July 1978 - Philippine Supreme Court Decisions/Resolutions

Philippine Supreme Court Jurisprudence

Philippine Supreme Court Jurisprudence > Year 1978 > July 1978 Decisions > G.R. No. L-42319 July 31, 1978 - B. F. GOODRICH PHILIPPINES, INC. v. WORKMEN’S COMPENSATION COMMISSION, ET AL.:

FIRST DIVISION

[G.R. No. L-42319. July 31, 1978.]

B. F. GOODRICH PHILIPPINES, INC., Petitioner, v. WORKMEN’S COMPENSATION COMMISSION, TEODOLFO OCHIA, ISBELA SECURITY AND WATCHMEN AGENCY, represented herein by its MANAGER, PASTOR T. NERI, Respondents.

Ricardo G. Mon, for Petitioner.

E.V. Español & E.E. Andres for respondent, WCC.

Pedro Alforo for Private Respondent.

SYNOPSIS

For the security of its rubber plantation at Tumahubong, Lamitan, Province of Basilan, petitioner entered into a contract with respondent Isabela Security and Watchmen Agency entitled "Private Security Service Agreement" wherein the security agency assumed full liability for any and all compensation which may be due under the law to any of the security guards stationed at petitioner’s rubber plantation, and to guarantee its obligations under the agreement respondent agency executed a performance bond in favor of petitioner. Thereafter, Jose Ochia, one of the security guards assigned to petitioner’s plantation, was killed during an encounter between muslim rebels on one hand, and the Philippine Army, together with the security guards of respondent agency, on the other. A claim for death compensation was filed by the father of the deceased security guard. In granting the claim, the hearing officer held the petitioner, as the statutory employer, solely liable for the compensation due to the claimant. The decision was affirmed by the respondent Commission en banc.

Petitioner appealed invoking exemption from liability under the provision of the "Private Security Service Agreement."

The Supreme Court held that although the Commission rightly held the petitioner as the statutory employer, it erred in not holding respondent agency as a direct employer of the deceased security guard liable to reimburse the petitioner the full amount that the later may or shall pay to the claimant. Appealed decision was modified and respondent security agency was ordered to reimburse and pay petitioner all amounts adjudged against the latter in this case, although petitioner was given the option to proceed directly against the respondent security agency’s performance bond in the same proceeding and to secure a writ of execution thereon. In all other respects, questioned decision affirmed.

SYLLABUS

1. WORKMEN’S COMPENSATION; DEATH BENEFITS; STATUTORY EMPLOYER ENTITLED TO REIMBURSEMENT OF DEATH COMPENSATION PAID TO EMPLOYEE. — Where under the terms of a private security service agreement between the security agency and the company, the security agency assumed full liability for any and all compensations which may be due under the law to any of the security guards stationed at the company’s plantation, and to secure that obligation, the security agency filed a performance bond, and is liable to reimburse the company under the existing contract for the full amount which the company, as statutory employer, was ordered to pay as death compensation benefits of a security guard, and the company may, if it chooses, proceed directly against the security agency’s performance bond and secure a writ of execution thereon.

2. ID.; STATUTORY EMPLOYER, CONCEPT. — A corporation which has a private security service agreement with a security agency is deemed a statutory employer of the security guard assigned to the former’s plantation and rendering services as such.

D E C I S I O N

MUÑOZ PALMA, J.:

This is a simple case of applying the ruling in Aboitiz & Co., Inc. v. Workmen’s Compensation Commission, Pioneer Detective Credit Security Agency, Inc., Et Al., L-42134, handed down on April 30, 1976, in a decision penned by Justice Claudio Teehankee.

The factual background of this petition for review filed by B. F. Goodrich Philippines, Inc., follows:chanrobles.com.ph : virtual law library

Petitioner company is the owner of a rubber plantation located at Tumahubong, Lamitan, Province of Basilan. For the security of its plantation, petitioner entered into a contract on June 5 and June 8, 1973, entitled "Private Security Service Agreement" with the Isabela Security and Watchmen Agency, a corporation duly registered and licensed to operate as a private security agency. Under this contract, the Agency was to supply special police and watchmen’s services in B. F. Goodrich’s Tumahubong rubber plantation in consideration of a monthly fee of P6,840.00. Among the conditions stipulated in the contract was the following:chanrob1es virtual 1aw library

x x x

"7. The AGENCY also agrees to hold B. F Goodrich free from any liability, cause of action, or claim which may be filed by any special police, watchman, or guard or his heirs by reason of his employment under this agreement or under the provisions of the Minimum Wage Law, Workmen’s Compensation Act, and other laws which are now in effect or which may hereafter he enacted." (pp. 50-53, WCC, records)

On September 19, 1974, a supplemental contract was entered into between the parties which provided among other things these conditions:chanrob1es virtual 1aw library

x x x

"1. That the Isabela Security Agency, referred to as the Agency in the aforesaid contract, shall post a performance bond in the amount of TWENTY THOUSAND (P20,000.00) PESOS, Philippine currency, to guarantee the faithful compliance of the terms and conditions of the aforementioned contract, and the terms and conditions of this supplemental private security service agreement, said performance bond to be approved by the B. F. Goodrich Phil., Inc., referred to as B. F. Goodrich in the aforementioned contract;

