Contents

Santiago v. CF Sharp......................................................................................................................................................1
Jebsens Maritime Inc v. Undag.....................................................................................................................................5
Flourish Maritime Shipping v. Almanzor......................................................................................................................12
People v. Nogra...........................................................................................................................................................14
People v. Ganigan........................................................................................................................................................19
People v. Jamilosa.......................................................................................................................................................23
People v. Zenchiro.......................................................................................................................................................31
People v. Comilla.........................................................................................................................................................37
Marsaman Manning Agency v. NLRC...........................................................................................................................43
Serrano v. Gallant Maritime Services..........................................................................................................................47
PERT/CPM Manpower Exponent v. Vinuya.................................................................................................................50
New Life Enterprises v. CA...........................................................................................................................................58
Sunace International Management v. NLRC................................................................................................................64
CF Sharp v. Pioneer Insurance and Surety Corp..........................................................................................................69

Santiago v. CF Sharp
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[2007V730] PAUL V. SANTIAGO, Petitioner, versus CF SHARP CREW MANAGEMENT, INC., Respondent.2007
Jul 102nd DivisionG.R. No. 162419D E C I S I O N

Tinga, J.:

At the heart of this case involving a contract between a seafarer, on one hand, and the manning agent and
the foreign principal, on the other, is this erstwhile unsettled legal quandary: whether the seafarer, who was
prevented from leaving the port of Manila and refused deployment without valid reason but whose POEA-approved
employment contract provides that the employer-employee relationship shall commence only upon the seafarer’s
actual departure from the port in the point of hire, is entitled to relief?

This treats of the petition for review filed by Paul V. Santiago (petitioner) assailing the Decision and
Resolution of the Court of Appeals dated 16 October 2003 and 19 February 2004, respectively, in CA-G.R. SP No.
68404.[1]

Petitioner had been working as a seafarer for Smith Bell Management, Inc. (respondent) for about five (5)
years.[2] On 3 February 1998, petitioner signed a new contract of employment with respondent, with the duration
of nine (9) months. He was assured of a monthly salary of US$515.00, overtime pay and other benefits. The
following day or on 4 February 1998, the contract was approved by the Philippine Overseas Employment
Administration (POEA). Petitioner was to be deployed on board the “MSV Seaspread” which was scheduled to
leave the port of Manila for Canada on 13 February 1998.
 A week before the scheduled date of departure, Capt. Pacifico Fernandez, respondent’s Vice President, sent
a facsimile message to the captain of “MSV Seaspread,” which reads:

I received a phone call today from the wife of Paul Santiago in Masbate asking me not to send her
husband to MSV Seaspread anymore. Other callers who did not reveal their identity gave me some feedbacks that
Paul Santiago this time if allowed to depart will jump ship in Canada like his brother Christopher Santiago, O/S who
jumped ship from the C.S. Nexus in Kita-kyushu, Japan last December, 1997.

We do not want this to happen again and have the vessel penalized like the C.S. Nexus in Japan.

Forewarned is forearmed like his brother when his brother when he was applying he behaved like a Saint but in his
heart he was a serpent. If you agree with me then we will send his replacement.

Kindly advise.[3]

To this message the captain of “MSV Seaspread” replied:

Many thanks for your advice concerning P. Santiago, A/B. Please cancel plans for him to return to Seaspread.
[4]

On 9 February 1998, petitioner was thus told that he would not be leaving for Canada anymore, but he was
reassured that he might be considered for deployment at some future date.

Petitioner filed a complaint for illegal dismissal, damages, and attorney's fees against respondent and its
foreign principal, Cable and Wireless (Marine) Ltd.[5] The case was raffled to Labor Arbiter Teresita Castillon-Lora,
who ruled that the employment contract remained valid but had not commenced since petitioner was not deployed.
According to her, respondent violated the rules and regulations governing overseas employment when it did not
deploy petitioner, causing petitioner to suffer actual damages representing lost salary income for nine (9) months
and fixed overtime fee, all amounting to US$7, 209.00.

The labor arbiter held respondent liable. The dispositive portion of her Decision dated 29 January 1999 reads:

WHEREFORE, premises considered, respondent is hereby Ordered to pay complainant actual damages in
the amount of US$7,209.00 plus 10% attorney's fees, payable in Philippine peso at the rate of exchange prevailing
at the time of payment.

All the other claims are hereby DISMISSED for lack of merit.

SO ORDERED.[6]

On appeal by respondent, the National Labor Relations Commission (NLRC) ruled that there is no employer-
employee relationship between petitioner and respondent because under the Standard Terms and Conditions
Governing the Employment of Filipino Seafarers on Board Ocean Going Vessels (POEA Standard Contract), the
employment contract shall commence upon actual departure of the seafarer from the airport or seaport at the point
of hire and with a POEA-approved contract. In the absence of an employer-employee relationship between the
parties, the claims for illegal dismissal, actual damages, and attorney’s fees should be dismissed.[7] On the other
hand, the NLRC found respondent’s decision not to deploy petitioner to be a valid exercise of its management
prerogative.[8] The NLRC disposed of the appeal in this wise:

WHEREFORE, in the light of the foregoing, the assailed Decision dated January 29, 1999 is hereby
AFFIRMED in so far as other claims are concerned and with MODIFICATION by VACATING the award of actual
damages and attorney’s fees as well as excluding Pacifico Fernandez as party respondent.

SO ORDERED.[9]

Petitioner moved for the reconsideration of the NLRC’s Decision but his motion was denied for lack of merit.
[10] He elevated the case to the Court of Appeals through a petition for certiorari.
In its Decision[11] dated 16 October 2003, the Court of Appeals noted that there is an ambiguity in the NLRC’s
Decision when it affirmed with modification the labor arbiter’s Decision, because by the very modification introduced
by the Commission (vacating the award of actual damages and attorney’s fees), there is nothing more left in the
labor arbiter’s Decision to affirm.[12]

According to the appellate court, petitioner is not entitled to actual damages because damages are not
recoverable by a worker who was not deployed by his agency within the period prescribed in the POEA Rules.[13]
It agreed with the NLRC’s finding that petitioner’s non-deployment was a valid exercise of respondent’s
management prerogative.[14] It added that since petitioner had not departed from the Port of Manila, no employer-
employee relationship between the parties arose and any claim for damages against the so-called employer could
have no leg to stand on.[15]

Petitioner’s subsequent motion for reconsideration was denied on 19 February 2004.[16]

The present petition is anchored on two grounds, to wit:

A. The Honorable Court of Appeals committed a serious error of law when it ignored [S]ection 10 of
Republic Act [R.A.] No. 8042 otherwise known as the Migrant Worker’s Act of 1995 as well as Section 29 of the
Standard Terms and Conditions Governing the Employment of Filipino Seafarers On-Board Ocean-Going Vessels
(which is deemed incorporated under the petitioner’s POEA approved Employment Contract) that the claims or
disputes of the Overseas Filipino Worker by virtue of a contract fall within the jurisdiction of the Labor Arbiter of the
NLRC.

B. The Honorable Court of Appeals committed a serious error when it disregarded the required quantum
of proof in labor cases, which is substantial evidence, thus a total departure from established jurisprudence on the
matter.[17]

Petitioner maintains that respondent violated the Migrant Workers Act and the POEA Rules when it failed to deploy
him within thirty (30) calendar days without a valid reason. In doing so, it had unilaterally and arbitrarily prevented
the consummation of the POEA- approved contract. Since it prevented his deployment without valid basis, said
deployment being a condition to the consummation of the POEA contract, the contract is deemed consummated,
and therefore he should be awarded actual damages, consisting of the stipulated salary and fixed overtime pay.[18]
Petitioner adds that since the contract is deemed consummated, he should be considered an employee for all
intents and purposes, and thus the labor arbiter and/or the NLRC has jurisdiction to take cognizance of his claims.
[19]

Petitioner additionally claims that he should be considered a regular employee, having worked for five (5) years on
board the same vessel owned by the same principal and manned by the same local agent. He argues that
respondent’s act of not deploying him was a scheme designed to prevent him from attaining the status of a regular
employee.[20]

Petitioner submits that respondent had no valid and sufficient cause to abandon the employment contract, as it
merely relied upon alleged phone calls from his wife and other unnamed callers in arriving at the conclusion that he
would jump ship like his brother. He points out that his wife had executed an affidavit[21] strongly denying having
called respondent, and that the other alleged callers did not even disclose their identities to respondent.[22] Thus, it
was error for the Court of Appeals to adopt the unfounded conclusion of the NLRC, as the same was not based on
substantial evidence.[23]

On the other hand, respondent argues that the Labor Arbiter has no jurisdiction to award petitioner’s monetary
claims. His employment with respondent did not commence because his deployment was withheld for a valid
reason. Consequently, the labor arbiter and/or the NLRC cannot entertain adjudication of petitioner’s case much
less award damages to him. The controversy involves a breach of contractual obligations and as such is cognizable
by civil courts.[24] On another matter, respondent claims that the second issue posed by petitioner involves a
recalibration of facts which is outside the jurisdiction of this Court.[25]

There is some merit in the petition.

There is no question that the parties entered into an employment contract on 3 February 1998, whereby petitioner
was contracted by respondent to render services on board “MSV Seaspread” for the consideration of US$515.00
per month for nine (9) months, plus overtime pay. However, respondent failed to deploy petitioner from the port of
Manila to Canada. Considering that petitioner was not able to depart from the airport or seaport in the point of hire,
the employment contract did not commence, and no employer-employee relationship was created between the
parties.[26]

However, a distinction must be made between the perfection of the employment contract and the commencement of
the employer-employee relationship. The perfection of the contract, which in this case coincided with the date of
execution thereof, occurred when petitioner and respondent agreed on the object and the cause, as well as the rest
of the terms and conditions therein. The commencement of the employer-employee relationship, as earlier
discussed, would have taken place had petitioner been actually deployed from the point of hire. Thus, even before
the start of any employer-employee relationship, contemporaneous with the perfection of the employment contract
was the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the
erring party. Thus, if the reverse had happened, that is the seafarer failed or refused to be deployed as agreed
upon, he would be liable for damages.

Moreover, while the POEA Standard Contract must be recognized and respected, neither the manning agent nor the
employer can simply prevent a seafarer from being deployed without a valid reason.

Respondent’s act of preventing petitioner from departing the port of Manila and boarding “MSV Seaspread”
constitutes a breach of contract, giving rise to petitioner’s cause of action. Respondent unilaterally and
unreasonably reneged on its obligation to deploy petitioner and must therefore answer for the actual damages he
suffered.

We take exception to the Court of Appeals’ conclusion that damages are not recoverable by a worker who was not
deployed by his agency. The fact that the POEA Rules[27] are silent as to the payment of damages to the affected
seafarer does not mean that the seafarer is precluded from claiming the same. The sanctions provided for non-
deployment do not end with the suspension or cancellation of license or fine and the return of all documents at no
cost to the worker. They do not forfend a seafarer from instituting an action for damages against the employer or
agency which has failed to deploy him.

The POEA Rules only provide sanctions which the POEA can impose on erring agencies. It does not provide
for damages and money claims recoverable by aggrieved employees because it is not the POEA, but the NLRC,
which has jurisdiction over such matters.

Despite the absence of an employer-employee relationship between petitioner and respondent, the Court rules that
the NLRC has jurisdiction over petitioner’s complaint. The jurisdiction of labor arbiters is not limited to claims arising
from employer-employee relationships. Section 10 of R.A. No. 8042 (Migrant Workers Act), provides that:

Sec. 10. Money Claims. – Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within
ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims
for actual, moral, exemplary and other forms of damages. x x x [ mphasis supplied]

Since the present petition involves the employment contract entered into by petitioner for overseas employment, his
claims are cognizable by the labor arbiters of the NLRC.

Article 2199 of the Civil Code provides that one is entitled to an adequate compensation only for such pecuniary
loss suffered by him as he has duly proved. Respondent is thus liable to pay petitioner actual damages in the form
of the loss of nine (9) months’ worth of salary as provided in the contract. He is not, however, entitled to overtime
pay. While the contract indicated a fixed overtime pay, it is not a guarantee that he would receive said amount
regardless of whether or not he rendered overtime work. Even though petitioner was “prevented without valid
reason from rendering regular much less overtime service,”[28] the fact remains that there is no certainty that
petitioner will perform overtime work had he been allowed to board the vessel. The amount of US$286.00 stipulated
in the contract will be paid only if and when the employee rendered overtime work. This has been the tenor of our
rulings in the case of Stolt-Nielsen Marine Services (Phils.), Inc. v. National Labor Relations Commission[29] where
we discussed the matter in this light:
The contract provision means that the fixed overtime pay of 30% would be the basis for computing the overtime pay
if and when overtime work would be rendered. Simply stated, the rendition of overtime work and the submission of
sufficient proof that said work was actually performed are conditions to be satisfied before a seaman could be
entitled to overtime pay which should be computed on the basis of 30% of the basic monthly salary. In short, the
contract provision guarantees the right to overtime pay but the entitlement to such benefit must first be established.
Realistically speaking, a seaman, by the very nature of his job, stays on board a ship or vessel beyond the regular
eight-hour work schedule. For the employer to give him overtime pay for the extra hours when he might be sleeping
or attending to his personal chores or even just lulling away his time would be extremely unfair and unreasonable.
[30]

The Court also holds that petitioner is entitled to attorney’s fees in the concept of damages and expenses of
litigation. Attorney's fees are recoverable when the defendant's act or omission has compelled the plaintiff to incur
expenses to protect his interest.[31] We note that respondent’s basis for not deploying petitioner is the belief that he
will jump ship just like his brother, a mere suspicion that is based on alleged phone calls of several persons whose
identities were not even confirmed. Time and again, this Court has upheld management prerogatives so long as
they are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating
or circumventing the rights of the employees under special laws or under valid agreements.[32] Respondent’s
failure to deploy petitioner is unfounded and unreasonable, forcing petitioner to institute the suit below. The award
of attorney’s fees is thus warranted.

However, moral damages cannot be awarded in this case. While respondent’s failure to deploy petitioner seems
baseless and unreasonable, we cannot qualify such action as being tainted with bad faith, or done deliberately to
defeat petitioner’s rights, as to justify the award of moral damages. At most, respondent was being overzealous in
protecting its interest when it became too hasty in making its conclusion that petitioner will jump ship like his brother.

We likewise do not see respondent’s failure to deploy petitioner as an act designed to prevent the latter from
attaining the status of a regular employee. Even if petitioner was able to depart the port of Manila, he still cannot be
considered a regular employee, regardless of his previous contracts of employment with respondent. In Millares v.
National Labor Relations Commission,[33] the Court ruled that seafarers are considered contractual employees and
cannot be considered as regular employees under the Labor Code. Their employment is governed by the contracts
they sign every time they are rehired and their employment is terminated when the contract expires. The exigencies
of their work necessitates that they be employed on a contractual basis.[34]

WHEREFORE, petition is GRANTED IN PART. The Decision dated 16 October 2003 and the Resolution dated
19 February 2004 of the Court of Appeals are REVERSED and SET ASIDE. The Decision of Labor Arbiter Teresita
D. Castillon-Lora dated 29 January 1999 is REINSTATED with the MODIFICATION that respondent CF Sharp
Crew Management, Inc. is ordered to pay actual or compensatory damages in the amount of US$4,635.00
representing salary for nine (9) months as stated in the contract, and attorney’s fees at the reasonable rate of 10%
of the recoverable amount.

