LABOR LAW I –November 11, 2017  The San Miguel Sales Forces Union (PTGWO), representing

the salesmen and helpers within Metro Manila, filed a

2. San Miguel Corp. vs. NLRC
complaint with the Bureau of Labor Relations praying that
Facts: SMC be compelled to pay in proper cases the difference in
monetary benefits between what it had theretofore been
 On May 1, 1974, the Labor Code brought into being a new
granting and that payable under the Labor Code.
employees’ compensation program.

 The Union filed a second complaint with the Labor Arbiters

 Prior to the inauguration of this new compensation program, it
Office, accusing SMC of non compliance with the
had been the practice of SMC to grant to its salesmen and
requirements of PD 851 of premium pay for work done during
helpers suffering work-connected sickness or disability, their
rest days and holidays, and underpayment of wages under PD
basic salary and other benefits consisting of average
928.
commission one sack of rice per month, free hospitalization
and cost of living allowance.
 Conciliation proceedings failed to bring an amicable
settlement.
 The aggregate value of these benefits was, of course, higher
than the corresponding benefits under the Workmen’s
 LA: Sustained the Union. SMC is under legal obligation to pay
Compensation Act.
the union members who have suffered industrial accident and
illnesses, the difference between what they receive from the
 This practice was discontinued by petitioner, on effectivity of
State Insurance Fund and their monthly salary as this has
the new compensation scheme.
been its practice and policy before the effectivity of the Code.

 It registered itself and its employees with the Social Security

 NLRC: Affirmed. Hence, this petition.
System, commenced to pay to the State Insurance Fund the
required monthly premium contributions and started to comply
 ISSUES:
with all the obligations imposed on all employers by the new
1. Whether the Bureau of Labor Relations has jurisdiction
law.

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 2. Whether or not the Labor Code put an end to the SMC’s
voluntarily assumed obligation, prior to the Code’s enactment,
of paying work-connected disability benefits to its employees
 RULING:
1. NO.
2. NO.
o At the time of the initiation (January 1978) of the
proceedings before the Bureau of Labor Relations by
the Union, for the purpose of defining and in effect
expanding the benefits otherwise due to its members
under the new compensation program of the Labor
Code, the Bureau – and the LA and the NLRC – had
no jurisdiction of the subject matter thereof.
o That particular subject matter had already been placed
within the exclusive original jurisdiction of the SSS
subject to appeal to the Employee’s Compensation
Commission. Art. 180 of the Labor Code provides:
“The system shall have original and exclusive
jurisdiction to settle any dispute from this Title
with respect to coverage, entitlement to benefits
collection and payment of contributions and
penalties thereon, or any other matter related
thereto, subject to appeal to the Commission,
which shall decide appealed cases within 20
working days from the submission of evidence.”
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
o It is evident that what was sought to be litigated by the
union before the Bureau of Labor relations was the
matter of its members’ entitlement to benefits for work-
connected disability. Hence fall within the catch-all
phrase “any other matter related thereto.”
o The right to compensation or benefit for the loss or
impairment of an employee’s earning capacity due to
work-related illness or injury is premised on the
occurrence of the illness or injury. It accrues upon, and
not before, the happening of these contingencies.
o Since as has already been stated, claims for indemnity
under the Labor Code are to be adjudicated “in
accordance with the law an rules at the time their
causes of action accrued,” the benefits due to an
employee suffering from a compensable disability must
be computed in accordance with the method existing at
the time of the illness or the injury.
o It is thus obvious that an employee acquires no vested
right to a program of compensation benefits simply
because it was operative at the time he became
employed and had been subsequently discontinued.
That he must have incurred the illness or injury during
the program’s effectivity, given the cut-off date set by
law, is the only fact which operates to vest the right to
 be indemnified according to either the phased-out
scheme or the new one.
3. Raro vs. Employees’ Compensation Commission
Facts:
 Zaida Raro states that she was in perfect health when
employed as a clerk by the Bureau of Mines and Geo-
Sciences at its Daet, Camarines Norte regional office on
March 17, 1975.
 Four years later, she began suffering from severe and
recurrent headaches coupled with blurring of vision. She
sought medical treatment in Manila. She was then a Mining
Recorder in the Bureau.
 She was diagnosed at the Makati Medical Center to be
suffering from brain tumor. By that time, her memory,
sense of time, vision, and reasoning power had been lost.
 A claim for disability benefits filed by her husband with the
GSIS was denied.
 On appeal, the Employees’ Compensation Commission
affirmed.
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 ISSUES: Whether the brain tumor which causes are
unknown but contracted during employment is
compensable?
 RULING:
o NO.
o Section 1(b), Rule III of the Amended Rules on
Employees Compensation clearly defines who are
entitled. It provides:
“For the sickness and the resulting disability or
death to be compensable, the sickness must be
the result of an occupational disease listed
under Annex A of these rules with the
conditions set therein satisfied, otherwise, proof
must be shown that the risk of contracting the
disease is increased by the working conditions.”
o The law requires the claimant to prove a positive thing
– that the illness was caused by employment and the
risk of contracting the disease is increased by the
working conditions.
o To say that since the proof is not available, therefore,
the trust fund has the obligation to pay is contrary to
the legal requirement that proof must be adduced. The
existence of otherwise non-existent proof cannot be
presumed.
 o The Court recognized the fact that cancer is a disease
of still unknown origin which strikes people in all walks
of life, employed or unemployed. Unless it be shown
that a particular form of cancer is caused by specific
working conditions, the Court cannot conclude that it
was the employment which increased the risk of
contracting the disease.
 GSIS, however, denied the claim on the ground that at the
time of SPO2 Alegres death, he was performing a personal
activity which was not work-connected. Subsequent appeal to
the Employees Compensation Commission (ECC) proved
futile as said body, in a decision dated May 9, 1996, merely
affirmed the ruling of the GSIS. However, the CA reversed the
decision when appealed.

Citing Nitura v. Employees Compensation Commission[3] and

o Hence, the Commission’s ruling is affirmed.
Employees Compensation Commission v. Court of Appeals,[4] the
appellate court explained the conclusion arrived at, thus:

4. GSIS VS. CA  [T]he Supreme Court held that the concept of a workplace
cannot always be literally applied to a person in active duty
FACTS:
status, as if he were a machine operator or a worker in an

 Private respondent Felonila Alegres is the wife of the assembly line in a factory or a clerk in a particular fixed office.

deceased SPO2 Alegre who was a police officer assigned to

It is our considered view that, as applied to a peace officer, his work
the PNP.
place is not confined to the police precinct or station but to any place
 On December 6, 1994, he was driving his tricycle and ferrying
where his services, as a lawman, to maintain peace and security, are
passengers within the vicinity of Imelda Commercial Complex
required.
when SPO4 Alejandro Tenorio, Jr., Team/Desk Officer of the
Police Assistance Center located at said complex, confronted
 At the time of his death, Alegre was driving a tricycle at the
him regarding his tour of duty. SPO2 Alegre allegedly snubbed
northeastern part of the Imelda Commercial Complex where
SPO4 Tenorio and even directed curse words upon the latter.
the police assistance center is located. There can be no
A verbal tussle then ensued between the two which led to the
dispute therefore that he met his death literally in his place of
fatal shooting of the deceased police officer.
work.
 On account of Alegres death, his wife filed a claim for death
benefits with the GSIS pursuant to PD 626.

