TESCO VS WCC CASE DIGEST

G.R. No. L-28694 May 13, 1981
TELEPHONE ENGINEERING & SERVICE COMPANY, INC., petitioner,
vs.
WORKMEN'S COMPENSATION COMMISSION, PROVINCIAL SHERIFF OF RIZAL and LEONILA SANTOS GATUS, for herself and in behalf of her minor children, Teresita, Antonina and Reynaldo, all surnamed GATUS, respondents.

CORPORATION LAW; ALTER EGO

FACTS:

• Petitioner is a domestic corporation engaged in the business of manufacturing telephone equipment, It has a sister company, the Utilities Management Corporation (UMACOR), with offices in the same location. UMACOR is also under the management of Jose Luis Santiago.

• UMACOR employed the Gatus as Purchasing Agent. He contracted illness and although he retained to work, he died  of "liver cirrhosis with malignant degeneration."

• His widow, filed a "Notice and Claim for Compensation" alleging therein that her deceased husband was an employee of TESCO.

• TESCO, through Jose Luis Santiago, informed its non-conformity to the award and contended that the cause of the illness contracted by Gatus was in no way aggravated by the nature of his work. 

• Meanwhile, the Provincial Sheriff of Rizal levied on and attached the properties of TESCO

• TESCO filed petition for "Certiorari with Preliminary Injunction" seeking to annul the award and to enjoin the Sheriff from levying and selling its properties at public auction.

• Court required respondents to answer the Petition but denied Injunction. 

• TESCO asserts that the respondent Workmen's Compensation Commission has no jurisdiction nor authority to render the award against your petitioner there being no employer-employee relationship between it and the deceased Gatus.

ISSUE:

Whether or not TESCO can be held liable

 HELD:

• Yes. The lack of employer-employee relationship, is a matter of defense that the employer should properly raise in the proceedings below. Petitioner represented and defended itself as the employer of the deceased. Nowhere in said documents did it allege that it was not the employer. Petitioner even admitted that TESCO and UMACOR are sister companies operating under one single management and housed in the same building. 

• The veil of corporate fiction was not allowed to be availed of, and piercing was allowed when the corporate fiction was made as a scheme to confuse the legitimate issues, such when the defense of separate juridical personality is interposed for the first time on appeal.