Ocheda vs. Court of Appeals

A claim for damages arising from a quasi-delict that results in an employee's death falls within the jurisdiction of the regular courts, not Labor Arbiters, because it bears no reasonable causal connection with the employer-employee relationship; furthermore, a party who voluntarily submits to a court's jurisdiction by seeking affirmative relief is estopped from later challenging that jurisdiction.

Doroteo Ocheda was a subcontractor engaged for the painting of M.J. Building in Makati, then under construction by the principal contractor C.E. Construction Corporation, Inc. (CECCI) for the building owner M.J. Development Corporation. Fujitec Philippines Industrial Company, Inc. (FUJITEC) had been separately contracted to install two scenic elevator units in the same building. Eduardo Santos was employed as a painter by Ocheda. The statutory framework central to the dispute is Article 217 of the Labor Code, as amended by P.D. No. 1691, B.P. Blg. 227, and R.A. No. 6715, which defines the original and exclusive jurisdiction of Labor Arbiters over money claims arising from employer-employee relations, and Articles 2176 and 2180 of the Civil Code on quasi-delict and vicarious liability.

Doroteo Ocheda was a subcontractor for the painting job on M.J. Building, then under construction along Salcedo Street, Makati, Metro Manila. The principal contractor was C.E. Construction Corporation, Inc. (CECCI), which had contracted with the building owner, M.J. Development Corporation. A third corporation, Fujitec Philippines Industrial Company, Inc. (FUJITEC), had been separately engaged by M.J. Development Corporation to install two standard scenic elevator units in the building. Eduardo Santos was employed as a painter by Ocheda, having been hired, according to Ocheda, only a week before the accident and purely on a casual basis for the particular painting job.

When the painting job was nearly complete, with only the wall of the shaft for the second elevator remaining to be painted, Ocheda trimmed his workforce to two employees — Hernani Gozun and Eduardo Santos — and tasked them with finishing the job. On 5 February 1981, they began work on the inner wall of the elevator shaft. To paint the wall, they had to stand on top of the elevator, which was then positioned at the second floor of the building. After completing their work, they called on the boy operating the elevator to bring it down to the first floor. Instead of lowering the elevator, the boy moved it upward to the sixth floor. The sudden upward jerk caused both painters to lose their balance. Hernani managed to cling to the cable, but Eduardo fell from the top of the elevator, was pinned between the shaft wall and the elevator as it continued upward, and then fell to the ground when the elevator stopped at the sixth floor. Hernani rushed to Eduardo's aid, lifted him, and with the help of another man brought him to the Makati Medical Center, where he later died. The elevator boy was never identified, though it was 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 for damages against Ocheda and CECCI before the then Court of First Instance (now Regional Trial Court) of Pampanga, docketed as Civil Case No. 6263. The complaint alleged that Eduardo had been employed by Ocheda since 1979 at a daily wage of ₱35.00 without any SSS, Medicare, or Workmen's Compensation coverage, and that the elevator boy was inexperienced. The heirs sought burial expenses, moral damages, attorney's fees, compensatory damages, and costs. Ocheda filed an answer with a counterclaim against the plaintiffs and a cross-claim against CECCI, asserting that Eduardo's death was caused by the negligence of the elevator boy, an employee of CECCI, and that the trial court lacked jurisdiction over claims involving SSS, Medicare, Workmen's Compensation, and insurance benefits. CECCI, in turn, filed a third-party complaint against FUJITEC, alleging that FUJITEC was the employer of the elevator boy; FUJITEC denied the allegations and asserted that operation of the elevator had been turned over to the building owner long before the accident.

The trial court found both Ocheda and CECCI liable. It determined that Ocheda had ordered Santos and Gozun to use the top of the elevator as a platform while painting the shaft wall and had failed to exercise the diligence of a good father of a family in supervising his employees. It also found that CECCI was in full control and management of the elevator at the time of the incident, as general contractor of the building, and was thus equally liable under Article 2180 in conjunction with Article 2176 of the Civil Code. The Court of Appeals affirmed these findings but reduced the damages based on a finding of contributory negligence on the part of Santos, who had failed to heed an order to tie a rope around his waist while working.

• Jurisdiction of the Trial Court: Petitioner argued that the Regional Trial Court lacked jurisdiction over the complaint because the monetary award was sought in connection with the employer-employee relationship between him and the late Eduardo Santos, and that under Article 217 of the Labor Code, as amended, only Labor Arbiters had original and exclusive jurisdiction over all money claims of workers and all other claims arising from employer-employee relations, including moral and exemplary damages pursuant to P.D. No. 1691.
• Inapplicability of Floresca vs. Philex Mining Corp.: Petitioner contended that Floresca vs. Philex Mining Corp., relied upon by the Court of Appeals, was not applicable because the cause of action in that case accrued on 28 June 1967, before the enactment of the Labor Code and P.D. No. 1691, and that the decision therein constituted "judicial legislation."
• Lack of Negligence: Petitioner maintained that the proximate cause of Eduardo's death was the negligence and carelessness of the elevator boy, an employee of CECCI, and that he had nothing to do with the operation, control, or management of the elevator; his participation was limited solely to painting specific portions of the building.
• Improper Application of Article 2180: Petitioner argued that the trial court erred in applying Article 2180 of the Civil Code to him.
• Improper Joint and Several Liability: Petitioner asserted that he should not have been held jointly and severally liable with CECCI, since the death was attributable solely to the negligence of CECCI's employee.

