MALAYSIAN INTERNATIONAL SHIPPING CORPORATION and BOTELHO MARITIME AGENCIES, INC., petitioners, vs. MARCOS LARIZA, NATIONAL SEAMEN’S BOARD and HON. BLAS F. OPLE, respondents.
FACTS
Marcos Lariza was employed as Chief Engineer by petitioner Malaysian International Shipping Corporation. On December 27, 1976, while on duty, he fractured his left knee, necessitating surgery and removal of his left patella. After repatriation and further medical treatment, Lariza filed a complaint before the National Seamen’s Board (NSB) for disability benefits. The NSB, affirming the Labor Arbiter, awarded him US$24,000 for “permanent total disablement” under Item 7 of a “Scale of Compensation” attached to his employment contract. Petitioners denied the Scale was part of the contract and contested the classification of the disability as total.
ISSUE
Whether Lariza’s knee injury constituted permanent total disability warranting full compensation under the employment contract’s Scale of Compensation.
RULING
The Supreme Court modified the NSB decision, ruling that Lariza’s disability was permanent partial, not total. The legal logic centered on the definition of permanent total disability. The Court held it means an impairment rendering it impossible for the insured to follow any substantially gainful occupation continuously for life. Medical reports indicated Lariza’s left knee injury resulted in limited flexion and pain, but he retained fair activity tolerance and had even consulted for a pre-employment medical examination. This demonstrated his earning power was not wholly destroyed. The Court analogized to a precedent where a truck driver with an injured arm, who could still work albeit slower, was deemed partially disabled. Consequently, Lariza’s condition did not meet the threshold for total disability. However, the Scale of Compensation was deemed part of the contract as a factual finding by the NSB. Therefore, Lariza was entitled under Item 5 for “Loss of one limb” (interpreted as loss of use), granting 50% of the US$24,000 Chief Engineer benefit, amounting to US$12,000. The award was to be computed at the exchange rate when the Labor Arbiter rendered judgment.
