Object 1

Metrobank vs. CA
4.4.2020
Metropolitan Bank & Trust Company vs. Court of Appeals
G.R. No. 88866, February 18, 1991
FACTS:
In January 1979, a certain Eduardo Gomez opened an account
with Golden Savings and Loan Association and deposited over a
period of two months 38 treasury warrants which were drawn by
the Philippine Fish Marketing Authority. Six of these were directly
payable to Gomez while the others have been endorsed by their
respective payees, followed by Gomez as second endorser. All
these warrants were subsequently endorsed by Gloria Castillio as
cashier of Golden Savings and deposited to its savings account
with Metrobank.. They were then sent for clearing by Metrobank
branch office to its principal office which forwarded them to the
Bureau of Treasury for special clearing. More than two weeks after
the deposits, Gloria Castillo went to Metrobank branch several
times to ask whether the warrants had been cleared and she was
told to wait. Meanwhile, Gomez was not allowed to withdraw from
his account. Metrobank, exasperated over the persistent inquiries
of Gloria Castillo about the clearance and also wanting to
accommodate a valued client, allowed Golden Savings to
withdraw from the uncleared treasury warrants. In turn, Golden
Saving subsequently allowed Gomez to make withdrawals from
his own account.

ISSUE:
Whether or not treasury warrants are negotiable
instruments.
 RULING:
No, an instrument to be negotiable must contain an
unconditional promise or order to pay a sum certain in
money. An unqualified order or promise to pay is
unconditional within the meaning of the Negotiable
Instruments Law though coupled with (a) an indication of
a particular fund out of which reimbursement is to be
made or a particular account to be debited with the
amount; or (b) a statement of the transaction which gives
rise to the instrument. But an order or promise to pay out
of a particular fund is not unconditional. The indication of
Fund 501 as the source of the payment to be made on
the treasury warrants makes the order or promise to pay
“not unconditional” and the warrants themselves non-
negotiable.

G.R. No. 128523 September 28, 1998

GOVERNMENT SERVICE, INSURANCE SYSTEM, petitioner,
vs.
COURT OF APPEALS, and ZENAIDA LIWANAG, respondents.

DAVIDE, JR. J.:

