G.R. No.
187950 The Commission held that Cristina was unable to establish that her husband's case fell under any of the
CRISTINA BARSOLO, Petitioner,
vs.
SOCIAL SECURITY SYSTEM, Respondent.
DECISION
LEONEN, J.:
This resolves a Petition for Review on Certiorari 1 filed by Cristina Barsolo, assailing the Decision2 dated
November 19, 2008 and the Resolution3 dated May 19, 2009 of the Court of Appeals in CA-G.R. SP No.
102469.
Cristina Barsolo's (Cristina) deceased husband, Manuel M. Barsolo (Manuel), "was employed as a
seaman by various companies from 1988 to 2002."4 From July 2, 2002 to December 6, 2002, Manuel
served as a Riding Gang/ Able Seaman onboard MT Polaris Star with Vela International Marine Ltd.,
(Vela).5 Vela was his last employer before he died in 2006.6
After his separation from employment with Vela, Manuel was diagnosed with hypertensive cardiovascular
disease, coronary artery disease, and osteoarthritis. 7 He was examined and treated at the Philippine
Heart Center as an outpatient from April 2, 2003 to October 22, 2004. 8 When he died on September 24,
2006, the autopsy report listed myocardial infarction as his cause of death. 9
Believing that the cause of Manuel's death was work-related, Cristina filed a claim for death benefits
under Presidential Decree No. 626, as amended, with the Social Security System. 10 The Social Security
System, on June 27, 2007, denied her claim on the ground that there was no longer an employer-
employee relationship at the time of Manuel's death and that "[h]is being a smoker increased his risk of
contracting the illness." 11
Cristina appealed her case to the Employees' Compensation Commission (Commission), which, in a
Decision12 dated December 17, 2007, denied the appeal for lack of merit. 13 According to the
Commission:
Since Myocardial Infarction (Cardiovascular Disease) is listed as an occupational
disease under P.D. 626 as amended, [Cristina] is bound to comply with all the
conditions required [under Annex A of the Amended Rules on Employee's
Compensation] to warrant the grant of benefits
• If the heart disease was known to have been present during employment, there
must be proof that an acute exacerbation was clearly precipitated by the unusual
strain by reasons of the nature of his/her work.
• The strain of work that brings about an acute attack must be of sufficient severity
and must be followed within 24 hours by the clinical signs of a cardiac insult to
constitute causal relationship;
• If a person who was apparently asymptomatic before being subjected to strain at
work showed signs and symptoms of cardiac injury during the performance of his
work and such symptoms and signs persisted, it is reasonable to claim a causal
relationship. 14
above circumstances. 15
Moreover, since Manuel was a smoker, the Commission believed that Manuel's "smoking habits
precipitated the manifestation of his Myocardial Infarction."16 The Commission added that "the System
correctly ruled that the development of the Myocardial Infarction could not be categorically attributed to
the occupation of [Manuel] as Seaman because of the presence of major causative factor which is not
work-related."17
Aggrieved, Cristina filed a Petition for Review18 before the Court of Appeals, which was denied for lack of
merit on November 19, 2008. 19
The Court of Appeals ruled that while there was no doubt that myocardial infarction was a compensable
disease,20 Cristina failed to prove a causal relationship between Manuel's work and the illness that
brought about his death.21 The Court of Appeals agreed with the Commission that Manuel's habit of
smoking, which dates as far back as 1973, may have contributed to the development of his heart
ailment.22
Cristina moved for reconsideration23 of the said Decision but her Motion was denied by the Court of
Appeals in a Resolution24 dated May 19, 2009.25
Hence, this Petition was filed.
Petitioner Cristina argues that the Court of Appeals erred in finding that "the illness which caused the
death of [her] husband[,] had no relation with his occupation." 26 She insists that Manuel's case falls under
the third condition27 under Annex "A"of the Amended Rules on Employee Compensation.
Petitioner contends that although Manuel did not exhibit symptoms while he was employed with Vela, it
was not unreasonable to assume that he was already suffering from the illness, which prompted him to
visit the Philippine Heart Center, four (4) months after his employment contract ended.28
Petitioner also presented a Medical Certificate29 dated October 22, 2004, wherein it was stated that when
Manuel was initially seen during his pre-employment examination, he claimed to have Hypertension even
prior to the examination, and was already on the maintenance drug Capoten. 30
Petitioner further avers that even if her husband had a history of smoking, it cannot be denied that the
cause of his death is a compensable disease and that his work as a seaman aggravated his ailment. 31
The issue in this case boils down to the entitlement of Cristina to compensation for the death of her
husband Manuel.
The Petition has no merit.
The Amended Rules on Employee Compensation provide the guidelines before a beneficiary can claim
from the state insurance fund. Rule III, Section l(b) states:
For the sickness and the resulting disability or death to be compensable, the
sickness must be the result of an occupational disease listed under Annex "A" of
these Rules with the conditions set therein satisfied, otherwise, proof must be
shown that the risk of contracting the disease is increased by the working
conditions.
1
The pertinent portions of Annex A of the Amended Rules on Employee Compensation read:
For an occupational disease and the resulting disability or death to be
compensable, all of the following conditions must be satisfied:
(1) The employee's work must involve the risks described herein;
(2) The disease was contracted as a result of the employee's exposure to the
described risks;
(3) The disease was contracted within a period of exposure and under such other
factors necessary to contract it;
(4) There was no notorious negligence on the part of the employee.
....
The following diseases are considered as occupational when contracted under
working conditions involving the risks described herein:
....
18. CARDIO-V ASCULAR DISEASES. ** Any of the following conditions -
a. If the heart disease was known to have been present during employment, there
must be proof that an acute exacerbation was clearly precipitated by the unusual
strain by reasons of the nature of his/her work.
b. The strain of work that brings about an acute attack must be of sufficient severity
and must be followed within 24 hours by the clinical signs of a cardiac assault to
constitute causal relationship.
c. If a person who was apparently asymptomatic before being subjected to strain at
work showed signs and symptoms of cardiac injury during the performance of his
work and such symptoms and signs persisted, it is reasonable to claim a causal
relationship. (Emphasis supplied)
It is worthy to note that this Court has already ruled on the compensability of Myocardial Infarction as an
occupational disease. Rañises v. Employees Compensation Commission,  32 is instructive:
Section l(h), Rule III of the ECC Amended Rules on Employees Compensation,
now considers cardio-vascular disease as compensable occupational
disease. Included in Annex "A" is cardio-vascular disease, which cover
myocardial infarction. However, it may be considered as compensable
occupational disease only when substantial evidence is adduced to prove
any of the following conditions:
a) If the heart disease was known to have been present during employment there
must be proof that an acute exacerbation clearly precipitated by the unusual strain
by reason of the nature of his work;
b) The strain of work that brings about an acute attack must be of sufficient severity
and must be followed within twenty-four (24) hours by the clinical signs of a cardiac
assault to constitute causal relationship.
c) If a person who was apparently asymptomatic before subjecting himself to strain
of work showed signs and symptoms of cardiac injury during the performance of
his work and such symptoms and signs persisted, it is reasonable to claim a causal
relationship.33 (Emphasis supplied.)
In Rañises, we held that for myocardial infarction to be considered a compensable occupational disease,
any of the three conditions must be proven by substantial evidence. 34 Petitioner failed in this regard. On
petitioner's insistence that Manuel's case falls under the third condition, this Court disagrees. For a claim
under this condition to prosper, there must be proof that: first, the person was asymptomatic before
beginning employment and second, he had displayed symptoms during the performance of his duties.
Such symptoms should have persisted long enough to establish that his work caused his heart problem.
However, petitioner offered no proof that her husband suffered any of the symptoms during his
employment. All she managed to prove was that her husband went to the Philippine Heart Center and
was treated for Hypertensive Cardiovascular Disease from April 2, 2003 to January 9, 2004, 35 four
months after his contract with Vela ended on December 6, 2002. 36
The Medical Certificate37 did not help petitioner's cause, as this only shows that Manuel was already
suffering from hypertension even before his pre-employment examination, and that he did not contract it
during his employment with Vela. Having had a pre-existing cardio vascular disease classifies him under
the first condition. However, for a claim under the first category to prosper, petitioner must show that
there was an acute exacerbation of the heart disease caused by the unusual strain of work. Petitioner
failed to adduce any proof that her husband experienced any symptom of a heart ailment while employed
with Vela, much less any sign that his heart condition was aggravated by his job.
Since there was no showing that her husband showed any sign or symptom of cardiac injury during the
performance of his functions, petitioner clearly failed to show that her husband's employment caused the
disease or that his working conditions aggravated his existing heart ailment. Moreover, as the Court of
Appeals correctly pointed out, Manuel died on September 24, 2006, four years after he disembarked
from MV Polaris Star.38 Other factors have already played a role in aggravating his illness. Due to the
considerable lapse of time, more convincing evidence must be presented in order to attribute the cause
of death to Manuel's work. In the absence of such evidence and under the circumstances of this case,
this Court cannot assume that the illness that caused Manuel's death was acquired during his
employment with Vela.
To emphasize, it is not refuted that myocardial infarction is a compensable occupational illness.
However, it becomes compensable only when it falls under any of the three conditions, which should be
proven by substantial evidence.
Furthermore, Manuel was a smoker. The presence of a different major causative factor, which could
explain his illness and eventual death, defeats petitioner's claim.
In any case, the Court in Triple Eight Integrated Services, Inc. v. National Labor Relations
Commission,39held that findings of facts of quasi-judicialagencies are accorded great respect and, at
times, even finality ifsupported by substantial evidence. 40 These findings are especially persuasive when,
such as in this case, all three lower tribunals concur in their findings. We find no reason to overturn their
findings.
Petitioner's claim for death benefits was correctly denied by the Court of Appeals.
WHEREFORE, the Petition is DENIED. The Court of Appeals Decision dated November 19, 2008 and
Resolution dated May 19, 2009 in CA-G.R. SP No. 102469 are hereby AFFIRMED.
2

