GR L 9110; (April, 1957) (Digest)
G.R. No. L-9110 April 30, 1957
JOSEFA VDA. DE CRUZ, ET AL., plaintiffs-appellants, vs. THE MANILA HOTEL COMPANY, defendant-appellee.
FACTS
Tirso Cruz and his orchestra furnished music to the Manila Hotel for several years under a contract. On May 22, 1954, the Manila Hotel Company announced that due to its lease to the Bay View Hotel, employees to be laid off would receive a separation gratuity. Cruz and his musicians claimed this gratuity, but the Hotel denied their claim, asserting they were not employees. The plaintiffs filed an action in the Manila court of first instance. The defendant moved to dismiss, attaching the contract (Exhibit 1) and arguing the plaintiffs were not employees and were not members of the Government Service Insurance System (GSIS). The plaintiffs did not deny the contract’s terms or their non-membership in the GSIS but insisted they were employees. The trial court dismissed the complaint, ruling the plaintiffs had no cause of action as they were not employees. The plaintiffs appealed directly to the Supreme Court on questions of law. Tirso Cruz died during the proceedings and was substituted by his legal heirs.
ISSUE
Whether Tirso Cruz and the members of his orchestra were employees of the Manila Hotel Company, thereby entitling them to the separation gratuity offered in its announcement.
RULING
No. The Supreme Court affirmed the order of dismissal. The Court held that Tirso Cruz was not an employee but an independent contractor. The contract engaged the “services of your orchestra” at a fixed daily rate, with the orchestra leader having discretion over musical details, providing his own instruments and materials, selecting his musicians, and receiving a lump-sum payment. The Hotel lacked control over the means and methods of the work, reserving no power to hire, fire, or pay individual musicians. Furthermore, the gratuity announcement (Annex A) specifically referred to employees “not yet entitled to either the optional or compulsory retirement insurance provided under Republic Act No. 660,” which applies only to GSIS members. Since the plaintiffs were not GSIS members, they did not qualify as beneficiaries under the announcement’s terms. Thus, they had no cause of action.