G.R. No. L-42319. July 31, 1978.
B. F. GOODRICH PHILIPPINES, INC., petitioner, vs. WORKMEN’S COMPENSATION COMMISSION, TEODOLFO OCHIA, ISABELA SECURITY AND WATCHMEN AGENCY, represented herein by its MANAGER, PASTOR T. NERI, respondents.

FACTS

Petitioner B.F. Goodrich Philippines, Inc. owned a rubber plantation in Basilan. For its security, it entered into a “Private Security Service Agreement” with respondent Isabela Security and Watchmen Agency, a licensed private security agency. The contract stipulated that the Agency would supply security guards for a monthly fee and explicitly held B.F. Goodrich free from any liability under laws like the Workmen’s Compensation Act for claims filed by the guards. A supplemental contract later required the Agency to post a performance bond and secure workmen’s compensation insurance for all guards assigned to the plantation.
Pursuant to this contract, the Agency assigned security guard Jose Ochia to the plantation. On May 16, 1974, Ochia was killed during an encounter between Muslim rebels and Philippine Army forces, which included the plantation’s security guards. His father, Teodolfo Ochia, filed a claim for death compensation. The Workmen’s Compensation Unit, and later the Commission en banc, held B.F. Goodrich solely liable as the statutory employer of the deceased guard, ordering it to pay compensation benefits.

ISSUE

Whether the Workmen’s Compensation Commission erred in not holding the Isabela Security and Watchmen Agency jointly liable or liable for reimbursement to B.F. Goodrich for the death compensation awarded, despite the contractual stipulations between them.

RULING

Yes, the Commission erred. The Supreme Court affirmed the finding that B.F. Goodrich is the statutory employer under the Workmen’s Compensation Act, as the deceased security guard was rendering services for the benefit and within the premises of the company. This aligns with the doctrine established in Universal Corn Products, Inc. vs. Workmen’s Compensation Commission.
However, the Court modified the Commission’s decision by applying its ruling in Aboitiz & Co., Inc. vs. Workmen’s Compensation Commission, which involved substantially identical facts. The legal logic is that while the principal (B.F. Goodrich) is directly liable to the employee’s heirs under the Act as the statutory employer, this does not nullify the separate contractual obligations between the principal and the security agency. The “Private Security Service Agreement” and supplemental contract clearly stipulated that the Agency assumed full liability for all compensation claims and secured this obligation with a performance bond. Therefore, the Agency is liable to reimburse the principal for all amounts paid to the claimant.
Consequently, the Court ordered the Isabela Security and Watchmen Agency to reimburse B.F. Goodrich for all sums adjudged against the latter. It further authorized B.F. Goodrich to proceed directly against the Agency’s P20,000.00 performance bond in the same proceedings to satisfy this reimbursement. The award of death compensation to the claimant against B.F. Goodrich was sustained.