ASIA STEEL CORPORATION, PETITIONER, VS. WORKMEN’S COMPENSATION COMMISSION AND ISMAEL CARBAJOSA, RESPONDENTS.

Petition to review the order of the Workmen’s Compensation Commission
approving the award of its referee in favor of the laborer Ismael Carbajosa,
against his employer Asia Steel Corporation.

It appears that on April 16, 1951, while working in said Corporation’s steel
factory in Grace Park, Manila, Carbajosa tapped the belt of a running machine to
tighten it, but his hand was caught accidentally by the belt, he stumbled down
and his two feet were so seriously injured, they had to be amputated at the
Chinese General Hospital where he was rushed immediately after the mishap.
Hospitalization were paid by the corporation.

Thereafter Carbajosa claimed for compensation. The referee, having found that
he was employed as apprentice, and that the accident arose out of employment,
required the Asia Steel Corporation to indemnify in the total sum of two
thousand two hundred forty six pesos and forty centavos (P2,246.40) and to pay
the costs.

The instant petition for review rests on two major propositions: (1) Ismael
Carbajosa was not an employee or laborer and (2) the accident was “occasioned by”
his “own fault and negligence”.

This second issue, however, was not tendered in the Corporation’s motion to
dismiss, Annex B, filed with Workmen’s Compensation Commission, and neither the
referee nor the Commission made findings on such question of negligence. Anyway
it is no excuse for the employer: it merely reduces the compensation. (Art. 1711
New Civil Code.) Nevertheless, on close examination the contention turn out to
be founded on the reasoning that being a stranger in the premises -not an
employee- Carbajosa had no right, and therefore was careless, to touch the
machines of the factory. (p. 27 Record.)

Hence this revision may be limited to the simple question whether the
petitioner had given employment to Carbajosa.

According to the Commission,

“x x x the claimant, a native of Negros Occidental, came to Manila on March
31, 1951, to look for a job. On April 5, 1951, he met an aquaintance, Pablo
Sesia, whose aid sought in the matter of securing employment. Sesia, who was
employed in the Asia Steel Corporation as a mechanic, promised to take Carbajosa
to his employer.

Upon previous arrangement with Sesia, therefore, Carbajosa went to
respondent’s nail factory at Grace Park, Caloocan, Rizal, on April 9, 1951.
Sesia introduced the claimant to Mr. Kim, in charge of the factory. During the
interview, Kim told the claimant that he, (Kim) would take up the matter with
the manager, and Carbajosa would know the manager’s decision as soon as he (the
claimant) returned. The next morning, the claimant came back to the factory and
was told by Kim to begin working as an apprentice. It was further agreed that
claimant’s wage would be determined upon the arrival of materials which the
manager ordered from Japan. The claimant assumed work on the same day, doing odd
jobs under the direction of Sesia.

It also appears that Kim lived in the factory. Pablo Sesia was also lodging
in the factory and permission was secured from Kim in order that the claimant
might live in the factory with Sesia.

On April 16, 1951, hardly a week since the claimant began working in the
factory, while he was tightening the belt of one of the machines, his hand was
caught by the running belt. The force of the moving belt caused claimant to lose
his balance. He was dragged to the other end of the machine. His feet were
smashed by the iron shaft and he was pinned under the machine itself.”x x
x

Under the laws we are bound to accept these findings; and must disregard
petitioner’s arguments disputing them^[1].
But this does not necessarily dispose of the matter, because ther remains the
legal proposition extensively discussed by counsel for petitioner that Kim’s
acts could not bind the corporation, since only the President, Yu Kong Tiong,
was authorized by its by-laws to hire employees for the manufacturing
establishment.

The Commission found that Yu Kong Tiong was the president of the corporation
and Sy Te the manager; but Yu Kong Tiong was permitted actually to manage its
affairs, (it being a “family” corporation) by remote control from his office in
Manila thru Kim who was “in charge” of the factory in Caloocan. It also declared
that Kim was allowed by Yu Kong Tiong to employ Carbajosa as apprentice. (p. 52
Record.)

From such circumstances, the conclusion flows inevitably that Carbajosa was,
at the time of the occurence, an employee of the petitioning corporation.

Of course it is undeniable that as president and manager Yu Kong Tiong could
legally employ, by himself, manual laborers to work in the factory^[2]. And there is nothing to prevent him from
employing Carbajosa, thru his agent Kim, as the latter did. In fact it may even
be held that in default of proof establishing Yu Kong Tiong’s assent to the
employment, inasmuch as Kim the person actually in charge of the factory
represented to Carbajosa that he was authorized by the manager to engage his
(Carbajosa’s) services, there was apparent authority of Kim, sufficiently ample
to create the relationship of employer and employee for the purposes of the
Workmen’s Compensation Law.

