Sunace International Management Services v. Montehermozo
REITERATIONFacts
The Antecedents: Divina A. Montehermozo (Divina) was deployed to Taiwan by Sunace International Management Services, Inc. (Sunace) as a domestic helper under a 12-month contract. After the contract expired, Divina continued working for her Taiwanese employer for two more years. Upon her return to the Philippines, Divina filed a complaint against Sunace, alleging she was jailed and underpaid. Procedural History: The Labor Arbiter ruled in favor of Divina, holding Sunace liable for withheld income tax and savings, rejecting Sunace's claim that the contract extension was without its knowledge and consent, and invalidating Divina's waiver and quitclaim. The National Labor Relations Commission (NLRC) affirmed the Labor Arbiter's decision. The Court of Appeals dismissed Sunace's petition for certiorari, finding no grave abuse of discretion. The Petition: Sunace filed a petition for review on certiorari with the Supreme Court, arguing that the Court of Appeals erred in affirming the NLRC's finding that Sunace impliedly consented to the contract extension and that it was continuously communicating with the foreign employer.
Issue(s)
Whether Sunace International Management Services, Inc. impliedly consented to the two-year extension of Divina A. Montehermozo's employment contract. Whether Sunace International Management Services, Inc. can be held liable for claims arising from the extended employment contract. Whether the theory of imputed knowledge applies in favor of Sunace in this case. Whether the agency relationship between Sunace and its foreign principal was revoked.
Ruling
The petition is GRANTED. The challenged resolutions of the Court of Appeals are REVERSED and SET ASIDE. The complaint of respondent Divina A. Montehermozo against petitioner Sunace International Management Services, Inc. is DISMISSED.
Ratio Decidendi
On whether Sunace impliedly consented to the contract extension: The Supreme Court found that the telefax message from the Taiwanese broker, Edmund Wang, to Sunace, dated February 21, 2000, was the sole basis for the Court of Appeals' finding of continuous communication and implied consent. However, the Court held that this message did not provide evidence that Sunace was privy to the new contract executed after the expiration of the original contract on February 1, 1998. The communication regarding Divina's allegedly withheld savings did not necessarily mean Sunace ratified the extension of the contract. The message merely informed Sunace that Divina had taken back her savings and that no money was deducted from her salary, without mentioning the contract extension or Sunace's consent thereto. On Sunace's liability for claims arising from the extended contract: The Court ruled that since there was no substantial proof that Sunace knew of and consented to be bound under the two-year employment contract extension, it could not be considered privy thereto. Consequently, Sunace and its owner could not be held solidarily liable for any of Divina's claims arising from the extension. The Court cited Article 1311 of the New Civil Code, which states that contracts take effect only between the parties, their assigns, and heirs, unless the rights and obligations are transmissible by nature, stipulation, or law. On the applicability of the theory of imputed knowledge: The Supreme Court clarified that the theory of imputed knowledge ascribes the knowledge of the agent to the principal, not the other way around. Therefore, the knowledge of the principal-foreign employer could not be imputed to its agent, Sunace. The Court found the Court of Appeals' application of this theory to hold Sunace liable for the extension to be a misapplication. On the revocation of the agency relationship: The Court found that there was an implied revocation of the agency relationship between Sunace and its foreign principal. This occurred when, after the termination of the original employment contract, the foreign principal directly negotiated with Divina and entered into a new and separate employment contract in Taiwan. The Court invoked Article 1924 of the New Civil Code, which states that an agency is revoked if the principal directly manages the business entrusted to the agent, dealing directly with third persons.
Main Doctrine
An agent cannot profess ignorance of an extension of an employment contract if it was privy to the principal's continuous communication with the employee, and the agent's knowledge of the principal's acts is imputed to the agent, not the other way around. Furthermore, an agency relationship is deemed revoked if the principal directly manages the business entrusted to the agent, dealing directly with third persons.