TALISAY-SILAY MILLING CO., INC., PETITIONER, VS. WORKMEN’S COMPENSATION COMMIS­SION AND ILDEFONSO ALVAREZ, RESPONDENTS.

Talisay-Silay Milling versus Workmen's Compensation Commission

The Case

This is a petition for review by certiorari filed by Talisay-Silay Milling Company against the Workmen's Compensation Commission and its paymaster, Ildefonso Alvarez. The company asks the Supreme Court to overturn an award of compensation, reimbursement of medical expenses, and fees in favor of Alvarez, who was injured in a vehicular accident while riding home in a company vehicle. The case matters because it settles two recurring questions in workmen's compensation practice: when an injury suffered while going home is deemed to arise out of and in the course of employment, and what happens to an employer who fails to controvert a claim on time.

Procedural History

The claim was filed with the Workmen's Compensation Commission, which, through its hearing officer and later the Commission itself, ruled in favor of Alvarez. The Commission ordered the company to pay him compensation in lump sum, to reimburse his medical expenses, and to pay fees to the Workmen's Compensation Fund. The Commission en banc affirmed that decision. The company then elevated the matter to the Supreme Court by an appeal by certiorari, assigning as errors the Commission's findings on the employment connection of the injury and on the company's failure to controvert the claim.

Facts

On November 23, 1953, Ildefonso Alvarez, paymaster of the company, had just finished paying the wages of some laborers when he was ordered to stop work and go home because a typhoon was approaching. A passenger bus brought him to Bacolod City, where he boarded one of the company's pick-up trucks headed for Bago, Negros Occidental, his hometown. At Kilometer 17 in barrio Calumangan, the vehicle figured in an accident. Three passengers died and four were injured, among them Alvarez.

Alvarez was confined at the Negros Occidental Provincial Hospital for twenty-one days, and his injuries took three more months to heal after discharge. He was never re-employed. It was undisputed that the company furnished its employees free transportation from its central to Bacolod City and back, and that the pick-up truck involved was assigned for that purpose.

The company argued that the trip to Bago was made without the knowledge and consent of its resident manager or his authorized representative, and that Alvarez therefore rode at his own risk, like a hitch-hiker. Alvarez testified that he asked permission from the superintendent of transportation, who granted it orally. The company also admitted that it failed to file its controverting claim and its supplementary report of accident on time.

Issues

• Whether or not the injuries of Alvarez arose out of and in the course of his employment within the meaning of the Workmen's Compensation Act.
• Whether or not the company failed to controvert the claim for compensation, and what the legal effect of that failure is.

Applicable Provisions

Section 2 of the Workmen's Compensation Act, as amended, is the provision the Court construes on the employment connection of the injury. The Court adopts the settled distinction between its two phrases:

The words "arising out of" refer to the origin or cause of the accident and are descriptive of its character, while the words "in the course of" refer to the time, place and circumstances under which the accident takes place.

This distinction bears on the case because the Court uses it to test whether a going-home injury, suffered in a company vehicle, falls within the coverage of the Act.

Section 24 of the Workmen's Compensation Act, as amended, governs the employer's duty to controvert a claim. The Court treats the requirement as one that may be dispensed with only in limited circumstances:

We have repeatedly held that the requirement prescribed in section 24 of the Workmen's Compensation Act, as amended may be dispensed with, where, as in this case the record indubitably shows that the petitioner had knowledge of the accident that resulted in physical injuries to the respondent and that no prejudice was caused to the employer by the delay in the filing of the claim for compensation.

This provision bears on the case because the company's late controversion is the ground on which the Court treats its right to question the claim as waived by operation of law.

Ruling

On the first issue, the Court held that the injuries arose out of and in the course of employment. The company's contention that the trip lacked its knowledge and consent is untenable. The resident manager's testimony that Alvarez did not ask his permission does not belie the claim that permission was asked from and granted by the superintendent of transportation. The superintendent never categorically denied that the oral request was made and orally granted, and absent such denial the reasonable inference is that it was. The Court also refused to disturb the findings of fact of the Commission, there being no showing that they lacked support in the evidence. The Commission had observed that three other passengers of the truck also resided in Bago, and that the company had declared an emergency because of the coming storm and had sent its employees home; the logical conclusion is that the trip was with the company's knowledge and consent, as had been done before during emergencies or overtime work.

The Court added that it is of no moment that the trip went beyond the customary perimeter of travel, because the extended trip was made with the acquiescence of the superintendent of transportation. It laid down the rule that injuries sustained by a workman provided with transportation while going to or coming from work are considered as arising out of and in the course of employment:

when such transportation is the result of an "express agreement" between the employer and his workman, or when it has ripened into a "custom" to the extent and it is "incidental to," and "part of", the "contract of employment," or when it is with the "knowledge and acquiescence of the employer," or when it is the result of a "continued practice" in the "course of the employer's business" and which practice "beneficial to both employer and employee."

On the second issue, the Court held that the company failed to controvert the claim on time and thereby waived, by operation of law, its right to question the validity or reasonableness of the claim. This statutory renunciation was not undone by the fact that the hearing officer never treated the case as uncontroverted, nor by the claimant's failure to have the company declared in default or to object to its evidence. To reinstate the right to controvert, the company had to submit reasonable grounds, and its honest assumption that controversion was superfluous because the claim was filed out of time is not one of those grounds.

Doctrine

First, an injury suffered by a workman while going to or coming from work, in transportation provided by the employer, arises out of and in the course of employment when the transportation is the result of an express agreement, has ripened into a custom incidental to and part of the contract of employment, is furnished with the knowledge and acquiescence of the employer, or is the result of a continued practice in the course of the employer's business beneficial to both. Second, the employer's failure to file a timely controversion under Section 24 of the Workmen's Compensation Act operates as a waiver, by operation of law, of the right to question the validity or reasonableness of the claim; the right is not reinstated by the hearing officer's failure to treat the case as uncontested, and may be restored only upon reasonable grounds shown by the employer.

Disposition

The Supreme Court affirmed the judgment of the Workmen's Compensation Commission in its entirety, with costs against the company.

Remember This

Memorize the rule that free transportation furnished by the employer, used with its knowledge and acquiescence, makes a going-home injury compensable as arising out of and in the course of employment. Examiners use this case to test the employer's duty to controvert a claim on time and the consequences of waiver by operation of law.