Case Summary (G.R. No. 236263)
Antecedent Facts
Romeo Ellao was shot and killed by unknown assailants during a company errand. Respondent demanded death compensation; petitioner invoked lack of negligence and prior labor compensation.
Trial Court Ruling
RTC held Article 1711 claims require proof of employer fault and dismissed for respondent’s failure to establish negligence link.
Court of Appeals Ruling
CA held Art. 1711 liability arises “out of and in course of employment” regardless of negligence. Applied Candano (2007) and awarded P1,409,850 via Villa Rey loss-of-earning formula plus 10% attorney’s fees, costs, 6% interest.
Parties’ Contentions
Petitioner:
- Art. 1711 repealed by Labor Code Title II, Book IV.
- Labor Code’s special compensation law prevails over general Civil Code.
- Candano misread.
- Heirs share with deceased’s parents under Art. 991.
- SSS benefits bar civil claim.
Respondent:
– Art. 1711 still viable; Labor Code does not preclude civil remedy; minor sole heir of indemnity; SSS death benefits do not bar further recovery.
Supreme Court Ruling: Implied Repeal of Art. 1711
• Title II, Book IV of the Labor Code provides an exclusive, no-fault compensation scheme and shifted liability to the State Insurance Fund.
• Art. 2196, Civil Code, preserves special compensation laws (now Labor Code) over general damage rules.
• Absence of express repeal but irreconcilable inconsistency and comprehensive coverage of work-related compensation in Labor Code imply repeal of Art. 1711.
• Rule: special law (Labor Code) trumps general law (Art. 1711).
Abandonment of Candano
• Candano’s approval of Art. 1711 civil claims for work-related compensation is inconsistent with Labor Code exclusivity; henceforth overruled prospectively.
Prospective Application
- Actions filed before Aug. 6, 2007 (pre-Candano finality): Art. 1711 deemed repealed, no civil remedy.
- Actions filed Aug. 6, 2007–July 19, 2022: Candano applies; Art. 1711 civil remedy recognized.
- Actions filed after July 19, 2022: only Labor Code remedy available; Art. 1711 no longer effective.
Respondent’s complaint (Apr. 16, 2012) falls under period 2 – Candano governs.
Election of Remedies
• Remedies are alternative, not cumulative: compensation under Labor Code or damages under Civil Code (Art. 1711) – election bars the other.
• Based on doctrine of election of remedies and Labor Code Art. 179 exclusivity (“liability… exclusive and in place of all other liabilities…”).
Social Security Benefits
• SSS death and funeral lump-sum benefits under R.A. 8282 are statutory benefits, not Labor Code compensation, and do not bar civil Art. 1711 claims.
Computation of Indemnity
Villa Rey formula for loss of earning capacity:
Net Earning Capacity = (2/3) × (80 – age at death) × (annual income – living expenses)
= (2/3 × (80 – 33)) × (P7,500×12 – ½GP)
= 31⅓ × P45,000 = P1,410,000.00
Beneficiaries of Award
• Indemnity under A
Case Syllabus (G.R. No. 236263)
Facts of the Case
- Romeo S. Ellao, age thirty-three, worked as a company driver for Oceanmarine Resources Corporation.
- On 02 November 2011, Romeo drove company employees on errands to three banks in Pasay and Parañaque City.
- While traveling along Bayview Drive, Barangay Tambo, two unidentified motorcyclists stopped the vehicle, shot Romeo to death, and seized the money bag.
- Respondent Jenny Rose G. Nedic, common-law partner of Romeo and mother of minor Jerome Nedic Ellao, filed a complaint on 16 April 2012 seeking ₱3,383,640.00 for her son’s lost future income.
Procedural History
- Respondent’s counsel demanded death compensation; petitioner denied liability as unfounded and premature.
- Complaint was filed under Article 1711 of the Civil Code; petitioner answered, denying negligence and causal link.
- Regional Trial Court (RTC), Parañaque City, dismissed for failure to prove employer’s negligence and causal connection.
- Court of Appeals (CA) reversed, awarding actual damages for loss of earning capacity, attorney’s fees, costs, and interest.
- Supreme Court (SC) granted review on certiorari, leading to the present decision.
Issues
- Whether Article 1711 of the Civil Code was repealed by the Labor Code.
- Whether, if not repealed, a special compensation law prevails over the general Civil Code provision.
- Whether the CA misapplied Candano Shipping Lines, Inc. v. Sugata-on.
- Whether the award must be shared with the deceased’s parents under Article 991 of the Civil Code.
- Whether receipt of SSS death benefits bars a separate Civil Code claim.
Petitioner’s Arguments
- Article 1711 was expressly or impliedly repealed by Title II, Book IV of the Labor Code.
- Even if not repealed, the Labor Code compensation provisions prevail as a special law.
- Candano was misinterpreted; employer liability under Article 1711 does not include computation for death compensation.
- Illegitimate minor heir must share awards with legitimate ascendants under Civil Code rules.
- Receipt of SSS death benefits precludes another recovery for the same injury.
Respondent’s Arguments
- Romeo’s death arose out of and in the course of his employment; Article 1711 applies regardless of fault.
- Article 1711 was not repealed by the Labor Code; respondent validly chose the Civil Code remedy.
- Loss of future income is not an inheritance and need not be divided with the deceased’s parents.
- Acceptance of SSS benefits does not bar a Civil Code claim; remedies of compensation and damages are alternative.
Ruling of the Regional Trial Court
- Dismissed respondent’s complaint for failure to prove petitioner’s negligence or causal connection.
- Held