DOROTEO OCHEDA, PETITIONER, VS. THE HONORABLE COURT OF APPEALS AND THE HEIRS OF EDUARDO SANTOS, RESPONDENTS.

The trial court’s jurisdiction over an action for damages arising
from a quasi-delict which resulted in the death of an employee while in the
performance of his duty is challenged in this case.

The late Eduardo Santos was, at the time of his death, employed
as a painter by the petitioner who was a sub-contractor for the painting job on
M.J. Building then being constructed along Salcedo Street, Makati, Metro
Manila. The C.E. Construction
Corporation, Inc. (CECCI) was the principal contractor thereof by virtue of a
contract it entered into with M.J. Development Corporation, the owner of the
building. Another corporation, Fujitec
Philippines Industrial Company, Inc. (FUJITEC), was contracted by M.J.
Development Corporation to install two (2) standard scenic elevator units in
the building.

When the painting job was almost complete, i.e., all that
remained to be painted was the wall of the shaft for the second elevator, the
petitioner trimmed his work force to two (2) employees, Hernani Gozun and
Eduardo Santos; these employees were tasked to finish the painting. On 5 February 1981, they started work on the
inner wall of the elevator shaft; to paint the same, they had to stand on top
of the elevator which was then on the second floor of the building. After they finished, they called on the boy
operating the elevator to ask him to bring the same down to the first
floor. Instead of lowering the
elevator, however, the boy brought it up to the sixth floor. The sudden upward movement caused the
elevator to jerk and the two (2) painters to lose their balance. Hernani was able to cling to the cable but
Eduardo fell off the top, found himself pinned between the shaft and the
elevator as the latter was moving upward and then fell to the ground when the
elevator finally stopped on the sixth floor. Hernani rushed to Eduardo’s aid upon hearing the latter’s cry for
help. The former lifted Eduardo in his
arms and, with the help of another man, brought him to the Makati Medical
Center where he later died. While the
elevator boy was never identified, it is alleged that he worked for CECCI.

On 11 September 1981, the spouses Catalino and Ester Santos,
together with Wilma Palabasan-Santos, parents and widow, respectively, of
Eduardo, filed a Complaint^[1]
for damages against Doroteo Ocheda and CECCI before the then Court of First
Instance (now Regional Trial Court) of Pampanga. The case was docketed as Civil Case No. 6263 and was assigned to
Branch 42 thereof. The complaint
alleges the foregoing facts and, in addition, specifically states that while
Eduardo was employed by the petitioner in 1979 and received a daily wage of
P35.00, the petitioner did not place him within “any SSS, Medicare and
Workmen’s Compensation coverage.” It is further averred that the elevator
boy was inexperienced for the work assigned to him. They then asked for judgment ordering the defendants, jointly and
severally, to pay P10,000.00 as burial expenses, P30,000.00 as moral damages,
attorney’s fees and compensatory damages as may be proved at the trial and
costs.

Petitioner filed an Answer with a Counterclaim against the
plaintiff, and a Cross-Claim against CECCI.^[2]
He alleges therein that Eduardo was employed by him only a week before the
accident and purely on a casual basis for the particular painting
job. As affirmative defense, he avers
that Eduardo’s death was due to the negligence and carelessness of the elevator
boy, an employee of CECCI. Thus, the
latter is solely liable for the said death and no cause of action exists
against him. Moreover, it is postulated
that the trial court has no jurisdiction over claims involving SSS, Medicare,
Workmen’s Compensation and insurance benefits. Such jurisdiction is vested in other administrative or quasi-judicial
bodies; furthermore, he avers that the allegation concerning such claims
(paragraph 8 of the complaint) is not essential to the plaintiffs’ cause of
action which is the negligent operation of the elevator. In his counterclaim, petitioner asks for an
award of attorney’s fees in the amount of P10,000.00, and the expenses of
litigation.