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  However, the argument, though initially plausible, overlooks
the fact that policemen, by the nature of their functions, are
deemed to be on a round-the-clock duty.
ISSUE: WON the death of SPO2 Alegre is compensable pursuant to
the applicable laws and regulations.
RULING: NO
Under the pertinent guidelines of the ECC on compensability, it is
provided that for the injury and the resulting disability or death to be
compensable, the injury must be the result of an employment accident
satisfying all of the following conditions:
(1) The employee must have been injured at the place where
his work requires him to be;
(2) The employee must have been performing his official
functions; and
(3) If the injury is sustained elsewhere, the employee must
have been executing an order for the employer.
 Taking together jurisprudence and the pertinent guidelines
of the ECC with respect to claims for death benefits,
namely: (a) that the employee must be at the place where
his work requires him to be; (b) that the employee must
have been performing his official functions; and (c) that if
the injury is sustained elsewhere, the employee must
have been executing an order for the employer, it is not
difficult to understand then why SPO2 Alegres widow
should be denied the claims otherwise due her.
 Obviously, the matter SPO2 Alegre was attending to at
the time he met his death, that of ferrying passengers for
a fee, was intrinsically private and unofficial in nature
proceeding as it did from no particular directive or
permission of his superior officer.
 In the absence of such prior authority as in the cases of
Hinoguin and Nitura, or peacekeeping nature of the act
attended to by the policeman at the time he died even
without the explicit permission or directive of a superior
officer, as in the case of P/Sgt. Alvaran, there is no
justification for holding that SPO2 Alegre met the
requisites set forth in the ECC guidelines. That he may be
called upon at any time to render police work as he is
considered to be on a round-the-clock duty and was not
on an approved vacation leave will not change the
conclusion arrived at considering that he was not placed
in a situation where he was required to exercise his
authority and duty as a policeman. In fact, he was refusing
to render one pointing out that he already complied with
the duty detail.
 At any rate, the 24-hour duty doctrine, as applied to
policemen and soldiers, serves more as an after-the-fact
validation of their acts to place them within the scope of
the guidelines rather than a blanket license to benefit
them in all situations that may give rise to their deaths.
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  In other words, the 24-hour duty doctrine should not be
sweepingly applied to all acts and circumstances causing
the death of a police officer but only to those which,
although not on official line of duty, are nonetheless
basically police service in character.
5. LUZON STEVEDORING CO. INC VS. WCC (January 31, 1964)
FACTS:
 Deceased Antonio Cordero was employed as a sailor on a
barge of the Luzon Stevedoring Co., Inc. receiving a wage of
verify P28.00 a week. His duty was to look after the safety of
the barge and its cargo especially in the absence of the
patron.
 On 1956, Cordero, having been requested by the patron to
take over, was left alone in charge of the barge.
 Two days later his lifeless body was found floating in the
Pasig river by Det. Labao of the Manila Police Department. A
post-mortem examination revealed that he died of asphyxia as
a result of submersion in water.
 After the incident, Ramon Relente president of the union to
which the deceased belonged, reported the matter to the
officer in charge of the marine department of the company and
asked for financial aid to the family of the deceased, and this
request having been denied, he made arrangement for a loan
of P250.00 from the company. The company filed a report with
the Workmen's Compensation Commission manifesting its
desire to controvert the claim if one is filed later.
 Deceased's widow filed a formal claim for compensation which
was referred to a hearing officer who, after hearing, rendered
decision ordering the company to pay to claimant death
benefits, reimbursements, burial expense and attorney’s fees.
 The company filed a petition for reconsideration based on
three grounds:
o (a) there was no causal connection between Cordero's
death and his employment as a sailor;
o (b) Cordero's death was due to his own negligence;
and
o (c) claimant's right, if will, is already barred by Section
24 of Act 3428, as amended.
WORKMEN’S COMPENSATION COMMISSION AFFIRMED.
ISSUE: WON the death of Antonio Cordero is compensable.
1. Whether the claimant’s right is already barred by Sec. 24
of Act 3428, as amended.
2. Whether there was a causal connection between Cordero’s
death and his employment as a sailor.
3. Whether Cordero’s death was due to his own negligence.
RULING: YES (1. No; 2. Yes; 3. No)
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1. Under section 24 of Act 3428, in order for a claim for
compensation may prosper, it is necessary that it be made not
later than three months after the death of the deceased and
that if that is not done the claim may considered of no legal
effects.
 However, in this case, it pears that when Antonio
Cordero died notice of his death was given by Ramon
Relente two or three days thereof to the officer in
charge of the marine department of the company.
Relente likewise asked the company to extend certain
financial aid to the family of the victim and when this
was denied he made representations that some loan
extended to it to cover the expenses it may have to
face as a result of Cordero's death.
 We believe that such request for financial aid can be
considered as advance filing of claim in
contemplation of law for then the company cannot
plead surprise the preparation of its defense, this being
the only tenable reason for requiring an early filing of
the claim on the part of the employee or heirs of the
deceased.
 This is especially so taking into account that under
Section 44 of the same Act it is presumed that "the
claim comes within the provision of the Act and that
sufficient notice thereof was given." This provision
should be liberally construed.
2. While in the strict sense death caught up with Cordero when
he was not in the barge where he is supposed to be for 24
hours watching and taking care of it but swimming with some
companions somewhere in the Pasig river near where the
barge was moored, it may be said that he died in line of duty
for he was then undertaking something that is necessary
to his personal need and comfort since the taking of bath
is not only habitual in a sailor but necessary to the human
body.
 He went swimming not for pleasure, not for fun, but in
answer to the daily need nature, in the same manner
as a human being needs to answer other calls, such as
eating, sleeping and the like. When these needs are
satisfied in the course of employment and something
takes place that may cause injury, harm or death to the
employee or laborer, it is fair and logical that the
happening be considered as one occurring in the
course of employment for under the circumstances it
cannot be undertaken in any other way.
 The situation would be different if the mishap occurs in
a manner that it may clearly show that the laborer has
acted beyond his duty or course of employment. Not so
in this case.
3. Neither can it be contended that in going out with some
companions to swim the deceased is guilty of notorious
negligence for the reason that if his purpose was to take a
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
 bath he could have done it with the aid of a water tank on
board the barge.
 If the deceased were one who does not know how to
swim or is not a sailor accustomed to the perils of the
water, the argument may have some value but not so
in the case of the deceased who undisputable was a
swimmer.
 He must have preferred to take a bath while swimming
than by pouring water over his body on board the
barge because of his awareness that he was swimmer
and for him to swim in a river was merely routine. And
if he died in the course thereof it must be due to an
event that he has not foreseen.
 At any rate there is no clear evidence that his death
was due to his notorious negligence and not to a
cause which he could not have reasonably avoided.
6. PAEZ vs. WCC
FACTS:
 Paez and his wife were on and sometime before 1953,
engaged in the business of buying palay for the King Tong
Seng Ricemill of Victoria, Tarlac, with the latter supplying the
capital of P1,000.00 to P2,000.00.
 Paez had been buying palay in Isabela. For such purpose, he
employed agents, two truck drivers and two truck helpers, all
of whom were paid on commission basis. In bringing the palay
purchased by his agents to Nueva Ecija or Tarlac, the same
had to be ferried in bancas across the Magat River in Aurora,
Isabela, towards the other bank, which is Cabatuan; from
Cabatuan side to Guimba, the palay were hauled by truck
which was regularly driven by Valentin Lagman. Respondent's
truck driver on the Aurora side was Primitivo Apolonio
 Because his child became seriously ill, Lagman engaged the
services of Marciano Barawid to substitute him in undertaking
the trip to Isabela, with the understanding that he (Barawid),
was to receive his (Lagman's) pay during the latter's absence.
 Barawid drove respondent's truck up to the Cabatuan side of
the Magat River to await for the palay that were to be ferried
from the Aurora side. On the same date, instead of awaiting
the palay on the Cabatuan side, Barawid crossed the Magat
River and joined Apolonio on the Aurora side in hauling the
palay. After having collected all the palay on the Aurora side,
 Apolonio and Barawid reached the river's bank at about 9:00
o'clock in the evening, and both helped in loading three (3)
bancas. Apolonio advised Barawid not to ride the third banca
because same was already fully loaded, but to take another to
Guimba, as he had to drive a new truck of his brother-in-law.
While in the midst of the Magat River, the banca capsized and
sunk, and Barawid was drowned.
ISSUE:
1. WON the WCC has jurisdiction over the case;
2. WON the death of Barawid arose out of and in the course
of employment.
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RULING: enumerated therein are among those that are
considered hazardous or deleterious to the employees.
1. YES. The Workmen's Compensation Act No. 3428. as  True it is, that the mere act of buying and selling palay
amended provides — is in itself not hazardous, but when the one engaged in
the business used motor vehicles to transport the
SEC. 42. Law applicable to small industries.— All
goods, especially when, as in the instant case, the
claims for compensation by reason of an accident in an
place of purchase was very far from the place of sale
enterprise, industry, or business carried on or in a trade,
(Isabela to Tarlac), that business became inherently
occupation or profession exercised by an employer for the
hazardous and dangerous. To a driver, like the
purpose of gain, whose capital amounts to less than ten
deceased Barawid, risk on the road was great,
thousand pesos and is not hazardous or deleterious to
resulting from hold-ups and outlaws, falling into
employees, shall be governed by the provisions of Act
ravines, vehicular accidents of all sorts, collisions, tire
Numbered Eighteen hundred and seventy-four and its
blowouts, etc.
amendments: Provided, however, That the following
 There seem to be no serious discussion that the
enterprises or establishments shall be among those
regular use of motor vehicles by the claimant's own
considered hazardous or deleterious to employees:
employees makes the business hazardous
 The respondent Court found that petitioner was in a
(1) Any business for the transportation of persons
sense engaged in the transportation of goods (palay),
or goods, or both; ....
by charging freight from other persons who loaded their
 The regular use of motor vehicles, was indispensable palay in his trucks, thereby definitely classifying the
and essential in carrying on petitioner's business, and business of the petitioner as hazardous.
necessarily placed his business under the category of
2. The deceased Marciano Barawid left the International truck
hazardous enterprises. Without the use of motor
assigned to him and went to the other side of the Magat
vehicles, it would be extremely difficult for petitioner to
River (Aurora side) for the purpose of advising the other
conduct such business.
truck driver, Primitivo Apolonio, to have all the palay
 The provision of law above cited is not exclusive, for it
bought by the respondent's agent loaded early because he
clearly provides that the enterprises or establishments
was in a hurry to go back to Guimba. In fact, Barawid

