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Labor Arbiter, NLRC; NCR, Arbitration Branch, Quezon City and DIVINA A. MONTEHERMOZO, Respondents.

January 25, 2006 CARPIO MORALES, J.:

1. Sunace International Management Services (Sunace), deployed Divina A. Montehermozo (Divina) to
Taiwan as domestic helper under 12-month contract. This is with assistance of Taiwanese broker, Edmund
2. After the 12-month contract expired, Divina continued to work for 2 more years.
3. Shortly after her return or on February 14, 2000, Divina filed a complaint before the National Labor Relations
Commission (NLRC) against Sunace, one Adelaide Perez, the Taiwanese broker, and the employer-foreign
principal alleging that she was jailed for three months and that she was underpaid.
4. Divina was claiming the refund of the deduction for income tax and savings under the one-year and 2-year
extened contract.
Year Deduction for Income Tax Deduction for Savings
1997 NT10,450.00 NT23,100.00
1998 NT9,500.00 NT36,000.00
1999 NT13,300.00 NT36,000.00;
5. Sunace says she was not entitled to refund for 24 months savings because employer did not deduct any
from her salary from there. There is also no basis for her claim of tax refund because as the she finished
her one year contract and hence, was not illegally dismissed by her employer. (not entitled to compensation
because no injury suffered)
6. Reacting to Divina’s Position Paper, Sunace filed on April 25, 2000 an ". . . answer to complainant’s position
paper" alleging that Divina’s 2-year extension of her contract was without its knowledge and consent, hence,
it had no liability attaching to any claim arising therefrom, and Divina in fact executed a Waiver/Quitclaim
and Release of Responsibility and an Affidavit of Desistance, copy of each document was annexed to said ".
. . answer to complainant’s position paper."
7. Labor Arbiter, rejected Sunace’s claim that the extension of Divina’s contract for two more years was without
its knowledge (communication between Sunace and Edmund Wang). Labor Arbiter also says that any
agreement for settlement (quitclaim) should be reduced to writing and signed by parties and counsel before
Labor Arbiter. Held for Divina, Sunace and Adelaida Perge (owner) jointly and severally for the amounts.
8. NLRC affirmed LA.
9. CA dismissed petition for certiorari. Principal-agent relationship.

Issue: Whether or not Sunace can be held liable for the money claims of Divina

Held: No. Sunace not privy to extended contract. Petition granted.

The February 21, 2000 telefax message from the Taiwanese broker to Sunace, the only basis of a finding of
continuous communication, reads verbatim:
x x x x
Regarding to Divina, she did not say anything about her saving in police station. As we contact with her
employer, she took back her saving already last years. And they did not deduct any money from her
salary. Or she will call back her employer to check it again. If her employer said yes! we will get it back for
Thank you and best regards.

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Edmund Wang

The message does not provide evidence that Sunace was privy to the new contract executed after the expiration on
February 1, 1998 of the original contract. That Sunace and the Taiwanese broker communicated regarding Divina’s
allegedly withheld savings does not necessarily mean that Sunace ratified the extension of the contract. As Sunace
points out in its Reply filed before the Court of Appeals:
As can be seen from that letter communication, it was just an information given to the petitioner that the
private respondent had t[aken] already her savings from her foreign employer and that no deduction was
made on her salary. It contains nothing about the extension or the petitioner’s consent thereto.

Parenthetically, since the telefax message is dated February 21, 2000, it is safe to assume that it was sent to
enlighten Sunace who had been directed, by Summons issued on February 15, 2000, to appear on February 28,
2000 for a mandatory conference following Divina’s filing of the complaint on February 14, 2000.

There being no substantial proof that Sunace knew of and consented to be bound under the 2-year employment
contract extension, it cannot be said to be privy thereto. As such, it and its "owner" cannot be held solidarily liable for
any of Divina’s claims arising from the 2-year employment extension. As the New Civil Code provides:
Contracts take effect only between the parties, their assigns, and heirs, except in case where the rights and
obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of

Furthermore, as Sunace correctly points out, there was an implied revocation of its agency relationship with its
foreign principal when, after the termination of the original employment contract, the foreign principal directly
negotiated with Divina and entered into a new and separate employment contract in Taiwan. Article 1924 of the New
Civil Code reading:
The agency is revoked if the principal directly manages the business entrusted to the agent, dealing directly
with third persons.