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01) Naguiat vs. NLRC hired by CFTI, and military bases agreement.

Petitioner/s: Sergio F. Naguiat & Clark Field Taxi Inc. (CFTI) c. That NAGUIAT ENT. thence b. Admitted that CFTI had agreed with
Respondent/s: NLRC, National Labor of Workingmen (NOWM), Leonardo T. managed, controlled and supervised the driver’s union to grant separation
Galang their employment. pay
Doctrine: Our jurisprudence is wanting as to the definite scope of "corporate d. They were entitled to separation
tort." Essentially, Definition of “Tort”: Consists in the violation of a right given or pay based on their latest daily
the omission of a duty imposed by law. Simply stated, tort is a breach of a legal earnings of US$15.00 for working 16
duty. days/month.

GR: Stockholders who are actively engaged in the management or operation of


the business and affairs of a close corporation shall be personally liable for 7. Labor Arbiter ruling: Individual complainants are regular workers of CFTI
corporate torts  Ordered CFTI to pay P1,200/year of service for “humanitarian
E: unless the corporation has obtained reasonably adequate liability insurance consideration2”
 Set aside the 500/year of service agreement
Facts:  Rejected CFTI’s allegation that it was forced to close business due to great
1. Petitioner (CFTI) held a concessionaire’s contract with the Army Air Force financial losses as the time it ceased operations, CFTI was profitably
Exchange Services (AAFES) for the operation of taxi services within Clark earning
Air Base. SERGIO NAGUIAT was CFTI’s president and ANTOLIN NAGUIAT  Cessation of business was actually due to the untimely closure of Clark Air
was the VP. Both Sergio F. Naguiat Enterprises, Incorporated (NAGUIAT Base
ENTERPRISES), a trading firm, and CFTI were family-owned 8. NLRC ruling: Petitoner’s MR denied. Modified LA’s decision
corporations.  Granted separation pay
2. Individual Respondents (IR) were previously employed by CFTI as taxicab
drivers and, during their employment: Issue: W/N Naguiat Ent. is a separate and distinct juridical entity which cannot
 they were required to pay a daily “boundary fee”1 be held jointly and severally liable for the obligations of CFTI
 All incidental expenses for maintenance of vehicles they were driving, even Held: Petition is partially meritorious.3
gas, were accounted against them Ruling:
 Drivers worked 3-4x a week depending on the availability of the taxicabs 1. Naguiat Ent. NOT liable
 Earned not less than $15/day; in excess of which, drivers were required to  Legal Basis: Articles 106, 107 and 109 of the Labor Code
make cash deposits to the company which they could withdraw every 15  SC affirmed the decision of the LA which found that individual respondents
days were regular employees of CFTI who received wages on a
3. AAFES was dissolved because of the phase-out of the US military bases in boundary/commission basis
the PH. Services of the IR were officially terminated on November 26, 1991.  Petitioners submitted documents such as the drivers' applications for
4. AAFES Taxi Drivers Association (Driver’s Union) and CFTI held negotiations employment with CFTI and social security remittances and payroll of
with regard to the separation benefits that should be awarded. It was Naguiat Enterprises showing that none of the individual respondents were
agreed that the drivers will be given P500/year of service as severance pay. its employees.
Most drivers accepted but IR refused to accept.  Moreover, in the contract between CFTI and AAFES, CFTI, as
5. IR disaffiliated themselves from Driver’s Union and, through NOWM, filed a concessionaire, agreed to purchase from AAFES for a certain amount
complaint against Naguiat Enterprises, AAFES, and the Driver’s Union for within a specified period a fleet of vehicles to be "ke(pt) on the road" by
payment of separation pay due to termination/phase-out. CFTI, pursuant to their concessionaire's contract. This indicates that CFTI
6. Claims
Individual Complainants Petitioners
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a. They were regular employees of a. The cessation of business of CFTI "To allow respondents exemption from its obligation to pay separation pay would be inhuman
to complainants but to impose a monetary obligation to an employer whose profitable business
NAGUIAT ENT. Although their was due to “great financial losses and
was abruptly shot down by force majeure would be unfair and unjust to say the least.
individual applications for employment lost business opportunity” resulting 3
(1) Petitioner Clark Field Taxi, Incorporated, and Sergio F. Naguiat, president and co-owner
were approved by CFTI from the phase-out of Clark Air Base thereof, are ORDEREDto pay, jointly and severally, the individual respondents their separation
b. Claimed to have been assigned to brought about by the Mt. Pinatubo pay computed at US$120.00 for every year of service, or its peso equivalent at the time of
NAGUIAT ENT. after having been eruption and expiration of the RP-US payment or satisfaction of the judgment;
(2) Petitioner Sergio F. Naguiat Enterprises, Incorporated, and Antolin T. Naguiat
are ABSOLVED from liability in the payment of separation pay to individual respondents.