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joined Apolonio in the work of loading and unloading the
palay at the bank of the river to be ferried towards the
Cabatuan side where the International truck was parked.
 The activities performed by Barawid, we believe,
were incidental to his duties not only as driver
but as purchaser of the respondent who was
engaged in the business of buying and selling
palay. It is reasonable to expect an employee,
as in the case of Barawid to help a co-employee
in the performance of his duties. And even
granting, only for the sake of argument, that the
acts performed by the deceased were not strictly
within the bounds of his duties, still he was, in the
fullest sense of the term, in the course of the
employment. For the performance of those acts —
helping the other employee of the respondent load
and unload palay — would inure to the benefit of
the respondent in the pursuit of his business.
As Arthur Larsen, an eminent authority on the
subject of Workmen's Compensation Laws, has put
it:
o An act outside an employee's regular
duties which is undertaken in good faith
to advance the employer's interests,
whether or not the employee's own
assigned work is hereby furthered, is
within the course of
employment.(Larsen's Workmen's
Compensation Text, Vol. 7, p. P338)
"Simply stated, 'if the act is one for the benefit of the employer or for
the mutual benefit of both, an injury arising out of it will usually be
compensable.
7. LUZON STEVEDORING CORPORATION, Petitioner, vs.
WORKMEN'S COMPENSATION COMMISSION and LEONARDA
VDA. DE HAYSON respondents.
FACTS:
 The deceased Pantaleon Hayson was employed by the
respondent Luzon Stevedoring Corporation as a Gang Boss or
capataz with a daily wage of P 9.00. He was on duty as such
capataz on board the M/V President Aguinaldo, while he and
other laborers were waiting for the cargoes and telling stories
to pass the time, the 3rd Officer of the M/V President
Aguinaldo approached them. Since there was a party on board
the boat at that time and since it was a cold night, the
deceased asked for something to drink from the 3rd Officer.
So, the 3rd Officer left them for a while and when he returned
the latter gave them a half-filled bottle of pocket-size Tanduay
Rhum.
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 The group then took turns in drinking from the said bottle with
the deceased taking the first drink. After his co- workers drank
from the supposed bottle of Tanduay Rhum they found out that
the contents of the said bottle was rot liquor but oil of winter
green, About an hour after that the late Pantaleon Hayson
complained of stomach pain and he was immediately brought
to the San Pedro Hospital where he due to poisoning
according to the findings of the attending physician, and which
was confirmed by the autopsy.
 It was also established that the deceased was not a heavy
drinker as testified to by Segundo Catalan also an employee of
the respondent and who was present at the incident because
he was on duty together with the deceased.
 From the facts as established, the Referee ruled that the death
of Pantaleon Hayson arose out of and in the course of his
employment as capataz, and ordered Luzon Stevedoring
Corporation to pay the claimant for compensation and burial
expenses.
 Petitioner filed a motion for reconsideration of the Referee's
decision raising as sole ground the allegation that Pantaleon
Hayson was notoriously negligent, hence, his death is not
compensable under Section 4 of Act 3428, as amended.
 Referee Martinez denied the motion for reconsideration. The
entire record of the case was thus elevated to the Workmen's
Compensation Commission for review.
 The Workmen's Compensation Commission affirmed the
decision appealed from.
 Petitioner insists that the deceased was notoriously negligent
because he drank from the bottle containing oil of wintergreen
not only once but continued to do so despite the unanimous
opinion of his companions for which reason his death falls
outside the compensatory coverage of the Workmen’s
Compensation Act.
ISSUE:
Whether or not the claim for compensation benefit on account of
Pantaleon’s demise due to accidental poisoning when he mistook oil
of wintergreen for Tanduay Rhum falls within the coverage of the
Workmen’s Compensation Act.
RULING:
 The Court ruled that the claim for compensation falls within the
coverage of the Workmen’s Compensation Act.
 To constitute notorious negligence, it must be shown that the
act of the deceased entirely wants in care as to raise a
presumption that he was conscious of the probable
consequences of his carelessness and indifferent to the
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
 danger of injury to himself and other persons. It must be
equivalent to the doing of an intentional wrong. Certainly, this
Commission cannot consider the attitude of the deceased in
the case at bar to constitute notorious negligence, because he
was not aware of the probable consequences of his act, nor
was it shown that there was an intent on his part to end his life.
If at all, his attitude simply constitutes simple negligence,
which is well within the compensatory coverage of the Act.
 It was established that the deceased was not a heavy drinker
and at the time they asked something to drink from the 3rd
Officer of the boat, the deceased or his companions were not
shown to have drunk any liquor or anything that could have
affected the mental state of the deceased at the time he asked
a drink from the said Officer. Nor was it shown that previous to
the incident, the deceased was so despondent that there was
an intention on his part to end his life. All that they did in
asking for a drink from the Officer is what ordinary persons
would do under the circumstances. It was a cold night on
board the boat and they were waiting for work, then, it was but
natural that they want to do something to alleviate the cold. In
the nature of their job, occasional drinking is quite ordinary and
does not in any way violate standard rules and regulations,
unless of course the same is done to the extent of causing
drunkenness. Being not a drinker as he was, the deceased
could not be expected to know the different tastes of wines.
That what he drank contained oil of wintergreen made no
difference to him because as stated, he was not a drinker and
could not have distinguished the taste of the kind of wine, so
much so, that when his companions tasted the wine later, and
told him that it contained oil of wintergreen, he even bragged
that it was stateside, an act which projected his innocence.
And even if he drank after he was told that the bottle contained
oil of wintergreen, still the same could not constitute notorious
negligence on his part, because there was no showing that he
admitted knowledge that the contents of the bottle was oil of
wintergreen, nor was there a warning made by his companions
that drinking the same could be fatal to him.
 Considering the philosophy behind the requirement that to be
compensable the death must occur while the worker is
performing some work in the course of his employment, the
authorities are to the effect that to come within the purview of
such requirement, three things must concur: the injury must be
received during the period covered by the employment; the
worker must be shown to have been injured at the time and
place where the performance of his work requires him to be;
and the worker must have been doing something in pursuance
of his work.
 In the instant case, the Court holds and rules that the above
conditions have been established and met. Indeed, acts
reasonably necessary to health and comfort of an employee
while at work, such as satisfaction of his thirst, hunger, or
other physical demands. or protecting himself from excessive
cold, are incidental to the employment and injuries sustained
in the performance of such acts are compensable as arising
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 out of and in the course of the employment.
 The law presumes that a claim is compensable, absent
substantial evidence to the contrary. So this Court has
consistently and resolutely adhered to the doctrine that even
where the cause of death is unknown, the right to
compensation subsists, the underlying philosophy being that
the Workmen's Compensation Act is a social loesiation
formulated in obeisance to the social justice guarantee of the
Constitution, its raison d'etre being to alleviate and ameliorate
the plight of the workingman, and thus uplift the quality of life
of the laboring class. And so, it has been reiterated in a long
chain of workmen's compensation cases elevated to and
resolved by this Court that the Workmen's Compensation Law
should be construed fairly, reasonably and liberally in favor of
and for the benefit of employees and their dependents and an
doubts as to the right of compensation as well as all
presumptions resolved in their favour.
8. YSMAEL MARITIME CORPORATION, petitioner, vs. AVELINO,
et al., respondents
FACTS:
 Rolando G. Lim, a licensed second mate, was on board the
vessel M/S Rajah, owned by petitioner Ysmael Maritime
Corporation, when the same ran ground and sank near Sabtan
Island, Batanes. Rolando perished as a result of that incident.
 Claiming that Rolando's untimely death at the age of twenty-
five was due to the negligence of petitioner, his parents,
respondents Felix Lim and Consorcia Geveia, sued petitioner
in the Court of First Instance for damages.
 By way of affirmative defense, petitioner claimed that the
private respondents had already been compensated by the
Workmen’s Compensation Commission (WCC) for the same
incident, for which reason they are now precluded from
seeking other remedies against the same employer under the
Civil Code.
 A protracted legal battle over procedural points ensued.
Finally, the case was set for pre-trial. Petitioner sought the
dismissal of the complaint on
 In his order, respondent Judge Avelino upheld respondents'
vigorous opposition and denied petitioner's motion to dismiss
for being unmeritorious. Its motion for reconsideration having
met the same fate, petitioner filed the instant special civil
action for certiorari, prohibition and mandamus with
preliminary injunction, contending that respondent judge acted
with grave abuse of discretion when he refused to dismiss the
complaint for damages on the ground of lack of jurisdiction.
This Court subsequently granted a temporary restraining order
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
 prohibiting the trial court from proceeding with the hearing of
the case.
ISSUE:
Whether or not the compensation remedy under the Workmen's
Compensation Act [WCA], and now under the Labor Code, for work-
connected death or injuries sustained by an employee, is exclusive of
the other remedies available under the Civil Code.
RULING:
 The Court ruled that respondent Lim spouses cannot be allowed
to maintain their present action to recover additional damages
against petitioner under the Civil Code. In open court, respondent
Consorcia Geveia admitted that they had previously filed a claim
for death benefits with the WCC and had received the
compensation payable to them under the WCA. It is therefore
clear that respondents had not only opted to recover under the Act
but they had also been duly paid. At the very least, a sense of fair
play would demand that if a person entitled to a choice of
remedies made a first election and accepted the benefits thereof,
he should no longer be allowed to exercise the second option.
"Having staked his fortunes on a particular remedy, [he] is
precluded from pursuing the alternate course, at least until the
9. GSIS vs. CA
prior claim is rejected by the Compensation Commission
FACTS:
 In the recent case of Floresca vs. Philex Mining Company, L-
30642, April 30, 1985, 136 SCRA 141, involving a complaint for
damages for the death of five miners in a cave in on June 28,
1967, this Court was confronted with three divergent opinions on
the exclusivity rule as presented by several amici curiae One
view is that the injured employee or his heirs, in case of death,
may initiate an action to recover damages [not compensation
under the Workmen's Compensation Act) with the regular courts
on the basis of negligence of the employer pursuant to the Civil
Code. Another view, as enunciated in the Robles case, is that the
remedy of an employee for work connected injury or accident is
exclusive in accordance with Section 5 of the WCA. A third view
is that the action is selective and the employee or his heirs have
a choice of availing themselves of the benefits under the WCA or
of suing in the regular courts under the Civil Code for higher
damages from the employer by reason of his negligence. But
once the election has been exercised, the employee or his heirs
are no longer free to opt for the other remedy. In other words, the
employee cannot pursue both actions simultaneously. This latter
view was adopted by the majority, in the Floresca case,
reiterating as main authority its earlier decision in Pacaña vs.
Cebu Autobus Company, L-25382, April 30, 1982, 32 SCRA 442.
In so doing, the Court rejected the doctrine of exclusivity of the
rights and remedies granted by the WCA as laid down in the
Robles case. 'Three justices dissented.

DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
 Efrenia D. Celoso was a classroom teacher assigned by the
Department of Education, Culture and Sports (DECS) in Panit-
an, Capiz. She had been in the government teaching service
since 1951 up to November, 1985 when she retired (at 55) due
to poor health. While she was teaching her Grade I pupils the
proper way of scrubbing and sweeping the floor, she
accidentally slipped. Her back hit the edge of a desk. She later
complained of weak lower extremities and difficulty in walking.
 She underwent an x-ray examination and results of the
examination revealed that she had pulmonary tuberculosis
and a compression fracture in the spine with sclerosis.
After a second x-ray examination, she was found to be
suffering from Potts disease and was advised to undergo
an operation.
 She filed with the GSIS a claim for disability benefits
under P.D. 626, as amended. The GSIS denied the claim
by reason of prescription, holding that the petitioner
should have filed her claim within one year from the
occurrence of the contingency in March 1982.
 The petitioner appealed to the ECC.
 ECC reversed the decision of the GSIS and ruled that the
application for leave of absence of herein petitioner with
the Department of Education on July 19, 1982 is
considered a constructive filing of the compensation claim
under our rules. Pursuant to the ECC resolution, the GSIS
awarded petitioner permanent partial disability benefits
corresponding to 45 months.
 The petitioner underwent a surgical operation on her
spine. Her condition worsened.
 The petitioner filed with the GSIS a petition for conversion
praying that her disability status be changed from
permanent partial disability to permanent total disability,
with the corresponding adjustment of her disability
benefits.
 However, the GSIS did not give the petition due course.
 Efrenia Celoso then filed a petition with the Court of
Appeals which decided in her favor.
 Petitioner GSIS filed a petition and contends that the
period of 120 days is not the determining factor for an
injury or an illness to be pronounced as permanent total
disability; that an injury or an illness that goes beyond the
said period of 120 days may still be considered permanent
partial disability pursuant to Sec. 2, Rule X of the Rules on
Employees Compensation, as amended; and that she
cannot further be entitled to her claim for conversion to
permanent total disability; that for any progression of a
retired employees condition after the date of her
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
 retirement is no longer within the compensatory coverage
of P.D. 626, since severance of an employee-employer
relationship result to the release of the State Insurance
Fund from any liability in the event of sickness and
resulting disability or death after such retirement or
separation from the service; and that having been granted
the maximum benefits commensurate to the degree of her
disability at retirement date, she is no longer entitled to
additional compensation benefits.
ISSUE:
 A person’s disability might not emerge at one precise moment
Whether or not private respondent Efrenia Celosos request for the
conversion of her permanent partial disability to permanent total
disability should be granted.
RULING:
 The Court rule for private respondent.
Sec. 2, Rule X of the Rules on Employees
Compensation states that:
The income benefit shall be paid beginning
with the first day of disability. If caused by an
 Where an employee is constrained to retire at an early
injury, it shall not be paid longer than 120
consecutive days except where such injury still
require medical attendance beyond 120 days, in
which case benefit for temporary total disability
shall be paid.
 Disability should not be understood more on its medical
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
significance but on the loss of earning capacity.
Permanent total disability means disablement of an
employee to earn wages in the same kind of work, or work
of a similar nature that she was trained for or accustomed
to perform, or any kind of work which a person of her
mentality and attainment could do. It does not mean
absolute helplessness. In the case at bar, with more
reason private respondent should be granted permanent
total disability benefits.
in time but rather over a period of time. It is possible that an
injury which at first was considered to be temporary may later
on become permanent or one who suffers a partial disability
becomes totally and permanently disabled from the same
cause. While private respondent was awarded the benefits
commensurate to the degree of her physical condition at the
time of her retirement, it is however not disputed by petitioner
GSIS that private respondent later on became permanently
and totally disabled.
age due to his illness and the illness persists even after
retirement, resulting in his continued unemployment, such
a condition amounts to total disability, which should entitle
him to the maximum benefits allowed by law
10. GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS) v. THE described ailment. Her illness was evaluated as compensable
HON. COURT OF APPEALS and ROSA BALAIS (Jan. 29, 1998) by the GSIS Medical Evaluation and Underwriting Group.
GSIS granted her temporary total disability (TTD) benefits for
FACTS: the period starting and subsequently, permanent partial
disability (PPD) benefits for nine months starting on March 2,
 Private respondent started working as an emergency
1990.
employee of the National Housing Authority (NHA) in 1952.
She then rose from the ranks until she was promoted to Chief
 The private respondent requested the GSIS for the conversion
Paying Cashier in 1984.
of the classification of her disability benefits from permanent
partial disability (PPD) to permanent total disability (PTD).
 Medical records disclose that on December 17, 1989, private
Such plea was denied by the GSIS on the ground that the
respondent suddenly experienced chills, followed by loss of
GSIS Medical Evaluation and Underwriting Department which
consciousness. She was brought to the Capitol Medical Center
evaluated her claim found no basis to alter its findings. That
where she was sedated but allowed to go home after three
the results of the physical examination did not satisfy the
hours.
criteria for permanent total disability. Moreover, she was told
that the pension granted to her was the maximum benefit due
 Later, on the same day, however, she vomited several times
her under the Rating Schedule established by the ECC.
and suffered from parie-occipital pains. She was again rushed
to U.E.R.M. Medical Center where she underwent a thorough
 The denial of her request then prompted private respondent to
medical examination. She was diagnosed to be suffering from
file a request for reconsideration of the earlier denial of her
Subarachnoid Hemorrhage Secondary to Ruptured
application for the conversion of her disability benefits from
Aneurysm. After undergoing craniotomy, she was finally
permanent partial disability to permanent total disability,
discharged from the hospital on January 20, 1990.
explaining that since the time of her operation she continued to
suffer from dizziness, headaches, loss of memory and inability
 Despite her operation, private respondent could not perform
to properly sleep. Moreover, she contended that there were
her duties as efficiently as she had done prior to her illness.
instances when she felt extremely weak and could not walk
This forced her to retire early from the government service on
without support. She further stated that she was required to
March 1, 1990 at the age of 62. Thus, private respondent filed
a claim for disability benefits with the GSIS for the above-
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
 take medication for life.
 The GSIS, however, denied reconsideration which denial was
later affirmed on appeal by the ECC in its decision.
 CA: Promulgated a decision favorable to private respondent.
ISSUE: Whether or not private respondent is entitled to conversion of
her benefits from permanent partial disability to permanent total
disability.
HELD: YES.
 While it is true that the degree of private respondent’s physical
condition at the time of her retirement was not considered as
permanent total disability, yet, it cannot be denied that her
condition subsequently worsened after her head operation and
consequent retirement. In fact, she suffered afterwards from
some ailments like headaches, dizziness, weakness, inability
to properly sleep, inability to walk without support and failure to
regain her memory. All these circumstances ineluctably
demonstrate the seriousness of her condition, contrary to the
claim of petitioner. More than that, it was also undisputed that
private respondent was made to take her medication for life.
disability becomes totally and permanently disabled from the
same cause.
 The Court has ruled that disability should not be understood
more on its medical significance but on the loss of earning
capacity. Private respondent’s persistent illness indeed forced
her to retire early which, in turn, resulted in her unemployment,
and loss of earning capacity.
 It has been a consistent pronouncement of this Court that
permanent total disability means disablement of an
employee to earn wages in the same kind of work, or work of a
similar nature that she was trained for or accustomed to
perform, or any kind of work which a person of her mentality
and attainment could do.
 It is also important to note that private respondent was
constrained to retire at the age of 62 years because of her
impaired physical condition. This, again, is another indication
that her disability is permanent and total. As held by this Court,
the fact of an employee’s disability is placed beyond question
with the approval of the employees optional retirement, for
such is authorized only when the employee is `physically
incapable to render sound and efficient service.

