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SECOND DIVISION

AMECOS INNOVATIONS, INC. G.R. No.178055

and ANTONIO F. MATEO,
Petitioners, Present:

CARPIO, Chairperson,
BRION,
-versus- DEL CASTILLO,
PEREZ, and
LEONEN,* JJ.

ELIZA R. LOPEZ, Promulgated:

Respondent. JUL 0 2 2014
x------------------------------------------------ - - 1 ---
DECISION

DEL CASTILLO, J.:

1
Assailed in this Petition for Review on Certiorari are the March 22, 2007
2
Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 96959 which
3
affirmed the June 30, 2006 Decision of the Regional Trial Court (RTC) of
4
Caloocan City, Branch 121, dismissing the Complaint for lack of jurisdiction, and
5 6
its May 23,2007 Resolution denying petitioners' Motion for Reconsideration.

Factual Antecedents

Petitioner Amecos Innovations, Inc. (Amecos) is a corporation duly

incorporated under Philippine laws engaged in the business of selling assorte
. Per Raffle dated August23, 2013.
Rollo, pp. 13-32.
2
CA rolla, pp. 174-176; penned by Associate Justice Lucas P. Bersamin (now a Member of this Court) and
concurred in by Associate Justices Rodrigo V. Cosico and Estela M. Perlas Bernabe (now a Member of this
Court).
Records, pp. 194-198; penned by Judge Adoracion G. Angeles.
4
ld. at 1-7.
CA rolla, p. 189; penned by Associate Justice Lucas P. Bersamin and concurred in by Associate Justices Jose
C. Reyes, Jr. and Monina Arevalo-Zenarosa.
6
Id. at 177-187.
Decision 1 G.R. No. 178055

products created by its President and herein co-petitioner, Antonio F.

Mateo (Mateo). On May 30, 2003, Amecos received a Subpoena7 from the
Office of the City Prosecutor of Quezon City in connection with a complaint
filed by the Social Security System (SSS) for alleged delinquency in the
remittance of SSS contributions and penalty liabilities in violation of Section
22(a) and 22(d) in relation to Section 28(e) of the SSS law, as amended.

By way of explanation, Amecos attributed its failure to remit the

SSS contributions to herein respondent Eliza R. Lopez (respondent). Amecos
claimed that it hired respondent on January 15, 2001 as Marketing Assistant to
promote its products; that upon hiring, respondent refused to provide Amecos
with her SSS Number and to be deducted her contributions; that on the basis
of the foregoing, Amecos no longer enrolled respondent with the SSS and
did not deduct her corresponding contributions up to the time of her
termination in February 2002.

Amecos eventually settled its obligations with the SSS; consequently,

SSS filed a Motion to Withdraw Complaint8 which was approved by the Office
of the City Prosecutor.9

Thereafter, petitioners sent a demand letter10 to respondent for

P27,791.65 representing her share in the SSS contributions and expenses for
processing, but to no avail. Thus, petitioners filed the instant Complaint for
sum of money and damages against respondent docketed as Civil Case No.
04-27802 and raffled to Branch 51 of the Metropolitan Trial Court (MeTC) of
Caloocan City. Petitioners claimed that because of respondent’s
misrepresentation, they suffered actual damages in the amount of P27,791.65
allegedly incurred by Amecos by way of settlement and payment of its
obligations with the SSS.11 Mateo also allegedly suffered extreme
embarrassment and besmirched reputation as a result of the filing of the
complaint by the SSS. Hence they prayed for P50,000.00 as
moral damages, P50,000.00 as exemplary damages, P50,000.00 as attorney’s
fees, and costs of the suit.

Respondent filed her Answer with Motion to Dismiss12 claiming that

she was formerly an employee of Amecos until her illegal dismissal in February
2002; that Amecos deliberately failed to deduct and remit her SSS
contributions; and that petitioners filed the instant Complaint in retaliation to
her filing of an illegal dismissal case. Respondent also averred that the
regular courts do not have jurisdiction over the instant case as it arose out
of their employer-employee relationship.
7 Records, p. 10.
8 Id. at 93.
9 Id. at 94.
10 Id. at 30.
11 Id. at 30.
12
Id. at 33-36.
Decision 2 G.R. No. 178055

The parties then submitted their respective Position Papers.13

Ruling of the Metropolitan Trial Court

On March 24, 2006, the MeTC issued its Decision,14 which decreed
as follows:

All viewed from the foregoing, the court hereby dismisses the
complaint for lack of jurisdiction.