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$26.50 (1:00am-12:00 nn) and $27 (12:00 nn-12mn)
became the owner of the taxicabs which became the principal management or operation of the business should be held personally
investment and asset of the company. liable.
 Private respondents failed to substantiate their claim that Naguiat
Enterprises managed, supervised and controlled their employment as the  In posting the surety bond required by this Court for the issuance of a
personalities of Sergio Naguiat as an individual who was the president of TRO enjoining the execution of the assailed NLRC Resolutions, only
CFTI, and Sergio F. Naguiat Enterprises, Inc., as a separate corporate Sergio, in his individual and personal capacity, principally bound
entity with a separate business. himself to comply with the obligation, i.e., "to guarantee the payment to
 Sergio, in supervising the-taxi drivers and determining their employment private respondents of any damages which they may incur by reason of the
terms, was rather carrying out his responsibilities as president of issuance of a temporary restraining order sought, if it should be finally
CFTI. Hence, Naguiat Enterprises as a separate corporation does not adjudged that said principals were not entitled thereto.”
appear to be involved at all in the taxi business.  The Court here finds no application to the rule that a corporate officer
 The drivers also admitted that they received salary from the office of CFTI cannot be held solidarily liable with a corporation in the absence of
 The constitution of the driver’s union, which was the union of the drivers in evidence that he had acted in bad faith or with malice.[39] In the present
question, states that members thereof are the employees of CFTI and "(f)or case, Sergio Naguiat is held solidarily liable for corporate tort because he
collective bargaining purposes, the definite employer is the Clark Field Taxi had actively engaged in the management and operation of CFTI, a close
Inc." corporation.
2. CFTI Preseident Solidarily liable4 3. Antolin Naguiat not personally liable
 Sergio and Antolin Naguiat averred that they were denied due process as  Although he carried the title of "general manager" as well, it had not
they were not parties to the complaint. been shown that he had acted in such capacity. Furthermore, no
 SC held that in the broader interest of justice, Segio, in his capacity as evidence on the extent of his participation in the management or
president of the CFTI, CANNOT be exonerated from joint and several operation of the business was proffered. In this light, he cannot be held
liability in the payment of separation pay to individual respondents.5 solidarily liable for the obligations of CFTI and Sergio to the private
 SERGIO was the President of CFTI who actively managed the business. respondents.
Applying A. C. Ransom, he falls within the meaning of an "employer" as
contemplated by the Labor Code, who may be held jointly and severally Additional Notes:
liable for the obligations of the corporation to its dismissed
employees. MAM Realty Development vs. NLRC,[37] the Court recognized that a director or
 CFTI and Naguiat Ent. were “close family corporations” owned by the officer may still be held solidarily liable with a corporation by specific provision of
Naguiats.(See doctrine for GR and E and definition of corporate tort) law. Thus:
 Nothing in the records show whether CFTI obtained reasonably adequate
liability insurance; thus, the question is w/n there was a corporate tort "x x x A corporation, being a juridical entity, may act only through its
 Article 283 of the Labor Code mandates the employer to grant directors, officers and employees. Obligations incurred by them, acting
separation pay to employees in case of closure or cessation of as such corporate agents, are not theirs but the direct accountabilities
operations of establishment or undertaking not due to serious of the corporation they represent. True, solidary liabilities may at times
business losses or financial reverses, which is the condition obtaining at be incurred but only when exceptional circumstances warrant such as,
bar. generally, in the following cases:
 CFTI failed to comply with this law-imposed duty or
obligation. Consequently, its stockholder who was actively engaged in the 4. When a director, trustee or officer is made, by specific provision of law,
personally liable for his corporate action." (footnotes omitted)

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See additional notes for more cases
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Jurisprudence: A.C. Ransom Labor Union-CCLU vs. NLRC: (d) The record does not clearly
identify 'the officer or officers' of RANSOM directly responsible for failure to pay the back wages
of the 22 strikers. In the absence of definite proof in that regard, we believe it should be
presumed that the responsible officer is the President of the corporation who can be deemed the
chief operation officer thereof. Thus, in RA 602, criminal responsibility is with the 'Manager or in
his default, the person acting as such.' In RANSOM, the President appears to be the Manager."

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