SO ORDERED.

Jebsens Maritime Inc v. Undag

Republic of the Philippines
Supreme Court
Manila
 
THIRD DIVISION
 
 
JEBSENS MARITIME INC.,   G.R. No. 191491
represented by MS. ARLENE  
ASUNCION and/or ALLIANCE MARINE
SERVICES, LTD., Present:
                                 Petitioners,
   
 
  
- versus - VELASCO, JR., J.,Chairperson,
 
  PERALTA,
 
 
ABAD,
ENRIQUE UNDAG,
                         Respondent.
  MENDOZA, and

PERLAS-BERNABE, JJ.

Promulgated:

 
       December 14, 2011
 
x -----------------------------------------------------------------------------------------------------x
 
DECISION
 
MENDOZA, J.:
 
 
This petition for review assails the September 16, 2009 Decision [1] and the March 3, 2010 Resolution [2] of the
Court of Appeals (CA), which set aside the October 17, 2005 and January 24, 2006 Resolutions of the National
Labor Relations Commission(NLRC), dismissing the complaint of respondent Enrique Undag (respondent) for
disability benefits.
 
 
Records bear out that respondent was hired as Lead Operator on board the vessel FPSO Jamestown
owned by Alliance Marine Services, Ltd. and managed by its local agent, Jebsens Maritime,
Inc. (petitioners). Respondent’s contract with petitioners was for a period of four (4) months with a basic salary of
US$806.00 a month. He was deployed on March 24, 2003 and eventually repatriated to the Philippines on July 18,
2003 after his contract with the petitioners had expired.
 
On September 24, 2003, about two months after repatriation, he went to see a physician, Dr. Efren
Vicaldo (Dr. Vicaldo), for a physical check-up and was diagnosed to have “Hypertensive cardiovascular disease,
Atrial Fibrillation, Diabetes Mellitus II, Impediment Grade X (20.15%).” According to Dr. Vicaldo, respondent had a
history of hypertension and diabetes and was at risk of developing a stroke, coronary artery disease and congestive
heart failure. He likewise stated that respondent’s ailment was aggravated by his work as a seaman and that he was
no longer fit for work. For said reason, respondent requested for financial assistance from petitioners but the latter
denied his request.
 
Constrained, he filed a complaint for sickness benefits against petitioners before the NLRC, alleging that he
had been suffering from chest pains and difficulty of breathing since July 2003 when he was on board petitioners’
vessel. Despite knowing his bad physical condition upon repatriation, the petitioners did not give him any financial
assistance. Thus,  he prayed that petitioners be ordered to reimburse him for his medical expenses and pay him
sickness allowance amounting to US$3,224.00, including damages and attorney’s fees.
 
Petitioners countered that respondent was not entitled to disability benefits because his repatriation was not
due to medical reasons but due to the expiration of his employment contract. Petitioners basically argued that,
under the POEA Standard Employment Contract (POEA-SEC), a seafarer was entitled to disability benefits only if
he had suffered a work-related illness during the term of his contract.
 
 On June 30, 2005, after due hearing, the Labor Arbiter (LA) rendered a decision ordering petitioners to pay,
jointly and severally, respondent the Philippine peso equivalent of US$60,000.00 representing total permanent
disability compensation benefits for US$3,224.00 sickness allowance, and 10% attorney’s fees.
 
On appeal, however, the NLRC reversed the LA decision and denied respondent’s claim for disability
benefits. The NLRC reasoned out that respondent failed to present substantial evidence proving that he had
suffered any illness while on board or after disembarking from petitioners’ vessel. Respondent’s motion for
reconsideration was later denied.
 
Not satisfied with the NLRC decision, respondent appealed before the CA. On September 16, 2009, the CA
rendered a decision setting aside the ruling of the NLRC. The appellate court stated that respondent was able to
prove by substantial evidence that his work as a seafarer caused his hypertensive cardiovascular disease or, at
least, was a relevant factor in contracting his illness. The CA explained that as Lead Operator, respondent
performed multi-tasking functions which required excessive physical and mental effort.   Moreover, he was also
exposed to the perils of the sea and was made to endure unpredictable and extreme climate changes in the daily
performance of his job. The CA also took judicial notice of the fact that overseas workers suffer a great degree of
emotional strain while on duty on board vessels because of their being separated from their families for the duration
of their contract. The CA was of the strong view that the inherent difficulties in respondent’s job definitely caused his
illness. The CA added that because of the nature of his work, the illness suffered by respondent contributed to the
aggravation of his injury which was pre-existing at the time of his employment. Finally, the CA ruled that respondent
is entitled to claim total and permanent disability benefits because of the undisputed doctor’s findings that he “is now
unfit to resume work as a seaman in any capacity,” which clearly constitutes a permanent and total disability as
defined by law.
 
Not in conformity with the CA decision, petitioners filed this petition for review praying for its reversal raising
this lone
 
ISSUE
 
 
WHETHER OR NOT THE COURT OF APPEALS ERRED IN AWARDING FULL DISABILITY BENEFITS TO THE
PRIVATE RESPONDENT.

 
 
In advocacy of their position, petitioners argue that the CA committed a reversible error in awarding
respondent disability benefits on the principal ground that there are numerous substantial and competent evidence
on record which clearly establish the fact that respondent was guilty of fraudulent misrepresentation, hence,
forfeiting his right to any benefits under the POEA contract. For one, respondent intentionally lied when he declared
that he was not suffering from a previous medical condition in his pre-employment medical examination  (PEME).
Specifically, he failed to disclose the fact that he was suffering from diabetes and heart problem, which is a clear
case of concealment.
 
Secondly, respondent’s illnesses were not acquired during the term of his contract with petitioners. He had
no evidence showing that he acquired the heart problem and hypertension while he was on board the vessel. The
fact that respondent passed his PEME does not automatically mean that he suffered his illness on board the vessel
or that the same was not pre-existing.
Third, the Labor Code provision on permanent disability is not applicable in a claim for disability benefits
under the POEA contract.
 
Respondent’s Position
 
          Respondent counters that petitioners never raised the issue of fraudulent misrepresentation before the labor
tribunals despite being given the opportunity to do so. Hence, they are estopped from raising it for the first time on
appeal. At any rate, he claims that he did not commit any fraud or misrepresentation because he underwent a
stringent PEME, which included a blood and urine examination, conducted by the company-designated physician.
His illness, therefore, was not pre-existing.  In any case, the pre-existence of an illness is not a bar for the
compensability of a seafarer’s illness. His non-compliance with the mandatory 3-day reporting upon signoff is
irrelevant because it only applies to a seafarer who has signed off from the vessel for medical reasons.
 
          Moreover, respondent argues that a repatriation due to a finished contract does not preclude a seafarer from
recovery of benefits, as the only requirement is that the disease must be a consequence or a result of the work
performed.  He has shown by substantial evidence that his cardiovascular disease was work-related. The strenuous
work conditions that he experienced while on sea duty coupled with his usual encounter with the unfriendly forces of
nature increased the risk of contracting his heart ailment.
 
          Lastly, he asserts that his disability is permanent and total because he has been declared to be unfit for sea
duty for which he is entitled to recover attorney’s fees and litigation costs under Article 2208. 
 
THE COURT’S RULING
 
No substantial evidence that illness was work-related
 
Entitlement of seamen on overseas work to disability benefits is a matter governed, not only by medical
findings, but by law and by contract. The material statutory provisions are Articles 191 to 193 under Chapter VI
(Disability Benefits) of the Labor Code, in relation with Rule X of the Rules and Regulations Implementing Book IV of
the Labor Code.  By contract, the POEA-SEC, as provided under Department Order No. 4, series of 2000 of the
Department of Labor and Employment, and the parties’ Collective Bargaining Agreement (CBA) bind the seaman
and his employer to each other. [3]
 
Deemed incorporated in every Filipino seafarer’s contract of employment, denominated as POEA-SEC or
the Philippine Overseas Employment Administration-Standard Employment Contract, is a set of standard provisions
established and implemented by the POEA, called the Amended Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean-Going Vessels, which contain the minimum requirements
prescribed by the government for the employment of Filipino seafarers. Section 20(B), paragraph 6, of the 2000
Amended Standard Terms and Conditions provides:
 
SECTION 20. COMPENSATION AND BENEFITS
 
xxx
 
B.        COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
 
The liabilities of the employer when the seafarer suffers work-related injury or illness during
the term of his contract are as follows: 
 
Xxx
             
6.         In case of permanent total or partial disability of the seafarer caused by either injury
or illness the seafarer shall be compensated in accordance with the schedule of benefits
enumerated in Section 32 of this Contract. Computation of his benefits arising from an illness or
disease shall be governed by the rates and the rules of compensation applicable at the time the
illness or disease was contracted. 
 
Pursuant to the aforequoted provision, two elements must concur for an injury or illness to be
compensable.  First, that the injury or illness must be work-related; and second, that the work-related injury or illness
must have existed during the term of the seafarer’s employment contract.
 
The 2000 POEA Amended Standard Terms and Conditions defines "work-related injury" as "injury(ies)
resulting in disability or death arising out of and in the course of employment" and "work-related illness" as "any
sickness resulting in disability or death as a result of an occupational disease listed under Section 32-A of this
contract with the conditions set therein satisfied." These are:
 
SECTION 32-A.        OCCUPATIONAL DISEASES
 
For an occupational disease and the resulting disability or death to be compensable, all of
the following conditions must be satisfied:
 
 1) The seafarer’s work must involve the risks described herein;
 
2) The disease was contracted as a result of the seafarer’s exposure to the
described risks;
 
3) The disease was contracted within a period of exposure and under such other
factors necessary to contract it; and  
 
4)     There was no notorious negligence on the part of the seafarer.
 
 
Sec. 32-A(11) of the 2000 POEA Amended Standard Terms and Conditions explicitly considers a
cardiovascular  disease as an occupational disease if the same was contracted under  working  conditions
that  involve  any of  the  following risks –
 
a)   If the heart disease was known to have been present during employment, there must be proof
that an acute exacerbation was clearly precipitated by the unusual strain by reasons of the
nature of his work.
 
b)  The strain of the work that brings about an acute attack must be sufficient severity and must be
followed within 24 hours by the clinical signs of cardiac insult to constitute causal relationship.
 
c)  If a person who was apparently asymptomatic before being subjected to strain at work showed
signs and symptoms of cardiac injury during the performance of his work and such symptoms
and signs persisted, it is reasonable to claim a causal relationship.
 
 
Consequently, for cardiovascular disease to constitute an occupational disease for which the seafarer may
claim compensation, it is incumbent upon said seafarer to show that he developed the same under any of the three
conditions identified above.[4]
 
In labor cases as in other administrative proceedings, substantial evidence or such relevant evidence as a
reasonable mind might accept as sufficient to support a conclusion is required. The oft-repeated rule is that whoever
claims entitlement to the benefits provided by law should establish his or her right thereto by substantial evidence.
[5]
 Substantial evidence is more than a mere scintilla.  The evidence must be real and substantial, and not merely
apparent; for the duty to prove work-causation or work-aggravation imposed by law is real and not merely apparent.
[6]

 
In this case, the Court is of the considered view that respondent failed to prove that his ailment was work-
related and was acquired during his 4-month sea deployment. Respondent claims that sometime in July 2003, he
showed manifestations of a heart disease when he suddenly felt chest pains, shortness of breath and fatigability.
[7]
  He, however, never substantiated such claim. He never showed any written note, request or record about any
medical check-up, consultation or treatment.  Similarly, he failed to substantiate his allegation that after his arrival
in Manila on July 18, 2003, he reported to petitioners’ office on July 31, 2003 to seek medical consultation for the
discomfort he was experiencing but petitioners ignored him. [8]
 
He also alleged that on August 4, 2003, more or less sixteen (16) days after arriving in Manila, he underwent
a physical and laboratory examination at the Maritime Clinic for International Service, Inc. conducted by petitioners
where he was declared to be unfit for sea duty. Again, there is no record of this except his self-serving claim. What
is on record is that on September 24, 2003, respondent surfaced demanding payment of disability benefits.
 
Respondent failed to comply with the mandatory 3-day rule
 
More importantly, respondent failed to comply with the mandatory 3-day medical examination deadline
provided in Section 20(B), paragraph (3) of the 2000 Amended Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean-Going Vessels. As earlier stated, it was only on  September 24,
2003, or more than two (2) months after his arrival inManila, that he sought a medical opinion from Dr. Vicaldo who
declared him unfit to work as a seaman due to “hypertensive cardiovascular disease, atrial fibrillation and diabetes
mellitus II.”[9]  Section 20(B), paragraph (3) of the 2000 Amended Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean-Going Vessels, reads:
 
Section 20(B), paragraph (3) thereof states:
 
X x x.
 
3. Upon sign off from the vessel for medical treatment, the seafarer is entitled to sickness
allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent
disability has been assessed by the company-designated physician but in no case shall this period
exceed one-hundred twenty (120) days.
 
For this purpose, the seafarer shall submit himself to a post-employment medical
examination by a company-designated physician within three working days upon his
return except when he is physically incapacitated to do so, in which case a written notice to the
agency within the same period is deemed as compliance. Failure of the seafarer to comply with
the mandatory reporting requirement shall result in his forfeiture of the right to claim the
above benefits. [Emphases and underscoring supplied]
 
 While the rule is not absolute, there is no credible explanation from respondent why he failed to comply with
the mandatory rule considering his claim that in July, 2003, he was suffering from chest pain, shortness of breath
and fatigue. An award of disability benefit to a seaman in this case, despite non-compliance with strict mandatory
requirements of the law, cannot be sustained.  The rationale behind the rule can easily be divined. Within three days
from repatriation, it would be fairly easier for a physician to determine if the illness was work-related or not.  After
that period, there would be difficulty in ascertaining the real cause of the illness. 
 
To ignore the rule would set a precedent with negative repercussions because it would open the floodgates
to a limitless number of seafarers claiming disability benefits.  It would certainly be unfair to the employer who would
have difficulty determining the cause of a claimant’s illness considering the passage of time. In such a case, the
employers would have no protection against unrelated disability claims.
 
Respondent claims that the 3-day mandatory rule is not applicable as it is only for those who were
repatriated for medical reasons. This could only mean that he had no medical reason then.  In his pleadings, he
claimed that sometime in July 2003, he showed manifestations of a heart disease as he suddenly felt chest pains,
shortness of breath and fatigability. [10] He, however, failed to disclose when exactly in July 2003 that he felt those
manifestations whether before or after his repatriation on July 18, 2003. If it was before the said date, he should
have submitted himself to a medical examination three days after repatriation.
 