• Jurisdiction: Whether the Regional Trial Court had jurisdiction over the action for damages arising from a quasi-delict that resulted in the death of an employee, or whether such jurisdiction was exclusively vested in Labor Arbiters under Article 217 of the Labor Code.
• Estoppel to Raise Jurisdiction: Whether the petitioner was estopped from raising the issue of the trial court's jurisdiction after having voluntarily submitted to its jurisdiction and sought affirmative relief.
• Factual Findings on Negligence, Article 2180, and Joint Liability: Whether the factual findings of the Court of Appeals affirming the trial court's determination of the petitioner's negligence, the application of Article 2180, and the joint and several liability with CECCI should be disturbed.

• Jurisdiction: Yes, the Regional Trial Court had jurisdiction. A claim for damages arising from a quasi-delict has no reasonable causal connection with the employer-employee relationship and therefore falls outside the jurisdiction of Labor Arbiters under Article 217 of the Labor Code, as construed in San Miguel Corporation vs. NLRC.
• Estoppel to Raise Jurisdiction: Yes, the petitioner was estopped. Having filed a counterclaim and cross-claim, actively participated in the proceedings, and presented evidence on the merits, he could not later question the trial court's jurisdiction to escape an adverse decision.
• Factual Findings on Negligence, Article 2180, and Joint Liability: No, the factual findings should not be disturbed. The findings of fact of the Court of Appeals are binding upon the Supreme Court, and the petitioner failed to show that the case fell under any of the recognized exceptions to that rule.

• Jurisdiction: The source of the obligation upon which the private respondents' cause of action was based is a quasi-delict or tort, which has no reasonable connection with any of the claims provided for in Article 217 of the Labor Code. Applying the rule of noscitur a sociis as articulated in San Miguel Corporation vs. NLRC, the "money claims of workers" referred to in Article 217 embrace only those claims which arise out of or in connection with the employer-employee relationship, or some aspect or incident of such relationship. The claim here would have been entirely different had it arisen from, for instance, the illegal dismissal of Eduardo, in which case the Labor Arbiter would have had exclusive jurisdiction. The Court of Appeals correctly relied on Floresca vs. Philex Mining Corp., which held that recovery under the Civil Code for damages arising from negligence is not barred by Article 217 of the Labor Code and that an ordinary court has jurisdiction over complaints for damages filed by heirs of employees against the employer for death allegedly caused by negligence. Petitioner's attempt to distinguish Floresca on the ground that the cause of action therein accrued before the Labor Code was enacted was rejected as a strained and tenuous analysis, particularly given that petitioner himself had avoided grounding his jurisdictional objection on the Workmen's Compensation Law — likely because he had failed to register Eduardo with the Social Security System, exposing himself to civil and criminal sanctions.

• Estoppel to Raise Jurisdiction: While jurisdiction over the subject matter may be raised at any stage of the proceedings because it is conferred by law, a party may be barred from raising it on the ground of estoppel. The petitioner's affirmative defense of lack of jurisdiction in his answer specifically referred only to the allegation in paragraph 8 of the complaint concerning SSS, Medicare, Workmen's Compensation, and insurance benefits — not to the claim for damages arising from the quasi-delict. He even considered that allegation non-essential to the complaint's cause of action. During pre-trial, he failed to raise the jurisdiction issue and instead focused on his theory that the proximate cause of death was the elevator boy's negligence. He then openly submitted to the trial court's jurisdiction by setting up a counterclaim seeking attorney's fees and expenses of litigation, filing a cross-claim against CECCI, and presenting evidence on the merits. After voluntarily submitting a cause and encountering an adverse decision, it would be improper and too late for the petitioner to question the court's jurisdiction. A party who has invoked a court's jurisdiction to secure affirmative relief cannot afterwards deny that very jurisdiction to escape penalty.

• Factual Findings on Negligence, Article 2180, and Joint Liability: The findings of fact of the Court of Appeals are binding upon the Supreme Court, subject only to recognized exceptions. The petitioner did not even attempt to show that the case fell under any of the accepted exceptions to this well-settled rule. Accordingly, the trial court's findings — that Ocheda ordered the employees to use the top of the elevator as a platform and failed to exercise the diligence of a good father of a family in supervising them, and that CECCI was in full control and management of the elevator as general contractor — were affirmed.