In due course, CECCI likewise filed its Answer with a Third-Party
Complaint^[3]
against FUJITEC which it alleged to be liable, being the employer of the
elevator boy. FUJITEC filed its Answer
to the said Third-Party Complaint^[4]
denying the allegations made therein and asserting that the operation of the
elevator was turned over to the building owner long before the fatal accident.

Pre-trial was conducted on 23 September 1983. The pre-trial order issued by the trial
court embodies the respective positions of the parties. As to herein petitioners, the Pre-trial
order summarized his stand as follows:

“2. Defendant
Ocheda’s Case:

Defendant Doroteo Ocheda denies liability. He claims that the complaint states no cause
of action against him; that the death of the deceased Eduardo Santos resulted
from the operation of the elevator at the construction site; that he had
nothing to do with the operation, or control, or management of the elevator in
question, hence, the death of Eduardo Santos is not attributable to him; that
his participation in the construction of the building was limited solely to
painting specific portions thereof; that he filed a cross-claim against
defendant C.E. Construction Corp. because the said corporation was the general
contractor of the building, operator/maintainer of the elevator, and employer
of the elevator boy.”^[5]

During the trial of the case on the merits, petitioner presented
two (2) witnesses — Josefino Rivera and himself.^[6]

On 24 February 1986, the trial court rendered its decision^[7]
finding both the petitioner and CECCI liable for the death of Eduardo. The dispositive portion of the decision
reads as follows:

“WHEREFORE, in view of the foregoing considerations, judgment
is hereby rendered as follows:

1. The defendant (sic) Doroteo Ocheda and C.E.
Construction Corporation, Inc. are ordered to pay jointly and severally the
plaintiffs the following amounts:

a) Seven Thousand Three Hundred Fifty Pesos (P7,350.00) as burial
expenses;

b) Thirty Thousand Pesos (P30,000.00) as moral damages;

c) Five Thousand Pesos (P5,000.00) as attorney’s fees; and

d) Costs of suit.

2. The third-party complaint is hereby
dismissed and the third-party plaintiff C.E. Construction Corporation, Inc. is
ordered to pay the third-party defendant Fujitec the sum of Fifteen Thousand
Pesos (P15,000.00) as attorney’s fees, plus the cost of suit;

3. The cross-claim and counterclaim of
defendant Ocheda and the counterclaim of defendant C.E. Construction are hereby
dismissed.

SO ORDERED.”^[8]

This determination of liability is based on the trial court’s
findings that:

“It has been sufficiently established that it was defendant
Ocheda who caused the accident to happen. It was defendant Ocheda who ordered the late Eduardo Santos and Hernani
Gozun to use the top of the elevator as stepping board while painting the wall
of the elevator shaft. And defendant
Ocheda failed to exercise the diligence of a good father of a family in the
supervision of his employees.

It has likewise been shown that C.E. Construction was, at the time
of the incident in question, in full control of the building since the same was
not yet accepted by the owner thereof. C.E. Construction was the general contractor of the building, hence, it
was in full management and control of the elevator because the same was already
turned over to and accepted by the building owner from Fujitec. As such, C.E. Construction should have
guarded against the unauthorized use of the elevator by people working in the
building. At the time of the incident,
the late Eduardo Santos was an employee of defendant Ocheda, a sub-contractor
of C.E. Construction. In view of all
these, C.E. Construction is equally liable with defendant Ocheda pursuant to
Article 2180, in conjunction with Article 2176 of the Civil Code. The elevator which caused the injury and
subsequent death of Eduardo Santos was under the management and control of C.E.
Construction. Consequently, had C.E.
Construction used proper care in the management and operation of the elevator,
and had it exercised the diligence of a good father of a family in the
supervision of its employees, then the fatal incident would not have
happened.”^[9]

Petitioner and CECCI appealed this adverse decision to the
respondent Court of Appeals which docketed the case as C.A.-G.R. CV No.
09574. In the Brief he submitted,
petitioner made the following assignment of errors:

“I

THE LOWER COURT ERRED IN HOLDING THAT THE REGIONAL TRIAL COURT HAD
JURISDICTION OVER THE COMPLAINT FILED;