G.R. No. 141709 August 16, 2005
MANUEL RAÑISES, Petitioners,
vs.
THE EMPLOYEES COMPEN-SATION COMMISSION and SOCIAL SECURITY
SYSTEM, Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
For our resolution is the petition for review on certiorari assailing the Decision1 of the Court of Appeals
dated September 24, 1999 and the Resolution2 dated December 28, 1999, in CA-G.R. SP No. 50069.
The factual antecedents of this case as found by the Court of Appeals are:
"Petitioner Manuel Rañises, with SSS No. 03-3214936-7, was employed by ADCOMS International, Inc.,
as driver-messenger from November 11, 1994 to March 4, 1997. When ADCOMS was brought by Data
Craft Communication System, petitioner was absorbed by the latter company, hence, his continuous
employment from May 4, 1997 to April 9, 1998.
As reflected in petitioner’s Daily Time Record, on August 29, 1997, petitioner was assigned to bring a
guest to Puerto Azul for a seminar. Subsequently, he suffered chest pains and was brought to the Makati
Medical Center for consultation and examination. He was diagnosed as having Coronary Artery
Disease/Antero Septal Wall, Myocardial Infarction.
Petitioner filed the instant claims for compensation benefits under P.D. No. 626, as amended. The SSS
denied the claim on the ground that the ailment is not work-related, that there is no causal relationship
between petitioner’s alleged ailment and that of his work as driver-messenger.
On October 23, 1998, the Employees’ Compensation Commission (ECC) rendered its Decision affirming
the decision of the SSS and dismissed the case for lack of merit."3
Rañises then seasonably filed with the Court of Appeals a petition for review.
In its assailed Decision, the Court of Appeals affirmed the Decision of the ECC and dismissed his
petition.
Rañises filed a motion for reconsideration, but this was denied by the Court of Appeals in its Resolution
dated December 28, 1999.
Hence, Rañises filed with this Court the instant petition for review on certiorari.
In our Resolution4 of February 14, 2000, we granted petitioner Rañises’ motion to litigate as a pauper.
The sole issue for our resolution is:
WHETHER PETITIONER’S CLAIM UNDER P.D. 626 IS COMPENSABLE.
In his comment on the petition, the Solicitor General averred that pursuant to ECC Resolution No. 432
dated July 20, 1977, cardio-vascular disease, although not considered as occupational disease, is
nevertheless considered as work-related and, therefore, compensable.
P.D. No. 626, otherwise known as the Employees Compensation Act., is a specie of social legislation,
the primary purpose of which is to provide meaningful protection to the ordinary worker against the perils
of disability, the hazards of illness, and hardships of other contingencies which may result in the loss of
income. Indeed, it is the policy of the State to give maximum aid and protection to labor.5
Section 1(h), Rule III of the ECC Amended Rules on Employees Compensation, now considers cardio-
vascular disease as compensable occupational disease. Included in Annex "A" is cardio-vascular
disease, which cover myocardial infarction. However, it maybe considered as compensable occupational
disease only when substantial evidence is adduced to prove any of the following conditions:
a) If the heart disease was known to have been present during employment there must be proof that an
acute exacerbation clearly precipitated by the unusual strain by reason of the nature of his work;
b) The strain of work that brings about an acute attack must be of sufficient severity and must be
followed within twenty-four (24) hours by the clinical signs of a cardiac assault to constitute causal
relationship.
c) If a person who was apparently asymptomatic before subjecting himself to strain of work showed signs
and symptoms of cardiac injury during the performance of his work and such symptoms and signs
persisted, it is reasonable to claim a causal relationship.
The Court of Appeals found that "[E]vidently, petitioner’s work as driver/messenger does not entail the
working conditions with the aforequoted risks. The myocardial infarction could not have developed as a
natural result of hazards constantly present and characteristic of his occupation."
We do not agree.
Records show that petitioner falls under the third condition. In September 1997, when he was diagnosed
to be suffering from
myocardial infraction, he was employed as a driver-messenger by Data Craft Systems and
subsequently by ADCOMS International, Inc. Prior to his employment, both companies’ doctors
certified that he was in good health and fit to work. As a driver and messenger, he spent virtually his
whole day driving around Metro Manila, delivering equipment, collecting checks, and picking up company
guests at the airport and driving them to designated places. Obviously, petitioner in the performance of
his job, was subject to severe strain and fatigue and exposed to the stress and strain of everyday traffic.
We thus agree with the Solicitor General that petitioner’s ailment, being work-connected, is
compensable.
The issue before us is not of first impression.
In Sepulveda v. Employees Compensation Commission,6 a public school teacher, assigned to a remote
rural area, died of myocardial infarction. In sustaining the claim for compensation benefits, we held that
due to his occupation as a school teacher assigned to one of the remotest parts of Tangub City, his
illness was directly brought about by his employment or was a result of the nature of such employment.
In Cortes v. Employees Compensation Commission,7 we ruled that myocardial infarction is now
considered an occupational disease by the ECC and is, therefore, compensable.
3
Then in Eastern Shipping Lines, Inc. v. Philippine Overseas Employment Administration,8 we upheld the
ruling of the POEA awarding compensation benefits to the heirs of a Filipino seaman who died of
myocardial infarction while his vessel was in Japan.
In Roldan v. Republic,9 we held that a poor schoolteacher who gave the best years of her life in the
service and who in the process, contracted heart ailment and hypertension, is entitled to compensatory
benefits corresponding to her claim.
In Tibulan v. Inciong,10 a barge captain died of myocardial infarction. We held that where an employee
had entered employment in good health and suffered an illness in the course of an employment which he
never had before, he has in his favor the statutory presumption that his illness or disease is
compensable. We reiterated our ruling in the Heirs of the Late R/O Reynaldo Aniban v. National Labor
Relations Commission.11 In this case, a ship radio operator, who was healthy when he boarded his
vessel, died of myocardial infarction three months later. We ruled that his disease is compensable on the
ground that any kind of work or labor produces stress and strain normally resulting in wear and tear of
the human body.
In Government Service Insurance System v. Gabriel,12 we ruled that acute myocardial infarction is listed
as an occupational disease, and its incidence, whether or not associated with a non-listed ailment, is
enough basis for requiring compensation. And in Republic v. Mariano,13 we reiterated our ruling
in Gabriel that heart disease and hypertension are compensable illnesses.
WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the Court of Appeals
in CA-G.R. SP No. 50069 are REVERSED. The Social Security System is ordered to pay Manuel
Rañises, petitioner, the compensation benefits due him under P.D. No. 626, as amended.
G.R. No. 193500
GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioners
vs.
SIMEON TAÑEDO, JR., Respondent
DECISION
LEONARDO-DE CASTRO, J.:
This is a petition for review on certiorari pursuant to Rule 45 of the 1997 Rules on Civil Procedure filed by
petitioner Government Service Insurance System (GSIS) seeking to reverse and set aside the
Decision1 dated April 15, 2010 and the Resolution2 dated August 18, 2010 of the Court of Appeals in CA-
G.R. SP No. 102493, entitled "Simeon Tañedo, Jr. v. Employees ' Compensation Commission (ECC)
and Government Service Insurance System (GSIS)." The first appellate court issuance reversed the
Decision3 dated December 17, 2007 of the Employees' Compensation Commission (ECC) in ECC Case
No. GM-17750-0917-07 while the latter denied the motion for reconsideration filed by GSIS with regard
to the aforementioned reversal. The ECC Decision at issue affirmed the denial by the GSIS of
respondent Simeon A. Tañedo, Jr.'s (Tañedo) claim for disability benefits under Presidential Decree No.
626, as amended.
The factual history of this case was concisely narrated in the assailed April 15, 2010 Decision of the
Court of Appeals as follows:
[Tañedo] has been a public servant since March 1, 1976. Before his retirement in
December 2007, he held the position of records officer at the Bureau of Internal
Revenue (BIR). His duties and responsibilities included the following:
a. Encodes and prints in the computer treasury reconciliation
statements, supporting schedules and endorsement letters of
funds;
b. Delivers said statements, schedules and letters to financial
and administrative service, Commission on Audit and other
revenue services;
c. Files statements and letters to the records section;
d. Performs other functions designated by the division chief.
On December 1, 2003, petitioner was examined at the National Kidney Institute
where he was found to have varicosities or varicose veins in his legs as follows:
1. Mildly dilated left greater saphenous vein, particularly at
the above knee, below the knee and ankle segment.
2. All deep veins are compressible with no evidence of deep
venous thrombosis.
3. Superficial varicosities join the above knee and ankle
segment of the left greater saphenous vein and its adjoining
varices.
4. Mild venous blood flow reflux on maneuver in the left
common femoral vein, entire left greater saphenous vein and
its adjoining varices.
5. Incompetent and perforator vein join the distal left posterior
tibial vein with superficial varicosities.
Convinced that his ailment supervened by reason and in the course of his
employment with the BIR, [Tañedo] filed a claim before the Government Service
Insurance System (GSIS) for compensation benefits under P.D. No. 626, as
amended. His plea, however, was denied by the GSIS in a letter dated January 24,
2004 on the ground that varicosities is not considered an occupational disease
under P.D. No. 626, as amended.4
On appeal, the ECC affirmed the GSIS's denial of Tañedo's claim, ruling that:
The pertinent provision of the law provides that for sickness or death to be
compensable, the ailment or death resulting therefrom must be listed as an
occupational disease. Otherwise, proof must be shown that the risk of contracting
the ailment is increased by the nature of the employment and/or the working
conditions of the covered employee. This is the so-called Increased Risk Theory
where only substantial evidence is required by law to support one's claim.
4
 xxxx
Varicosities is not among the occupational diseases listed under Annex "A" of the
Amended Rules on Employees' Compensation Law. Thus, it is required of the
appellant to prove that the risk of contracting the said ailment was increased by the
nature of his working conditions. However, looking at the possible causes and the
appellant's job as Records Officer, it appears that causal relationship between his
illness and his job cannot be established. Medical science has already established
that familial tendency is the most important predisposing factor in the development
of varicose veins.
The appellant should have presented substantial evidence x x x showing that the
nature of his employment or working conditions increased the risk of varicosities. In
this case, there is no showing that the progression of the disease was brought
about largely by the conditions in the appellant's job.x x x.5
Dissatisfied with the ECC's verdict, Tañedo elevated his case to the Court of Appeals which, in its
assailed April 15, 2010 Decision, granted his appeal and disposed of the case in this wise:
FOR THESE REASONS, We GRANT the instant petition. The assailed Decision of
the Employees' Compensation Commission is SET ASIDE. Respondent
Government Service Insurance System is ORDERED to pay petitioner the
compensation benefits due him under P.D. 626, as amended.6
The GSIS filed a motion for reconsideration but this was denied in the assailed August 18, 2010
Resolution of the appellate court.
Thereafter, the GSIS filed the present petition and raised the following issues for consideration:
1. WHETHER THE COURT OF APPEALS ERRED IN FINDING THAT
RESPONDENT'S VARICOSITIES WAS WORKCONNECTED OR THAT THE
NATURE OF HIS WORK INCREASED THE RISK OF CONTRACTING THE
SAME; AND
2. WHETHER THE COURT OF APPEALS ERRED IN GRANTING
RESPONDENT'S CLAIM FOR TEMPORARY DISABILITY BENEFITS.7
The petition is meritorious.
Simply put, the issue for resolution in this case is whether or not Tañedo's medical condition is
compensable under the law.1âwphi1
Presidential Decree No. 626, as amended, defines compensable sickness as "any illness definitely
accepted as an occupational disease listed by the Commission, or any illness caused by employment
subject to proof by the employee that the risk of contracting the same is increased by the working
conditions."
In order to warrant compensation for an ailment and its resulting disability or death under Presidential
Decree No. 626, as amended, Section l(b), Rule III of the Amended Rules on Employees' Compensation
(AREC) provides:
SECTION 1. Grounds. - (a) For the injury and the resulting disability or death
to be compensable, the injury must be the result of accident arising out of
and in the course of the employment.
(a) For the sickness and the resulting disability or death to be
compensable, the sickness must be the result of an occupational disease listed
under Annex "A" of these Rules with the conditions set therein satisfied, otherwise,
proof must be shown that the risk of contracting the disease is increased by the
working conditions. (Emphases supplied.)
Thus, for sickness or death of an employee to be compensable, the claimant must show either: (1) that it
is a result of an occupational disease listed under Annex "A" of the AREC with the conditions set therein
satisfied; or (2) if not so listed, that the risk of contracting the disease was increased by the working
conditions.8
It is undisputed that Tañedo's medical condition (i.e., varicosities in the left leg) is not among the
occupational diseases listed under Annex "A" of the AREC. Therefore, he is required by statute to
prove that the risk of contracting the said ailment was increased by the nature of his working conditions.
The Court of Appeals was correct in stating in its assailed April 15, 2010 Decision that "what the law
requires is reasonable work-connection, not direct causal relation"9 and that "the degree of proof required
under Presidential Decree No. 626 is merely substantial evidence or such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion."10
However, a careful review of the records of this case would reveal that Tañedo failed to provide
substantial evidence to prove that his medical condition was caused by his work at the Bureau of Internal
Revenue (BIR). He was unable to present any competent medical history, records or a physician's report
that would objectively demonstrate that his claim of a reasonable connection between his work and his
medical ailment has substantial basis. All that can be found on record are (a) the hospitalization claim for
payment, and (b) the radiology consultation report that both merely describe his medical condition of
"stasis dermatitis" or "superficial varicosities" but with no medical assessment as to the cause thereof.
In his pleadings, Tañedo asserted that his function of delivering documents to various government
offices, encoding, printing as well as filing statements and letters cannot be accomplished without great
leg exertion which caused the varicosities on his left leg. Unfortunately, his statements were not
supported by any substantial medical or credible proof. Being such, they are mere speculations or
presumptions upon which an award of compensation cannot be properly based. It is axiomatic that the
employee is required to prove a positive proposition - that the risk of contracting the disease is increased
by his working conditions.11
Although we agree with the Court of Appeals that according to jurisprudence "it is enough that the
hypothesis, on which the workmen's claim is based, is probable,"12 we likewise previously ruled
in Government Service Insurance System v. Cuntapay, 13 that said probability must be reasonable and
based on credible information, to wit:
Probability, not the ultimate degree of certainty, is the test of proof in compensation
proceedings. And probability must be reasonable; hence, it should, at least, be
anchored on credible information. Moreover, a mere possibility will not suffice; a
claim will fail if there is only a possibility that the employment caused the disease.
In all, Tañedo's evidence merely point to a possibility that there is a nexus between his work and his
ailment which cannot be deemed adequate basis to grant workmen's compensation claims.
5
We have held that findings of facts of quasi-judicial agencies are accorded great respect and, at times,
even finality if supported by substantial evidence. 14 In the case at bar, we concur with the ECC's
evaluation of the evidence that Tañedo suffered from a non-occupational disease and that he failed to
prove the work-connection of his illness. Perforce, his claim for compensation under Presidential Decree
No. 626, as amended, has no legal and factual bases.
In closing, we reiterate that while we sympathize with the plight of the working man like Tañedo, it is
important to note that such sympathy must be balanced by the equally vital interest of denying
undeserving claims for compensation. Compassion in this instance must give way to "a greater concern
for the trust fund to which the tens of millions of workers and their families look to for compensation
whenever covered accidents, diseases and deaths occur."15 In Government Service Insurance System v.
Capacite,16 we again elucidated on the underlying reason why the workmen's compensation fund or
insurance trust fund should only be applied to legitimate claims for compensation benefits, to wit:
While PD 626, as amended, is a social legislation whose primary purpose is to
provide meaningful protection to the working class against the hazards of disability,
illness, and other contingencies resulting in loss of income, it was not enacted to
cover all ailments of workingmen. The law discarded, among others, the concepts
of "presumption of compensability" and "aggravation" and substituted a system
based on social security principles. The intent was to restore a sensible equilibrium
between the employer's obligation to pay workmen's compensation and the
employee's right to receive reparation for work-connected death or disability.
In light of the foregoing, we are compelled to overturn the appellate court's grant of Tañedo's claim for
compensation benefits for want of substantial evidence to prove work-related causation or aggravation of
his medical condition.
WHEREFORE, the petition is GRANTED. The Decision dated April 15, 2010 and the Resolution dated
August 18, 2010 of the Court of Appeals in CA-G.R. SP No. 102493 are hereby REVERSED and SET
ASIDE. The Decision dated December 17, 2007 of the Employees' Compensation Commission in ECC
Case No. GM-17750-0917-07 is hereby REINSTATED.
G.R. No. 199780               September 24, 2014
GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner,
vs.
JOSE M. CAPACITE, Respondent.
DECISION
BRION, J.:
This is an appeal under Rule 43 of the Rules of Court of the decision 1 dated August 4, 2011 and the
resolution2 dated November 24, 2011 of the Court of Appeals (CA) in CA-GR SP No. 116030. The
appealed decision reversed and set aside the Decision dated June 29, 2010 of the Employees'
Compensation Commission (ECC), which denied the claim for compensation benefits under Presidential
Decree No. 626 (PD 626)3 filed by Jose M. Capacite (Jose).
The Antecedent Facts
Elma Capacite (Elma) was an employee in the Department of Agrarian Reform (DAR) – Eastern Samar
Provincial Office, Borongan, Eastern Samar, who successively held the following positions between the
periods of November 8, 1982 to July 15, 2009: Junior Statistician,
Bookkeeper, Bookkeeper II, and finally as Accountant I.4
On May 11, 2009, due to persistent cough coupled with abdominal pain, Elma was admitted at the
Bethany Hospital. The pathology examination showed thatshe was suffering from "Adenocarcinoma,
moderately differentiated, probably cecal origin with metastases to mesenteric lymph node and seeding
of the peritoneal surface."5
On July 16, 2009, Elma died due to "Respiratory Failure secondary to Metastatic Cancer to the lungs;
Bowel cancer with Hepatic and Intraperitoneal Seeding and Ovarian cancer."6
On May 13, 2009, Elma’s surviving spouse, Jose, filed a claim for ECC death benefits before the
Government Service Insurance System (GSIS) Catbalogan Branch Office, alleging thatElma’s stressful
working condition caused the cancer that eventually led to her death.7
On August 18, 2009, the GSIS deniedJose’s claim. The GSIS opined that Jose had failed to present
direct evidence to prove a causal connection between Elma’s illness and her work in order for the
claimant to be entitled to the ECC death benefits.8
Jose appealed the GSIS decision tothe ECC. On June 29, 2010, the ECC denied Jose’s claim for death
benefits.9 The ECC held that colorectal cancer is not listed as an occupational and compensable disease
under Annex "A" of the Amended Rules on Employee’s Compensation.10 Although its item 17 provides
that "[c]ancer of the lungs, liver and brain shall be compensable," the rules required"that it had been
incurred by employees working as vinyl chloride workers, or plastic workers."11
Jose appealed the ECC ruling to the CA under Rule 43 of the Rules of Court. On August 4, 2011, the CA
granted the petition and reversed the ECC findings. Without discussing the nature of Elma’s
employment, the CA ruled that she had "adenocarcinoma of the lungs" or "lung cancer," which is a
respiratory disease listed under Annex "A" of the Amended Rules on Employee’s Compensation, entitling
her heirs to death benefits even if she had not been a "vinyl chloride worker, or plastic worker."
The CA further ruled that Jose was no longer required to provide evidence that would directly connect
the deceased’s illness with her working conditions; that it was enough that the nature of her employment
contributed to the development of the disease. As a bookkeeper, the CA assumed that Elma had been
exposed to voluminous dusty records and other harmful substances that aggravated her respiratory
disease.
GSIS filed a motion for reconsideration which the CA denied in its resolution dated November24, 2011.
The GSIS now comes before us for a final review.
The Issues
GSIS raises the following assignment of errors:
I.
THE CA ERRED IN RULING THAT METASTASIZED TO THE LUNGS IS AN AILMENT AKIN TO
RESPIRATORY DISEASE UNDER ANNEX "A" OF P.D. NO. 626, AS AMENDED, OR THAT SUCH
DISEASE IS WORK-RELATED.
6
 II.
THE CA ERRED IN APPLYING THE LIBERAL INTERPRETATION OF THE RULES SINCE THE
LIMITED RESOURCES DERIVED FROM ECC CONTRIBUTIONS SHOULD ONLY BE APPLIED TO
LEGITIMATE CLAIMS FOR COMPENSATION BENEFITS.
GSIS primarily argues that Elma’s illness is not work-related. It is neither listed under Annex "A" of the
Amended Rules on Employee’s Compensation, nor was it caused by her working conditions. GSIS
asserts that the liberal attitude to grant benefits should not be used to defeat the mandate of the GSIS to
provide meaningful protection to all government employees who are actually working under hazardous
circumstances.
The Court’s Ruling
We find the petition meritorious.
PD 626, as amended, defines compensable sicknessas "any illness definitely accepted as an
occupational disease listed by the Commission, or any illness caused by employment subject to proof by
the employee that the risk of contracting the same is increased by the working conditions." Of particular
significance in this definition is the use of the conjunction "or," which indicates alternative situations.
Based on this definition, we ruled in GSIS v. Vicencio 12 that for sickness and the resulting death of
anemployee to be compensable, the claimant must show either: (1) that it is a result of an occupational
disease listed under Annex "A" of the Amended Rules on Employees' Compensation with the conditions
set therein satisfied; or (2) if not so listed, that the risk of contracting the disease was increased by the
working conditions.
While item 17, Annex "A" of the Amended Rules of Employee’s Compensation considers lung cancer to
be a compensable occupational disease, it likewise provides that the employee should be employed as a
vinyl chloride worker or a plastic worker. In this case, however, Elma did not work in an environment
involving the manufacture of chlorine or plastic, for her lung cancer to be considered an occupational
disease.13 There was, therefore, no basis for the CA to simply categorize her illness as an occupational
disease without first establishing the nature of Elma’s work. Both the law and the implementing rules
clearly state that the given alternative conditions must be satisfied for a disease to be compensable.
No proof exists showing that Elma’s lung cancer
was induced or aggravated by her working conditions
We also do not find that Elma’s cause of death was work-connected. As we earlier pointed out,
entitlement to death benefits depends on whether the employee’s disease is listed as an occupational
disease or, if not so listed, whether the risk of contracting the disease has been increased by the
employee’s working conditions.
In reversing the ECC and granting the claim for death benefits, the CA relied on the case of GSIS v.
Vicencio,14 which particularly states:
Granting, however, that the only cause of Judge Vicencio’s death is lung cancer, we are still one with the
CA in its finding that the working conditions of the late Judge Vicencio contributed to the development of
his lung cancer.
It is true that under Annex "A" of the Amended Rules on Employees’ Compensation, lung cancer is
occupational only with respect to vinyl chloride workers and plastic workers. However, this will not bar a
claim for benefits under the law if the complainant can adduce substantial evidence that the risk of
contracting the illness is increased or aggravated by the working conditions to which the employee is
exposed to.
It is well-settled that the degree of proof required under P.D. No. 626 is merely substantial evidence,
which means, "such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion." What the law requires is a reasonable work-connection and not a direct causal relation. It is
enough that the hypothesis on which the workman's claim is based is probable. Medical opinion to the
contrary can be disregarded especially where there is some basis in the facts for inferring a work-
connection. Probability, not certainty, is the touchstone. It is not required that the employment be the sole
factor in the growth, development or acceleration of a claimant’s illness to entitle him to the benefits
provided for. It is enough that his employment contributed, even if to a small degree, to the development
of the disease.
[Emphasis ours]
xxxx
We hold that the CA’s application of the Vicencio ruling is misplaced. The correct implementing ruleunder
PD 626 or Section 1(b), Rule III of the Amended Rules on Employee’s Compensation in fact provides
that:
Section 1. Grounds.
xxxx
(b) For the sickness and the resulting disability or death to be compensable, the sickness must bethe
result of an occupational disease listed under Annex "A" of these Rules with the conditions set therein
satisfied, otherwise, proof must be shown that the risk of contracting the disease is increased by the
working conditions. [Emphasis ours]
The CA failed to consider that what moved the Court to grant death benefits to the heirs of Judge
Vicencio was the proof that the judge had been in contact with voluminous and dusty records. The Court
also took judicial notice of the dilapidated conditions of Judge Vicencio’s workplace:
The late Judge Vicencio was a frontline officer in the administration of justice, being the most visible
living representation of this country's legal and judicial system. It is undisputed that throughout his noble
career from Fiscal to Metropolitan Trial Court Judge, and, finally, to RTC Judge, his work dealt with
stressful daily work hours, and constant and long-term contact with voluminous and dusty records. We
also take judicial notice that Judge Vicencio’s workplace at the Manila City Hall had long been a place
with sub-standard offices of judges and prosecutors overflowing with records of cases covered up in dust
and are poorly ventilated. All these, taken together, necessarily contributed to the development of his
lung illness."[Emphasis ours]
In contrast with the present case, Jose merely alleged that throughout Elma’s 27-year service atthe DAR,
she had a very demanding job; that she rose from the ranks as a Junior Statistician, until she reached
the position of Accountant I. Jose also explained that Elma had to examine various financial statements
for accuracy; perform complex accounting reports; and prepare financial statements. She also had to
constantly render overtime work, even during weekends, in order to study, analyze, balance, formulate
and finalize reports. All these involved prolonged sitting, exposure to cold room temperature at the office,
physical effort and mental exertion, making her highly susceptible to physical and mental fatigue, stress
and strain.15
7
The rule is that the party who alleges an affirmative fact has the burden of proving it because mere
allegation of the fact is not evidence of it.16 Proof of direct causal connection is not, however,
indispensably required. The law merely requires substantial evidence – such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion that the claimant’s employment
contributed, even if to a small degree, to the development of the disease. 17 Thus, there is no requirement
that the employment be the sole factor in the growth, development or acceleration of a claimant’sillness
for the latter to beentitled to the benefits provided for.18 However, it is important to note that adequate
proofmust be presented to substantiate the claim for death benefits.
In Dator v. Employees’ Compensation Commission,19 we emphasized that the deceased employee had
been proven to have been exposed to dusty substances and unsanitary conditions:
Until now the cause of cancer is not known. Despite this fact, however, the Employees' Compensation
Commission has listed some kinds of cancer as compensable. There is no reason why cancer of the
lungs should not be considered as a compensable disease. The deceased worked as a librarian for
about 15 years. During all that period she was exposed to dusty books and other deleterious substances
in the library under unsanitary conditions. [Emphasis ours]
20
In Raro v. Employees' Compensation Commission,  we stated that medical science cannot, as yet,
positively identify the causes of various types of cancer. It is a disease that strikes people in general. The
nature of a person's employment appears to have no relevance. Cancer can strike a lowly paid laborer,
or a highly paid executive, or one who works on land, in water, or in the bowels of the earth. It makes no
difference whether the victim is employed or unemployed, a white collar employee or a blue collar
worker, a housekeeper, an urban dweller or the resident of a rural area.
By way of exception, certain cancers have reasonably been traced to or considered as strongly induced
by specific causes.1âwphi1 For example, heavy doses of radiation (as in Chernobyl, USSR), cigarette
smoke over a long period for lung cancer, certain chemicals for specific cancers, and asbestos dust,
among others, are generally accepted as increasing the risks of contracting specific cancers. In the
absence of such clear and established empirical evidence, the law requires proof of causation or
aggravation.
Aside from Jose’s general allegationsproving the stressful duties of his late wife, no reasonable proof
exists to support the claim that her respiratory disease, which is similar to lung cancer, was aggravated
by her working conditions. The records do not support the contention that she had been exposed to
voluminous and dusty records, nor do they provide any definite picture of her working environment.
We cannot, under this evidentiary situation, grant death compensation benefits solely on the assumption
thatshe might have been exposed to deleterious substances while working as bookkeeper and
accountant. We cannot likewise award compensation benefits on the basis of stress and fatigue, which
are general consequences of working in practically all kinds of human activity; otherwise, we would
unreasonably open the flood gates of compensability and render the purposes ofa system like GSIS
meaningless.
Insurance trust fund should only be applied to legitimate claims for compensation benefits
While PD 626, as amended, is a social legislation whose primary purpose is to provide meaningful
protection to the working class against the hazards of disability, illness, and other contingencies resulting
in loss of income, it was not enacted to cover all ailments of working men. The law discarded, among
others, the conceptsof "presumption of compensability" and "aggravation" and substituted a system
based on social security principles. The intent was to restore a sensible equilibrium between the
employer's obligation to pay workmen's compensation and the employee's right to receive reparation for
work-connected death or disability.21
The new employee compensation program now directs that all covered employers throughout the
country be required by law to contribute fixed and regular premiums or contributions to a trust fund for
their employees. Benefits are paid from this trust fund. If diseases not intended by the law to be
compensated are inadvertently or recklessly included, the integrity of the trust fundwould be
endangered.In this sense, compassion for the victims of diseases not covered by the law ignores the
need to show a greater concern for the trust fund to which the tens of millions of workers and their
families look up to for compensation whenever covered accidents, salary and deaths occur.22
As an agency charged by law to manage and administer the limited trust fund of the government officials
and employees, the GSIS has the difficult task of insuring all legitimate claims. Suffice it to say that a
misplaced compassion for victims of diseases or injuries would prejudice the very same workers and
their beneficiaries in times of need.
In sum, for insufficiency of evidence of causation or aggravation, we cannot grant Jose's claim for
compensation benefits.
WHEREFORE, premises considered, we hereby GRANT the petition. The decision and the resolution of
the Court of Appeals in CA-GR SP No. 116030 are hereby REVERSED and SET ASIDE. The ECC
decision dated June 29, 2010 is hereby REINSTATED. No costs.
G.R. No. 199780               September 24, 2014
GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner,
vs.
JOSE M. CAPACITE, Respondent.
DECISION
BRION, J.:
This is an appeal under Rule 43 of the Rules of Court of the decision 1 dated August 4, 2011 and the
resolution2 dated November 24, 2011 of the Court of Appeals (CA) in CA-GR SP No. 116030. The
appealed decision reversed and set aside the Decision dated June 29, 2010 of the Employees'
Compensation Commission (ECC), which denied the claim for compensation benefits under Presidential
Decree No. 626 (PD 626)3 filed by Jose M. Capacite (Jose).
The Antecedent Facts
Elma Capacite (Elma) was an employee in the Department of Agrarian Reform (DAR) – Eastern Samar
Provincial Office, Borongan, Eastern Samar, who successively held the following positions between the
periods of November 8, 1982 to July 15, 2009: Junior Statistician,
Bookkeeper, Bookkeeper II, and finally as Accountant I.4
On May 11, 2009, due to persistent cough coupled with abdominal pain, Elma was admitted at the
Bethany Hospital. The pathology examination showed thatshe was suffering from "Adenocarcinoma,
moderately differentiated, probably cecal origin with metastases to mesenteric lymph node and seeding
of the peritoneal surface."5
On July 16, 2009, Elma died due to "Respiratory Failure secondary to Metastatic Cancer to the lungs;
Bowel cancer with Hepatic and Intraperitoneal Seeding and Ovarian cancer."6
8
On May 13, 2009, Elma’s surviving spouse, Jose, filed a claim for ECC death benefits before the
Government Service Insurance System (GSIS) Catbalogan Branch Office, alleging thatElma’s stressful
working condition caused the cancer that eventually led to her death.7
On August 18, 2009, the GSIS deniedJose’s claim. The GSIS opined that Jose had failed to present
direct evidence to prove a causal connection between Elma’s illness and her work in order for the
claimant to be entitled to the ECC death benefits.8
Jose appealed the GSIS decision tothe ECC. On June 29, 2010, the ECC denied Jose’s claim for death
benefits.9 The ECC held that colorectal cancer is not listed as an occupational and compensable disease
under Annex "A" of the Amended Rules on Employee’s Compensation.10 Although its item 17 provides
that "[c]ancer of the lungs, liver and brain shall be compensable," the rules required"that it had been
incurred by employees working as vinyl chloride workers, or plastic workers."11
Jose appealed the ECC ruling to the CA under Rule 43 of the Rules of Court. On August 4, 2011, the CA
granted the petition and reversed the ECC findings. Without discussing the nature of Elma’s
employment, the CA ruled that she had "adenocarcinoma of the lungs" or "lung cancer," which is a
respiratory disease listed under Annex "A" of the Amended Rules on Employee’s Compensation, entitling
her heirs to death benefits even if she had not been a "vinyl chloride worker, or plastic worker."
The CA further ruled that Jose was no longer required to provide evidence that would directly connect
the deceased’s illness with her working conditions; that it was enough that the nature of her employment
contributed to the development of the disease. As a bookkeeper, the CA assumed that Elma had been
exposed to voluminous dusty records and other harmful substances that aggravated her respiratory
disease.
GSIS filed a motion for reconsideration which the CA denied in its resolution dated November24, 2011.
The GSIS now comes before us for a final review.
The Issues
GSIS raises the following assignment of errors:
I.
THE CA ERRED IN RULING THAT METASTASIZED TO THE LUNGS IS AN AILMENT AKIN TO
RESPIRATORY DISEASE UNDER ANNEX "A" OF P.D. NO. 626, AS AMENDED, OR THAT SUCH
DISEASE IS WORK-RELATED.
II.
THE CA ERRED IN APPLYING THE LIBERAL INTERPRETATION OF THE RULES SINCE THE
LIMITED RESOURCES DERIVED FROM ECC CONTRIBUTIONS SHOULD ONLY BE APPLIED TO
LEGITIMATE CLAIMS FOR COMPENSATION BENEFITS.
GSIS primarily argues that Elma’s illness is not work-related. It is neither listed under Annex "A" of the
Amended Rules on Employee’s Compensation, nor was it caused by her working conditions. GSIS
asserts that the liberal attitude to grant benefits should not be used to defeat the mandate of the GSIS to
provide meaningful protection to all government employees who are actually working under hazardous
circumstances.
The Court’s Ruling
We find the petition meritorious.
PD 626, as amended, defines compensable sicknessas "any illness definitely accepted as an
occupational disease listed by the Commission, or any illness caused by employment subject to proof by
the employee that the risk of contracting the same is increased by the working conditions." Of particular
significance in this definition is the use of the conjunction "or," which indicates alternative situations.
Based on this definition, we ruled in GSIS v. Vicencio 12 that for sickness and the resulting death of
anemployee to be compensable, the claimant must show either: (1) that it is a result of an occupational
disease listed under Annex "A" of the Amended Rules on Employees' Compensation with the conditions
set therein satisfied; or (2) if not so listed, that the risk of contracting the disease was increased by the
working conditions.
While item 17, Annex "A" of the Amended Rules of Employee’s Compensation considers lung cancer to
be a compensable occupational disease, it likewise provides that the employee should be employed as a
vinyl chloride worker or a plastic worker. In this case, however, Elma did not work in an environment
involving the manufacture of chlorine or plastic, for her lung cancer to be considered an occupational
disease.13 There was, therefore, no basis for the CA to simply categorize her illness as an occupational
disease without first establishing the nature of Elma’s work. Both the law and the implementing rules
clearly state that the given alternative conditions must be satisfied for a disease to be compensable.
No proof exists showing that Elma’s lung cancer
was induced or aggravated by her working conditions
We also do not find that Elma’s cause of death was work-connected. As we earlier pointed out,
entitlement to death benefits depends on whether the employee’s disease is listed as an occupational
disease or, if not so listed, whether the risk of contracting the disease has been increased by the
employee’s working conditions.
In reversing the ECC and granting the claim for death benefits, the CA relied on the case of GSIS v.
Vicencio,14 which particularly states:
Granting, however, that the only cause of Judge Vicencio’s death is lung cancer, we are still one with the
CA in its finding that the working conditions of the late Judge Vicencio contributed to the development of
his lung cancer.
It is true that under Annex "A" of the Amended Rules on Employees’ Compensation, lung cancer is
occupational only with respect to vinyl chloride workers and plastic workers. However, this will not bar a
claim for benefits under the law if the complainant can adduce substantial evidence that the risk of
contracting the illness is increased or aggravated by the working conditions to which the employee is
exposed to.
It is well-settled that the degree of proof required under P.D. No. 626 is merely substantial evidence,
which means, "such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion." What the law requires is a reasonable work-connection and not a direct causal relation. It is
enough that the hypothesis on which the workman's claim is based is probable. Medical opinion to the
contrary can be disregarded especially where there is some basis in the facts for inferring a work-
connection. Probability, not certainty, is the touchstone. It is not required that the employment be the sole
factor in the growth, development or acceleration of a claimant’s illness to entitle him to the benefits
provided for. It is enough that his employment contributed, even if to a small degree, to the development
of the disease.
[Emphasis ours]
9
 xxxx
We hold that the CA’s application of the Vicencio ruling is misplaced. The correct implementing ruleunder
PD 626 or Section 1(b), Rule III of the Amended Rules on Employee’s Compensation in fact provides
that:
Section 1. Grounds.
xxxx
(b) For the sickness and the resulting disability or death to be compensable, the sickness must bethe
result of an occupational disease listed under Annex "A" of these Rules with the conditions set therein
satisfied, otherwise, proof must be shown that the risk of contracting the disease is increased by the
working conditions. [Emphasis ours]
The CA failed to consider that what moved the Court to grant death benefits to the heirs of Judge
Vicencio was the proof that the judge had been in contact with voluminous and dusty records. The Court
also took judicial notice of the dilapidated conditions of Judge Vicencio’s workplace:
The late Judge Vicencio was a frontline officer in the administration of justice, being the most visible
living representation of this country's legal and judicial system. It is undisputed that throughout his noble
career from Fiscal to Metropolitan Trial Court Judge, and, finally, to RTC Judge, his work dealt with
stressful daily work hours, and constant and long-term contact with voluminous and dusty records. We
also take judicial notice that Judge Vicencio’s workplace at the Manila City Hall had long been a place
with sub-standard offices of judges and prosecutors overflowing with records of cases covered up in dust
and are poorly ventilated. All these, taken together, necessarily contributed to the development of his
lung illness."[Emphasis ours]
In contrast with the present case, Jose merely alleged that throughout Elma’s 27-year service atthe DAR,
she had a very demanding job; that she rose from the ranks as a Junior Statistician, until she reached
the position of Accountant I. Jose also explained that Elma had to examine various financial statements
for accuracy; perform complex accounting reports; and prepare financial statements. She also had to
constantly render overtime work, even during weekends, in order to study, analyze, balance, formulate
and finalize reports. All these involved prolonged sitting, exposure to cold room temperature at the office,
physical effort and mental exertion, making her highly susceptible to physical and mental fatigue, stress
and strain.15
The rule is that the party who alleges an affirmative fact has the burden of proving it because mere
allegation of the fact is not evidence of it.16 Proof of direct causal connection is not, however,
indispensably required. The law merely requires substantial evidence – such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion that the claimant’s employment
contributed, even if to a small degree, to the development of the disease. 17 Thus, there is no requirement
that the employment be the sole factor in the growth, development or acceleration of a claimant’sillness
for the latter to beentitled to the benefits provided for.18 However, it is important to note that adequate
proofmust be presented to substantiate the claim for death benefits.
In Dator v. Employees’ Compensation Commission,19 we emphasized that the deceased employee had
been proven to have been exposed to dusty substances and unsanitary conditions:
Until now the cause of cancer is not known. Despite this fact, however, the Employees' Compensation
Commission has listed some kinds of cancer as compensable. There is no reason why cancer of the
lungs should not be considered as a compensable disease. The deceased worked as a librarian for
about 15 years. During all that period she was exposed to dusty books and other deleterious substances
in the library under unsanitary conditions. [Emphasis ours]
In Raro v. Employees' Compensation Commission,20 we stated that medical science cannot, as yet,
positively identify the causes of various types of cancer. It is a disease that strikes people in general. The
nature of a person's employment appears to have no relevance. Cancer can strike a lowly paid laborer,
or a highly paid executive, or one who works on land, in water, or in the bowels of the earth. It makes no
difference whether the victim is employed or unemployed, a white collar employee or a blue collar
worker, a housekeeper, an urban dweller or the resident of a rural area.
By way of exception, certain cancers have reasonably been traced to or considered as strongly induced
by specific causes.1âwphi1 For example, heavy doses of radiation (as in Chernobyl, USSR), cigarette
smoke over a long period for lung cancer, certain chemicals for specific cancers, and asbestos dust,
among others, are generally accepted as increasing the risks of contracting specific cancers. In the
absence of such clear and established empirical evidence, the law requires proof of causation or
aggravation.
Aside from Jose’s general allegationsproving the stressful duties of his late wife, no reasonable proof
exists to support the claim that her respiratory disease, which is similar to lung cancer, was aggravated
by her working conditions. The records do not support the contention that she had been exposed to
voluminous and dusty records, nor do they provide any definite picture of her working environment.
We cannot, under this evidentiary situation, grant death compensation benefits solely on the assumption
thatshe might have been exposed to deleterious substances while working as bookkeeper and
accountant. We cannot likewise award compensation benefits on the basis of stress and fatigue, which
are general consequences of working in practically all kinds of human activity; otherwise, we would
unreasonably open the flood gates of compensability and render the purposes ofa system like GSIS
meaningless.
Insurance trust fund should only be applied to legitimate claims for compensation benefits
While PD 626, as amended, is a social legislation whose primary purpose is to provide meaningful
protection to the working class against the hazards of disability, illness, and other contingencies resulting
in loss of income, it was not enacted to cover all ailments of working men. The law discarded, among
others, the conceptsof "presumption of compensability" and "aggravation" and substituted a system
based on social security principles. The intent was to restore a sensible equilibrium between the
employer's obligation to pay workmen's compensation and the employee's right to receive reparation for
work-connected death or disability.21
The new employee compensation program now directs that all covered employers throughout the
country be required by law to contribute fixed and regular premiums or contributions to a trust fund for
their employees. Benefits are paid from this trust fund. If diseases not intended by the law to be
compensated are inadvertently or recklessly included, the integrity of the trust fundwould be
endangered.In this sense, compassion for the victims of diseases not covered by the law ignores the
need to show a greater concern for the trust fund to which the tens of millions of workers and their
families look up to for compensation whenever covered accidents, salary and deaths occur.22
As an agency charged by law to manage and administer the limited trust fund of the government officials
and employees, the GSIS has the difficult task of insuring all legitimate claims. Suffice it to say that a
misplaced compassion for victims of diseases or injuries would prejudice the very same workers and
their beneficiaries in times of need.
In sum, for insufficiency of evidence of causation or aggravation, we cannot grant Jose's claim for
compensation benefits.
WHEREFORE, premises considered, we hereby GRANT the petition. The decision and the resolution of
the Court of Appeals in CA-GR SP No. 116030 are hereby REVERSED and SET ASIDE. The ECC
decision dated June 29, 2010 is hereby REINSTATED. No costs.
10
 ZAIDA G. RARO, petitioner,
vs.
EMPLOYEES' COMPENSATION COMMISSION and GOVERNMENT SERVICE INSURANCE
SYSTEM (Bureau of Mines and Geo-Sciences), respondents.
GUTIERREZ, JR., J.:
Facts: The petitioner states that she was in perfect health when employed as a clerk by the Bureau of
Mines and Geo-Sciences at its Daet, Camarines Norte regional office on March 17, 1975. About four
years later, she began suffering from severe and recurrent headaches coupled with blurring of vision.
Forced to take sick leaves every now and then, she sought medical treatment in Manila.
The petitioner was diagnosed at the Makati Medical Center to be suffering from brain tumor. By that time,
her memory, sense of time, vision, and reasoning power had been lost. A claim for disability benefits
filed by her husband with the Government Service Insurance System (GSIS) was denied. A motion for
reconsideration was similarly denied. An appeal to the Employees' Compensation Commission resulted
in the Commission's affirming the GSIS decision.
On January 1, 1975, the Workmen's Compensation Act was replaced by a novel scheme under the new
Labor Code. The new law discarded, among others, the concepts of "presumption of compensability" and
"aggravation" and substituted a system based on social security principles. The present system is also
administered by social insurance agencies — the Government Service Insurance System and Social
Security System — under the Employees' Compensation Commission. The intent was to restore a
sensible equilibrium between the employer's obligation to pay workmen's compensation and the
employee's right to receive reparation for work- connected death or disability. Instead of an adversarial
contest by the worker or his family against the employer, we now have a social insurance scheme where
regular premiums are paid by employers to a trust fund and claims are paid from the trust fund to those
who can prove entitlement
The list of occupational diseases prepared by the Commission includes some cancers as compensable,
namely —Occupational Diseases Nature of Employment
16. Cancer of stomach and other Woodworkers, wood products lymphatic and blood forming vessels;
industry carpenters, nasal cavity and sinuses and employees in pulp and paper mills and plywood mills.
17. Cancer of the lungs, liver Vinyl chloride workers, and brain plastic workers.
G.R. No. 168821             April 10, 2006
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), Petitioner,
vs.
JAIME A. VALENCIANO, Respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition1 for review on certiorari under Rule 45 of the Rules of Court assails the July 7, 2005
Decision of the Court of Appeals 2 in CA-G.R. SP No. 78511 which reversed and set aside the June 26,
2003 Decision of the Employees’ Compensation Commission 3 (ECC) dismissing the claim by respondent
Jaime A. Valenciano for compensation benefits under Presidential Decree (PD) No. 626 or the
Employees’ Compensation Law.
The facts of the case as summarized in the ECC Decision are as follows:
The [respondent], Jaime Valenciano, started his career in government on November 8, 1977 as Clerk II
of the Philippine Ports Authority (PPA), South Harbor, Port Area, Manila. He was promoted to Clerk B,
Traffic Systems Implementation Specialist, Terminal Operations Officer, Terminal Operations Officer A,
and, finally, as Senior Terminal Operations Officer in 1993.
[Respondent’s] job description showed that he was responsible for the following:
1. Analyzes effectiveness of system and procedures to determine reliability and integrity of financial,
administrative, engineering and operational transactions;
2. Analyzes and evaluates implementation and compliance of RCs, PDS and service agents to PPA
policies, rules and regulations;
3. Appraises the organizational structure and adequacy and effectiveness of internal control to ascertain
the extent to which the assets and other resources of the agency are accounted for and safeguarded
from losses of all kinds;

