Thursday, February 23, 2012

R.F. Sugay & Co., Inc., vs. Reyes

Facts: Pablo C. Reyes and Cesar Curata were employees of R.F. Sugay and Co., Inc. who were assigned to a painting job on the building of Pacific Products, Inc. In January 13, 1961, Reyes and Curata suffered burn injuries from a fire in the vicinity of Pacific Products resulting from temporary disability from work. Because of this, Reyes and Curata filed a claim for disability and medical expenses against R.F. Sugay and Co., Inc., Romulo Sugay and Pacific Products. 

R.F. Sugay & Co. claimed that it is not the employer of Reyes and Curata, but it is the Pacific Products. 

The Hearing Officer of the Workmen’s Compensation Commission dismissed the case against Sugay and R.F. Sugay & Co. and found Pacific Product to be liable. 

Pacific Products appealed to the Commission which reversed the order of the hearing officer and found that R.F. Sugay & Co., Inc. is the statutory employer of Reyes and Curata. 

The Commission en banc, on September 19, 1962, denied the motion for reconsideration of R. F. Sugay & Co.. Thus, this Petition. 

In forwarding the argument that Pacific Products is the employer and not R.F. Sugay & Co, the latter alleged that Romulo Sugay, its President, was the one who entered into a contract of administration and supervision for the painting of the factory of the Pacific Products, Inc., and making it appear that said Romulo F. Sugay acted as an agent of the Pacific Products, Inc., and as such, the latter should be made answerable to the compensation due to the claimants. 

Issue: Should the Doctrine of Piercing the Veil of Corporate Fiction be employed to connect the relationship of Romulo Sugay to R.F. Sugay and Co., Inc.? 

Held: The Court agreed with the Commission that "the dual roles of Romulo F. Sugay should not be allowed to confuse the facts relating to employer-employee relationship." It is a legal truism that when the veil of corporate fiction is made as a shield to perpetrate a fraud and/or confuse legitimate issues (here, the relation of employer-employee), the same should be pierced. Verily the R. F. Sugay & Co., Inc. is a business conduit of R. F. Sugay.

Digg Google Bookmarks reddit Mixx StumbleUpon Technorati Yahoo! Buzz DesignFloat Delicious BlinkList Furl

0 comments: on "R.F. Sugay & Co., Inc., vs. Reyes"

Post a Comment