The Court’s ruling is not novel.  In the past, the Court repeatedly denied the payment of disability benefits to
seamen who failed to comply with the mandatory reporting and examination requirement. Lately, in the recent case
of Alex C. Cootauco v. MMS Phil. Maritime Services, Inc.,[11] it was written:
 
For this purpose, the seafarer shall submit himself to a post-employment medical
examination by a company-designatedphysician within three working days upon his return
except when he is physically incapacitated to do so, in which case a written notice to the agency
within the same period is deemed as compliance. Failure of the seafarer to comply with the
mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits.
  
As these provisions operate, the seafarer, upon sign-off from his vessel, must report to the
company-designated physician within three working days from arrival for diagnosis and treatment.
 
Applying the above provision of Section 20(B), paragraph (3), petitioner is required to
undergo post-employment medical examination by a company-designated physician within three
working days from arrival, except when he is physically incapacitated to do so, in which case, a
written notice to the agency within the same period would suffice.
 
In Maunlad Transport, Inc. v. Manigo, Jr., this Court explicitly declared that it is mandatory for
a claimant to be examined by a company-designated physician within three days from his
 repatriation. The unexplained omission of this requirement will bar the filing of a claim for disability
benefits.
 
The NLRC and the Court of Appeals determined that petitioner did not observe the
established procedure as there is no proof at all that he reported to the office of the respondents. We
see no reason to depart from their findings. While petitioner remains firm that he reported to the
office of the respondents for mandatory reporting, the records are bereft of any proof to fortify his
claim. The onus probandi falls on petitioner to establish or substantiate such claim by the requisite
quantum of evidence. There is absolutely no evidence on record to prove petitioner’s claim that he
reported to respondents’ office for mandatory reportorial requirement. Petitioner therefore failed to
adduce substantial evidence as basis for the grant of relief. [Emphasis and underscoring supplied]
 
 
The Court reiterated the same ruling in the case of Coastal Safeway Marine Services, Inc. vs. Elmer T.
Esguerra,[12] where it was written:
 
For this purpose, the seafarer shall submit himself to a post-employment medical
examination by a company-designated physician within three working days upon his
return except when he is physically incapacitated to do so, in which case, a written notice to the
agency within the same period is deemed as compliance. Failure of the seafarer to comply with the
mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits.
 
 If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be
agreed jointly between the employer and the seafarer. The third doctor's decision shall be final and
binding on both parties.
 
The foregoing provision has been interpreted to mean that it is the company-
designated physician who is entrusted with the task of assessing the seaman's disability,
whether total or partial, due to either injury or illness, during the term of the latter's
employment. Concededly, this does not mean that the assessment of said physician is final, binding
or conclusive on the claimant, the labor tribunal or the courts. Should he be so minded, the seafarer
has the prerogative to request a second opinion and to consult a physician of his choice regarding
his ailment or injury, in which case the medical report issued by the latter shall be evaluated by the
labor tribunal and the court, based on its inherent merit. For the seaman’s claim to prosper, however,
it is mandatory that he should be examined by a company-designated physician within three days
from his repatriation. Failure to comply with this mandatory reporting requirement without justifiable
cause shall result in forfeiture of the right to claim the compensation and disability benefits provided
under the POEA-SEC. [Emphases and underscoring supplied]
 
 
WHEREFORE, the petition is GRANTED. The September 16, 2009 Decision of the Court of Appeals and its
March 3, 2010 Resolution are hereby REVERSED and SET ASIDE, and the October 17, 2005 and January 24,
2006 Resolutions of the National Labor Relations Commission are REINSTATED.
 
SO ORDERED.
 

Flourish Maritime Shipping v. Almanzor

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[2008V323] FLOURISH MARITIME SHIPPING and LOLITA UY, Petitioners, versus DONATO A. ALMANZOR,
Respondent.2008 Mar 143rd DivisionG.R. No. 177948DECISION

NACHURA, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Decision[1] of the Court
of Appeals dated February 27, 2007 and its Resolution[2] dated May 18, 2007 in CA-G.R. SP No. 95056. The
assailed Decision affirmed with modification the Decision[3] of the National Labor Relations Commission (NLRC)
dated April 28, 2006 in NLRC NCR CA NO. 046596-05 which, in turn, affirmed the Decision[4] of Labor Arbiter
Lutricia F. Quitevis-Alconcel, dated October 7, 2005 in OFW NLRC CASE NO. (M) 05-01-0243-00.

The facts of the case are as follows:

Respondent Donato A. Almanzor entered into a two-year employment contract with Flourish Maritime Shipping as
fisherman, with a monthly salary of NT15,840.00 with free meals every day. It was, likewise, agreed that
respondent would be provided with suitable accommodations.[5]

On October 1, 2004, respondent was deployed to Taipei, Taiwan as part of the crew of a fishing vessel known as FV
Tsang Cheng 66. Respondent was surprised to learn that there were only five (5) crew members on board and he
had to buy his own food, contrary to the agreed stipulation of free food and accommodation.[6]

While on board, the master of the vessel gave respondent orders which he could not understand; thus, he failed to
obey him. Consequently, enraged at not being obeyed, the master struck him, hitting the right dorsal part of his
body. He then requested medical assistance, but the master refused.[7] Hence, he sought the help of petitioner
Lolita Uy (the manning agency owner), who then talked to the master of the vessel.

While the vessel was docked at the Taipei port, respondent was informed that he would be repatriated. Upon his
arrival in the Philippines, he reported to petitioners and sought medical assistance after which he was declared “fit to
work.” Petitioners promised that he would be redeployed, but it turned out that it was no longer possible because of
his age, for then he was already 49 years old.

Thus, respondent filed a complaint for illegal dismissal, payment for the unexpired portion of his employment
contract, earned wages, moral and exemplary damages plus attorney’s fees.

Petitioners countered that respondent voluntarily resigned[8] from his employment and returned to the Philippines
on the same day. They, likewise, sought the dismissal of the complaint for failure of respondent to comply with the
grievance machinery and arbitration clause embodied in the contract of employment. Lastly, they insisted that
respondent failed to discharge the burden to prove that he was illegally dismissed.[9]

On October 7, 2005, the Labor Arbiter rendered a Decision in favor of respondent, the dispositive portion of which
reads:

WHEREFORE, viewed from the foregoing, judgment is hereby rendered declaring respondents guilty of illegal
dismissal.

Respondents Flourish Maritime Shipping and Wang Yung Chin are hereby ordered to jointly and solidarily pay
complainant Donato A. Almanzor the amount of NT15,840.00 times six (6) months or a total of NT Ninety-Five
Thousand Forty (NT95,040.00). Respondents shall pay the total amount in its peso equivalent at the time of actual
payment plus legal interest.

All other claims herein sought and prayed for are hereby denied for lack of legal and factual bases.

SO ORDERED.[10]

On appeal to the NLRC, the Commission affirmed in toto the Labor Arbiter’s findings.

Unsatisfied, petitioners elevated the matter to the Court of Appeals on petition for certiorari.[11] The appellate
court agreed with the Labor Arbiter’s conclusion (as affirmed by the NLRC) that respondent was illegally dismissed
from employment. It, however, modified the NLRC decision by increasing the monetary award due respondent in
accordance with its interpretation of Section 10 of Republic Act (R.A.) 8042.[12]

Both the Labor Arbiter and the NLRC Board of Commissioners awarded such amount equivalent to respondent’s
salary for six (6) months (3 months for every year of the unexpired term) considering that respondent’s employment
contract covered a two-year period and he was dismissed from employment after only 26 days of actual work. The
CA, however, disagreed with such interpretation. According to the CA, since respondent actually worked for 26
days and was thereafter dismissed from employment, the unexpired portion of the contract is one (1) year, eleven
(11) months and four (4) days. For the unexpired one (second) whole year, the court awarded three months’ salary.
As to the 11 months and 4 days of the first year, the appellate court refused to apply the three-month rule. Instead,
in addition to three months (for the unexpired second year), it awarded full compensation corresponding to the
whole unexpired term of 11 months and 4 days. Thus, the CA deemed it proper to award a total amount equivalent
to the respondent’s salary for 14 months and 4 days.[13]

Petitioners now raise the following issues for resolution:

1. WHETHER OR NOT THE THREE LETTERS ARE RESIGNATION LETTERS OR QUITCLAIMS.

2. WHETHER OR NOT THE MODIFICATION OF THE NLRC DECISION BY THE COURT OF APPEALS IS
CONTRARY TO LAW.[14]

Simply stated, petitioners want this Court to resolve the issue of whether respondent was illegally dismissed from
employment and if so, to determine the correct award of compensation due respondent.

The Labor Arbiter concluded that petitioners, who had the burden of proof, failed to adduce any convincing evidence
to establish and substantiate its claim that respondent voluntarily resigned from employment.[15] Likewise, the
NLRC held that petitioners failed to show that respondent was not physically fit to perform work due to his old age.
Moreover, the labor tribunal said that petitioners failed to prove that the employment contract indeed provided a
grievance machinery.[16] Clearly, both labor tribunals correctly concluded, as affirmed by the Court of Appeals, that
respondent was not redeployed for work, in violation of their employment contract. Perforce, the termination of
respondent’s services is without just or valid cause.

We reiterate the dictum that this Court is not a trier of facts, and this doctrine applies with greater force in labor
cases. Factual questions are for the labor tribunals to resolve. In this case, the factual issues were resolved by the
Labor Arbiter and the NLRC. Their findings were affirmed by the Court of Appeals. Judicial review by this Court
does not extend to a reevaluation of the sufficiency of the evidence upon which the proper labor tribunal has based
its determination.[17]

On the amount of the award due respondent, Section 10 of R.A. 8042 provides:

SECTION 10. Money Claims. – x x x

xxxx

In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract,
the worker shall be entitled to the full reimbursement of his placement fee with interest at twelve percent (12%) per
annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year
of the unexpired term, whichever is less.

x x x x.

The correct interpretation of this provision was settled in Marsaman Manning Agency Inc. v. National Labor
Relations Commission[18] where this Court held that “the choice of which amount to award an illegally dismissed
overseas contract worker, i.e., whether his salaries for the unexpired portion of his employment contract, or three (3)
months’ salary for every year of the unexpired term, whichever is less,” comes into play only when the employment
contract concerned has a term of at least one (1) year or more.[19]

The employment contract involved in the instant case covers a two-year period but the overseas contract worker
actually worked for only 26 days prior to his illegal dismissal. Thus, the three months’ salary rule applies. There is a
similar factual milieu between the case at bench and Olarte v. Nayona.[20] The only difference lies in the length of
the subject employment contract: Olarte involved a one-year contract; while the employment in this case covers a
two-year period. However, they both fall under the three months’ salary rule since the term of the contract is “at
least one year or more.” In Olarte, as well as in JSS Indochina Corporation v. Ferrer,[21] we ordered the employer
of an illegally dismissed overseas contract worker to pay an amount equivalent to three (3) months’ salary.

We are not in accord with the ruling of the Court of Appeals that respondent should be paid his salaries for 14
months and 4 days. Records show that his actual employment lasted only for 26 days. Applying the above
provision, and considering that the employment contract covers a two-year period, we agree with the Labor Arbiter’s
disposition, as affirmed by the NLRC, that respondent is entitled to six (6) months’ salary. This is obviously what the
law provides.

WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals, dated February 27,
2007, and its Resolution dated May 18, 2007 in CA-G.R. SP No. 95056, are AFFIRMED with the MODIFICATION
that the monetary award to be paid the respondent shall be the amount set forth in the decision of the Labor Arbiter
as affirmed by the NLRC.

SO ORDERED.

People v. Nogra
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[2008V984] PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, versus Antonio Nogra, Accused-Appellant.2008

Aug 293rd DivisionG.R. No. 170834D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before the Court is an appeal from the Decision[1] dated August 31, 2005 of the Court of Appeals (CA) in
CA-G.R. C.R. No. 00244 affirming the Judgment of the Regional Trial Court (RTC), Branch 19, Naga City in Criminal
Case No. 98-7182, convicting Antonio Nogra (appellant) of large scale illegal recruitment under Section 6(m) in
relation to Section 7(b) of Republic Act No. 8042 (R.A. No. 8042),[2] otherwise known as the “Migrant Workers and
Overseas Filipinos Act of 1995.”[3]

The inculpatory portion of the Information charging one Lorna G. Orciga and appellant with large scale illegal
recruitment reads as follows:

That sometime during the period of March 1997 to November, 1997 in the City of Naga, Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused, being the General Manager and
Operations Manager of LORAN INTERNATIONAL OVERSEAS RECRUITMENT CO., LTD., with office at
Concepcion Grande, Naga City, conspiring, confederating together and mutually helping each other, representing
themselves to have the capacity to contract, enlist, hire and transport Filipino workers for employment abroad, did
then and there willfully, unlawfully and criminally, for a fee, recruit and promise employment/job placement to the
herein complaining witnesses RENATO ALDEN, OLIVER SARMIENTO, FE ZABALLA, TEOFILA LUALHATI,
PILIPINA MENDOZA and KERWIN DONACAO, but failed to actually deploy them without valid reason, as well as to
reimburse their documentation, placement and processing expenses for purposes of deployment despite their
repeated demands for the return of the same, to their damage and prejudice in the amounts as may be proven in
court.

CONTRARY TO LAW.[4]

Only appellant was brought to the jurisdiction of the trial court since Lorna G. Orciga was then and still is at
large. Arraigned with the assistance of counsel, appellant entered a plea of “NOT GUILTY” to the crime charged.
Thereafter, trial of the case ensued.

Of the six complainants, the prosecution was able to present five of them, namely: Renato Alden, Fe
Zaballa, Teofila Lualhati, Filipina Mendoza and Kerwin Donacao. Anaielyn Sarmiento, wife of complainant Oliver
Sarmiento, also testified for the prosecution.

The facts, as established by the prosecution, are aptly summarized by the Office of the Solicitor General
(OSG), as follows:

Appellant held office at Loran International Overseas Recruitment Co., (Loran) in Concepcion Grande, Naga
City (p. 4, TSN, October 19, 1998). A nameplate on his table prominently displayed his name and position as
operations manager (p. 11, TSN, November 17, 1998; p. 4, TSN, January 12, 1999; p. 21, TSN, November 19,
1998). The license of Loran also indicated appellant as the operations manager (p. 5, TSN, February 10, 1999).
The POEA files also reflect his position as operations manager of Loran (Exhibit L to L-4, pp. 5-9, TSN, November
19, 1998).