Petitioner Government Service Insurance System (GSIS) seeks to reverse the 26 February 1997
decision1 of respondent Court of Appeals in CA G.R. SP No. 41976 which granted private respondent
Zenaida Liwanag compensation benefits under P.D. No. 626, as amended, and in the process, set aside
the 27 December 1995 decision2 of the Employees' Compensation Commission (ECC) in ECC Case No.
7633.
As found by respondent Court of Appeals, the facts of this case were as follows:
[Private respondent] Zenaida Liwanag is the surviving spouse of the late Jaime Liwanag who died
on September 14, 1994. He was 48 years old and had served the police force continuously for 17
years. At the time of his death, he was [a] Senior Superintendent of the Philippine National Police.
On August 28, 1994, the late P/Sr. Supt. Jaime Liwanag was admitted at the Medical Center of
Manila due to complaints of Ascites, Poor Appetite. [The] CT Scan showed Cirrhosis with probable
Hepatocellular CA, HB 5A3 positive. Despite medical intervention, Jaime Liwanag succumbed to
Upper GI Bleeding, Cirrhosis Secondary to Hepatitis B; Hepatocellular Carcinoma on September
14, 1994.
 As a consequence, [private respondent] filed a claim with the Government Service Insurance
System (GSIS) for compensation benefits. The claim was denied for not being an occupational
disease under the law neither was the risk of contracting the ailment of the deceased increased by
his employment as a member of the police force.
On appeal pursuant to Section 5, Rule XVIII of Presidential Decree No. 626, as amended, the . . .
Employees Compensation Commission affirmed the GSIS ruling and ultimately dismissed the
appeal for lack of merit. . . .3
In denying private respondent's claim, the ECC ruled:
Sec. 1 (B), Rule III of the Amended Rules on Employees' Compensation clearly defined when a
disability or death resulting from illnesses is considered compensable. It provides:
Sec. 1. . . .;
(b) For the sickness and the resulting disability or death to be compensable, the sickness
must be the result of an occupational disease listed under Annex "A" of these Rules with the
conditions set therein satisfied; otherwise proof must be shown that the risk of contracting
the disease is increased by the working conditions.
The late P/Sr[.] Supt. Liwanag's ailments, Upper GI Bleeding; Cirrhosis secondary to Hepatitis B;
Hepatocellualar Carcinoma, cannot be made compensable inasmuch as the said ailments are not
among those listed as occupational diseases, nor has appellant shown proofs [sic] that the risk of
contacting said diseases were [sic] increased be her late husband's working conditions and
employment as a member of our country's police force.
A study on the etiologies of P/Sr. Supt. Liwanag's ailments reveal that to wit:
Cirrhosis a disorganization of liver architecture by widespread fibrosis and nodule formation. It may
be due to the following:
a.) Congenital Causes: hemorrhagic telagiectaria galactosemia
b.) Chemicals: alcohol methotrexate halothane
c.) infection: Viral Hepatitis B congenital Syphilis
(Merck's Manual, 14th ed. P. 831)
Hepatocellular Carcinoma — grievously somitinus called a hepatoma. It may be due, to wit:
a.) underlying cirrhosis: alcoholic postneurotic, hemochromatotic
b.) environmental carcinogen: food contaminated with fungal aflatoxin
c.) Chronic infection with Hepatitis B
(Merck's Manual 14th ed., p. 859)
Apparently, P/Sr. Supt. Liwanag's ailments are not inherent among policemen and everybody is
susceptible to the said diseases regardless of one[']s job.
It is well settled under the Employees' Compensation Law that when the ailment is not the direct
result of the covered employee's employment, like the instant case, and the appellant failed to show
proof that the risk of contracting the disease was increased by the covered employee's employment
and working conditions the claim for compensation benefits cannot prosper.
 Thus, finding no causal relation between P/Sr. Supt. Liwanag's ailment with his employment and
working conditions, or the nature of appellant's work had increased the risk of contracting said
diseases, . . . GSIS is correct in denying [private respondent's] application for compensation
benefits under PD. NO. 262, as amended.4
In her petition5 filed before the Court of Appeals, private respondent relied heavily on two (2) documents as
proof of the causal relation between P/Sr. Supt. Liwanag's ailments and his employment and working
conditions: first, the "Investigation Report Re Death of the Late P/SSUPT JAIME M. LIWANAG" dated 14
September 1994 submitted by Cristeto Rey R. Gonzalodo, Police Chief Inspector, Investigator on Case;
and second, the "REPORT OF PROCEEDING OF LOD BOARD TO DETERMINE THE LINE OF DUTY
STATUS OF THE LATE P/SSUPT JAIME J. LIWANAG PNP." Moreover, private respondent argued that the
requirement of proof of a causal relation between a claimant's ailments and his employment and working
conditions "admits of exceptions and must yield to the higher interests of justice." In closing, private
respondent advocated for a liberal interpretation of social legislation statutes, citing jurisprudence which,
however, dealt with the relaxation of the procedural requirements as regards the late filing of pleadings
and/or belated appeals.
As these documents form the Philippine National Police (PNP) are of importance to the resolution of this
dispute, they are hereunder quoted in full. The Investigation Report6 reads as follows:
Republic of the Philippines
Department of the Interior and Local Government
National Police Commission
NATIONAL HEADQUARTERS, PHILIPPINE NATIONAL POLICE
DIRECTORATE FOR PLANS
Camp Crame, Quezon City

ODPL-A 14 September 1994

SUBJECT: Investigation Report Re Death of the late

P/SSUPT JAIME M LIWANAG

TO: Officer-In-Charge, DPL

Post

I. AUTHORITY:

Verbal Order of the Officer-In-Charge, DPL.

II. MATTERS INVESTIGATED:

To determine the causes surrounding the death of the late P/SSUPT JAIME M. LIWANAG, Deputy Director
for Plans and the Line of Duty Status thereof.

III. FACTS OF THE CASE:

...

IV. DISCUSSION:
1. The late P/SSUPT JAIME M. LIWANAG had been vigorously/mentally examined before he was called to
Active Duty as Second Lieutenant in the defunct Philippine Constabulary on 16 January 1969 which was
repeated when he was appointed as Regular Officer (Direct Commission) on 1 Aug. 1971. From that initial
rank he gradually rose to Police Senior Superintendent with Physical/Medical examination as a matter of
requirement for promotion. All the while, P/SSUPT JAIME M. LIWANAG was physically/mentally fit for the
service.

2. It [is] highly believed that the late P/SSUPT JAIME M. LIWANAG acquired his illness in the course of his
employment with the Philippine National Police considering that there are some personnel in his office who
are positive to [sic] Hepatitis B (Reactive) virus.

