LOURDES VDA. DE MAGALONA, PETITIONER, VS. THE WORKMEN’S COMPENSATION COMMISSION AND THE NATIONAL SHIPYARD AND STEEL CORPORA­TION (NASSCO), RESPONDENTS.

Magalona versus Workmen's Compensation Commission

The Case

This is a petition for certiorari filed by Lourdes Vda. de Magalona against the Workmen's Compensation Commission and the National Shipyard and Steel Corporation, which the Court calls NASSCO. The widow of a deceased employee asks the Supreme Court to set aside the Commission's reversal of a compensation award that a hearing officer had already granted her. The case matters because it settles two working rules for labor practice: an employer who fails to controvert a claim loses every non-jurisdictional defense, and once an illness supervenes in the course of employment, a rebuttable presumption of causation arises that relieves the claimant of proving causation.

Procedural History

The widow filed her claim for compensation with the Regional Office of the Department of Labor. The hearing officer awarded her death benefits, burial expenses, medical expenses, and attorney's fees, reasoning that the conditions of work might have caused the duodenal ulcer, in line with the liberal construction of labor laws in favor of the laborer. NASSCO brought the matter on review to the Workmen's Compensation Commission in Manila. The Commissioner, without resolving the widow's motion to dismiss the appeal for lack of controversion, referred the case to the Evaluation Division for a medical opinion, then reversed the hearing officer, absolved NASSCO, and ruled that a duodenal ulcer is not compensable absent a showing of causal connection with the nature of the work. The Commission en banc denied the widow's motion for reconsideration. She then appealed to the Supreme Court by way of certiorari.

Facts

Since April 1954, Jorge Magalona worked for NASSCO in its Iligan Steel Mills, first as a batteryman, then as an electrician-helper, and finally as a pulpit operator, earning a weekly salary of 26 pesos and 40 centavos. As a batteryman, he filled jars of dry cells with hydrochloric acid inside a room that was always damp because water was sprinkled over the dry cells to keep the acid from flowing. As an electrician-helper, he cleaned electric motors and rewound coils in the electric shop. As pulpit operator, he worked in the hot rolling mill department, operating an electric switch and catching steel bars passing through at the finish line.

On February 16, 1956, Magalona went on sick leave, which was to last until March 10, 1956. He never reported back for work after his leave expired. On May 1, 1956, he was admitted to Riverside Hospital in Bacolod City, where he died on May 17 of a duodenal ulcer with partial obstruction at the pyloric end of the stomach, severe anemia, and kidney complications.

On July 25, 1956, his widow filed a claim for compensation under the Workmen's Compensation Act. NASSCO did not controvert the claim. The hearing officer awarded the widow and her child 2,745 pesos and 60 centavos as death benefits, 200 pesos as burial expenses, 1,645 pesos and 60 centavos as medical expenses, and 135 pesos and 28 centavos as attorney's fees. On review, the medical officer of the Evaluation Division reported that the exact cause of duodenal ulcer is unknown and that the working conditions had no causal relationship with the ailment. The Commissioner reversed the award, and the Commission en banc denied reconsideration.

Issues

• Whether or not NASSCO could legally petition for review of the hearing officer's decision considering that it had not controverted the claim.
• Whether or not the admission by the Commissioner of the medical opinion of a Senior Compensation Rating Officer of the Commission was proper.
• Whether or not there was need for the claimant to show a causal connection between the death of the employee and the nature of his work.

Applicable Provisions

Section 45, paragraph 2, of the Workmen's Compensation Act provides:

The law itself provides that only the Commissioner may reinstate the right to controvert.

This fixes who may restore a lost right of controversion, and it is the provision the Court invokes against NASSCO's claim that the hearing officer's acceptance of its evidence reinstated that right.

Section 24 of the Workmen's Compensation Act, on notice of claim, is applied by the Court when it treats the widow's acts as substantial compliance:

In a case, We accepted as substantial compliance with Section 24 of the Act an oral demand for compensation hardly a month after lay-off, making of little consequence a subsequent written claim filed much later.

This bears on NASSCO's defense of prescription, which the Court holds is likewise barred for lack of proper controversion.

Ruling

On the first issue, the Court held that NASSCO could not legally petition for review. To reinstate a right to controvert, the rules require a petition under oath by the employer specifying the reason for its failure to controvert, and no such petition was filed. Mere acceptance by the hearing officer of the evidence presented did not reinstate that right. By failing to present a written controversion, NASSCO renounced its right to challenge the claim, and all non-jurisdictional defenses, such as non-compensability of the illness and prescription, are barred.

On the second issue, the Court held that the medical opinion-report should not have been admitted, because while the Commission need not follow technical rules of procedure, no evidence should be taken into account where the adverse party was not given the opportunity to object to its admissibility. This is especially so where the decision of reversal was principally based on that report.

On the third issue, the Court held that the claimant need not first establish a causal link between the employment and the cause of death. The employee had obviously been sick, and his failure to report back when his sick leave expired did not sever the employer-employee relationship, since NASSCO never claimed it had terminated him. The Court ruled:

It is now unquestionable that once the illness supervened at the time of the employment there is a rebuttable presumption that such illness arose out of the employment or was at least aggravated by such employment.

The claimant is relieved of the burden of proving causation once the illness is shown to have arisen in the course of employment. The precise medical cause is not legally significant, and the burden to overthrow the presumption by substantial evidence lies at the door of the employer. No substantial evidence existed to overcome it, and even the medical report admitted that the real cause of duodenal ulcer is unknown.

Doctrine

First, an employer who fails to file a written controversion of a compensation claim renounces its right to challenge the claim, and all non-jurisdictional defenses are barred; only the Commissioner may reinstate the right to controvert, and only upon a petition under oath specifying the reason for the failure.

Second, once an illness supervenes in the course of employment, a rebuttable presumption arises that it arose out of the employment or was at least aggravated by it, relieving the claimant of the burden of proving causation and placing on the employer the burden of disconnecting the illness from the employment by substantial evidence.

Third, the Commission may relax technical rules of procedure, but it may not take evidence into account where the adverse party was not given the opportunity to object to its admissibility.

Disposition

The Court reversed the resolution of the Commission en banc and the Commissioner's decision, and affirmed the hearing officer's award of death benefits, burial expenses, medical expenses, and attorney's fees to the widow, with no costs.

Remember This

Memorize this line: once the illness supervened in the course of employment, a rebuttable presumption of causation arises, and the employer bears the burden of overthrowing it by substantial evidence. Examiners use this case on the consequences of failure to controvert and on the presumption of compensability under the Workmen's Compensation Act.