• Solidary liability of business partners

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    Acrime took place in Liwanag Auto Supply, a partnership of two individuals. One of its employees, a security guard, was killed while on duty. The heirs of the deceased, a widow and three minor children, filed a claim for compensation with the Workmen’s Compensation Commission. Their claim was granted, finding the partners jointly and severally liable for the amount of P3,494.40.

    The partners appealed the claim to the Court because although they agreed that the heirs of their employee were entitled to compensation and that the amount granted was proper, they insisted that there was nothing in the Workmen’s Compensation Act which provides that the obligation of an employer arising from compensable injury or death of an employee should be a solidary obligation. Absent any clear provision, the partners liability should be joint instead of solidary.

    The Supreme Court affirmed the decision of the Workmen’s Compensation Commission and ruled on the solidary obligation of the partners. It explained that even though the Workmen’s Compensation Act did not contain any provision expressly declaring solidary obligation of business partners, there are other provisions of law such as Articles 1711 and 1712 of the New Civil Code, which if read with Section 2 of the Workmen’s Compensation Act, implies that in circumstances like this, the liability between business partners must be solidary –

    The provisions of the New Civil Code above quoted taken together with those of Section 2 of the Workmen’s Compensation Act, reasonably indicate that in compensation cases, the liability of business partners, like appellants, should be solidary; otherwise, the right of the employee may be defeated, or at least crippled. If the responsibility of appellants were to be merely joint and solidary, and one of them happens to be insolvent, the amount awarded to the appellees would only be partially satisfied, which is evidently contrary to the intent and purposes of the Act. In the previous cases we have already held that the Workmen’s Compensation Act should be construed fairly, reasonably and liberally in favor of and for the benefit of the employee and his dependents; that all doubts as to the right of compensation resolved in his favor; and that it should be interpreted to promote its purpose. Accordingly, the present controversy should be decided in favor of the appellees.

    Section 2 of the Workmen’s Compensation Act provides that the right to compensation “shall not be defeated or impaired on the ground that the death, injury or disease was due to the negligence of a fellow servant or employee, without prejudice to the right of the employer to proceed against the negligence party.” Articles 1711 and 1712 provides for the obligation to pay compensation for the death of an employee as well as the solidary liability of compensation of the employer if the death or injury is due to the negligence of a fellow-worker.

    The Court also used Article 1207 of the New Civil Code to support its view. Article 1207 provides that “there is solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires solidarity”–
    Since the Workmen’s Compensation Act was enacted to give full protection to the employee, reason demands that the nature of the obligation of the employers to pay compensation to the heirs of their employee who died in line of duty, should be solidary; otherwise, the purpose of the law could not be attained (Liwanag v. Workmen’s Compensation Commission, No. L-2164, 22 May 1959, J. Endencia).

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