G.R.

No. 192105, December 09, 2013 reason, the balance that petitioner should pay on his service vehicle stood at P116,380.00 if
he opts to purchase the same.
ANTONIO LOCSIN II, Petitioners, v. MEKENI FOOD CORPORATION, Respondent.
On May 3, 2007, petitioner filed against Mekeni and/or its President, Prudencio S. Garcia, a
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Complaint for the recovery of monetary claims consisting of unpaid salaries, commissions,
D E C I S I O N
sick/vacation leave benefits, and recovery of monthly salary deductions which were
earmarked for his cost-sharing in the car plan. The case was docketed in the National Labor
DEL CASTILLO, J.: Relations Commission (NLRC), National Capital Region (NCR), Quezon City as NLRC NCR CASE
NO. 00-05-04139-07.
In the absence of specific terms and conditions governing a car plan agreement between the
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employer and employee, the former may not retain the installment payments made by the On October 30, 2007, Labor Arbiter Cresencio G. Ramos rendered a Decision, decreeing as
latter on the car plan and treat them as rents for the use of the service vehicle, in the event follows:
that the employee ceases his employment and is unable to complete the installment WHEREFORE, in the light of the foregoing premises, judgment is hereby rendered directing
payments on the vehicle. The underlying reason is that the service vehicle was precisely used respondents to turn-over to complainant x x x the subject vehicle upon the said
in the former’s business; any personal benefit obtained by the employee from its use is complainant’s payment to them of the sum of P100,435.84.
merely incidental.
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SO ORDERED.
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This Petition for Review on Certiorari assails the January 27, 2010 Decision of the Court of Ruling of the National Labor Relations Commission
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Appeals (CA) in CA-G.R. SP No. 109550, as well as its April 23, 2010 Resolution denying
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petitioner’s Motion for Partial Reconsideration. ChanRoblesVirtualawlibrary On appeal, the Labor Arbiter’s Decision was reversed in a February 27, 2009 Decision of
the NLRC, thus:
Factual Antecedents WHEREFORE, premises considered, the appeal is hereby Granted. The assailed Decision dated
October 30, 2007 is hereby REVERSED and SET ASIDE and a new one entered ordering
In February 2004, respondent Mekeni Food Corporation (Mekeni) – a Philippine company respondent-appellee Mekeni Food Corporation to pay complainant-appellee the following:
engaged in food manufacturing and meat processing – offered petitioner Antonio Locsin II
the position of Regional Sales Manager to oversee Mekeni’s National Capital Region 1. Unpaid Salary in the amount of P12,511.45;
Supermarket/Food Service and South Luzon operations. In addition to a compensation and
benefit package, Mekeni offered petitioner a car plan, under which one-half of the cost of 2. Unpaid sick leave/vacation leave pay in the amount of P14,789.15;
the vehicle is to be paid by the company and the other half to be deducted from petitioner’s
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salary. Mekeni’s offer was contained in an Offer Sheet which was presented to petitioner. 3. Unpaid commission in the amount of P9,780.00; and

Petitioner began his stint as Mekeni Regional Sales Manager on March 17, 2004. To be able 4. Reimbursement of complainant’s payment under the car plan agreement in the amount of
to effectively cover his appointed sales territory, Mekeni furnished petitioner with a used P112,500.00; and
Honda Civic car valued at P280,000.00, which used to be the service vehicle of petitioner’s
immediate supervisor. Petitioner paid for his 50% share through salary deductions of 5. The equivalent share of the company as part of the complainant’s benefit under the car
P5,000.00 each month. plan 50/50 sharing amounting to P112,500.00.

Subsequently, Locsin resigned effective February 25, 2006. By then, a total of P112,500.00 Respondent-Appellee Mekeni Food Corporation is hereby authorized to deduct the sum of
had been deducted from his monthly salary and applied as part of the employee’s share in P4,736.50 representing complainant-appellant’s cash advance from his total monetary
the car plan. Mekeni supposedly put in an equivalent amount as its share under the car plan. award.
In his resignation letter, petitioner made an offer to purchase his service vehicle by paying
the outstanding balance thereon. The parties negotiated, but could not agree on the terms of All other claims are dismissed for lack of merit.
the proposed purchase. Petitioner thus returned the vehicle to Mekeni on May 2, 2006.
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SO ORDERED.
Petitioner made personal and written follow-ups regarding his unpaid salaries, commissions, The NLRC held that petitioner’s amortization payments on his service vehicle amounting to
benefits, and offer to purchase his service vehicle. Mekeni replied that the company car plan P112,500.00 should be reimbursed; if not, unjust enrichment would result, as the vehicle
benefit applied only to employees who have been with the company for five years; for this remained in the possession and ownership of Mekeni. In addition, the employer’s share in

