determined.

THIRD DIVISION

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G.R. No. 179640, March 18, 2015

HACIENDA CATAYWA/MANUEL VILLANUEVA, owner,
JOEMARIE VILLANUEVA, manager, MANCY AND SONS
ENTERPRISES, INC., Petitioners, v. ROSARIO LOREZO,
Respondent.
DECISION
PERALTA, J.:

Aggrieved, respondent then filed her Amended Petition dated

September 30, 2003, before the SSC. She alleged that she was
employed as laborer in Hda. Cataywa managed by Jose Marie
Villanueva in 1970 but was reported to the SSS only in 1978. She
alleged that SSS contributions were deducted from her wages from
1970 to 1995, but not all were remitted to the SSS which,
subsequently, caused the rejection of her claim. She also impleaded
Talisay Farms, Inc. by virtue of its Investment Agreement with Mancy
and Sons Enterprises. She also prayed that the veil of corporate fiction
be pierced since she alleged that Mancy and Sons Enterprises and
Manuel and Jose Marie Villanueva are one and the same.4
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Before this Court is a petition for review on certiorari dated

September 28, 2007 of petitioner Hacienda Cataywa, Manuel
Villanueva, et al., (petitioners) seeking to reverse and set aside the
Resolutions, dated October 17, 20061 and August 10, 2007,2
respectively, of the Court of Appeals (CA) and the Resolution and
Order, dated October 12, 2005 and March 8, 2006, respectively, of the
Social Security Commission, ordering petitioners to pay jointly and
severally all delinquent contributions, 3% penalty per month of
delayed payment and damages to respondent Rosario Lorezo.

Petitioners Manuel and Jose Villanueva refuted in their answer, the

allegation that not all contributions of respondent were remitted.
Petitioners alleged that all farm workers of Hda. Cataywa were
reported a^id their contributions were duly paid and remitted to SSS. It
was the late Domingo Lizares, Jr. who managed and administered the
hacienda.5 While, Talisay Farms, Inc. filed a motion to dismiss on the
ground of lack of cause of action in the absence of an allegation that
there was an employer-employee relationship between Talisay Farms
and respondent.6
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The antecedent facts follow:

On October 22, 2002, respondent Rosario Lorezo received, upon
inquiry, a letter from the Social Security System (SSS) Western Visayas
Group informing her that she cannot avail of their retirement benefits
since per their record she has only paid 16 months. Such is 104
months short of the minimum requirement of 120 months payment to
be entitle to the benefit. She was also informed that their investigation
of her alleged employment under employer Hda. Cataywa could not be
confirmed because Manuel Villanueva was permanently residing in
Manila and Joemarie Villanueva denied having managed the farm. She
was also advised of her options: continue paying contributions as
voluntary member; request for refund; leave her contributions in-trust
with the System, or file a petition before the Social Security
Commission (SSC) so that liabilities, if any, of her employer may be

Consequently, the SSC rendered its Resolution dated October 12,

2005, thus:
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WHEREFORE, PREMISES CONSIDERED, this Commission finds,

and so holds, that Rosario M. Lorezo was a regular employee subject
to compulsory coverage of Hda. Cataywa/Manuel Villanueva/ Mancy
and Sons Enterprises, Inc. within the period of 1970 to February 25,
1990. In view thereof, the aforenamed respondents are hereby ordered
to pay jointly and severally, within thirty (30) days from receipt
hereof, all delinquent contributions within the proven employment
period computed in accordance with the then prevailing minimum
wage (at 11 months per year) in the amount of P8,293.90, the 3% per
month penalty on the delayed payment of contributions in the amount
of P59,786.10 (computed as of September 9, 2005), pursuant to

Section 22 of the SS Law and the damages in the amount of

P32,356.21 for misrepresentation of the real date of employment,
pursuant to Section 24 (b) of the said statute.
The SSS, on the other hand, is ordered to pay (subject to existing rules
and regulations) petitioner Rosario M. Lorezo her retirement benefit,
upon the filing of the claim therefor, and to inform this Commission of
its compliance herewith.
SO ORDERED.7