Sometime in December 1996, Renato Alden went to Loran to apply for a job as hotel worker for Saipan. He
was interviewed by appellant, who required Alden to submit an NBI clearance and medical certificate and to pay the
placement fee. Alden paid the amount of P31,000.00. The additional amount of P4,000.00 was to be paid prior to
his departure to Saipan (pp. 5-6, TSN, November 17, 1998). Appellant promised Alden that he would leave within a
period of three to four months. After one year of waiting Alden was not able to leave. Alden filed a complaint with
the NBI when he was not able to recover the amount and could no longer talk with appellant (p. 6, TSN, November
17, 1998).

On April 18, 1997, Teofila Lualhati applied for employment as hotel worker for Saipan with Loran (pp. 1-3,
10, TSN, November 19, 1998). Appellant required her to submit an NBI clearance and medical certificate and to
pay the processing fee in the amount of P35,000.00 so she could leave immediately. She paid the amount of
P35,000.00 to Loran's secretary in the presence of appellant. She was promised that within 120 days or 4 months
she would be able to leave (pp. 11-13, TSN, November 19, 1998). Despite repeated follow-ups, Lualhati was
unable to work in Saipan. She demanded the refund of the processing fee. When the amount was not returned to
her, she filed a complaint with the NBI (pp. 14-15, TSN, November 19, 1998).

Sometime in April 1998, Filipina Mendoza went to Loran to apply for employment as hotel worker (p. 4, TSN,
July 12, 1999). She paid the amount of P35,000.00 as placement fee. When she was not able to work abroad, she
went to Loran and sought the return of P35,000.00 from appellant (p. 7, TSN, January 21, 1999).

Sometime in October 1997, Kerwin Donacao went to Loran to apply for employment as purchaser in Saipan
(p. 4, TSN, February 10, 1999). He was required to submit NBI clearance, police clearance, previous employment
certificate and his passport. He paid the placement fee of P35,000.00 (pp.4-5, TSN, February 10, 1999). After
paying the amount, he was told to wait for two to three months. When he was not able to leave for Saipan, he
demanded the return of the placement fee, which was not refunded (pp. 6-7, TSN, February 10, 1999).

During the first week of November 1997, Annelyn Sarmiento and her husband, Oliver Sarmiento, applied for
overseas employment. For the application of Oliver Sarmiento, they submitted his medical certificate and
certification of previous employment. They were also made to pay the amount of P27,000.00 as processing fee.
Oliver Sarmiento was promised that within 1 month, he would be able to leave. Initially, Oliver Sarmiento was told
that allegedly his visa was yet to be obtained. When he was not able to leave and what he paid was not refunded,
he filed a complaint with the NBI (pp. 4-6, TSN, April 23, 1999).

Sometime in May 1997, Fe Zaballa applied for overseas employment in Saipan with Loran (p. 4, TSN, May
21, 1999). She was required to submit her medical certificate, original copy of her birth certificate, NBI clearance
and police clearance. She was also required to pay the amount of P35,000.00 as placement fee. When she could
not be deployed, she sought to recover the amount she paid, which was not returned (pp. 7-8, TSN, May 2, 1999).
[5]

On the other hand, appellant presented the following evidence:

The defense presented [appellant] Antonio Nogra and the agency's secretary and cashier, Maritess Mesina.

From their testimonies it was established that LORAN INTERNATIONAL OVERSEAS RECRUITMENT CO.,
LTD., (LORAN, for brevity) was owned by accused Lorna Orciga and Japanese national Kataru Tanaka (TSN,
September 30, 2000, p. 7). Sometime in July 1994, [appellant] Antonio Nogra read from outside the agency's main
office at Libertad, Mandaluyong City that it was in need of a liaison officer. He applied for the position. The part-
owner and co-accused, Lorna Orciga, hired him instead as Operations Manager as the agency was then still in the
process of completing the list of personnel to be submitted to the POEA. (TSN, January 31, 2001, p. 5).

[Appellant] Nogra started working with LORAN in October 1994. In 1995, he was transferred to Naga City
when the agency opened a branch office thereat. Although he was designated as the Operations Manager,
[appellant] Nogra was a mere employee of the agency. He was receiving a monthly salary of P5,000.00 and
additional P2,000.00 monthly meal allowance. He was in-charge of the advertisement of the company. He also
drove for the company. He fetched from the airport the agency's visitors and guests and drove them to hotels and
other places. (TSN, May 3, 2000, pp. 2-9).
 Although part-owner Lorna Orciga was stationed in Manila, she, however, actually remained in control of the
branch office in Naga City. She conducted the final interview of the applicants and transacted with the foreign
employers. She also controlled the financial matters and assessment fees of the agency in Naga City (TSN,
September 20, 2000, pp. 8-9). The placement and processing fees collected by the agency in Naga City were all
deposited in the bank account of Lorna Orciga and not a single centavo went to the benefit of [appellant] Nogra
(TSN, January 10, 2000, pp. 14-22).[6]

On March 26, 2003, the RTC rendered Judgment[7] finding appellant guilty beyond reasonable doubt of the
crime charged. The fallo of the decision reads:

WHEREFORE, the Court finds the accused ANTONIO NOGRA guilty beyond reasonable doubt of the crime
of Illegal Recruitment Committed in Large Scale defined under Sections 6(m) and 7(b) of RA 8042, otherwise known
as The Migrant Workers and Overseas Filipinos Act of 1995 and, accordingly, hereby imposes upon him the penalty
of life imprisonment and a fine of Five hundred thousand pesos (P500,000.00).

SO ORDERED.[8]

On April 10, 2003, appellant filed a Notice of Appeal.[9] The RTC ordered the transmittal of the entire
records of the case to this Court.

Conformably to the ruling in People v. Mateo,[10] the case was referred to the CA for intermediate review.
[11]

On August 31, 2005, the CA rendered a Decision[12] affirming the decision of the RTC. The CA held that
being an employee is not a valid defense since employees who have knowledge and active participation in the
recruitment activities may be criminally liable for illegal recruitment activities, based upon this Court's ruling in
People v. Chowdury[13] and People v. Corpuz;[14] that appellant had knowledge of and active participation in the
recruitment activities since all the prosecution witnesses pinpointed appellant as the one whom they initially
approached regarding their plans of working overseas and he was the one who told them about the fees they had to
pay, as well as the papers that they had to submit; that the mere fact that appellant was not issued special authority
to recruit does not exculpate him from any liability but rather strongly suggests his guilt; that appellant's invocation of
non-flight cannot be weighed in his favor since there is no established rule that non-flight is, in every instance, an
indication of innocence.

A Notice of Appeal[15] having been timely filed by appellant, the CA forwarded the records of the case to
this Court for further review.

In his Brief, appellant assigns as errors the following:

I. THE TRIAL COURT ERRED IN NOT FINDING THAT THE ACCUSED-APPELLANT WAS A MERE EMPLOYEE
OF THE RECRUITMENT AGENCY DESPITE HIS DESIGNATION AS ITS OPERATIONS MANAGER.

II. THE TRIAL COURT ERRED IN CONVICTING THE ACCUSED-APPELLANT OF THE OFFENSE-CHARGED
DESPITE THE FACT THAT UNDER THE LAW, HE WAS NOT CRIMINALY LIABLE FOR HIS AGENCY'S
TRANSACTIONS.[16]

Appellant argues that the agency was under the management and control of Orciga, and that he was a mere
employee; that he could not be held personally liable for illegal recruitment in the absence of any showing that he
was validly issued special authority to recruit workers, which was approved by the Philippine Overseas Employment
Administration (POEA); that his non-flight is indicative of his innocence.

Appellee, through the OSG, counters that appellant is not a mere clerk or secretary of Loran, but its
Operations Manager who directly participated in the recruitment scheme by promising private complainants work
abroad, but failed to deploy them and refused to reimburse the applicants' placement fees when demanded.

The appeal fails. The CA did not commit any error in affirming the decision of the RTC.
 R.A. No. 8042 broadened the concept of illegal recruitment under the Labor Code[17] and provided stiffer
penalties, especially those that constitute economic sabotage, i.e., Illegal Recruitment in Large Scale and Illegal
Recruitment Committed by a Syndicate.

Section 6 of R.A. No. 8042 defined when recruitment is illegal:

SEC. 6. Definition. – For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or
advertising for employment abroad, whether for profit or not, when undertaken by a non-licensee or non-holder of
authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the
Labor Code of the Philippines: Provided, That any such non-licensee or non-holder who, in any manner, offers or
promises for a fee employment abroad to two or more persons shall be deemed so engaged. It shall likewise
include the following acts, whether committed by any person, whether a non-licensee, non-holder, licensee or holder
of authority:

xxxx

(l) Failure to actually deploy without valid reason as determined by the Department of Labor and Employment; and

(m) Failure to reimburse expenses incurred by the workers in connection with his documentation and processing for
purposes of deployment, in cases where the deployment does not actually take place without the worker's fault.
Illegal recruitment when committed by a syndicate or in large scale shall be considered as offense involving
economic sabotage.

Illegal recruitment is deemed committed by a syndicate carried out by a group of three (3) or more persons
conspiring or confederating with one another. It is deemed committed in large scale if committed against three (3) or
more persons individually or as a group.

The persons criminally liable for the above offenses are the principals, accomplices, and accessories. In
case of juridical persons, the officers having control, management or direction of their business shall be liable.
(Emphasis and underscoring supplied)

In the present case, evidence for the prosecution showed that Loran International Overseas Recruitment
Co., Ltd. is a duly licensed recruitment agency with authority to establish a branch office. However, under R.A. No.
8042, even a licensee or holder of authority can be held liable for illegal recruitment, should he commit or omit to do
any of the acts enumerated in Section 6.

Appellant was charged with illegal recruitment in large scale under Section 6 (l) and (m) of R.A. No. 8042.
Section 6 (l) refers to the failure to actually deploy without valid reason, as determined by the Department of Labor
and Employment (DOLE). Section 6 (m) involves the failure to reimburse expenses incurred by the worker in
connection with his documentation and processing for purposes of deployment, in cases in which the deployment
does not actually take place without the worker’s fault.

A thorough scrutiny of the prosecution's evidence reveals that it failed to prove appellant's liability under
Section 6 (l) of R.A. No. 8042. The law requires not only that the failure to deploy be without valid reason “as
determined by the Department of Labor and Employment.” The law envisions that there be independent evidence
from the DOLE to establish the reason for non-deployment, such as the absence of a proper job order. No
document from the DOLE was presented in the present case to establish the reason for the accused's failure to
actually deploy private complainants. Thus, appellant cannot be held liable under Section 6 (l) of R.A. No. 8042.

As to Section 6 (m) of R.A. No. 8042, the prosecution has proven beyond reasonable doubt that private
complainants made payments to Loran, and appellant failed to reimburse the amounts paid by private complainants
when they were not deployed. The prosecution presented the receipts issued by Loran to private complainants
evidencing payment of placement fees ranging from P27,000.00 to P35,000.00.

Appellant does not dispute that private complainants were not deployed for overseas work, and that the
placement fees they paid were not returned to them despite demand. However, he seeks to exculpate himself on
the ground that he is a mere employee of Loran.
 The Court is unswayed by appellant's contention.

The penultimate paragraph of Section 6 of R.A. No. 8042 explicitly states that those criminally liable are the
“principals, accomplices, and accessories. In case of juridical persons, the officers having control, management or
direction of their business shall be liable.” Contrary to appellant's claim, the testimonies of the complaining
witnesses and the documentary evidence for the prosecution clearly established that he was not a mere employee
of Loran, but its Operations Manager. The license of Loran, the files of the POEA and the nameplate prominently
displayed on his office desk reflected his position as Operations Manager. As such, he received private
complainants' job applications; and interviewed and informed them of the agency’s requirements prior to their
deployment, such as NBI clearance, police clearance, medical certificate, previous employment certificate and the
payment of placement fee. He was also responsible for the radio advertisements and leaflets, which enticed
complaining witnesses to apply for employment with the agency. Clearly, as Operations Manager, he was in the
forefront of the recruitment activities.

The defense of being a mere employee is not a shield against his conviction for large scale illegal
recruitment. In People v. Gasacao[18] and People v. Sagayaga,[19] the Court reiterated the ruling in People v.
Cabais,[20] People v. Chowdury[21] and People v. Corpuz[22] that an employee of a company or corporation
engaged in illegal recruitment may be held liable as principal by direct participation, together with its employer, if it is
shown that he actively and consciously participated in the recruitment process.

In the present case, it was clearly established that appellant dealt directly with the private complainants. He
interviewed and informed them of the documentary requirements and placement fee. He promised deployment
within a three or four month-period upon payment of the fee, but failed to deploy them and to reimburse, upon
demand, the placement fees paid.

The Court is not persuaded by appellant's argument that his non-flight is indicative of his innocence. Unlike
the flight of an accused, which is competent evidence against him tending to establish his guilt, non-flight is simply
inaction, which may be due to several factors. It may not be construed as an indication of innocence.[23]

Of marked relevance is the absence of any showing that the private complainants had any ill motive against
appellant other than to bring him to the bar of justice to answer for the crime of illegal recruitment. Besides, for
strangers to conspire and accuse another stranger of a most serious crime just to mollify their hurt feelings would
certainly be against human nature and experience.[24] Where there is nothing to show that the witnesses for the
prosecution were actuated by improper motive, their positive and categorical declarations on the witness stand
under the solemnity of an oath deserve full faith and credence.[25]

It is a settled rule that factual findings of the trial courts, including their assessment of the witnesses’
credibility, are entitled to great weight and respect by the Supreme Court, particularly when the CA affirmed such
findings.[26] After all, the trial court is in the best position to determine the value and weight of the testimonies of
witnesses.[27] The absence of any showing that the trial court plainly overlooked certain facts of substance and
value that, if considered, might affect the result of the case, or that its assessment was arbitrary, impels the Court to
defer to the trial court’s determination according credibility to the prosecution evidence.

Under the last paragraph of Section 6 of R.A. No. 8042, illegal recruitment shall be considered an offense
involving economic sabotage if committed in large scale, viz, committed against three or more persons individually
or as a group. In the present case, five complainants testified against appellant’s acts of illegal recruitment, thereby
rendering his acts tantamount to economic sabotage. Under Section 7 (b) of R.A. No. 8042, the penalty of life
imprisonment and a fine of not less than P500,000.00 nor more than P1,000.000.00 shall be imposed if illegal
recruitment constitutes economic sabotage.

Thus, the RTC and the CA correctly found appellant guilty beyond reasonable doubt of large scale illegal
recruitment.

WHEREFORE, the appeal is DISMISSED. The Decision dated August 31, 2995 of the Court of Appeals
affirming the conviction of appellant Antonio Nogra for large scale illegal recruitment under Sections 6 (m) and 7 (b)
of Republic Act No. 8042 is AFFIRMED.