IV. CONCLUSION:

The death of the late P/SSUPT JAIME M. LIWANAG was in Line of Duty and not attributable to his own
misconduct or negligence.

V. RECOMMENDATION:

Recommend that the death benefits due to the legal heirs/beneficiary (ies) of the late P/SSUPT JAIME M.
LIWANAG be granted to them.

(signed)
CRISTETO REY R. GONZALODO
Police Chief Inspector
Investigator on Case
The Report of Proceedings7 reads as follows:
REPORT OF PROCEEDINGS OF LOD BOARD TO DETERMINE THE LINE OF DUTY STATUS OF THE
LATE P/SSUPT JAIME M. LIWANAG PNP

UNIT/ORGANIZATION: Directorate for Plans, NHQ PNP Camp Crame, Quezon City
DATE/TIME: 040900 October 1994
AUTHORITY: Letter Order Nr 454 dtd 04 October 1994
PRESENT:

P/SSUPT FRANCISCO F. CABACCANG, MDS — Chairman

P/SUPT REYNALDO R. ALBERTO, LS — Member

P/CINSP CRISTETO REY R. GONZALODO — Mbr/Recorder

P/INSP SERVILLANO B. RITUALO, PHPGH — Member

P/INSP LYDIA M. DAVID, BFAD — Member

ABSENT: P/SINSP EMMA S. LACANDULA — DPRM — Member

040900 Oct. 94
CHAIRMAN — There being a quorum, I hereby declare that the Board will come to
order. Mr. Member/Recorder, what is the order for today?
Member/Recorder: Mr. Chairman, we have been convened pursuant to Letter Order Nr
454 NHQ PNP dtd 04 Oct 94 to determine the Line of Duty (LOD) Status of the late
P/SSUPT JAIME M. LIWANAG, then Deputy Director for Plans who died at Medical
Center Manila located along Taft Ave. corner UN Ave. Manila on or about 132210 Sept.
94. . . .
Chairman: So, [t]herefore (referring to all the members) having been detailed as
members and member/recorder, do you swear and affirm to thoroughly examine
today's proceeding, the evidence now available in your possession without partiality,
favor, affection, prejudice or hope of any reward?
Member/Recorder: Yes, Mr. Chairman, we do.
Member: On the otherhand [sic], P/SSUPT FRANCISCO F. CABACCANG, having
been detailed as Chairman of this Board, do you swear and affirm to thoroughly
examine today's proceeding, the evidence now available in your possession without
partiality, favor, affection, prejudice or hope of any reward?
Chairman: Yes, I do.
Chairman: Mr. Member/Recorder, what are the evidence now in the possession of [the]
LOD Board?
Member/Recorder: Chairman, the available evidences [sic] follows:
Appointment Order
Death Certificate
Medical Certificate
Abstract Clinical Record of

P/SSUPT LIWANAG JM

Spot Report
Investigation Report
Result of Hepatitis B Lab Test of all ODPL Personnel
Statement of Service

