10/20/21, 10:16 PM PHILIPPINE REPORTS ANNOTATED VOLUME 101

[Nos. L-10308 and L-10385-8. April 30, 1957]

MARIA PAZ S. ALBA, ETC., ET AL., petitioners, vs. DR.

HoRACIO BULAONG, ET AL., ETC., respondents.

1. WORKMEN'S COMPENSATION LAW; INJURED EMPLOYEE

MAY NOT RECOVER TWICE FOR SAME INJURY.—The plain
intent of Section 6 of the Workmen's Compensation Law is that an
injured employee shall not receive payment twice for the same
injury (from the third party and from the employer).

2. ID.; ID.; INJURED EMPLOYEE ENTITLED TO FULL

COMPENSATION.—Where the injured employee is offered, by
the third party, compensation which he deems insufficient, he may
reject it and thereafter litigate with such party; or choose instead to
complain against his employer; or accept such insufficient
compensation but expressly reserving at the same time his right to
recover additional damages from his employer. In the latter case the
amount received from the third party shall be deducted from the
amount payable by the employer.

PETITION for review by certiorari of a decision of the Workmen's

Compensation Commission.
The facts are stated in the opinion of the Court.
435

VOL. 101, APRIL 30, 1957 435

Alba, et al. vs, Bulaong, et al.

Abad Santos & Pablo for petitioners.

Antonio C. Masaquel and Adaucto P. Ocampo for respondents.

BENGZON, J.:

This is a petition to reverse the decision of the Commissioner of the

Workmen's Compensation Commission in five cases denying the
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claims for compensation, against Dr. Horacio Bulaong, of herein

petitioners, who were his employees and dependents of his
employees.
On March 12, 1955, petitioners Gregorio de la Cruz, Pedro C.
Bulaong and Pacifico Bulaong were employees of Dr. Horacio
Bulaong in his business of threshing palay. Other employees were
Engracio Alba (husband of petitioner Maria Paz S. Alba) and
Vicente A. Sebastian (husband of petitioner Elisea S. Sebastian).
Early in the morning of that day said five employees were, upon
specific orders of Dr. Bulaong, on their way to Barrio Baringan,
Malolos, Bulacan, to thresh palay, riding on a tractor which was
pulling a threshing machine. Suddenly a speeding bus of the Victory
Liner Inc. collided with the thresher which in turn hit the tractor, and
as a result those on board were violently thrown out. Engracio Alba
and Vicente Sebastian died; Gregorio de la Cruz, Pedro C. Bulaong
and Pacifico Bulaong sustained physical injuries.
WHEREFORE, five separate claims were filed before the
Workmen's Compensation Commission against the employer Dr.
Bulaong. Three defenses were set up by him: (a) claimants were not
his employees, but industrial partners, (b) the injuries were not
sustained in the course of employment and (c) the claims, if any, had
been extinguished by virtue of the monetary settlements which
petitioners had concluded with the Victory Liner Inc.
The referee overruled the defenses, having found the five men to
be employees who had died or were injured in the course of
employment. Consequently he required the employer to make
compensation in the amounts specified in his award. However on
appeal, the Work-

436

436 PHILIPPINE REPORTS ANNOTATED

Alba, et al. vs. Bulaong, et al.

men's Compensation Commissioner absolved Dr. Bulaong from all

liability, because he found that the claimants had received, after the
mishap, various amounts of money from the owner of the colliding
bus, the Victory Liner Inc., each of them having executed a written
release or waiver in favor of said Liner, the pertinent part of which
reads as follows:

"And I likewise freely and completely cede and transfer into said Company
(Victory Liner Inc.) any right given to me by law against any person or
company that should be liable for the said accident except my right to claim
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against Dr. Horacio Bulaong in accordance with and under the Workmen's
Compensation Act (Rep. Act 772)."

Claimants, the Commissioner declared, had elected to hold the Liner

responsible for the accident, and could not thereafter turn around to
recover compensation from their employer. He cited section 6 of the
Workmen's Compensation Law, which for convenience is quoted:

"SEC. 6. Liability of third parties.—In case an employee suffers an injury

for which compensation is due under this Act by any other person besides
his employer, it shall be optional with such injured employee either to claim
compensation from his employer, under this Act, or sue such other person
for damages, in accordance with law; and in case compensation is claimed
and allowed in accordance with this Act, the employer who paid such
compensation or was found liable to pay the same, shall succeed the injured
employee to the right of recovering from such person what he paid:
Provided, That in case the employer recovers from such third person
damages in excess of those paid or allowed under this Act, such excess shall
be delivered to the injured employee or any other person entitled thereto,
after deduction of the expenses of the employer and the costs of the
proceedings. The sum paid by the employer for compensation or the amount
of compensation to which the employee or his dependents are entitled under
the provisions of this Act, shall not be admissible as evidence in any
damage suit or action." (As amended.)