Issues: 1. Whether brain tumor which causes are unknown but contracted during employment is 4. Conducts review of services provided by PPA RCs/Units and appraises quality of performance;
compensable under the present compensation laws. 2. Whether the presumption of compensability is
absolutely inapplicable under the present compensation laws when a disease is not listed as
5. Prepares audit reports and presents to management, key officials findings/observation gathered during
occupational disease.
the audit;

Held: The Court saw no arbitrariness in the Commission's allowing vinyl chloride workers or plastic
6. Recommends to management action to be taken to improve performance of PPA RCs and services
workers to be compensated for brain cancer. What the law requires for others is proof. The law, as it now
agencies;
stands requires the claimant to prove a positive thing – the illness was caused by employment and the
risk of contracting the disease is increased by the working conditions. To say that since the proof is not
available, therefore, the trust fund has the obligation to pay is contrary to the legal requirement that proof 7. Conducts researches on issuances and publications related to assigned areas;
must be adduced. The existence of otherwise non-existent proof cannot be presumed .The Court has
recognized the validity of the present law and has granted and rejected claims according to its
provisions. We find in it no infringement of the worker's constitutional rights. 8. Performs other related functions.|avvphi|.net

WHEREFORE, the petition is hereby DISMISSED The questioned decision of the public respondents is A Medical Certificate from the University of Santo Tomas Hospital (UST), Espana, Manila dated April 12,
AFFIRMED. SO ORDERED. 1984 reveals that the [respondent], a chain smoker since age twenty (20), was admitted at the said
hospital on February 27, 1984 where he was diagnosed to be suffering from Coronary Artery Disease.

