G.R. No. 79664 August 11, 1992
ANDRES VILLAVILLA and ESTER GADIENTE VILLAVILLA, petitioners, vs. COURT OF APPEALS, SOCIAL SECURITY COMMISSION, REYNALDO MERCADO, and MARCELO COSUCO, respondents, SOCIAL SECURITY SYSTEM, intervenor.

FACTS

Petitioners Andres Villavilla and Ester Gadiente Villavilla are the parents of Arturo Villavilla, who was employed as a crew member (“tripulante”) of the fishing boat “F/B Saint Theresa” from 1974 until September 11, 1977, when the boat sank off Isla Binatikan, Taytay, Palawan. Arturo was missing and not among the known survivors. On November 20, 1979, petitioners filed a petition with the Social Security Commission against Reynaldo Mercado and Marcelino Cosuco, alleged owners of the fishing boat, for death compensation benefits, claiming respondents failed to register Arturo as their employee. Respondent Cosuco claimed he had sold the boat to Mercado on December 10, 1975, and was no longer involved. Mercado was declared in default. The Social Security System (SSS) intervened, stating the boat was a registered member-employer and that if employment was proven, respondents should be liable for damages for failure to report Arturo for coverage. After petitioners presented evidence, Cosuco filed a motion to dismiss. The Social Security Commission dismissed the petition for lack of cause of action, which the Court of Appeals affirmed.

ISSUE

The primary issue is whether an employer-employee relationship existed between the deceased Arturo Villavilla and private respondents Reynaldo Mercado and Marcelino Cosuco, which would make Arturo subject to compulsory coverage under the Social Security Act and entitle petitioners to death benefits.

RULING

The Supreme Court ruled that NO employer-employee relationship existed. The arrangement between the boat owner and the crew members, including Arturo, was a joint venture, not an employment relationship. The evidence, particularly testimonies from witnesses for petitioners (Captain Pedro Matibag and crew member Gil Chua), showed that: (1) the crew did not receive fixed salaries but shared in the catch; (2) the boat owner supplied the boat, equipment, and provisions but did not control or supervise the fishing operations; (3) the crew decided when, where, and how long to fish; and (4) the boat owner did not hire the crew members directly—they joined upon the ship master’s invitation. There was no right of control by the boat owner over the crew. Citing Pajarillo v. Social Security System, the Court held such a sharing arrangement constitutes a joint venture where parties contribute equipment and labor, respectively, and share in the output, exempting them from compulsory SSS coverage. Consequently, private respondents did not violate the Social Security Act by not registering Arturo, and petitioners were not entitled to death benefits. The decision of the Court of Appeals was AFFIRMED.