G.R. No. L-9868 June 28, 1957
REPUBLIC OF THE PHILIPPINES, petitioner, vs. CESAREO DE LEON, in his capacity as Commissioner of the Workmen’s Compensation Commission, and HILARIO ASENDIDO, respondents.

FACTS

Hilario Asendido was an emergency laborer employed in the Division of Ports and Harbors of the Bureau of Public Works from May 22, 1950, to December 31, 1952. His work involved mixing cement, cleaning the pier deck, and operating a jack-hammer. On December 31, 1952, he coughed blood and was later diagnosed with active pulmonary tuberculosis. He resigned on January 3, 1953. Asendido filed a claim with the Workmen’s Compensation Commission. After hearings where the Bureau of Public Works was represented by its Legal Division attorney, Referee Priscila Argonza Medina rendered a decision on February 14, 1955, awarding compensation and benefits to Asendido, holding the Bureau of Public Works liable. The Bureau received the decision on February 26, 1955, and forwarded it to the Solicitor General. The Solicitor General filed a petition for relief with the Commission, arguing that the Republic of the Philippines was the proper party in interest as the judgment involved government financial liability, that the Republic was not notified through the Solicitor General’s Office, and that the Bureau’s counsel had no authority to represent the Government in such proceedings. This petition was denied. The Solicitor General then filed a petition for review, which was denied by the Referee for failure to attach an affidavit of merit. The Workmen’s Compensation Commissioner affirmed the Referee’s judgment. The Republic of the Philippines, through the Solicitor General, appealed to the Supreme Court.

ISSUE

Whether the Republic of the Philippines is an indispensable party in the case and, consequently, whether the Workmen’s Compensation Commission acted in excess of jurisdiction by issuing orders against the Bureau of Public Works without the Republic being duly notified and represented.

RULING

The Supreme Court ruled in favor of the petitioner, the Republic of the Philippines. The Court held that the Bureau of Public Works is an agency of the Executive branch, and its operations are funded by the National Government. It performs governmental functions and is not an employer in the business sense under the Workmen’s Compensation Act. An action involving financial liability against such a government agency is an action against the Government itself. Therefore, the proper party defendant should have been the Republic of the Philippines. Since the Republic was not notified through its statutory counsel, the Solicitor General, it was deprived of its day in court, rendering the proceedings before the Referee null and void as to the Republic. The Court also held that an affidavit of merit was not necessary for the petition for review filed by the Solicitor General, as the petition directly assailed the jurisdiction of the Commission over the person of the proper party. An attack on jurisdiction does not require an affidavit of merit, which is meant to show a meritorious defense. Consequently, the decision of the Referee and the affirming order of the Commissioner were set aside. The case was ordered remanded for a new trial after giving proper notice to all parties, including the Republic of the Philippines.