ANASTACIO VIAÑA vs.

ALEJO AL-LAGADAN and Furthermore, the report contained that the patron selects and
FILOMENA PIGA engages the crew, and also, that the members thereof are
G.R. No. L-8967. subject to his control and may be dismissed by him. To put it
May 31, 1956 differently, the literal import of said report is open to the
conclusion that the crew has a contractual relation, not with
the owner of the vessel, but with the patron, and that the latter,
FACTS: not the former, is either their employer or their partner.

The fishing sailboat “Magkapatid”,owned by Anastacio Viana, The case was remanded to the Workmen’s Compensation
had a collision with a U.S. Navy vessel and sunk to the waters. Commission, for further proceedings in conformity with the
Alejandro Al-Lagadan, a member of the crew of the former decision of the Supreme Court.
disappeared with the craft. Workmen’s Compensation
Commission ordered Anastacio Viana to pay the claimants,
Alejo Al-Lagadan and Filomena Piga. Petioner said, however,
that this case does not fall within the purview of Act No. 3428,
because Alejandro Al-Lagadan was, at the time of his death,
industrial partner, not his employee. He further contended that
they were in a share basis— owner of the vessel, on one hand
receives one-half of the earnings of the sailboat, the other half
is divided pro rata among the members of the crew. The trial
referee said, as well as the Workmen’s Compensation
Commission that there was an employer-employee relation
between the Respondent and the deceased, Alejandro Al-
Lagadan, and the share which the deceased received at the end
of each trip was in the nature of ‘wages’ which is defined
under section 39 of the Compensation Act. This is so because
such share could be reckoned in terms of money. In other
words, there existed the relation of employer and employee
between the Respondent and Alejandro Al-Lagadan at the time
of the latter’s death.

ISSUE

Whether or not the mere fact that a person’s share in the

understanding “could be reckoned in terms of money”,
sufficed to characterize him as an employee of another.

HELD:

