Lorenzo vs. Workmen's Compensation Commission

Once the illness subject of a compensation claim is shown to have supervened in the course of employment, there arises in favor of the claimant a rebuttable presumption that the illness either arose out of or at least was aggravated by the nature of his employment, and the burden to show by substantial evidence the contrary lies with the employer.

Petitioner Leopoldo Lorenzo was employed as a moulder at Philippine Glass Manufacturing Co., Inc. beginning February 21, 1964, working on a weekly rotation basis across three shifts (6:00 A.M. to 2:00 P.M., 2:00 P.M. to 10:00 P.M., and 10:00 P.M. to 6:00 A.M.) at a salary of ₱59.00. The nature of his work exposed him to intense heat from furnaces, as well as dust and fumes, with sudden changes of temperature. The claim was filed under the Workmen's Compensation Act, as amended, which governs compensation for work-related illness or disability.

Petitioner Leopoldo Lorenzo was employed as a moulder at Philippine Glass Manufacturing Co., Inc. on February 21, 1964, earning ₱59.00 per period. His work schedule rotated weekly across three shifts, exposing him to intense furnace heat, dust, and fumes, with sudden changes of temperature. On August 27, 1974, petitioner experienced complaints of cough, chest pain, and fever, prompting him to consult Dr. Rodolfo Gonzales. He orally notified the company's manager of his ailment on the same date. On October 4, 1974, petitioner stopped working, allegedly due to illness. Three days later, on October 7, 1974, he underwent an X-ray examination at the Philippine Tuberculosis Society, which revealed minimal infiltrations on both lungs. A subsequent X-ray on September 4, 1975 showed the same minimal infiltrations.

Respondent company, for its part, submitted evidence showing that on October 4, 1974, it ceased business operations for lack of fuel, a fact reported to the Department of Labor under DOL Form No. 74-3 dated September 19, 1974. On January 31, 1975, the company filed an application for clearance to close business effective that same date, citing losses and lack of operating capital. The company maintained that petitioner was continuously reporting for work up to October 3, 1974 and that his cessation from work was due to the closure of business, not illness.

Petitioner's evidence included Physician's Medical Certificates dated October 9, 1974 and September 4, 1975 issued by Dr. Rodolfo J. Gonzales, certifying that petitioner was under his medical care for Pulmonary Tuberculosis (active) since August 27, 1974. Additional evidence consisted of photofluorography results from the Philippine Tuberculosis Society, Inc., dated October 7, 1974 and January 15, 1975, showing fibro-exudative infiltrations in both lungs. Petitioner also submitted SSS sickness notifications signed by the general manager of respondent company, showing that on various dates — February 23, 1974, March 25, 1974, October 9, 1974, November 8, 1974, and January 24, 1975 — he was medically examined in connection with SSS sickness benefit claims and found to be suffering from acute bronchitis and PTB minimal, for which the SSS allowed confinement periods totaling up to 120 days. These documents demonstrated that even before October 4, 1974, petitioner had already intermittently failed to report for work due to illness requiring confinement. A medical certificate dated November 12, 1975 showed that petitioner's PTB had progressed to moderately advanced.

• Presumption of Compensability: Petitioner argued that both the Regional Office and the WCC expressly found that his illness supervened in the course of employment, which mandated the application of the legal presumption of compensability under the Workmen's Compensation Act, as amended.
• Sufficiency of Medical Evidence: Petitioner contended that the WCC's conclusion that there was no competent medical evidence of disabling sickness during employment was patently contrary to the evidence on record, which included physician's medical certificates and photofluorography results.
• Timeliness of Controversion: Petitioner maintained that respondent company had knowledge of his illness as early as February 25, 1974 and August 27, 1974, yet failed to timely controvert the claim as required by Sections 37 and 45 of the Workmen's Compensation Act, constituting a waiver of the right to controvert.

• No Disability During Employment: Respondent company argued that petitioner was continuously reporting for work up to October 3, 1974, and therefore had not suffered any disability, as cessation from work was caused by the closure of business for lack of fuel, not by illness.
• Lack of Competent Medical Evidence: Respondent company contended that the X-ray findings were all taken after petitioner's separation from employment and that no medical certificate or physician's report was attached to the original claim to attest to the facts of his sickness.
• Closure of Business: Respondent company implied that the cessation of business operations on October 4, 1974 terminated any employer-employee relationship and precluded liability for compensation.