Chairman: Based on the record, the immediate cause of death of the late P/SSUPT
JAIME M. LIWANAG, then Deputy Director for Plans was due to Cardio-Respiratory
Arrest Secondary to Gastro-Intestinal bleeding as a result of fulminating Hepatitis. How
was he infected by this Virus?
P/SINPS RITUALO: It is highly possible that he got infected just recently in the
Directorate for Plans since there were five (5) other ODPL pers[onnel] out of the total
strength of forty five (45) who are reactive to Hepatitis B Antigen Test. Modes of
transmittal are through body fluids and secretion. Another proof is that all the immediate
members of his family are negative [for the] Hepatitis B Virus.
P/CINSP ODPL received an undated report on Hepa B Test
GONZALODO: finding from the Chief, Laboratory Section, PNPGH on 15 June 1994,
when did P/SSUPT LIWANAG actually know that he was positive [for] Hepatitis B
 P/SINSP RITUALO: He came to know about it as early as 19 Apr. 94 when he visited
my office at the Laboratory Section, PNPGH. On 20 June 1994 when he came to my
office again, I advised him to go slow with his work as I observed something unusual in
his Liver Profile.
P/SUPT ALBERTO: Where did P/SSUPT LIWANAG g[e]t this Hepatitis B?
F/SINSP RITUALO: I strongly believe that he got this while working [at] Headquarters
since this is [sic] already endemic in this camp. You can get infected anywhere? [sic]
F/SUPT ALBERTO: So, do you want to say that this kind of disease was acquired by
the late P/SSUPT LIWANAG while serving the Philippine National Police?
P/SINSP RITUALO: Yes, sir.
P/CINSP. What type of Hepatitis [did] the late P/SSUPT GONZALODO: LIWANAG
acquired [sic]?
P/SINSP RITUALO: It was of Acute Fulminant Type. The effect is so immediate that
one out of ten usually dies.
P/SINSP DAVID: I would like to inform the Board that under Ministry of National
Defense Department Order Nr 162 dtd 15 Jan. 65, a military personnel who died while
in the Active Service is presumed to have died in [the] Line of Duty and not as a result
of his own misconduct unless there is substantial evidence to rebut such presumption.
P/CINSP Is this still binding [upon] PNP Personnel?
GONZALODO:
P/SINSP DAVID: Yes, sir. We are still using this as a reference.
P/SUPT ALBERTO: Based on the records and the foregoing discussions, it is hereby
resolved that P/SSUPT JAIME M. LIWANAG died in [the] Line of Duty. Mr. Chairman, I
therefore move that all the benefits due the late P/SR JAIME M. LIWANAG be granted
to his legal heirs/beneficiary(ies) and henceforth, be likewise cleared from money and
property accountabilities.
Member/Recorder: I second the motion.
CHAIRMAN: After a judicious appreciation of all evidences [sic] and after hearing the
members of the Board, I personally favor the motion, hence, I now declared [sic] it as
carried, voted upon affirmatively and duly resolved unanimously by the LOD Board. Do
we have other more business to transact?
MEMBER/RECORDER: No more other business, Mr. Chairman.
CHAIRMAN: There being no other business to transact, upon motion duly made and
seconded, this LOD proceeding is hereby adjourned.
WE HEREBY CERTIFY that the foregoing are true and correct of the LOD (P/SSUPT
JAIME M. LIWANAG, PNP) Board proceeding.
(signed)
P/SSUPT F[R]ANCISCO F. CABACCANG, PNP
Chairman
P/SUPT REYNATO R. ALBERTO, PNP
 Member
P/CINSP CRISTETO REY R. GONZALODO, PNP
Member/Recorder
P/SINSP SERVILLANO B. RITUALO, PNP
Member
P/SINSP LYDIA M. DAVID, PNP
Member

