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Mafinco Trading Corp. vs.

GR No. L-37790
March 25, 1976

Cosmos Aerated Water Factory, a firm based at Malabon, Rizal, appointed petitioner Mafinco
as its sole distributor of Cosmos soft drinks in Manila. Rodrigo Repomanta and Mafinco
executed a peddling contract whereby Repomanta agreed to buy and sell Cosmos soft drinks.
Rey Moralde entered into a similar contract. Months later, Mafinco terminated the peddling
contract with Repomanta and Moralde. Consequently, Repomanta and Moralde, through their
union, filed a complaint with the NLRC, charging the general manager of Mafinco for illegally
dismissing them.4.Mafinco filed a motion to dismiss the complaint on the ground that the NLRC
had no jurisdiction because Repomanta and Moralde were not its employees but were
independent contractors. It stressed that there was termination of the contract not a dismissal
of an employee.

Whether or not there exist an employer-employee relationship between petitioner Mafinco
and private respondents Repomanta and Moralde.

The Supreme Court held that under the peddling contracts, Repomanta and Moralde were not
employees of Mafinco but were independent contractors as found by the NLC and its fact finder
and by the committee appointed by the Secretary of Labor to look into the status of Cosmos
and Mafinco peddlers. A contract whereby one engages to purchase and sell soft drinks on
trucks supplied by the manufacturer but providing that the other party (peddler) shall have the
right to employ his own workers, shall post a bond to protect the manufacturer against losses,
shall be responsible for damages caused to third persons, shall obtain the necessary licenses
and permits and bear the expenses incurred in the sale of the soft drinks is not a contract of