G.R. No. L-46992 March 31, 1980
FRANCISCO CANEJA, petitioner, vs. EMPLOYEES’ COMPENSATION COMMISSION and GOVERNMENT SERVICE INSURANCE SYSTEM, respondents.

FACTS

Petitioner Francisco Cañeja was a classroom teacher in Leyte. His service record, beginning in 1950, was marked by several interruptions due to schizophrenia. He was hospitalized for this illness in 1961-1962, 1966-1967, and 1973, and received outpatient treatment intermittently until 1976. He alleged that his condition began after a traumatic incident while serving as a poll clerk in the 1959 elections. His employer reported an illness in December 1972 that prevented his return to work in January 1973, though records suggest he may have served intermittently thereafter. He filed a claim for disability benefits under P.D. No. 626 with the GSIS on July 30, 1976.
The GSIS denied the claim, asserting schizophrenia is not an occupational disease. The Employees’ Compensation Commission affirmed the denial, adding that even if the old Workmen’s Compensation Act applied, the claim had prescribed as it was filed after March 31, 1975, the deadline set for transitional claims under the new law.

ISSUE

Whether petitioner’s claim for disability compensation is compensable and has not prescribed.

RULING

The Supreme Court granted the petition, ruling in favor of Cañeja. The legal logic is anchored on the application of the Workmen’s Compensation Act, not the New Labor Code (P.D. 626), because the illness and the disabling events occurred prior to its effectivity on January 1, 1975. Under the old Act, once an illness supervenes in the course of employment, a rebuttable presumption arises that it is work-connected or work-aggravated. The employer bears the burden to disprove this connection by substantial evidence. Here, Cañeja’s schizophrenia manifested and recurred during his employment, and his employer never controverted the claim. This failure made the presumption of compensability conclusive.
On the issue of prescription, the Court held that claims under the Workmen’s Compensation Act prescribe in ten years pursuant to the Civil Code, not by the transitional deadline under the new law. The prescriptive period commences from the time of disability. Cañeja’s disability, particularly from the 1972-1973 illness, occurred well within ten years of his 1976 claim. Furthermore, the Court noted that his reinstatements after prior episodes created separate periods of employment and potential liability, with the employer assuming the risk of recurrence upon each rehiring. Thus, the claim was timely and compensable. The GSIS was ordered to pay disability benefits, medical reimbursement, attorney’s fees, and costs.