THE PHILIPPINE BRITISH ASSURANCE CO., INC., PETITIONER, VS. LINO MANGUNE, MACARIO CAPILI, ALFREDO RIVERA, ERNESTO MANGUNE, PABLO LEYBA, DESIDERIO AZUELA, JOSE MAGALLANES, ISABEL…

This is a petition for certiorari and mandamus involving the
orders of Hearing Officer Pedro Pelaez of the
Workmen’s Compensation Commission, dated July 7 and August 4, 1965, issued in connection with a number
of employees’ compensation claims.

Pursuant to the provisions of Section 30 of the Workmen’s
Compensation Act (No. 3428, as amended), respondent Sy
Kap Printing Press secured from petitioner Philippine
British Assurance Co., Inc., thru the latter’s general agent, the St. Mary
Insurance Agency, Inc., a workmen’s compensation insurance policy to cover payment
of all compensation benefits to which the insured’s workers or laborers might
be legally entitled in accordance with said Act.

While the policy was in force a number of employees filed their
respective compensation claims against Sy Kap Printing Press, which claims were later amended to
include the Philippine British Assurance Co., Inc. as party respondent.  Upon receipt of the aforesaid claims the
company filed its answers, with cross-claims against the Sy
Kap Printing Press, alleging that the insurance
policy was null and void on the ground that at the time it was issued the
insured concealed from the insurer the fact that “the claimants as well as
other employees of the insured were suffering from various illnesses and/or had
consulted the company physician on various matters of importance to their
health,” and that consequently any sums
which the insurer might be compelled to pay under said policy should be
reimbursed by the insured employer. 
Respondent Sy Kap
Printing Press moved to dismiss the cross-claims, to which motion the
Philippine British Assurance Co., Inc. filed its written opposition.  On July
7, 1965 the Hearing Officer of the Workmen’s Compensation
Commission dismissed the cross-claims on ground of lack of jurisdiction.  On July
23, 1965 the insurer filed a petition for review, to which an
opposition was filed by the claimants. 
On August 4 following the
Hearing Officer denied the petition for review on the ground that the order dismissing the cross-claims was not subject to appeal or review,
being an interlocutory order not affecting the merits of the compensation
claims.

The two issues posed before us for resolution are:  (1) whether or not the Workmen’s Compensation
Commission has jurisdiction over the cross-claims filed by the insurer against
the insured employer; and (2) whether or not the order of the Hearing Officer
dismissing the cross-claims for lack of jurisdiction is subject to review by
the Commission.

Petitioner contends that
the Workmen’s Compensation Commission has jurisdiction to hear and adjudicate
an insurer’s cross-claim against an insured employer under Section
30-(f) of Republic Act 4119 and that to hold otherwise would be in effect putting the insurer
out of court, considering that cross-claims not set up shall be barred.

Section 30(f) of Republic
Act 4119 amending the Workmen’s Compensation Act provides:

“SEC. 30(f). Every policy of
insurance issued under this section shall contain a provision that, as between
the employee and the insurance carrier, the notice to or knowledge, of the
occurrence of the injury or accident on the part of the employer shall be
deemed notice or knowledge, as the case may be, on the part of the insurance
carrier; that jurisdiction over the employer is jurisdiction over the insurance
carrier; and the insurance carrier shall in all things be bound by and subject
to the orders, findings, decisions or awards rendered against the employer for
the payment of compensation under the provisions of this Act.  Every such policy shall also contain a provision
to the effect that the insolvency or bankruptcy of the employer shall not
relieve the insurance carrier from the payment of compensation for injury,
illness or death sustained by an employee during the life of such policy.”

The foregoing provision
is silent as to the jurisdiction of the Workmen’s
Compensation Commission over the subject-matter here under consideration. 
But since the Commission is an administrative body created by law
to perform a specific quasi-judicial function it possesses only such
jurisdiction as is conferred directly by the statute.  Section 46 of the Workmen’s Compensation Act
defines this jurisdiction as follows:

“SEC. 46. Jurisdiction.
– The Workmen’s Compensation Commission shall have exclusive jurisdiction to
hear and decide claims for compensation under the Workmen’s Compensation Act,
subject to appeal to the Supreme Court, in the same manner and in the same
period as provided by law and by rules of court for appeal from the court of
Industrial Relations to the Supreme Court.”