SO ORDERED.15

Ruling of the Regional Trial Court

Petitioners appealed to the RTC. On June 30, 2006, the RTC rendered its
Decision16 disposing as follows:

WHEREFORE, premises considered, the instant appeal is

accordingly DISMISSED for lack of merit.

SO ORDERED.17

The RTC affirmed the view taken by the MeTC that under
Article 217(a)(4) of the Labor Code,18 claims for actual, moral, exemplary
and other
13 Id. at 106-123 (for petitioners), 147-150 (for respondent).
14 Id. at 164-166; penned by Judge Eleanor R. Kwong.
15 Id. at 166.
16 Id. at 194-198; penned by Judge Adoracion G. Angeles.
17 Id. at 198.
18 ART. 217. Jurisdiction of the 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 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 strikes 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 agreements 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
Decision 3 G.R. No. 178055
be provided in said agreements. (As amended by Section 9, Republic Act No. 6715, March 21, 1989).
Decision 4 G.R. No. 178055

forms of damages arising from employer-employee relationship are under

the jurisdiction of the Labor Arbiters or the National Labor Relations
Commission (NLRC); that since petitioners and respondent were in an
employer-employee relationship at the time, the matter of SSS contributions
was thus an integral part of that relationship; and as a result, petitioners’ cause
of action for recovery of damages from respondent falls under the
jurisdiction of the Labor Arbiters, pursuant to Article 217(a)(4) of the Labor
Code.

Petitioners filed a Motion for Reconsideration19 which the RTC

denied.20

Ruling of the Court of

Appeals

Petitioners thus instituted a Petition for Review21 with the CA claiming

that the RTC seriously erred in sustaining the dismissal of the Complaint by the
MeTC on the ground of lack of jurisdiction. On March 22, 2007, the CA
rendered the assailed Resolution, viz:

ACCORDINGLY, the petition for review is DENIED DUE COURSE

and this case is DISMISSED.

SO ORDERED.22

Finding no error in the Decision of the RTC, the CA held

that:

x x x The matter of whether the SSS employer’s contributive shares required

of the petitioners to be paid due to the complaint of the respondent
necessarily flowed from the employer-employee relationship between the
parties. As such, the lower courts were correct in ruling that jurisdiction over
the claim pertained to the Labor Arbiter and the National Labor Relations
Commission, not to the regular courts, even if the claim was initiated by
the employer against the employee.23

Petitioners moved to reconsider, but in the second assailed

Resolution24 dated May 23, 2007, the CA denied petitioners’ Motion for
Reconsideration.25 Hence, the instant Petition.

19 Records, pp. 200-215.

20 Id. at 223.
21 CA rollo, pp. 11-52.
22 Id. at 176.
23
Id. at 175-176.
24
Id. at 189.
25
Id. at 177-187.
Decision 5 G.R. No. 178055

Issues

The issues raised in this Petition are:

WHETHER THE REGULAR CIVIL COURT AND NOT THE

LABOR ARBITER OR X X X THE NATIONAL LABOR
RELATIONS COMMISSION HAS JURISDICTION OVER CLAIM[S]
FOR REIMBURSEMENT ARISING FROM EMPLOYER-EMPLOYEE
RELATIONS.