11
Sometime in 1986, it was discovered that the appellant was suffering from Diabetes. His Physical and
Medical Examination Record shows that sometime in 1988, the [respondent] experienced insomnia and
sudden loss of appetite accompanied by dyspnea (shortness of breathing), cough with whitish phlegm,
and chest pain. Despite medications, no improvement was noted and he soon complained of lumbar
pain, hoarseness of voice and itchiness of throat. He was diagnosed to be suffering from Hypertension.
His blood pressure reading then was noted to be at 150/100 mmHg to 160/100 mmHg.
susceptible to stress and fatigue that could weaken his resistance and cause hypertension which in turn
could trigger a cerebrovascular accident or stroke.16
The Court of Appeals thus held that respondent is entitled to claim compensation benefits
because pneumonia, pulmonary tuberculosis and hypertension are among the occupational
diseases listed in Annex ‘A" of the Amended Rules on Employees’ Compensation.

On March 8, 1999, the [respondent] was confined at Medical Center Manila, Ermita, Manila due to
cough, fever and hemoptysis (the coughing out of blood) where his ailment was diagnosed
as Pulmonary Tuberculosis III.
Sometime in April, 2001, the [respondent] felt chest pain. Immediate consultative diagnosis taken at The
Doctor’s Hospital, Bacolod City found him to be suffering from Bronchial Asthma, Chronic
Intermittent; Infero Lateral Wall, Non ST elevation Myocardial Infarction; Dyslipidemia. His medical
records show that starting April, 2001, he frequently went on sick leave due to his ailments. From May to
December, 2001, he was hospitalized for several times at the Manila Doctors Hospital, United Nations
Ave., Manila. His ailment was diagnosed as Ischemic Heart Disease; Non-Insulin Dependent
Diabetes Mellitus; Dyslipidemia.
In the instant petition for review, petitioner insists that hypertension is a complication of respondent’s
diabetes mellitus which has been found to be non-work connected; as such, respondent could not validly
claim compensation benefits under this disease.17 It asserts that medical science has proven that
diabetics are vulnerable to various infections and that pneumonia is common among them.18 As regards
respondent’s pulmonary tuberculosis, petitioner alleges that respondent suffered the same way back
in 1999 and that his medical records show that he is no longer afflicted with the disease.19
Respondent, on the other hand, argues that hypertension, pneumonia and pulmonary
tuberculosis are not caused by diabetes mellitus alone but also by other environmental and
occupational factors.20 He alleges that his work entailed a lot of analysis, appraisals, review, audit and
research which may have caused him to suffer cerebrovascular accident and pneumonia.21

On November 28, 2001, the [respondent] was admitted at the Manila Doctors’ Hospital due to cough with
phlegm. His attending physician diagnosed his ailment as Pneumonia, moderate risk
resolved; Cerebrovascular Disease (CVD), bleed, left thalaminc; Hypertensive Cardiovascular
Disease, not in failure; Diabetes Mellitus, type II.
When the [respondent’s] chest was subjected to x-ray on October 17, 2002 at New World Laboratory,
Quezon City, it was found out that his heart was suffering from Lateral Wall Ischemia; Left Atrial
Enlargement.4
Respondent filed with petitioner Government Service Insurance System (GSIS), a claim
compensation benefits under PD No. 626. However, petitioner denied the respondent’s claim on
ground that the ailments, Hypertension, Cerebrovascular Accident (CVA), Diabetes Mellitus type II
not considered occupational diseases; neither is there any showing that his duties have increased
risk of contracting said ailments.5
The issue before us is whether respondent’s hypertension, pneumonia or pulmonary tuberculosis is
compensable under the Employees’ Compensation Act.
We affirm the Court of Appeals ruling with modification.
Section 1 (b), Rule III of the Rules Implementing PD No. 626, as amended, states that for the sickness
and the resulting disability or death to be compensable, the same must be the result of an occupational
disease listed under Annex "A" with the conditions set therein satisfied; otherwise, proof must be shown
for that the risk of contracting the disease is increased by the working conditions.
the
are We find that respondent’s hypertension is a complication of his primary ailment which is diabetes
the mellitus, a non-occupational disease, hence not compensable. As explained by the Court of Appeals:

Respondent’s appeal to the ECC was dismissed for lack of merit 6 on the grounds that
hypertension,7 pneumonia and pulmonary tuberculosis8 are mere complications of his primary ailment,
diabetes mellitus, which is not an occupational disease hence, not compensable. Even if cerebrovascular
accident is an occupational disease under Annex "A" of the Amended Rules on Employees’
Compensation, the ECC held that its compensability requires compliance with all the conditions set forth
in the rules which respondent failed to show.9
On petition for review, the Court of Appeals upheld the ruling of the ECC that diseases, such as Ischemic
Heart Disease, Coronary Artery Disease, Myocardial Infarction, Bronchial Asthma, dyspnea and
dyslipidemia, are complications of diabetes mellitus, which is not work-connected hence not
compensable.10 The appellate court also noted that respondent failed to prove that the risk of contracting
these diseases is increased by his working conditions.11
In 1986, [respondent] was found to have been suffering from Diabetes Mellitus, a Non-Insulin Dependent
type (NIDDM) which renders patients suffering from this sickness insulin resistant. Insulin resistance is
common in patients with NIDDM and the same has been suggested as being responsible for the
increased arterial pressure sufficient to cause hypertension. Diabetes mellitus can also trigger an
increased incidence of large vessel atherosclerosis or arteriosclerosis and myocardial infarction in
patients with insulin and non-insulin dependent diabetes mellitus. These are some of the contributory
factors that can cause a coronary artery disease which is the commonly cause of death in adult patients
with diabetes mellitus. Diabetic patients suffer abnormalities in blood circulation. The sickness can cause
an impairment in the reverse cholesterol transport out of the arteries and this can cause clogging of one
or several coronary arteries in the heart. The disease is characterized as procoagulant and the failure to
deliver sufficient blood supply to the heart because of the narrowing or clogging of one of the main
coronary arteries automatically cuts off the distribution of oxygen and nourishment to the heart area it
serves. This would result to myocardial infarction and eventually to hypertension. x x x.22