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The SSC denied petitioners' Motion for Reconsideration. The

petitioner, then, elevated the case before the CA where the case was
dismissed outrightly due to technicalities, thus:
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The Court Resolved to DISMISS the instant petition on the basis of the
following observations:
1. Signatory to the Verification failed to attach his authority to
sign for and [in] behalf of the other Petitioners.
(Violation of Section 5, Rule 43 of the Rules of Court, in
relation to Section 7, Rule 45 of the Rules of Court)
2. Certified true copies of pleadings and documents relevant and
pertinent to the petition are incomplete, to wit:
-Petitioner failed to attach the following:
- Petition/Amended Petition filed before the SSS of Makati
City
- Respondents' Answer filed before the SSS of Makati City
- Parties' respective position paper filed before the SSS of
Makati City
- Parties' respective memorandum of appeal filed before the
Commission
(Violation of Section 6, Rule 43 of the Rules of Court, in relation to
Section 7, Rule 43 of the Rules of Court)8
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Following the denial of petitioners' Motion for Reconsideration of the

CA, petitioner filed with this Court the present petition stating the
following grounds:
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1) THE HONORABLE COURT OF APPEALS COMMITTED

REVERSIBLE ERROR IN STRICTLY AND RIGIDLY APPLYING
THE TECHNICAL RULES OF PROCEDURE AND DISMISSING
THE CASE ON TECHNICALITY WITHOUT EVALUATING THE
MERITS OF THE CASE;
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2) THE [SSC] COMMITTED REVERSIBLE ERROR IN MAKING

CONCLUSIONS FOUNDED ON SPECULATIONS AND
SURMISES NOT CONFORMING TO EVIDENCE ON RECORD,
MAKING MANIFESTLY MISTAKEN INFERENCES, AND
RENDERING JUDGMENT BASED ON MISAPPREHENSION OF
FACTS AND MISAPPLICATION OF THE LAW, RULING AND
RENDERING JUDGMENT THAT:
a) RESPONDENT WORKED FROM 1970 TO FEBRUARY 25,1990
b) PETITIONERS ARE LIABLE FOR DELINQUENT
CONTRIBUTIONS
c) PETITIONERS ARE LIABLE FOR 3% PER MONTH PENALTY
d) PETITIONERS ARE LIABLE FOR DAMAGES DUE TO
MISREPRESENTATION
e) MANCY & SONS ENTERPRISES, INC. AND MANUEL
VILLANUEVA ARE ONE AND THE SAME.9
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The petition is partially meritorious.

Petitioners argues that the CA has been too rigid in the application of
the rules of procedure in dismissing the appeal without evaluation of
the merits.
This Court has emphasized that procedural rules should be treated with
utmost respect and due regard, since they are designed to facilitate the
adjudication of cases to remedy the worsening problem of delay in the
resolution of rival claims and in the administration of justice.
However, this Court has recognized exceptions to the Rules, but only
for the most compelling reasons where stubborn obedience to the
Rules would defeat rather than serve the ends of justice.10
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As in the case of Obut v. Court of Appeals,11 this Court held that

"judicial orders are issued to be obeyed, nonetheless a non-compliance
is to be dealt with as the circumstances attending the case may
warrant. What should guide judicial action is the principle that a partylitigant is to be given the fullest opportunity to establish the merits of
his complaint of defense rather than for him to lose life, liberty, honor
or property on technicalities."12
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When the CA dismisses a petition outright and the petitioner files a

motion for the reconsideration of such dismissal, appending thereto the
requisite pleadings, documents or order/resolution, this would
constitute substantial compliance with the Revised Rules of Court.13
Thus, in the present case, there was substantial compliance when in
their Motion for Reconsideration, they attached a secretary certificate
giving Joemarie's authority to sign on behalf of the corporation.
Petitioners also included the necessary attachment.14
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At the outset, it is settled that this Court is not a trier of facts and will
not weigh evidence all over again.15 However, considering the issues
raised which can be resolved on the basis of the pleadings and
documents filed, and the fact that respondent herself has asked this
Court for early resolution, this Court deems it more practical and in the
greater interest of justice not to remand the case to the CA but, instead,
to resolve the controversy once and for all.
Petitioners are of the opinion that the SSC committed reversible error
in making conclusions founded on speculations and surmises that
respondent worked from 1970 to February 25, 1990. Petitioners argue
that the SSC did not give credence nor weight at all to the existing SSS
Form R-1A and farm bookkeeper Wilfredo Ibalobor. Petitioners insist
that after thirty long years, all the records of the farm were already
destroyed by termites and elements, thus, they relied on the SSS Form
R-1A as the only remaining source of information available.
Petitioners also alleged that respondent was a very casual worker.
This Court disagrees.
It was settled that there is no particular form of evidence required to
Drove the existence of the employer-employee relationship. Any