 A person’s disability may not manifest fully at one precise

 In the case at bar, the denial of the claim for permanent total
moment in time but rather over a period of time. It is possible
disability benefit of private respondent who, for 38 long years
that an injury which at first was considered to be temporary
during her prime had rendered her best service with an
may later on become permanent or one who suffers a partial
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
 unblemished record and who was compelled to retire on
account of her worsening condition, would indeed subvert the
salutary intentions of the law in favor of the worker. The Court,
therefore, affirms the decision of the respondent Court of
Appeals decreeing conversion of private respondent’s
disability from permanent partial disability to permanent total
disability.
11. GSIS v. CA (March 4, 1999)
FACTS:
 On June 10, 1964, private respondent Romeo S. Bella was
employed by the Bureau of Animal Industry as a livestock
inspector. He retired from the service on August 16, 1986. On
July 16, 1987, he was re-employed by the Department of
Agriculture as Agricultural Food Technologist and on March 1,
1994, promoted to the position of Agriculturist II.
 As disclosed by his records of employment, private
respondent was suspended without pay from September 1,
1993 to March 1, 1994. A month after, or on April 1, 1994, to
be precise, he was reinstated to his former position as
Agriculturist II at the Provincial Agricultural Office in Tacurong,
Sultan Kudarat. On July 1, 1995, private respondent who was
then 56years old, filed a terminal leave of absence due to
physical disability.
 The medical records of private respondent reveal that he was
suffering from Acute Myocardial Infraction and was confined
at the Notre Dame Hospital in Cotabato City from September
13, 1988 to September 19, 1988 and at the Philippine Heart
Center from September 6, 1994 to September 26, 1994.
 Thus, private respondent filed with the GSIS, Cotabato
Branch, a claim for compensation benefits under P.D. 626, as
amended. Finding his application meritorious and his ailment
compensable, the GSIS awarded him a Temporary Total
Disability income benefit during the periods of July 16 to July
21, 1994 and August 24 to August 29, 1994, as well as
reimbursement for medical expenses. Private respondent
Romeo S. Bella was also granted a Permanent Partial
Disability income benefit equivalent to thirty-eight (38) months
for his Ischemic Cardiomayopathy.
 Private respondent requested for the conversion of his benefits
from Permanent Partial Disability to Permanent Total
Disability, reasoning out that his ailments of Ischemic
Cardiomayopathy[6] and Chronic Obstructure Pulmonary
Disease rendered him unable to engage in any gainful
occupation for a continuous period exceeding 120 days, as
certified to by his attending physicians, Dr. Romulo Uy, Dr.
Anne Marie Luat, Dr. Danilo Rustia, Dr. Juanito Lastimosa and
Dr. Eldefonso Maglasang.
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
  GSIS denied his request for Permanent Total Disability on the
ground that the degree of private respondents disability as
evaluated by petitioners medical officers, did not satisfy the
criteria for Permanent Total Disability. His motion for
reconsideration was similarly denied.
 On appeal, the Employees Compensation Commission
(ECC) affirmed the Decision of the GSIS, denying private
respondents request for conversion of his Permanent Partial
Disability benefit to Permanent Total Disability benefit.
 The fact that he was forced to retire at the early age of 56,
 CA: Came out with its decision reversing the Decision of the
Employees Compensation Commission.
ISSUE: Whether or not the private respondent is entitled to
permanent total disability benefits.
 Petitioner contends that the criteria for Permanent Total
Disability, like permanent complete paralysis of two limbs
have not been met by private respondent’s ailment and
physical condition. As aptly pointed out by the Solicitor
General, total disability does not mean a state of absolute
helplessness, but disablement of an employee to earn wages
in the same kind of work or a work of similar nature, that he
was trained or accustomed to perform, or any kind of work
which a person of his mentality and attachments could do.
due to a sickness disabling him from performing his job as
Agriculturist II, qualifies his disability as a Permanent Total
Disability, though he lost no use of any particular anatomical
part of his body.

 Also, no less than five doctors certified that private

HELD: YES.
Permanent Total Disability
If as a result of the injury or
sickness the employee is
unable to perform any gainful
occupation for a continuous
period exceeding 120 days
except as otherwise provided
for in Rule X of these Rules.
Permanent Partial
Disability
If as a result of the injury or
sickness the employee
suffers a permanent partial
loss of the use of any part of
his body.
respondents illness disabled him from performing any gainful
occupation for a continuous period exceeding 120 days. Well
settled is the rule that a physicians report of sickness or
accident substantiates the disability claim.
 It is then beyond cavil that the sickness of the private
respondent made him unable to perform any gainful
occupation for a continuous period exceeding 120 days, thus
entitling him to permanent total disability benefits.

DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY

 Clearly, the position taken by the GSIS and the ECC runs
counter to the avowed policy of the State to construe social
legislations liberally in favor of the beneficiaries. Section 18,
Article II of the Constitution, provides:

Sec. 18. The State affirms labor as a primary social

economic force. It shall protect the rights of workers and
promote their welfare.

 All things studiedly considered, we are of the ineluctable

conclusion that the Court of Appeals erred not in granting
private respondents claim for Permanent Total Disability
benefits.

DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY

12. IJARES v. CA, ECC & GSIS
FACTS:
 Petitioner was employed by the government on March 16,
1955 as a Researcher in the Institute of National Language of
the Department of Education, Culture and Sports (DECS). In
1983, he was diagnosed by Dr. Merlin B. Consing, a
Phthisiologist, to have PTB Minimal and Emphysema. Since
then, he has undergone medical treatment.
evaluated medically compensable he was only granted
Permanent Partial Disability compensation, equivalent to a
period of nineteen (19) months beginning June 1, 1985 to
December 31, 1986. His subsequent request for an award of
his original claim was denied by the System on the ground
that the petitioner was already awarded the maximum benefits
commensurate to the degree of his disability at the time of
retirement. The matter was elevated to the Employees
Compensation Commission (ECC) which, in due, time affirmed
the finding of the GSIS, ratiocinating thus:

 From May 1 to 31, 1985, petitioner went on sick leave due to

o After going over the records of the case under
chronic emphysema. On June 1, 1985, he availed of early
consideration, we agree with the decision of the
retirement under Presidential Decree No. 1146 bringing to a
respondent System in denying appellants claim for
close thirty (30) years of public service. He was sixty (60)
additional compensation. Under the ECC Schedule of
years old at the time of his retirement.
Compensation, appellant was already awarded the
maximum benefits commensurate to the degree of his
 Sometime in 1988, petitioner was confined at the Philippine
disability at the time of his retirement from the service.
General Hospital (PGH) due to Chronic Obstructive Pulmonary
The confinement of appellant at the Philippine General
Diseases, Emphysema, PTB class IV and S/P Pneumothorax,
Hospital sometime in January, 1988 due to PTB,
Right. He underwent a Pulmonary Function Test which
minimal with Pulmonary Emphysema, Bilateral, could
indicated Severe Obstructive Ventilatory Pattern unresponsive
not be attributed to his employment considering that he
to Bronchodilator. Dr. Leon James Young of the UP-PGH
retired from the service on June 1, 1985, hence, the
Medical Center found petitioner to be suffering from
risk of his employment aggravating his PTB was
Permanent Total Disability.
unlikely. For any progression of a retired employees
condition after the date of his retirement is no longer
 On January 5, 1989, petitioner filed with the Government
within the compensatory coverage of P. D. 626, as
Service Insurance System (GSIS) a claim for Permanent Total
amended, since severance of an employee-employer
Disability benefits under P. D. No. 626. After his ailment was
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
 relationship results to the release of the State
Insurance Fund from any liability in the event of
sickness and resulting disability or death after such
retirement or separation from the service. Thus, claim
of appellant for additional compensation benefits could
not be given favorable consideration.
 Court of Appeals came out with the assailed decision
affirming the disposition of the respondent Commission.
ISSUE: Whether or not Court of Appeals erred in not adjudging him
entitled to his original income benefits claim for Permanent Total
 It is abundantly clear that petitioner’s disability cannot be
Disability and not Permanent Partial Disability as found by the
respondent Commission.
HELD: YES.
 Petitioner anchors his position on the fact that he was unable
to perform any gainful occupation for a period exceeding 120
days by reason of his illness. It is his submission that his
illness was acquired during his employment with the
government, the same illness which caused him to avail of an
early retirement in 1985 and to be confined in 1988 at the
Philippine General Hospital. Further, petitioner theorizes that
the diagnosis by his physician, Dr. Leon James Young,
declaring him to be permanently and totally disabled should
 No amount of dodging by the respondent System will alter the
have prodded the Commission to grant his original claim.
 On the other hand, the respondent Commission contended
that the mere inability to perform gainful occupation for a
period exceeding 120 days due to his illness or injury does not
entitle him (petitioner) to the benefits claimed. Respondent
Commission also seeks to deny further liability to the petitioner
on account of the non-compensable nature of the illness of the
latter, alleging that the confinement of petitioner at the PGH
sometime in 1988 due to the same ailment could not be
attributed to his employment considering that he retired from
the service on June 1, 1985.
considered as anything less than permanent and total. As
attested to by the declaration of his physician and his medical
history, it does not appear that petitioner comes within the
coverage of Rule X which should, in effect, only provide for
entitlement to temporary total disability benefits. The early
retirement of an employee due to work-related ailment proves
that indeed the employee was disabled totally to further
perform his assigned task, and to deny permanent total
disability benefits when he was forced to retire would render
inutile and meaningless the social justice precept guaranteed
by the Constitution.
undeniable fact that the illness of petitioner was contracted
while he was still in the service. This much is established as a
result of the grant to him by the System of permanent partial
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
 disability, after inevitably ruling on the compensable nature of
said illness.
 The Court finds as devoid of any basis on record the
conclusion of the Court of Appeals that modern medicine can
easily heal petitioner’s particular ailment if he is really taking all
the care of a diligent patient. While it may be true that the law
on disability benefits does not preclude the possibility that one
who receives benefits under a permanent total disability may
eventually be gainfully employed or recover from his
permanent total disability, thus suspending the benefits, such
possibility however does not justify the denial of a claim for a
permanent total disability which rightfully pertains to the
claimant. The petitioner is hereby declared entitled to benefits
under Permanent Total Disability. No pronouncement as to
costs.
13. Vicente vs ECC
Facts:
 Domingo Vicente, was formerly employed as a nursing
attendant at the Veterans Memorial Medical Center in Quezon
City.
 At the age of forty-five, and after having rendered more than
twenty-five years of government service, he applied for
optional retirement (effective August 16, 1981) under the
provisions of Section 12(c) of Republic Act No. 1616, giving as
reason therefor his inability to continue working as a result of
his physical disability.
 The petitioner likewise filed with the Government Service
Insurance System (GSIS) an application for "income benefits
claim for payment" under Presidential Decree (PD) No. 626, as
amended. Both applications were accompanied by the
necessary supporting papers, among them being a
"Physician's Certification" issued by the petitioner's attending
doctor at the Veterans Memorial Medical Center.
 Petitioner was diagnosed suffering from: Osteoarthritis,
multiple; Hypertensive Cardiovascular Disease; Cardiomegaly;
and Left Ventricular Hypertrophy; and classified him as being
under "permanent total disability."
 The petitioner's application for income benefits claim payment
was granted but only for permanent partial disability (PPD)
compensation or for a period of nineteen months.
 The petitioner requested the General Manager of the GSIS to
reconsider the award given him and prayed that the same be
extended beyond nineteen months invoking the findings of his
attending physician, as indicated in the latter's Certification.
 As a consequence of his motion for reconsideration, and on
the basis of the "Summary of Findings and Recommendation"
of the Medical Services Center of the GSIS, the petitioner was
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
 granted the equivalent of an additional four (4) months
benefits. Still unsatisfied, the petitioner again sent a letter to
the GSIS Disability Compensation Department Manager on
November 6, 1986, insisting that he (petitioner) should be
compensated no less than for "permanent total disability."
 The said manager informed the petitioner that his request had
been denied. Undaunted, the petitioner sought reconsideration
and as a result of which, on September 10, 1987, his case was
elevated to the respondent Employees Compensation
Commission (ECC). Later, or on October 1, 1987, the
petitioner notified the respondent Commission that he was
confined at the Veterans Memorial Medical Center for "CVA
probably thrombosis of the left middle cerebral artery."
 ECC—affirmed the decision of GSIS Disability Compensation
and denied the appeal of petitioner.
 Petitioner’s Contention: petitioner maintains that his disability
is "permanent total" and not "permanent partial" as classified
by the respondent Commission. In support of his position, the
petitioner points to the clinical evaluation and certification
earlier adverted to issued by his attending physicians at the
Veterans Memorial Medical Center.
 Respondent’s Contention: argues that the petitioner only
suffers from "permanent partial disability" and not from
"permanent total disability." The findings of the petitioner's
attending physician is not binding on the GSIS, nor on the
Commission, as the proper evaluation of an employee's
degree of disability exclusively belongs to the GSIS medical
experts who have specialized on the subject.
 Hence, this petition.
ISSUE: Whether or not the petitioner suffers from permanent
total disability.
HELD: YES. The decision of the respondent Employees’
Compensation Commission (ECC) was set aside.
 The petitioner’s permanent total disability is established
beyond doubt by several factors and circumstances.
Noteworthy is the fact that from all available indications, it
appears that the petitioner’s application for optional
retirement on the basis of his ailments had been
approved. Considering that the petitioner was only 45
years old when he retired and still entitled, under good
behavior, to 20 more years in service, the approval of his
optional retirement application proves that he was no
longer fit to continue in his employment. For optional
retirement is allowed only upon proof that the employee-
applicant is already physically incapacitated to render
sound and efficient service.
 Court's pronouncements that while "permanent total disability"
invariably results in an employee's loss of work or inability to
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
 perform his usual work, "permanent partial disability," on the
other hand, occurs when an employee loses the use of any
particular anatomical part of his body which disables him to
continue with his former work. Stated otherwise, the test of
whether or not an employee suffers from "permanent total
disability" is a showing of the capacity of the employee to
continue performing his work notwithstanding the disability he
incurred. Thus, if by reason of the injury or sickness he
sustained, the employee is unable to perform his customary
job for more than 120 days and he does not come within the
coverage of Rule X of the Amended Rules on Employees
Compensability (which, in a more detailed manner, describes
what constitutes temporary total disability), then the said
employee undoubtedly suffers from "permanent total disability"
regardless of whether or not he loses the use of any part of his
body.
 In the case at bar, the petitioner's permanent total disability is
established beyond doubt by several factors and
circumstances.1âwphi1 Noteworthy is the fact that from all
available indications, it appears that the petitioner's application
for optional retirement on the basis of his ailments had been
approved. The decision of the respondent Commission even
admits that the petitioner "retired from government service at
the age of 45." Considering that the petitioner was only 45
years old when he retired and still entitled, under good
behavior, to 20 more years in service, the approval of his
optional retirement application proves that he was no longer fit
to continue in his employment. For optional retirement is
allowed only upon proof that the employee-applicant is already
physically incapacitated to render sound and efficient service.
14. Manila Railroad Co vs Perez
FACTS:
 That claimant Daniel Perez was first employed by the
respondent company as a sixth class assistant conductor in its
transportation department on September 1, 1959; that since
then, he was assigned to different positions until he was made
second class assistant conductor on May 10, 1946 with an
annual salary of P1,800.00;
 That as a second class assistant conductor, his work
consisted of: (1) attending to the tickets of the passengers, (2)
helping lift the baggages of old passengers boarding the train,
and (3) sometimes giving signals as requested by his
superiors. The evidence also shows that because the
schedules of the train were not the same, he sometimes
worked seven (7) or eight (8) hours a day and that he started
his tour of duty sometimes at 3:00 o'clock a.m. or 3:00 o'clock
p.m.
 The records further reveal that because of prolonged absence
due to his pulmonary tuberculosis, the claimant was dismissed
from the service on November 16, 1944; that on May 10, 1946,
he was again allowed to work and assigned as second class
assistant conductor
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 October, 1950 claimant met with an accident while acting on
the advice of his superior, Chief Conductor Silva, claimant
applied for retirement which was approved effective January 1,
1951, the reason of Chief Conductor Silva in advising the