The appellate court however disagreed with the findings of the ECC that pneumonia, pulmonary
tuberculosis and hypertension are solely caused and directly connected with respondent’s diabetes
mellitus and that the cerebrovascular accident (stroke) he sustained did not sufficiently comply with the
requirements of the Amended Rules on Employees’ Compensation thereby justifying the dismissal of his
claim.12 According to the appellate tribunal, pneumonia and pulmonary tuberculosis are respiratory
diseases which may be caused by the environment or occupation depending on the level of sanitation of
the surroundings.13 In the course of his employment, respondent was stationed in the Port of Manila
which is located in an area where sanitation is questionable.14 His work required him to mingle with
people from different walks of life. 15 His job also demanded a lot of mental work thereby making him
xxxx
x x x [D]iabetes mellitus, especially the NIDDM-type, is acquired through the mechanism of inheritance. It
is an endocrine and familial disease characterized by metabolic abnormalities remotely caused by
environmental and occupational conditions. x x x.23
As regards pneumonia24 and pulmonary tuberculosis,25 both are listed in Annex "A" of the Amended
Rules on Employees’ Compensation as occupational diseases and are deemed compensable. As found
12
by the appellate court, the possible cause of these diseases may be environmental or occupational
depending on the level of sanitation of the surroundings and the health condition of the persons he
mingles with. While diabetic persons are prone to various infections, it is also equally true that one’s
susceptibility to these maladies is increased by the occupational and environmental exposure to the
pathogens, not to mention fatigue and mental and emotional strain that affects the physical condition of a
person.
Respondent’s work entailed that he be stationed in the Port of Manila and the South Harbor, areas
whose sanitation and overall environmental condition are suspect. Moreover, respondent’s duties
required that he mingle with numerous persons who may have been carriers of the disease-causing
virus. The nature of his job demanded long working hours to maintain the efficient and systematic
release of outgoing vessels and the reception of incoming vessels.
The degree of proof required under P.D. No. 626 is merely substantial evidence, which means, "such
relevant evidence as a reasonable mind might accept as adequate to support a conclusion." What the
law requires is a reasonable work-connection and not a direct causal relation. It is enough that the
hypothesis on which the workmen's claim is based is probable. Medical opinion to the contrary can be
disregarded especially where there is some basis in the facts for inferring a work-connection. Probability,
not certainty, is the touchstone.26 While claimant must adduce substantial evidence that the risk of
contracting the illness is increased by the working conditions to which an employee is exposed to, we
cannot close our eyes to any reasonable work-related connection of the worker’s ailment and his
employment.27 Any doubt on this matter has to be interpreted in favor of the employee, considering that
P.D. No. 626 is a social legislation.28
P.D. No. 626, as amended, is said to have abandoned the presumption of compensability and the theory
of aggravation prevalent under the Workmen’s Compensation Act. Despite such abandonment, however,
the present law has not ceased to be an employees’ compensation law or a social legislation; hence, the
liberality of the law in favor of the working man and woman still prevails, and the official agency charged
by law to implement the constitutional guarantee of social justice should adopt a liberal attitude in favor of
the employee in deciding claims for compensability, especially in light of the compassionate policy
towards labor which the 1987 Constitution vivifies and enhances.29
WHEREFORE, the July 7, 2005 Decision of the Court of Appeals in CA-G.R. SP No. 78511 is
AFFIRMED with the MODIFICATION that respondent Jaime A. Valenciano’s hypertension is held to be
directly connected to his primary ailment, diabetes mellitus, and therefore non-compensable. However,
Jaime A. Valenciano is DECLARED entitled to claim for benefits for his compensable diseases, namely
pneumonia and pulmonary tuberculosis. The Government Service Insurance System is DIRECTED to
pay respondent’s claim under the Employees’ Compensation Act.
SECOND DIVISION
G.R. No. 194137, June 21, 2017
AMBASSADOR HOTEL, INC., Petitioner, v. SOCIAL SECURITY SYSTEM, Respondent.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari seeking to reverse and set aside the July 29, 2010 Decision1 and
October 18, 2010 Resolution2 of the Court Appeals (CA) in CA-G.R. CV No. 87948, which affirmed in
toto the December 20, 2005 Decision3 of the Regional Trial Court, Branch 218, Quezon City (RTC) in
Criminal Case No. Q-04-125458, a case for nonpayment of Social Security System (SSS) contributions.
Sometime in September 2001, the SSS filed a complaint with the City Prosecutor's Office of Quezon City
against Ambassador Hotel, Inc. (Ambassador Hotel) and its officers for non-remittance of SSS
contributions and penalty liabilities for the period from June 1999 to March 2001 in the aggregate amount
of P769,575.48.
After preliminary investigation, the City Prosecutor's Office filed an Information, 4 dated January 28, 2004,
before the RTC charging Ambassador Hotel, Inc.'s Yolanda Chan (Yolanda), as President and Chairman
of the Board; and Alvin Louie Rivera, as Treasurer and Head of the Finance Department, with violation of
Section 22(a), in relation to Section 22(d) and Section 28(e) of Republic Act (R.A.) No. 1161, as
amended by R.A. No. 8282. Only Yolanda was arrested. Upon arraignment, she pleaded not guilty.
Thereafter, trial ensued.
Evidence of the Prosecution
The prosecution presented Maria Rezell C. De Ocampo (De Ocampo), Accounts Officer of SSS and
Simeon Nicolas Chan (Simeon), former President of Ambassador Hotel. Their combined testimonies
tended to establish the following:
De Ocampo was assigned to investigate the account of Ambassador Hotel. In the course of her
investigation, she discovered that the hotel was delinquent in its payment of contributions for the period
from June 1999 to March 2001, as an examination of the hotel's records revealed that its last payment
was made in May 1999. Thereafter, De Ocampo prepared a delinquency assessment and a billing letter
for Ambassador Hotel. On April 17, 2001, she visited Ambassador Hotel, where a certain Guillermo
Ciriaco (Ciriaco) assisted her. De Ocampo then informed Ciriaco of the hotel's delinquency. She showed
him the assessment, billing letter, and letter of authority. De Ocampo also requested for the records of
previous SSS payments, but the same could not be produced. Thus, she told Ciriaco that Ambassador
Hotel had to comply with the said request within fifteen (15) days.
De Ocampo referred the matter to their Cluster Legal Unit. On May 23, 2001, she prepared an
investigation report stating that Ambassador Hotel failed to present the required reports and to fully pay
their outstanding delinquency. In turn, the Cluster Legal Unit issued a final demand letter to Ambassador
Hotel. De Ocampo sent the final demand letter to Ambassador Hotel via registered mail. She also
returned to the hotel to personally serve the said letter, which was received by Norman Cordon, Chief
Operating Officer of Ambassador Hotel.
On July 4, 2001, Pilar Barzanilla of Ambassador Hotel went to the SSS office and submitted a list of
unpaid contributions from June 1999 to March 2001. On September 14, 2001, De Ocampo went back to
the hotel to seek compliance with the demand letter. The representatives of the hotel requested that the
delinquency be settled by installment. They also submitted a collection list, the audited financial
settlement and the request of installment to the SSS. Ambassador Hotel, however, did not tender any
postdated checks for the installment payments.
De Ocampo concluded that based on the actual assessment and documents submitted, the unpaid
contributions of Ambassador Hotel from June 1999 to March 2001 amounted to P303,459.00. Further, as
of January 2, 2005, the hotel is liable for penalties in the amount of P531,341.44.
On the other hand, Simeon testified that he was the President of Ambassador Hotel from 1971 until he
was replaced in 1998; and that on April 25, 1998, her daughter, Yolanda, became the President of the
hotel pursuant to Board Resolution No. 7, series of 1998.5
Evidence of the Defense
The defense presented the following witnesses: Yolanda, President and Chairman of the Board of
Ambassador Hotel; Atty. Laurenao Galon (Atty. Galon), lawyer of Ambassador Hotel; Michael Paragas,
Sheriff of RTC Branch 46; and Norman D. Cordon (Cordon), Chief Operating Officer of Ambassador
Hotel. Their testimonies are summarized, to wit:
Yolanda was elected as President of Ambassador Hotel on April 25, 1998. Simeon, however, prevented
her from assuming her office and performing her functions as President. Consequently, she filed a case
for grave coercion and grave threats against Simeon and his allies. On the other hand, Simeon filed a
case for injunction, damages and declaration of nullity of the corporate meeting, which elected Yolanda
13
as President. The case was raffled to RTC Branch 46, which ruled in her favor. Pursuant to the Order,
dated April 10, 2001 of RTC Branch 46, she assumed the position of President of the hotel without any
impediment.
Accordingly, Yolanda argued that because she was not performing the functions as the President of
Ambassador Hotel from April 25, 1998 until April 10, 2001, she could not be held criminally liable for the
non-payment of SSS contributions from June 1999 to March 2001.
Further, Cordon testified that the SSS indeed conducted an investigation as to their non-remittance of
contributions. He attempted to locate the records regarding their SSS contributions, but could not find
any. Cordon also communicated with the SSS, but it failed to respond and instead filed the present case
against them.
The RTC Ruling
In its December 20, 2005 Decision, the RTC held that Yolanda could not be held criminally liable for the
non-payment of SSS contributions because she was not performing the duties of the hotel's president
from June 1999 to March 2001. It opined that Yolanda could not be considered as the managing head of
the hotel within the purview of Section 28(f) of R.A. No. 8282; thus, she was not criminally accountable.
The RTC, however, ruled that the acquittal of Yolanda did not absolve Ambassador Hotel from its civil
liabilities. Thus, it concluded that Ambassador Hotel must pay SSS in the amount of P584,804.00 as
contributions for SSS Medicare and Employee Compensation, including 3% penalties thereon.
Aggrieved, Ambassador Hotel filed an appeal insofar as the civil liability is concerned. It alleged that the
RTC did not acquire jurisdiction over its person because it was not a party in the said case.
The CA Ruling
In its assailed decision, dated July 29, 2010, the CA affirmed in toto the RTC ruling. It held that the
payment of SSS contributions is mandatory and its non-payment results in criminal prosecution. The
appellate court stated that every criminal liability carries with it civil liability. As Ambassador Hotel neither
waived nor reserved its right to institute a separate civil case, it was deemed instituted in the criminal
case. The CA opined that the acquittal of Yolanda did not extinguish the civil action against Ambassador
Hotel as the RTC did not declare that the fact from which the civil liability might arise did not exist.
Moreover, it underscored that Ambassador Hotel was not deprived of due process as its directors and
officers were informed numerous times regarding its delinquency and the pending case filed against it.
The CA concluded that Ambassador Hotel was given every opportunity to contest its obligation with the
SSS yet it did nothing.
Ambassador Hotel moved for reconsideration, but its motion was denied by the CA in its assailed
resolution, dated October 18, 2010.
Hence, this petition.
ISSUES
I section shall be remitted to the SSS within the first ten (10) days of each calendar
WHETHER OR NOT THE LOWER COURT ACQUIRED JURISDICTION OVER
THE PERSON OF THE PETITIONER.
II
WHETHER OR NOT PETITIONER WAS DEPRIVED OF DUE PROCESS WHEN
THE LOWER COURT DECLARED IT LIABLE TO RESPONDENT SSS EVEN
THOUGH IT IS NOT A PARTY TO THE CASE.
III
WHETHER OR NOT THE DECISION RENDERED BY THE LOWER COURT
DECLARING PETITIONER LIABLE TO RESPONDENT SOCIAL SECURITY
SYSTEM FOR ALLEGED UNREMITTED SSS CONTRIBUTION IS VALID. 6
In its Memorandum,7 Ambassador Hotel argued that it has a separate and distinct personality from its
officers such as Yolanda; that it was neither a party to the criminal case nor was summons issued
against it, hence, the RTC did not acquire jurisdiction over it; that it was deprived due process when the
RTC ruled that it was civilly liable for the unpaid SSS contributions even though the trial court had no
jurisdiction over its person; and that the RTC had no right to render an adverse decision against it
because it was not a party in the criminal action.
In its Memorandum,8 the SSS countered that under R.A. No. 8282, employers, including juridical entities,
that violate their obligation to remit the SSS contributions shall be criminally liable and that in cases of
corporations, it is the managing head that shall be the one criminally responsible. It argued that since
Yolanda, as President of Ambassador Hotel, was properly arrested, the RTC acquired jurisdiction over it.
The SSS added that the acquittal of Yolanda did not extinguish the civil liability of the hotel because it
was deemed instituted in the criminal action. Further, it highlighted that Ambassador Hotel was given
sufficient notice of its delinquency and the pending case against it.
The Court's Ruling
The petition is bereft of merit.
The Social Security System is a government agency imbued with a salutary purpose to carry out the
policy of the State to establish, develop, promote and perfect a sound and viable tax-exempt social
security system suitable to the needs of the people throughout the Philippines which shall promote social
justice and provide meaningful protection to members and their beneficiaries against the hazards of
disability, sickness, maternity, old-age, death and other contingencies resulting in loss of income or
financial burden.9
The soundness and viability of the funds of the SSS in turn depend on the contributions of its covered
employee and employer members, which it invests in order to deliver the basic social benefits and
privileges to its members. The entitlement to and amount of benefits and privileges of the covered
members are contribution-based. Both the soundness and viability of the funds of the SSS as well as the
entitlement and amount of benefits and privileges of its members are adversely affected to a great extent
by the non-remittance of the much-needed contributions.10
Ambassador Hotel is obligated to remit SSS contributions
Under Section 8(c) of R.A. No. 8282, an employer is defined as "any person, natural or juridical,
domestic or foreign, who carries on in the Philippines any trade, business, industry, undertaking, or
activity of any kind and uses the services of another person who is under his orders as regards the
employment, except the Government and any of its political subdivisions, branches or instrumentalities,
including corporations owned or controlled by the Government." Ambassador Hotel, as a juridical entity,
is still bound by the provisions of R.A. No. 8282. Section 22 (a) thereof
states:chanRoblesvirtualLawlibrary
Remittance of Contributions, (a) The contributions imposed in the preceding
month following the month for which they are applicable or within such time as the
Commission may prescribe. Every employer required to deduct and to remit such
contributions shall be liable for their payment and if any contribution is not paid to
the SSS as herein prescribed, he shall pay besides the contribution a penalty
thereon of three percent (3%) per month from the date the contribution falls due
until paid. If deemed expedient and advisable by the Commission, the collection
and remittance of contributions shall be made quarterly or semi-annually in
advance, the contributions payable by the employees to be advanced by their
respective employers: Provided, That upon separation of an employee, any
contribution so paid in advance but not due shall be credited or refunded to his
employer.
Verily, prompt remittance of SSS contributions under the aforesaid provision is mandatory. Any
divergence from this rule subjects the employer not only to monetary sanctions, that is, the payment of
14
penalty of three percent (3%) per month, but also to criminal prosecution if the employer fails to: (a)
register its employees with the SSS; (b) deduct monthly contributions from the salaries/wages of its
employees; or (c) remit to the SSS its employees' SSS contributions and/or loan payments after
deducting the same from their respective salaries/wages.11
To acquire jurisdiction over Ambassador Hotel, its managing head, director or partner must be arrested
As discussed above, even when the employer is a corporation, it shall still be held liable for the non-
remittance of SSS contributions. It is, however, the head, directors or officers that shall suffer the
personal criminal liability. Although a corporation is invested by law with a personality separate and
distinct from that of the persons composing it,12 the corporate veil is pierced when a director, trustee or
officer is made personally liable by specific provision of law.13 In this regard, Section 28 (f) of R.A. No.
8282 explicitly provides that "[i]f the act or omission penalized by this Act be committed by an
association, partnership, corporation or any other institution, its managing head, directors or partners
shall be liable to the penalties provided in this Act for the offense." Thus, a corporation cannot invoke its
separate judicial entity to escape its liability for non-payment of SSS contributions.
To acquire jurisdiction over the corporation in a criminal case, its head, directors or partners must be
served with a warrant of arrest. Naturally, a juridical entity cannot be the subject of an arrest because it is
a mere fiction of law; thus, an arrest on its representative is sufficient to acquire jurisdiction over it. To
reiterate, the law specifically disregards the separate personality between the corporation and its officers
with respect to violations of R.A. No. 8282; thus, an arrest on its officers binds the corporation.
In this case, Yolanda, as President of Ambassador Hotel, was arrested and brought before the RTC.
Consequently, the trial court acquired jurisdiction over the person of Yolanda and of Ambassador Hotel
as the former was its representative. No separate service of summons is required for the hotel because
the law simply requires the arrest of its agent for the court to acquire jurisdiction over it in the criminal
action. Likewise, there is no requirement to implead Ambassador Hotel as a party to the criminal case
because it is deemed included therein through its managing head, directors or partners, as provided by
Section 28 (f) of R.A. No. 8282.
The acquittal of Yolanda does not extinguish the civil liability of Ambassador Hotel
It is a basic rule that when a criminal action is instituted, the civil action for the recovery of civil liability
arising from the offense charged shall be deemed instituted with the criminal action unless the offended
party waives the civil action, reserves the right to institute it separately, or institutes the civil action prior
to the criminal action.14 Necessarily, when the Information was filed with the RTC, the civil action against
Ambassador Hotel for the recovery of civil liability arising from the non-remittance of SSS contributions
was deemed instituted therein.
Further, extinction of the penal action does not carry with it the extinction of the civil action, unless the
extinction proceeds from a declaration in a final judgment that the fact from which the civil liability might
arise did not exist.15 When Yolanda was acquitted in the criminal case because it was proven that she did
not perform the functions of the president from June 1999 to March 2001, it did not result in the dismissal
of the civil case against Ambassador Hotel. The RTC did not declare in its judgment that the fact from
which the civil liability might arise did not exist. Thus, the civil action, deemed impliedly instituted in the
criminal case, remains.
The argument of Ambassador Hotel - that the RTC lost its jurisdiction over it when Yolanda was
acquitted - fails to convince. It is a well-settled rule that the jurisdiction of a court depends upon the state
of facts existing at the time it is invoked, and if the jurisdiction once attaches to the person and subject
matter of the litigation, the subsequent happening of events, although they are of such a character as
would have prevented jurisdiction from attaching in the first instance, will not operate to oust jurisdiction
already attached.16 Also, it is fundamental that the jurisdiction of a court in criminal cases is determined
by the allegations of the information or criminal complaint and not by the result of the evidence presented
at the trial, much less by the trial judge's personal appraisal of the affidavits and exhibits attached by the
fiscal to the record of the case without hearing the parties and their witnesses nor receiving their
evidence at a proper trial.17
In this case, the Information alleged that Yolanda was the President of Ambassador Hotel. Moreover,
such fact was supported by the affidavits and exhibits attached to the Information. Hence, the RTC
properly issued a warrant of arrest over Yolanda pursuant to Section 28(f) of R.A. No. 8282 to acquire
jurisdiction over her person and that of Ambassador Hotel. From that moment, the jurisdiction over their
persons was acquired.
Even though it was established during the trial that Yolanda was not performing the functions of the
hotel's president from June 1999 to March 2001, which negated her criminal responsibility, it is non
sequitur that the jurisdiction over Ambassador Hotel will be detached. Any subsequent event during trial
will not strip the RTC of its jurisdiction because once it attaches, the same shall remain with the said
court until it renders judgment.
To subscribe to the theory of Ambassador Hotel - that evidence will dictate the jurisdiction of the court -
will create a chaotic situation. It will be absurd for the courts to first conduct trial on the merits before it
can determine whether it has jurisdiction over the person or subject matter. The more logical and orderly
approach is for the court to determine jurisdiction by the allegations in the information or criminal
complaint, as supported by the affidavits and exhibits attached therein, and not by the evidence at trial.
Once jurisdiction attaches, it shall not be removed from the court until the termination of the case.
As the jurisdiction over Ambassador Hotel was obtained, it became a party in the case and, as will be
discussed later, it was given fair opportunity to present its evidence and controvert the prosecution's
evidence. In fine, the RTC's jurisdiction over Ambassador Hotel continued in spite of Yolanda's acquittal.
Ambassador Hotel failed to controvert the evidence of its non-remittance of SSS contributions
The CA found that Ambassador Hotel was well informed of its delinquency by the SSS even before the
case was filed. When the case was eventually filed, its directors and officers were also notified. Notably,
even its own lawyer, Atty. Galon, testified during trial on its behalf. Ambassador Hotel was given the
opportunity to present its defense before the court for its non-payment of SSS contributions. Thus, it was
given the right to be heard and controvert the evidence presented against it.
During trial, the prosecution established that the SSS, through De Ocampo, discovered that the last
remittance of SSS contributions by Ambassador Hotel was made in May 1999. She then informed the
hotel of its delinquency when she visited the establishment on April 17, 2001. She gave the hotel's
representative the delinquency assessment and the billing letter. De Ocampo also requested that the
records of previous SSS payments be presented, but these could not be produced. After referring the
case to the Cluster Legal Unit, De Ocampo sent a final demand letter to Ambassador Hotel by registered
mail and personal service. Notwithstanding the several notices of its delinquency, Ambassador Hotel
failed to settle its obligations. Moreover, though it offered to pay its delinquency through installment, no
postdated checks were ever submitted.
On the other hand, Ambassador Hotel's evidence simply focused on establishing that Yolanda was not
acting as its President from June 1999 to March 2001 because of an internal dispute. Although this may
be sufficient to eliminate the criminal liability of Yolanda, it does not justify the nonpayment of SSS
contributions. Ambassador Hotel did not squarely address the issue on its obligations because there was
dearth of evidence that it remitted the said contributions. Cordon, a witness for the hotel, even admitted
that they were informed of their delinquency and that they attempted to unearth its SSS records to
defend its obligations, but failed to do so. The hotel never proved that it had already paid its contributions
or, if not, who should have been accountable for its non-payment. Glaringly, even though Ambassador
Hotel was given sufficient leeway to explain its obligations, it did not take advantage of the said
opportunity. Consequently, it had nothing else to blame for its predicament but itself.
In fine, the Court is of the view that there is preponderance of evidence that Ambassador Hotel failed to
remit its SSS contributions from June 1999 to March 2001 in the amount of P584,804.00. It must pay the
said amount to the SSS plus interest at the legal rate of six percent (6%) per annum.
WHEREFORE, the petition is DENIED. The July 29, 2010 Decision and October 18, 2010 Resolution of
the Court Appeals in CA-G.R. CV No. 87948 are AFFIRMED with MODIFICATION in that the judgment
award shall earn interest at the rate of six percent (6%) per annum from the date of finality until fully paid.
G.R. No. 224943, March 20, 2017
15
 JORGE B. NAVARRA, Petitioner, v. PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated October 29, 2015 and the
Resolution3 dated May 19, 2016 of the Court of Appeals (CA) in CA-G.R. CR No. 35855, which affirmed
the Decision4 dated March 13, 2013 of the Regional Trial Court of Muntinlupa City, Branch 206 (RTC) in
Crim. Case No. 01-303 finding petitioner Jorge B. Navarra (petitioner) guilty beyond reasonable doubt of
the crime of violation of Section 22 (a), in relation to Section 28 (h) and (f), of Republic Act No. (RA)
8282.5
The Facts
6
The instant case stemmed from an Information  dated January 18, 2001 filed before the RTC
charging, inter alia, petitioner of violation of Section 22 (a), in relation to Section 28 (h) and (f), of RA
8282, the accusatory portion of which states:chanRoblesvirtualLawlibrary
The undersigned Assistant City Prosecutor accuses JORGE B. NAVARRA, x x x of
the crime of violation of Section 22 (a), in relation to Section 28 (h) and (f)[,] of R.A.
1161, as amended, by R.A. 8282, committed as follows:
That in or about and during the period comprised between July 1997 and June
2000, in the City of Muntinlupa, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, being members of the board of
directors of the Far East Network of Integrated Circuits Subcontractors (FENICS)
Corporation, a covered member of the Social Security System (SSS), conspiring
and confederating together and mutually helping and aiding one another, did then
and there willfully, unlawfully and feloniously fail and refuse to remit and pay to the
SSS the SS/Medicare/EC contributions withheld by them from the salaries of the
FENICS employees, the counterpart SSS/Medicare/EC contributions of FENICS,
as well as the salary/calamity loan payments due to the SSS withheld by them,
despite demands from them to remit and pay these obligations to the SSS.
Contrary to law.7
Upon motion,8 the criminal case was dismissed as against petitioner's co-accused as it was found that
they were no longer serving as members of FENICS's Board of Directors during the period when the
aforesaid crime was allegedly committed.9 On the other hand, the case pushed through against petitioner
who pleaded "not guilty" to the charge.10
The prosecution alleged that from 1995 to 2000, petitioner served as the President and Chairman of the
Board of Directors of Far East Network of Integrated Circuits Subcontractors Corporation (FENICS), an
employer registered with the Social Security System (SSS) and with SSS ID No. 03-9020939-
1.11 Sometime in the years 1999 to 2002, a total of eleven (11) employees of FENICS filed separate
complaints before the SSS, Alabang Branch against FENICS for the latter's non-remittance of their SSS
contributions, prompting Account Officer Felicula B. Argamosa (Argamosa) to investigate the matter.
Upon verification, Argamosa discovered that FENICS indeed failed to remit the SSS contributions of its
employees from July 1997 to June 2000 and, thus, determined that FENICS's total unpaid obligations
amounted to P10,077,656.24,12 excluding the three percent (3%) monthly penalty mandated by
law.13 Despite numerous demands, FENICS failed to pay its delinquencies, thus, constraining SSS to file
an Affidavit-Complaint14 against petitioner and his co-accused for the aforesaid crime before the Office of
the City Prosecutor of Muntinlupa City (OCP).15
Meanwhile, pending preliminary investigation proceedings, petitioner sent a letter16 dated October 25,
2000 to the SSS, offering to pay in installments FENICS' delinquent remittances from July 1997 to
September 2000, attaching thereto two (2) postdated checks in the amount of P500,000.00 each and
payable to SSS as payment, and promising to pay the remaining balance via 48 equal monthly
installments.17 While the first check was encashed, the second was dishonored for being drawn against a
closed account. The SSS sent petitioner a notice of dishonor, but the latter ignored the same.18 In
addition, petitioner failed to follow through with the monthly installments.19 Later on and while the case
was pending trial, petitioner sent another letter20 dated April 25, 2003 to the SSS, proposing a
restructuring of FENICS's account, but the SSS rejected such proposal.21
In his defense, petitioner averred that while he is indeed the President and Chairman of the Board of
Directors of FENICS, he never had custody of the employees' SSS contributions, as it was the Human
Resources Department that was tasked to handle such matters. Further, he asserted that during the
period when the alleged delinquencies were incurred, FENICS had already shut down. In this relation,
petitioner narrated that: (a) from 1995-1996, FENICS diligently remitted the employees' SSS
contributions; (b) beginning 1997, its business started to decline due to the pull-out of one of its biggest
customers eventually leading to its shut down; and (c) since FENICS was already non-operational, its
employees were unable to work, and naturally, there could have been no wages/salaries from which the
SSS contributions could be sourced.22
The RTC Ruling
23
In a Decision  dated March 13, 2013, the RTC found petitioner guilty beyond reasonable doubt of the
