An injured worker or their heirs have a choice of remedies between availing of the limited, no-fault compensation under the Workmen's Compensation Act or suing for greater damages under the Civil Code where the injury or death is caused by the employer's gross negligence; however, these remedies are mutually exclusive. An initial choice to receive compensation under the Act will not bar a subsequent civil suit for damages if that choice was based on ignorance or a mistake of fact, such as being unaware of the employer's culpable negligence at the time.

The case arose from a tragic mining accident where several employees of Philex Mining Corporation died. At the time, two distinct legal frameworks governed compensation for work-related injuries and deaths. The Workmen's Compensation Act (WCA) provided a system of limited, no-fault liability, ensuring that employees or their heirs received swift but modest compensation regardless of who was at fault. In contrast, the Civil Code allowed for actions based on tort (quasi-delict) or breach of contract, which could result in significantly higher awards for actual, moral, and exemplary damages, but required the claimant to prove the employer's fault or negligence. This created a legal conflict over which remedy was proper, particularly in cases where an employer's negligence was the direct cause of the accident.

• Petitioners are the heirs of deceased employees of Philex Mining Corporation (Philex) who died on June 28, 1967, in a cave-in at Philex's underground copper mines in Tuba, Benguet.
• The complaint filed in the Court of First Instance (CFI) alleged that Philex was guilty of gross and reckless negligence by deliberately failing to take required safety precautions for its miners.
• Specifically, petitioners claimed Philex allowed a great amount of water and mud to accumulate in an open pit above the mining tunnels, which created enormous pressure, causing the collapse of underground supports and burying the workers.
• The complaint further alleged that Philex, in disregard of its duties, prematurely abandoned rescue operations while many of the entombed miners were still alive.
• Before filing the civil case, some of the petitioners had already filed claims for death benefits with the Workmen's Compensation Commission and had received payments from Philex.
• Petitioners claimed they only became aware of the full extent of Philex's negligence after an official investigation report was released, which was subsequent to their filing for workmen's compensation benefits.

• The trial court has jurisdiction over their complaint because it is not a claim for compensation under the Workmen's Compensation Act (WCA) but a suit for damages under the Civil Code arising from the employer's gross negligence.
• There is a fundamental distinction between a WCA claim, which is based on a theory of no-fault liability for a limited amount, and a Civil Code action for damages, which is based on fault or negligence and allows for recovery of actual, moral, and exemplary damages.
• The exclusivity clause in Section 5 of the WCA does not bar a civil action when the employer's gross or wanton negligence is the cause of injury or death.
• Their prior acceptance of WCA benefits should not preclude their current civil suit because their initial choice of remedy was not an intelligent one, having been made in ignorance of the facts constituting Philex's gross negligence, which they only learned about from a subsequent official investigation report.

• The Court of First Instance has no jurisdiction over the case because the cause of action arises from a work-connected industrial accident, which is exclusively governed by the Workmen's Compensation Act (WCA).
• Section 5 of the WCA explicitly states that the rights and remedies granted by the Act "shall exclude all other rights and remedies" under the Civil Code or other laws.
• The allegation of employer negligence does not divest the Workmen's Compensation Commission of its exclusive jurisdiction; rather, Section 4-A of the WCA provides for an additional 50% compensation in such cases.
• Petitioners have already elected their remedy by filing claims and accepting payments under the WCA, and are therefore barred from pursuing an alternative action in the regular courts.

• Procedural Issues:
  • Whether the Court of First Instance has jurisdiction over an action for damages under the Civil Code filed by the heirs of deceased employees against their employer for a work-connected death allegedly caused by the employer's gross negligence.
• Substantive Issues:
  • Whether the remedy provided under the Workmen's Compensation Act is exclusive, or if an injured employee or their heirs have a choice of action between a claim under the Act and a suit for damages under the Civil Code.
  • Whether the petitioners' prior availment of benefits under the Workmen's Compensation Act constitutes a waiver of their right to file a subsequent civil action for damages against their employer.

• Procedural:
  • Yes, the Court of First Instance has jurisdiction over the case. The jurisdiction of a court is determined by the allegations in the complaint. Since the petitioners' complaint is based on the employer's alleged gross negligence and seeks damages under the provisions of the Civil Code, it falls within the jurisdiction of the regular courts, not the Workmen's Compensation Commission, whose jurisdiction is limited to claims for compensation under the WCA.
• Substantive:
  • The remedies are selective, not exclusive. An injured employee or their heirs have a right to choose between two remedies: (1) filing a claim for limited compensation under the WCA without need of proving fault, or (2) suing for higher damages in a civil action by proving the employer's fault or negligence. These remedies are mutually exclusive, meaning a claimant cannot pursue both simultaneously.
  • The petitioners' prior receipt of benefits under the WCA does not bar their subsequent civil suit for damages. The Court held that an election of remedies, to be binding, must be an intelligent and informed choice. Since the petitioners filed their WCA claims before they became aware of the official report detailing Philex's gross negligence, their initial choice was based on ignorance or a mistake of fact. This vitiated their choice, allowing them to pursue the alternative remedy under the Civil Code. However, any payments already received under the WCA must be deducted from any damages that may be awarded in the civil case.