SO ORDERED.
People v. Ganigan
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[2008V933] THE PEOPLE OF THE PHILIPPINES, Appellee, versus MARCOS GANIGAN, Appellant.2008 Aug
202nd DivisionG.R. No. 178204 [Formerly G.R. No. 156497]D E C I S I O N

Tinga, J.:

Before us for automatic review is the Decision[1] dated 14 November 2006 of the Court of Appeals
affirming the judgment of conviction[2] for the crime of illegal recruitment rendered by the Regional Trial
Court (RTC) of Malolos, Bulacan, Branch 21.[3]

In an Information filed before the RTC, accused Ruth, Monchito, Eddie, Avelin Sulaiman and Marcos
(appellant), all surnamed Ganigan, were charged with illegal recruitment committed as follows:

That sometime between the period from July and August 1998 in Plaridel, Bulacan and within the
jurisdiction of this Honorable Court, the above-named accused, representing themselves to have the
capacity to contract, enlist and transport workers for employment in New Zealand, conspiring, confederating
and mutually helping one another, did then and there willfully, unlawfully and feloniously recruit for a fee the
following persons namely: MAURO EUSEBIO, VALENTINO CRISOSTOMO and LEONORA DOMINGO, all
residents of Sto. Niño, Plaridel, Bulacan for employment in New Zealand, without first obtaining the required
license and/or authority from the Philippine Overseas Employment Administration.

CONTRARY TO LAW.[4]

Only appellant was arrested. The other accused remained at large.

Appellant, assisted by counsel, pleaded not guilty on arraignment. Trial ensued.

The three private complainants, Leonora Domingo (Leonora), Mauro Reyes (Mauro), and Valentino
Crisostomo (Valentino), testified for the prosecution.

They narrated that they first met appellant in the house of Manolito Reyes in Plaridel, Bulacan in
June 1998. Appellant allegedly made representations to private complainants, among others, that his
brother, Monchito, and his sister-in-law, Ruth, had the capacity to recruit apple and grape pickers for
employment in New Zealand.[5]

On 5 July 1998, the group, composed of the three private complainants and 35 others,[6] went to La
Union where they met with Monchito and Ruth. Ruth proceeded to explain their prospective employment
with a $1,200.00 monthly salary. Ruth also required the group to attend bible study sessions every Sunday
because their prospective employer is a devout Catholic. Pursuant to their desire to work in New Zealand,
the group attended bible study from 5 July to December 1998.[7]

Each member of the group was asked to pay P2,000.00 as assurance fee.[8] Leonora paid an
additional P400.00 for her National Statistics Office-issued birth certificate,[9] P500.00 for physical
examination and P320.00 for medical fee.[10] Mauro gave an additional P320.00 for medical expenses[11]
whereas Valentino shelled out P180.00 for pictures, P1,000.00 for bio-data and P350.00 for medical
examination.[12] The three attested that appellant received their payment and a document was prepared by
one of their companions as evidence of the receipt.[13] The exhibits submitted by the prosecution show that
Monchito acknowledged having received a total of P101,480.00 from various applicants.[14] Other
documents showed that appellant and Ruth received payment from the applicants.[15]

Ruth and appellant allegedly promised them that they would leave for New Zealand before October
1998. When they were unable to leave, however, they were told that their prospective employer would arrive
in the Philippines on 22 November 1998. On the designated date, they were informed that their prospective
employer fell down the stairway of the airplane. An interview was then scheduled on 29 December 1998 but
on that day, they were told that their prospective employer had been held up. This prompted the
complainants to go to the Philippine Overseas Employment Administration (POEA) to check on the
background of the accused.

They learned that appellant, Ruth and Monchito do not have the authority to recruit workers for
employment abroad.[16] Certifications to that effect were issued by the POEA.[17]

Appellant denied having recruited private complainants for work abroad. He claimed that he himself
was also a victim as he had also paid P3,000.00 for himself and P2,000.00 for his daughter. He likewise
attended the bible study sessions as a requirement for the overseas employment.[18] He contended that he
was merely implicated in the case because he was the only one apprehended among the accused.[19]

The trial court rendered judgment convicting appellant of the crime of illegal recruitment. The
dispositive portion of the decision reads:

Wherefore, all premises considered, this Court finds and so holds that the prosecution was able to
establish by proof beyond reasonable doubt the criminal culpability of the accused Marcos Ganigan on the
offense charged against him. Accordingly, this Court finds him guilty of the crime of illegal recruitment in
large scale resulting in economic sabotage as defined under Section 6 and penalized under Section 7(b) of
Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995.
Accordingly, he is sentenced to suffer the penalty of life imprisonment and to pay a fine of P500,000.00.

Accused Marcos Ganigan is also directed to pay complainants Leonora Domingo, Mauro Reyes and
Valentino Crisostomo the amounts of P2,400.00 each plus the sum of P500.00 for Leonora Domingo for
actual damages and P25,000.00 as and for moral damages.

With regard to accused Ruth Ganigan, Monchito Ganigan, Eddie Ganigan and Avelin Sulaiman
Ganigan, who remain at large until this time, the case against them is ordered archived. Let an alias
Warrant of arrest be issued for their apprehension.

SO ORDERED.[20]

The trial court found that all elements of illegal recruitment in large scale had been established
through the testimonial and documentary evidence of the prosecution.

In view of the penalty imposed, the case was elevated to this Court on automatic review. However,
this Court resolved to transfer the case to the Court of Appeals for intermediate review in light of our ruling in
People v. Mateo.[21]

On 14 November 2006, the Court of Appeals affirmed the trial court’s decision.

Upon receipt of the unfavorable decision, appellant filed a notice of appeal. On 15 October 2007,
this Court resolved to accept the case and to require the parties to simultaneously submit their respective
supplemental briefs. The Office of the Solicitor General (OSG) filed a Manifestation and Motion[22] stating
that it would no longer file any supplemental briefs and instead adopt its appellee's brief filed on 12 January
2006. Appellant likewise manifested that he would merely adopt his appellant's brief.[23]

Appellant argues that the prosecution has failed to establish his guilt beyond reasonable doubt. He
maintains that he did not participate in any recruitment activity and that the alleged payments made by
private complainants were for membership in the Christian Catholic Mission, as shown by the fact that
private complainants have regularly attended bible study sessions from 5 July to November 1998. He also
points out that nothing on record would show that the necessary training or orientation seminar pertaining to
the supposed employment has ever been conducted.

Assuming arguendo that the Christian Catholic Mission was only a front to an illegal venture,
appellant avers that he was not part of the conspiracy because he was a victim himself as he in fact also
paid assurance fees for membership in the Christian Catholic Mission. He laments that aside from
introducing private complainants to Ruth, he has not done any other act tantamount to recruitment.
 The OSG defended the decision of the trial court in giving full faith and credence to the testimonies
of the complaining witnesses. It contends that there is no showing that the victims were impelled by any ill
motive to falsely testify against appellant. It asserts that the collective testimony of the witnesses has
categorically established appellant’s participation in the crime.[24]

The crime of illegal recruitment is committed when these two elements concur: (1) the offenders
have no valid license or authority required by law to enable them to lawfully engage in the recruitment and
placement of workers; and (2) the offenders undertake any activity within the meaning of recruitment and
placement defined in Article 13(b) or any prohibited practices enumerated in Article 34 of the Labor Code. In
case of illegal recruitment in large scale, a third element is added – that the accused commits the acts
against three or more persons, individually or as a group.[25]

Article 13(b) defines recruitment and placement as "any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers; and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or not.” In the simplest terms, illegal
recruitment is committed by persons who, without authority from the government, give the impression that
they have the power to send workers abroad for employment purposes.[26]

Since appellant, along with the other accused, made misrepresentations concerning their purported
power and authority to recruit for overseas employment, and in the process collected from private
complainants various amounts in the guise of placement fees, the former clearly committed acts constitutive
of illegal recruitment. In fact, this Court held that illegal recruiters need not even expressly represent
themselves to the victims as persons who have the ability to send workers abroad. It is enough that these
recruiters give the impression that they have the ability to enlist workers for job placement abroad in order to
induce the latter to tender payment of fees.[27]

It is clear from the testimonies of private complainants that appellant undertook to recruit them for a
purported employment in New Zealand and in the process collected various amounts from them as
“assurance fees” and other fees related thereto.

Private complainants testified in a clear, positive and straightforward manner. Leonora testified that
appellant recruited her to work in New Zealand as a fruit picker and was promised by Ruth a monthly salary
of $1,200.00. She was required to pay an assurance fee of P2,000.00. She later learned that appellant and
his cohorts had not been licensed by the POEA to recruit for overseas employment.[28] On cross-
examination, she confirmed that she turned over the amount of fees to appellant with the understanding that
such payment was for employment abroad.[29]

Mauro similarly recounted that he was introduced to Monchito and Ruth by appellant as an applicant
for farm work in New Zealand. He was told to prepare P2,000.00 as assurance fee, which he paid to
appellant. When he was unable to leave, he checked with the POEA and found out that appellant had no
license to recruit.[30] During the cross-examination, Mauro was firm in his stance that he paid the amount of
P2,000.00 as assurance of employment in New Zealand. Furthermore, he regularly attended the bible study
as a requirement for said employment.[31]

Valentino’s testimony corroborated that of Leonora and Mauro.[32]

The trial court found these testimonies credible and convincing.

Well-settled is the doctrine that great weight is accorded to the factual findings of the trial court
particularly on the ascertainment of the credibility of witnesses; this can only be discarded or disturbed when
it appears in the record that the trial court overlooked, ignored or disregarded some fact or circumstance of
weight or significance which if considered would have altered the result.[33] In the present case, we find no
reason to depart from the rule.

Verily, we agree with the OSG that the testimonies of private complainants have adequately
established the elements of the crime, as well as appellant’s indispensable participation therein. Appellant
recruited at least three persons, the private complainants in this case, giving them the impression that he
and his relatives had the capability of sending them to New Zealand for employment as fruit pickers. The
OSG adds that appellant went to Bulacan to invite the victims and accompanied them to a fellowship and
 briefing in La Union; that appellant misrepresented that joining the religious group would ensure their
overseas employment; and that appellant without any license or authority to recruit, collected various
amounts from private complainants.

Appellant miserably failed to convince this Court that the payments made by the complainants were
actually for their membership in the religious organization. He did not present any document to prove this
allegation.

For their part, private complainants were adamant that the payments made to appellant were for
purposes of employment to New Zealand. They further explained that their participation in the bible study
sessions was but a requirement imposed by appellant because their prospective employer was also a
member of the same religious group.

Moreover, appellant has failed to rebut the evidence presented by the prosecution consisting of a
receipt of payment signed by him.[34] His flimsy denial that the signature on the receipt was not his own
does not merit consideration in light of the trial court’s contrary finding.

As between the positive and categorical testimonies of private complainants and the unsubstantiated
denial proffered by appellant, this Court is inclined to give more weight to the former.

In sum, appellant is correctly found guilty of large scale illegal recruitment tantamount to economic
sabotage.

Under Section 7(b) of Republic Act No. 8042, the penalty of life imprisonment and a fine of not less
than P500,000.00 nor more than P1,000.000.00 shall be imposed if illegal recruitment constitutes economic
sabotage.

WHEREFORE, premises considered, the decision of the Court of Appeals in CA-G.R. CR-H.C. No.
00867 is AFFIRMED.

SO ORDERED.

People v. Jamilosa
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[2007V24] PEOPLE OF THE PHILIPPINES, Appellee, versus JOSEPH JAMILOSA, Appellant.2007 Jan 233rd
DivisionG.R. No. 169076D E C I S I O N

CALLEJO, SR., J.:

This is an appeal from the Decision[1] of the Regional Trial Court (RTC) of Quezon City in Criminal Case No.
Q-97-72769 convicting appellant Joseph Jamilosa of large scale illegal recruitment under Sections 6 and 7 of
Republic Act (R.A.) No. 8042, and sentencing him to life imprisonment and to pay a P500,000.00 fine.

The Information charging appellant with large scale illegal recruitment was filed by the Senior State Prosecutor on
August 29, 1997. The inculpatory portion of the Information reads:

That sometime in the months of January to February, 1996, or thereabout in the City of Quezon, Metro
Manila, Philippines, and within the jurisdiction of this Honorable Court, representing to have the capacity, authority
or license to contract, enlist and deploy or transport workers for overseas employment, did then and there, willfully,
unlawfully and criminally recruit, contract and promise to deploy, for a fee the herein complainants, namely, Haide R.
Ruallo, Imelda D. Bamba, Geraldine M. Lagman and Alma E. Singh, for work or employment in Los Angeles,
California, U.S.A. in Nursing Home and Care Center without first obtaining the required license and/or authority from
the Philippine Overseas Employment Administration (POEA).

Contrary to law.[2]

On arraignment, the appellant, assisted by counsel, pleaded not guilty to the charge.

The case for the prosecution, as synthesized by the Court of Appeals (CA), is as follows:

The prosecution presented three (3) witnesses, namely: private complainants Imelda D. Bamba, Geraldine
M. Lagman and Alma E. Singh.

Witness Imelda D. Bamba testified that on January 17, 1996, she met the appellant in Cubao, Quezon City
on board an aircon bus. She was on her way to Shoemart (SM), North EDSA, Quezon City where she was working
as a company nurse. The appellant was seated beside her and introduced himself as a recruiter of workers for
employment abroad. The appellant told her that his sister is a head nurse in a nursing home in Los Angeles,
California, USA and he could help her get employed as a nurse at a monthly salary of Two Thousand US Dollars
($2,000.00) and that she could leave in two (2) weeks time. He further averred that he has connections with the US
Embassy, being a US Federal Bureau of Investigation (FBI) agent on official mission in the Philippines for one
month. According to the appellant, she has to pay the amount of US$300.00 intended for the US consul. The
appellant gave his pager number and instructed her to contact him if she is interested to apply for a nursing job
abroad.

On January 21, 1996, the appellant fetched her at her office. They then went to her house where she gave
him the photocopies of her transcript of records, diploma, Professional Regulatory Commission (PRC) license and
other credentials. On January 28 or 29, 1996, she handed to the appellant the amount of US$300.00 at the
McDonalds outlet in North EDSA, Quezon City, and the latter showed to her a photocopy of her supposed US visa.
The appellant likewise got several pieces of jewelry which she was then selling and assured her that he would sell
the same at the US embassy. However, the appellant did not issue a receipt for the said money and jewelry.
Thereafter, the appellant told her to resign from her work at SM because she was booked with Northwest Airlines
and to leave for Los Angeles, California, USA on February 25, 1996.

The appellant promised to see her and some of his other recruits before their scheduled departure to hand
to them their visas and passports; however, the appellant who was supposed to be with them in the flight failed to
show up. Instead, the appellant called and informed her that he failed to give the passport and US visa because he
had to go to the province because his wife died. She and her companions were not able to leave for the United
States. They went to the supposed residence of the appellant to verify, but nobody knew him or his whereabouts.
They tried to contact him at the hotel where he temporarily resided, but to no avail. They also inquired from the US
embassy and found out that there was no such person connected with the said office. Thus, she decided to file a
complaint with the National Bureau of Investigation (NBI).

