G.R. No. L-10308 and L-10385-8; April 30, 1957
MARIA PAZ S. ALBA, ETC., ET AL., petitioners, vs. HORACIO BULAONG, ET AL., ETC., respondents.

FACTS

On March 12, 1955, petitioners Gregorio de la Cruz, Pedro C. Bulaong, and Pacifico Bulaong were employees of Dr. Horacio Bulaong in his palay-threshing business. Other employees were Engracio Alba (husband of petitioner Maria Paz S. Alba) and Vicente A. Sebastian (husband of petitioner Elisea S. Sebastian). That morning, upon Dr. Bulaong’s orders, these five employees were on their way to Barrio Baringan, Malolos, Bulacan, to thresh palay, riding on a tractor pulling a threshing machine. A speeding bus of Victory Liner Inc. collided with the thresher, which hit the tractor, violently throwing the occupants out. Engracio Alba and Vicente Sebastian died; Gregorio de la Cruz, Pedro C. Bulaong, and Pacifico Bulaong sustained physical injuries.
Five separate claims for compensation were filed against employer Dr. Bulaong before the Workmen’s Compensation Commission. Dr. Bulaong raised three defenses: (a) claimants were not employees but industrial partners; (b) the injuries were not sustained in the course of employment; and (c) the claims had been extinguished by monetary settlements petitioners concluded with Victory Liner Inc. The referee overruled the defenses, finding the five men were employees injured in the course of employment, and awarded compensation. On appeal, the Workmen’s Compensation Commissioner absolved Dr. Bulaong from liability because petitioners had received various amounts from Victory Liner Inc. after executing written releases in favor of the Liner. Each release contained a clause stating the claimant ceded and transferred to Victory Liner Inc. any right against any person liable for the accident, “except my right to claim against Dr. Horacio Bulaong in accordance with and under the Workmen’s Compensation Act (Rep. Act 772).” The Commissioner held petitioners had elected to hold the Liner responsible and could not thereafter recover from their employer, citing Section 6 of the Workmen’s Compensation Law.

ISSUE

Whether the acceptance of compensation from Victory Liner Inc. (a third party) under releases expressly reserving the right to claim against the employer under the Workmen’s Compensation Act bars the employees’ (or their dependents’) action for compensation against said employer.

RULING

No. The action against employer Dr. Bulaong is not barred by Section 6 of the Workmen’s Compensation Law. The Court interpreted Section 6, which gives an injured employee the option to either claim compensation from the employer under the Act or sue a third party for damages. The law’s plain intent is to prevent the employee from receiving double payment for the same injuries. However, there is nothing in the law to prevent an employee from accepting insufficient compensation from a third party while expressly reserving the right to recover additional damages from the employer. The written releases signed by petitioners showed they were not content with the amount received from the Liner, as they expressly reserved their right to claim against Dr. Bulaong under the Workmen’s Compensation Act. Hence, their action against him is not barred. The employer may, in turn, demand reimbursement from the third party (Victory Liner Inc.) under Section 6. To avoid double compensation, the amounts received from the Liner shall be deducted from the compensation sums determined to be due from the employer. The record was remanded to the Workmen’s Compensation Commission to ascertain and award such compensation.