claimant to seek retirement being the latter's poor health due
to serious pulmonary tuberculosis.
 Respondent filed his claim for compensation, which was
controverted by petitioner herein. After due hearing, the Chief
Hearing Officer of the Workmen's Compensation Commission
rendered a decision, dated February 6, 1962, holding that it
had not been shown that respondent had contracted his
disease "in the course of his employment and by reason of
factors traceable to the nature of his employment" and that
"the aggravation of his sickness was due to the natural
development thereof", and, accordingly dismissing the claim
upon the theory that it is not compensable.
 Elevated to the Commission, said decision of the Chief
Hearing Officer was reversed by the Acting Chairman of the
Commission, who rendered the appealed decision, which, on
motion for reconsideration filed by petitioner herein, was
upheld by the Commission en banc.
 Hence, this petition.
ISSUE: Whether or not respondent’s disability has neither
arisen out of the nature of his employment nor been
aggravated by the same, and that, even if so aggravated, it is
not compensable.
HELD:
 Respondent started working for petitioner on September 1,
1939, and there is no evidence that he was then submitted to
medical examination.
 He appeared to be suffering from tuberculosis, for he then
spat two spoonfuls of blood. There was a recurrence of this
incident in 1943 and again in 1945. He was given artificial
pneumothorax in 1944 and, also, in 1946. Thereafter, the
illness admittedly went from bad to worse.
 In other words, the records do not show clearly that
respondent's illness was contracted in the course of the
employment, and the fact that he spat blood several months
after he had begun to work for petitioner suggests that he
probably had it then in a latent or mild condition; but we are
satisfied, as the Commission was, that the illness was
aggravated by the nature of his employment.
 In this connection, it should be noted that our Workmen's
Compensation Law is patterned after similar laws in the
United States, under which compensation for disability
resulting from the aggravation of a pre-existing illness has
invariably been granted despite the absence of a specific
provision to this effect we held the employer liable for
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 compensation, despite the fact that the aggravation of a pre-
existing illness and the consequent disability had taken place
before June 20, 1952. (Before Workmen’s Compensation Act
became effective)
15. ECC vs Sanico
FACTS:
 Private respondent was a former employee of John Gotamco
and Sons.
 He worked in said company as wood filer from 1986 until he
was separated from employment on 31 December 1991 due to
his illness. His medical evaluation report, dated 31 September
1991, showed that he was suffering from pulmonary
tuberculosis (PTB). Subsequent chest x-rays taken on 9
October 1994 and 3 May 1995 diagnostically confirmed his
illness.
 Private respondent filed with the Social Security System (SSS)
a claim for compensation benefits under P.D. No. 626, as
amended.
 The SSS denied private respondents claim on the ground of
prescription. The SSS ruled that under Article 201 of the Labor
Code, a claim for compensation shall be given due course only
when the same is filed with the System three (3) years for the
time the cause of action accrued.
 In private respondents case, the SSS reckoned the three-year
prescriptive period on 21 September 1991 when his PTB first
became manifest. When he filed his claim on 9 November
1994, the claim had allegedly already prescribed.
 On appeal, petitioner affirmed the decision of the SSS. Private
respondent then elevated the case to the CA, which reversed
petitioners decision and granted private respondents claim for
compensation benefits.
 CA reconciled Article 201 of the Labor Code with Article
1144(2) of the Civil Code. Under the latter provision of law, an
action upon an obligation created by law must be filed within
ten (10) years from the time the cause of action accrues. Thus,
while private respondents illness became manifest in
September 1991, the filing of his compensation claim on 9
November 1994 was within, even long before, the prescriptive
period.
ISSUE: Whether or not private respondents claim for
compensation benefit had already prescribed when he filed his
claim on 9 November 1994.
HELD: NO.
 In disability compensation, it is not the injury which is
compensated, but rather it is the incapacity to work resulting in
the impairment of ones earning capacity.
 Petitioner thus seriously erred when it affirmed the decision of
the SSS denying private respondents claim on the ground of
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 prescription. In determining whether or not private respondents
claim was filed within the three-year prescriptive period under
Article 201 of the Labor Code, petitioner and the SSS
reckoned the accrual of private respondents cause of action
on 31 September 1991, when his PTB became known. This is
erroneous.
 The prescriptive period for filing compensation claims should
be reckoned from the time the employee lost his earning
capacity, i.e., terminated from employment, due to his illness
and not when the same first became manifest. Indeed, a
persons disability might not emerge at one precise moment in
time but rather over a period of time. In this case, private
respondents employment was terminated on 31 December
1991 due to his illness, he filed his claim for compensation
benefits on 9 November 1994. Accordingly, private
respondents claim was filed within the three-year prescriptive
period under Article 201 of the Labor Code.
16. L.G. CRISTOBAL v. ECC
FACTS:
 On 1980, a decision was rendered finding that Luz G.
Cristobal, widow of the deceased Fortunato Cristobal, has
shown by clear and convincing evidence that her husband
contracted rectal cancer or at least the risk of contracting the
same had been increased by the conditions under which he
was working and accordingly ordered GSIS.
1) to pay the petitioner the sum of P12,000.00 as death
benefits;
2) to reimburse petitioner medical, surginal and hospital
expenses duly supported by proper receipts;
3) to pay petitioner the sum of P700.00 as funeral expenses;
and
4) to pay the petitioner attorney's fees equivalent to 10% of the
death benefits.
 GSIS then filed a MR alleging that: I As the ailment of the
deceased is not a listed occupational disease, proof should
have been shown that the cause of the ailment was the
working conditions. This Honorable Court only found a case of
aggravation which is different from proof of increased risk of
contracting the ailment. II. Assuming that the ailment is
compensable under the new law, the benefits awarded to
petitioner are not in accordance with said law. III. The grant of
attorney's fees in the sum equivalent to ten (10%) percent of
the death benefits is not proper.
 ECC (Employee’s Compensation Commission) filed a MR
alleging that: I. The illness of rectal malignancy which caused
the death of Fortunato S. Cristobal is not compensable under
the theory of increased risk as provided in PD 626, as
amended. II. The amounts awarded as death benefits, funeral
expenses and attorney's fees are not in accordance with law.
III. The cause of death not being a compensable illness, the
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
 order for reimbursement of medical, surgical and hospital
expenses has no basis.
 With respect to the award of death benefits in the amount of
P12,000.00, GSIS and ECC argue that the same is not in
consonance with Articles 193 (a) and 191(a) of the Labor
Code, as amended by PD 891. They also questioned the
award of attorney’s fees.
ISSUE: WON the award of death benefits and attorney’s fees were
properly computed?
RULING:
As to the death benefits:
 A computation of the death benefits in accordance with the
underlined procedure would disclose that the amount,
awarded by this Court is well within the limitations provided
therein. To illustrate: The husband of petitioner received an
annual salary of P11,904.00. His average monthly salary,
therefore, is P992.00.
 Consequently, the monthly income benefit (115 % of P235.28)
would amount to P270.57.
 In addition, the law grants an additional 10%, of the basic
benefit (P235.28) for each dependent child not exceeding 5.
The deceased left, at the time of his death, 7 dependent
children. Petitioner would therefore be entitled to an additional
grant of P23.53 (rounded) for each child or a total of P117.65
for 5 dependent children, observing the limitation. ln
summation, petitioner should be receiving a monthly income
benefit of P270.57 plus P117.65 or a total of P388.22. In a
year's time, this would amount to P4,658.64 and in 5 years’
time, the total would be P23,293.20. This Court in compliance
with the proviso set forth in Article 193 (a) “that total payment
shall in no case exceed twelve thousand pesos [P12,000.000]"
limited its award to P12,000.00.
As to the attorney’s fees:
 Under Art 203 of the Labor Code, A close examination of the
aforequoted provision reveals that the intent of the law is to
free the award from any liability or charge so that the claimant
who is exempt from liability for attorney's fees. The defaulting
employer or government agency remains liable for attorney's
fees; because it compelled the claimant to employ the services
of counsel by unjustly refusing to recognize the validity of the
claim of petitioner. This actually is the rationale behind the
prohibition. Nothing is wrong with the court's award of
attorney's fees which is separate and distinct from the other
benefits awarded.
 Besides, in the instant case, the participation of petitioner's
counsel was not limited to the preparation or filling of the claim
but in appealing petitioner's case before this Court
necessitating submission of pleadings to establish his cause of
action and to rebut or refute the arguments of herein
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
 respondents. Fairness dictates that the counsel should receive
compensation for his services; otherwise, it would be entirely
difficult for claimants, majority of whom are not learned in the
intrecacies of the law, to get good legal service. To deny
counsel compensation for his professional services, would
amount to deprivation of property without due process of law.
 Petitioner appealed to this Court in forma pauperis.
Respondents are of the mistaken belief that such manner of
appeal is incompatible with the award of attorney's fees. It
must be pointed out that Section 22, Rule 3 of the Rules of
Court merely exempts a pauper litigant from the payment of
legal fees and from the filing of appeal bond, printed record
and printed brief, but does not exempt him from the payment
of attorney's fees. Therefore, the award of attorney's fees in
the instant case is proper.
17. MENDOZA v. PP
FACTS:
 For failure to remit the SSS premium contributions of
employees of the Summa Alta Tierra Industries, Inc. (SATII) of
which he was president, Romarico J. Mendoza was convicted
of violation of Section 22(a) and (d) vis--vis Section 28 of R.A.
No. 8282 or the Social Security Act of 1997 by RTC of Iligan
City, Branch 4. His conviction was affirmed by the CA.
 Mendoza was advised by the SSS to pay the above-said
amount, he proposed to settle it over a period of 18 months
which proposal the SSS approved by Memorandum of
September 12, 2000.
 Despite the grant of Mendoza’s request for several extensions
of time to settle the delinquency in instalments, Mendoza
failed, hence, his indictment.
 Mendoza sought to exculpate himself by explaining that during
the questioned period, SATII shut down due to the general
decline in the economy.
 Mendoza maintains, inter alia, that the managing head or
president or general manager of a corporation is not among
those specifically mentioned as liable in the above-quoted
Section 28(f). And he calls attention to an alleged congenital
infirmity in the Information in that he was charged as proprietor
and not as director of SATII. It further claims that the lower
courts erred in penalizing him with six years and one day to
eight years of imprisonment considering the mitigating and
alternative circumstances present, namely: his being merely
vicariously liable; his good faith in failing to remit the
contributions; his payment of the premium contributions of
SATII out of his personal funds; and his being economically
useful, given his academic credentials, he having graduated
from a prime university in Manila and being a reputable
businessman.
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ISSUE: WON Remittance of contribution to the SSS under Section payments by force of law.
22(a) of the Social Security Act is mandatory?
 Failure to comply with the law being malum prohibitum, intent
RULING: YES.
to commit it or good faith is immaterial.

