MADRIGAL SHIPPING CO., vs. MONICA MELAD, et. al.

FACTS: In a series of unfortunate events, 4 men died from the sinking of a ship owned by Madrigal
Shipping Co., Inc. and a boat which was supposed to come to its recue. 4 claims were filed in the
Workmen's Compensation Commission against petitioner and award was made ordering petitioner to
pay the claimants. The petitioner contends, among others, that there was no employer-employee
relationship between it (petitioner) and the persons for whose death these claims were filed for the
following reasons:

1. Because its pilotage contract was with the Aparri Pilots' Association and not with the members
thereof;

2. Because the salaries of the pilots were paid not by petitioner but by the association;

3. Because petitioner had no control over the action of the Chief pilot and district pilot; and

4. Because the service of Filoteo Siccuan and Domingo Batta were contracted by the pilots' association
and not by the petitioner.

ISSUE: WON there was an employer-employee relationship between the deceased persons and
petitioner company

RULING: YES, Workmen's Compensation Commission’s decision of awarding the heirs of the deceased
claims against the petitioner is affirmed.

RATIO: Primitivo Siccuan and Francisco Ricerra were members of the Aparri Pilots' Association, not its
employees. While it is true that their salaries were paid by the association, yet it is equally true that the
same were taken out of the pilotage fees paid by vessels. The pilots' association cannot be considered
an independent contractor so as to free the petitioner from the liability of an employer because it
appears to have neither capital nor money to pay its employees nor does it appear to have filed a bond.
Even if it were an independent contractor, Section 39 of the Workmen's Compensation Act provides that
“Employer” includes the owner or lessee of a factory or establishment or place of work or any other
person who is virtually the owner or manager of the business carried on in the establishment or place of
work but who, for the reason that there is an independent contractor in the same, or for any other
reason, is not the direct employer of laborers employed there.

Also, while Customs Administrative Order No. 26 Par. XLIII says that a pilot is responsible for the
direction of the vessel from the moment he assumes control of the same, the provision nevertheless
makes the conduct of the pilot subject to approval by the master of the vessel.

As to the sounder and oarsman, it is well settled that a person who is asked for help in an emergency
which threatens the employer's interests becomes an employee under an implied contract of hire.

FULL TEXT

Republic of the PhilippinesSUPREME COURTManila

EN BANC

G.R. Nos. L-17362 and L-17367-69 February 28, 1963

Concepcion A. Salud for petitioner.Villanueva & Villavieja for respondents.

REGALA, J.:

The S.S. "Cetus" was owned and operated by petitioner Madrigal Shipping Co., Inc. On November 25,
1955, it leftthe port of Aparri for Manila. However, after sailing five miles, the officers of the ship
decided to return to the port ofAparri for repair of its rudder. For this purpose, the captain sent Jua
Siong Kong Ho, Inc., the ship's agent in Aparri,a telegram with instruction to "PLEASE ADVISE PILOT WILL
ENTER AGAIN FOR RUDDER REPAIR."

Accordingly, the agent informed the Aparri Pilots' Association of the contents of the telegram and,
forthwith, PrimitivoSiccuan, chief pilot, and Francisco Ricerra, district pilot, of the pilots' association,
made arrangements with FiloteoSiccuan and Domingo Batta to take them by boat to the ship in distress.

The party reached the ship about past 12 midnight of November 25. Primitivo Siccuan, Francisco Ricerra
andFiloteo Siccuan boarded the ship while Domingo Batta remained on the boat. At about 2:30 a.m.,
November 26, theship sank on account of heavy waves. The boat was also lost. Among those who
perished in the tragedy werePrimitivo Siccuan, Francisco Ricerra, Filoteo Siccuan and Domingo Batta.