Prosecution witness Geraldine Lagman, for her part, testified that she is a registered nurse by profession. In
the morning of January 22, 1996, she went to SM North EDSA, Quezon City to visit her cousin Imelda Bamba. At
that time, Bamba informed her that she was going to meet the appellant who is an FBI agent and was willing to help
nurses find a job abroad. Bamba invited Lagman to go with her. On the same date at about 2:00 o’clock in the
afternoon, she and Bamba met the appellant at the SM Fast-Food Center, Basement, North EDSA, Quezon City.
The appellant convinced them of his ability to send them abroad and told them that he has a sister in the United
States. Lagman told the appellant that she had no working experience in any hospital but the appellant assured her
that it is not necessary to have one. The appellant asked for US$300.00 as payment to secure an American visa
and an additional amount of Three Thousand Four Hundred Pesos (P3,400.00) as processing fee for other
documents.

On January 24, 1996, she and the appellant met again at SM North EDSA, Quezon City wherein she handed
to the latter her passport and transcript of records. The appellant promised to file the said documents with the US
embassy. After one (1) week, they met again at the same place and the appellant showed to her a photocopy of her
US visa. This prompted her to give the amount of US$300.00 and two (2) bottles of Black Label to the appellant.
She gave the said money and liquor to the appellant without any receipt out of trust and after the appellant promised
her that he would issue the necessary receipt later. The appellant even went to her house, met her mother and
uncle and showed to them a computer printout from Northwest Airlines showing that she was booked to leave for
Los Angeles, California, USA on February 25, 1996.

Four days after their last meeting, Extelcom, a telephone company, called her because her number was
appearing in the appellant’s cellphone documents. The caller asked if she knew him because they were trying to
locate him, as he was a swindler who failed to pay his telephone bills in the amount of P100,000.00. She became
suspicious and told Bamba about the matter. One (1) week before her scheduled flight on February 25, 1996, they
called up the appellant but he said he could not meet them because his mother passed away. The appellant never
showed up, prompting her to file a complaint with the NBI for illegal recruitment.

Lastly, witness Alma Singh who is also a registered nurse, declared that she first met the appellant on
February 13, 1996 at SM North EDSA, Quezon City when Imelda Bamba introduced the latter to her. The appellant
told her that he is an undercover agent of the FBI and he could fix her US visa as he has a contact in the US
embassy. The appellant told her that he could help her and her companions Haidee Raullo, Geraldine Lagman and
Imelda Bamba find jobs in the US as staff nurses in home care centers.

On February 14, 1996 at about 6:30 in the evening, the appellant got her passport and picture. The
following day or on February 15, 1996, she gave the appellant the amount of US$300.00 and a bottle of cognac as
“grease money” to facilitate the processing of her visa. When she asked for a receipt, the appellant assured her that
there is no need for one because she was being directly hired as a nurse in the United States.

She again met the appellant on February 19, 1996 at the Farmers Plaza and this time, the appellant required
her to submit photocopies of her college diploma, nursing board certificate and PRC license. To show his sincerity,
the appellant insisted on meeting her father. They then proceeded to the office of her father in Barrio Ugong, Pasig
City and she introduced the appellant. Thereafter, the appellant asked permission from her father to allow her to go
with him to the Northwest Airlines office in Ermita, Manila to reserve airline tickets. The appellant was able to get a
ticket confirmation and told her that they will meet again the following day for her to give P10,000.00 covering the
half price of her plane ticket. Singh did not meet the appellant as agreed upon. Instead, she went to Bamba to
inquire if the latter gave the appellant the same amount and found out that Bamba has not yet given the said
amount. They then paged the appellant through his beeper and told him that they wanted to see him. However, the
appellant avoided them and reasoned out that he could not meet them as he had many things to do. When the
appellant did not show up, they decided to file a complaint for illegal recruitment with the NBI.

The prosecution likewise presented the following documentary evidence:

Exh. “A” – Certification dated February 23, 1998 issued by Hermogenes C. Mateo, Director II, Licensing
Branch, POEA.

Exh. “B” – Affidavit of Alma E. Singh dated February 23, 1996.[3]

On the other hand, the case for the appellant, as culled from his Brief, is as follows:

Accused JOSEPH JAMILOSA testified on direct examination that he got acquainted with Imelda Bamba
inside an aircon bus bound for Caloocan City when the latter borrowed his cellular phone to call her office at Shoe
Mart (SM), North Edsa, Quezon City. He never told Bamba that he could get her a job in Los Angeles, California,
USA, the truth being that she wanted to leave SM as company nurse because she was having a problem thereat.
Bamba called him up several times, seeking advice from him if Los Angeles, California is a good place to work as a
nurse. He started courting Bamba and they went out dating until the latter became his girlfriend. He met Geraldine
Lagman and Alma Singh at the Shoe Mart (SM), North Edsa, Quezon City thru Imelda Bamba. As complainants
were all seeking advice on how they could apply for jobs abroad, lest he be charged as a recruiter, he made Imelda
Bamba, Geraldine Lagman and Alma Singh sign separate certifications on January 17, 1996 (Exh. “2”), January 22,
1996 (Exh. “4”), and February 19, 1996 (Exh. “3”), respectively, all to the effect that he never recruited them and no
money was involved. Bamba filed an Illegal Recruitment case against him because they quarreled and separated.
He came to know for the first time that charges were filed against him in September 1996 when a preliminary
investigation was conducted by Fiscal Dañosos of the Department of Justice. (TSN, October 13, 1999, pp. 3-9 and
TSN, December 8, 1999, pp. 2-9)[4]

On November 10, 2000, the RTC rendered judgment finding the accused guilty beyond reasonable doubt of
the crime charged.[5] The fallo of the decision reads:
 WHEREFORE, judgment is hereby rendered finding accused guilty beyond reasonable doubt of Illegal
Recruitment in large scale; accordingly, he is sentenced to suffer the penalty of life imprisonment and to pay a fine
of Five Hundred Thousand Pesos (P500,000.00), plus costs.

Accused is ordered to indemnify each of the complainants, Imelda Bamba, Geraldine Lagman and Alma
Singh the amount of Three Hundred US Dollars ($300.00).

SO ORDERED.[6]

In rejecting the defenses of the appellant, the trial court declared:

To counter the version of the prosecution, accused claims that he did not recruit the complainants for work
abroad but that it was they who sought his advice relative to their desire to apply for jobs in Los Angeles, California,
USA and thinking that he might be charged as a recruiter, he made them sign three certifications, Exh. “2,” “3” and
“4,” which in essence state that accused never recruited them and that there was no money involved.

Accused’s contention simply does not hold water. Admittedly, he executed and submitted a counter-affidavit
during the preliminary investigation at the Department of Justice, and that he never mentioned the aforesaid
certifications, Exhibits 2, 3 and 4 in said counter-affidavit. These certifications were allegedly executed before
charges were filed against him. Knowing that he was already being charged for prohibited recruitment, why did he
not bring out these certifications which were definitely favorable to him, if the same were authentic. It is so contrary
to human nature that one would suppress evidence which would belie the charge against him.

Denials of the accused can not stand against the positive and categorical narration of each complainant as
to how they were recruited by accused who had received some amounts from them for the processing of their
papers. Want of receipts is not fatal to the prosecution’s case, for as long as it has been shown, as in this case, that
accused had engaged in prohibited recruitment. (People v. Pabalan, 262 SCRA 574).

That accused is neither licensed nor authorized to recruit workers for overseas employment, is shown in the
Certification issued by POEA, Exh. “A.”

In fine, the offense committed by the accused is Illegal Recruitment in large scale, it having been committed
against three (3) persons, individually.[7]

Appellant appealed the decision to this Court on the following assignment of error:

THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF THE CRIME OF ILLEGAL

RECRUITMENT IN LARGE SCALE DESPITE THE FACT THAT THE LATTER’S GUILT WAS NOT PROVED
BEYOND REASONABLE DOUBT BY THE PROSECUTION.[8]

According to appellant, the criminal Information charging him with illegal recruitment specifically mentioned
the phrase “for a fee,” and as such, receipts to show proof of payment are indispensable. He pointed out that the
three (3) complaining witnesses did not present even one receipt to prove the alleged payment of any fee. In its
eagerness to cure this “patent flaw,” the prosecution resorted to presenting the oral testimonies of complainants
which were “contrary to the ordinary course of nature and ordinary habits of life [under Section 3(y), Rule 131 of the
Rules on Evidence] and defied credulity.” Appellant also pointed out that complainants’ testimony that they paid him
but no receipts were issued runs counter to the presumption under Section [3](d), Rule 131 of the Rules on
Evidence that persons take ordinary care of their concern. The fact that complainants were not able to present
receipts lends credence to his allegation that it was they who sought advice regarding their desire to apply for jobs
in Los Angeles, California, USA. Thus, thinking that he might be charged as a recruiter, he made them sign three
(3) certifications stating that he never recruited them and there was no money involved. On the fact that the trial
court disregarded the certifications due to his failure to mention them during the preliminary investigation at the
Department of Justice (DOJ), appellant pointed out that there is no provision in the Rules of Court which bars the
presentation of evidence during the hearing of the case in court. He also pointed out that the counter-affidavit was
prepared while he was in jail “and probably not assisted by a lawyer.”[9]

Appellee, through the Office of the Solicitor General (OSG), countered that the absence of receipts signed by
appellant acknowledging receipt of the money and liquor from the complaining witnesses cannot defeat the
prosecution and conviction for illegal recruitment. The OSG insisted that the prosecution was able to prove the guilt
of appellant beyond reasonable doubt via the collective testimonies of the complaining witnesses, which the trial
court found credible and deserving of full probative weight. It pointed out that appellant failed to prove any ill-motive
on the part of the complaining witnesses to falsely charge him of illegal recruitment.

On appellant’s claim that the complaining witness Imelda Bamba was his girlfriend, the OSG averred:

Appellant’s self-serving declaration that Imelda is his girlfriend and that she filed a complaint for illegal
recruitment after they quarreled and separated is simply preposterous. No love letters or other documentary
evidence was presented by appellant to substantiate such claim which could be made with facility. Imelda has no
reason to incriminate appellant except to seek justice. The evidence shows that Alma and Geraldine have no
previous quarrel with appellant. Prior to their being recruited by appellant, Alma and Geraldine have never met
appellant. It is against human nature and experience for private complainants to conspire and accuse a stranger of
a most serious crime just to mollify their hurt feelings. (People v. Coral, 230 SCRA 499, 510 [1994])[10]

The OSG posited that the appellant’s reliance on the certifications[11] purportedly signed by the complaining
witnesses is misplaced, considering that the certifications are barren of probative weight.

On February 23, 2005, the Court resolved to transfer the case to the CA.[12] On June 22, 2005, the CA
rendered judgment affirming the decision of the RTC.[13]

The OSG filed a Supplemental Brief, while the appellant found no need to file one.

The appeal has no merit.

Article 13(b) of the Labor Code of the Philippines defines recruitment and placement as follows:

(b) “Recruitment and placement” refers to any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not. Provided, That any person or entity which, in any manner,
offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and
placement.

Section 6 of R.A. No. 8042 defined when recruitment is illegal:

SEC. 6. Definition. – For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or
advertising for employment abroad, whether for profit or not, when undertaken by a non-licensee or non-holder of
authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the
Labor Code of the Philippines: Provided, That any such non-licensee or non-holder who, in any manner, offers or
promises for a fee employment abroad to two or more persons shall be deemed so engaged. x x x

Any recruitment activities to be undertaken by non-licensee or non-holder of contracts shall be deemed illegal
and punishable under Article 39 of the Labor Code of the Philippines.[14] Illegal recruitment is deemed committed
in large scale if committed against three (3) or more persons individually or as a group.[15]

To prove illegal recruitment in large scale, the prosecution is burdened to prove three (3) essential elements,
to wit: (1) the person charged undertook a recruitment activity under Article 13(b) or any prohibited practice under
Article 34 of the Labor Code; (2) accused did not have the license or the authority to lawfully engage in the
recruitment and placement of workers; and (3) accused committed the same against three or more persons
individually or as a group.[16] As gleaned from the collective testimonies of the complaining witnesses which the
trial court and the appellate court found to be credible and deserving of full probative weight, the prosecution
mustered the requisite quantum of evidence to prove the guilt of accused beyond reasonable doubt for the crime
charged. Indeed, the findings of the trial court, affirmed on appeal by the CA, are conclusive on this Court absent
evidence that the tribunals ignored, misunderstood, or misapplied substantial fact or other circumstance.

The failure of the prosecution to adduce in evidence any receipt or document signed by appellant where he
acknowledged to have received money and liquor does not free him from criminal liability. Even in the absence of
money or other valuables given as consideration for the “services” of appellant, the latter is considered as being
engaged in recruitment activities.

It can be gleaned from the language of Article 13(b) of the Labor Code that the act of recruitment may be for profit or
not. It is sufficient that the accused promises or offers for a fee employment to warrant conviction for illegal
recruitment.[17] As the Court held in People v. Sagaydo:[18]

Such is the case before us. The complainants parted with their money upon the prodding and enticement of
accused-appellant on the false pretense that she had the capacity to deploy them for employment abroad. In the
end, complainants were neither able to leave for work abroad nor get their money back.

The fact that private complainants Rogelio Tibeb and Jessie Bolinao failed to produce receipts as proof of
their payment to accused-appellant does not free the latter from liability. The absence of receipts cannot defeat a
criminal prosecution for illegal recruitment. As long as the witnesses can positively show through their respective
testimonies that the accused is the one involved in prohibited recruitment, he may be convicted of the offense
despite the absence of receipts.[19]

Appellant’s reliance on the certifications purportedly signed by the complaining witnesses Imelda Bamba,
Alma Singh and Geraldine Lagman[20] is misplaced. Indeed, the trial court and the appellate court found the
certifications barren of credence and probative weight. We agree with the following pronouncement of the appellate
court:

Anent the claim of the appellant that the trial court erred in not giving weight to the certifications (Exhs. “2,”
“3” & “4”) allegedly executed by the complainants to the effect that he did not recruit them and that no money was
involved, the same deserves scant consideration.

The appellant testified that he was in possession of the said certifications at the time the same were
executed by the complainants and the same were always in his possession; however, when he filed his counter-
affidavit during the preliminary investigation before the Department of Justice, he did not mention the said
certifications nor attach them to his counter-affidavit.

