GUARDEX ENTERPRISES AND/OR MARCELINA A. ESCANDOR, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION AND JUMBEE ORBETA, RESPONDENTS.

A claim for alleged unpaid commissions of an agent is what is
basically involved in the action at bar. 
Somehow, it twice escaped outright rejection for lack of jurisdiction in
the Department of Labor where the case was resolved at the first instance and on
appeal.  Both the Labor Arbiter and the
National Labor Relations Commission appeared unaware of the utter lack of
labor-related issues in the parties’ conflicting contentions as to the
existence of agency relations between them, and proceeded to decide the
case.  Neither of them of course had
competence to do so.  Be that as it may,
the instant petition for certiorari will be decided on its merits
to the end that the controversy may now be laid to rest without further
proceedings.

The protagonists in this case are:

1) Marcelina A. Escandor
— engaged, under the name and style of Guardex
Enterprises, in (a) the manufacture and sale of fire-fighting equipment such as
fire extinguishers, fire hose cabinets and related products, and (b)
occasionally, the building or fabrication of fire trucks; and

2) Jumbee Orbeta
— a “freelance” salesman.^[1]

It appears that Orbeta somehow learned that Escandor
had offered to fabricate a fire truck for Rubberworld
(Phil.) Inc.  He wrote to Escandor inquiring about the amount of commission for the sale of a fire truck.  Escandor wrote back on the same day to advise that it was
P15,000.00 per unit.  Four days later, Orbeta offered to look after (follow-up) Escandor’s pending proposal to sell a fire truck to Rubberworld, and asked for P250.00 as representation
expenses.  Escandor
agreed and gave him the money.

When no word was received
by Escandor from Orbeta
after three days, she herself inquired in writing from Rubberworld
about her offer of sale of a fire truck. 
Having apparently received an encouraging response, Escandor
sent Rubberword a revised price quotation some ten
days later.

In the meantime, Orbeta sold to
other individuals some of Escandor’s fire extinguishers, receiving traveling expenses
in connection therewith as well as the corresponding
commissions.  He then dropped out of
sight.

About seven months
afterwards, Escandor herself finally concluded a
contract with Rubberworld for the latter’s purchase of a fire truck. 
The transaction was consummated with the delivery of the truck and full
payment thereof by Rubberworld.

At this point, Orbeta suddenly reappeared and asked for his commission for
the sale of the fire truck to Rubberworld.  Escandor refused,
saying that he had had nothing to do with the offer, negotiation and
consummation of the sale.

Insisting that he was
entitled to the commission, Orbeta filed a complaint
against Escandor with the Ministry of Labor.  The Labor Arbiter agreed with him and
rendered judgment in his favor, on August 26, 1982.  That judgment was affirmed by the National
Labor Relations Commission on December 29, 1983, on appeal taken by Escandor.^[2] Hence, this petition for certiorari,
to annul those judgments as having been rendered with grave abuse of discretion if not indeed without or in excess of jurisdiction.

It is claimed that an implied agency had been created between Escandor and Orbeta on the basis
of the following circumstances:

1) the alleged verbal authority given to him to offer a fire
truck to Rubberworld;

2) the alleged written authority to sell the truck contained in a
letter of Escandor’s dated August 14, 1978;

3) Escandor’s having given Orbeta P250.00 as representation expenses; and

4) Orbeta’s submission of a price
quotation to Rubberworld and his having arranged a
meeting between Escandor and Rubberworld’s
Purchasing Manager.

The circumstances have
not been correctly read by Orbeta and his
co-respondents.

Escandor denies that she had ever given Orbeta any such verbal authority.  Indeed, months prior to Orbeta’s
approaching Escandor, the latter had already made a
written offer of a fire truck to Rubberworld.  All that she consented to
was for Orbeta to “follow up” that pending
offer.  In truth, it does not even appear
that on the strength of this “arrangement” — vague as it was — Orbeta undertook the promised follow-up at all.  He reported nothing of his efforts or their
fruits to Escandor. 
It was Escandor who, in the months that
followed her initial meeting with Orbeta,
determinedly pushed the Rubberworld deal.  Orbeta was simply
nowhere to be found.  Furthermore, it
seems fairly evident that the “representation allowance” of P250 was
meant to cover the expenses for the “follow-up” offered by Orbeta — an ambiguous fact which does not of itself
suggest the creation of an agency and is not at all inconsistent with the
theory of its absence in this case.

