BALIWAG TRANSIT, INC., PETITIONER, VS. THE HON. COURT OF APPEALS AND ROMAN MARTINEZ, RESPONDENTS.

This is a petition for review on certiorari, seeking the
reversal of the decision of the Court of Appeals dated June 4, 1981, the dispositive portion of which reads:

“WHEREFORE, the resolution (decision) of the Social Security
Commission in SSC Case No. 3272 is hereby set aside and another one
entered:  ordering respondent Baliwag
Transit, Inc. to remit to the Social Security Commission the premium
contributions for the petitioner for the years 1958 to May 1963 and from 1967 to
March 1971, inclusive, plus penalties thereon at the rate of 3% per month of
delinquency.”

Two passenger bus lines with similar buses and similar routes were
being operated by firm names “Baliwag Transit” and
“Baliwag Transit, Inc.” (BTI) the
herein petitioner.  The former was owned by the late Pascual Tuazon who continued to
operate it until his death on January
26, 1972, while the latter was owned by petitioner
corporation, incorporated in the year 1968 and existing until the present
time.  Both bus lines operate under different grants of franchises
by the Public Service Commission (Brief for Petitioner, p. 11), but were issued
only one ID Number 03-22151 by the Social Security System (Rollo, p. 66).

Private respondent claiming to be an employee of both bus lines
with one ID Number, filed a petition with the Social Security Commission on
August 14, 1975 which was docketed as SSC Case No. 3272 to compel BTI to remit
to the Social Security System private respondent’s SSS Premium contributions for
the years 1958 to March, 1963 and from 1967 to March, 1971.  He
alleged that he was employed by petitioner from 1947 to 1971 as conductor and
later as inspector with corresponding salary increases and that petitioner
deducted from his salaries, premium contributions, but what was remitted to the
SSS was only for a period covering June, 1963 to 1966, at a much lesser
amount.

In its answer, BTI denied having employed private respondent Ramon
Martinez, the truth being that he was employed by Pascual Tuazon who since 1948
owned and operated buses under the trade name Baliwag
Transit which were separate and distinct from the buses operated by petitioner company owned by Mrs. Victoria Vda. de Tengco.  Both bus lines had different offices,
different maintenance and repair shops, garages, books of account, and
managers.  The employment of private respondent lasted until 1971
when his employer Pascual Tuazon became bankrupt.  It was the latter
which deducted from private respondent the amount corresponding to his SSS
contributions for the years in question but allegedly did not remit the
same.  Finally, herein petitioner BTI claims that private
respondent allowed 17 years to elapse and at a time when
Pascual Tuazon was already dead
before filing the subject petition with the Social Security Commission. 
(Rollo, p.
18).

After trial on the merits, the Social Security Commission on
September 12, 1979, entered
a resolution in SSC Case No. 3272, the dispositive
portion of which reads:

“PREMISES CONSIDERED, this Commission finds and so holds that there
existed no employer-employee relationship between the petitioner
and respondent as would warrant further remittance of SSS contributions for and
in behalf of petitioner Roman Martinez.

“Consequently, this petition is hereby dismissed for lack of
merit.“SO ORDERED.”

On appeal, the Court of Appeals finding that the late Pascual Tuazon operated his buses
under the “Kabit” System, reversed and set aside the
foregoing resolution as follows:

“WHEREFORE, the resolution
(decision) of the Social Security Commission in SSC Case No. 3272 is hereby set
aside and another one entered ordering respondent Baliwag Transit, Inc. to remit to the Social Security
Commission the premium contributions for the petitioner for the years 1958 to
May 1963 and from 1967 to March 1971, inclusive, plus penalties thereon at the
rate of 3% per month of delinquency.

“SO
ORDERED.”

Herein petitioner filed a Motion for
Reconsideration with respondent Court of Appeals, which Motion was
later denied.

Hence, this
petition.

In the resolution of August 26, 1981 of the Second Division
of this Court, respondents were required to comment (Rollo, p. 64) which was complied
with on September 21,
1981 (Rollo, pp.
65-71).  On October 5, 1981, petitioner filed its
Reply (Rollo, pp. 73-75) in compliance with
the resolution of September 30, 1981 (Rollo, p. 71).  In
the resolution of December 7, 1981, the petition was
given due course (Rollo, p. 81). 
The brief for petitioner-appellant was filed on
March 27, 1982 (Rollo, p. 89) while private
respondent filed a manifestation and motion to be excused for not filing private
respondent’s brief and to be allowed to adopt as his arguments the comments he
filed on September 19, 1981 and his brief with the Court of Appeals (Rollo, p. 92).  Said manifestation and
motion was noted in the resolution of June 23, 1982 (Rollo, p. 93) and this case was submitted for
deliberation in the resolution of February 3, 1984 (Rollo, p.
94).