II

THE LOWER COURT ERRED IN HOLDING THAT OCHEDA WAS GUILTY OF
NEGLIGENCE FOR THE DEATH OF SANTOS;

III

THE LOWER COURT ERRED IN APPLYING ARTICLE 2180 OF THE NEW CIVIL
CODE TO OCHEDA;

IV

THE LOWER COURT ERRED IN HOLDING OCHEDA JOINTLY AND SEVERALLY
LIABLE WITH C.E. CONSTRUCTION CORP. TO THE PLAINTIFFS FOR DAMAGES.”^[10]

On the other hand, CECCI, in its Brief, contended that the trial
court gravely erred in finding it solidarily liable with the herein petitioner
for the death of Eduardo, in awarding moral damages, in dismissing the
third-party complaint and in not holding the plaintiffs therein liable for
damages, attorney’s fees and costs of the suit.^[11]

On 1 September 1988, the respondent Court promulgated its
decision^[12]
upholding the findings of the trial court but reducing the amount of damages;
it likewise eliminated the grant of attorney’s fees in favor of FUJITEC. Thus:

“WHEREFORE, the decision appealed from is hereby AFFIRMED in
all respects, except as modified herein by reducing the award for actual or
compensatory damages to only P5,880.00; reducing the damage caused by death to
only P24,000.00; and eliminating the award of P15,000.00 attorney’s fees to
third party defendant Fujitec. No
costs.

SO ORDERED.“^[13]

The reduction in the award of damages was based on the respondent
Court’s finding of contributory negligence on the part of Eduardo Santos when
he failed to heed the order to tie a rope around his waist while working.

As to the issue of lack of jurisdiction on the part of the trial
court, the respondent Court held:

“The case at bar is being prosecuted in behalf of a deceased,
not dismissed, employee for damages arising from the death of the employee
based on quasi-delict founded on an undoubted principle of justice recognized
by all legislations that every injury, loss or damage which a person receives
in his right (sic), be it by act or by omission, creates a juridical relation
from which is derived the right which the aggrieved party has to be indemnified
and the consequent obligation by the other party.

In the recent case of Floresca vs. Philex Mining Corporation, 136
SCRA 141, the Supreme Court ruled that recovery under the new Civil Code for
damages arising from negligence is not barred by Article 173 of the New Labor
Code. In this case, it was further held
that an ordinary court has jurisdiction over complaints for damages filed by
heirs of mining employees against the mining corporation for the death the
former allegedly caused by the negligence of their employer.”^[14]

His motion to reconsider the decision having been denied in the
resolution of the respondent Court dated 18 October 1988,^[15]
petitioner took this recourse under Rule 45 of the Rules of Court. He reiterates in the instant petition for
review the assignment of errors submitted before the respondent Court.

This Court gave due course to the petition and required the
parties to submit their respective Memoranda^[16]
after the submission of the Comment to the petition by the private respondents,
the Reply thereto by the petitioner and the Rejoinder to the latter by the
private respondents.

We find no merit in the petition.

Regarding the issue of the factual findings upon which the
second, third and fourth assigned errors are based, We find no cogent reason to
disturb such findings of both the trial and respondent courts. Petitioner does not even attempt to show
that this case falls under any of the accepted exceptions to the well-settled
and oft-repeated rule that findings of facts of the Court of Appeals are binding
upon this Court.^[17]

Anent the alleged lack of jurisdiction on the part of the trial
court, petitioner admits that the private respondents’ cause of action, as
expressed in the complaint, is based on a quasi-delict. The former submits, however, that since the
monetary award is sought in connection with the employer-employee relationship
which existed between him and the late Eduardo Santos, only Labor Arbiters,
pursuant to Article 217 of the Labor Code of the Philippines as it was then
worded,^[18]
have original and exclusive jurisdiction over them. Under the said provision, “all money claims of workers”
and “all other claims arising from employer-employee relations” are
exclusively cognizable by Labor Arbiters. We ruled in Getz Corp. vs. Court of Appeals^[19]
that pursuant to P.D. No. 1691, such claims include moral and exemplary
damages. Petitioner further contends
that Floresca vs. Philex Mining Corp.,^[20]
which the respondent Court relied upon, is not applicable because the cause of
action involved therein accrued on 28 June 1967, or before the enactment of the
Labor Code and P.D. No. 1691; he asserts that the decision therein constituted
“judicial legislation”.