We find it unbelievable that the appellant, a college graduate, would not divulge the said certifications which
would prove that, indeed, he is not an illegal recruiter. By failing to present the said certifications prior to the trial,
the appellant risks the adverse inference and legal presumption that, indeed, such certifications were not genuine.
When a party has it in his possession or power to produce the best evidence of which the case in its nature is
susceptible and withholds it, the fair presumption is that the evidence is withheld for some sinister motive and that its
production would thwart his evil or fraudulent purpose. As aptly pointed out by the trial court:

“x x x These certifications were allegedly executed before charges were filed against him. Knowing that he
was already being charged for prohibited recruitment, why did he not bring out these certifications which were
definitely favorable to him, if the same were authentic. It is so contrary to human nature that one would suppress
evidence which would belie the charge against him.” (Emphasis Ours)[21]

At the preliminary investigation, appellant was furnished with copies of the affidavits of the complaining
witnesses and was required to submit his counter-affidavit. The complaining witnesses identified him as the culprit
who “recruited” them. At no time did appellant present the certifications purportedly signed by the complaining
witnesses to belie the complaint against him. He likewise did not indicate in his counter-affidavit that the
complaining witnesses had executed certifications stating that they were not recruited by him and that he did not
receive any money from any of them. He has not come forward with any valid excuse for his inaction. It was only
when he testified in his defense that he revealed the certifications for the first time. Even then, appellant lied when
he claimed that he did not submit the certifications because the State Prosecutor did not require him to submit any
counter-affidavit, and that he was told that the criminal complaint would be dismissed on account of the failure of the
complaining witnesses to appear during the preliminary investigation. The prevarications of appellant were exposed
by Public Prosecutor Pedro Catral on cross-examination, thus:

Q Mr. Witness, you said that a preliminary investigation [was] conducted by the Department of Justice through
State Prosecutor Dañosos. Right?

A Yes, Sir.
Q Were you requested to file your Counter-Affidavit?

A Yes, Sir. I was required.

Q Did you file your Counter-Affidavit?

A Yes, Sir, but he did not accept it.

Q Why?

A Because he said “never mind” because the witness is not appearing so he dismissed the case.

Q Are you sure that he did not accept your Counter-Affidavit, Mr. Witness?

A I don’t know of that, Sir.

Q If I show you that Counter-Affidavit you said you prepared, will you be able to identify the same, Mr. Witness?

A Yes, Sir.

Q I will show you the Counter-Affidavit dated June 16, 1997 filed by one Joseph J. Jamilosa, will you please go
over this and tell if this is the same Counter-Affidavit you said you prepared and you are going to file with the
investigating state prosecutor?

A Yes, Sir. This the same Counter-Affidavit.

Q There is a signature over the typewritten name Joseph J. Jamilosa, will you please go over this and tell this
Honorable Court if this is your signature, Mr. Witness?

A Yes, Sir. This is my signature.

Q During the direct examination you were asked to identify [the] Certification as Exh. “2” dated January 17, 1996,
allegedly issued by Bamba, one of the complainants in this case, when did you receive this Certification issued by
Imelda Bamba, Mr. Witness?

A That is the date, Sir.

Q You mean the date appearing in the Certification.

A Yes, Sir.

Q Where was this handed to you by Imelda Bamba, Mr. Witness?

A At SM North Edsa, Sir.

Q During the direct examination you were also asked to identify a Certification Exh. “3” for the defense dated
February 19, 1996, allegedly issued by Alma Singh, one of the complainants in this case, will you please go over
this and tell us when did Alma Singh allegedly issue to you this Certification?

A On February 19, 1996, Sir.

Q And also during the direct examination, you were asked to identify a Certification which was already marked as
Exh. “4” for the defense dated January 22, 1996 allegedly issued by Geraldine M. Lagman, one of the complainants
in this case, will you please tell the court when did Geraldine Lagman give you this Certification?

A January 22, 1996, Sir.

Q During that time, January 22, 1996, January 17, 1996 and February 19, 1996, you were in possession of all
these Certification. Correct, Mr. Witness?

A Yes, Sir.

Q These were always in your possession. Right?

A Yes, Sir, with my papers.

Q Do you know when did the complainants file cases against you?

A I don’t know, Sir.

Q Alright. I will read to you this Counter-Affidavit of yours, and I quote “I, Joseph Jamilosa, of legal age, married
and resident of Manila City Jail, after having duly sworn to in accordance with law hereby depose and states that: 1)
the complainants sworn under oath to the National Bureau of Investigation that I recruited them and paid me certain
sums of money assuming that there is truth in those allegation of this (sic) complainants. The charge filed by them
should be immediately dismissed for certain lack of merit in their Sworn Statement to the NBI Investigator; 2)
likewise, the complainants’ allegation is not true and I never recruited them to work abroad and that they did not give
me money, they asked me for some help so I [helped] them in assisting and processing the necessary documents,
copies for getting US Visa; 3) the complainant said under oath that they can show a receipt to prove that they can
give me sums or amount of money. That is a lie. They sworn (sic), under oath, that they can show a receipt that I
gave to them to prove that I got the money from them. I asked the kindness of the state prosecutor to ask the
complainants to show and produce the receipts that I gave to them that was stated in the sworn statement of the
NBI; 4) the allegation of the complainants that the charges filed by them should be dismissed because I never
[received] any amount from them and they can not show any receipt that I gave them,” Manila City Jail, Philippines,
June 16, 1997. So, Mr. Witness, June 16, 1997 is the date when you prepared this. Correct?

A Yes, Sir.

Q Now, my question to you, Mr. Witness, you said that you have with you all the time the Certification issued by
[the] three (3) complainants in this case, did you allege in your Counter-Affidavit that this Certification you said you
claimed they issued to you?

A I did not say that, Sir.

Q So, it is not here in your Counter-Affidavit?

A None, Sir.

Q What is your educational attainment, Mr. Witness?

A I am a graduate of AB Course Associate Arts in 1963 at the University of the East.

Q You said that the State Prosecutor of the Department of Justice did not accept your Counter-Affidavit, are you
sure of that, Mr. Witness?

A Yes, Sir.

Q Did you receive a copy of the dismissal which you said it was dismissed?

A No, Sir. I did not receive anything.

Q Did you receive a resolution from the Department of Justice?

A No, Sir.

Q Did you go over the said resolution you said you received here?
A I just learned about it now, Sir.

Q Did you read the content of the resolution?

A Not yet, Sir. It’s only now that I am going to read.

COURT

Q You said it was dismissed. Correct?

A Yes, Your Honor.

Q Did you receive a resolution of this dismissal?

A No, Your Honor.

FISCAL CATRAL

Q What did you receive?

A I did not receive any resolution, Sir. It’s just now that I learned about the finding.

Q You said you learned here in court, did you read the resolution filed against you, Mr. Witness?

A I did not read it, Sir.

Q Did you read by yourself the resolution made by State Prosecutor Dañosos, Mr. Witness?

A Not yet, Sir.

Q What did you take, if any, when you received the subpoena from this court?

A I was in court already when I asked Atty. Usita to investigate this case.

Q You said a while ago that your Affidavit was not accepted by State Prosecutor Dañosos. Is that correct?

A Yes, Sir.

Q Will you please read to us paragraph four (4), page two (2) of this resolution of State Prosecutor Dañosos.

(witness reading par. 4 of the resolution)

Alright. What did you understand of this paragraph 4, Mr. Witness?

A Probably, guilty to the offense charge.[22]

It turned out that appellant requested the complaining witnesses to sign the certifications merely to prove that
he was settling the cases:

COURT

Q These complainants, why did you make them sign in the certifications?

A Because one of the complainants told me to sign and they are planning to sue me.

Q You mean they told you that they are filing charges against you and yet you [made] them sign certifications in
your favor, what is the reason why you made them sign?

A To prove that I’m settling this case.

Q Despite the fact that they are filing cases against you and yet you were able to make them sign certifications?

A Only one person, Your Honor, who told me and he is not around.

Q But they all signed these three (3) certifications and yet they filed charges against you and yet you made them
sign certifications in your favor, so what is the reason why you made them sign?

(witness can not answer)[23]

The Court notes that the trial court ordered appellant to refund US$300.00 to each of the complaining
witnesses. The ruling of the appellate court must be modified. Appellant must pay only the peso equivalent of
US$300.00 to each of the complaining witnesses.

IN LIGHT OF ALL THE FOREGOING, the appeal is DISMISSED. The Decision of the Court of Appeals
affirming the conviction of Joseph Jamilosa for large scale illegal recruitment under Sections 6 and 7 of Republic Act
No. 8042 is AFFIRMED WITH MODIFICATION. The appellant is hereby ordered to refund to each of the
complaining witnesses the peso equivalent of US$300.00. Costs against appellant.

SO ORDERED.

People v. Zenchiro
/---!e-library! 6.0 Philippines Copyright © 2000 by Sony Valdez---\

[2008V886] PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, versus FUJITA ZENCHIRO, Accused-

Appellant.2008 Aug 112nd DivisionG.R. No. 176733D E C I S I O N

CARPIO MORALES, J.:

Accused-appellant Fujita Zenchiro (Zenchiro), a Japanese national, and one Eva Regino (Eva) were, in an
Information filed before the Regional Trial Court (RTC) of Malolos, Bulacan where it was docketed as Criminal Case
No. 3261-M-2001, charged to have conspired in committing illegal recruitment in large scale as follows:

Criminal Case No. 3261-M-2001:

xxxx

That in or about the month of January, 1999, in the municipality of Meycauayan, province of Bulacan,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring and helping
each other, non-licensees or non-holders of authority from the Department of Labor and Employment to recruit
and/or place workers in employment either locally or overseas, did then and there willfully, unlawfully and
feloniously, with false pretenses, undertake illegal recruitment and placement for a fee of Alberto M. Anatalio,
Fredie[1] P. Ocampo and Alicia A. Diaz for overseas employment.[2] nderscoring supplied)

Zenchiro and Eva were, in Informations also filed before the same court where they were docketed as
Criminal Cases No. 3262-M-2001, 3263-M-2001, and 3264-M-2001, likewise charged to have conspired in
committing three counts of estafa under Article 315, paragraph 2 (a) of the Revised Penal Code as follows:

Criminal Case No. 3262-M-2001:

That on or about the 2nd day of February, 1999, in the municipality of Meycauayan, province of Bulacan,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring and helping
each other, with intent of gain, did then and there willfully, unlawfully and feloniously defraud Alberto M. Anatalio and
Fredie P. Ocampo in the sum of P50,000.00 each, by then and there misrepresenting that they have the power and
qualification to recruit and employ the said Alberto M. Anatalio and Fredie P. Ocampo as worker[s] or assist them in
securing employment abroad, more particularly in Japan, and could facilitate the processing and approval of the
necessary papers in connection therewith, when in truth and in fact, as they well knew, they did not have such
qualifications, that pursuant to such misrepresentation and defraudation, said accused demanded and received from
Alberto M. Anatalio and Fredie P. Ocampo the sum of P50,000.00 each; that said accused failed and refused to
comply with their aforementioned undertakings and instead, misappropriated the sum of P50,000.00 each, for their
benefit, to the damage and prejudice of the said Alberto M. Anatalio and Fredie P. Ocampo, in the total amount of
P100,000.00.[3] nderscoring supplied)

Criminal Case No. 3263-M-2001:

That on or about the 10th of March, 1999, in the municipality of Meycauayan, province of Bulacan,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring and helping
each other, with intent of gain, did then and there willfully, unlawfully and feloniously defraud one Alicia A. Diaz in
the sum of P10,000.00, by then and there misrepresenting that they have the power and qualification to recruit and
employ the said Alicia A. Diaz as worker or assist her in securing employment abroad, more particularly in Japan,
and could facilitate the processing and approval of the necessary papers in connection therewith, when in truth and
in fact, as they well knew, they did not have such qualifications; that pursuant to such misrepresentation and
defraudation, said accused demanded and received from Alicia A. Diaz the sum of P10,000.00; that said accused
failed and refused to comply with their aforementioned undertakings and instead, misappropriated the sum of
P10,000.00 for their benefit, to the damage and prejudice of the said Alicia A. Diaz in the said amount of
P10,000.00.[4] nderscoring supplied)

Criminal Case No. 3264-M-2001:

That on or about the 12th of March, 1999, in the municipality of Meycauayan, province of Bulacan,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring and helping
each other, with intent of gain, did then and there willfully, unlawfully, and feloniously defraud one Alicia A. Diaz in
the sum of P40,000.00, by then and there misrepresenting that they have the power and qualification to recruit and
employ the said Alicia A. Diaz as worker or assist her in securing employment abroad, more particularly in Japan,
and could facilitate the processing and approval of the necessary papers in connection therewith, when in truth and
in fact, as they well knew they did not have such qualifications, that pursuant to such misrepresentation and
defraudation, said accused demanded and received from Alicia A. Diaz the sum of P40,000.00; that said accused
failed and refused to comply with their aforementioned undertakings and instead, misappropriated the sum of
P40,000.00 for their benefit, to the damage and prejudice of the said Alicia A. Diaz in the said amount of
P40,000.00.[5] nderscoring supplied)

Zenchiro pleaded not guilty to all the charges on arraignment.[6] Eva has remained at large.

From the testimonies of prosecution witnesses-private complainants Alberto Anatalio (Anatalio) and his
cousin Fredie Ocampo (Ocampo), the following version is gathered:[7]

In January 1999, Eva introduced private complainants to Zenchiro, telling them that Zenchiro could deploy
them to work in Japan. Speaking in “broken” Tagalog, Zenchiro told the two that he would take care of everything
because he knows many persons who could work on their papers, and that they would receive a monthly salary of
30 lapad, a lapad being equivalent to P3,500.

Eva and Zenchiro charged P250,000 each of the private complainants who each gave him P50,000 on
February 2, 1999 as downpayment for the processing of their papers. Ocampo’s sister, Florinda Cadorna, also a
prosecution witness, paid P400,000 representing the total balance of Anatalio and Ocampo. [8]

On June 26, 1999, Anatalio and Ocampo, escorted by Zenchiro, went to Japan where they were met by Eva
who thereupon accompanied them to her aunt’s house in Tokyo where they stayed.

Contrary, however, to Eva’s promises that they would be hired at her sister’s hanger factory, Anatalio and
Ocampo were idle for two months, and whenever they asked her and Zenchiro (who alternately stayed in Japan for
one month and the Philippines for another month) about why, Zenchiro and Eva would merely converse with each
other in Japanese.
 In September 1999, Anatalio and Ocampo returned to the Philippines upon which they asked Zenchiro to
refund the amounts they paid him. Zenchiro did promise to refund them, but he welched thereon, prompting the
filing of complaints against him that led to the filing of the Informations.

Anatalio and Ocampo were later to learn that Zenchiro and Eva are neither licensed nor authorized to recruit
workers for overseas employment.

From the testimony of private complainant Alicia Diaz (Alicia),[9] the following version is gathered:

Zenchiro offered Alicia a job at the hanger factory in Japan of Eva’s sister for a P250,000 placement fee, he
undertaking to take care of the processing of all her travel documents. Alicia accepted the offer and thus paid
Zenchiro the amount in several installments for which she was issued receipts.

