G.R. No. L-21582 November 29, 1966
TALISAY-SILAY MILLING CO., INC., and J. AMADO ARANETA, petitioners, vs. THE COURT OF INDUSTRIAL RELATIONS and CENTRAL AZUCARERA DEL DANAO, respondents.

FACTS

Prior to March 3, 1960, petitioner Talisay-Silay Milling Co., Inc. (with J. Amado Araneta as president) owned 93% of the stock of respondent Central Azucarera del Danao. On that date, Talisay-Silay transferred its shares to the Philippine National Bank (PNB) as part of a settlement agreement involving cases between the Central and PNB. The agreement stipulated that all pre-agreement obligations of the Central, if approved and acknowledged by PNB, would be its responsibility, except its accounts with PNB and DBP. Crucially, paragraph 10 provided that any obligations purporting to be of the Central but not appearing in its books or acknowledged per paragraph 9 “shall be borne and paid for by Talisay-Silay Central and/or Mr. J. Amado Araneta.”
Subsequently, the Negros Occidental Federation of Labor filed an unfair labor practice complaint in the Court of Industrial Relations (CIR) against the Central, alleging the dismissal of employees in September 1953 for refusing to join a rival union and seeking their reinstatement. The Central then filed a third-party complaint against petitioners Talisay-Silay and Araneta, alleging the unfair labor practices were committed when petitioners controlled the Central and, under the agreement’s paragraph 10, any resulting backpay claims were petitioners’ sole responsibility. Petitioners moved to dismiss the third-party complaint for lack of jurisdiction, citing the absence of an employer-employee relationship between them and the Central. The CIR assumed jurisdiction and denied the motion for reconsideration, prompting this certiorari petition.

ISSUE

Whether the Court of Industrial Relations has jurisdiction to take cognizance of a third-party complaint filed against parties with whom the main respondent has no employer-employee relationship.

RULING

Yes. The petition is denied. The Supreme Court held that where the CIR has already acquired jurisdiction over the main unfair labor practice case, it can take cognizance of a third-party complaint as a continuation of the main action, even absent a direct employer-employee relationship between the third-party plaintiff and the third-party defendants. The requisites for CIR jurisdiction (employer-employee relationship and a controversy relating to certified cases, unfair labor practice, or labor laws) must concur for the main case, but not independently for a third-party complaint. A third-party complaint seeks contribution, indemnity, or similar relief and is ancillary to the main action. Its purpose is to avoid multiplicity of suits, save time and cost, ensure consistent results, and prevent a time lag between judgments. Jurisdiction over the ancillary proceeding is dependent on and referable to the court’s jurisdiction over the principal suit. The injunction issued was dissolved.