G.R. No. L-25665 - Victorias Milling Co., Inc. vs. Workmen's Compensation Commission

Case Summary (G.R. No. L-25665)

Factual Background

Segovia worked for petitioner until his dismissal in December, 1957 due to pulmonary tuberculosis. Several times before his final dismissal, petitioner had allowed him to return to his work after he had been discharged from the hospital. On May 20, 1963, Segovia filed with the Sub-Regional Office in Bacolod City a notice of injury or sickness and claim for compensation against petitioner. By registered mail dated June 8, 1963, the office sent the notice and claim to petitioner and requested the submission of the employer’s required reports under Sec. 37 of the Workmen’s Compensation Act. The record showed that petitioner received the claim on June 17, 1963, evidenced by the registry return receipt.

Because petitioner did not answer within the period allowed by the governing rules of the Commission, Segovia filed a motion for judgment by default on December 16, 1963. That motion was granted on December 20, 1963, and petitioner received the order declaring it in default by registered mail on January 17, 1964. An ex parte hearing was then conducted on February 4, 1964, where Segovia established compensability under Act No. 3428, as amended. The Commission’s narrative emphasized that petitioner, though duly notified, refused to answer, and took no step to protect its interests until after it allegedly received from Segovia’s counsel a copy of the decision.

Proceedings Before the Workmen’s Compensation Commission

Before the Commission, petitioner raised a due process theory. It argued that the regional office never acquired jurisdiction over its person because no summons had been served on it. It asserted that this violated Rule 17, Sec. 2 of the Commission rules and Rule 7 of the old Rules of Court, and insisted on the “settled jurisprudence” that jurisdiction over the person is acquired through service of summons.

The Commission rejected the argument. It ruled that the cited procedural rules applied only to contested or controverted claims, and that Segovia’s claim was not such a case because petitioner had not effectively controverted the claim within the statutory period. The Commission cited petitioner’s own conduct as showing knowledge of Segovia’s illness and its election not to controvert, particularly in view of Secs. 27 and 45 of the Workmen’s Compensation Act. It held that petitioner’s failure to file the required notice of controversion within the period converted its inaction into a renunciation or forfeiture of the right to oppose the claim.

On the specific controversion point, the Commission further found that although petitioner knew of Segovia’s illness and dismissed him because of his physical disability, it failed to give the notice required by Sec. 37 to the regional or sub-regional office, and likewise failed to file a notice to controvert within the statutory period under Sec. 45.

The Issues Raised on Review

Petitioner, on review, persisted in its due process contention, framing it as a jurisdictional defect arising from the alleged absence of summons. It also assigned errors that, in essence, attempted to preserve the right to controvert notwithstanding the failure to comply with statutory requirements. Another assigned error challenged the Commission’s refusal to allow petitioner to introduce what it called its “substantial defense.” Petitioner likewise raised an issue attacking the finality and executory nature of the award, given the alleged procedural irregularities and lack of jurisdiction.

The Parties’ Contentions

Petitioner contended that it was deprived of a day in court without due process. It maintained that the absence of summons meant the Commission did not acquire jurisdiction over its person, and that the award should not be treated as final and executory.

Segovia, as sustained by the Commission, invoked the statutory consequences of non-controversion. The Commission had treated the claim as uncontested due to petitioner’s failure to controvert within the legal period. It emphasized that petitioner was duly notified of the claim and that its refusal to answer or controvert negated the due process complaint.

Legal Basis and Reasoning

The Court held that the due process argument failed because petitioner’s failure to controvert was fatal to its right to demand a day in court. It relied on controlling precedent. In Filipino Pipe & Foundry Corp. v. Workmen’s Compensation Commission, the Court had ruled that where an employer’s answer to the employee’s claim was not filed within ten days from notice, Sec. 45 deemed the employer to have renounced the right to controvert and thus the employer could no longer demand a hearing. Similarly, in Malan Brothers Watchman Agency v. Conanan, the Court had held that where the claim was non-controverted, the Regional Administrator was authorized to decide based on the submission of the claim and accompanying evidence without the necessity of a formal hearing. The Court also cited Apolega v. Hizon for the principle that lack of notice and hearing could not be sustained when the employer failed to controvert both claims and thereby waived the right to present evidence.

