TESCO vs.

WCC TESCOs denial that it is the employer of the deceases is

G.R. No. L-28694 May 13, 1981 obviously an afterthought, a devise to defeat the law and
evade its obligation.
FACTS:

Petitioner Telephone Engineering and Service Company

(TESCO), is a domestic corporation engaged in the business
of manufacturing telephone equipment, located in
Mandaluyong, Rizal.

Its executive vice president and general manager is Jose

Luis Santiago.

It has a sister company, the Utilities Management

Corporation (UMACOR), with office at the same location and
also under the management of Santiago.

UMACOR employed Pacifico L. Gatus as purchasing agent.

He was detailed at TESCO but reported back to UMACOR.
He contracted an illness and died subsequently due to liver
cirrhosis with malignant degeneration.

His widow, respondent Leonila Gatus filed a claim before the

Workmens Compensation Commission. TESCO, through
Santiago, maintained that the illness is not an occupational
disease, hence, not compensable under the law.

The Acting Referee of WCC awarded death benefits and

burial expenses to be paid by TESCO on the basis of an
admission made by TESCO that the illness was contracted
in regular occupation.

Provincial Sheriff levied on and attached the properties of

TESCO and scheduled the sale of the same at public auction.

TESCO filed this Petition for Certiorari with Preliminary

Injunction seeking to annul the award and enjoining the
Sheriff from levying and selling its properties asserting that
there is no employer-employee relationship, the deceased
having been an employee of UMACOR and not of TESCO,
hence the respondent commission has no jurisdiction or
authority to render the award.

ISSUE:

Whether or not WCC has no jurisdiction nor authority to

render the award against TESCO.

WON the piercing of the veil of corporate fiction is proper.

RULING:

The contention of TESCO that WCC cannot render an award

against TESCO as there was no employer-employee
relationship between TESCO and the deceased, the
deceased having been an employee of UMACOR, is without
merit.

Petitioner itself admitted that TESCO and UMACOR are sister

companies operating under one single management and
housed in the same.

Although respect for the personality as such, is the general

rule, there are exceptions. In appropriate cases, the veil of
corporate fiction may be pierced as when the same is made
as a shield to confuse the legitimate issues.