Naturally the argument before this Court dwelt mostly on the

interpretation of the above section,and its application to the
circumstances of record. There was no election, petitioners contend,
to recover from the Liner to the ex-

437

VOL. 101, APRIL 30, 1957 437

Alba, et al. vs. Bulaong, et al.

clusion of Dr. Bulaong, because the document itself signed by

petitioners reserved their right to claim against Dr. Horacio Bulaong
under the Workmen's Compensation Act."
Such reservation, counter the respondents, besides being void and
against the law, cannot bind Dr. Bulaong who was not a party to the
instrument.
There is no question that the Liner was a "third party" within the
meaning of section 6. There is also no question that petitioner have
not sued the Liner for damages. Wherefore they are not deemed to

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have made the election specified in section 6. However, the plain

intent of the law is that they shall not receive payment twice for the
same injuries (from the third party and from the employer). Hence if
without suing they receive f ull damages from the third party, they
should be deemed to have practically made the election under the
law, and should be prevented from thereafter suing the employer.
Full damages means, of course what they would have demanded in a
suit against the third party or what they would receive in a
compensation as complete settlement. Needless to say, where the
injured employee is offered, by the third party, compensation which
he deems insufficient, he may reject it and thereafter litigate with
such third party. Or choose instead to complain against his employer.
Nevertheless there is nothing in the law to prevent him from
accepting such insufficient compensation but expressly reserving at
the same time his right to recover additional damages from his
employer. If the third party agrees to the reservation, such partial
payment may legally be made and accepted. We say "if", because
the reservation necessarily entails some disadvantage to the third
party, inasmuch as pursuant to legal principles when the employer
subsequently pays, he may in turn recover from the third party (See
sec. 6). The employer can not validly object to such reservation by
the employee, because in effect the settlement helps to reduce the
amount he will afterwards have to disgorge.

438

438 PHILIPPINE REPORTS ANNOTATED

Alba, et al. vs. Bulaong, et al.

As we see it, the five employees' acceptance of the Victory Liner's

offer of compensation, under the circumstances disclosed by this
record, especially the written acknowledgments, showed they were
not content with the amount received—they did not consider it
sufficient—so they reserved their right to require additional compen-
sation from their employer. Hence their action against Dr. Bulaong is
not barred by section 6. He may in turn demand reimbursement from
Victory Liner Inc.
The implied reservation of Dr. Bulaong's right against Victory
Liner Inc. is not unprecedented in the realm of jurisprudence. When
a promissory note is dishonored for non-payment, the holder may
recover its value either from the maker or from the indorser. If he
sues the indorser and recovers, the latter may in turn recoup from the
maker. The statute expressly permits him to renounce his right

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against the maker and reserve his right to recover from the indorser
(Sec. 120 (e) Negotiable Instruments Law). When that happens, the
courts say the indorser's right to recover from the maker is also
reserved. (Bootman's Sav. Bank vs. Johnson, 24 Mo. App. 317;
1
Tolentino Commercial Laws Vol. I (7th Ed.) p. 361. )
In the situation resulting after the collision, we could regard the
five employees, the Victory Liner and Dr. Bulaong in the same
juridical position, respectively, of holder, maker and indorser. The
release with express reservation produced the implied reservation
already stated.
What then, it may be asked, was the advantage accruing to the
Liner from the settlement it had worked to accomplish? For one
thing its driver would not be prosecuted by petitioners; besides
earning such driver's gratitude, the Liner thereby avoided losses in
time and services. For another, even if afterwards it should be

_______________

1 The same implied reservation is admitted where holder of negotiable instrument

waives right against first indorser but reserves his right to sue the second indorser.
The latter's right against first indorser is impliedly reserved.

439

VOL. 101, APRIL 30, 1957 439

Magalona & Co. vs. Workmen's Compensation Commissioner, et al.

liable to the employer for whatever the latter might have to satisfy,
the Liner could expect the settlement between employer and
employees to be reasonable considering their relationship, more
reasonable perhaps than a settlement between itself and the injured
employees.
It is therefore our view that the moneys received from Victory
Liner Inc. did not necessarily have the effect of releasing Dr.
Bulaong. Inasmuch as the five men were his employees, and they
were injured by reason of and in the course of their employment, he
must pay compensation to be fixed in accordance with law. Bearing
in mind, however, the law's intention not to give double
compensation, the amounts they have received from the Victory
Liner shall be deducted from the sums so determined.
In this connection we notice that the referee who has investigated
the matter has made some calculations of monetary award. However
they were not passed upon by the Commissioner.

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Wherefore, for the purpose of ascertaining and awarding such

compensation to petitioners, the record will be remanded to the
Workmen's Compensation Commission for further action in
accordance with this opinion. No costs. So ordered.

Padilla, Reyes, A., Bautista Angelo, Labrador, Concepción,

Endencia, and Felix, //., concur. Montemayor, J., concurs in the
result.

Case remanded to Workmen's Compensation Commission for

further action.

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