In due time, four claims were filed in the Workmen's Compensation Commission against petitioner.
Upon thecreation by Reorganization Plan 20-A of Regional Offices in the Department of Labor, these
cases were transferredto Regional Office No. 2, which, after hearing, made an award ordering petitioner
to pay the claimants the following:

1. To the heirs and dependents of decedent FRANCISCO RICERRA, the sum of FOUR THOUSAND
PESOS(P4,000.00), the maximum amount allowed by law, which should be divided among them;

2. To the heirs and dependents of decedent FILOTEO SICCUAN, the sum of FOUR THOUSAND
PESOS(P4,000.00), the maximum amount allowed by law, which should be divided among them;

3. To the heirs and dependents of decedent PRIMITIVO SICCUAN, the sum of FOUR THOUSAND
PESOS(P4,000.00), the maximum amount allowed by law, which should be divided among them;

4. To the widow and dependent of decedent DOMINGO BATTA, the sum of ONE THOUSAND
SEVENHUNDRED TWENTY FIVE PESOS AND TWELVE CENTAVOS (P1,725.12), which includes burial
expenses;

5. To this office, the sum of ONE HUNDRED FORTY-ONE PESOS ONLY (P141.00), pursuant to Section 55of
said Act.

This award was affirmed by Associate Commissioner Jose Sanchez and later by the Workmen's
CompensationCommission sitting en banc. Hence, this petition for review, petitioner contending in its
assignment of errors:

1. That the hearing officer of Regional Office No. 2 had no jurisdiction to decide these cases;
2. That there was no employer-employee relationship between it (petitioner) and the persons for whose
deaththese claims were filed; and10/7/2020 G.R. Nos. L-17362 and L-17367-69
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3. That some of the respondents were not the dependents of Primitivo Siccuan and Domingo Batta, as
theterm dependents is used in the law.

With regard to the first point, petitioner argues that Reorganization Plan 20-A, which confers jurisdiction
to hearworkmen's compensation claims on Regional Offices of the Department of Labor, is
unconstitutional.

The contention is without merit. As this Court held in San Miguel Brewery, Inc. v. Sobremesana, et al.,
G.R. No. L-18730, September 16, 1961,

Petitioner argues incorrectly that our previous rulings (Corominas v. Labor Standards Commission, G.R.
No.L-14837, and related cases decided June 20, 1961) held null and void Reorganization Plan 20-A in so
far as itvests the Regional Offices of the Department of Labor with original and exclusive jurisdiction to
try and decidelabor claims, including workmen's compensation claims. This Court never ruled that the
Regional Officeshave no authority to pass upon workmen's compensation claims under Plan 20-A; on the
contrary, in ourdecisions in the case of Miller v. Mardo, G.R. No. L-15138, and related cases,
promulgated on July 31, 1961,we said:

On the basis of the foregoing considerations, we hold and declare that Reorganization Plan No. 20-
A,insofar as it confers judicial power to the Regional Offices over cases other than those falling under
theWorkmen's Compensation Law, is invalid and of no effect. (Emphasis supplied)

The reason for the ruling is that, as pointed out in the same cases, the consideration and adjudication
ofclaims under the Workmen's Compensation Law was already being exercised by the Department of
Labor'sCompensation Commission even prior to its reorganization under Plan 20-A. In conferring initial
power to hearand decide such claims upon the hearing officers of the Department's Regional Offices,
section 25 of Plan 20-A was merely reallocating powers already possessed by the Department, and was
in conformity with theauthority granted by section 6 of Republic Act 997 as amended by Republic Act
No. 1241. There was in theparticular case no assumption of powers not previously vested in the
Department, and, therefore, notransgression of the reorganizational authority and purposes of the
enabling laws.

This ruling was reiterated in later cases.1

Anent the second point, Section 26 of the Workmen's Compensation Law (Act No. 3428, as amended)
provides:

When an employee suffers personal injury from accident arising out of and in the course of his
employment,or contracts tuberculosis or other illness directly caused by such employment, or either
aggravated by or theresult of the nature of such employment, his employer shall pay compensation in
the sums and to the personshereinafter specified ....
As may be noted from the above-quoted provision, the existence of employer-employee relationship is
thejurisdictional foundation for recovery under the law. (Asia Steel Corp. v. Workmen's Compensation
Commission, etal. G.R. No. L-7638, June 27, 1955). Hence, the question is: Was there such a relationship
between petitioner, onthe one hand, and Primitivo Siccuan, Francisco Ricerra, Filoteo Siccuan and
Domingo Batta, on the other?