WHETHER THE REGULAR CIVIL COURT AND NOT THE

LABOR ARBITER OR X X X THE NATIONAL LABOR
RELATIONS COMMISSION HAS JURISDICTION OVER CLAIM[S]
FOR DAMAGES FOR MISREPRESENTATION ARISING FROM
EMPLOYER-EMPLOYEE RELATIONS.26

Petitioners’ Arguments

In praying that the assailed CA Resolutions be set aside, petitioners

argue that their Complaint is one for recovery of a sum of money and damages
based on Articles 19,27 22,28 and 215429 of the Civil Code; that their cause of
action is based on solutio indebiti or unjust enrichment, which arose from
respondent’s misrepresentation that there was no need to enroll her with the
SSS as she was concurrently employed by another outfit, Triple A Glass
and Aluminum Company, and that she was self-employed as well. They
argue that the employer- employee relationship between Amecos and
respondent is merely incidental, and does not necessarily place their dispute
within the exclusive jurisdiction of the labor tribunals; the true source of
respondent’s obligation is derived from Articles 19, 22, and 2154 of the Civil
Code. They add that by reason of their payment of respondent’s counterpart or
share in the SSS premiums even as it was not their legal obligation to do so,
respondent was unjustly enriched, for which reason she must return what
petitioners paid to the SSS.

Petitioners cite the pronouncements of the Court to the effect that where
the employer-employee relationship is merely incidental and the cause of
action proceeds from a different source of obligation, such as tort, malicious
prosecution or breach of contract, the regular courts have jurisdiction;30 that
when the cause of
26 Rollo, p. 95.
27 Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith.
28 Art. 22. Every person who through an act of performance by another, or any other means, acquires or
comes into possession of something at the expense of the latter without just or legal ground, shall return
the same to
him.
29 Art. 2154. If something is received when there is no right to demand it, and it was unduly delivered
through mistake, the obligation to return it arises.
30 Bañez v. Hon. Valdevilla, 387 Phil. 601, 608 (2000); Tolosa v. National Labor Relations Commission,
449
Phil. 271 (2003).
Decision 6 G.R. No. 178055

action is based on Articles 19 and 21 of the Civil Code, the case is not
cognizable by the labor tribunals;31 that money claims of workers which
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;32 and that when a person unjustly
retains a benefit to the loss of another, or when a person retains money or
property of another against the fundamental principles of justice, equity and
good conscience, a case of solutio indebiti arises.33

Respondent’s
Arguments

Respondent, on the other hand, maintains that jurisdiction over

petitioners’ case lies with the Labor Arbiter, as their cause of action
remains necessarily connected to and arose from their employer-employee
relationship. At any rate, respondent insists that petitioners, as employers, have
the legal duty to enroll her with the SSS as their employee and to pay or remit
the necessary contributions.

Our Ruling

The Court denies the Petition.

This Court holds that as between the parties, Article 217(a)(4) of the
Labor Code is applicable. Said provision bestows upon the Labor Arbiter
original and exclusive jurisdiction over claims for damages arising from
employer-employee relations. The observation that the matter of SSS
contributions necessarily flowed from the employer-employee relationship
between the parties – shared by the lower courts and the CA – is correct;
thus, petitioners’ claims should have been referred to the labor tribunals. In this
connection, it is noteworthy to state that “the Labor Arbiter has jurisdiction to
award not only the reliefs provided by labor laws, but also damages governed
by the Civil Code.”34

At the same time, it cannot be assumed that since the dispute concerns
the payment of SSS premiums, petitioners’ claim should be referred to the
Social Security Commission (SSC) pursuant to Republic Act No. 1161, as
amended by Republic Act No. 8282.35 As far as SSS is concerned, there is no
longer a dispute
31 Flores v. Court of Appeals, G.R. No. 160694, Resolution of January 21, 2004; Eviota v. Court of
Appeals, 455 Phil. 118 (2003).
32 San Miguel Corporation v. National Labor Relations Commission, 244 Phil. 741 (1988).
33 Car Cool Philippines, Inc. v. Ushio Realty and Development Corporation, 515 Phil. 376, 384 (2006).
34 Bañez v. Hon. Valdevilla, supra note 30 at 611.
35 “An Act Further Strengthening The Social Security System Thereby Amending For This
Purpose Republic Act No. 1161, As Amended, Otherwise Known As The Social Security Law”. It
provides that –
SEC. 5. Settlement of Disputes. - (a) Any dispute arising under this Act with respect to
coverage, benefits, contributions and penalties thereon or any other matter related thereto,
Decision 7 G.R. No. 178055
shall be cognizable by the Commission, and any case filed with respect thereto shall be
heard by the
Decision 8 G.R. No. 178055

