8/3/2019 ANASTACIO VIANA v.

ALEJO AL-LAGADAN

[ GR No. 8967, May 31, 1956 ]

ANASTACIO VIANA v. ALEJO AL-LAGADAN

DECISION
99 Phil. 408

CONCEPCION, J.:
Petitioner Anastacio Viana owned the fishing sailboat "Magkapatid", which, in the
night of September 3, 1948, sunk in the waters between the province of Bataan and
the island of Corregidor, as a consequence of a collision with the USS "Tingles", a
vessel of the U.S. Navy, In asmuch as Alejandro Al-Lagadan, a member of the crew of
the "Magkapatid", disappeared with the craft, his parents, respondent Ale jo Al-
Lagadan and Filomena Piga, filed the corresponding claim for compensation under
Act No 3428. After appropriate proceedings, a Referee of the Workmen's
Compensation Commission rendered a decision, dated February 23, 1953:
"1. Ordering Mr. Anastacio Viaiia to pay the above-named claimants through the
Workmen's Compensation Commission, Manila, the sum of P1,560 in lump sum
with interest at 6 per cent from September 3, 1948 until fully paid; and
"To pay the sum of P16 to the Workmen's Compensation Commission as costs."

Said decision was, on petition for review filed by Viana, affirmed by the Workmen's
Compensation Commissioner, on or about October 22, 1954, "with additional fee of
P5.00". Said Commissioner, having subsequently denied a reconsideration of this
action, Viana has brought the matter to us, for review by certiorari, upon the ground
that this case does not fall within the purview of Act No. 3428, because the gross
income of his business for the year 1947 was allegedly less than P10,000, and
because Alejandro Al-Lagadan was, at the time of his death, His (petitioner's)
industrial partner, not his employee.
The first ground is untenable, petitioner not having invoked it before the rendition of
the Referee's decision on February 23, 1953. The objection to the application of Act
No. 3428, upon said ground, was made for the first time when .petitioner sought a
review of said decision by the Workmen's Compensation Commissioner. The non-
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applicability of said Act to employers whose gross income does not reach P20,000 is,
however, a matter, of defense, which cannot be availed of unless pleaded in the
employer's answer to the claim for compensation filed by the employee or his heirs.
Petitioner herein having failed to do so, said defense may not now be entertained
(Rolan vs. Perez, 63 Phil., 80, 85-86).
As regards the second ground, petitioner maintains, contrary to the finding of the
Referee and said Commissioner, that the deceased was his industrial partner, not
employee. In this connection, it is alleged in paragraph (6) of the petition:

"That the practice observed then and now in engaging the services of
crewmen of sailboats plying between Mindoro and Manila is on a partnership
basis, to wit: that the owner of the vessel, on one hand receives one-half of the
earnings of the sailboat after deducting the expenses for the maintenance of
the crew, the other half is divided pro rata among' the members, of the crew,
the 'patron' or captain receiving four parts, the 'piloto' or next in command
three parts, the wheelsman or 'timonel' 1 1/2 parts and the rest of the members
of the crew one part each, as per Annex 'B' hereof."

It appears that, before rendering' his aforementioned decision, the Referee

requested Mr. Manuel O. Morente, an attorney of the Workmen's Compensation
Commission, "to look into and inquire and determine the method of and the basis of
engaging the services of crewmen for sailboats (batel) of twenty (20) tons or more
plying between Manila and Mariveles and moored along Manila North Harbor", and
that, thereafter, said Atty. Morente reported:

"The basis of engaging the services of crewmen of a batel is determined in

accordance with the contract executed between the owner and the patron. The
contract commonly followed is on a share basis after deducting all the expenses
incurred on the voyage. One half goes to the owner of the batel and the other
half goes to the patron and the members of the crew and divided among
themselves on a share basis also in accordance with their agreement with the
patron getting the lion's share. The hiring of the crew is done by the patron
himself. Usually, when a patron enters into a contract with the owner of the
batel, he has a crew ready with him." (Italics supplied.)