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the monthly car plan payments should likewise be awarded to petitioner because it forms Therefore, Mekeni has no obligation to return these payments to Locsin. Conversely, Mekeni
part of the latter’s benefits under the car plan. It held further that Mekeni’s claim that the has no right to demand the payment of the balance of the purchase price from Locsin since
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company car plan benefit applied only to employees who have been with the company for the latter has already surrendered possession of the vehicle.
five years has not been substantiated by its evidence, in which case the car plan agreement Moreover, the CA held that petitioner cannot recover Mekeni’s corresponding share in the
should be construed in petitioner’s favor. purchase price of the service vehicle, as this would constitute unjust enrichment on the part
of petitioner at Mekeni’s expense.
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Mekeni moved to reconsider, but in an April 30, 2009 Resolution, the NLRC sustained its
original findings. The CA affirmed the NLRC judgment in all other respects. Petitioner filed his Motion for
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Partial Reconsideration, but the CA denied the same in its April 23, 2010 Resolution.
Ruling of the Court of Appeals
Thus, petitioner filed the instant Petition; Mekeni, on the other hand, took no further action.
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Mekeni filed a Petition for Certiorari with the CA assailing the NLRC’s February 27, 2009
Decision, saying that the NLRC committed grave abuse of discretion in holding it liable to Issue
petitioner as it had no jurisdiction to resolve petitioner’s claims, which are civil in nature.
Petitioner raises the following solitary issue:
On January 27, 2010, the CA issued the assailed Decision, decreeing as follows: WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS ERRED IN NOT CONSIDERING
WHEREFORE, the petition for certiorari is GRANTED. The Decision of the National Labor THE CAR PLAN PRIVILEGE AS PART OF THE COMPENSATION PACKAGE OFFERED TO
Relations Commission dated 27 February 2009, in NLRC NCR Case No. 00-05-04139-07, and PETITIONER AT THE INCEPTION OF HIS EMPLOYMENT AND INSTEAD LIKENED IT TO A CAR
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its Resolution dated 30 April 2009 denying reconsideration thereof, are MODIFIED in that the LOAN ON INSTALLMENT, IN SPITE OF THE ABSENCE OF EVIDENCE ON RECORD.
reimbursement of Locsin’s payment under the car plan in the amount of P112,500.00, and Petitioner’s Arguments
the payment to him of Mekeni’s 50% share in the amount of P112,500.00 are DELETED. The
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rest of the decision is AFFIRMED. In his Petition and Reply, petitioner mainly argues that the CA erred in treating his monthly
contributions to the car plan, totaling P112,500.00, as rentals for the use of his service
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SO ORDERED. vehicle during his employment; the car plan which he availed of was a benefit and it formed
In arriving at the above conclusion, the CA held that the NLRC possessed jurisdiction over part of the package of economic benefits granted to him when he was hired as Regional Sales
petitioner’s claims, including the amounts he paid under the car plan, since his Complaint Manager. Petitioner submits that this is shown by the Offer Sheet which was shown to him
against Mekeni is one for the payment of salaries and employee benefits. With regard to the and which became the basis for his decision to accept the offer and work for Mekeni.
car plan arrangement, the CA applied the ruling in Elisco Tool Manufacturing Corporation v.
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Court of Appeals, where it was held that – Petitioner adds that the absence of documentary or other evidence showing the terms and
First. Petitioner does not deny that private respondent Rolando Lantan acquired the vehicle conditions of the Mekeni company car plan cannot justify a reliance on Mekeni’s self-serving
in question under a car plan for executives of the Elizalde group of companies. Under a claims that the full terms thereof applied only to employees who have been with the
typical car plan, the company advances the purchase price of a car to be paid back by the company for at least five years; in the absence of evidence, doubts should be resolved in his
employee through monthly deductions from his salary. The company retains ownership of favor pursuant to the policy of the law that affords protection to labor, as well as the
the motor vehicle until it shall have been fully paid for. However, retention of registration of principle that all doubts should be construed to its benefit.
the car in the company’s name is only a form of a lien on the vehicle in the event that the
employee would abscond before he has fully paid for it. There are also stipulations in car plan Finally, petitioner submits that the ruling in the Elisco Tool case cannot apply to his case
agreements to the effect that should the employment of the employee concerned be because the car plan subject of the said case involved a car loan, which his car plan benefit
terminated before all installments are fully paid, the vehicle will be taken by the employer was not; it was part of his compensation package, and the vehicle was an important
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and all installments paid shall be considered rentals per agreement. component of his work which required constant and uninterrupted mobility. Petitioner
In the absence of evidence as to the stipulations of the car plan arrangement between claims that the car plan was in fact more beneficial to Mekeni than to him; besides, he did
Mekeni and petitioner, the CA treated petitioner’s monthly contributions in the total amount not choose to avail of it, as it was simply imposed upon him. He concludes that it is only just
of P112,500.00 as rentals for the use of his service vehicle for the duration of his employment that his payments should be refunded and returned to him.
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with Mekeni. The appellate court applied Articles 1484-1486 of the Civil Code, and added
that the installments paid by petitioner should not be returned to him inasmuch as the Petitioner thus prays for the reversal of the assailed CA Decision and Resolution, and that the
amounts are not unconscionable. It made the following pronouncement: Court reinstate the NLRC’s February 27, 2009 Decision.
Having used the car in question for the duration of his employment, it is but fair that all of
Locsin’s payments be considered as rentals therefor which may be forfeited by Mekeni. Respondent’s Arguments