In its Comment8 filed with the Court of Appeals, petitioner argued that since the ailments of P/Sr. Supt.
Liwanag were not among those listed as occupational diseases, the burden then lay on herein private
respondent to prove that the risk of contracting the disease was increased by her late husband's working
conditions and employment as a member of the PNP. As regards private respondent's reliance on the
Investigation Report, petitioner pointed out that said Report fallaciously concluded that the deceased
contracted Hepatitis B in the course of his employment as some of his co-workers in his office tested
positive for Hepatitis B. Petitioner deemed this reasoning as mere allegations which were inadmissible. In
fact, petitioner contends that the ailments of the deceased were not inherent among policemen and
everybody was susceptible to the disease regardless of one's work. At bottom, petitioner asserted that
there was no substantial evidence pointing to a reasonable connection, much less, a direct causal relation,
between the deceased's ailments and the nature of his employment; and that while social legislation
statutes had to be interpreted liberally in favor of the intended beneficiaries, undue compassion for victims
of diseases not covered by the law would endanger the integrity of the State Insurance Fund and deprive
beneficiaries truly deserving of benefits.
In its Comment9 filed with the Court of Appeals, the Employees' Compensation Commission (ECC),
represented by the office of the Solicitor General (OSG), expectedly echoed the arguments of petitioner
herein. The ECC merely added that as regards the nature of Hepatitis B and the need for substantial
evidence proving that the risk of contracting the same was increased by one's working conditions: "It is a
sickness that strikes people in general. The nature of one's employment is irrelevant. It makes no
difference whether the victim is employed or not, [a] white collar employee or a blue collar worker, a
housekeeper, an urban dweller or a resident of a rural area."
Respondent court, in ruling for private respondent, held:
In the case at bench, the [ECC] ruled that the ailment[s] of the deceased . . . are not among those
listen as compensable occupational diseases. [The ECC] furthermore said that . . . there is no
showing of any casual relation between the sickness of the late P/Supt. Liwanag with his
employment or working condition[s]. We disagree.
Records of this case reveal that proceedings were conducted by the Directorate for Plans, National
Headquarters, PNP, Camp Crame, Quezon City, to determine the line of duty status of the late
P/Supt. Jaime M. Liwanag (Annex F, Petition). Submitted as well is the investigation report thereof
(Annex E, Petition).
In said exhibits, it is clearly shown that prior to the employment of the deceased to active duty as [a]
2nd Lieutenant in the defunct Philippine Constabulary up until his appointment as [a] regular officer
(Direct Command) to his position at the time of his death as Senior Police Superintendent, he was
found to be physically, medically and mentally fit for the service. It was also concluded that it [was]
highly believable that the late S/Supt. Liwanag acquired his illness in the course of his employment
with the PNP considering that there are some personnels [sic] in his office who [tested] positive [for]
Hepatitis B (reactive virus). In conclusion, it was recommended that death benefits due to the legal
heirs be granted. Conformably, said evidences [sic] are sufficient under P.D. 626.
 The degree of proof required under PD 62[6] is merely substantial evidence, which means
relevant evidence as a reasonable mind might accept as adequate to support a conclusion.
Besides under the law, it is not required that the employment [is] the sole factor in the
growth, development and acceleration of his illness. It is enough if his employment had
contributed, even in a small degree, to the development or acceleration of the disease.
(Magistrado vs. ECC, 174 SCRA 605 [1989])
The above proofs were not rebutted. No contrary' evidence was presented to counter attack the
conclusions arrived at that the cause of death of P/Supt. Jaime Liwanag is work-connected and
acquired from his said employment. After all, the policy of Presidential Decree 626 is to provide a
[sic] meaningful and appropriate compensation to workers in the event of work related
contingencies. As the law is social in character for the promotion and development of a tax exempt
employee's compensation program whereby employees and their dependents, in the event of work
related disability of death, may promptly secure adequate income or medical benefits, it is only
fitting and proper that all doubts be interpreted in favor of labor. In this way, the very essence and
creation of employment compensation laws will be given more meaning.
IN VIEW OF ALL THE FOREGOING, the appealed decision is hereby REVERSED and SET
ASIDE and a new one entered declaring [private respondent] entitled to the death benefits under
Presidential Decree No. 626, as amended. No pronouncement as to costs. 10
Petitioner now takes respondent court to task for "taking into consideration only the records of the
proceedings conducted by the . . . PNP," as what the Court of Appeals seems to have forgotten was that
"the investigation was [only] for the purpose of determining the line of duty status of the [deceased] and if
his ailment was work connected." Moreover, petitioner argues that Hepatitis B cannot be acquired by mere
mingling with other people who test positive for the illness, hence reliance by respondent Court on the PNP
investigation constituted reversible error as the same, by itself, did not constitute substantial evidence.
Petitioner likewise hastens to add:
It should be remembered that Hepatitis B is not just acquired by simple association. There was no
medical proof/evidence presented how the [deceased] could have acquired his illness. Hepatitis B.
[sic] According to the medical view point (Merk [sic] Manu[a]l p. 100) HBV is often transmitted
parenterally, typically by contaminated blood or blood products. Routine screening of donor blood
for H B s Ag has dramatically diminished posttransfusion HBV infection but transmission via
needles shared by drug abusers remain[s] an important problem. There is an increased risk in
patients in renal dialysis and oncology units and to hospital personnel in contact with blood. HBV is
associated with a wide spectrum carrier state to acute-hepatitis, chronic hepatitis, cirrhosis, and
hepatocellular carcinoma. While it was mentioned that there were some personnel in the office of
the [deceased] who [were] positive with Hepatitis B, it was not medically shown or proven that he
had any association with them that might have transferred the disease to him in a medically proven
means as stated above.11
We grant the petitioner.
At the outset, certain basic postulates governing employees' compensation benefits under P.D. No. 626 be
reviewed.ℒ First, said Decree abandoned the presumption of compensability and the theory of
αwρhi ৷

