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Georg Gratjahn Gmbh and Co. v. Isnani et al.

GR 109272, August 10, 1994

Petitioner is a multinational company licensed to operate in PHL. Private respondent Romana
Lanchinebre was a sales representative of petitioner from 1983 to mid-1992. On 3/12/ 1992 she secured
a loan of PHP 25K from petitioner. On 3/26/1992 and 6/10/1992 Lanchinebre made additional cash
advances totaling PHP10K. Of the total amount, PHP 12,170.73 remained unpaid. Despite demand,
private respondent Lanchinebre failed to pay.

On 7/22/1992 Lanchinebre filed with the RAB of NLRC Manila a complaint for illegal suspension,
dismissal and non-payment of commissions against petitioner. On 8/18/1992 petitioner filed against
private respondent a complaint for damages amounting to PHP 120K also with the AB NLRC Manila. The
two cases were consolidated.

On 9/2/1992 petitioner filed a complaint for collection of sum of money against private respondents
Romana and Teofilo Lanchinebre and raffled to the sala of respondent Judge Isnani. Instead of filing an
answer, private respondents moved to dismiss the complaint.

On 12/21/1992, a motion to dismiss was granted. Motion for Reconsideration by petitioner was denied.


1. Are the loan and cash advances of Romana secured while still employed by petitioner covered
by Art. 217 of Labor Code?

2. Does petitioner have the capacity to sue?

3. Is misjoinder of party ground for dismissing a case?


1. No, in a long line of cases, the High Court averred that not every dispute between an
employer-employee is cognizable by the Labor Arbiter and the NLRC. In Molave Motor Sales, Inc. v.
Laron (129 SCRA 485) the court stated that "although a controversy is between an employer and
employee, the Labor Arbiters have no jurisdiction if the Labor Code is not involved."

In Medina v. Castro-Bartolome (116 SCRA 597) the court ruled that "the pivotal question is whether or
not the Labor Code has any relevance to the reliefs sought by plaintiffs. For if the LC has no relevance,
any discussion concerning the statutes amending it and whether or not they have retroactive effect is

In San Miguel Corp. v. NLRC (161 SCRA 719) the court crystallized the doctrines set in Medina and
Molave Motors to wit:

"The important principle that runs through these 3 cases is that where the claim
to the principal relief sought is to be resolved not by reference to the LC or other
labor relations statute or a collective bargaining agreement but by the general
civil law, the jurisdiction over the dispute belongs to the regular courts and not
to the Labor Arbiter and the NLRC."

Civil Case No. 92-2486 is a simple collection of a sum of money brought by petitioner, as creditor, against
private respondent, Romana Lanchinebre as debtor. The fact thaty they were employer and employee at
the time of the transaction does not negate the civil jurisdiction of the trial court. The case does not
involve adjudication of a labor dispute but recovery of a sum of money based on our civil laws on
obligation and contracts.

2. Yes, petitioner has the capacity to sue and being a foreign corp. is covered by the Omnibus
Investment Code of 1987, said law defines doing business as:

"include soliciting orders, purchases, service contracts, opening offices,

whether called 'liaison offices' or branches; appointing representatives or
distributors who are domiciled in the PHL or who in any calendar year stay in the
PHL for a period or periods totaling 180 days or more; participating in the mgt.,
super-vision or control of any domestic business firm, entity or corp. in the PHL,
and any other acct or acts that imply a continuity of commercial dealings or
arrangements and contemplate to that extent the performance of acts or works,
or the exercise of some of the functions normal and incident to and in
progressive prosecution of commercial gain or of the purpose and object of the
business organization."

In addition, private respondents are estopped to challenge the personality of a corporation after having
acknowledged the same by entering into a contract with it (Merrill Lynch Futures Inc. v CA)

3. No, misjoinder of a party is not a ground for dismissal of a case, it is a question of fact that
must be resolved with relevant evidence and not a motion to dismiss.

Petition granted. RTC orders are reversed and set aside and RTC Br. 59 Makati is ordered to reinstate
the case on its merits.

Petition granted. Respondent Judge ordered to reinstate the civil case and render judgment on the merits.