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 It was made clear in the above pronouncement that installments made on the car plan may
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In its Comment, Mekeni argues that the Petition does not raise questions of law, but merely be treated as rentals only when there is an express stipulation in the car plan agreement to
of fact, which thus requires the Court to review anew issues already passed upon by the CA – such effect. It was therefore patent error for the appellate court to assume that, even in the
an unauthorized exercise given that the Supreme Court is not a trier of facts, nor is it its absence of express stipulation, petitioner’s payments on the car plan may be considered as
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function to analyze or weigh the evidence of the parties all over again. It adds that the issue rentals which need not be returned.
regarding the car plan and the conclusions of the CA drawn from the evidence on record are
questions of fact. Indeed, the Court cannot allow that payments made on the car plan should be forfeited by
Mekeni and treated simply as rentals for petitioner’s use of the company service vehicle. Nor
Mekeni asserts further that the service vehicle was merely a loan which had to be paid may they be retained by it as purported loan payments, as it would have this Court believe.
through the monthly salary deductions. If it is not allowed to recover on the loan, this would In the first place, there is precisely no stipulation to such effect in their agreement. Secondly,
constitute unjust enrichment on the part of petitioner. it may not be said that the car plan arrangement between the parties was a benefit that the
petitioner enjoyed; on the contrary, it was an absolute necessity in Mekeni’s business
Our Ruling operations, which benefited it to the fullest extent: without the service vehicle, petitioner
would have been unable to rapidly cover the vast sales territory assigned to him, and sales or
The Petition is partially granted. marketing of Mekeni’s products could not have been booked or made fast enough to move
Mekeni’s inventory. Poor sales, inability to market Mekeni’s products, a high rate of product
To begin with, the Court notes that Mekeni did not file a similar petition questioning the CA spoilage resulting from stagnant inventory, and poor monitoring of the sales territory are the
Decision; thus, it is deemed to have accepted what was decreed. The only issue that must be necessary consequences of lack of mobility. Without a service vehicle, petitioner would have
resolved in this Petition, then, is whether petitioner is entitled to a refund of all the amounts been placed at the mercy of inefficient and unreliable public transportation; his official
applied to the cost of the service vehicle under the car plan. schedule would have been dependent on the arrival and departure times of buses or jeeps,
not to mention the availability of seats in them. Clearly, without a service vehicle, Mekeni’s
When the conclusions of the CA are grounded entirely on speculation, surmises and business could only prosper at a snail’s pace, if not completely paralyzed. Its cost of doing
conjectures, or when the inferences made by it are manifestly mistaken or absurd, its business would be higher as well. The Court expressed just such a view in the past. Thus –
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findings are subject to review by this Court. In the case at bar, the disallowance of the subject car plan benefits would hamper the
officials in the performance of their functions to promote and develop trade which requires
From the evidence on record, it is seen that the Mekeni car plan offered to petitioner was mobility in the performance of official business. Indeed, the car plan benefits are
subject to no other term or condition than that Mekeni shall cover one-half of its value, and supportive of the implementation of the objectives and mission of the agency relative to
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petitioner shall in turn pay the other half through deductions from his monthly salary. the nature of its operation and responsive to the exigencies of the service. (Emphasis
Mekeni has not shown, by documentary evidence or otherwise, that there are other terms supplied)
and conditions governing its car plan agreement with petitioner. There is no evidence to Any benefit or privilege enjoyed by petitioner from using the service vehicle was merely
suggest that if petitioner failed to completely cover one-half of the cost of the vehicle, then incidental and insignificant, because for the most part the vehicle was under Mekeni’s
all the deductions from his salary going to the cost of the vehicle will be treated as rentals for control and supervision. Free and complete disposal is given to the petitioner only after the
his use thereof while working with Mekeni, and shall not be refunded. Indeed, there is no vehicle’s cost is covered or paid in full. Until then, the vehicle remains at the beck and call of
such stipulation or arrangement between them. Thus, the CA’s reliance on Elisco Tool is Mekeni. Given the vast territory petitioner had to cover to be able to perform his work
without basis, and its conclusions arrived at in the questioned decision are manifestly effectively and generate business for his employer, the service vehicle was an absolute
mistaken. To repeat what was said in Elisco Tool – necessity, or else Mekeni’s business would suffer adversely. Thus, it is clear that while
First. Petitioner does not deny that private respondent Rolando Lantan acquired the vehicle petitioner was paying for half of the vehicle’s value, Mekeni was reaping the full benefits
in question under a car plan for executives of the Elizalde group of companies. Under a from the use thereof.
typical car plan, the company advances the purchase price of a car to be paid back by the
employee through monthly deductions from his salary. The company retains ownership of In light of the foregoing, it is unfair to deny petitioner a refund of all his contributions to the
the motor vehicle until it shall have been fully paid for. However, retention of registration of car plan. Under Article 22 of the Civil Code, “[e]very person who through an act of
the car in the company’s name is only a form of a lien on the vehicle in the event that the performance by another, or any other means, acquires or comes into possession of
employee would abscond before he has fully paid for it. There are also stipulations in car something at the expense of the latter without just or legal ground, shall return the same to
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plan agreements to the effect that should the employment of the employee concerned be him.” Article 2142 of the same Code likewise clarifies that there are certain lawful,
terminated before all installments are fully paid, the vehicle will be taken by the employer voluntary and unilateral acts which give rise to the juridical relation of quasi-contract, to the
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and all installments paid shall be considered rentals per agreement. (Emphasis supplied) end that no one shall be unjustly enriched or benefited at the expense of another. In the
absence of specific terms and conditions governing the car plan arrangement between the