competent and relevant evidence to prove such relationship may be

admitted. This may entirely be testimonial.16 If only documentary
evidence would be required to demonstrate the relationship, no
scheming employer would be brought before the bar of justice.17
Petitioners erred in insisting that, due to passage of time, SSS Form R1A is the only remaining source of information available to prove
when respondent started working for them. However, such form
merely reflected the time in which the petitioners reported the
respondent for coverage of the SSS benefit. They failed to substantiate
their claim that it was only in 1978 that respondent reported for work.
The records are bereft of any showing that Demetria Denaga and
Susano Jugue harbored any ill will against the petitioners prompting
them to execute false affidavit. There lies no reason for this Court not
to afford full faith and credit to their testimonies. Denaga, in her Joint
Affidavit with Jugue, stated that she and respondent started working in
Hda. Cataywa in 1970 and like her, she was reported to the SSS on
December 19, 1978.18 It was also revealed in the records that the SSC
found that Denaga was employed by Manuel Villanueva at Hda.
Cataywa from 1970 to December 1987.19
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Jurisprudence has identified the three types of employees mentioned in

the provision20 of the Labor Code: (1) regular employees or those who
have been engaged to perform activities that are usually necessary or
desirable in the usual business or trade of the employer; (2) project
employees or those whose employment has been fixed for a specific
project or undertaking, the completion or termination of which has
been determined at the time of their engagement, or those whose work
or service is seasonal in nature and is performed for the duration of the
season; and (3) casual employees or those who are neither regular nor
project employees.21
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Farm workers generally fall under the definition of seasonal

employees.22 It was also consistently held that seasonal employees
may be considered as regular employees when they are called to work
from time to time.23 They are in regular employment because of the
nature of the job, and not because of the length of time they have
worked. However, seasonal workers who have worked for one season
only may not be considered regular employees.24
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The nature of the services performed and not the duration thereof, is
determinative of coverage under the law.25 To be exempted on the basis
of casual employment, the services must not merely be irregular,
temporary or intermittent, but the same must not also be in connection
with the business or occupation of the employer.26 Thus, it is erroneous
for the petitioners to conclude that the respondent was a very casual
worker simply because the SSS form revealed that she had 16 months
of contributions. It does not, in any way, prove that the respondent
performed a job which is not in connection with the business or
occupation of the employer to be considered as casual employee.
The test for regular employees to be considered as such has been
thoroughly explained in De Leon v. NLRC,27viz.:
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The primary standard, therefore, of determining a regular employment

is the reasonable connection between the particular activity performed
by the employee in relation to the usual business or trade of the
employer. The test is whether the former is usually necessary or
desirable in the usual business or trade of the employer. The
connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or
trade in its entirety. Also, if the employee has been performing the job
for at least one year, even if the performance is not continuous or
merely intermittent, the law deems the repeated and continuing need
for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the
employment is also considered regular, but only with respect to such
activity and while such activity exists.28
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A reading of the records would reveal that petitioners failed to dispute

the allegation that the respondent performed hacienda work, such as
planting sugarcane point, fertilizing, weeding, replanting dead
sugarcane fields and routine miscellaneous hacienda work.29 They
merely alleged that respondent was a very casual worker because she
only rendered work for 16 months.30 Thus, respondent is considered a
regular seasonal worker and not a casual worker as the petitioners
alleged.