• Doctrine of Election of Remedies — This doctrine provides that when two or more inconsistent remedies are available to a party, the choice of one remedy bars the pursuit of the others. The Court applied this by ruling that an injured worker or their heirs can choose between a WCA claim and a Civil Code suit for damages due to employer negligence, but cannot pursue both simultaneously.
• Social Justice — A constitutional principle that mandates the State to afford protection to labor and to resolve all doubts in the implementation and interpretation of laws in favor of the working class. The Court used this principle to justify a liberal interpretation of the law, holding that the restrictive exclusivity clause of the WCA should not be interpreted to prevent workers from seeking full redress under the Civil Code for injuries caused by an employer's gross negligence.
• Mistake of Fact Vitiating Choice — A legal principle holding that a choice or election is not binding if it is made based on ignorance or a mistake regarding a material fact. The Court applied this by finding that the petitioners' initial choice to claim under the WCA was not an intelligent one because they were unaware of Philex's gross negligence at the time, thus allowing them to pursue the alternative remedy under the Civil Code upon discovering the true facts.
• Judicial Legislation — The concept that courts, in interpreting statutes, may fill in gaps or resolve ambiguities in the law. The majority opinion argued that its ruling was not an act of judicial legislation but an application of constitutional social justice principles, while the dissent argued that the Court was overstepping its bounds and legislating a new remedy for workers.

• "WE hold that although the other petitioners had received the benefits under the Workmen's Compensation Act, such may not preclude them from bringing an action before the regular court because they became cognizant of the fact that Philex has been remiss in its contractual obligations with the deceased miners only after receiving compensation under the Act. Had petitioners been aware of said violation of government rules and regulations by Philex, and of its negligence, they would not have sought redress under the Workmen's Compensation Commission which awarded a lesser amount for compensation. The choice of the first remedy was based on ignorance or a mistake of fact, which nullifies the choice as it was not an intelligent choice."

• Pacaña vs. Cebu Autobus Company — Cited as controlling precedent for the rule that an injured worker has a choice of action: either to recover the fixed amounts set by the WCA or to prosecute an ordinary civil action against the tortfeasor for higher damages, but cannot pursue both courses of action simultaneously.
• Esguerra vs. Muñoz Palma — Referenced for establishing the same principle of election of remedies in the context of an injured worker suing a third-party tortfeasor. The Court extended the rationale of this case to apply equally to an employer-tortfeasor.
• Belandres vs. Lopez Sugar Mill Co., Inc. — Cited to support the procedural rule that the nature of a cause of action is determined by the averments or allegations in the complaint. This was used to establish the CFI's jurisdiction based on the petitioners' allegations of negligence and their prayer for damages under the Civil Code.

• Workmen's Compensation Act (Act 3428), Section 5 — This section's "exclusivity clause" was the central provision argued by the respondent to bar the civil suit. The Court interpreted this clause not to apply in cases of gross employer negligence where the claimant opts for a Civil Code remedy.
• Workmen's Compensation Act (Act 3428), Section 4-A — This provision for a 50% additional compensation for employer negligence was cited by the respondent as the sole remedy for such situations within the WCA framework.
• Workmen's Compensation Act (Act 3428), Section 46 — This section granting exclusive jurisdiction to the Workmen's Compensation Commission was held by the Court to apply only to claims for compensation under the Act, not to suits for damages under the Civil Code.
• Civil Code, Article 2176 — This article on quasi-delicts served as the primary substantive basis for the petitioners' claim for damages arising from Philex's alleged fault or negligence.
• Civil Code, Articles 1173, 2201, and 2231 — These articles concerning fault or negligence in obligations and the grounds for awarding actual and exemplary damages were invoked by the petitioners to support their civil action.
• 1935 and 1973 Constitutions (Social Justice Provisions) — The Court heavily relied on the constitutional mandate for social justice and protection of labor to resolve doubts in favor of the petitioners and to justify its departure from a strict, literal interpretation of the WCA's exclusivity clause.

• Justice Melencio-Herrera — Argued that the Civil Code itself, in Article 2196, defers to special laws for workmen's compensation, making the WCA the governing law. She contended that the petitioners had already made a binding election of remedies by accepting WCA benefits, which constituted a "finished transaction" that barred them from pursuing a second, alternative remedy. The legislative intent behind the WCA was clearly to make the remedy exclusive.
• Justice Gutierrez, Jr. — Argued that the majority's decision undermines the entire historical and theoretical foundation of workmen's compensation, which is a "compromise" where workers trade the right to sue for large tort damages for the certainty of a swift, no-fault, albeit limited, recovery. He asserted that the exclusivity provision is essential to this statutory scheme, and allowing an election to sue for damages disrupts the predictability and stability of the system. He concluded that changing such a fundamental aspect of labor law is a matter for the legislature, not the Court.