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petitioner and Mekeni, a quasi-contractual relation was created between them.
Consequently, Mekeni may not enrich itself by charging petitioner for the use of its vehicle
which is otherwise absolutely necessary to the full and effective promotion of its business. It
may not, under the claim that petitioner’s payments constitute rents for the use of the
company vehicle, refuse to refund what petitioner had paid, for the reasons that the car plan
did not carry such a condition; the subject vehicle is an old car that is substantially, if not
fully, depreciated; the car plan arrangement benefited Mekeni for the most part; and any
personal benefit obtained by petitioner from using the vehicle was merely incidental.

Conversely, petitioner cannot recover the monetary value of Mekeni’s counterpart
contribution to the cost of the vehicle; that is not property or money that belongs to him, nor
was it intended to be given to him in lieu of the car plan. In other words, Mekeni’s share of
the vehicle’s cost was not part of petitioner’s compensation package. To start with, the
vehicle is an asset that belonged to Mekeni. Just as Mekeni is unjustly enriched by failing to
refund petitioner’s payments, so should petitioner not be awarded the value of Mekeni’s
counterpart contribution to the car plan, as this would unjustly enrich him at Mekeni’s
expense.
There is unjust enrichment “when a person unjustly retains a benefit to the loss of another,
or when a person retains money or property of another against the fundamental principles of
justice, equity and good conscience.” The principle of unjust enrichment requires two
conditions: (1) that a person is benefited without a valid basis or justification, and (2) that
such benefit is derived at the expense of another.

The main objective of the principle against unjust enrichment is to prevent one from
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enriching himself at the expense of another without just cause or consideration. x x x
WHEREFORE, the Petition is GRANTED IN PART. The assailed January 27, 2010 Decision and
April 23, 2010 Resolution of the Court of Appeals in CA-G.R. SP No. 109550 are MODIFIED, in
that respondent Mekeni Food Corporation is hereby ordered to REFUND petitioner Antonio
Locsin II’s payments under the car plan agreement in the total amount of P112,500.00.

Thus, except for the counterpart or equivalent share of Mekeni Food Corporation in the car
plan agreement amounting to P112,500.00, which is DELETED, the February 27, 2009
Decision of the National Labor Relations Commission is affirmed in all
respects.chanRoblesvirtualLawlibrary

SO ORDERED.