The Court further reasoned that even apart from precedent, petitioner’s invocation of a technicality was inconsistent with what due process required. It stressed that due process is fairness or reasonableness, and that nothing in the proceedings appeared unfair or unreasonable under the circumstances. The petition itself, and petitioner’s brief, admitted that the hearing officer had sent petitioner by registered mail a copy of the claim with a request that the accompanying forms be submitted, so petitioner could not plausibly disclaim knowledge of potential liability. The Court held that petitioner could have been heard had it complied and abandoned its adamant stance. It rejected the claim that the hearing officer violated due process by refusing to proceed with formalities petitioner failed to trigger through timely controversion.

On petitioner’s third and fourth assigned errors, the Court held that they could not succeed because the right to controvert was no longer available. Even if petitioner pointed out that Segovia’s claim was filed on May 20, 1963, nearly six years after his separation from employment, the Court ruled that the lack of controversion remained “fatal” to the defense that the claim was filed out of time. It reiterated that failure to controvert results in waiver, renunciation, forfeiture, or loss of the right to raise the timeliness defense, and specifically stated that the failure to controvert was fatal to that defense.

On the fifth assigned error regarding the Commission’s supposed refusal to allow petitioner to introduce its substantial defense, the Court held that petitioner’s prior failure to controvert foreclosed the complaint that it was denied the opportunity to be heard. It noted that the Commission’s decision had found Segovia’s right to compensation sufficiently established from the evidence submitted during the ex parte hearing. It described the evidentiary support recited by the Commission: Segovia’s employment in carpentry work and log hauling from 1952 to 1955, and his transfer from 1956 to 1957 to work in the drydock, where he worked daily six days a week from 6:00 to 3:00 P.M. and, if not relieved, worked up to sixteen hours. The Commission’s factual findings also showed the nature of the drydock work, including building a canal for the drydock walls, digging, erecting posts, diving or staying in water four to six feet deep depending on the tide, and working with muddy water containing oil and paint and other materials used in constructing the walls. The Commission further found that Segovia’s chest x-rays were negative for pulmonary tuberculosis at the start of employment and for the period up to 1956, but in 1957 x-rays revealed pulmonary tuberculosis, leading to hospitalization for 38 days and treatment by Dr. Jose Dungo at St. Joseph Hospital. After discharge, Segovia reported for work but was told by the foreman that he could not return because he had tuberculosis. The Commission treated Segovia’s pulmonary tuberculosis as compensable on the theory that it resulted from or was aggravated by the nature and conditions of employment, citing exposure to elements and variations of temperature and dirt in muddy cana

Case Syllabus (G.R. No. L-25665)

Victorias Milling Co., Inc. petitioned for review of a Workmen's Compensation Commission (WCC) decision affirming a hearing officer’s order granting compensation to Julio Segovia for pulmonary tuberculosis.
Workmen's Compensation Commission was the respondent, and Julio Segovia was the opposing claimant-beneficiary whose right to compensation the WCC sustained.

Parties and Procedural Posture

The WCC decision sought to be reviewed was rendered on October 15, 1965.
The WCC affirmed an order of its hearing officer, Reuben D. Borres, from the Bacolod Regional Office.
The hearing officer’s order sustained Segovia’s claim for compensation.
The Supreme Court reviewed and ultimately affirmed the WCC decision, thereby sustaining the award.