• Estoppel from Challenging Jurisdiction — A party who has voluntarily submitted to a court's jurisdiction by seeking affirmative relief — such as filing a counterclaim or cross-claim — and who has actively participated in the proceedings and presented evidence on the merits, is estopped from later questioning the court's jurisdiction after an adverse decision is rendered. The rationale is that 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. The Court applied this doctrine to bar the petitioner from raising the jurisdictional objection for the first time on appeal, noting that his original affirmative defense of lack of jurisdiction referred only to SSS, Medicare, Workmen's Compensation, and insurance claims, not to the quasi-delict damages.

• Jurisdiction over Quasi-Delict Claims vs. Labor Arbiter Jurisdiction — Money claims of workers that fall within the original and exclusive jurisdiction of Labor Arbiters under Article 217 of the Labor Code are only those which have some reasonable causal connection with the employer-employee relationship. Claims for damages arising from a quasi-delict or tort — as distinguished from claims arising from, for example, illegal dismissal — bear no such reasonable causal connection and therefore fall within the general jurisdiction of the regular courts. The Court applied this principle by holding that the heirs' cause of action, founded on a quasi-delict under Articles 2176 and 2180 of the Civil Code, was properly cognizable by the Regional Trial Court.

• Binding Nature of Court of Appeals Factual Findings — The factual findings of the Court of Appeals are binding upon the Supreme Court, subject only to recognized exceptions. The petitioner failed to demonstrate that the case fell under any of the accepted exceptions, and the Court accordingly declined to disturb the concurrent factual findings of the trial court and the Court of Appeals on negligence, the application of Article 2180, and joint and several liability.

• "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." — This passage articulates the core rationale for the estoppel doctrine as applied to jurisdictional challenges, explaining why a party who actively litigates and seeks affirmative relief cannot later repudiate the court's authority.

• "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." — This formulation, quoted from San Miguel Corporation vs. NLRC, defines the scope of Labor Arbiter jurisdiction under Article 217 and is the controlling test for distinguishing quasi-delict claims from labor claims.

• "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." — This sentence applies the San Miguel test to the facts and constitutes the ratio decidendi on the jurisdictional issue.

• Floresca vs. Philex Mining Corporation, 136 SCRA 141 (1985) — Followed. The Court relied on this case for the proposition that recovery under the Civil Code for damages arising from negligence is not barred by Article 217 of the Labor Code, and that an ordinary court has jurisdiction over complaints for damages filed by heirs of employees against the employer for death allegedly caused by negligence. Petitioner's attempt to distinguish it on temporal grounds was rejected.

• San Miguel Corporation vs. National Labor Relations Commission, 161 SCRA 719 (1988) — Followed as controlling authority. The Court quoted extensively from this case to establish that "money claims of workers" under Article 217 of the Labor Code embrace only those claims with a reasonable causal connection to the employer-employee relationship, applying the rule of noscitur a sociis.

• Getz Corp. vs. Court of Appeals, 116 SCRA 86 (1982) — Cited for the proposition that pursuant to P.D. No. 1691, moral and exemplary damages are included within the jurisdiction of Labor Arbiters — a point raised by the petitioner but ultimately rendered inapplicable because the claim here was quasi-delictual, not labor-related.

• Tijam vs. Sibonghanoy, 23 SCRA 29 (1968) — Cited as the foundational case for the doctrine that a party may be barred by estoppel from raising the issue of jurisdiction after voluntarily submitting to the court and seeking affirmative relief.

• Article 217, Labor Code of the Philippines (P.D. No. 442), as amended by P.D. No. 1691, B.P. Blg. 227, and R.A. No. 6715 — Defines the original and exclusive jurisdiction of Labor Arbiters over cases involving all workers, including unfair labor practice, termination disputes, money claims arising from employer-employee relations, and claims for damages arising from employer-employee relations. The Court construed the provision as requiring a reasonable causal connection between the money claim and the employer-employee relationship, thereby excluding quasi-delict claims from the Labor Arbiter's jurisdiction.

• Article 2176, Civil Code of the Philippines — Establishes liability for quasi-delicts: whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. The trial court found CECCI liable under this article in conjunction with Article 2180, as the elevator that caused Santos's death was under CECCI's management and control.

• Article 2180, Civil Code of the Philippines — Imposes vicarious liability on employers for damages caused by their employees acting within the scope of their assigned tasks, subject to the defense of exercise of the diligence of a good father of a family. The trial court applied this provision to both Ocheda (as employer of Santos) and CECCI (as the entity in control of the elevator), and the Court of Appeals affirmed.

• Section 4, Rule II, Amended Rules on Employees Compensation (in relation to Chapter II, Title II, Book IV of the Labor Code) — Prescribes penalties for failure to register employees, including fines and imprisonment, and employer liability for lump-sum benefits. The Court noted that petitioner likely avoided grounding his jurisdictional objection on the Workmen's Compensation Law because he had failed to register Eduardo with the SSS, exposing himself to sanctions under this provision.

Gutierrez, Jr., Bidin, Romero, and Melo, JJ., concurred.