• Presumption of Compensability: Whether the express finding that petitioner's illness supervened in the course of employment triggered the presumption of compensability, and whether the employer rebutted that presumption.
• Competency of Medical Evidence: Whether the medical certificates and photofluorography results constituted competent evidence of disabling illness during the period of employment.
• Effect of Business Closure: Whether the employer's cessation of business operations prejudices the employee's right to compensation.
• Timeliness of Controversion: Whether respondent company timely and effectively controverted petitioner's claim under the Workmen's Compensation Act.

• Presumption of Compensability: Yes. Once illness is shown to have supervened in the course of employment, the rebuttable presumption arises that it arose out of or was aggravated by the nature of employment, and the burden shifts to the employer to prove the contrary by substantial evidence — which respondent company failed to discharge.
• Competency of Medical Evidence: Yes. The physician's medical certificates and photofluorography results constitute competent evidence under Section 49 of the Workmen's Compensation Act, and their evidentiary value is not diluted by the fact that examinations were conducted shortly after the cessation of business operations, as tuberculosis is not an instantaneous disease.
• Effect of Business Closure: No. The closure of business cannot prejudice the employee's right to compensation, as the employer's liability under the Workmen's Compensation Act had already accrued at the time the illness supervened during employment.
• Timeliness of Controversion: No. Respondent company failed to timely controvert the claim despite knowledge of the illness as early as February 25, 1974 and August 27, 1974, and its controversion filed only on May 4, 1975 was too late, constituting a waiver of all non-jurisdictional defenses.

• Presumption of Compensability: Both the Assistant Chief of Section and the WCC expressly found that petitioner contracted PTB on August 27, 1974 due to fatigue and exposure to intense heat, furnace dust and fumes, and sudden changes of temperature, which was aggravated by the nature of his employment, causing him to stop working on October 4, 1974. With that express finding, the legal presumption of compensability was mandated. The burden to show by substantial evidence the contrary lay with the employer. The only evidence submitted by respondent company on that score was the affidavit of its assistant manager, which was insufficient to discharge the burden. The WCC therefore grossly erred in not applying and enforcing the presumption of compensability to which petitioner was legally entitled.

• Competency of Medical Evidence: The WCC's conclusion that there was no competent medical evidence was patently contrary to the record. Petitioner submitted Physician's Medical Certificates dated October 9, 1974 and September 4, 1975 from Dr. Rodolfo J. Gonzales certifying that petitioner was under medical care for Pulmonary Tuberculosis (active) since August 27, 1974, along with photofluorography results from October 7, 1974 and January 15, 1975. The veracity of these documents was never disputed by respondent company. Pursuant to Section 49 of the Workmen's Compensation Act, a medical report of an attending physician may be received as evidence and used as proof of the fact in dispute. The fact that the examinations were conducted after the cessation of business operations does not dilute their evidentiary value, because tuberculosis is not an instantaneous disease — it is an imperceptible germ disease whose incubation period is two to ten weeks, and whose presence in the body cannot be easily discerned at its incipient stage. Exposure to dust and dirt is a predisposing cause of tuberculosis and tends to produce fibrosis of the lungs, weakening resistance to latent infection.

• Effect of Business Closure: The fact that respondent company ceased operations on October 4, 1974 cannot prejudice petitioner's rights because at that precise point, the company's liability under the Workmen's Compensation Act had already accrued. In Ayuso vs. WCC, the Court ordered compensation despite closure of business due to expiration of license, ruling that closure will not excuse the employer from liability to give compensation benefits to an employee who became ill during the course of employment. Similarly, in Laude vs. Cine Moderna, the destruction of the employer's property by fire did not ipso facto terminate the employer-employee relationship. The company's jurisdictional defense of lack of employer-employee relationship at the time of disability was therefore unmeritorious.

• Timeliness of Controversion: Respondent company had knowledge of petitioner's illness on August 27, 1974 and even earlier, on February 25, 1974, as shown by SSS sickness notifications signed by its own general manager. Yet it did not comply with Sections 37 and 45 of the Workmen's Compensation Act, which require timely controversion. The controversion filed only on May 4, 1975 was too late, and the company's right to controvert was never reinstated as there was no petition to that effect. Having failed to timely controvert, the company was deemed to have renounced all non-jurisdictional defenses, including the non-compensability of the claim. The WCC gravely abused its discretion in failing to treat the claim as uncontroverted.

• Presumption of Compensability — Once the illness subject of a compensation claim is shown to have supervened in the course of employment, there arises in favor of the claimant a rebuttable presumption that the illness either arose out of or at least was aggravated by the nature of his employment. The burden to show by substantial evidence the contrary lies with the employer. The Court applied this presumption because both the Regional Office and the WCC expressly found that petitioner's illness supervened during employment, yet the employer failed to present sufficient and competent evidence to rebut the presumption.