No, the Court did not share with the Trial Referee and
Commission’s view. However, petitioner’s theory to the
effect that the deceased was his partner, not an employee,
simply because he (the deceased) shared in the profits, not in
the losses cannot be accepted. In determining the existence of
employer-employee relationship, the following elements are
generally considered, namely:(1) the selection and
engagement of the employee; (2) the payment of wages; (3)
the power of dismissal;(4) the power to control the employees’
conduct — although the latter is the most important element
(35 Am. Jur. 445). Assuming that the share received by the
deceased could partake of the nature of wages and that the
second element, therefore, exists in the case at bar, the record
does not contain any specific data regarding the third and
fourth elements.
[G.R. No. L-8967. May 31, 1956.] deceased was his industrial partner, not employee. In this
connection, it is alleged in paragraph (6) of the petition:
ANASTACIO VIAÑA, Petitioner, vs. ALEJO AL-
LAGADAN and FILOMENA PIGA, Respondents. “That the practice observed then and now in engaging the
services of crewmen of sailboats plying between Mindoro and
Manila is on a partnership basis, to wit: that the owner of the
CONCEPCION, J.: vessel, on one hand receives one-half of the earnings of the
sailboat after deducting the expenses for the maintenance of
Petitioner Anastacio Viaña owned the fishing sailboat the crew, the other half is divided pro rata among the members
“Magkapatid”, which, in the night of September 3, 1948, sunk of the crew, the ‘patron’ or captain receiving four parts, the
in the waters between the province of Bataan and the island of ‘piloto’ or next in command three parts, the wheelsman or
Corregidor, as a consequence of a collision with the USS ‘timonel’ 1 1/2 parts and the rest of the members of the crew
“TINGLES”, a vessel of the U.S. Navy. Inasmuch as one part each, as per Annex ‘B’ hereof.”
Alejandro Al-Lagadan, a member of the crew of the
“Magkapatid”, disappeared with the craft, his parents, It appears that, before rendering his aforementioned decision,
Respondent Alejo Al-Lagadan and Filomena Piga, filed the the Referee requested Mr. Manuel O. Morente, an attorney of
corresponding claim for compensation under Act No. 3428. the Workmen’s Compensation Commission, “to look into and
After appropriate proceedings, a Referee of the Workmen’s inquire and determine the method of and the basis of engaging
Compensation Commission rendered a decision, dated the services of crewmen for sailboats (batel) of twenty (20)
February 23, 1953: tons or more plying between Manila and Mariveles and
moored along Manila North Harbor”, and that, thereafter, said
“1. Ordering Mr. Anastacio Viaña to pay the above-named Atty. Morente reported:
claimants through the Workmen’s Compensation Commission,
Manila, the sum of P1,560 in lump sum with interest at 6 per “The basis of engaging the services of crewmen of a batel is
cent from September 3, 1948 until fully paid; determined in accordance with the contract executed between
the owner and the patron. The contract commonly followed is
“To pay the sum of P16 to the Workmen’s Compensation on a share basis after deducting all the expenses incurred on
Commission as costs.” the voyage. One half goes to the owner of the batel and the
other half goes to the patron and the members of the crew and
Said decision was, on petition for review filed by Viaña,
divided among themselves on a share basis also in accordance
affirmed by the Workmen’s Compensation Commissioner, on
with their agreement with the patron getting the lion’s share.
or about October 22, 1954, “with additional fee of P5.00”.
The hiring of the crew is done by the patron himself. Usually,
Said Commissioner, having subsequently denied a
when a patron enters into a contract with the owner of the
reconsideration of this action, Viaña has brought the matter to
batel, he has a crew ready with him.” (Italics supplied.)
us, for review by certiorari, upon the ground that this case
does not fall within the purview of Act No. 3428, because the In sustaining the Referee’s finding to the effect that the
gross income of his business for the year 1947 was allegedly deceased was an employee of Viaña, the Workmen’s
less than P10,000, and because Alejandro Al-Lagadan was, at Compensation Commissioner said:
the time of his death, his (Petitioner’s) industrial partner, not
his employee. “The trial referee found that there was an employer-employee
relation between the Respondent and the deceased, Alejandro
The first ground is untenable, Petitioner not having invoked it Al-Lagadan, and the share which the deceased received at the
before the rendition of the Referee’s decision on February 23, end of each trip was in the nature of ‘wages’ which is defined
1953. The objection to the application of Act No. 3428, upon under section 39 of the Compensation Act. This is so because
said ground, was made for the first time when Petitioner such share could be reckoned in terms of money. In other
sought a review of said decision by the Workmen’s words, there existed the relation of employer and employee
Compensation Commissioner. The non- applicability of said between the Respondent and Alejandro Al-Lagadan at the time
Act to employers whose gross income does not reach P20,000 of the latter’s death.
is, however, a matter of defense, which cannot be availed of
unless pleaded in the employer’s answer to the claim for “We believe that the trial referee did not err in finding the
compensation filed by the employee or his heirs. Petitioner deceased an employee of the Respondent. We cite the
herein having failed to do so, said defense may not now be following cases which illustrate the point at issue:
entertained (Rolan vs. Perez, 63 Phil., 80, 85-86).
‘The officers and crews of whaling and other fishing vessels
As regards the second ground, Petitioner maintains, contrary who are to receive certain proportions of produce of the
to the finding of the Referee and said Commissioner, that the voyage in lieu of wages (Rice vs. Austin, 17 Mass. 206; & C.
61Captains of merchant ships who, instead of wages, receive crew, but, also, that the members thereof are subject to his
shares in the profits of the adventure; (4 Maule & C. 240); or control and may be dismissed by him. To put it differently, the
who take vessels under an agreement to pay certain charges literal import of said report is open to the conclusion that the
and receive a share of the earnings; (Tagard vs. Loring, 16 crew has a contractual relation, not with the owner of the
Mass. 336, 8 Am. Dec. 140; Winsor vs. Cutts, 7 Greenl. Me. vessel, but with the patron, and that the latter, not the former,
261) have generally been held not to be partners with the is either their employer or their partner.
Respondent, and the like. Running a steamboat on shares does
not make the owners partners in respect to the vessel (The Upon the other hand, the very allegations of the petition show
Daniel Koine, 35 Fed. 785); so of an agreement between two otherwise, for Petitioner explicitly averred therein that the
parties to farm on shares; (Hooloway vs. Brinkley, 42 Ga. deceased Alejandro Al-Lagadan was his “industrial partner”.
226); seaman who is to receive pay in proportion to the This implies that a contract of partnership existed between
amount of fish caught is not a partner; (Holdren vs. French, 68 them and that, accordingly, if the crew was selected and
Me. 241); profits in lieu of wages is not a partnership. There is engaged by the “patron”, the latter did so merely as agent or
no true contribution; (Crawford vs. Austin, 34 Md. 49; representative of Petitioner herein. Again, if Petitioner were a
Whitehill vs. Shickle, 43 Mo. 538; Sankey vs. Iron Works, 44 partner of the crew members, then neither the former nor the
Ga. 228.)’“ (Italics supplied.) patron could control or dismiss the latter.

