G.R. No. 83319 , July 24, 1990
EDWINA LEMA BEECH and LEONARDO MANECLANG, petitioners, vs. HON. JOSE C. DE GUZMAN, Presiding Judge, RTC, Quezon City, Branch 93, and LETICIA BADAR, respondents.

FACTS

Petitioners, operating as Veam Enterprises, are engaged in training local talents for overseas employment. In September 1986, private respondent Leticia Badar entered into an agreement with petitioner Edwina Lema Beech, as general manager, whereby Badar, designated as production manager, would receive a commission of fifty dollars per talent and a processing fee of four hundred pesos per talent referred to her principal. Badar successfully referred 79 confirmed talents, entitling her to a commission of P79,000 and a processing fee of P100,000 for 25 talents. Petitioners only paid P20,000 in commission and P5,600 in processing fees, leaving a substantial unpaid balance.
After Badar’s demand letter went unheeded, she filed a complaint for sum of money in the Regional Trial Court (RTC) of Quezon City. The trial court ruled in her favor, ordering petitioners to pay the unpaid balances, attorney’s fees, and costs. Petitioners then filed the instant petition, contending that the RTC lacked jurisdiction.

ISSUE

Whether the Regional Trial Court had jurisdiction over the complaint for sum of money, or whether it falls under the exclusive original jurisdiction of labor arbiters due to an alleged employer-employee relationship.

RULING

The Supreme Court upheld the RTC’s jurisdiction, dismissing the petition for lack of merit. The legal logic is twofold. First, the Court found that no employer-employee relationship existed between the parties. The principal test for such a relationship is the employer’s right to control the means and methods by which the work is accomplished. Here, Badar was an independent contractor, not a regular, salaried employee. She worked on a per-talent commission basis, set her own schedule, and determined her own working conditions. The absence of control over her performance negates an employment relationship, placing the dispute outside the realm of labor laws.
Second, the Court applied the principle of estoppel against petitioners. In their Answer to the original complaint, petitioners explicitly asserted that “employee-employer relationship never existed” and described Badar as a “free lance talent scout.” Having judicially admitted the absence of an employment relationship to define their contractual arrangement, petitioners are estopped from subsequently invoking its existence as a jurisdictional defense. Consequently, the action correctly originated from a civil contract for services between independent parties, squarely within the regular court’s jurisdiction. The trial court’s decision was affirmed.