aggravation under the Workmen's Compensation Act. 12 Second, for the sickness and resulting disability or
death to be compensable, the claimant must prove either of two (2) things: (a) that the sickness was the
result of an occupational disease listed under Annex "A" of the Rules on Employees' Compensation; or (b)
if the sickness is not so listed, that the risk of contracting the disease was increased by the claimant's
working conditions. Third, the claimant must prove this causal relation between the ailment and working
conditions by substantial evidence, since the proceeding is taken before the ECC, an administrative
or quasi-judicial body. Within the field of administrative law, while strict rules of evidence are not applicable
to quasi-judicial proceedings, nevertheless, in adducing evidence constitutive of substantial evidence, the
basic rule that mere allegation is not evidence cannot be disregarded. 13 Finally, in case of doubt in
construction and interpretation of social legislation statutes, the liberality of the law in favor of the working
man and woman prevails in light of the Constitution's social justice policy.14
On the other side of the coin, however, there is a competing, yet equally vital interest to heed in passing
upon undeserving claims for compensation. It is well to remember that if diseases not intended by the law
to be compensated are inadvertently or recklessly include, the integrity of the State Insurance Fund is
endangered. Compassion for the victims of diseases not covered by the law ignores the need to show a
greater concern for the trust fund to which the tens of millions of workers and their families look to for
compensation whenever covered accidents, diseases and deaths occur. 15 This stems from the
development in the law that no longer is the poor employee still arrayed against the might and power of his
rich corporate employer, hence the necessity of affording all kinds of favorable presumptions to the
employee. This reasoning is no longer good policy. It is now the trust fund and not the employer which
suffers if benefits are paid to claimants who are not entitled under the law. The employer joins the
employee in trying to have their claims approved. The employer is spared the problem the problem of
proving a negative proposition that the disease was not caused by employment. 16 Moreover, the new
system instituted by the new law has discarded, among others, the concept of "presumption of
compensability and aggravation" and substituted one based on social security principles. The new system
is administered by social insurance agencies — the GSIS and the SSS — under the ECC. The purpose of
this innovation was to restore a sensible equilibrium between the employer's obligation to pay workmen's
compensation and the employee's right to receive reparation for work-connected death or disability. 17
Applying these principles to the instant case, there is no dispute that Hepatitis B, the disease which caused
the demise of the decedent, is not listed as an occupational disease under Annex "A" of the Rules on
Employees' Compensation. As such, private respondent's burden of evidence before the ECC was to
prove, by substantial evidence, the causal relationship between her deceased husband's illness and his
working conditions. This she failed to do, as will be discussed below. In the same vein and for the same
reasons, respondent court, in reversing the ECC, committed an error of law by misappreciating the legal
standard of what constitutes substantial evidence; and in according full credence to the proceedings before
the PNP Board and thus shifting the burden of evidence to petitioner to rebut private respondent's claim,
when private respondent's evidence was sorely wanting to justify the award of compensation benefits
under P.D. No. 626, as amended.
What is striking as regards private respondent's advocacy was that throughout the course of this dispute,
private respondent merely relied on the PNP Reports, and nothing more, to substantiate her claim.
However, the PNP Reports, as quoted above in full, merely contained sweeping statements and
conclusions and treated the matter in a most perfunctory manner.
Notably, the Result of Hepatitis B Lab Test of all ODPL Personnel was made available to the PNP
Investigation Board, but the details of the lab test not disclosed and there was merely the general averment
that five (5) out of 45 ODPL personnel contracted Hepatitis B. Likewise noteworthy was the statement of
P/SInsp. Ritualo before the PNP Board that Hepatitis B is transmitted through body fluid or secretion, but
there was no showing whatsoever as to the degree of contact, if any, between the deceased and his office
mates who contracted Hepatitis B. In this light, petitioner properly maintains in its Reply: "Further, the report
on the investigation on the ailment of the [deceased] merely stated 'it is highly believable that his illness
was acquired in the course in the course of his employment.' This statement was not based on medical
findings but on a layman's point of view which should not be given weight by the Honorable Court for such
is tantamount to hearsay."18 On this score, as early as 1940, in the landmark case of Ang Tibay v. The
Court of Industrial Relations,19 this Court already declared that as regards the standard of substantial
evidence required in administrative proceedings, "[m]ere uncorroborated hearsay or rumor does not
constitute substantial evidence."
As to the definition, nature and workings of substantial evidence in administrative proceedings, Ang
Tibay declared:
Substantial evidence is more than a mere scintilla. It means such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion, [citations omitted] The statute
provides that "the rules of evidence prevailing in courts of law and equity shall not be controlling,"
The obvious purpose of this and similar provisions is to free administrative boards from the
compulsion of technical rules so that the mere admission of matter which would be deemed
incompetent in judicial proceedings would not invalidate the administrative order. [citations omitted]
But this assurance of a desirable flexibility in administrative procedure does not go so far as to
justify orders without a basis in evidence having rational probative force.20
While the PNP Reports may have sufficed to grant private respondent whatever benefits were due her
under PNP Rules and Regulations, clearly, the dearth of evidence adduced by private respondent militates
against the grant of compensation benefits under P.D. No. 626, as amended. On this note, what is worth
mentioning is that the PNP Board's conclusions were founded upon the Ministry of National Defense
Department Order Number 162 dated 15 January 1965, i.e., that a member of the military who died while in
active service is presumed to have died in the line of duty and not as a result of his own misconduct unless
there is substantial evidence to rebut such presumption.