crime charged and, accordingly, sentenced him to suffer the penalty of imprisonment for the
indeterminate period of four (4) years and two (2) months of prision correccional, as minimum, to twenty
(20) years of reclusion temporal, as maximum, and ordered him to pay the SSS the unpaid obligation of
P9,577,656.2424 plus three percent (3%) monthly interest reckoned from July 1997 until fully paid.25
In so ruling, the RTC did not give credence to petitioner's claim that the FENICS's operations had already
shut down, considering that: (a) if this claim were indeed true, then it should have been raised from the
moment the SSS sent its first demand letter to FENICS and before the filing of the case before the court;
and (b) the same is inconsistent with the letters petitioner himself made in an attempt to amicably settle
FENICS's SSS delinquencies. Further, the RTC took note of petitioner's letter dated April 25, 2003
wherein he proposed to settle FENICS's outstanding delinquencies with the SSS. In this regard, the RTC
ratiocinated that since the said letter was made during the pendency of the instant criminal case, then the
same should be considered as an implied admission of guilt on his part.26
Aggrieved, petitioner appealed27 to the CA, arguing that: (a) the information against him was defective as
it failed to properly charge him with a criminal offense; (b) he cannot be held liable for violation of Section
28 (h) of RA 8282 since under this provision, it is the employer, i.e., FENICS, that should be charged with
the same; (c) the prosecution failed to establish that the private complainants were indeed FENICS's
employees; and (d) in any event, his criminal liability was already extinguished by his compromise
agreement with the SSS.28
The CA Ruling
In a Decision29 dated October 29, 2015, the CA affirmed petitioner's conviction in toto.30 It held that: (a)
petitioner's failure to raise the issue of the validity or regularity of the Information prior to entering his plea
was deemed a waiver of any defect in the same; (b) since FENICS is a corporation, its failure to remit the
SSS contributions of its employees subjects its officers, such as petitioner, to liability, especially since
FENICS had already been dissolved; (c) the prosecution's documentary evidence clearly show that the
private complainants were FENICS's employees; (d) petitioner's letters dated October 25, 2000 and April
25, 2003 proposing to settle FENICS's delinquencies should be viewed as an admission of guilt on his
part; and (e) there was no compromise as SSS did not assent thereto, and even assuming there was
one, such cannot extinguish petitioner's criminal liability.31
Undaunted, petitioner moved for reconsideration,32 which was, however, denied in a Resolution33 dated
May 19, 2016; hence, this petition.
The Issue Before the Court
The sole issue raised for the Court's resolution is whether or not the CA correctly upheld petitioner's
conviction for violation of Section 22 (a), in relation to Section 28 (h) and (f), of RA 8282.
16
 The Court's Ruling
The petition has no merit.
Preliminarily, the Court notes that petitioner assails the validity or regularity of the Information filed
against him on the ground that it allegedly did not charge a criminal offense. However, as pointed out by
the CA, petitioner never raised such issue prior to his arraignment. In fact, a reading of the records
shows that petitioner only raised the same after he was convicted by the RTC and the case was already
on appeal before the CA. Thus, the CA correctly ruled that his failure to object to the alleged defect in the
Information before entering his plea amounted to a waiver of such defects, especially since objections as
to matters of form or substance in the Information cannot be made for the first time on appeal.34 Hence,
petitioner can no longer be allowed to raise this issue before the Court.
Going now to the substantive issue of the instant case, a plain reading of the Information reveals that
petitioner, as FENICS's President and Chairman of the Board of Directors at that time, is charged for
violation of Section 22 (a), in relation to Section 28 (h)35 and (f), of RA 8282 for FENICS's failure and/or
refusal to remit its employees' SSS contributions to the SSS during the period from July 1997 to June
2000. Section 22 (a) of RA 8282 states:chanRoblesvirtualLawlibrary
Section 22. Remittance of Contributions. - (a) The contributions imposed in the
preceding section shall be remitted to the SSS within the first ten (10) days of each
calendar month following the month for which they are applicable or within such
time as the Commission may prescribe. Every employer required to deduct and to
remit such contributions shall be liable for their payment and if any contribution is
not paid to the SSS as herein prescribed, he shall pay besides the contribution a
penalty thereon of three percent (3%) per month from the date the contribution falls
due until paid. If deemed expedient and advisable by the Commission, the
collection and remittance of contributions shall be made quarterly or semi-annually
in advance, the contributions payable by the employees to be advanced by their
respective employers: Provided, That upon separation of an employee, any
contribution so paid in advance but not due shall be credited or refunded to his
employer.
xxxx
Verily, prompt remittance of SSS contributions under the aforesaid provision is mandatory.36 Any
divergence from this rule subjects the employer not only to monetary sanctions, i.e. the payment of
penalty of three percent (3%) per month, but also to criminal prosecution if the employer fails to: (a)
register its employees with the SSS; (b) deduct monthly contributions from the salaries/wages of its
employees; or (c) remit to the SSS its employees' SSS contributions and/or loan payments after
deducting the same from their respective salaries/wages.37 In this regard, Section 28 (f) of RA 8282
explicitly provides that "[i]f the act or omission penalized by this Act be committed by an association,
partnership, corporation or any other institution, its managing head, directors or partners shall be liable to
the penalties provided in this Act for the offense." Notably, the aforesaid punishable acts are
considered mala prohibita and, thus, the defenses of good faith and lack of criminal intent are rendered
immaterial.38
In this case, a judicious review of the records reveals that the prosecution - through a plethora of
documentary evidence39 - had established by proof beyond reasonable doubt that during the period of
July 1997 to June 2000, FENICS failed to remit its employees' SSS contributions despite withholding
such amounts from their respective salaries. It is settled that "[f]actual findings of the RTC, when affirmed
by the CA, are entitled to great weight and respect by this Court and are deemed final and conclusive
when supported by the evidence on record,"40 as in this case.
In sum, the CA correctly affirmed petitioner's conviction for the crime of violation of Section 22 (a), in
relation to Section 28 (h) and (f), of RA 8282.
WHEREFORE, the petition is DENIED. The Decision dated October 29, 2015 and the Resolution dated
May 19, 2016 of the Court of Appeals in CA-G.R. CR No. 35855, which affirmed the Decision dated
March 13, 2013 of the Regional Trial Court of Muntinlupa City, Branch 206 in Crim. Case No. 01-303
finding petitioner Jorge B. Navarra GUILTY beyond reasonable doubt of the crime of violation of Section
22 (a), in relation to Section 28 (h) and (f), of Republic Act No. 8282 is hereby AFFIRMED. Accordingly,
petitioner Jorge B. Navarra is sentenced to suffer the penalty of imprisonment for the indeterminate
period of four (4) years and two (2) months of prision correccional, as minimum, to twenty (20) years
of reclusion temporal, as maximum, and is ordered to pay the SSS the unpaid obligation of
P9,577,656.24 plus three percent (3%) monthly interest reckoned from July 1997 until fully paid.
KUKAN INTERNATIONAL CORPORATION, Petitioner, vs HON. AMOR REYES, in her capacity as
Presiding Judge of the Regional Trial Court of Manila, Branch 21, and ROMEO M. MORALES,
doing business under the name and style “RM Morales Trophies and Plaques,” Respondents.
FACTS
Sometime in March 1998, Kukan, Inc. conducted a bidding worth Php 5M (reduced to PhP 3,388,502) for
the supply and installation of signages in a building being constructed in Makati City which was won by
Morales.
Despite his compliance, Morales was only paid the amount of PhP 1,976,371.07, leaving a balance of
PhP 1,412,130.93, which Kukan, Inc. refused to pay despite demands.
Morales filed a Complaint with the RTC against Kukan, Inc. for a sum of money. However, starting
November 2000, Kukan, Inc. no longer appeared and participated in the proceedings before the trial
court, prompting the RTC to declare Kukan, Inc. in default and paving the way for Morales to present his
evidence ex parte.
On November 28, 2002, the RTC rendered a Decision finding for Morales and against Kukan, Inc.
After the above decision became final and executory, Morales moved for and secured a writ of execution
against Kukan, Inc. The sheriff then levied upon various personal properties found at what was supposed
to be Kukan, Inc.’s office at Unit 2205, 88 Corporate Center, Salcedo Village, Makati City.  Alleging that it
owned the properties thus levied and that it was a different corporation from Kukan, Inc., Kukan
International Corporation (KIC) filed an Affidavit of Third-Party Claim. Notably, KIC was incorporated in
August 2000, or shortly after Kukan, Inc. had stopped participating in Civil Case No. 99-93173.
In reaction to KIC’s claim, Morales interposed an Omnibus Motion dated April 30, 2003, praying, and
applying the principle of piercing the veil of corporate fiction, that an order be issued for the satisfaction
of the judgment debt of Kukan, Inc. with the properties under the name or in the possession of KIC, it
being alleged that both corporations are but one and the same entity.  KIC opposed Morales’ motion.
The court denied the omibus motion.
In a bid to establish the link between KIC and Kukan, Inc., Morales filed a Motion for Examination of
Judgment Debtors dated May 4, 2005 which sought that subponae be issued against the primary
stockholders of Kukan, Inc., among them Michael Chan, a.k.a. Chan Kai Kit. This too was denied by the
court.
Morales then sought the inhibition of the presiding judge, Eduardo B. Peralta, Jr., who eventually granted
the motion. The case was re-raffled to Branch 21, presided by public respondent Judge Amor Reyes.
Before the Manila RTC, Branch 21, Morales filed a Motion to Pierce the Veil of Corporate Fiction to
declare KIC as having no existence separate from Kukan, Inc. This time around, the RTC, by Order
dated March 12, 2007, granted the motion. From the above order, KIC moved but was denied
reconsideration in another Order dated June 7, 2007.
KIC went to the CA on a petition for certiorari to nullify the aforesaid March 12 and June 7, 2007 RTC
Orders but on January 23, 2008, the CA denied the petition and affirmed the assailed Orders. The CA
later denied KIC’s MR in the assailed resolution.
Hence, the instant petition for review.
ISSUES
17
A. whether the trial court can, after the judgment against Kukan, Inc. has attained finality, execute it
against the property of KIC;
B. whether the trial court acquired jurisdiction over KIC;
C. whether the trial and appellate courts correctly applied, under the premises, the principle of piercing
the veil of corporate fiction.
DECISION
A. No.
          In Carpio v. Doroja,[13] the Court ruled that the deciding court has supervisory control over the
execution of its judgment:
A case in which an execution has been issued is regarded as still pending so that all proceedings on the
execution are proceedings in the suit.  There is no question that the court which rendered the judgment
has a general supervisory control over its process of execution, and this power carries with it the right to
determine every question of fact and law which may be involved in the execution.
The court’s supervisory control does not, however, extend as to authorize the alteration or amendment of
a final and executory decision, save for certain recognized exceptions, among which is the correction of
clerical errors. Else, the court violates the principle of finality of judgment and immutability.
As may be noted, the above decision, in unequivocal terms, directed Kukan, Inc. to pay the
aforementioned awards to Morales.  Thus, making KIC, thru the medium of a writ of execution,
answerable for the above judgment liability is a clear case of altering a decision, an instance of granting
relief not contemplated in the decision sought to be executed. And the change does not fall under any of
the recognized exceptions to the doctrine of finality and immutability of judgment.  It is a settled rule that
a writ of execution must conform to the fallo of the judgment; as an inevitable corollary, a writ beyond the
terms of the judgment is a nullity.
Thus, on this ground alone, the instant petition can already be granted.  Nonetheless, an examination of
the other issues raised by KIC would be proper.
B. No.
          In the instant case, KIC was not made a party-defendant in Civil Case No. 99-93173. Even if it is
conceded that it raised affirmative defenses through its aforementioned pleadings, KIC never abandoned
its challenge, however implicit, to the RTC’s jurisdiction over its person. The challenge was subsumed in
KIC’s primary assertion that it was not the same entity as Kukan, Inc.  Pertinently, in its Comment and
Opposition to Plaintiff’s Omnibus Motion dated May 20, 2003, KIC entered its “special but not voluntary
appearance” alleging therein that it was a different entity and has a separate legal personality from
Kukan, Inc.  And KIC would consistently reiterate this assertion in all its pleadings, thus effectively
resisting all along the RTC’s jurisdiction of its person.  It cannot be overemphasized that KIC could not
file before the RTC a motion to dismiss and its attachments in Civil Case No. 99-93173, precisely
because KIC was neither impleaded nor served with summons.  Consequently, KIC could only assert
and claim through its affidavits, comments, and motions filed by special appearance before the RTC that
it is separate and distinct from Kukan, Inc.
          Following La Naval Drug Corporation, KIC cannot be deemed to have waived its objection to the
court’s lack of jurisdiction over its person. It would defy logic to say that KIC unequivocally submitted
itself to the jurisdiction of the RTC when it strongly asserted that it and Kukan, Inc. are different entities.
In the scheme of things obtaining, KIC had no other option but to insist on its separate identity and plead
for relief consistent with that position.
C.  No.
The principle of piercing the veil of corporate fiction, and the resulting treatment of two related
corporations as one and the same juridical person with respect to a given transaction, is basically applied
only to determine established liability;[34] it is not available to confer on the court a jurisdiction it has not
acquired, in the first place, over a party not impleaded in a case.  Elsewise put, a corporation not
impleaded in a suit cannot be subject to the court’s process of piercing the veil of its corporate fiction.  In
that situation, the court has not acquired jurisdiction over the corporation and, hence, any proceedings
taken against that corporation and its property would infringe on its right to due process.  Aguedo
Agbayani, a recognized authority on Commercial Law, stated as much:
          23. Piercing the veil of corporate entity applies to determination of liability not of jurisdiction. x x x
This is so because the doctrine of piercing the veil of corporate fiction comes to play only during the trial
of the case after the court has already acquired jurisdiction over the corporation. Hence, before this
doctrine can be applied, based on the evidence presented, it is imperative that the court must first have
jurisdiction over the corporation.[35] x x x (Emphasis supplied.)
The implication of the above comment is twofold: (1) the court must first acquire jurisdiction over the
corporation or corporations involved before its or their separate personalities are disregarded; and (2) the
doctrine of piercing the veil of corporate entity can only be raised during a full-blown trial over a cause of
action duly commenced involving parties duly brought under the authority of the court by way of service
of summons or what passes as such service.
–––
In fine, to justify the piercing of the veil of corporate fiction, it must be shown by clear and convincing
proof that the separate and distinct personality of the corporation was purposefully employed to evade a
legitimate and binding commitment and perpetuate a fraud or like wrongdoings.  To be sure, the Court
has, on numerous occasions, applied the principle where a corporation is dissolved and its assets are
transferred to another to avoid a financial liability of the first corporation with the result that the second
corporation should be considered a continuation and successor of the first entity.
In those instances when the Court pierced the veil of corporate fiction of two corporations, there was a
confluence of the following factors:
1.          A first corporation is dissolved;
2.          The assets of the first corporation is transferred to a second corporation to avoid a financial
liability of the first corporation; and
3.          Both corporations are owned and controlled by the same persons such that the second
corporation should be considered as a continuation and successor of the first corporation.
In the instant case, however, the second and third factors are conspicuously absent.  There is, therefore,
no compelling justification for disregarding the fiction of corporate entity separating Kukan, Inc. from KIC.
In applying the principle, both the RTC and the CA miserably failed to identify the presence of the
abovementioned factors.
–––
It bears reiterating that piercing the veil of corporate fiction is frowned upon. Accordingly, those who seek
to pierce the veil must clearly establish that the separate and distinct personalities of the corporations are
set up to justify a wrong, protect fraud, or perpetrate a deception. In the concrete and on the assumption
that the RTC has validly acquired jurisdiction over the party concerned, Morales ought to have proved by
convincing evidence that Kukan, Inc. was collapsed and thereafter KIC purposely formed and operated
to defraud him. Morales has not to us discharged his burden.
WHEREFORE, the petition is hereby GRANTED. The CA’s January 23, 2008 Decision and April 16,
2008 Resolution in CA-G.R. SP No. 100152 are hereby REVERSED and SET ASIDE.  The levy placed
upon the personal properties of Kukan International Corporation is hereby ordered lifted and the personal
properties ordered returned to Kukan International Corporation.  The RTC of Manila, Branch 21 is hereby
directed to execute the RTC Decision dated November 28, 2002 against Kukan, Inc. with reasonable
dispatch.
18
G.R. No. 170284             March 16, 2007
BENITO ARATEA and PONCIANA CANONIGO, Petitioners,
vs.
ESMERALDO P. SUICO and COURT OF APPEALS, Cebu City, Respondents.
DECISION
GARCIA, J.:
This petition for review on certiorari under Rule 45 of the Rules of Court seeks the reversal and setting
aside of the decision1 dated 5 May 2005 of the Court of Appeals (CA)-Cebu City, as reiterated in its
resolution2 of 23 September 2005, in CA-G.R. CV No. 60174 which affirmed an earlier decision of the
Regional Trial Court (RTC) of Cebu City, Branch 24, in an action for a sum of money and damages
thereat instituted by the herein private respondent Esmeraldo P. Suico (Suico) against, among others,
the herein petitioners Benito Aratea (Aratea) and Ponciana Canonigo (Canonigo).
The facts:
Petitioners Aratea and Canonigo are the controlling stockholders of Samar Mining Development
Corporation (SAMDECO), a domestic corporation engaged in mining operations in San Isidro, Wright,
Western Samar. On the other hand, private respondent Suico is a businessman engaged in export and
general merchandise.
Sometime in 1989, Suico entered into a Memorandum of Agreement (MOA) with SAMDECO. Armed with
the proper board resolution, Aratea and Canonigo signed the MOA as the duly authorized
representatives of the corporation. Under the MOA, Suico would extend loans and cash advances to
SAMDECO in exchange for the grant of the exclusive right to market fifty percent (50%) of the total coal
extracted by SAMDECO from its mining sites in San Isidro, Wright, Western Samar.
Suico was enticed into the aforementioned financing scheme because Aratea and Canonigo assured him
that the money he would lend to SAMDECO would easily be paid with five percent (5%) monthly interest
as the coals in said sites is easier to gather because it is excavated from open-pit mines. Aratea and
Canonigo also promised to Suico that the loan the latter would extend to SAMDECO could easily be paid
from the profits of his fifty percent (50%) share of the coal produced. Also reserved in favor of Suico was
the right of first priority to operate the mining facilities in the event SAMDECO becomes incapable of
coping with the work demands. By way of further incentive, Suico was actually appointed SAMDECO’s
Vice-President for Administration.
Pursuant to the same MOA, Suico started releasing loans and cash advances to SAMDECO, still through
Aratea and Suico. SAMDECO started operations in its mining sites to gather the coal. As agreed in the
MOA, fifty percent (50%) of the coals produced were offered by Suico to different buyers. However,
SAMDECO, again through Aratea and Canonigo, prevented the full implementation of the marketing
arrangement by not accepting the prices offered by Suico’s coal buyers even though such prices were
competitive and fair enough, giving no other explanation for such refusal other than saying that the price
was too low. Aratea and Canonigo did not also set any criterion or standard with which any price offer
would be measured against. Because he failed to close any sale of his 50% share of the coal-produce
and gain profits therefrom, Suico could not realize payment of the loans and advances he extended to
SAMDECO.
SAMDECO, on the other hand, successfully disposed of its 50% share of the coal-produce. Even with
said coal sales, however, SAMDECO absolutely made no payment of its loan obligations to Suico,
despite demands.
Aratea and Canonigo eventually sold the mining rights and passed on the operations of SAMDECO to
Southeast Pacific Marketing, Inc. (SPMI). They also sold their shares in SAMDECO to SPMI’s President,
Arturo E. Dy without notice to, or consent of Suico, in violation of the MOA.
Hence, in the RTC of Cebu City, Suico filed a complaint for a Sum of Money and Damages against
SAMDECO, Aratea, Canonigo, and Seiko Philippines, Inc. (SEIKO, which was later substituted by SPMI
and Arturo E. Dy). The complaint was docketed as Civil Case No. CEB-10618 and raffled to Branch 24 of
the court.
On 5 January 1998, the trial court came out with its decision rendering judgment for Suico as follows:
WHEREFORE, finding that the plaintiff has meritorious cause of action against the defendants, this Court
hereby orders all the defendants SAMDECO, SPMI, Dy, SEIKO, Benito Aratea, Ponciana Canonigo to
solidarily pay the plaintiff the principal obligation of ₱3.5 million plus 5% interest per month reckoned
from March 1989 until fully paid; while defendants Aratea & Canonigo should solidarily pay plaintiff the
balance on the principal amounting to ₱978,440.00 plus 5% interest per month reckoned from March
1989 until fully paid. In addition all defendants are hereby ordered solidarily to pay plaintiff ₱2,000,000.00
million (sic) as moral damages, ₱500,000.00 as exemplary damages, ₱250,000.00 as attorney’s fees,
and ₱100,000.00 as litigation expenses. All counterclaims and cross-claims are hereby dismissed.
SO ORDERED.
On 9 February 1998, SAMDECO, SPMI, Dy, and SEIKO filed their common notice of appeal, while
Aratea and Canonigo filed theirs on 16 February 1998. All appeals were docketed in CA-Cebu City as
CA-G.R. CV No. 60174.
After review of the records of the case, CA-Cebu City, in its decision of 5 May 2005, dismissed the
appeal and affirmed the appealed decision of the trial court, to wit::
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DISMISSING the
appeal filed in this case and AFFIRMING the decision dated January 5, 1998 of the RTC of Cebu City,
Branch 24 in Civil Case No. CEB-10618.
SO ORDERED.
Petitioners Aratea and Canonigo filed their common motion for reconsideration but the same was denied
by the appellate court in its resolution of 23 September 2005.1ªvvphi1.nét
Hence, this recourse by the two on the following assigned errors:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ERROR IN FINDING AGAINST THE
DEFENDANTS-APPELLANTS BENITO ARATEA AND PONCIANA CANONIGO AND CONDEMNING
THEM TO PAY JOINTLY AND SEVERALLY THE LOANS, CASH ADVANCES AND CAPITAL
INFUSION MADE BY PLAINTIFF TO DEFENDANT-APPELLANT SAMDECO.
THE COURT OF APPEALS OVERLOOKED AND MISINTERPRETED SOME FACTS OR
CIRCUMSTANCES AND COMMITTED SOME MISAPPREHENSION OF THE FACTS AND THE
APPLICABLE LAW/S WHICH HAD ADVERSELY AFFECTED THE RESULT OF THE CASE.
We DENY.
19
The Court notes that petitioners Aratea and Canonigo do not assail the decisions of the two courts below
insofar as their co-defendants in the court of origin, namely: SAMDECO; SPMI; Dy; and SEIKO, were
held liable to Suico. As it were, petitioners take exception from both decisions only, insofar as they are
held personally and solidarily liable with their co-defendants. They strongly assert that "the records of this
case clearly show that the loans, cash advances and capital infusion made by xxx Suico to SAMDECO
are the sole and exclusive liability and/or responsibility of SAMDECO and/or its transferee/s." 3 Relying
heavily on the allegations in Suico’s complaint in Civil Case No. CEB-10618, whereunder they were
referred to as mere representatives/agents of SAMDECO, petitioners seek to be declared free from any
liability which their co-defendants in the suit may be adjudged liable for.
We must first stress that petitioners’ personal and solidary liability depends on whether the Court finds
SAMDECO’s monetary obligations on account of the loans and cash advances made to it by Suico are
due and demandable as borne by the evidence.
After carefully and thoroughly reviewing the records of the proceedings before the trial court, we find no
cogent reason to depart from the factual findings of both the trial and appellate courts holding all
defendants liable for said loans and cash advances.
However, in determining whether SAMDECO’s stockholders and/or representatives (petitioners Aratea
and Canonigo) may be held solidarily liable with SAMDECO’s obligations, the Court must determine
whether, upon the same facts found by the two courts below, there is basis to pierce the veil of corporate
fiction and hold SAMDECO’s stockholders and/or officers personally and solidarily liable with the
corporation.
Prudential Bank v. Alviar4 stated:
Well-settled is the rule that a corporation has a personality separate and distinct from that of its officers
and stockholders. Officers of a corporation are not personally liable for their acts as such officers unless
it is shown that they have exceeded their authority. However, the legal fiction that a corporation has a
personality separate and distinct from stockholders and members may be disregarded if it is used as a
means to perpetuate fraud or an illegal act or as a vehicle for the evasion of an existing obligation, the
circumvention of statutes, or to confuse legitimate issues.
SAMDECO must generally be treated as separate and distinct entity from petitioners Aratea and
Canonigo unless there are facts and circumstances that would justify the Court to pierce the veil of
corporate fiction and treat them as one and the same. From the facts, as found by the trial court and
reechoed by the appellate court, the Court has no reason to doubt that Suico was very well aware that he
was dealing with SAMDECO and that Aratea and Canonigo were mere authorized representatives acting
for and in behalf of the corporation. In fact, Suico took note that Aratea and Canonigo were duly
authorized by the corresponding board resolution. There were no indications whatsoever that Suico was
misled to believe that the loans and cash advances were initially intended for the personal benefit of
Aratea and/or Canonigo, and that the corporation was only used thereafter for the purpose of hiding
behind the veil of corporate fiction to evade personal liability. The evidence sufficiently established that
all loans and cash advances were used for the mining operations of SAMDECO, and there were neither
allegations nor proofs to the contrary. Absent any proof of fraud or double dealing, therefore, the doctrine
on piercing the veil of corporate entity would not apply.
Considering that the veil of corporate fiction cannot be pierced in this case but the evidence indisputably
established that Suico released loans and cash advances in favor of SAMDECO, which loans and cash
advances remain unpaid to the present, to Suico’s damage and prejudice, may Aratea and Canonigo, as
SAMDECO’s controlling stockholders and/or representatives, be nonetheless held personally and
solidarily liable with SAMDECO and its successors-in-interest for obligations the corporation incurred
under the facts herein obtaining?
We rule in the affirmative.
In MAM Realty Development Corporation v. NLRC,5 the Court stated:
A corporation is a juridical entity with legal personality separate and distinct from those acting for and in
its behalf and, in general, from the people comprising it. The general rule is that obligations incurred by
the corporation, acting through its directors, officers and employees, are its sole liabilities. There are
times, however, when solidary liabilities may be incurred but only when exceptional circumstances
warrant such as in the following cases:
1. When directors and trustees or, in appropriate cases, the officers of a corporation:
(a) vote for or assent to patently unlawful acts of the corporation;
(b) act in bad faith or with gross negligence in directing the corporate affairs;
(c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and
other persons;6
2. When a director or officer has consented to the issuance of watered stocks or who, having knowledge
thereof, did not forthwith file with the corporate secretary his written objection thereto;7
3. When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and
solidarily liable with the corporation;8 or
4. When a director, trustee or officer is made, by specific provision of law, personally liable for his
corporate action.9
In labor cases, particularly, corporate directors and officers are solidarily liable with the corporation for
the termination of employment of corporate employees done with malice or in bad faith. (Emphasis
supplied.)
Petitioners Aratea and Canonigo, despite having separate and distinct personalities from SAMDECO
may be held personally liable for the loans and advances made by Suico to SAMDECO which they
represent on account of their bad faith in carrying out the business of the corporation. In the words of the
trial court:
As evidenced by the transcripts of the direct examination of [respondent Suico] (TSN, Arnejo, 10 August
1995, pp. 20-21), [petitioners] Canonigo, Aratea and SAMDECO prevented the full implementation of the