• Nature of Tuberculosis as a Non-Instantaneous Disease — Tuberculosis is not an instantaneous disease but an imperceptible germ disease caused by bacteria inhaled into the lungs, with an incubation period of two to ten weeks. Its incipient stage may not be readily discovered, and exposure to dust and dirt is a predisposing cause that tends to produce fibrosis of the lungs, weakening resistance to latent infection. The Court applied this principle to reject the argument that X-ray findings taken after cessation of employment could not establish illness during employment.

• Timely Controversion Under the Workmen's Compensation Act — Under Sections 37 and 45 of the Workmen's Compensation Act, as amended, the employer must timely controvert a compensation claim upon knowledge of the employee's illness. Failure to do so constitutes a waiver or renunciation of the right to controvert, and the employer is deemed to have renounced all non-jurisdictional defenses, including non-compensability. The employer's right to controvert, once lost, can only be reinstated upon petition; absent such reinstatement, a late controversion cannot be given cognizance.

• Non-Prejudice of Business Closure to Compensation Rights — The closure of an employer's business does not prejudice the employee's right to recover compensation benefits, provided the illness supervened during the course of employment and the employer's liability had already accrued. The employer-employee relationship is not ipso facto terminated by cessation of business operations.

• "once the illness, subject of the compensation claim, is shown to have supervened in the course of employment, there arises in favor of claimant the rebuttable presumption that the said illness either arose out of or at least was aggravated by the nature of his employment; and that consequently, the burden to show by substantial evidence the contrary lies with the employer" — This passage articulates the canonical formulation of the presumption of compensability under the Workmen's Compensation Act, establishing the burden-shifting framework that controls compensation claims.

• "Tuberculosis is not an instantaneous dibe it is an imperceptible disease caused by a germ which is breathed in and feeds on the lungs or taken with food. It is medically accepted that exposure to dust and dirt is a predisposing cause of tuberculosis and tends to produce fibrosis of the lungs Which weakens resistance to any latent tuberculosis infection and reactivates that infection" — This passage explains the medical rationale for treating post-employment diagnostic findings as competent evidence of illness contracted during employment, particularly for chronic diseases like tuberculosis.

• "Having failed to timely controvert the claim, the respondent company was thereby considered to have renounced all non-jurisdictional defenses, such as the non-compensability of the claim." — This passage states the consequence of an employer's failure to comply with the controversion requirements of the Workmen's Compensation Act, establishing waiver of defenses as a procedural sanction.

• Romero vs. WCC, 77 SCRA 483 (1977) — Followed for the rule that under Section 49 of the Workmen's Compensation Act, a medical report of an attending physician may be received as evidence and used as proof of the fact in dispute.
• Justo vs. WCC, 75 SCRA 224 (1976) — Followed for the medical proposition that exposure to dust and dirt is a predisposing cause of tuberculosis and tends to produce fibrosis of the lungs, weakening resistance to latent infection.
• Valencia vs. WCC, 72 SCRA 245 (1976) — Followed as strikingly similar in facts; the Court there ruled that an ailment found three days after cessation of employment could not have simply appeared on the third day of separation, reinforcing that tuberculosis is not instantaneous.
• Batangas Transportation Co. vs. Perez and WCC, L-19522, August 31, 1964 — Followed for the principle that tuberculosis is not an instantaneous disease but an imperceptible germ disease whose incipient stage may not be readily discovered.
• Ayuso vs. WCC, 73 SCRA 237 (1976) — Followed for the rule that closure of business does not excuse the employer from liability to compensate an employee who became ill during employment.
• Laude vs. Cine Moderna, 72 SCRA 569 (1976) — Followed for the rule that destruction of the employer's property does not ipso facto terminate the employer-employee relationship even if the employer ceases to do business.

• Section 49, Workmen's Compensation Act, as amended — Provides that a medical report of an attending physician may be received as evidence and used as proof of the fact in dispute. The Court applied this provision to uphold the competency of petitioner's physician's medical certificates as evidence of his illness.
• Sections 37 and 45, Workmen's Compensation Act, as amended — Require the employer to timely controvert a compensation claim upon knowledge of the employee's illness. The Court found that respondent company's failure to comply with these sections constituted a waiver of the right to controvert and a renunciation of all non-jurisdictional defenses.

Teehankee (Chairman), Muñoz Palma, Fernandez, and Guerrero, JJ., concurred.