Petitioner’s unusual patience and tenacity on the first assigned
error merits him no reward. In the first
place, he did not raise in his answer that defense with respect to the claim
for damages arising from a quasi-delict. His affirmative defense of lack of jurisdiction specifically refers to
the allegation in paragraph 8 of the complaint concerning the SSS, Medicare,
Workmen’s Compensation and insurance benefits the award of which, according to
him, falls within the competence and jurisdiction of other administrative or
quasi-judicial bodies. In fact, he even
considers such allegation to be non-essential to the complaint’s cause of
action — the negligent operation of the elevator. This is how he worded that particular affirmative defense:

“SECOND
AFFIRMATIVE DEFENSE

12. He need not deny nor (sic) admit the allegations
in paragraph 8 regarding the alleged SSS, Medicare, Workmen’s Compensation, and
insurance coverage since this Honorable Court has no jurisdiction over disputes
involving cases of these sorts, jurisdiction thereof being vested in other
administrative or quasi-judicial bodies. Furthermore, the allegations in said paragraph 8 of the complaint is
(sic) not essential to plaintiff’s cause of action which is the negligent
operation of the elevator resulting in the death of Eduado (sic) Santos.”^[21]

Obviously, he did not even have Labor Arbiters in mind for such
cases. He knew, or at least ought to
have known, that expressly excepted from the broad jurisdiction of Labor
Arbiters in Section 217 of the Labor Code are “claims for employees
compensation, social security, medicare and maternity benefits.”

In the second place, during the pre-trial conference, petitioner
failed to raise the issue of jurisdiction. He instead harped on the lack of a cause of action — his first
affirmative defense — which was based on the theory that the proximate cause
of Eduardo’s death was the negligence of the elevator boy who was an employee
of CECCI; in fact, it was against the latter that he filed a cross-claim.

In the third place, petitioner openly and unqualifiedly invoked
and submitted to the jurisdiction of the trial court by setting up a
counterclaim, asking for relief in the concept of attorney’s fees and expenses
of litigation against the private respondents and filing a cross-claim against
CECCI, whom he alleged to be the employer of the elevator boy.

Finally, he presented evidence to prove that the proximate cause
of the accident and resulting death of Eduardo was the negligence of the
elevator boy. He concludes that as
employer of the said boy, CECCI is solely liable to the private respondents for
the damages claimed by the latter.

Petitioner was, therefore, effectively estopped from raising the
issue of jurisdiction with respect to the damages arising from a
quasi-delict. While it is true that
jurisdiction over the subject matter of a case may be raised at any stage of
the proceedings as the same is conferred by law,^[22]
it is nevertheless settled that a party may be barred from raising it on the
ground of estoppel.^[23]
The reason for this is that after voluntarily submitting a cause and
encountering an adverse decision on the merits, it would be improper and too
late, to say the least, for the loser to question the jurisdiction or power of
the court. It is not correct for a
party who has invoked the jurisdiction of a court in a particular matter to
secure affirmative relief, to afterwards deny that very jurisdiction to escape
penalty.

And even granting, for the sake of argument, that the issue of
jurisdiction can still be raised in connection with its specific reference to
the damages arising out of a quasi-delict, petitioner’s thesis would still
fail. Such damages may not be awarded
in accordance with Section 217 of the Labor Code, as amended, for there is no
reasonable causal connection with the employer-employee relationship. At the time the cause of action accrued,
Article 217 of the Labor Code required that in order that the Labor Arbiter may
adjudicate claims not included in the other paragraphs, the same must arise out
of employer-employee relations.