Key Factual Allegations

Segovia filed a notice of injury or sickness and claim for compensation with the Sub-Regional Office in Bacolod City on May 20, 1963 against Victorias Milling Co., Inc.
The Sub-Regional Office sent the notice and claim to the employer by registered mail dated June 8, 1963, requesting submission of the required employer reports under the Workmen's Compensation Act.
The employer received the claim on June 17, 1963, as shown by the registry return receipt.
Approximately six months later, on December 16, 1963, Segovia filed a motion for judgment by default due to the employer’s failure to answer within the legal period.
The WCC granted the motion for default on December 20, 1963.
The employer received the order declaring it in default by registered mail on January 17, 1964.
An ex parte hearing was conducted on February 4, 1964, where Segovia established compensability.
The WCC found that the employer was notified of the claim and deliberately refused to answer, and that it took no action to protect its interests until it allegedly received a copy of the decision from Segovia’s counsel.

Employment History and Disease Circumstances

The WCC found that Segovia was employed in the Civil Construction Department performing carpentry work and hauling logs from 1952 to 1955.
From 1956 to 1957, Segovia was transferred to work in the drydock.
In the drydock, the WCC found he worked daily, six days a week, from 6:00 to 3:00 P.M., and sometimes worked a total of up to sixteen hours if not relieved.
The WCC found that the drydock work involved building canal foundations for the walls of the drydock, with exposure to muddy water contaminated with oil, paint, and other construction materials.
The WCC found that Segovia worked in water four to six feet deep, depending on tide levels, and performed tasks requiring diving or staying in the canal.
The WCC found that at the time of first employment, he was free from illness due to required physical examinations and that chest x-rays showed no signs of P.T.B. until 1957.
The WCC found that when the x-ray in 1957 revealed P.T.B., he was hospitalized and treated by Dr. Jose Dungo at St. Joseph Hospital for thirty-eight days.
The WCC found that after hospitalization, he reported to his foreman but was not allowed to return because he was found sick of tuberculosis.
The WCC found that prior to dismissal, Segovia earned P4.24 a day and worked six days a week.
The WCC concluded that, considering the nature and conditions of employment, Segovia’s P.T.B. was the result of or was aggravated by the nature of his employment absent proof to the contrary.

Issues Raised on Review

The employer argued that it was deprived of due process because no summons was served and thus the regional office did not acquire jurisdiction over its person.
The employer asserted that the hearing officer and WCC should not have ruled against it without complying with service and hearing requirements.
The employer claimed it had not lost its right to controvert, and it attempted to dispute the effect of its alleged failure to timely file its required controversion.
The employer assailed the WCC’s jurisdiction by invoking alleged tardiness in the filing of the compensation claim.
The employer challenged the WCC’s refusal to allow it to introduce what it termed a “substantial defense.”
The employer contended that the WCC and hearing officer’s decision should not have been treated as final and executory.

Statutory and Procedural Framework

The WCC’s determinations were anchored on provisions of the Workmen's Compensation Act, as amended, including Sec. 27, Sec. 37, Sec. 45, and related rules invoked by the parties.
The WCC applied Sec. 27 in relation to the employer’s knowledge and the lack of bar to proceedings despite delayed notice.
The WCC treated the statutory requirement to submit an employer’s report and the employer’s duty to controvert within the statutory period as critical to the employer’s rights.
The WCC relied on the consequence under Sec. 45: failure to controvert within the prescribed time results in renunciation of the right to controvert and an admission of the claim.
The WCC addressed the employer’s invocation of procedural rules on contested cases, including the concept that certain rules apply only to contested or controverted claims.

Arguments of the Employer

The employer insisted that it would still be held liable under the Workmen’s Compensation Act only if its right to due process was respected.
The employer argued that the WCC acquired no jurisdiction over its person because no summons was issued or served, and it invoked the alleged violation of Rule 17, Sec. 2 of the Rules of the Commission and Rule 7 of the old Rules of Court.
The employer emphasized that it was entitled to a day in court and complained about the absence of formal service and the manner by which it was adj