Of course, by express mandate of Section 30-f, jurisdiction over
the employer is jurisdiction over the insurer, but this is true only insofar as
the employees’ claims, and hence the insurer’s liability therefor
by virtue of the policy, are concerned, the only question at issue being the
compensability of such claims.  The
grounds upon which petitioner’s cross-claims are based are not alleged by way
of defense with respect to this issue and have no bearing thereon
whatsoever.  Petitioner defines its
position succinctly as follows: 
“that while it stands responsible to claimants…in any amount that
the Workmen’s Compensation Commission may finally adjudicate, nevertheless,
since the insured employer…violated the terms of the Insurance Act as well as
the terms of the policy itself any amount adjudicated by the Commission may be
recovered by Philippine British from Sy Kap.” These matters, however, are purely between the
insurer and the insured.  The alleged
breaches of the terms and conditions of the insurance contract have nothing to
do with whether the claimants-employees are entitled to the compensation
benefits asserted, but rather to the contractual relations between the insurer and insured. 
These are justiciable matters which pertain to
the ordinary courts of justice.  (Larson’s Workmen’s Compensation Law, Vol. 3, 1968 ed., p. 443).  Otherwise the hearing and adjudication
thereof – for which a hearing officer of the Workmen’s Compensation may not be
properly equipped – may needlessly tie up and delay the resolution of the main
issue.

Therefore, the argument that petitioner’s cross-claims will be
barred if not set up in the answer cannot be sustained.

With respect to the other issue raised by petitioner, that is,
whether or not the hearing officer (or referee) should have referred the
petition for review of his orders to the Commission, it seems that his refusal
to do so on the ground that the said orders were interlocutory took note of the fact that no decision on the main
claims had yet been rendered.  The
implication is that the petition should await the decision so that the entire
case could be elevated.  The ruling is
not entirely without basis.  In the first
place, if the hearing officer, after receiving the evidence on the claims of
the employees, should decide that they are not compensable at all, then
petitioner’s cross-claims would be unnecessary and the elevation of the order
dismissing them to the Commission, in advance of the decision itself, would
have been at least premature.  It is a fair presumption that this was the import of the hearing officer’s
statement that the order complained of was interlocutory, aware as he must have
been of the provision of Section 4, Rule 15 of the Rules of the Workmen’s
Compensation Commission, as follows:

“SEC. 4. Duties of
Referee.  – x x x.

x x x              x x x                x x x

“In case the referee does not render a new decision or amend
or modify the deci­sion or order sought to be reviewed, he shall immediately
issue an order denying the petition for review or motion for re­consideration
and elevating the entire case to the Commission for review.”

It is to be noted that
the foregoing rule speaks of “elevating the entire case to the Commission
for review.” Obviously the entire case is not supposed to be elevated unless the employees’ claims are first decided by the hearing officer,
for there can be no review of the entire case while the principal cause of
action has not been resolved in the first instance.

On the other hand, we
agree with petitioner that if the sense of the ruling of the hearing officer is
that his order dismissing the cross-claims is not subject to review by the
Commission at all, then said ruling is palpably erroneous,
being contrary to Section 1 of the same
Rule 15 referred to above, which
says that “any party-in-interest who is
dissatisfied with the decision or order of the referee may within
fifteen (15) days from receipt of notice thereof file with the referee a
petition for the review or reconsideration of said decision or order.”

But whatever be the import of the order of the hearing officer
now sought to be reviewed – that it is not appealable
to the Commission at all or that the appeal therefrom
was premature – we have deemed it wise and expedient to resolve the question of
jurisdiction on the merits in connection with the first issue, for to return
the case below so that the Commission may consider and resolve it would be an
exercise in futility, and might only involve further delay of the case to the
prejudice of the claimants-employees.

Wherefore, the writ prayed for is denied and the petition
dismissed, with costs against petitioner.

Concepcion, C.J., Reyes, J.B.L., Zaldivar, Ruiz Castro, Fernando, Teehankee,
Barredo, and Villamor, JJ., concur.

Dizon and
Makasiar, JJ., on official leave.