Petitioner contends that there was none for the following reasons:

1. Because its pilotage contract was with the Aparri Pilots' Association and not with the members
thereof;

2. Because the salaries of the pilots were paid not by petitioner but by the association;

3. Because petitioner had no control over the action of the Chief pilot and district pilot; and

4. Because the service of Filoteo Siccuan and Domingo Batta were contracted by the pilots' association
andnot by the petitioner.

Petitioner's claim lacks merit. As pointed out by the Workmen's Compensation Commission, Primitivo
Siccuan andFrancisco Ricerra were members of the Aparri Pilots' Association, not its employees. While it
is true that theirsalaries were paid by the association, yet it is equally true that the same were taken out
of the pilotage fees paid byvessels. The pilots' association cannot be considered an independent
contractor so as to free the petitioner from theliability of an employer because it appears to have
neither capital nor money to pay its employees nor does it appearto have filed a bond. (Madrigal
Shipping Co., Inc. v. Workmen's Compensation Commission, et al., G.R. No. L-17395, June 29, 1962; Caro
v. Rilloraza, et al., G.R. No. L-9569, Sept. 30, 1957)

The claim that petitioner had no right of control over the work of the pilots is based on Customs
Administrative OrderNo. 26 (Nov. 28, 1946) which provides as follows:

Par. XLIII. A pilot shall be held responsible for the direction of a vessel from the time he assumes control
thereofuntil he leaves it anchored free shoal; Provided, That his responsibility shall cease at the moment
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neglects or refuses to carry out his instruction. (Emphasis supplied)

Petitioner misreads the provision in question, for while it says that a pilot is responsible for the direction
of the vesselfrom the moment he assumes control of the same, the provision nevertheless makes the
conduct of the pilot subjectto approval by the master of the vessel. That is why it relieves the pilot of
responsibility if his action is disapprovedby the master of the vessel.

Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and
approved by thisHonorable Court, without prejudice to the parties adducing other evidence to prove
their case not covered by thisstipulation of facts. 1äwphï1.ñët
Besides, as the Commission held, Customs Administrative Order No. 69 (Oct. 1, 1948), likewise invoked
bypetitioner, shows that coast pilots are employed by the vessels needing their services. Thus, it
provides:

Any vessel employing a coast pilot between pilotage districts shall pay the prescribed compulsory or
optionalpilotage, fee to the pilots' association within whose jurisdictional waters any part of said service
may berendered and any vessel employing a district pilot from one pilotage district to another in
addition to thepayment provided for in paragraph II, shall pay to the association in the district or in
which such vessel ispiloted, the compulsory pilotage fee provided for said district.

In some respects, this case is similar to the case of Martha Lumber Mill, Inc. v. Lagradante, et al., 52 O.G.
No. 9,4230. In the latter case, the deceased was appointed by the Department of Agriculture and
Natural Resourcespursuant to the following provisions of Forestry Administrative Order No. 11 (Sept. 11,
1934):

34(s) Within thirty (30) days from the date of the issuance of a license, and after the terms and
conditions ofsaid license had been duly accepted in their entirety by the licensee concerned, at least one
concessionguard, if so required in the license, shall be employed by said licensee. The name and address
of theconcession guard so employed shall be reported to the local forest office under whose jurisdiction
the licensearea falls. The concession guard, whose salary will be paid him directly by the licensee, shall
from time totime, report to the herein mentioned forest officer for instruction regarding his duties and
obligations to patroland cooperate with the government in the protection of the area of the licensee
employing him.

His appointment by the Department of Agriculture and Natural Resources and his being under the
supervision andcontrol of that department notwithstanding, this Court held the concession guard to be
an employee of licensee.