with respect to petitioners’ accountability to the System; petitioners already

settled their pecuniary obligations to it. Since there is no longer any dispute
regarding coverage, benefits, contributions and penalties to speak of, the SSC
need not be unnecessarily dragged into the picture.36 Besides, it cannot be
made to act as a collecting agency for petitioners’ claims against the
respondent; the Social Security Law should not be so interpreted, lest the SSC
be swamped with cases of this sort.

At any rate, it appears that petitioners do not have a cause of action

against respondent. The Complaint in Civil Case No. 04-27802 reads in part:

STATEMENT OF FACTS AND CAUSES OF ACTION

4. On or about 15 January 2001, [petitioners] hired [respondent] as

a Marketing Assistant to promote the products of [petitioners].

5. Immediately, [respondent] represented that she had other gainful

work and that she was also self-employed for which reason, she
refused to divulge her [SSS] Number and refused to be deducted her
share in the [SSS] contributions. In her bio-data submitted to
[petitioners], she did not even indicate her SSS [N]umber. x x x
[These] representations were later found out to be untrue and
[respondent]knew that.

6. Misled by such misrepresentation, [petitioners’] employees no

longer deducted her corresponding SSS contributions up to the
time of her termination from employment on or about 18 February
2002.

7. On or about 30 May 2003, to the unpleasant surprise and

consternation of [petitioner] Mateo, he received a Subpoena x x x
pursuant to a criminal complaint against [petitioner] Dr. Antonio
Mateo for alleged un-remitted SSS Contributions including that
corresponding to the [respondent]. Upon subsequent clarification
with the Social Security System, only that portion corresponding to
the [respondent’s] supposed unremitted contribution remained as the
demandable amount. The total amount demanded was P18,149.95. x
xx

8. On or about 24 July 2003, [petitioner] Mateo had to explain to the

Social Security System the circumstances as to why no contributions
reflected for [respondent]. x x x

9. On or about 31 July 2003, [petitioners] had to pay the Social

Security System the amount of P18,149.95 including the share which
should have been deducted from [respondent] in the amount of
P12,291.62. x x x

10. With this development, some of [petitioners’] employees felt

troubled and started to doubt x x x whether or not their SSS
contributions were

Commission, or any of its members, or by hearing officers duly authorized by the

Commission and decided within the mandatory period of twenty (20) days after the
submission of the evidence. The filing, determination and settlement of disputes shall be
governed by the rules and regulations promulgated by the Commission.
Decision 9 G.R. No. 178055
36 See Social Security System v. Atlantic Gulf and Pacific Company of Manila, Inc., 576 Phil. 625, 632
(2008).
Decision 1 G.R. No. 178055
0

being remitted or paid by the [petitioners]. [Petitioner] Mateo had

to explain to them why there was an alleged deficiency in SSS
contributions and had to assure them that their contributions were
properly remitted.

11. As a result of these events, [petitioner] Mateo, for days, felt deep
worry and fear leading to sleepless nights that the Social Security
System might prosecute him for a possible criminal offense.

12. [Petitioner] Mateo also felt extreme embarrassment and

besmirched reputation as he, being a recognized inventor, a dean
of a reputable university and a dedicated teacher, was made the butt
of ridicule and viewed as a shrewd businessman capitalizing on
even the SSS contributions of his employees. x x x

13. On or about 15 January 2004, in order to [recover] what is due

[petitioners], they sent a demand letter to [respondent] for her to pay
the amount of P27,791.65 as her share in the SSS contributions and
other expenses for processing. x x x

14. This demand, however, fell on deaf ears as [respondent] did not pay
and has not paid to date the amount of her share in the SSS
contributions and other amounts demanded.

15. For such malicious acts and the suffering befalling [petitioner]
Mateo, [respondent] is liable for moral damages in the amount
of FIFTY THOUSAND PESOS (P50,000.00).