In the interest of justice and equity, and considering that a

decision on the merits of the issue before us may establish an
In other words, in the opinion of the Referee, as well as of said important precedent, it would be better to remand the case to
Commissioner, the mere fact that Alejandro’s share in the the Workmen’s Compensation Commission for further
understanding “could be reckoned in terms of money”, evidence and findings on the following questions: (1) who
sufficed to characterize him as an employee of Viaña. We do selected the crew of the “Magkapatid” and engaged their
not share this view. Neither can we accept, however, services; (2) if selected and engaged by the “patron”, did the
Petitioner’s theory to the effect that the deceased was his latter act in his own name and for his own account, or on
partner, not an employee, simply because he (the deceased) behalf and for the account of Viaña; 3) could Viaña have
shared in the profits, not in the losses. In determining the refused to accept any of the crew members chosen and
existence of employer-employee relationship, the following engaged by the “patron”; (4) did Petitioner have authority to
elements are generally considered, namely: (1) the selection determine the time when, the place where and/or the manner
and engagement of the employee; chan or conditions in or under which the crew would work; and (5)
roblesvirtualawlibrary(2) the payment of wages; c (3) the who could dismiss its members.
power of dismissal; chan roblesvirtualawlibraryand (4) the
power to control the employees’ conduct — although the latter Wherefore, let the case be remanded to the Workmen’s
is the most important element (35 Am. Jur. 445). Assuming Compensation Commission, for further proceedings in
that the share received by the deceased could partake of the conformity with this decision, without special pronouncement
nature of wages — on which we need not, and do not, express as to costs. SO ORDERED.
our view — and that the second element, therefore, exists in
the case at bar, the record does not contain any specific data
regarding the third and fourth elements.

With respect to the first element, the facts before us are

insufficient to warrant a reasonable conclusion, one way or the
other. On the one hand, Atty. Morente said, in his
aforementioned report, that “the contract commonly followed
is on a share basis cralaw The hiring of a crew is done by the
patron himself. Usually, when a patron enters into a contract
with the owner of the batel, he has a crew ready with him”.
This statement suggests that the members of the crew are
chosen by the patron, seemingly, upon his sole responsibility
and authority. It is noteworthy, however, that said report
referred to a practice commonly and “usually” observed in a
given place. The record is silent on whether such practice had
been followed in the case under consideration. More important
still, the language used in said report may be construed as
intimating, not only that the “patron” selects and engages the
GERONIMO DE LOS REYES vs. GREGORIO they were invited to have some drinks at the house of Chief
ESPINELI G.R. No. L-28280-81, November 28, 1969 Engineer.

FACTS: The widow claim for compensation and the Workmen’s

Compensation declared that petitioner Compañia Maritima as
Geronimo de los Reyes owned a 200-hectare coconut
the employer thereof and ordered that company to pay these
plantation. His overseer (“katiwala”) Gonzalo Belarmino,
survivors the sum of P4,000.00 as death compensation,
before his dismissal, took into the land the 17 respondents
P200.00 as reimbursement for burial expenses and P41.00 as
under an agreement that the latter were to receive 1/7 portion
fees required under section 55 of the Workmen's
of every coconut harvest. The respondents filed petitions
Compensation Act, as amended. However, the petitioner
seeking the delivery to them of the difference between the 1/7
claims that it never had any employer-employee relationship
share which the petitioner had been giving them and the 30%
with the deceased due to the absence of written employment
share to which they, as share tenants, were allegedly entitled.
contract between them and also, that the deceased was but a
The respondents alleged that they were tenants, while, the
casual employee whose services were engaged only for the
petitioner said they were agricultural laborers.
duration of the strike and, therefore, not entitled to
ISSUE: compensation.