This only buttresses our observation that the proceedings before the PNP Board and the ECC are separate
and distinct, treating of two (2) totally different subjects; moreover, the PNP Board's conclusions here may
not be used as basis to find that private respondent is respondent is entitled to compensation under P.D.
No. 626, as amended. The presumption afforded by the Order relied upon by the PNP Board concerns
itself merely with the query as to whether one died in the line of duty, while P.D. No. 626 addresses the
issue of whether a causal relation existed between a claimant's ailment and his working conditions. Plainly,
these are different issues calling for differing forms of proof or evidence, thus accounting for the existence
of a favorable presumption in favor of a claimant under the Defense Department Order, but not under P.D.
No. 626 when the disease is not listed under Annex "A" of the Amended Rules on Employees'
Compensation.
It would likewise not be remiss to point out that Police Chief Inspector Gonzalodo, having prepared the
Investigation Report dated 14 September 1994 wherein he recommended the grant of benefits to private
respondent, should have inhibited himself from the proceedings subsequently conducted by the PNP Board
on 4 October 1994. Having already pre-judged the matter by way of his recommendation that the deceased
passed away while in the line of duty and to grant benefits to his heirs or beneficiaries, Police Chief
Inspector Gonzalodo could hardly have been said to have been able to subsequently act in an impartial
and unbiased capacity as a member of the PNP Investigating Board.
On the imperative of ensuring due process in administrative proceedings, Ang Tibay21 laid down the
guidelines for administrative tribunals to observe. However, what Ang Tibay failed to explicitly state was,
prescinding from the general principles governing due process, the requirement of an impartial tribunal
which, needless to say, dictates that one called upon to resolve a dispute may not sit as judge and jury
simultaneously, neither may he review his decision on appeal.
In Rivera v. Civil Service Commission,22 this Court, sitting en banc, unanimously set aside a Resolution
issued by respondent Commission as it was shown that Civil Service Commissioner Thelma P. Gaminde,
who took part only in the deliberations for the assailed Resolution (but not the deliberations prior to
promulgation of respondent Commission's Decision), had earlier participated in the case as Board
Chairman of the Merit Systems Protection Board (MSPB). As it was the MSPB's decision which was
appealed to respondent Commission, then even the mere participation of Commissioner Gaminde, at the
appellate level, in issuing the questioned Resolution (but not the Decision) violated procedural due process.
Thus the Court there declared that Commissioner Gaminde should have inhibited herself totally from
participating in the resolution of the appeal and remanded the case to respondent Commission, sans the
participation of Commissioner Gaminde, in order to "give full meaning and consequence to a fundamental
aspect of due process." This Court moreover noted:
This is not the first time that the Court has been confronted with this kind of prejudicial issue.
In Zambales Chromite Mining Company vs. Court of Appeals [94 SCRA 261], the decision of the
Secretary of Agriculture and Natural Resources was set aside by this Court after it had been
established that the case concerned an appeal from the Secretary's own previous decision he
handed down while he was yet the incumbent Director of Mines. Caling the act of the Secretary a
"mockery of administrative justice," the Court said:
In order that the review of the decision of a subordinate officer might not turn out to be a
farce, the reviewing officer must perforce be other than the officer whose decision is under
review; otherwise, there could be no different view or there would be no real review of the
case. The decision of the reviewing officer would be a biased view; inevitably, it would be
the same view since being human, he would not admit that he was mistaken in his first view
of the case.
The Court similarly struck down a decision of Presidential Executive Assistance Jacobo Clave over
a resolution of the Civil Service Commission, in which he, then concurrently its Chairman, had
earlier "concurred." [Anzaldo v. Clave, 119 SCRA 353 (1982)]23
In fealty then to due process and this Court's rulings, and in absence of any showing that Police Chief
Inspector Gonzalodo acted in the capacity of a Board-designated commissioner merely tasked to receive
evidence on behalf of the PNP Board, it should have behooved Police Chief Inspector Gonzalodo to recuse
himself from the proceedings before the PNP Board. While this matter was not assigned as error, we have
taken it upon ourselves to comment on this irregularity, if only for the guidance of PNP Investigating Boards
constituted in the future.
To further evince the paucity of evidence extant on the record to support private respondent's cause, in
both her Comment to the Petition 24 and Memorandum25 filed with this Court, in lieu of any discussion of the
issues, private respondent merely adopted the following pleadings and/or documents to convince this Court
to uphold the decision of the Court of Appeals: her Petition for Review filed with the Court of Appeals;
petitioner's Comment filed with the Court of Appeals; the Comment of the Employees' Compensation
Commission filed with the Court of Appeals; and the Notice of Judgment and Decision of respondent court.
The total absence of any semblance of discussion on the issues betrays a deplorable degree of want of
industry on the part of private respondent's counsel, both as far as his client and the courts are concerned.
All told, what the Court of Appeals should have done here was to respect the findings of the ECC on the
technical matter concerning the nature of the deceased's illness, Hepatitis B. As likewise quoted above,
plainly, the ECC's rejection of private respondent's claim was not unfounded, in fact, the ECC even took the
pains to quote from a medical manual in order to substantiate its holding. This is one instance when,
pursuant to prudence and judicial restraint, a tribunal's zeal in bestowing compassion should have yielded
to the precept in administrative law that in absence of grave abuse of discretion, courts are loathe to
interfere with and should respect the findings of quasi-judicial agencies in fields where they are deemed
and held to be experts due to their special technical knowledge and training. 26
WHEREFORE, the instant petition is GRANTED and the decision of respondent Court of Appeals dated 26
February 1997 in CA G.R. SP No. 41976 is hereby REVERSED and SET ASIDE and the decision of the
Employees' Compensation Commission dated 27 December 1995 in ECC Case No. 7633 is
hereby REINSTATED.
No pronouncement as to costs.
SO ORDERED.
Bellosillo, Vitug, Panganiban and Quisumbing, JJ., concur.