In sustaining the Referee's finding to the effect that the deceased was an employee of
Viaña, the Workmen's Compensation Commissioner said:
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"The trial referee found that there was an employer-employee relation between
the respondent and the deceased, Alejandro Al-Lagadan, and the share which the
deceased received at the end of each trip was in the nature of 'wages' which
is defined under section 39 of the Compensation Act. This is so because such
share could be reckoned in terms of money. In other words, there existed the
relation of employer and employee between the respondent and Alejandro .Al-
Lagadan at the time of the latter's death.
"We. believe that the trial referee did not err in finding the deceased an
employee of the respondent. We cite the following cases which illustrate the
point at issue:
The officers and crews of whaling and other fishing vessels who are to receive
certain proportions of produce of the voyage in lieu of wages; (Rice vs. Austin, 17
Mass. 206; 2Y & C. 61); Captains of. merchant ships who,, instead of wages,
receive shares in the profits of the adventure; (4 Maule & C. 240); or who take
vessels under an agreement to pay certain charges and receive a share of the
earnings; (Tagard vs. Loring, 16 Mass. 336, 8 Am. Dec. 140; Winsor vs. Cutts, 7
Greenl. Me. 261) have generally been held not to be partners with the
respondent, and the like. Running a steamboat on shares does not make the
owners partners in respect to the vessel (The Daniel Koine, 35 Fed. 785); so of
an agreement between two parties to farm on shares; (Hooloway vs. Brinkley,
42 Ga. 226); A seaman who is to receive pay in proportion to the amount of
fish caught is not a partner; (Holdren vs. French, 68 Me. 241); sharing profits
in lieu of wages is not a partnership. There is no true contribution;
(Crawford vs. Austin, 34 Md. 49; Whitehill vs, Shickle, 43 Mo. 538; Sankey
vs. Iron Works, 44 Ga. 228.)'" (Italics supplied.)

In other words, in the opinion of the Referee, as well as of said Commissioner, the
mere fact that Alejandro's share in the understanding "could be reckoned in terms of
money", sufficed to characterize him as an employee of Viaña. We do not share this
view. Neither can we accept, however, petitioner's theory to the effect that the
deceased was his partner, not an employee, simply because he (the deceased) shared
in the profits, not in the losses. In determining the existence of employer-employee
relationship, the following elements are generally considered, namely: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the power
of dismissal; and (4) the power to control the employees' conduct although the latter
is the most important element (35 Am. Jur. 445). Assuming that the share received
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by the deceased could partake of the nature of wages on which we need not, and do
not, express our view and that the second element, therefore, exists in the case at bar,
the record does not contain any specific data regarding the third and fourth
elements.
With respect to the first element, the facts before us are insufficient to warrant a
reasonable conclusion, one way or the other. On the one hand, Atty. Morente said, in
his aforementioned report, that "the contract commonly followed is on a share basis.
* * * The hiring of a crew is done by the patron himself. Usually, when a patron
enters into a contract with the owner of the batel, he has a crew ready with him".
This statement suggests that the members of the crew are chosen by the patron,
seemingly, upon his sole responsibility and authority. It is noteworthy, however,
that said report referred to a practice commonly and "usually" observed in a given
place. The record is silent on whether such practice had been followed in the case
under consideration. More important still, the language used in said report may be
construed as intimating, not only, that the "patron" selects and engages the crew,
but, also, that the members thereof are subject to his control and may be dismissed
by him. To put it differently, the literal import of said report is open to the
conclusion that the crew has a contractual relation, not with the owner of the vessel,
but with the patron, and that the latter, not the former, is either their employer or
their partner.
Upon the other hand, the very allegations of the petition show otherwise, for
petitioner explicitly averred there in that the deceased Alejandro Al-Lagadan was
his "industrial partner". This implies that a contract of partnership existed between
them and that, accordingly, if the crew was selected and engaged by the "patron", the
latter did so merely as agent or representative of petitioner here in. Again, if
petitioner were a partner of the crew members, then neither the former nor the
patron could control or dismiss the latter.
In the interest of justice and equity, and considering that a decision on the merits of
the issue before us may establish an important precedent, it would be better to
remand the case to the Workmen's Compensation Commission for further evidence
and findings on the following questions: (17 who selected the crew of the
"Magkapatid" and engaged their services; (2) if selected and engaged by the
"patron", did the latter act in his own name and for his own account, or on behalf and
for the account of Viaña; (3) could Viana have refused to accept any of the crew

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members chosen and engaged by the "patron"; (4) did petitioner have authority to
determine the time when, the place where and/or the manner or conditions in or
under which the crew would work; and (5) who could dismiss its members.
Wherefore, let the case be remanded to the Workmen's Compensation Commission,
for further proceedings in conformity with this decision, without special
pronouncement as to costs. So ordered.
Paras, C. J., Bengzon, Padilla, Mototemayor, Reyes, A., Bautista Angelo, Reyes, J. B.
L., and Endencia, JJ., concur.

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