In San Miguel Corporation vs. National Labor Relations
Commission,^[24]
this Court ruled, with respect to Article 217, as amended by B.P. Blg. 227:

“While paragraph 3 above refers to ‘all money claims of
workers,’ it is not necessary to suppose that the entire universe of money
claims that might be asserted by workers against their employers has been
absorbed into the original and exclusive jurisdiction of Labor Arbiters. In the first place, paragraph 3 should be
read not in isolation from but rather within the context formed by paragraph 1
(relating to unfair labor practices), paragraph 2 (relating to claims
concerning terms and conditions of employment), paragraph 4 (claims relating to
household services, a particular species of employer-employee relations), and
paragraph 5 (relating to certain activities prohibited to employees or to
employers). It is evident that there is
a unifying element which runs through paragraphs 1 to 5 and that is, that they
all refer to cases or disputes arising out of or in connection with an employer-employee
relationship. This is, in other words,
a situation where the rule of noscitur a sociis may be usefully invoked
in clarifying the scope of paragraph 3, and any other paragraph of Article 217
of the Labor Code, as amended. We reach
the above conclusion from an examination of the terms themselves of Article
217, as last amended by B.P. Blg. 227, and even though earlier versions of
Article 217 of the Labor Code expressly brought within the jurisdiction of the
Labor Arbiters and the NLRC ‘cases arising, from employer-employee relations,’
which clause was not expressly carried over, in printer’s ink, in Article 217
as it exists today. For it cannot be
presumed that money claims of workers which do not arise out of or in
connection with their employer-employee relationship, and which would therefore
fall within the general jurisdiction of the regular courts of justice, were
intended by the legislative authority to be taken away from the jurisdiction of
the courts and lodged with Labor Arbiters on an exclusive basis. The Court, therefore, believes and so holds
that the ‘money claims of workers’ referred to in paragraph 3 of Article 217
embraces money claims which arise out of or in connection with the employer-employee
relationship, or some aspect or incident of such relationship. Put a little differently, that money claims
of workers which now fall within the original and exclusive jurisdiction of
Labor Arbiters are those money claims which have some reasonable causal
connection with the employer-employee relationship.”

Said article presently reads as follows:^[25]

“ART. 217. Jurisdiction
of Labor Arbiters and the Commission. — (a) Except as otherwise provided
under this Code, the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide, within thirty (30) calendar days after the
submission of the case by the parties for decision without extension, even in
the absence of stenographic notes, the following cases involving all workers,
whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination of disputes;

3. If accompanied with a claim for
reinstatement, those cases that workers may file involving wages, rates of pay,
hours of work and other terms and conditions of employment;

4. Claims for actual, moral, exemplary and
other forms of damages arising from the employer-employee relations;

5. Cases arising from any violation of Article
264 of this Code, including questions involving the legality of strike and
lockouts; and

6. Except claims for Employees Compensation,
Social Security, Medicare and maternity benefits, all other claims, arising
from employer-employee relations, including those of persons in domestic or
household service, involving an amount exceeding five thousand pesos
(P5,000.00) regardless of whether accompanied with a claim for reinstatement.

(b) The Commission shall have exclusive
appellate jurisdiction over all cases decided by Labor Arbiters.

(c) Cases arising from
the interpretation or implementation of collective bargaining agreement and
those arising from the interpretation or enforcement of company personnel
policies shall be disposed of by the Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitration as may be provided in said
agreements.”

In the instant case, the source of the obligation upon which the
private respondents’ cause of action is based is a quasi-delict or tort which
has no reasonable connection with any of the claims provided for in the
aforesaid Article 217 of the Labor Code. It would have been entirely different if the claim for damages arose out
of, for instance, the illegal dismissal of Eduardo, in which case the Labor
Arbiter would have exclusive jurisdiction thereon.^[26]