Footnotes

Rollo, 23-26. Per Vasquez, C.M., Jr., J., with Purisima, F.P. and Sandoval Gutierrez, A., JJ.,
concurring.

Rollo, 56-61.

Id., 23-24.

Rollo, 58-60.

Rollo, 36-53.

Id., 67-68.

Rollo, 69-71.

Rollo, 72-79.

Rollo, 80-85.

Rollo, 25-26.

Rollo, 16-17.

See Latagan v. Employees' Compensation Commission, 213 SCRA 715, 718 [1992] as regards the
operation of the old rule: "[P]rior to the effectivity of the New Labor Code . . . once it was
established that the illness supervened during employment, there existed a rebuttable presumption
that such illness arose out of the employment or was at least aggravated by it. Consequently, the
employer assumed, by force of this presumption, the burden of establishing the contrary by
substantial evidence. But this rule has been abandoned under the compensation scheme in the
present Labor Code, which took effect 1 January 1975."

See Narazo v. Employees' Compensation Commission, 181 SCRA 874, 877 [1990].

See Employees' Compensation Commission v. Court of Appeals, 264 SCRA 248, 255-257 [1996].

See Raro v. Employees' Compensation Commission, 172 SCRA 845, 852 [1989].
Santos v. Employees' Compensation Commission, 221 SCRA 182, 187 [1993], citing Raro v.
Employees' Compensation Commission, supra note 15.

See Tria v. Employees' Compensation Commission, 208 SCRA 834, 841-842 [1992].

Rollo, 94.

69 Phil. 635, 643, citing Consolidated Edison Co. v. National Labor Relations Board, 59 S. Ct. 206,
83 Law. Ed. No. 4, Adv. Op., p. 131.

Supra note 19 at 642-643.

Supra note 19 at 642-644.

240 SCRA 43 [1995].

Rivera v. Civil Service Commission, 240 SCRA 43, 47-48 [1995]. See also Miguel Singson v.
NLRC, G.R. No. 122389, 19 June 1997.

Rollo, 32-35.

Id., 113-119.

See First Lepanto Ceramics, Inc. v. Court of Appeals, 253 SCRA 552, 558 [1996], citing Felipe
Ysmael, Jr. & Co., Inc. v. Deputy Executive Secretary, 190 SCRA 673, 683-684 [1990].