CALTEX (PHILIPPINES) INC., PETITIONER, VS. CRISTETA VILLANUEVA, FOR HERSELF AND IN BEHALF OF HER MINOR CHILD, AND THE WORKMEN’S COMPENSATION COMMISSION, RESPONDENTS.

Caltex versus Villanueva

The Case

This is Caltex versus Villanueva, a labor case decided by the Supreme Court in August 1961. Caltex (Philippines) Incorporated, the employer, seeks review of the award of death compensation to Cristeta Villanueva, for herself and in behalf of her minor child, after her husband Dominador Maramot, a messboy on board the vessel Caltex Mindanao, disappeared at sea. The case matters because it settles two questions every workmen's compensation practitioner must know: the effect of an employer's failure to controvert a claim within the period fixed by law, and whether the civil law presumption of death applies to a compensation claim.

Procedural History

Cristeta Villanueva filed a notice of death and claim for compensation with the Regional Office of the Department of Labor. The regional administrator entered an award in her favor, holding that the claim had not been controverted, and ordered Caltex to pay death benefits and the commission fee. Caltex wrote to the regional administrator insisting that the claim was in fact controverted, explaining the delay, and asking that the case be referred for hearing. The regional administrator denied the request for reconsideration and forwarded the record to the Workmen's Compensation Commission for review. The Commission, through its Chairman, affirmed the award, treating Caltex's own report that the employee was lost at sea and presumed dead as an admission against interest, and added a fee for the review. The Commission en banc denied Caltex's motion for reconsideration. Caltex then filed a petition for certiorari to review the decision of the Commission, and the case reached the Supreme Court by that appeal.

Facts

Dominador Maramot was employed by Caltex as a messboy on board its vessel, the Caltex Mindanao, with an average weekly salary of forty pesos and forty-three centavos, including allowance for board and lodging. At about ten o'clock in the evening of 9 October 1956 the vessel left Bauan, Batangas, for Legaspi City, and Maramot was on board by reason of his employment.

At about ten o'clock in the evening of the following day, while the vessel was in the open sea near Ticao Pass off the coast of Samar, Maramot was found missing. The captain ordered the route retraced and the surrounding waters searched, but after four hours of fruitless effort the search was abandoned. Neither the employee nor his body could be found. Upon reaching port, the captain filed the necessary marine protest.

On 29 October 1956 the hearing officer wrote to Caltex, enclosing the prescribed forms and asking it to appear and explain why it should not be penalized for failure to notify the proper authorities of the accident. Caltex transmitted the accomplished form only on 6 November 1956, stating that the employee was lost at sea and presumed dead as of 10 October 1956, and that it was controverting the claim.

Issues

• Whether or not the regional administrator had authority to hear and decide the claim without a hearing, considering that Caltex allegedly controverted it.
• Whether or not the Workmen's Compensation Commission had appellate jurisdiction over the case.
• Whether or not the widow may claim death compensation before the lapse of four years from her husband's disappearance under the presumption of death in the Civil Code.

Applicable Provisions

Section 45 of the Workmen's Compensation Act, as amended, provides:

In case the employer decides to controvert the right to compensation, he shall, either on or before the fourteenth day of disability or within ten days after he has knowledge of the alleged accident, file a notice with the Commissioner, on a form prescribed by him, that compensation is not being paid, giving the name of the claimant, name of the employer, date of the accident and the reason why compensation is not being paid. Failure on the part of the employer or the insurance carrier to comply with this requirement shall constitute a renunciation of his right to controvert the claim unless he submits reasonable grounds for the failure to make the necessary reports, on the basis of which grounds the Commissioner may reinstate his right to controvert the claim.

This is the provision on which the whole ruling on controversion turns.

Section 3, Rule 14, of the rules of the Workmen's Compensation Commission provides:

Where an employer fails to controvert the employee's right to compensation within the period and manner stated in the preceding two sections hereof, he shall be deemed to have renounced his right to controvert and the Hearing officer may, if a claim has already been filed, receive evidence for the claimant, if necessary, and have the case treated as an uncontroverted or uncontested case.

This rule supplies the consequence of a late controversion.

Section 4, Rule 14, of the same rules provides:

On or before the period for filing the answer under Rule 18 hereof, an employer who failed to seasonably controvert the right of the employee to compensation may file with the Hearing Officer a petition under oath specifying therein the reasons for his failure to do so and the Hearing Officer may reinstate the employer's right to controvert.

This is the remedy Caltex failed to avail itself of.

Article 391 of the Civil Code provides:

The following shall be presumed dead for all purposes, including the division of the estate among the heirs: (1) A person on board a vessel lost during a sea voyage or on aeroplane which is missing, who has not been heard of for four years since the loss of the vessel or aeroplane. (2) A person in the armed forces who has taken part in war, and has been missing for four years; (3) A person who has been in danger of death under other circumstances and his existence has not been known for four years.

The Court holds that these presumptions do not govern compensation claims.

Ruling

On the first issue, the Court held that the regional office has original jurisdiction over compensation claims, but a controverted claim must be heard by a regularly appointed hearing officer. However, Caltex lost the right to controvert. The employee was found missing on 10 October 1956, yet Caltex filed its controversion only on 6 November 1956, beyond the period fixed by law and the rules. Having failed to state under oath the reasons for its failure, Caltex is deemed to have renounced its right to controvert, and the regional administrator could adjudicate the claim on the evidence at hand.

On the second issue, the Court upheld the appellate jurisdiction of the Commission, which reviews decisions of the regional offices under the reorganization plan and the implementing executive order.

On the third issue, the Court held that the presumptions of death in Article 391 may be availed of only for the purpose of settling the estate of a missing person. They do not apply to claims under the Workmen's Compensation Act, where no settlement of the estate is involved. Moreover, the first paragraph of that article applies where the vessel is lost during a sea voyage, and here the vessel was not lost. The reasonable inference from the employee's disappearance at sea, and the fruitless search, is that he accidentally fell into the sea and was drowned. Death having arisen out of and in the course of employment, the widow and her minor child are entitled to compensation.

Doctrine

An employer must controvert a claim within fourteen days from the accident or illness, or within ten days after knowledge of it. Failure to do so amounts to a renunciation of the right to controvert, unless the employer files a petition under oath stating reasonable grounds, on which the right may be reinstated. When the claim is uncontroverted, the regional administrator may enter an award without a hearing. The civil law presumptions of death under Article 391 are available only for settling the estate of a missing person and do not apply to workmen's compensation claims.

Disposition

The Supreme Court affirmed the decision under review, with costs against Caltex.

Remember This

Memorize this line: failure to controvert within the period is a renunciation of the right to controvert, and the Article 391 presumption of death does not apply to compensation claims. Examiners use this case to test the effect of a late controversion and the distinction between civil law presumptions of death and workmen's compensation claims.