G.R. No. L-57493 - Baliwag Transit, Inc. vs. Court of Appeals

This case is a petition for review on certiorari challenging the decision of the Court of Appeals dated June 4, 1981.
The focal administrative decision emanated from the Social Security Commission (SSC) in SSC Case No. 3272, which originally dismissed the claim for remittance of unpaid SSS premium contributions.
Subsequent to the dismissal, the Court of Appeals reversed the SSC resolution, ordering petitioner Baliwag Transit, Inc. to remit the unpaid contributions along with penalties.
The petitioner subsequently filed a Motion for Reconsideration with the Court of Appeals, which was denied, prompting the filing of the present petition.

Two similarly named passenger bus lines were involved: one operating under the trade name “Baliwag Transit” and the other under “Baliwag Transit, Inc.” (BTI).
The “Baliwag Transit” bus line was originally owned and operated by the late Pascual Tuazon until his death on January 26, 1972.
Baliwag Transit, Inc. (incorporated in 1968 and owned by petitioner) operated the other bus line, despite both lines using the similar trade name.

Although both bus lines operated under different grants of franchises issued by the Public Service Commission, they were assigned one single SSS ID Number (03-22151) by the Social Security System.
This single identification number later became a point of contention, with inferences drawn about the existence of the “Kabit System.”

Private respondent, who claimed to have been employed as a conductor and later as an inspector from 1947 to 1971, filed a petition to compel remittance of his deducted SSS contributions for periods spanning 1958 to May 1963 and 1967 to March 1971.
The respondent alleged that although premium contributions were deducted from his salary during his tenure, remittances to the SSS were inadequate, covering only a period from June 1963 to 1966.

Baliwag Transit, Inc. (BTI) contended that it never employed private respondent Ramon Martinez.
Evidence presented indicated that the respondent was in fact employed by Pascual Tuazon, who owned and operated buses under the trade name “Baliwag Transit” long before the incorporation of BTI.
Testimonies and records revealed distinct operations between the two bus lines, including separate offices, garages, maintenance shops, books of account, and managerial personnel.

A series of witness testimonies, including that of Social Security System clerk Mangowan Macalaba, confirmed that both Victoria Vda. de Tengco and Pascual Tuazon held separate franchises for operating public utility buses between Manila and Baliuag.
Despite operating under separate franchises, the continuation of the shared firm name “Baliwag Transit”—with the petitioner adding “Inc.”—appeared aimed at leveraging the established goodwill of the brand.
The respondent’s employment with Pascual Tuazon ended in 1971 when Tuazon became bankrupt.
The SSC resolution of September 12, 1979, held that no employer-employee relationship existed between petitioner and respondent to warrant further remittance of SSS contributions on behalf of the respondent.

The vehicles operated by the late Pascual Tuazon were “attached” or operated under the “Kabit System” with Baliwag Transit, Inc.
Employer-employee relations would extend to include employees of the actual owner of the bus vehicles, implicating the petitioner.

Central to the dispute was the allegation that the issuance of one SSS ID Number to both bus lines implied the use of the “Kabit System,” thereby potentially shifting liability.

The “Kabit System” is defined as an arrangement wherein a person holding a certificate of public convenience allows another, who owns motor vehicles, to operate under the franchise for a fee.
The appellate court’s inference that the operation of the buses under this arrangement, by virtue of not registering in the name of the late Pascual Tuazon, implicated Baliwag Transit, Inc., was brought under scrutiny.
Evidence showed that both bus lines had independent franchises and that the use of a common trade name did not automatically confirm the operation under the “Kabit System.”

The private respondent allowed approximately 17 years to lapse before initiating the petition with the Social Security Commission, a delay that raised issues of prescription under Article 1144(2) of the Civil Code.
Arguments were advanced that such delay amounted to “sleeping on his rights,” thereby prejudicing his claim.

Whether the issuance of one SSS ID Number to both bus lines conclusively indicates that one of them operates under the “Kabit System.”

The determination centers on whether a single identification number necessarily implies a common or intertwined operation between distinct entities.

Whether the employer-employee relationship, as established by testimonies and evidence, is attributable to the petitioner despite the separation in franchise ownership and operations.

This involves assessing if the use of a shared trade name and deductions from the respondent’s salary suffice to extend liability for remitting SSS contributions to Baliwag Transit, Inc.

Whether the administrative and appellate findings are supported by substantial evidence, particularly regarding:

The existence (or non-existence) of the “Kabit System” in the operation of the buses.
The proper allocation of responsibility for remitting SSS contributions based on actual employment relationships.

Whether the respondent’s delay in filing his petition, which spanned 17 years, effectively prescribed his cause of action for remittance of SSS contributions.