“It may be stated as a general rule that anagent, who with authority express,
implied, apparent or actual, employs help for the benefit of his principal’s
business, therby creates the relationship of employer and employee between such
help and his principal.” (Schneider, Workmen’s Compensation (Permanent Ed.) Vol.
I p. 617, citing many cases.)

“It has been held: that where a driver, employed to solicit sales of beer and
make delivery, was permitted to employ helpers, a helper who was injured while
in the performance of his duty was entitled to compensation from brewery; that
an expert, hired by a factory owner to supervise the installation of machinery,
who hired assistants, paid by the owner, one of such assistants being injured
while so engaged was entitled to compensation from the factory owner; that
workmen hired by an agent of the company, which took over the logging work of an
independent contractor, became the employees of the company.” (Schneider, op.
cit. p. 619.)

Needless to say, the existence of employer-employee relationship is the
jurisdictional foundation without which an indemnity is unauthorized. Schneider
p. 569-570.) It is often difficult of determination, because purposely made so
by employers bent on evading liability under the Compensation Acts. Hence, if
the object of the law is to be accomplished with a liberal construction^[3], the creation of the relationship should not
be adjudged strictly in accordance with technical legal rules, but rather
according to the actualities and realities of industrial or business practice. A
laborer is told to work for the establishment by the person-in-charge, who in
turn represented he had consulted with the manager. If the by-laws of the
corporation had provided that no laborer may be hired unless with the written
consent of the board of directors, would it be consonant with justice to deny
such laborer compensation for injuries, upon the ground of lack of written
authority? If so, a loophole has thereby been created in the Workmen’s
Compensation Law. That is perhaps the reason why apparent authority has been
considered enough, what with the principles of estoppel lending persuasive
support. (Schneider op. cit. Vol. I p. 623.)

A parallel situation arose in Flores et al. v. La Compañia Maritima, 32 O.
Gaz. No. 21 pp. 406-407. The heirs of Graciano Paninsoro demanded compensation
because he died by reason of injuries received while working on the ship “Albay”
belonging to and operated by the Compañia Maritima, a corporation. The facts
were;

“About the last week of the month of October, 1929, the defendant’s boat,
Albay, dropped anchor in the port of Cebu where the captain thereof, through a
contractor or agent, recruited laborers who were to board the ship for the
purpose of unloading her cargo upon arrival at the next port of call, Davao, and
loading cargo for various ports of call on her return trip. Among those laborers
was the appellant Eusebia Flores’ husband, Graciano Paninsoro, who was earning a
daily wage of P1.50 including subsistence.”

The defendant contended on appeal that Paninsoro was not its employee. This
Court held,

“There is not a least shadow of a doubt that the deceased was a laborer in
the legal sense. He had been recruited by order of the captain of the ship and
he was engage in a task of unloading the ship’s cargo at the time of the
accident. There can be no dispute that this kind of work is included in the
business in which the appellee is engaged. That the deceased had been recruited
or engaged by a contractor is of no moment because the latter, for purposes of
the law, was in turn, represented the appellee.” (Flores et al. v. La Compañia
Maritima, 32 O. Gaz. No. 21 pp. 406-407.)

It should be observed in the above litigation that neither the board of
directors nor the President nor the manager of the defendant corporation had
hired the laborer Paninsoro. It was the captain of the ship, thru an agent, that
employed him. Now then, in this case as the person-in-charge of the factory
(Kim) hired Carbajosa, the contract of employment should be upheld.

There is further circumstance, implying ratification of the employment, that
the acting manager of the corporation Atty. Mercado directed the payment by the
corporation of Carbajosa’s hospital expenses, amounting to P2,000.00. Mercado’s
explanation that he did it out of pity, was not, and could not be accepted since
the Asia Steel Corporation is not a charitable institution.

In view of the foregoing, and the petitioner not having questioned the amount
of compensation, the order of the Commission, should be , as it is hereby,
affirmed with costs. So ordered.

Padilla, Montemayor, Reyes, Jugo, Bautista Angelo, Labrador,
Concepcion, and Reyes, J.B.L., JJ., concur.

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^[1] Sec. 46 Act No. 3428 as amended by
Rep. Act 772. Rule 44 sec.2.

^[2] Yu Chuck v. Kong Li Po, 46
Phil. 608

^[3] Vergara v. Pampanga Bus Co.
62 Phil. 820; Francisco v. Consing 62 Phil. 354; Ramos v.
Poblete 73 Phil. 241.