Whether or not the subject workers are agricultural Issue:

laborers and therefore employees of the owner of the land Whether or not Dionisio Hio can be considered an employee
they work on. of another despite the absence of a written employment
between them.
HELD:
Held:
On a determination of this question depends the respective
Yes. While it is true that no written employment contract
rights of the parties, more particularly the proper assessment
between the petitioner and the deceased was presented in
of the share of the respondents under the law.
evidence, it is not disputed that the petitioner company owns
The record is devoid of evidentiary support for the notion that the vessel where the deceased was assigned as gangwayman,
the respondents are farm laborers. They do not observe set and it was found by the Commission that the salary of the
hours of work. The petitioner has not laid down regulations deceased was paid directly from the funds of petitioner. From
under which they are supposed to do their work. The argument these circumstances, it would appear that at the time of the
tendered is that they are guards. However, it does not appear accident the deceased was under petitioner's employ.
that they are under obligation to report for duty to the Moreover, under Sec. 39 (b) of the Workmen’s Compensation
petitioner or his agent. They do not work in shifts. Nor has the Act it is clear that for an employee to be excluded from the
petitioner prescribed the manner by which the respondents term “laborer” or “employee”, his employment must be
were and are to perform their duties as guards. We do not find "purely casual and is not for the purpose of the occupation or
here that degree of control and supervision evincive of an business of the employer." And the casual service that the law
employer-employee relationship. Furthermore, if the speaks of must be construed, interpreted and concluded by the
respondents are guards, then they are not agricultural laborers, circumstance of whether or not the aforesaid service is related
because the duties and functions of a guard are not agricultural with the occupation of business of the employer.
in nature. It is the Industrial Court that has jurisdiction over In the case at bar, we have reason to believe that the work of
any dispute that might arise between employer and employee. the deceased was in connection with the business of petitioner.
Yet, the petitioner filed his complaint against the respondents It has been shown that it was not only during the strike that the
in the Court of Agrarian Relations. Compañia Maritima needed the services of watchmen. In fact,
the petitioner admitted having its own permanently employed
CIA Maritima vs. Cabagnot 107 Phil 873 watchmen doing the same duties as that of the deceased. The
Gutierrez David, J. duties referred to must be that of giving security not only to
the cargo of the vessel but also to the lives of its officers and
Facts: crew, and they are, undoubtedly, in connection with the
Petitioner Compañia Maritima contracted with Pablo business of the petitioner. Without security, any shipping
Velez Special Watchmen’s Agency to give security to certain company could not possibly go on with its maritime business.
officers when a strike was staged by the Marine Officer’s
Guild. Among the members was Dionisio Hio, who was found
floating near the side of the M/V BASILAN along the
gangway of which he was assigned for duty, the morning after
 noted from the jurisprudence of the case of Sunrise Coconut
Products vs. CIR, Justice Paras opined that the pakiaw sakyaw
system is in fact a labor contract between employee and
employer.
As to the contention that Solano was not an employee because
he worked on piece basis, this Court agrees with the Hearing
Examiner that:
Circumstances must be construed to determine indeed if
payment by the piece is just a method of compensation and
does not define the essence of the relation. Units of time ... and
units of work are in establishments like respondent (sic) just
yardsticks whereby to determine rate of compensation, to be
applied whenever agreed upon. We cannot construe payment
by the piece where work is done in such an establishment so as
DY KEH BENG VS INTERNATIONAL LABOR to put the worker completely at liberty to turn him out and take
GR NO L-32245, MAY 25, 1979 in another at pleasure.
FACTS:

A charge of unfair labor practice was filed against petitioner

Dy Keh Beng, proprietor of a basket factory for dismissing
employees Solano and Tudla for theor union activities. In his
response, Dy contends that he did not that know that Solano
and Tudla were his employess because they only went to the
work establishment if there is work, on “pakiaw” basis. CIR
rules in favor of the two employees and ordered petitioner DY
to reinstate them and pay back wages. Dy Keh Beng seeks a
review by certiorari, his main contention is that there is no
employer-employee relationship between him and Solano and
Tudla.

ISSUE:
Whether or not the “pakiaw” contract between an employee
and an employer will not pass the employer-employee
relationship control test wherein the employer has the power
to control the manner and method of the work, on the grounds
that there is no evidence to show that the employer had the
right to direct the manner and methods of the employee’s
work; and on another ground that the employees do not stay in
the work establishment regularly, and is only present
whenever there is work.

RULING:
The Court held that the circumstance of the present case
passed the control test because the test merely calls for the
existence of the right to control the manner na dmethod of
doing work and not the actual exercise of the right.
Considering that petitioner is involved in manufacturing
baskets, it is natural to expect that those working under Dy,
will also observe Dy’s requirements of the size and quality of
the basket or “kaing.” Some control would be necessarily
exercised by Dy as the making of the kaing is subject to Dy’s
specifications.
Since the work is also done in Dy’s establishment, Dy can
easiy exercise control on the men employed. It can also be