1. Oceanmarine Resources Corp. Vs. Jenny Rose Nedic, G.R.
236263, July 19,2022
Facts:
On Nov.2,2011, Romeo Ellao working as a company driver was instructed by his company to do
errands and drive for several employees. Ellao drove to several banks per instruction to him, while
traversing Paranaque City after a bank transaction to BPI, two unidentified assailants on motorcycles
stopped the vehicle and shot Romeo to death and steals the bag of money.
After his death, Jenny Rose his common law partner, wrote a letter demanding compensation for loss
of future income. Oceanmarine, Romeo’s employer denied the claim since they said that Jenny’s claim
was premature and was unfounded since in order for her to claim such, she has to be designated as
the legal guardian of their son, Jerome. This case was filed by Jenny in behalf of her minor son for
P3,383,640.00 as the cost for the future income that has been lost due to Romeo’s death.
Oceanmarine argued that the case of Romeo does not fall under the provisions of Article 2176 of the
Civil Code and that furthermore, Romeo’s death has already been compensated under the existing
labor laws.
RTC Ruling: Dismissed
Due to failure of establishing a causal relationship between Oceanmarine’s negligence and the death
of Romeo, RTC dismissed the case. RTC also ruled that the plaintiff did not present sufficient evidence
to support her claims.
RTC stated that an injured laborer can either recover damages under the compensation law or file a
separate legal action against the opposing party for higher damages. In this case, the respondent as
the claimant under the civil code has the burden of proving the causal connection between the
company’s negligence and the death or resulting injury.
Moreover, when Jenny was asked about the failure or fault of the company leading to Romeo’s death,
she only stated that the company failed to provide assistance to her and his son, which was not
sufficient to support the claim for damages.
CA ruling: Reversed RTC’s ruling, awarded damages
According to CA, the trial court erred in its ruling and focused too much on the negligence, which was
not explicitly mentioned in Art.1711 of the Civil Code. CA cited the case of of Candano v. Sugata-on
case, citing that the employer’s obligation for indemnity automatically applies if the worker died or
was injured in the course of employment. Therefore, the respondent was entitled to actual damages,
specifically for the loss of earning capacity.
Issues:
1. Whether or Not Article 1711 has been repealed by the Labor Code, which was enacted in 1974?
Answer: YES
There was confusion regarding whether employees could claim additional compensation under the
Civil Code in addition to benefits received under the Workmen’s Compensation Act. Initially the Court
ruled that claims for damages could only be filed under the Workmen’s Compensation act. However,
this ruling was abandoned and the court allowed employees to chose between the Workmen’s
compensation Act or the provisions of the Civil Code. If an employee chose a compensation under one
act then they are precluded from claiming an additional benefit under the other remedy.
The Court Clarified that the compensation under the Workmen’s Compensation Act is meant to
mitigate the hardships of industrial life, while the damages under the Civil Code are meant as an
indemnity for wrongful invasion of rights.
Given the irreconcilable inconsistency between aforesaid laws and their nature as a special law and a
general law, the Court declares that Title II, Book IV of the Labor Code has impliedly repealed Art.
1711 of the Civil Code.
The burden of proving the employer’s negligence and damages falls upon the claimant. Relying on
Art.1711 for claim of damages, particularly loss of future income, is inappropriate. Art.1711 has been
repealed by the Labor Code.
2. Whether or not the CA did not appreciated the Candano Case?
Answer: YES
Although Art.1711 is no longer applicable, in Candano, the court upheld that the employees should
choose between filing a claim under the labor code or pursuing a case under the Civil Code as the
basis for the compensation. In that case, the court clarified that accepting compensation under one
remedy would exclude the other, except in cases where the claimant received compensation in both
due to supervening facts or developments.
However in this case, the Candano ruling should be overturned. Since Art. 1711 is a law on
compensation and not damages, and said Article cannot be considered as an option that may be used
by an injured worker or his heir in an action for damages against an employer.
3. Whether or not Candano case should still be applied to this case?
Answer: Yes
Abandonment of Candano Ruling must be applied prospectively. Judicial decisions becomes part of
the law and is recognized as a good law until it is reversed. The Court has set guidelines for the
application and the transition of the Candano case: 1. Actions filed before the finality of Candano
which is before Aug.6, 2007 cannot rely on Art.1711. 2. Actions filed during the applicability of the
Candano case from August 6, 2007 until the finality of the present decision can rely on Art. 1711. 3.
Actions filed after the finality of the present decision cannot use Art.1711 for indemnity since it has
been repealed by the Labor Code.
In this case, the respondent filed her complaint on April 2012, so the Candano Ruling should be
applied to her claim, the respondent has reasonable grounds to assume that she could file a claim
under Art. 1711 considering the prevailing doctrine at that time. Thus, the indemnity for loss of
earning capacity may be awarded based on Candano and Art.1711 of the Civil Code due to the death
during the course of employment.
4. Whether or not the election of remedies under the Labor Code and the Civil Code are still valid?
Answer: Yes
The Court applies the doctrine of election of remedies, which states that once a choice between
inconsistent remedies are made, it is final and bars any action inconsistent with the chosen remedy. In
this case, pursuing compensation under the labor code waives the right to claim damages under the
Civil Code. The Courts concludes that the choice between compensation and damages is selective, not
cumulative or exclusive.
5. Whether or not benefits received under SSS are covered by the barring effect of Art. 179 of the
Labor Code?
Answer: No, beneficiary may claim benefits under SSS since it is not a compensation under the labor
code.
Whether or not the respondent can be assigned as beneficiary?
Answer: Yes
Art. 1711 did not specify the recipients of compensation. Art. 2206 of the Civil code states that
indemnity for loss of earning capacity should be paid to the heirs of the deceased.
Ruling:
The respondent erred in relying on Article 1711, which is now repealed under the Labor Code but her
action under Art.1711 was considered meritorious and entitled to relief based on the prevailing
doctrine in the Candano Case at the time the action was filed, prior’s to the Court’s abandonment of
that doctrine in this particular case.
WHEREFORE, the petition is PARTLY GRANTED. In view of the foregoing premises, the Court resolves
as follows:
(1) Article 1711 of the Civil Code of the Philippines is declared IMPLIEDLY REPEALED by Title II, Book IV
of the Labor Code of the Philippines;
(2) The doctrine in Candano Shipping Lines, Inc. v. Sugata-on,178 which sanctions the filing of an
action for work-related compensation under Article 1711 of the Civil Code of the Philippines and
applies the formula for computation of loss of earning capacity in Villa Rey Transit, Inc. v. Court of
Appeals,179 is ABANDONED, but the abandonment shall be APPLIED PROSPECTIVELY following the
guidelines stated in this Decision; and
(3) The Decision dated 19 December 2017 promulgated by the Court of Appeals in CA-G.R. CV No.
103881 is hereby AFFIRMED with MODIFICATION. Petitioner Oceanmarine Resources Corporation is
ORDERED to pay the heirs of Romeo S. Ellao the amount of P1,410,000.00, as indemnity for loss of
earning capacity, ten percent (10%) of the amount awarded as attorney's fees, and costs of suit. All
monetary awards shall earn interest at the rate of six percent (6%) per annum from the finality of this
Decision until fully paid.
SO ORDERED.