Petitioners raised the following assignment of
errors:

I. THAT THE FINDINGS OF
THE RESPONDENT HONORABLE COURT OF APPEALS TO THE EFFECT THAT THE VEHICLES
OF THE LATE PASCUAL TUAZON WERE “ATTACHED” OR
“KABIT” WITH PETITIONER, BALIWAG TRANSIT, INC. MAY NOT HAVE BEEN
SUPPORTED BY SUBSTANTIAL
EVIDENCE.

II. GRANTING THAT THE
VEHICLES OF THE LATE PASCUAL TUAZON WERE INDEED “ATTACHED” OR
“KABIT” WITH PETITIONER BALIWAG TRANSIT, INC. EMPLOYER-EMPLOYEE
RELATIONS MAY NOT EXTEND TO COVER OR INCLUDE THE EMPLOYEES
OF THE ACTUAL OWNER OF THE VEHICLES AS EMPLOYEES ALSO OF THE HOLDER OF THE
CERTIFICATE OF PUBLIC CONVENIENCE WHICH IS IN THIS CASE, PETITIONER
BALIWAG TRANSIT, INC.

However, the main issue in this case is whether
or not the issuance by the Social Security System of one SSS-ID-Number to two
bus lines necessarily indicates that one of them,
operates his buses under the “Kabit
System”.

The answer is in the negative.

The “Kabit System” has been
defined by the Supreme Court as an
arrangement “whereby a person who has been
granted a certificate of convenience allows another person who owns motor
vehicles to operate under such franchise for a fee.” (Lita Enterprises, Inc.
v. Second Civil Cases Division, IAC, et al., G.R. No.
64693, April 27,
1984).

The determining factor, therefore, is the
possession of a franchise to operate which negates the existence of the “Kabit System” and not the issuance
of one SSS ID Number for both bus lines from which the existence of said system
was inferred.

In the instant case, the findings of the Court of Appeals
are as follows:

“x x x It is very obvious from the foregoing narration of facts
that the late Pascual Tuazon, during the time material to this case, operated
his buses under the “kabit” system;
that is, while actually he was the owner and operator of public utility buses,
maintaining his own drivers, conductors, inspectors and other employees, his
buses were not registered with the Public Service Commission (now the Bureau of
Land Transportation) in his own name.  Instead, his buses were
absorbed and registered as owned and operated by the
“Baliwag Transit”, which was the firm name owned and
used by his niece, Victoria Vda. de
Tengco.”

“It is well settled that the findings of facts of the Court
of Appeals x x x are conclusive on the
parties and on this Court, unless:  x x x (2) the inference made
is manifestly mistaken; x x x (4) the judgment is based on
misapprehension of facts; x x x (6)
the Court of Appeals went beyond the issues of the case and its findings are
contrary to the admissions of both appellant and appellees; (7) the findings of facts of the Court of Appeals
are contrary to those of the trial court; x x
x.” (Sacay v.
Sandiganbayan, G.R. No. 66497-98, July
10, 1986).

In the case at bar, it is undisputed that as testified to,
not only by seven (7) witnesses presented by the petitioner but also by the
Social Security System witness Mangowan Macalaba, Clerk I, of the R & A Division of the Board of
Transportation, who had access to the records of said
office with respect to applications and grant of
franchises of public utility vehicles, that Victoria Vda. de
Tengco and Pascual Tuazon were granted
separate franchises to operate public utility buses, under Cases Nos. 15904,
114913, 11564, 103366, 64157 and 65894 for the former and Case No. 69-4592 and
Case No. 697775 for the latter, both operating between Manila and Baliuag routes.  However, the franchises of
Pascual Tuazon were
cancelled on December 16,
1971 and May 14, 1972 respectively
(Rollo, p. 22), when the latter terminated
his operation.