"2. That in addition to the performance bond of P20,000.00, the Isabela Security Agency should secure the necessary Workmen’s Insurance to each and every security guard assigned to the Tumahubong Plantation of the B. F. Goodrich Phil., Inc., to answer for any and all liabilities under the Workmen’s Compensation Act, or under the province of the Labor Code of the Philippines for the illness, sickness, injury or death which may have accrued or will accrue to any and all the security guards (and/or their heirs as the case may be). For this purpose, the Agency should submit a monthly report to the B.F. Goodrich Phil., Inc. showing the names of the security guards employed, under this contract, their SSS numbers SSS premium payments, Workmen’s Insurance policies, including date of coverage." (pp. 48-49, ibid)

Pursuant to the foregoing contracts, the Security Agency put up a performance bond of P20,000.00 issued by Workmen’s Insurance Co., Inc. in favor of B. F. Goodrich dated August 14, 1974. 1

On May 16, 1974, Jose Ochia, one of the security guards assigned by the Isabela Security & Watchmen Agency to the Tumahubong plantation was killed during an encounter between muslim rebels on one hand and the Philippine Army, together with the security guards of respondent Isabela Security & Watchmen Agency, on the other. A claim for death compensation was filed by Teodolfo Ochia, father of: the deceased security guard, before the Workmen’s Compensation Unit, Regional Office No. X, Department of Labor, in Zamboanga City, naming as respondents therein the Isabela Security & Watchmen Agency and its Manager, Pastor Neri, and B. F. Goodrich Philippines.

During the hearing, the petitioner herein submitted copies of the aforementioned private security service agreement on the basis of which the company claimed that it was the Isabela Security & Watchmen Agency that was solely liable to pay the death compensation the heirs of the deceased security guard.

Acting Chief, Brigido I. Tijamo of the Workmen’s Compensation Unit rendered a decision in favor of the claimant Teodolfo Ochia holding B. F. Goodrich Philippines as the only employer of the deceased security guard and as such solely liable for death compensation benefits to be paid to the claimant. (p. 61, ibid.)

The decision of the hearing officer was affirmed by the Workmen’s Compensation Commission en banc on October 28, 1975, the dispositive portion of which reads:cralawnad

"WHEREFORE, the decision appealed from should be, as it is hereby AFFIRMED. The respondent B. F. Goodrich Philippines, Inc. is hereby ordered:jgc:chanrobles.com.ph

"1. To pay the claimants the sum of FOUR THOUSAND THREE HUNDRED SIXTY PESOS (P4,360.00) as compensation benefit and reimbursement of burial expenses under Section 8 of the Act, as amended;

"2. To Atty. Jose Azcarraga, Jr., the sum of FOUR HUNDRED SIXTEEN PESOS (P416.00) as attorney’s fee under Section 31 of the Act, as amended; and

"3. To the Workmen’s Compensation Fund, the sum of FORTY SEVEN PESOS (P47.00) as administration fee and review costs under Section 55 of the Act, as amended.

"SO ORDERED." (p. 77, WCC records)

In this petition which seeks to review the abovementioned decision of the Commission, petitioner asserts that under the "Private Security Service Agreement" executed by the company and the Isabela Security & Watchmen Agency, the latter assumed full liability for any and all claims for compensation which may be filed under the Workmen’s Compensation Act by any of the security guards assigned in the Tumahubong rubber plantation.

In disposing of this appeal, We hold that, although respondent Commission correctly applied in the instant case the Court’s ruling in Universal Corn Products, Inc. v. Workmen’s Compensation Commission, Et Al., decided on May 21, 1974, 57 SCRA 51, and rightly held B. F. Goodrich as the statutory employer of the security guard, Jose Ochia, inasmuch as the latter was working as such in the rubber plantation of the company and was therefore rendering services to the latter, nevertheless, the Commission erred in not declaring the other respondent Isabela Security & Watchmen Agency as a direct employer of the deceased security guard and is liable to reimburse B. F. Goodrich under the existing contract for the full amount the company may or shall pay to the claimant herein.

In Aboitiz & Co. v. Workmen’s Compensation Commission and Pioneer Detective Credit Security Agency, Et Al., supra, the facts were: Anastacio Cañete was a security guard of Pioneer Detective Credit Security Agency, Inc., assigned by the latter to guard the premises of Aboitiz & Co. Cañete died from hypertensive heart disease in the course of his duty. The Workmen’s Compensation Commission awarded the heirs of Cañete death compensation benefits to be paid by Aboitiz & Co. as the statutory employer. Aboitiz appealed to this Court. In Our Decision, the Court recognized the right of Aboitiz under its contract with the Security Agency to secure reimbursement an the Court ordered the Agency to pay Aboitiz all amounts the latter was adjudged to pay the claimants.chanrobles.com : virtual law library

The situation of petitioner B. F. Goodrich falls squarely under the Aboitiz ruling, The agreement between petitioner herein and the Security Agency is explicit in that the latter assumes full liability for any and all compensations which may be due under the law to any of the security guards stationed at the Goodrich Rubber Plantation, and to secure that obligation, it filed a performance bond in the amount of P20,000.00.

PREMISES CONSIDERED, We modify the decision rendered by respondent Commission and order the Isabela Security & Watchmen Agency to reimburse and pay petitioner B. F. Goodrich Philippines all the amounts that were adjudged against the latter in this case, and for this purpose, B. F. Goodrich may, if it chooses, proceed directly against the Agency’s performance bond of P20,000.00 in this same proceedings and secure a writ of execution thereon, In all other respects, the decision of the Commission stands. No costs.

SO ORDERED.

Teehankee (Chairman), Makasiar, Fernandez, and Guerrero, JJ., concur.

Endnotes:

1. pp. 45-46, WCC records.

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