G.R. No. L-5628 October 29, 1952
MANILA RAILROAD COMPANY, petitioner, vs. THE INDUSTRIAL TRIBUNAL AND “KAP. NG MGA MANGGAGAWA SA MRR.”, respondents.

FACTS

The Manila Railroad Company appealed via certiorari against an order of the Industrial Tribunal dated January 16, 1952. The order directed the company to pay the heirs of its deceased employee, Alfonso Sanchez, the sum of P1,202.67, equivalent to five months and fourteen days of his accumulated unused leave. Alfonso Sanchez died while in the service of the company. The company’s own memorandum in a related case (No. 270-V) stated that since 1936, its laborers and employees had been enjoying vacation and sick leave, which was later increased to 30 days and made cumulative. Unused leave was carried over to succeeding years, and upon resignation or extended sickness, a laborer was entitled to the money equivalent of his unused leave not exceeding five months, unless separated for cause, in which case it was deemed forfeited. The company argued that if it paid the heirs for the accumulated leave, it would lose the chance to recover the payment should the employee later commit an offense warranting forfeiture, a possibility extinguished by the employee’s death.

ISSUE

Whether the heirs of a deceased employee, who died while in service, are entitled to receive the monetary equivalent of the employee’s accumulated unused vacation and sick leave.

RULING

Yes. The Supreme Court affirmed the order of the Industrial Tribunal. The Court found no reason why the heirs of Alfonso Sanchez should not receive the value of his accumulated leave. By operation of law, the deceased’s rights and properties are transmitted to his heirs. The Court cited its prior decision in *Manila Railroad Company vs. Court of Industrial Relations and Kapisanan ng mga Manggagawa sa Manila Railroad* (G.R. No. L-4616, promulgated July 31, 1952), which confirmed an Industrial Tribunal order for the payment of accumulated vacation leave to the heirs of another deceased employee, Tomas Gutierrez. The heirs of Alfonso Sanchez, who died in the performance of his duty, deserve equal or better consideration than those of employees who resign. The Court emphasized that government-capitalized corporations should set an example in complying with decisions and orders in social legislation disputes, as their primary purpose is not to reap large profits but to improve service and foster the welfare of their workers, especially the heirs of those who die in the line of duty. The appealed order was confirmed with costs against the petitioner.