It is thus evident that both bus lines operated under their
own franchises but opted to retain the firm name “Baliwag Transit” with slight modification, by the inclusion
of the word “Inc.” in the case of herein petitioner, obviously to take advantage
of the goodwill such firm name enjoys with the riding public. 
Conversely, the conclusion of the Court of Appeals that the late Pascual Tuazon, during the time
material to this case operated his buses under the “Kabit System” on the ground that while he was actually the
owner and operator, his buses were not registered with
the Public Service Commission (now the Bureau of Land
Transportation) in his own name, is not supported by the records. 
Much less can it be said that there is an analogy between the case at bar
and the cited case of Doligosa, et al. v.
Decolongon, et al. (3 CA Nos. 1135, 1142-43) to the extent that Baliwag Transit, Inc. being the ostensible operator of the
buses actually owned by Pascual Tuazon, should be held liable for the contributions
collected or ought to be collected from private respondent (Rollo, pp. 53-54), presumably to discourage the
proliferating “Kabit System” in public utility
vehicles.

While it is admitted that petitioner was the one who remitted the
SSS premiums of private respondent, it has also been established by
testimonies of witnesses that such arrangement was done purposely to accommodate
the request of the late Pascual Tuazon,
the uncle of Victoria Vda. de
Tengco and the money came from him.  On
the other hand, there is no reason why such testimonies should not
be given credence as the records fail to show that said witnesses
have any motive or reason to falsify or perjure their testimonies (Rollo, pp. 23-24).

Moreover, the Social Security Commission after several hearings
had been conducted, arrived at the following conclusion:

“It was established during the hearings that petitioner Roman
Martinez was employed by, worked for and took orders from Pascual Tuazon and was authorized
to get ‘vales’ from the conductors of the trucks of Mr. Tuazon.  This was
admitted got ‘vales’ from the buses of Pascual Tuazon (TSN pp. 24-25, May 7, 1976 and Exhibits “3” to
“49”).

“On the other hand, there is no evidence introduced to show that
petitioner ever received salaries from respondent or from Mrs. Victoria Vda. de
Tengco and neither had he been under the orders of the
latter.  The only basis upon which petitioner
anchors his claim despite his actual employment by Pascual Tuazon was the use by the
latter of the trade name, Baliwag Transit, in the
operation of his (Mr. Tuazon’s) own buses which the
latter had every reason to do since he laboriously helped and organized
said firm until it gained cognizance by the
public.

“It is, therefore, clear that even long before the incorporation of
the Baliwag Transit in 1968 petitioner was already an
employee of the late Pascual Tuazon who despite having separate office, employees and
buses which were operated under the line of the Baliwag Transit did not report him for coverage to the
SSS.  Sadly enough, petitioner who claims to be an employee of the
respondent did not refute, by way of submitting rebuttal evidence, the
testimonies given by respondent’s witnesses that he was an employee of the late
Pascual Tuazon and not of
said respondent or of Mrs. Victoria Tuazon and not of said respondent or of
Mrs. Victoria Vda. de Tengco.  Indeed, there is a reasonable basis to
believe that he would not attempt to do so if only to be consistent with his
stand when he filed a case before the National Labor Relations Commission, a
claim against both the late Pascual Tuazon and the respondent.  He is now
concentrating his action against the respondent in view of the death of Pascual Tuazon who during his
lifetime sold his trucks and became bankrupt Exhibit “2”) — Resolution,
September 14, 1979, pp. 29-31).” (Rollo, pp.
28-30)

It has been uniformly held by this Court that it is
sufficient that administrative findings of fact are supported by evidence on the
record, or stated negatively, it is sufficient that findings of fact are not
shown to be unsupported by evidence.

The Court has also held further that “in reviewing
administrative decisions, the reviewing court cannot re-examine the sufficiency
of the evidence as if originally instituted therein, and receive additional
evidence that was not submitted to the administrative agency concerned. 
The findings of fact must be respected, so long as they are supported by
substantial evidence, even if not overwhelming or preponderant.” (Police Commission v. Lood, 127 SCRA 758 [1984].

Thus, the employer-employee relationship between the late Pascual Tuazon and herein private
respondent, having been established, the remittance of SSS contributions of the
latter, is the responsibility of his employer Tuazon,
regardless of the existence or non-existence of the “Kabit System”.

Moreover, private respondent having allowed seventeen (17)
years to elapse before filing his petition with the Social Security
System, has undoubtedly slept on his rights and his cause of action has already
prescribed under Article 1144(2) of the Civil Code (Central Azucarrera del
Davao v. Court of Appeals, 137 SCRA 296 [1985]; applied by analogy).

PREMISES CONSIDERED,
the decision of respondent Court of Appeals dated June 4, 1981 is
hereby REVERSED and SET ASIDE, and the Resolution of the Social Security
Commission dated September
12, 1979 is hereby
REINSTATED.

SO
ORDERED.

Feria, (Chairman), Fernan, Alampay, and
Gutierrez, Jr., JJ., concur.