marketing agreement concerning the coal produced from the mining site, specifically called the Arizona
project, by not agreeing to the price of the coal offered by the buyers procured by [Suico] even though
the prices offered were competitive and fair enough. [Petitioners] Canonigo, Aratea and SAMDECO
made no explanation as to why they did not accept the offered price save to say that they were low. They
also did not set any criterion or standard against which any offered price would be measured. By not
acquiescing in to the proffered price, [respondent] Suico was not able to obtain his share of 50% of the
profits from the sale of the coal produced by the mining site.
1awphi1.nét
On the other hand, the [petitioners] were able to sell coal produced in the mining site in question. Hence,
this undoubtedly exhibits their bad faith, malice and wanton disregard of the [respondent’s] rights in not
complying with their part of the covenant. While the [petitioners] were able to market their share of the
coal, they precluded the [respondent] from marketing his. xxx.
20
Moreover, notwithstanding the unequivocal language of Title 4, paragraph 1, [petitioners] Canonigo and
Aratea further violated the [respondent’s] rights when they without informing [respondent] sold their
shares of SAMDECO to defendants Dy and SPMI thereby vesting on the latter the right to operate
SAMDECO’s coal mining area as evidence by the Memorandum of Agreement labeled Exhibits "B". Title
4, paragraph 1 of Exhibit "A" expressly states that [respondent] Suico had the right of first priority in
acquiring the coal area of SAMDECO. The most prudent action for [petitioners] would have been to first
offer to sell SAMDECO to [respondent] as what was stipulated under the contract prior to entering into an
agreement with defendants SPMI and Dy. xxx. (Words in brackets supplied.)
Petitioners Aratea and Canonigo acted in bad faith when they, as officers of SAMDECO, unreasonably
prevented Suico from selling his part of the coal-produce of the mining site, in gross violation of their
MOA. This resulted in Suico not being unable to realize profits from his 50% share of the coal-produce,
from which Suico could obtain part of the payment for the loans and advances he made in favor of
SAMDECO. Moreover, petitioners also acted in bad faith when they sold, transferred and assigned their
proprietary rights over the mining area in favor of SPMI and Dy, thereby causing SAMDECO to grossly
violate its MOA with Suico. Suico suffered grave injustice because he was prevented from acquiring the
opportunity to obtain payment of his loans and cash advances, while petitioners Aratea and Canonigo
profited from the sale of their shareholdings in SAMDECO in favor of SPMI and Dy. These facts duly
established Aratea and Canonigo’s personal liability as officers/stockholders of SAMDECO and their
solidary liability with SAMDECO for its obligations in favor of Suico for the loans and cash advances
received by the corporation.
WHEREFORE, the instant petition is DENIED and the assailed CA decision and resolution are
AFFIRMED in toto.
GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner VS. FE L. ESTEVES, Respondent
G.R. No. 182297
June 21, 2017
FACTS:
This is a petition for review on certiorari filed by the petitioner, assailing the Court of Appeals decision for
denying the death benefits of the respondent for the demise of her husband Antonio Estevez, Sr.
Antonio Esteves Sr., was a utility worker at the Gubat District Hospital (GDH) from December 1978 until
the time of his death on August 5, 2000.
On August 5, 2000, Antonio Esteves Sr. was rushed to the hospital due to body weakness, headache
and vomiting. After few hours after he was rushed to the hospital, Antonio Esteves Sr. died. His death
certificate states that the immediate cause of death was CVA, Hemorrhagic, antecedent cause was
Hypertension, Stage III and underlying cause was NIDDM.
The respondent believes that the death of her husband was work-related and compensable under P.D.
No. 626, which the respondent filed a claim for death benefits with the GSIS.
However, the petitioner GSIS denied the respondent’s claim on the ground that Antonio’s death is not
considered as work related. The aggrieved respondent appealed to the (ECC) Employees Compensation
Commission where the claim of the respondent was dismissed for lack of merit. On the contrary, the
respondent appealed to the Court of Appeals reversing and set aside the decision of the ECC and
directing GSIS to pay the respondent’s claim.
ISSUE:
Whether or not the underlying cause of death of Antonio Esteves Sr. may be considered compensable
under P.D. No. 626, as amended.
HELD:
No. The deceased’s underlying ailment, Non-independent Diabetes Mellitus is not work-related. The said
ailment is caused by genetic factors, obesity, and overeating which are not related to the deceased’s
employment and working conditions. Hence, irrespective of the type of work that he had been engaged
in, he could have contracted Diabetes. Moreover, under Section 1, Rule III of the Amended Rules of
Employees Compensation, Section 1. Grounds (a) For the injury and the resulting disability or death to
be compensable, the injury must be the result of accident arising out of and in the course of the
employment. (ECC Resolution No. 2799, July 25, 1984). (b) For sickness and the resulting disability or
death to be compensable, the sickness must be the result of an occupational disease listed under Annex
“A” of these Rules with the conditions set therein satisfied, otherwise, proof must be shown that the risk
of contracting the disease is increased by the working conditions.
The Supreme Court ruled that the instant petition is granted reversing and set aside the decision of the
Court of Appeals and reinstated the decision of the Employees Compensation Commission.
G.R. No. 196102               November 26, 2014
GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner,
vs.
AURELIA Y. CALUMPIANO, Respondent.
DECISION
DEL CASTILLO, J.:
Assailed in this Petition for Review on Certiorari1 are 1) the October 30, 2009 Decision2 of the Court of
Appeals (CA) in CA-G.R. SP No. 85908 which set aside the June 24, 2004 Decision 3 of the Employees'
Compensation Commission (ECC) in ECC Case No. GM-16174-0209-04 and ordered the payment of
disability benefits to the herein respondent Aurelia Y. Calumpiano; and 2) the CA's February 23, 2011
Resolution4 denying reconsideration of the assailed CA Decision.
Factual Antecedents
As determined by the CA, the facts are as follows:
x x x Aurelia Y. Calumpiano5 was employed as Court Stenographer at the then Court of First Instance
ofSamar from January 5, 1972 until her retirement on March 30, 2002.
On March 7, 2002, shortly before her retirement, [respondent] filed before the Supreme Court, an
application for disability retirement on account of her ailment[s], Hypertensive Cardiovascular Disease
[and] Acute Angle Closure Glaucoma. To bolster her claim, [respondent] submitted the medical
certificates issued by her attending physicians, Dr. Alfred I. Lim and Dr. Elmer Montes, both of whom are
Op[h]thalmologists [at] Eastern Samar Provincial Hospital. She submitted them together with the results
of her perimetry test, [a certificate of] which x x x was issued by Dr. Lim. On September 30, 2002, the
Supreme Court approved [respondent’s] application for disability retirement, under Republic Act No.
8291 (New GSIS Act of 1997).
[Respondent’s] disability claim was forwarded to GSIS,6 but the latter denied her claim for the reason that
hypertension and glaucoma, which were her illnesses, were not work[-]related. Her motion for
reconsideration was likewise denied by the GSIS.
Petitioner filed an appeal [with] the ECC, which rendered the assailed Decision, 7 the dispositive portion of
which stated:
21
WHEREFORE, in view of the foregoing, the decision appealed from is hereby AFFIRMED and the instant
appeal dismissed for want of merit.
SO ORDERED.8
In dismissing respondent’s appeal, the ECC held:
"Glaucoma is characterized by an intraocular pressure sufficiently elevated to produce intraocular
damage. The three major categories of glaucoma are: (1) angle-closure glaucoma, (2) open-angle
glaucoma, and (3) congenital and juvenile glaucoma. Eyes that develop primary angle glaucoma are
anatomically predisposed to the condition. In primary open-angle glaucoma, [the] angle appears open
[and] does notseem to function properly. The exact nature of obstruction has not yet been elucidated.
Congenital glaucoma and juvenile glaucoma are thought to be hereditary inmost cases, although
infectious causes are possible (rubella).["] (Pathologic Basis of Disease by Cotran, 6th edition, pages
1374-1375)
"Hypertension is an increase in the blood pressure within the normal of less than 120/80 mm Hg as
defined by the Joint National Committee VII. Primary risk factor for developing hypertension is smoking.
Other important risk factors are excess body weight, high salt intake, nutritional factors, high alcohol
consumption, physical inactivity and psychological factors, including stress." (Principles of Internal
Medicine)
To warrant compensability of ailment and its resulting sickness, disability or death under P.D. 626, as
amended, Rule III, Section 1(b) thereof, specifically provides that the ailment must be listed by the
Commission as an occupational disease with the conditions set forth therein satisfied, otherwise, the
conditions imposed under the Increased Risk Theory must be complied with.
Appellant9 worked as a Court Stenographer III of the Supreme Court for thirty (30) years. Her duties were
no doubt stressful and the same may have caused her to develop her ailment, hypertension. However, to
make the same compensable, it is necessary that there must be impairment of function of her body
organs like kidneys, heart, eyes and brain resulting in her permanent disability. An examination of the
appellant’s records would show that she was not suffering from end[-]organ damage. This was shown in
the x x x report [of the ECG] that was taken on the appellant on January 21, 2002. Thus, the same
cannot be considered compensable and work-connected.
Likewise, her other ailment, Glaucoma[,] cannot also be considered work-connected. Medical science
has explained that it is characterized by an intraocular pressure sufficiently elevatedto produce
intraocular glaucoma. Here, there was nothing in her duties that would cause or increase her risk of
contracting the said ailment.10
Ruling of the Court of Appeals
In a Petition for Review11 filed with the CA and docketed therein as CAG.R. SP No. 85908, respondent
sought to set aside the aboveECC Decision, arguing that her illness is work-connected which thus
entitles her to disability compensation.
On October 30, 2009, the CA issued the herein assailed Decision containing the following decretal
portion:
WHEREFORE, the petition is GRANTED. Accordingly, the assailed Decision is SET ASIDE. Let this
case be REMANDED to the Employees’ Compensation Commission for the payment of the disability
benefits due the Petitioner.
SO ORDERED.12
The CA held that while respondent’s hypertension and glaucoma are not listed as occupational diseases
under the implementing rules of the Employee Compensation Program under Presidential Decree No.
62613 (PD 626), they were nonetheless contracted and became aggravated during her employment as
court stenographer; that under the "increased risk theory," a "non-occupational disease" is compensable
as long as proof of a causal connection between the work and the ailment is established;14 that
respondent’s illnesses are connected to her work, given the nature of and pressure involved in her
functions and duties as a court stenographer; that the certifications issued by the attending physicians
certifying to respondent’s illnesses should begiven credence; that the ECC itself conceded that
respondent’s duties were "no doubt stressful and the same may have caused her to develop her ailment,
hypertension;" and that while the presumption of compensability has been abrogated with the issuance
of PD 626, employees’ compensation laws nevertheless constitute social legislation which allows for
liberality in interpretation to the benefit of the employee, and the policy has always been to extend the
applicability of said laws to as many employees who can avail of the benefits thereunder.15
Petitioner filed a Motion for Reconsideration, but the CA denied the same in its February 23, 2011
Resolution. Hence, the instant Petition.
Issues
Petitioner submits the following issues for resolution:
1. WHETHER THE COURT OF APPEALS ERRED IN FINDING THAT RESPONDENT’S DISEASES
(HYPERTENSION AND GLAUCOMA) ARE COMPENSABLE UNDER THE INCREASED RISK
THEORY; AND
2. WHETHER THE COURT OF APPEALS ERRED IN REVERSING THE FINDINGS OF FACTS OF THE
ECC.16
Petitioner’s Arguments
Praying that the assailed CA pronouncements be set aside and that the June 24, 2004 Decision of the
ECC be reinstated, petitioner argues in its Petition and Reply17 that respondent’s hypertension and
glaucoma are not compensable under the principle of increased risk; that although essential
hypertension is listed as an occupational disease, it is not compensable per seas the conditions under
Section 1, Rule III of the Amended Rules on Employees’ Compensation 18 should be satisfied; that
hypertension is compensable only "if it causes impairment of function of body organs like kidneys,
heart,eyes and brain, resulting in permanent disability;"19 that since respondent did not suffer "end-organ
damage" to or impairment of her kidneys, heart, eyes and brain which resulted in permanent disability,
her illness is not compensable; that respondent’s other illness – glaucoma – is not compensable; 20 and
that the findings of the ECC should be accorded respect and finality, as it has the expertise and
knowledge on account of its specialized jurisdiction overemployee compensation cases. Respondent’s
Arguments
In her Comment,21 respondent seeks the denial of the Petition, arguing relevantly that the "increased risk
theory," which applies to her, has been upheld in several decided cases; 22 that in disability compensation
cases, it is not the injury which is compensated for but rather the incapacity to work resulting in the
impairment of the employee’s earning capacity;23 and that while the ECC has the expertise and
knowledge relative to compensation cases, the CA isnot precluded from making its own assessment of
the case which goes against that of the ECC’s. Our Ruling
The Court denies the Petition.
22
In resolving this case, the case of Government Service Insurance System v. Baul 24 comes into mind and
lays the groundwork for a similar ruling. In said case, the Court held:
Cerebro-vascular accident and essential hypertension are considered as occupational diseases under
Nos. 19 and 29, respectively, of Annex "A" of the Implementing Rules of P.D. No. 626, as amended.
Thus, it is not necessary that there be proof of causal relation between the work and the illness which
resulted in the respondent’s disability. The open-ended Table of Occupational Diseases requires no
proof of causation. In general, a covered claimant suffering from an occupational disease is automatically
paid benefits.
However, although cerebro-vascular accident and essential hypertension are listed occupational
diseases, their compensability requires compliance with all the conditions set forth inthe Rules. In short,
both are qualified occupational diseases. For cerebro-vascular accident, the claimant must prove the
following: (1) there must be a history, which should be proved, of trauma at work (to the head
specifically) due to unusual and extraordinary physical or mental strain or event, or undue exposure to
noxious gases in industry; (2) there must be a direct connection between the trauma or exertion in the
course of the employment and the cerebro-vascular attack; and (3) the trauma or exertion then and there
caused a brain hemorrhage. On the other hand, essential hypertension is compensable only if it causes
impairment of function of body organs like kidneys, heart, eyes and brain, resultingin permanent
disability, provided that, the following documents substantiate it: (a) chest X-ray report; (b) ECG report;
(c) blood chemistry report; (d) funduscopy report; and (e) C-T scan.
The degree of proof required to validate the concurrence of the above-mentioned conditions under P.D.
No. 626 is merely substantial evidence, that is, such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion. What the law requires is a reasonable work connection and
not direct causal relation. It is enough that the hypothesis on which the workmen’s claim isbased is
probable. As correctly pointed out by the CA, probability, not the ultimate degree of certainty, is the test
of proof in compensation proceedings. For, in interpreting and carrying out the provisions of the Labor
Code and its Implementing Rules and Regulations, the primordial and paramount consideration is the
employee’s welfare. To safeguard the worker’s rights, any doubt as to the proper interpretation and
application must be resolved in [his] favor.
In the instant case, medical reports and drug prescriptions of respondent’s attending physicians
sufficiently support her claim for disability benefits. Neither the GSIS nor the ECC convincingly deny their
genuineness and due execution. The reports are made part of the record and there is no showing that
they are false or erroneous, or resorted to [for the purpose] of deceiving the Court, hence, are entitled to
due probative weight. The failure of respondent to submit to a full medical examination, as required by
the rules, to substantiate her essential hypertension, is of no moment. The law is that laboratory reports
such as X-ray and ECG are not indispensable prerequisites to compensability, the reason being that the
strict rules of evidence need not be observed in claims for compensation. Medical findings of the
attending physician may be received in evidence and used as proof[s] of the fact in dispute. The doctor’s
certification as to the nature of claimant’s disability may begiven credence as he orshe normally would
not make untruthful certification. Indeed, no physician inhis right mind and who is aware of the
far[-]reaching and serious effect that his or her statements would cause on a money claim against a
government agency would vouch indiscriminately without regarding his own interests and protection.
Significantly, evenmedical authorities have established that the exact etiology of essential hypertension
cannot be accurately traced:
The term essential hypertension has been employed to indicate those cases of hypertension for which a
specific endocrine or renal basis cannot befound, and in which the neural element may be only a
mediator ofother influences. Since even this latter relationship is not entirely clear, it is more properly
listed for the moment in the category of unknown etiology. The term essential hypertension defines
simply by failing to define; hence, it is of limited use except as an expression of our inability to
understand adequately the forces at work.25
It bears stressing, however, that medical experiments tracing the etiology of essential hypertension show
that there is a relationship between the sickness and the nature and conditions of work. In this
jurisdiction, we have already ruled in a number of cases the strenuous office of a public school teacher.
The case of Makabali v. Employees’ Compensation Commission, which we have re-affirmed in the
subsequent cases of De Vera v. Employees’ Compensation Commission, Antiporda v. Workmen’s
Compensation Commission, and De la Torre v. Employees’ Compensation Commission, amply
summarized, thus:
xxxx
The fact that the essential hypertension of respondent worsened and resulted in a CVA at the time she
was already out of service is inconsequential. The main consideration for its compensability is that her
illness was contracted during and by reason ofher employment, and any non-work related factor that
contributed to its aggravation is immaterial.
Indeed, an employee’s disability may not manifest fully at one precise moment in time but rather over a
period of time. It is possible that an injury which at first was considered to be temporary may later on
become permanent or one who suffers a partial disability becomes totally and permanently disabled from
the same cause. The right to compensation extends to disability due to disease supervening upon and
proximately and naturally resulting from a compensable injury. Where the primary injury is shown to have
arisen in the course of employment, every natural consequence that flows from the injury likewise arises
out of the employment, unless it is the result of an independent intervening cause attributable to
claimant’s own negligence or misconduct. Simply stated, all medical consequences that flow fromthe
primary injury are compensable.
P.D. No. 626, as amended, is said to have abandoned the presumption of compensability and the theory
of aggravation prevalent under the Workmen’s Compensation Act. Nonetheless, we ruled in Employees’
Compensation Commission v. Court of Appeals, that:
Despite the abandonment of the presumption of compensability established by the old law, the present
law has not ceased to be an employees’ compensation law or a social legislation; hence, the liberality of
the law in favor of the working man and woman still prevails, and the official agency charged by law to
implement the constitutional guarantee of social justice should adopt a liberal attitude in favor of the
employee in deciding claims for compensability, especially in light of the compassionate policy towards
labor which the 1987 Constitution vivifies and enhances. Elsewise stated, a humanitarian impulse,
dictated by no less than the Constitution itself under the social justice policy, calls for a liberal and
sympathetic approach to legitimate appeals of disabled public servants; or that all doubts to the right to
compensation must be resolved in favor of the employee or laborer. Verily, the policy is to extend the
applicability of the law on employees’ compensation to as many employees who can avail of the benefits
thereunder.26 (Emphasis supplied)
Also, in Government Service Insurance System v. De Castro,27 this Court made the following
pronouncement:
Other than the given facts, another undisputed aspect of the case is the status of the ailments that
precipitated De Castro’s separation from the military service – CAD and hypertensive cardiovascular
disease. These are occupational diseases. No less than the ECC itself confirmed the status of these
ailments when it declared that "Contrary to the ruling of the System, CAD is a form of cardiovascular
disease which is included in the list of Occupational Diseases." Essential hypertension is also listed
under Item 29 in Annex "A" of the Amended ECC Rules as an occupational disease.
Despite the compensable character of his ailments, both the GSIS and the ECC found De Castro’s CAD
to be non-work related and, therefore, noncompensable. To use the wording of the ECC decision, it
denied De Castro’s claim "due to the presence of factors which are not work-related, such as smoking
and alcohol consumption." De Castro’s own military records triggered this conclusion ashis Admitting
23
Notes, made when he entered the V. Luna General Hospital due to chest pains and hypertension, were
that he was a smoker and a drinker.
As the CA did, we cannot accept the validity of this conclusion at face value because it considers only
one side – the purely medical side – of De Castro’s case and even then may not be completely correct.
The ECC itself, in its decision, recites that CAD is caused, among others, by atherosclerosis of the
coronary arteries that in turn, and lists the following major causes: increasing age; male gender; cigarette
smoking; lipid disorder due to accumulation of too much fats in the body; hypertension or high blood
pressure; insulin resistance due to diabetes; family history ofCAD. The minor factors are: obesity;
physical inactivity; stress; menopausal estrogen deficiency; high carbohydrate intake; and alcohol.
We find it strange that both the ECC and the GSIS singled out the presence of smoking and drinking as
the factors that rendered De Castro’s ailments, otherwise listed as occupational, to be non-compensable.
To be sure, the causes of CAD and hypertension that the ECC listed and explained in its decision cannot
be denied; smoking and drinking are undeniably among these causes. However, they are not the sole
causes of CAD and hypertension and, at least, not under the circumstances of the present case. For this
reason, we fear for the implication of the ECC ruling if it will prevail and be read as definitive on the
effects of smoking and drinkingon compensability issues, even on diseases that are listed as
occupational in character. The ruling raises the possible reading that smoking and drinking, by
themselves, are factors that can bar compensability.
We ask the question of whether these factors can be sole determinants of compensability as the ECC
has apparently failed to consider other factors such as age and gender from among those that the ECC
itself listed as major and minor causes of atherosclerosis and, ultimately, of CAD. While age and gender
are characteristics inherent in the person (and thereby may be considered nonwork related factors), they
also do affect a worker’s job performance and may in this sense, together with stresses of the job,
significantly contribute to illnesses such as CAD and hypertension. To cite an example, some workplace
activities are appropriate only for the young (such as the lifting of heavy objects although these may
simply be office files), and when repeatedly undertaken by older workers, may lead to ailments and
disability. Thus, age coupled with an age-affected work activity may lead to compensability. From this
perspective, none of the ECC’s listed factors should be disregarded to the exclusion of others in
determining compensability.
In any determination of compensability, the nature and characteristics of the job are as important as raw
medical findings and a claimant’s personal and social history. This is a basic legal reality in workers’
compensation law. We are therefore surprised that the ECC and the GSIS simply brushed aside the
disability certification that the military issued with respect to De Castro’s disability, based mainly on their
primacy as the agencies with expertise on workers’ compensation and disability issues. 28 (Emphasis
supplied)
This case should not have been difficult for the petitioner to resolve on its own, given that so many cases
have been decided in the past which should have provided it the guiding hand to decide disability cases
on its own rightly – instead of putting claimants in the unfortunate position of having to chase the benefits
they are clearly entitled to, and waste years prosecuting their claims in spite of their adverse
circumstances in life. This Court should not have to parrot over and over again what clearly has been the
settled rule; in many ways, this is a waste of time, and it only indicates that petitioner has eithernot
learned its lesson, or it refuses to realize it.
Applying Bauland De Castro to the instant case and looking at the factual milieu, the Court agrees with
the CA’s conclusion and so declares that respondent’s illness is compensable. Respondent served the
government for 30 long years; veritably, as the ECC itself said, "[h]er duties were no doubt stressful and
the same may have caused her to develop her ailment, hypertension"29 – which is a listed occupational
disease, contrary to the CA’s pronouncement that itis not. And because it is a listed occupational
disease, the "increased risk theory" does not apply – again, contrary to the CA’s declaration; no proof of
causation is required.
It can also be said that given respondent’s age at the time, and taking into account the nature, working
conditions, and pressures of her work as court stenographer – which requires her to faithfully record
each and every day virtually all of the court’s proceedings; transcribe these notes immediately in order to
make them available to the court or the parties who require them; take down dictations by the judge, and
transcribe them; and type in final form the judge’s decisions, which activities extend beyond office hours
and without additional compensation or overtime pay 30 – all these contributed to the development of her
hypertension – or hypertensive cardiovascular disease, as petitioner would call it. 31 Consequently, her
age, work, and hypertension caused the impairment of vision in both eyes due to "advanced to late stage
glaucoma",which rendered her "legally blind."32
Contrary to petitioner’s submissions, there appears to be a link between blood pressure and the
development of glaucoma, which leads the Court to conclude that respondent’s glaucoma developed as
a result of her hypertension.
Although intra ocular pressure (IOP) remains an important risk factor for glaucoma, it is clear that other
factors can also influence disease development and progression. More recently, the role that blood
pressure (BP) has in the genesis of glaucoma has attracted attention, as it represents a clinically
modifiable risk factor and thus provides the potential for new treatment strategies beyond IOP reduction.
The interplay between blood pressure and IOP determines the ocular perfusion pressure (OPP), which
regulates blood flow to the optic nerve. If OPP is a more important determinant of ganglion cell injury
than IOP, then hypotension should exacerbate the detrimental effects of IOP elevation, whereas
hypertension should provide protection against IOP elevation. Epidemiological evidence provides some
conflicting outcomes of the role of systemic hypertension in the development and progression of
glaucoma. The most recent study showed that patients at both extremes of the blood pressure spectrum
show an increased prevalence of glaucoma. Those with low blood pressure would have low OPP and
thus reduced blood flow; however, that people with hypertension also show increased risk is more
difficult to reconcile. This finding may reflect an inherent blood flow dysregulation secondary to chronic
hypertension that would render retinal blood flow less able to resist changes in ocular perfusion
pressure.33 x x x (Emphasis and underscoring supplied)
In recent years, we’ve learned a lot about ocular perfusion pressure (OPP), i.e., the pressure difference
between blood entering the eye and IOP. It’s clear that three forces — OPP, IOP and blood pressure —
are interconnected in the glaucoma disease process. The mechanics of that relationship, however,
remain ambiguous.
xxxx
The ties between hypertension and glaucoma are less well established but the data, in addition to my
involvement in a new study (discussed below), have convinced me they probably do exist. Therefore, I
believe potential hypertension, along with potential low blood pressure, should be investigated in patients
whose glaucoma continues to progress despite what appears to be well controlled IOP.
xxxx
We suspect there is a close relationship among IOP, OPP, blood pressure and glaucoma, but the exact
nature of these associations remains elusive. Complicating matters is the physiological phenomenon
known as autoregulation.34
Abstract
Aims: To determine whether systemic hypertension and glaucoma might coexist more often than
expected, with possible implications for treatment.
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Methods: Case-control study using general practitioner database of patients with glaucoma matched with
controls for age and sex.