16. For having made gross misrepresentation, she is liable for

exemplary damages in the amount of FIFTY THOUSAND PESOS
(P50,000.00) to serve as a warning for the public not to follow her
evil example.

17. As [petitioners] were compelled to file the instant suit to protect

and vindicate [their] right and reputation, [respondent] should also be
held liable for attorney’s fees in the amount of FIFTY THOUSAND
PESOS (P50,000.00) in addition to the costs of this suit.

PRAYER

[Petitioners] respectfully [pray] that a judgment, in [their] favor

and against [respondent], be rendered by this Honorable Court, ordering
[respondent]:

1. To pay the amount due of TWENTY SEVEN THOUSAND

SEVEN HUNDRED NINETY ONE AND 65/100 (P27,791.65)
representing her share in the SSS contributions and processing costs,
with interest, at legal rate, from the time of the filing of this
Complaint;

2. To pay FIFTY THOUSAND PESOS (P50,000.00) for moral damages;

3. To pay FIFTY THOUSAND PESOS (P50,000.00) for

exemplary damages;

4. To pay FIFTY THOUSAND PESOS (P50,000.00) as attorney’s fees;

Decision 9 G.R. No. 178055

5. To pay the costs of this suit.

[Petitioners] further [pray] for such other relief as are just and equitable
under the circumstances.37

In fine, petitioners alleged that respondent misrepresented that she

was simultaneously employed by another company; consequently, they did not
enroll her with the SSS or pay her SSS contributions. Likewise, when
petitioners eventually paid respondent’s SSS contributions as a result of the
filing of a complaint by the SSS, respondent was unjustly enriched because the
amount was not deducted from her wages in Amecos.

The evidence, however, indicates that while respondent was

employed, Amecos did not remit premium contributions – both employer and
employees’ shares – to the SSS; the SSS demand letter38 sent to it covers non-
payment of SSS premium contributions from January 2001 up to April 2002,
amounting to P85,687.84.39 The Amecos payroll40 covering the period from
January 30 to November 29, 2001 likewise shows that no deductions for SSS
contributions were being made from respondent’s salaries. This can only mean
that during the period, Amecos was not remitting SSS contributions – whether
the employer or employees’ shares – pertaining to respondent. As such, during
her employment with Amecos, respondent was never covered under the
System as SSS did not know in the first instance that petitioners employed her,
since the petitioners were not remitting her contributions. Petitioners were
forced to remit monthly SSS contributions only when SSS filed I.S. No.
03-6068 with the Quezon City Prosecutor’s Office. By that time, however,
respondent was no longer with Amecos, as her employment was terminated
sometime in mid-February of 2002.

Given the above facts, it is thus clear that petitioners have no cause
of action against the respondent in Civil Case No. 04-27802. Since Amecos did
not remit respondent’s full SSS contributions, the latter was never covered by
and protected under the System. If she was never covered by the System,
certainly there is no sense in making her answerable for the required
contributions during the period of her employment. And it follows as a matter
of consequence that claims for other damages founded on the foregoing non-
existent cause of action should likewise fail.

WHEREFORE, premises considered, the Petition is DENIED. The

assailed March 22, 2007 and the May 23, 2007 Resolutions of the Court
of Appeals in CA-G.R. SP No. 96959 are AFFIRMED.
37 Records, pp. 2-6.
38 Id. at 15.
39 Id. at 12-13; undated Affidavit of SSS Accounts Officer Marilou D. Bautista and SSS Consolidated
Statement of Contributions and Penalties as of May 31, 2002 annexed to petitioners’ Complaint in Civil
Case No. 04-
27802.
40
Id. at 95-103.
Decision 10 G.R. No. 178055

SO ORDERED.

$
MARIANO C. DEL CASTILLO
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

{flruu/J
ARTURO D. BRION
Associate Justice

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court's Division.

ANTONIO T. CA
Associate Justice
Chairperson
Decision 11 G.R. No. 178055

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairperson's Attestation, I certify that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court's Division.

MARIA LOURDES P. A. SERENO

Chief Justice