JOSE E. BARRAMEDA, PETITIONER, VS. EMPLOYEES’ COMPENSATION COMMISSION AND GOVERNMENT SERVICE INSURANCE SYSTEM (PHILIPPINE NATIONAL BANK), RESPONDENTS.

This is a petition to review the decision of the Employees’
Compensation Commission dated February 15, 1979 in ECC Case No. 1098 entitled
“Jose E. Barrameda, appellant, vs. Government Service Insurance System
(Philippine National Bank), respondent,” affirming the Government Service
Insurance System’s denial of peti­tioner’s claim for income benefits for
disability under Presidential Decree No. 626, as amended.

Petitioner is a 58-year old former Branch Manager of the
Philippine National Bank’s Daet, Camarines Norte branch.  Until his disability retirement on March 8,
1976 under Republic Act No. 1616, as amended, he served the government for a
little over twenty-seven (27) years, his service with the Philippine National Bank
being exactly twenty-six (26) years, nine (9) months, and twenty (20)
days.  At the time of retirement, he was
already receiving a monthly salary of P2,500.00.

Petitioner’s illness which compelled him to retire sooner than
the compulsory retirement age was diagnosed by Dr. Jose E. Moraleda, M.D. as Dx
Tumor, LLL Benign.  He was treated for
his lung tumor affliction from June 1, 1974 to March 1, 1976.  His medical history as recounted on Part III
of the Government Service Insurance Form (Attending Physician’s Certification)
is as follows:

“Patient first consulted on June 1, 1974 for a chronic cough
of 2 mos., not relieved by usual medications. 
On June 21, 1974 to July 3, 1974, was admitted at UE Hospital for
work-up-Dx Tumor LLL; underwent left lower lobectomy at ABM Sison Hospital on
7-4-74, discharged improved.  He was back
to work one year after surgery but was unable to cope up with his usual job –
gets tired easily general body weakness and he retired on 3-8-76.”^[1]

On December 14, 1977, petitioner filed a claim for income
benefits with the Government Service Insurance System (GSIS) under the
provisions of the New Labor Code, as amended. 
The GSIS denied the claim on the ground that petitioner’s ailment (tumor
of the lungs, left lower lobe, benign) is not an occupational disease taking
into consideration the nature of his employment; further, that his claim for
hospitalization benefits could not be favorably acted upon since the medical
treatment was rendered one year prior to the effectivity of Presidential Decree
No. 626, as amended.  Petitioner
protested the GSIS’ ruling insisting that his ailment was directly caused by
his employment particularly during the period when he held the post of cashier
where he had to handle bundles of dusty mutilated bills specially small
denomination bills, exposing him to inhale the dust circulating inside the cash
vault, but to no avail.

Petitioner’s motion for reconsideration having failed, the case
was elevated for review to the Employee’s Compensation Commission which
affirmed the denial of the claim by the GSIS, asserting that there is no cogent
reason to disturb the GSIS’ decision. 
The ECC’s findings and conclusion state:

“A cursory examination of the evidence on record discloses
that there is no justi­fiable reason to deviate from the conclusion arrived at
by the respondent System.  Nothing in the
record supports the contention of the appellant, except the conjectural
statement of his co-employees that the aforementioned ailment may have been
contracted by him through inhalation of dust and dirt inside the Bank vault
through exposure to old bills.  These
environmental conditions, even if true, are not medically considered as
predisposing factors to the contraction of appellant’s “lung tumor.”
A closer study of the appel­lant’s ailment revealed that the same is in no way
traceable to his employment.  As averred
by the Medical Division of the res­pondent System, “tumor of the
lungs” is a malignant newgrowth of the said organ.  This disease has become more common in recent
years.  The report from the Royal College
of Physicians and others have emphasized the importance of cigarette smoking as
the cause of tumor of the lungs.  An
increased incidence is reported in miners exposed to dust from chromium,
nickel, radioactive ores and asbestos.

In the case at bar, there is no proof that a causal relationship
exists between the subject disease and the appellant’s occupation as branch
manager of the Philip­pine National Bank, neither was appellant exposed to the
aforementioned chemical substances.

Moreover, records show that his ail­ment was contracted on June 1,
1974 prior to the effectivity of the new compensation program (P.D. 626, as
amended).  This is shown in the
affidavits of the appellant’s co-employees as well as in his letter ad­dressed
to the GSIS.  We quote ‘It will please be
recalled that on July, 1974, I was operated on for a “Lobectomy”
where I almost lost my life.’ In other words, Presidential Decree No. 626, as
amended, cannot be applied to the case at bar, in­asmuch as the sickness of the
appellant was contracted prior to its effectivity on January 1, 1975.  This is mandated by Article 208 of said
Presidential Decree, which states ‘x x x shall apply only to injury, sickness
disability or death occur­ring on or after January 1, 1975.’

