G.R. No. L-7636 - Asia Steel Corporation vs. Workmen's Compensation Commission and Ismael Carbajosa

Carbajosa, a native of Negros Occidental, arrived in Manila on March 31, 1951, in search of work.
On April 5, 1951, he was introduced to Pablo Sesia—an employee of Asia Steel Corporation—who assisted him in securing employment.
On April 9, 1951, through Sesia’s arrangement, Carbajosa was taken to Asia Steel Corporation’s nail factory where he was interviewed by Mr. Kim, the person in charge of the factory.
During the interview, Kim informed Carbajosa that he would relay the matter to the manager and that Carbajosa would be informed of the decision upon his return.
The following morning, Carbajosa was instructed to begin work as an apprentice, with his wage to be determined after the arrival of materials ordered from Japan.
It was expressly arranged that Carbajosa would reside in the factory alongside Sesia, with permission secured from Kim.

On April 16, 1951—hardly a week into his employment—Carbajosa was engaged in tightening the belt of one of the running machines.
While performing his duties, his hand was accidentally caught by the moving belt, causing him to stumble.
The force of the belt and subsequent mishap resulted in severe injury: his two feet were so badly injured that they had to be amputated.
Carbajosa was rushed to the Chinese General Hospital, where the necessary medical treatment was rendered, and his hospitalization expenses were borne by the corporation.

Following the accident, Carbajosa claimed compensation for the injuries sustained while engaged in his work.
The Workmen’s Compensation Commission, relying on the findings that he was employed as an apprentice and that the accident arose out of his employment, approved an award of P2,246.40, in addition to costs.
Asia Steel Corporation challenged the decision on two main propositions:

The issue of his alleged negligence was not formally tendered by the petitioner in the administrative proceedings and received no express findings by either the referee or the Commission.

The petitioner’s argument further relied on the contention that Mr. Kim’s acts could not bind the corporation, as by the corporation’s by-laws, only President Yu Kong Tiong was authorized to hire employees for the manufacturing establishment.
The Workmen’s Compensation Commission, however, found that the corporation’s president (Yu Kong Tiong) managed its affairs—through remote instructions to Mr. Kim—thus validating Kim’s act of hiring Carbajosa as an apprentice.
Additional acts, such as the subsequent payment of Carbajosa’s hospital expenses by the acting manager Atty. Mercado, further implied a ratification of the employment relationship.

Whether Carbajosa was legally considered an employee or laborer of Asia Steel Corporation.
Whether the agency exercised by Mr. Kim, acting as the person in charge of the factory, with apparent authority, was sufficient to establish an employer-employee relationship binding the corporation.
Whether the allegation that the accident was occasioned by Carbajosa’s own fault and negligence, based on his being a “stranger” in the premises, could exempt the corporation from its liability under the Workmen’s Compensation Law.
Whether the principles of apparent authority and estoppel justify holding the corporation liable for the actions of its agent, despite any restrictive by-laws regarding the hiring of laborers.