ANTONIO ENGAN TY, “Y” SHIPPING CORPORATION, PETITIONER, VS. THE HONORABLE WORKMEN’S COMPENSATION COMMISSION AND RODRIGO DOMINGUEZ, RESPONDENTS.

Ty versus Workmen's Compensation Commission

The Case

This is Ty versus the Workmen's Compensation Commission, a petition for review brought by an employer, Antonio Engan Ty of Y Shipping Corporation, against the Workmen's Compensation Commission and its claimant, Rodrigo Dominguez. The employer complains that the commission, without any hearing, increased an award of disability benefits against it, and later refused to entertain its motion for reconsideration. While the case was pending before the Supreme Court, the parties signed a compromise settlement, which the claimant then repudiated. The case matters because it shows how the Supreme Court treats a compromise in a labor compensation claim: the settlement is not simply void, but must be tested against the approval requirement of the Workmen's Compensation Act.

Procedural History

The claimant's claim for disability benefits from pulmonary tuberculosis was initially dismissed for lack of merit at the last investigation on March 17, 1972. Five months later, without any hearing, the employer received a notice of award dated September 13, 1972 ordering it to pay disability benefits with administrative fees. The employer moved for reconsideration and asked for its day in court. On elevation to the commission, the chairman rendered a decision on August 22, 1973 increasing the award, again without hearing the employer, ordering payment of 6,000 pesos as disability compensation, 2,013 pesos and 45 centavos as reimbursement of medical expenses, 600 pesos as attorney's fees, and administrative fees. The commission en banc, in its orders of November 7, 1973 and January 9, 1974, declared that decision final and executory and that the commission had lost its power to entertain the employer's motion for reconsideration. The employer then filed this petition for review on March 19, 1974. The Supreme Court required the respondents to comment and issued a temporary restraining order. While the case was pending, the employer filed a motion to submit the case for judgment based on a compromise agreement, and the Court now resolves that motion.

Facts

Rodrigo Dominguez filed a claim for disability benefits arising from pulmonary tuberculosis. At the last investigation on March 17, 1972, the claim was dismissed for lack of merit. Five months later, without any hearing, the employer received a notice of award ordering it to pay disability benefits and administrative fees.

The employer moved for reconsideration, but on elevation the commission chairman increased the award without hearing the employer, ordering it to pay 6,000 pesos as disability compensation under sections 14 and 18 of the Workmen's Compensation Act, 2,013 pesos and 45 centavos as reimbursement of medical expenses, 600 pesos as attorney's fees, and administrative fees. The employer insisted it had already paid for all medicines and professional services and had paid the claimant various amounts directly. It also pointed out that the claimant left blank the answer to question number 18 of the claim form, which asked whether he had received any amount as compensation from his employer and, if so, how much.

While the petition was pending, the claimant offered to settle for 3,300 pesos cash, of which he would pay 400 pesos to his lawyer. He signed a satisfaction of decision dated June 17, 1974 and a receipt dated June 20, 1974 acknowledging the sum in full settlement of his claim. The employer submitted the settlement to the Court. The commission opposed it as null and void for lack of its approval, and the claimant, through counsel, repudiated it, claiming he signed when he was extremely in need and that the amount was far short of what the law provided.

Issues

• Whether or not the compromise settlement executed between the employer and the claimant may be given effect without the approval of the Workmen's Compensation Commission.
• Whether or not the case and the compromise settlement should be remanded to the commission for its consideration and appropriate action.
• Whether or not the claimant was guilty of fraud and misrepresentation in leaving blank the question on amounts previously received from the employer.

Applicable Provisions

Section 7 of the Workmen's Compensation Act provides:

Contract prohibited. Any contract, regulation, or device of any sort intended to exempt the employer from all or part of the liability created by this Act shall be null and void.

This provision guards against any device that would strip the worker of the compensation the law grants.

Section 29 of the Workmen's Compensation Act provides:

Agreement on compensation. In case the employer and the injured laborer or the dependents entitled to compensation arrive at an agreement concerning the compensation provided for by this Act, such agreement in order to be valid, shall provide, at least, the same amount of compensation as that prescribed by this Act and must be approved by the Workmen's Compensation Commissioner, or any of his authorized representatives: Provided, however, That the employer shall be exempt from all liability under this Act as soon as the compensation has been paid in accordance with this Section, saving provisions of section six of this Act.

This is the provision the Court applies: a settlement must meet the statutory amount and must be approved by the commission.

Article 2028 of the Civil Code provides:

A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.

The Court uses this definition to describe the nature of the agreement before it.

Ruling

On the first issue, the Court did not simply strike down the settlement as void. It held that the compromise must be submitted to the commission for its consideration and appropriate action under section 29 of the Act. The commission's approval is the mechanism the law requires, and it is the commission that must decide whether the settlement merits approval.

On the second issue, the Court ordered the remand of the case and particularly the compromise agreement to the commission. Since factual questions were involved and the claimant now repudiated the settlement as far short of what he claimed, the commission was directed to determine and take into account all amounts previously paid by the employer for compensation, medicines, and medical services, which the claimant had not disclosed in his claim.

On the third issue, the Court directed the commission to determine whether the claimant was in fact guilty of fraud and misrepresentation in not stating in his claim the amounts actually paid to and received by him, and to receive the employer's evidence on all such amounts. The Court reminded the commission that a compromise is a contract of reciprocal concessions on matters not clearly established one way or the other.

Doctrine

A compromise agreement on workmen's compensation is not valid merely because the parties signed it. Under section 29 of the Workmen's Compensation Act, it must provide at least the same amount of compensation as that prescribed by the Act and must be approved by the Workmen's Compensation Commissioner or his authorized representative. Until that approval is obtained, the agreement cannot bar the claim or bind the parties. The commission, in deciding whether to approve, must consider all amounts already paid by the employer and any fraud or misrepresentation by the claimant in his claim form. A compromise, as Article 2028 of the Civil Code defines it, is a contract of reciprocal concessions to avoid or end litigation, and it is measured against the protective standards of the compensation law.

Disposition

The Court remanded the case to the Workmen's Compensation Commission for further proceedings, for it to act on the compromise settlement and to furnish the Court a copy of its final action.

Remember This

The one line to memorize: a workmen's compensation compromise must meet the statutory amount and must be approved by the commission, or it cannot stand. Examiners use this case to test the approval requirement under section 29 and the rule that the commission must account for prior payments and any misrepresentation in the claim.