Thus, the conclusion arrived at by the respondent System is
supported by law and evidence; hence, there is no cogent reason to disturb the
same.  While we are not unmindful of the
fact that Presidential Decree No. 626, as amended, is a social legislation
designed for the protection of the workingman, we believe that the same law may
not be so stretched as to embrace within its compensable purview, cases outside
its jurisdiction or pro­tective realm.”^[2]

Respondent ECC’s affirmation of the GSIS’ denial of petitioner’s
claim is patently erroneous.  The
manifest flaw in ECC’s stance is clearly demonstrated in the comment submitted
by respondent GSIS to this Court on April 25, 1979 and in its
Manifestation/Motion dated September 18, 1979 when it made a volte-face on its
former position, this time positing with clarity that it admits the validity of
petitioner’s claim.  Respondent GSIS’
comment reads thus:

“At the outset, the GSIS respectfully manifests that, after an
assiduous study of the law and current jurisprudence, and in the interest of
justice and the compas­sionate objectives of the New Society, petitioner’s
employees’ compensation claim is valid and should be paid.

In a nutshell, this is a claim for employees’ compensation, filed
by a former PNB branch manager who contracted lung tumor on June 1, 1974 and
retired by reason of disability on March 8, 1976.

Going by Corales vs. Employees’ Compensation Commission (en
banc resolution), L-44063, February 27, 1979, cited by peti­tioner, the cause
of action in this case accrued as early as June 1, 1974.  Hence, applicable are the provisions of the
old Workmen’s Compensation Act, not the pro­visions of the New Labor Code,
which became effective only on January 1, 1975, as well as the well-entrenched
and oft-reiterated doctrines thereunder on pre­sumptions of compensability and
disability retirement, the principles of aggravation and non-controversion, and
the liberal construction in favor of the workingman of socio-labor legislation.

In Corales, supra, this Honorable Court emphasized
that Article 292 of the New Labor Code, which requires that workmen’s
compensation claims accruing prior to the New Labor Code shall be filed with
the appro­priate regional offices of the Department of Labor not later than
March 31, 1975, or they shall be forever barred, does not apply to petitioner
therein who filed his claim on August 4, 1975 with the GSIS because the
prescriptive period for claims which accrued under the Workmen’s Compensation
Act, as amended, is ten (10) years, it being a right founded on statute and
peti­tioner has a vested right which cannot be impaired by the repealing Labor
Code.

Here, the present claim was filed with the GSIS on December 14,
1977 or within the ten-year prescriptive period counted from accrual of the
cause of action on June 1, 1974.  x x
x”^[3]

Buttressing the stand taken by respondent GSIS is the case of Balatero v. ECC and GSIS (Department [now Ministry] of
Education and Culture, L-46634, January 28, 1980, 95 SCRA 609-611, where We
found as unmeritorious the ECC’s considered opinion that it could not rely on
the petitioner’s naked verbal asser­tion to support his contention that his
ailments were the result of the nature of his employment and the working
conditions obtaining therefrom for under the Workmen’s Compensation Law, where
there is a showing that the ailment was contracted and/or aggravated in the
course of one’s employment, the presumption of compensability arises and the
burden of proof is shifted to the
employer to show by substantial evidence that although the illness supervened
in the course of employ­ment, it does not necessarily follow that it also arose
from such employment or was at least aggravated by it.

The Balatero case also brought to the fore the
same objection raised in the case at bar – that the ailment of petitioner falls
outside the compensable ambit of Presidential Decree No. 626 because said
Decree, particularly Sec. 1, par. (c) of the Implementing Rules, covers only
injury or sickness that occurred on or after January 1, 1975.  We ruled then and We adhere to the same
ruling – that the governing law in the prosecution of the cause of action which
has accrued prior to the effectivity of a new law shall be the law enforced at
the time of the accrual of the said action. 
In the Balatero case, the cause of action existed as
early as 1972; in the present case, on June 1, 1974.  Since the Workmen’s Compensation Law was then
in full force and effect, then it should be the governing law, based on the
principle that “rights accrued and vested” while a statute was in
force ordinarily survives its appeal. 
(Case cited in Corrales v. ECC, et al., L-44063, February 27, 1979;
Villones v. ECC, et al., L-46200, July 30, 1979; De los Angeles v. ECC, et al.,
L-47099, November 16, 1979).

