for the purpose of dividing the income 50-50. He stressed that
    petitioner knew of this arrangement from the very start, having been the
    one to propose to private respondent Pacfor the setting up of a
    representative office, and "not a branch office" in the Philippines to save on
    taxes. Thus, the parties in this case, merely shared profits. This alone does
    not make a partnership.
    Besides, a corporation cannot become a member of a partnership in the
    absence of express authorization by statute or charter. This doctrine is
    based on the following considerations: (1) that the mutual agency between
    the partners, whereby the corporation would be bound by the acts of
    persons who are not its duly appointed and authorized agents and officers,
    would be inconsistent with the policy of the law that the corporation shall
    manage its own affairs separately and exclusively; and, (2) that such an

    3
    arrangement would improperly allow corporate property to become
    subject to risks not contemplated by the stockholders when they originally
    invested in the corporation. No such authorization has been proved in the
    case at bar.

    You might also like