It would have also been different if the petitioner had grounded
his claim of lack of jurisdiction on the basis of the Workmen’s Compensation
Law. Unfortunately, he adroitly avoided
this issue from the very beginning not only because of his claim that the
allegation on this matter is irrelevant to the private respondents’ theory but,
and more importantly, he did not, as revealed by the latter, register Eduardo
with the Social Security System pursuant to the Amended Rules on Employees
Compensation in relation to Chapter II, Title II, Book IV of the Labor Code of
the Philippines (P.D. No. 442), as amended. To avoid possible liability thereunder, and more particularly the
criminal and civil sanctions under Section 4, Rule II of said Rules which
reads:

“SEC. 4. Penalty. — Any violation of this Rule shall be
penalized as follows:

(1) In case of
failure or refusal to register employees, the employer or responsible official
who committed the violation shall be punished with a fine of not less than
P1,000 nor more than P10,000 and/or imprisonment for the duration of the
violation or noncompliance or until such time that rectification of the
violation has been made, at the discretion of the court.

(2) In case a
compensable contingency occurs after 30 days from employment and before the
System receives any report for coverage about the employee or EC contribution
on his behalf, his employer shall be liable to the System for the lump sum
equivalent to the benefits to which he or his dependents may be entitled.”

petitioner unabashedly asserted in his
Answer that the late Eduardo Santos was his employee for barely a week and that
he was hired on a casual basis only for the particular painting
job on the M.J. Building. Having done
so, he cannot now be heard to make a strained and tenuous analysis of Floresca
vs. Philex Mining Corporation.^[27]

WHEREFORE, for lack of merit, the instant petition is
DENIED with costs against the petitioner.

This decision is immediately executory.

SO ORDERED.

Gutierrez, Jr., (Chairman), Bidin, Romero, and Melo, JJ., concur.

^[1]
Rollo, 38-41.

^[2]
Rollo, 42-45.

^[3]
Rollo, 46-52.

^[4]
Id., 53-59.

^[5]
Rollo, 61.

^[6]
Id., 63.

^[7]
Id., 61-84.

^[8]
Rollo, 84.

^[9]
Id., 82-83.

^[10]
Rollo, 25.

^[11]
Id., 25-26.

^[12]
Id., 23-31; per Associate Justice Luis L. Victor, concurred in by
Associate Justices Ricardo P. Tensuan and Venancio D. Aldecoa, Jr.

^[13]
Rollo, 30.

^[14]
Id., 26.

^[15]
Rollo, 34-36.

^[16]
Id., 183.

^[17]
Remalante vs. Tibe, 158 SCRA 138 [1988]; Medina vs. Asistio, 191
SCRA 218 [1990].

^[18]
Amended by P.D. No. 1691; B.P. Blg. 227 subsequently amended the former by, inter
alia, deleting paragraph 6 of Article 217 which contained the phrase
“all other claims arising from employer-employee relations.”

^[19]
116 SCRA 86 [1982].

^[20]
136 SCRA 141 [1985].

^[21]
Rollo, 44-45.

^[22]
Lagman vs. Court of Appeals, 44 SCRA 228 [1972]; see also People vs.
Eduarte, 182 SCRA 750 [1990].

^[23]
Tijam vs. Sibonghanoy, 23 SCRA 29 [1968]; Quimpo vs. De la
Victoria, 46 SCRA 139 [1972]; Zulueta vs. Pan American World Airways,
Inc., 49 SCRA 1 [1973]; People vs. Munar, 53 SCRA 278 [1973]; Capilitan vs.
De la Cruz, 55 SCRA 706 [1974]; Balais vs. Balais, 159 SCRA 37 [1988];
Tejones vs. Gironella, 159 SCRA 100 [1988]; Marquez vs. Secretary
of Labor, 171 SCRA 337 [1989]; Bañaga vs. Commission on the Settlement
of Land Problems, 181 SCRA 599 [1990].

^[24]
161 SCRA 719, 724-727 [1988].

^[25]
As amended by Section 9, R.A. No. 6715.

^[26]
Vargas vs. Akai Philippines, Inc., 156 SCRA 531 [1987]; Victorias
Milling Co., Inc. vs. Intermediate Appellate Court, 200 SCRA 1 [1991].

^[27]
Supra.