Petitioner also argues that, even assuming that Primitivo Siccuan and Francisco Ricerra were its
employees withinthe purview of the law, yet the same cannot be said of Filoteo Siccuan and Domingo
Batta, sounder and oarsman,respectively, because these two were employed not by petitioner but by
the pilots' association. But it is a fact thatthe services of the two were needed so that the pilots could be
taken to the S.S. "Cetus." It is well settled that aperson who is asked for help in an emergency which
threatens the employer's interests becomes an employeeunder an implied contract of hire. (I Larson,
Workmen's Compensation Law, sec. 47-42(c) 699; 1 Schneider,Workmen's Compensation Text, sec. 234,
627) Here, as stated in the beginning, the S.S. "Cetus" had to return toport for a needed repair of its
rudder. Losing no time, the pilots engaged the services of Filoteo Siccuan andDomingo Batta to take
them to the ship in trouble. It is under these circumstances that We hold the sounder and theoarsman
to be employees of the petitioner.

Viewing from another point the relationship of the petitioner with the victims, We hold that even
granting that theAparri Pilots' Association was an independent contractor and that the deceased were
its employees, still the resultwould be the same. Section 39 of the Workmen's Compensation Act
provides in part:

In this Act, unless the context indicates otherwise, the definition of various words used therein shall be
asfollows:
(a) "Employer" includes every person or association of persons, incorporated or not, public or private,
and thelegal representative of the deceased employer. It includes the owner or lessee of a factory or
establishment orplace of work or any other person who is virtually the owner or manager of the
business carried on in theestablishment or place of work but who, for the reason that there is an
independent contractor in the same, orfor any other reason, is not the direct employer of laborers
employed there.

(b) "Laborer" is used as a synonym of "Employee" and means every person who has entered the
employmentof, or works under a service or apprenticeship contract for an employer. It does not include
a person whoseemployment is purely casual and is not for the purposes of the occupation or business of
the employer. Anyreference to a laborer injured shall, in case he dies, include a reference to the person
dependent on him, asdefined in this Act, if the context so requires, or, if the employee is a minor or
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Construing this provision, We held in De los Santos v. Javier, 58 Phil. 82 that although the owner of the
factory is notthe direct employer of the laborers employed therein because there is an independent
contractor in the factory, theowner of the factory is nevertheless to be considered for the purposes of
the law as the employer of the laborersworking under the independent contractor, as long as the work
is for the purposes of the business of the owner.2

Certainly, the pilotage of the ship so that it could enter port for necessary repair was in the usual course
of thebusiness of the petitioner in the same way that the repair of the window railing of a building
intended for rent (Caro v.Rilloraza, et al., G.R. No. L-9569, Sept. 30, 1957) and the construction of a
mezzanine floor of a hotel (ShellborneHotel v. De Leon, G.R. No. L-9149, May 31, 1957) have been held
for the purpose of the owner's business.

Our conclusion upon this point is in accord with the doctrine that the Workmen's Compensation Law
should beconstrued fairly, reasonably, or liberally in favor of and for the benefit of employees and their
dependents and alldoubt as to right of compensation resolved in their favor and all presumptions
indulged in their favor. (Caro v.Rilloraza, et al., G.R. No. L-9569, Sept. 30, 1957; Francisco v. Consing, 63
Phil. 354).

And now We come to the last point. It is contended that the claimants of Primitivo Siccuan, who are his
children,have all reached the age of 18 and therefore cannot be considered dependents under Section 9.
But We find thatthe Commission modified the decision of the hearing officer and instead gave the award
to Primitivo Siccuan'sgrandchildren to whom the Commission directed the amount of P4,000.00, to be
divided equally. The Commission'sfinding that the grandchildren were dependent on Primitivo Siccuan is
one of fact which We will not review unlessshown to be without support in evidence.

Petitioner does not explain in what way proof of respondent Placida de la Cruz' marriage to Domingo
Batta is notsatisfactory. The same goes with respect to the claim that there is no evidence as to the
amount of wages of thedeceased. Hence, We shall not pass upon these points.

WHEREFORE, the decision of the Workmen's Compensation Commission is affirmed, with costs against
petitioner.