Another decision of this Court lending support to the petitioner’s claim for
compensation is that of Cañeja v.
ECC and GSIS, L-46992,
March 31, 1980, which ruled thus:

“In any case, whether his claim was based on his first illness
in 1959 or the last hospitalization in 1973, it is not disputed that his
illness supervened in the course of employment and the same was never
controverted by his employer.  Hence,
under the Workmen’s Compensation Act, petitioner is freed from the burden of
proving that his illness or injury was caused or aggravated by the nature of
his work.  In fact, the cause of his
ailment is immaterial; what is important is that it occurred or was aggravated
in the course of employment and disabled the workingman from pursuing his ordinary
occupation (G.B. Francisco, Inc. v. WCC, 87 SCRA 23, 30).  The presumption of com­pensability had
already set in ‘x x x Because once an illness, subject matter of a compensation
claim is shown to have supervened in the course of employment, there arises in
favor of the claimant the rebuttable presumption that the said illness either
arose out of, or at least was aggravated by, the nature of claimant’s
employment; and consequently, the burden to show by substantial evidence the
cont­rary lies with the employer.  And
the ultimate result of that principle is that the presumption, rebuttable at
its incep­tion, becomes conclusive upon the failure of the respondent employer
to destroy the same (Enriquez v. WCC, et al., L-42640, September 28,
1979).”

It is succinctly clear that as borne by the facts of record,
there is but one ineluctable recourse – to award the claim for income benefits
for disability prayed for by herein petitioner.

It must be underscored that herein petitioner was compelled to
apply for retirement ahead of schedule, at age fifty-eight (58) which is way
ahead the compulsory retirement enjoyed by government employees like him.  The approval of his optional retirement
clearly demonstrates the fact of his physical incapacity to render further efficient
service.  For his optional retirement
would not have received the stamp of impri­matur unless he could comply with
the two requisite conditions called for in Memorandum Circular No. 133 issued
by the Office of the President on October 19, 1967, to wit:  (1) That he had not reached the compul­sory
age of 65 years; and (2) That he was physically incapacitated to render further
efficient service.  Petitioner could not
have given up the high and pres­tigious position he was actually holding at the
time of his retirement and the equally high remuneration attached to his
position unless he were really inca­pacitated to render further efficient
service.  In Valencia v. Republic,
L-43060, June 22, 1978, 83 SCRA 714, 719, this Court emphatically reiterated
its consistent ruling to allow and grant claims for compensation benefits under
the Workmen’s Compensation Act even though the claimants retired under the
government Optional Retirement Law.

How much income benefits for disability shall be awarded to
herein petitioner?

The case of Cayaba v. WCC, et al., L-43649, January 27,
1981 may serve as a guide in the determination of the compensation to be
awarded to petitioner.  In the Cayaba
case, this Court in awarding the maximum sum of P6,000.00 to petitioner who at
the time of his optional retirement was also 58 years of age as in the case at
bar, held:

“An employee forced to ask for retire­ment ahead of schedule
not because of old age but principally because of his weakened bodily condition
due to illness contracted in the course of his employment should be given
compensation for his inability to work during the remaining days of his sche­duled
compulsory retirement, aside from the retirement benefits received by him.  (Citing Hernandez v. WCC, et al., 14 SCRA
219)

Had petitioner not been forced to retire because of his illnesses
he could have con­tinued to work for seven years more until he reached the age
of 65 years.  Under the cir­cumstances he
is entitled to disability compensation in the amount of P6,000.00 and to be
reimbursed the medical expenses in­curred by him upon presentation of
supporting receipts.” (Note that petitioner in this Cayaba case was
receiving an annual salary of P3,000.00 immediately preceding his last day of
service in 1975.)

A more recent case, Republic of the Philippines v. Follosco
& WCC, L-29540, March 27, 1981, is equally in point and will serve to
illuminate the determination of compensation in cases of optional
retirement.  This Court affirmed the
Acting Referee’s computation of award to claimant in this wise:

“The claimant having been shown to have been disabled for
labor as a result of his illness and was by reason thereof compelled to retire
prematurely at the age of 63 years, 2 years away from the compulsory retirement
age of 65 years, he is entitled to disability compensation for two (2) years
and reimbursement of expense for medical supplies and services since the
requirements of notice of the ill­ness and corresponding treatment has been
substantially complied with.”

We, therefore, find the petition for review to be impressed with
merit.

WHEREFORE, the decision of the Employees’ Compen­sation
Commission sought to be reviewed is hereby set aside and the Government Service
Insurance System is ordered:

1.   To pay the petitioner the amount of SIX
THOUSAND PESOS (P6,000.00) as disability benefits;

2.   To pay the petitioner the amount of SIX
HUNDRED PESOS (P600.00) as attorney’s fees;

3.   To reimburse the petitioner expenses incurred
for medical services, hospitalization and medicines, duly supported by
receipts; and

4.   To pay the administrative fees.

SO ORDERED.

Teehankee, Acting C.J., Makasiar, Fernandez, and Melencio-Herrera, JJ., concur.

^[1]
Records, pp. 15-16.

^[2]
Records, pp. 17-18.

^[3]
Records, pp. 35-36.