Anastacio Viaña vs. Alejo Al-lagadan and Filomena PigaG.R. No. L-8967, May 31, 1956

FACTS: Anastacio Viaña owned the fishing sailboat “Magkapatid” which sunk on the night of September 3, 1948 between Bataan and Corregidor as a result of a collision with the US vessel USS Tingles. Alejandro Al-lagadan disappeared with the sailboat and his parents, Alejo Al-lagadan and Filomena Piga, filed a claim for compensation under Act 3428. The Workmen’s Compensation Commission (WCC) rendered a decision ordering Viaña to pay Alejo and Filomena the sum of ₱1,500 in lump sum with 6% interest from Sept. 3, 1948 until fully paid and the sum of ₱16 to the WCC as costs. WCC Commissioner affirmed the aforesaid decision with an additional fee of ₱5. Motion for Reconsideration by Viaña was denied.

ISSUE: (1) Does the case at bar fall within the purview of Act 3428 if the annual income of a business is less than ₱10,000? (2) Is Alejandro Al-lagadan an employee of petitioner?

RULING: (1) Yes, since petitioner only brought up the applicability of Act 3428 when it was brought to the Court for review. The non-applicability of said Act to employers whose gross annual income is less than ₱20,000 cannot be availed of unless pleaded in the employer’s answer to the claim for compensation filed by the employee or his heirs. Petitioner having thus failed to do so, said defense may not now be entertained. (2) It is not clear. In determining the existence of employer-employee relationship, the following elements are generally considered: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; (d) the power to control the employee’s conduct – the latter being the most important. The first element, considering the facts, are insufficient to warrant a reasonable conclusion, one way or the other, since the practice commonly followed is on a share basis, that is, the hiring of the crew is done by the patron himself and not the owner of the batel. When a patron enters into a contract with the ship owner, he already has a crew with him. This suggests that the members of the crew are chosen by the patron. But the report does not indicate if said practice was used in case at bar. On the other hand, petitioner contends that Alejandro was his partner, and that therefore, if the crew was selected and engaged by the “patron”, the latter did so as agent of petitioner. If petitioner were a partner of crew members, then neither the former nor the patron could control or dismiss the latter.

Case is remanded to the WCC for further evidence and findings on the following questions: (1) who selected the crew of “Magkapatid”, (2) if selected and engaged by the patron, did he do so in his own name and for his own account or on behalf and for the account of Viaña, (3)could Viaña have refused to accept any of the crew members chosen and engaged by the patron, (4) did petitioner have authority to determine the time when, the place where and/or manner or conditions where the crew would work and (5) who could dismiss workers.