G.R. No. L-19258; May 31, 1963
MANILA YACHT CLUB, INC., petitioner, vs. WORKMEN’S COMPENSATION COMMISSION and RAMON LAGAO, respondents.

FACTS

The Manila Yacht Club, Inc. was ordered by Regional Office No. 3 of the Department of Labor to pay the workmen’s compensation claim of its employee, Ramon Lagao. Lagao, a marine engineer and mechanic, was found to have contracted tuberculosis due to the nature of his employment. The Club’s motion for reconsideration was denied, and the case was elevated to the Workmen’s Compensation Commission for review.
While the case was pending before the Commission, the Club filed a “Motion to Dismiss Claim and/or for Rehearing.” It argued that as a non-profit, non-stock corporation not engaged in any trade for gain, the Workmen’s Compensation Act did not apply to it. Consequently, it contended that both the Regional Office and the Commission lacked jurisdiction over the claim. The Commission denied this motion and subsequently affirmed the award of compensation, medical expenses, attorney’s fees, and administrative fees to Lagao.

ISSUE

Whether the Workmen’s Compensation Commission acquired jurisdiction over the claim despite the petitioner’s belated assertion that it is a non-profit entity to which the Workmen’s Compensation Act does not apply.

RULING

The Supreme Court dismissed the petition, upholding the Commission’s jurisdiction. The Court clarified the distinction between jurisdictional facts and affirmative defenses under the Workmen’s Compensation Act. The existence of an employer-employee relationship is the fundamental jurisdictional foundation for a compensation claim. Sections 2 and 46 of the Act mandate the Commission’s jurisdiction over claims arising from employment-related injuries or illnesses where such a relationship exists.
The petitioner’s claim of being a non-profit organization, and thus excluded under Section 39(d)’s definition of “industrial employment” as work “exercised by an employer for the purpose of gain,” was deemed an affirmative defense. This defense, akin to the defense of having a capital of less than P10,000, is not jurisdictional. It is a matter that benefits the employer and must be pleaded and proven at the earliest opportunity; otherwise, it is deemed waived. The Court cited precedent, including Rolan v. Perez, establishing that such defenses favorable to the employer carry the burden of proof.
Since the Manila Yacht Club failed to raise this defense during the hearings before the Regional Office, it was waived. The Hearing Officer was deprived of the opportunity to make a factual finding on the matter. The defense was raised only on appeal before the Commission, which was too late. Therefore, the Commission correctly exercised its jurisdiction based on the established employer-employee relationship and properly affirmed the compensation award.