Development Bank v. Sarto
REITERATIONFacts
The Antecedents: On December 5, 1957, Melchora Z. Vda. de Britanico and her minor children filed a notice and claim for compensation under the Workmen's Compensation Act against the Development Bank of the Philippines (DBP) for the death of her husband, Wilfredo V. Britanico, who allegedly contracted an illness in line of duty as a records and mailing clerk of the DBP. Procedural History: The DBP filed a motion to dismiss the claim, asserting that its employees are not covered by the Workmen's Compensation Act. Respondent referee Estanislao D. Sarto denied the motion to dismiss and a subsequent motion for reconsideration. The Petition: The DBP filed a petition for prohibition before the Supreme Court, seeking to declare the respondent referee without jurisdiction over the claim and to enjoin further proceedings.
Issue(s)
Whether the Development Bank of the Philippines (DBP) is an instrumentality of the national government covered by the Workmen's Compensation Act. Whether the respondent referee has jurisdiction over the claim for death compensation filed by the heirs of a deceased DBP employee.
Ruling
The Supreme Court dismissed the petition for prohibition, finding it without merit. The Court held that the DBP is an instrumentality of the national government and its employees are covered by the Workmen's Compensation Act, thus affirming the jurisdiction of the respondent referee.
Ratio Decidendi
On Issue 1: The Court held that the Development Bank of the Philippines (DBP) is an instrumentality of the national government. It reasoned that the government, in performing its function to promote the welfare, progress, and prosperity of the people, acts through various agencies or instrumentalities. The DBP, created to promote credit facilities for economic development, serves as one such instrumentality. The Court noted that the DBP is a government-owned and controlled corporation, having taken over the functions of the former Agricultural and Industrial Bank and the Rehabilitation Finance Corporation. The Court clarified that while the DBP exercises proprietary functions, it is still an instrumentality through which the government reforms its function of promoting economic development. The Court distinguished this from the exercise of sovereign power, citing previous rulings on other government-owned and controlled corporations like the National Coal Company, National Coconut Corporation, and Philippine National Bank, which were also held to exercise proprietary functions. Therefore, as an instrumentality of the national government, its employees are covered by the Workmen's Compensation Act. On Issue 2: Given the ruling that the DBP is an instrumentality of the national government and its employees are covered by the Workmen's Compensation Act, it follows that the respondent referee, Estanislao D. Sarto of the Workmen's Compensation Unit, Regional Office No. 6, has jurisdiction over the claim for death compensation. The DBP's motion to dismiss was correctly denied by the referee, as the claim falls within the purview of the said Act. The petition for prohibition, which sought to divest the referee of jurisdiction, was therefore without merit.
Main Doctrine
The Development Bank of the Philippines (DBP), being a government-owned and controlled corporation created to promote economic development, is considered an instrumentality of the national government and its employees are covered by the Workmen's Compensation Act.