Results: Hypertension was significantly more common in the 27[,]080 patients with glaucoma (odds ratio
1.29, 95% confidence intervals 1.23 to 1.36, p<0.001) than in controls. x x x35

While some of the above conclusions are not definitive, it must be stressed that probability, not certainty,
is the test of proof in compensation cases." 36 It does not preclude the Court from concluding that
respondent’s hypertension – apart from her age, work, and working conditions – impaired her vision as a
result.

The Court likewise disregards the ECC’s finding, which petitioner relies upon, that the primary and
important risk factors for developing hypertension are smoking, excess body weight, high salt intake,
nutritional factors, high alcohol consumption, physical inactivity and psychological factors, including
stress. As the Court held in De Castro, these are not the sole causes of hypertension; age, gender, and
work stress significantly contribute to its development, and the nature and characteristics of the
employment are as important as raw medical findings and a claimant’s personal and social history.

Finally, while the ECC possesses the requisite expertise and knowledge in compensation cases, its
decision in respondent’s caseis nonetheless erroneous and contrary to law. The Court cannot uphold its
findings; its specialized training, experience and expertise did not serve justice well in this
case.1âwphi1 The medical certificates and relevant reports issued by respondent’s attending physicians
– Drs. Alfred I. Lim, Elmer Montes, and Salvador R. Salceda – as well as hospital records, 37 deserve
credence. The identical findings of these three eye specialists simply cannot be ignored.

In arriving at the above conclusions, the Court is well guided by the principles, declared in Bauland De
Castro, that probability, not certainty, is the test of proof in compensation cases;that the primordial and
paramount consideration is the employee’s welfare; that the strict rules of evidence need not be
observed in claims for compensation; that medical findings of the attending physician may be received in
evidence and used as proof of the facts in dispute; that in any determination of compensability, the
nature and characteristics of the job are as important as raw medical findings and a claimant’s personal
and social history; that where the primary injury is shown to have arisen in the course of employment,
every natural consequence that flows from the injury likewise arises out of the employment, unless it is
the result of an independent intervening cause attributable to claimant’s own negligenceor misconduct;
and that the policy is to extend the application of the law on employees’ compensation to as many
employees who can avail of the benefits thereunder.

WHEREFORE, the Petition is DENIED. The assailed October 30, 2009 Decision and February 23, 2011
Resolution of the Court of Appeals in CA-G.R. SP No. 85908 are AFFIRMED.

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