Even a finding that under
these circumstances, an agency had indeed been constituted will not save the
day for Orbeta, because nothing in the record tends
to prove that he succeeded in carrying out its terms or even as much as
attempted to do so.  The evidence in fact
clearly indicates otherwise.  The terms
of Escandor’s letter of August 14, 1978 — assuming
that it was indeed an “authority to sell,” as Orbeta
insists — are to the effect that entitlement to the P15,000 commission is
contingent on the purchase by a customer of a fire truck, the implicit
condition being that the agent would earn the commission if he was instrumental
in bringing the sale about.  Orbeta certainly had nothing to do with the sale of the
fire truck, and is not therefore entitled to any commission at all.

Furthermore, even if Orbeta is considered to have been Escandor’s
agent for the time he was supposed to “follow up” the offer to sell,
such agency would have been deemed revoked upon the resumption of direct
negotiations between Escandor and Rubberworld,
Orbeta having in the meantime abandoned all efforts
(if indeed any were exerted) to secure the deal in Escandor’s
behalf.

It has of course already
been stated at the outset that, given the sole issue raised by the parties
concededly from the case’s inception (i.e., whether or not Orbeta
is Escandor’s agent as regards the sale of a fire
truck to Rubberworld), the competence to resolve the
controversy did not pertain to either the Labor Arbiter or the NLRC.  The jurisdiction vested in them by the Labor
Code extends, generally speaking, only to cases arising from employer-employee relationships.^[3] What has all along been at issue here, as
advanced by the parties themselves and as is evident from the facts, is the
existence of a contract of agency^[4]
— not employment or lease of
services.  It is indeed a puzzle how the
fundamental differences between the two^[5] altogether escaped not only the parties’
counsel in this case but also the tribunals before which it had been
brought.  Nevertheless, since no one has
thought to question their authority even up to this late stage, as in fact all
the parties appear to have completely accepted the validity of their exercise
of jurisdiction over the case, the Court has opted, as already stated, to
render judgment on its merits
and end the controversy once and for all.^[6]

WHEREFORE, the petition for certiorari
is GRANTED, and the judgment of the
National Labor Relations Commission dated December 29, 1983, and that of the
Labor Arbiter dated August 26, 1982, are hereby REVERSED and SET ASIDE and
another one rendered dismissing respondent Jumbee Orbeta’s claim for unpaid commissions.

SO ORDERED.

Cruz, Gancayco, Grino-Aquino,
and Medialdea,
JJ., concur.

^[1]
Rollo, p. 14.

^[2]
Id. pp. 52-53.

^[3]
which arise from “contracts of labor” treated of in Chapter 3, Title
VIII Book IV of the Civil Code.  As
provided by Art. 1700 thereof, an employment contract or lease of service (as it
is referred to in Arts. 1642 and 1644 of the Civil Code) is “subject to
the special laws on labor unions, collective bargaining, strikes and lockouts,
closed shop, wages, working conditions, hours of labor and similar
subjects” — which in this jurisdiction is the Labor Code and other labor
laws.  SEE Art. 217 of the Labor Code for
the jurisdiction of the Labor Arbiter and the NLRC

^[4]
Treated of in Title X, Book IV, Civil Code (Arts. 1868, et seq.)

^[5]
Both involve the rendition of services by one party to the other, but the
similarity ends there.  The basis of
agency is representation, the agent being the representative of his principal,
while the basis of lease of service is employment.  (Nielson & Company, Inc, vs. Lepanto Consolidated Mining, 26 SCRA 540).  Agency is merely a preparatory contract which
empowers the agent to execute juridical acts to bring about contractual
relations between his principal and third persons (Padilla, Civil Code
Annotated, [1987 ed.], Vol. VI., pp. 248-249, citing Nielson & Company,
Inc. vs. Lepanto Consolidated Mining, supra,
and Philippine Free Press vs. P. Floro &
Sons, Inc., 21 CAR [2s] 601, 606

^[6]
SEE Tijam vs. Sibonghanoy,
23 SCRA 29