 No discretion or alternative is granted respondent Commission

 The provision of the law being clear and unambiguous,
in the enforcement of the laws mandate that the employer who
petitioners interpretation that a proprietor, as he was
fails to comply with his legal obligation to remit the premiums
designated in the Information, is not among those specifically
to the System within the prescribed period shall pay a penalty
mentioned under Sec. 28(f) as liable, does not lie. For the
of three 3% per month. The prescribed penalty is evidently of a
word connotes management, control and power over a
punitive character, provided by the legislature to assure that
business entity.
employers do not take lightly the States exercise of the police
power in the implementation of the Republics declared policy
 The term managing head in Section 28(f) is used, in its
to develop, establish gradually and perfect a social security
broadest connotation, not to any specific organizational or
system which shall be suitable to the needs of the people
managerial nomenclature. To heed petitioners reasoning
throughout the Philippines and (to) provide protection to
would allow unscrupulous businessmen to conveniently
employers against the hazards of disability, sickness, old age
escape liability by the creative adoption of managerial titles.
and death.[Section 2, Social Security Act; Roman Catholic
Archbishop v. Social Security Commission, 1 SCRA 10,
 While the Court affirms the appellate court’s decision, there is
January 20, 1961]
a need to modify the penalty imposed on petitioner.

 In this concept, good faith or bad faith is rendered irrelevant,

since the law makes no distinction between an employer who
professes good reasons for delaying the remittance of
premiums and another who deliberately disregards the legal
duty imposed upon him to make such remittance. From the
moment the remittance of premiums due is delayed, the
penalty immediately attaches to the delayed premium
18. PANLILIO v. HON. ROSALES
FACTS:
 On 2004, Jose Marcel Panlilio, Erlinda Panlilio, Nicole Morris
and Marlo Cristobal (PETITIONERS) as corporate officers of
Silahis International Hotel, Inc. (SIHI), filed with RTC Manila
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
 Branch 24 petition for Suspension of Payments and
Rehabilitation in SEC Corp. Case No. 04-111180.
 RTC Branch 24 – issued an Order staying all claims against
SIHI upon finding the petition sufficient in form and substance.

 At the time, however, of the filing of the petition for
rehabilitation, there were a number of criminal charges
pending against petitioners in RTC of Manila Branch 51.
These criminal charges were initiated by SSS and involved
charges of violations of Section 28 (h) of RA 8282, or the
Social Security Act of 1997 (SSS law), in relation to Article 315
(1) (b) of the RPC, or Estafa. Consequently, petitioners filed
with the RTC of Manila a Manifestation and Motion to Suspend
Proceedings. Petitioners argued that the stay order issued by
Branch 24 should also apply to the criminal charges pending in
Branch 51. Petitioners, thus, prayed that Branch 51 suspend
its proceedings until the petition for rehabilitation was finally
resolved.
 RTC Branch 51 – dismissed the motion to suspend
 CA - discussed that violation of the provisions of the SSS law
was a criminal liability and was, thus, personal to the offender.
As such, the CA held that the criminal proceedings against the
petitioners should not be considered a claim against the
corporation and, consequently, not covered by the stay order
issued by Branch 24.
ISSUE: WON the suspension of all claims as an incident to a
corporate rehabilitation also contemplate the suspension of
criminal charges filed against the corporate officers of the
distressed corporation?
RULING: No.
 Rosario v. Co is at fours with the case at bar. Petitioners
are charged with violations of Section 28 (h) of the SSS
law, in relation to Article 315 (1) (b) of the Revised Penal
Code, or Estafa. The SSS law clearly criminalizes the non-
remittance of SSS contributions by an employer to protect
the employees from unscrupulous employers. Therefore,
public interest requires that the said criminal acts be
immediately investigated and prosecuted for the protection
of society.
 The rehabilitation of SIHI and the settlement of claims
against the corporation is not a legal ground for the
extinction of petitioner’s criminal liabilities. There is no
reason why criminal proceedings should be suspended
during corporate rehabilitation, more so, since the prime
purpose of the criminal action is to punish the offender in
order to deter him and others from committing the same or
similar offense, to isolate him from society, reform and
rehabilitate him or, in general, to maintain social order. As
correctly observed in Rosario, it would be absurd for one
DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY
 who has engaged in criminal conduct could escape after trial. However, any civil indemnity awarded as a result
punishment by the mere filing of a petition for rehabilitation of their conviction would be subject to the stay order issued
by the corporation of which he is an officer. by the rehabilitation court. Only to this extent can the order
of suspension be considered obligatory upon any court,
 The prosecution of the officers of the corporation has no tribunal, branch or body where there are pending actions
bearing on the pending rehabilitation of the corporation, for claims against the distressed corporation.
especially since they are charged in their individual
capacities. Such being the case, the purpose of the law for
the issuance of the stay order is not compromised, since
the appointed rehabilitation receiver can still fully discharge
his functions as mandated by law. It bears to stress that
the rehabilitation receiver is not charged to defend the
officers of the corporation. If there is anything that the
rehabilitation receiver might be remotely interested in is
whether the court also rules that petitioners are civilly
liable.

 Such a scenario, however, is not a reason to suspend the

criminal proceedings, because as aptly discussed in
Rosario, should the court prosecuting the officers of the
corporation find that an award or indemnification is
warranted, such award would fall under the category of
claims, the execution of which would be subject to the stay
order issued by the rehabilitation court.

 The penal sanctions as a consequence of violation of the

SSS law, in relation to the revised penal code can
therefore be implemented if petitioners are found guilty

DINO - LAPEZ - MANGUERA - MORALES, C. - MORALES, I. – UMANGAY