Petitioners also assert that the sugarcane cultivation covers only a

period of six months, thus, disproving the allegation of the respondent
that she worked for 11 months a year for 25 years. This Court has
classified farm workers as regular seasonal employees who are called
to work from time to time and the nature of their relationship with the
employer is such that during the off season, they are temporarily laid
off; but reemployed during the summer season or when their services
may be needed.31 Respondent, therefore, as a farm worker is only a
seasonal employee. Since petitioners provided that the cultivation of
sugarcane is only for six] months, respondent cannot be considered as
regular employee during the months when there is no cultivation.
Based on the foregoing facts and evidence on record, petitioners are
liable for delinquent contributions. It being proven by sufficient
evidence that respondent started working for the hacienda in 1970, it
follows that petitioners are liable for deficiency in the SSS
contributions.
The imposition upon and payment by the delinquent employer of the
three percent (3%) penalty for the late remittance of premium
contributions is mandatory and cannot be waived by the System. The
law merely gives to the Commission the power to prescribe the
manner of paying the premiums. Thus, the power to remit or condone
the penalty for late remittance of premium contributions is not
embraced therein.32 Petitioners erred in alleging that the imposition of
penalty is not proper.
Petitioners also insist that the award of damages for misrepresentation
is without basis. This Court disagrees.
The law provides that should the employer misrepresent the true date
of the employment of the employee member, such employer shall pay
to the SSS damages equivalent to the difference between the amount of
benefit to which the employee member or his beneficiary is entitled
had the proper contributions been remitted to the SSS and the amount
payable on the basis of the contributions actually remitted. However,
should the employee member or his beneficiary is entitled to pension
benefits, the damages shall be equivalent to the accumulated pension
due as of the date of settlement of the claim or to the five years'

pension, whichever is higher, including the dependent's pension.33

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Lastly, petitioners aver that there is no legal basis to pierce the veil of
corporation entity.
It was held in Rivera v. United Laboratories, Inc.34 that While a corporation may exist for any lawful purpose, the law will
regard it as an association of persons or, in case of two corporations,
merge them into one, when its corporate legal entity is used as a cloak
for fraud or illegality. This is the doctrine of piercing the veil of
corporate fiction. The doctrine applies only when such corporate
fiction is used to defeat public convenience, justify wrong, protect
fraud, or defend crime, or when it is made as a shield to confuse the
legitimate issues, or where a corporation is the mere alter ego or
business conduit of a person, or where the corporation is so organized
and controlled and its affairs are so conducted as to make it merely an
instrumentality, agency, conduit or adjunct of another corporation. To
disregard the separate juridical personality of a corporation, the
wrongdoing must be established clearly and convincingly. It cannot be
presumed.35
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This Court has cautioned against the inordinate application of this

doctrine, reiterating the basic rule that "the corporate veil may be
pierced only if it becomes a shield for fraud, illegality or inequity
committed against a third person.36

applied to alter ego cases, as follows: Where the stock of a corporation

is owned by one person whereby the corporation functions only for the
benefit of such individual owner, the corporation and the individual
should be deemed the same.37
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This Court agrees with the petitioners that there is no need to pierce
the corporate veil. Respondent failed to substantiate her claim that
Mancy and Sons Enterprises, Inc. and Manuel and Jose Marie
Villanueva are one and the same. She based her claim on the SSS form
wherein Manuel Villanueva appeared as employer. However, this does
not prove, in any way, that the corporation is used to defeat public
convenience, justify wrong, protect fraud, or defend crime, or when it
is made as a shield to confuse the legitimate issues, warranting that its
separate and distinct personality be set aside. Also, it was not alleged
nor proven that Mancy and Sons Enterprises, Inc. functions only for
the benefit of Manuel Villanueva, thus, one cannot be an alter ego of
the other.
WHEREFORE, the petition for review on certiorari dated September
28, 2007 of petitioners Hda. Cataywa, Manuel Villanueva, et al. is
hereby DENIED. Consequently, the resolution by the Social Security
Commission is hereby AFFIRMED with MODIFICATIONS that the
delinquent contributions should be computed as six months per year of
service, and the case against Manuel and Jose Marie Villanueva be
DISMISSED.

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The Court has expressed the language of piercing doctrine when

SO ORDERED.

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