On January 12, 1999, Alicia, accompanied by Zenchiro, left for Japan where Eva met them. Eva at once
brought her to “Movara” where she stayed with Zenchiro and two Filipinos. After the lapse of a week, she was
transferred to Chiba but she remained jobless. Via overseas telephone call to Zenchiro who had gone back to the
Philippines, she asked him what they were doing to her, but he gave no answer. Eva even scolded her for calling
Zenchiro.

Alicia returned to the Philippines on March 16, 1999 and confronted Eva and Zenchiro who asked for
forgiveness, they promising to deploy her to work. The promise remained unfulfilled, however, hence, she
demanded the refund of her money, but Zenchiro refunded her only P50,000.[10]

Anatalio, Ocampo, and Alicia identified Zenchiro in open court.[11]

In addition to testimonial evidence, the prosecution presented documentary evidence consisting of private
complainants’ sworn statements, a certification from the Philippine Overseas Employment Administration[12] that
the accused are not licensed to recruit workers for employment overseas, receipts signed by Zenchiro
acknowledging receipt of payments for “replayment fee” to Japan,[13] receipts for “VISA ASSISTANCE GOING TO
JAPAN” signed by Eva,[14] and receipt signed by Alicia, bearing Zenchiro’s signature, acknowledging a partial
refund of P50,000[15] from Zenchiro.

Upon the other hand, Zenchiro, denying having promised private complainants that he would deploy them
for work in Japan,[16] claimed that his involvement in the transactions was limited to assistance in the processing of
their travel documents and escorting them to Japan;[17] and that private complainants in fact landed on jobs in
Japan[18] in support of which he presented certificates, worded in Japanese, issued by Yugengaisha P-I and
Kabushikigaisha Sekine Kagaku Kogyo, said to attest that Anatalio and Ocampo worked in Japan in July up to
September 1999.[19]

By Joint Decision[20] of July 5, 2005, Branch 11 of the RTC of Malolos convicted Zenchiro in Criminal Case
Nos. 3261-M-2001 (for illegal recruitment), 3263-M-2001 (for Estafa on complaint of Alicia ), and 3264-M-2001 (for
Estafa on complaint of Alicia). It dismissed Criminal Case No. 3262-M-2001 (for Estafa on complaint of Anatalio and
Ocampo) on the ground of double jeopardy.[21]

In arriving at its Joint Decision, the trial court noted the following findings:

When the three (3) complainants went to the residence of the Regino’s at Sto. Niño, Meycauayan on
different occasions, in the early part of January 1999, and the matter of their supposed employment in Japan was
taken up Zenchiro was personally present. Regino did much of the talking but as testified to by the complainants
she talked with Zenchiro in Nippongo, every now and then ostensibly to apprise him of what was being talked about.
Foremost was the representation by Regino, which Zenchiro appears to have acquiesced into, that he was in a
position to find work for the complainants in Japan. On this point, Zenchiro’s own admission that he offered his own
services to work for complainants’ Japanese visa was a dead giveaway on his part of his active involvement in the
illicit recruitment of the latter to work in Japan. xxx This coupled with the uncontroverted fact that he even escorted
the complainants in going to Japan in the months of June, 1999 and January 2000 even living under the same
house with Anatalio and Ocampo therein make a strong case against him for the offense charged.
That the complainants were duped into shelling large amounts for fictitious employment in Japan has been
convincingly shown. All three (3) were categorical in their assertion that the accused demanded, and received, from
each of them the amount of P250,000.00 as placement fee, adducing receipts in substantiation of these exactions.
In the case of Anatalio and Ocampo, the two (2) were uncontradicted in their claim that, on February 2, 1999, both
gave P50,000.00 each to Regino as initial payment of their supposed placement fee in the presence of Zenchiro,
and on this occasion, the latter told them that he would take care of their papers. Two (2) days later, before their
departure to Japan or on June 24, 1999, Florinda “Bong” Cadorna handed over to Zenchiro P400,000.00 duly
receipted by the latter who even signed his name in Japanese character[s].

The same situation holds true with Diaz. In her case on March 10, 1999, she gave Regino the initial amount
of P10,000.00 in her place at Sto. Niño, Meycauayan, Bulacan and two (2) days later or on March 12, 1999, she
gave her the additional amount of P40,000.00 as downpayment for her replacement fee. After her visa was issued,
on December 20, 1999 she gave the amount of P100,000.00 in cash and a check worth P100,000.00 to Zenchiro
personally xxx to complete her employment fee. xxx This transaction between Diaz and the accused is fully
substantiated by the receipt dated December 20, 1999 signed by Zenchiro again in Japanese characters. Although
Zenchiro made it appear in said receipt that the payment was for visa assistance, the enormity of the amount does
not warrant belief to such a pretension[.]

Zenchiro’s attempt to show that complainants worked in different firms in Japan is futile. All that he has to
show to prove his point are purported certifications from dubious Japanese firms attesting to their supposed
employment which from the mere fact that these are written in Japanese characters without any official translation in
English hardly deserve any evidentiary value[.]

With the Certification from the POEA that the accused are not licensed to recruit workers either for local and
foreign employment, both stand liable for qualified illegal recruitment in large scale under the provisions of the Labor
Code, the same having been committed against three (3) persons.[22] (Citations omitted; underscoring supplied)

The trial court thus disposed:

WHEREFORE, in Criminal Case No. 3261-M-2001, this Court finds the accused Fujita Zenchiro GUILTY
beyond reasonable doubt of the crime of Illegal Recruitment in Large Scale defined and penalized under Article 38
(b) in relation to Articles 34 and 39 of the Labor Code of the Philippines, P.D. No. 442, as amended and hereby
sentences him to suffer the penalty of Life Imprisonment and a fine of P100,000.00. Accused is likewise ordered to
pay the private complainants the following amounts as actual damages, to wit:

1. P250,000.00 to Alberto Anatalio;

2. P250,000.00 to Freddie Ocampo; and

3. P250,000.00 to Alicia Diaz.

In Criminal Case No. 3263-M-2001, this Court finds the accused Fujita Zenchiro GUILTY beyond reasonable
doubt of Estafa under Art. 315, par. 2(a) of the Revised Penal Code, as amended and hereby sentences him to a
prison term ranging from four (4) months and Twenty (20) days of Arresto Mayor, as minimum, up to Two (2) years,
Eleven (11) months and Ten (10) days of prision correccional, as maximum and to pay Alicia Diaz the amount of
P10,000.00 as actual damages.

In Criminal Case No. 3264-M-2001, this Court finds the accused Fujita Zenchiro GUILTY beyond reasonable
doubt of Estafa under Art. 315 par. 2(a) of the Revised Penal Code, as amended and hereby sentences him to a
prision term ranging from Four (4) Years, Nine (9) months and Eleven (11) days of prision correccional, as
minimum, up to Six (6) years, Eight (8) months, and one (1) day of prision mayor as maximum and to pay Alicia Diaz
the amount of P40,000.00 as actual damages.

Criminal Case No. 3262-M-2001 is hereby DISMISSED.

The cases against Eva Regino are hereby ARCHIVED.

SO ORDERED.[23] (Emphasis and underscoring supplied)

On appeal to the Court of Appeals, Zenchiro assigned to the trial court the following errors:
I . . . CONVICTING THE ACCUSED-APPELLANT FOR THE CRIME OF LARGE SCALE ILLEGAL RECRUITMENT
DESPITE THE FAILURE OF THE PROSECUTION TO PROVE BEYOND REASONABLE DOUBT THAT HIS ACT
OF SECURING COMPLAINANTS’ JAPANESE VISAS IS UNDER THE TERM “RECRUITMENT AND
PLACEMENT”.

II . . . FINDING THE ACCUSED-APPELLANT GUILTY FOR THE CRIME OF ESTAFA DESPITE FAILURE OF THE
PROSECUTION TO PROVE BEYOND REASONABLE DOUBT THAT THERE WAS DECEPTION ON HIS PART.
[24]

The Court of Appeals affirmed the trial court’s decision,[25] hence, Zenchiro’s appeal to this Court.[26]

Zenchiro maintains that what he promised to private complainants was assistance in securing their visas,
not employment. And he argues that he is not guilty of estafa because there was no deceit, he not having
misrepresented that he could obtain jobs for them in Japan.

As a general rule, the factual findings of the trial court, especially when affirmed by the appellate court as in
the cases at bar, are binding and conclusive on the Supreme Court.[27] The above-quoted portions of the trial
court’s factual findings are supported by the evidence. More particularly, Zenchiro’s claim that his involvement in
the transaction was limited to mere assistance in the processing of private complainants’ travel documents is
negated by documentary evidence showing that he received “replacement” fees from them.

Zenchiro goes on to reiterate his argument that Eva promised employment to private complainants without
his knowledge, he being a Japanese national and could not understand the conversation in Tagalog between Eva
and the private complainants. The Court of Appeals’ brushing aside such argument is well taken.

In the first place, appellant during his arraignment even assented to the reading of the information in Filipino
because according to his counsel it is a language known and understood by him. And as testified to by the private
complainants, appellant even spoke to them in broken Tagalog when he was promising them employment in Japan
upon payment of placement fee to him and his co-accused Regino. Private complainant Diaz also testified that
during their conversation regarding the proposed employment in Japan, while it was Regino who was explaining
things to them, Regino would first talk to appellant in Japanese and hence appellant cannot feign ignorance of the
dealings and undertakings by Regino with private complainants. Appellant knew and cooperated in the
misrepresentations and fraudulent scheme of Regino as they both duped private complainants into shelling
substantial amounts of money for those promised jobs as factory workers in Japan.[28] nderscoring supplied)

In fine, Zenchiro’s disclaimer of the charges fails.

Illegal recruitment is deemed committed in large scale if it is committed against three or more persons
individually or as a group.[29] Clearly, Zenchiro committed illegal recruitment against the three private
complainants.

His conviction in Criminal Case Nos. 3261-M-2001, 3263-M-2001 must thus be affirmed. Section 7 (b) of the
Migrant Workers and Overseas Filipinos Act of 1995 imposes a fine of not less than P500,000 nor more than
P1,000,000 if illegal recruitment for overseas employment constitutes economic sabotage – illegal recruitment
committed by a syndicate or in large scale. Since Zenchiro’s act was committed in large scale, the fine of P100,000
imposed upon him in Criminal Case No. 3261-M-2001 must be increased to P500,000.

Considering that Zenchiro already gave Alicia a partial refund of P50,000, the actual damages awarded to
her in Criminal Case No. 3261-M-2001 is reduced to P200,000, and the awards of actual damages to Alicia in
Criminal Cases Nos. 3263-M-2001 and 3264-M-2001 are deleted.

Respecting the penalty imposed in Criminal Case No. 3264-M-2001, Article 315 of the Revised Penal Code
provides:

Article 315. Swindling (estafa). – Any person who shall defraud another by any of the means mentioned
hereinbelow shall be punished by:

1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum period, if the
amount of the fraud is over 12,000 pesos but does not exceed 22,000 pesos; and if such amounts exceeds the
latter sum, the penalty provided in this paragraph shall be imposed in its maximum period, adding one year for each
additional 10,000 pesos; but the total penalty which may be imposed shall not exceed twenty years. In such cases,
and in connection with the accessory penalties which may be imposed and for the purpose of the other provisions of
this Code, the penalty shall be termed prision mayor or reclusion temporal, as the case may be. nderscoring
supplied)

Applying the Indeterminate Sentence Law, the minimum of the penalty should be taken from the range of the
penalty next lower in degree to that prescribed under the Revised Penal Code. In this case, the penalty next lower
in degree is prision correccional in its minimum and medium periods. This Court imposes a minimum penalty of two
years of prision correccional.

With regard to the maximum penalty in Criminal Case No. 3264-M-2001, since the amount involved
exceeds P22,000, the imposable penalty shall be taken from the maximum period of prision correccional maximum
period to prision mayor minimum period, which, when divided into three equal portions following Article 65 of the
Revised Penal Code, have the following periods:

Minimum period – four years, two months, and one day to five years, five months, and ten days.

Medium period – five years, five months, and 11 days to six years, eight months, and 20 days

Maximum period – six years, eight months and 21 days to eight years.[30]

Following the above-quoted portion of the provision of Article 315 of the Revised Penal Code, the maximum
term of the penalty imposed by the trial court in Criminal Case No. 3264-M-2001 should be increased by one year.

Adding one year to the maximum period of the prescribed penalty, which is from six years, eight months and
21 days to eight years of prision mayor, the maximum penalty may be taken from seven years, eight months and 21
days to nine years of prision mayor.[31] Thus, the maximum penalty imposed by the trial court in Criminal Case
No. 3264-M-2001 is increased to seven years, eight months, and 21 days of prision mayor.

WHEREFORE, the October 23, 2006 Decision of the Court of Appeals is AFFIRMED with the
MODIFICATION that the fine in Criminal Case No. 3261-M-2001 is P500,000. In Criminal Case No. 20-M-2001, the
minimum term of the imprisonment imposed is two years of prision correccional and the maximum term of the
imprisonment imposed is Seven Years, Eight Months and 21 Days of prision mayor.

In all other aspects, the appellate court’s decision is AFFIRMED.

SO ORDERED.

People v. Comilla
/---!e-library! 6.0 Philippines Copyright © 2000 by Sony Valdez---\

[2007V261] PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, versus CHARLIE COMILA and AIDA COMILA,
Accused-Appellants.2007 Feb 281st DivisionG.R. No. 171448D E C I S I O N

GARCIA, J.:

On April 5, 1999, in the Regional Trial Court (RTC) of Baguio City, an Information[1] for Illegal Recruitment
committed in large scale by a syndicate, as defined and penalized under Article 13(6) in relation to Articles 38(b),
34 and 39 of Presidential Decree No. 442, otherwise known as the New Labor Code, as amended, was filed
against Charlie Comila, Aida Comila and one Indira Ram Singh Lastra, allegedly committed as follows:
That on or about the 7th day of September, 1998, in the City of Baguio, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, conspiring, confederating, and mutually aiding one another, did then
and there willfully, unlawfully and feloniously offer, recruit, and promise employment as contract workers in Italy, to
the herein complainants, namely: MARLYN ARO y PADCAYAN, ANNIE FELIX y BAKISAN, ELEONOR DONGGA-
AS y ANGHEL, ESPERANZA BACKIAN y LAD-EY, ZALDY DUMPILES y MALIKDAN, JOEL EDIONG y
CALDERON, RICKY WALDO y NICKEY, JEROME MONTAÑEZ y OSBEN, DOVAL DUMPILES y SAP-AY,
JONATHAN NGAOSI y DUMPILES, EDMUND DIEGO y SUBIANGAN and MARLON PETTOCO y SUGOT, without
said accused having first secured the necessary license or authority from the Department of Labor and Employment.

CONTRARY TO LAW.

The Information was docketed in the RTC as Crim. Case No. 16427-R and raffled to Branch 60 thereof.

On the same date – April 5, 1999 – and in the same court, twelve (12) separate Informations[2] for Estafa were filed
against the same accused at the instance of the same complainants. Docketed as Criminal Case Nos. 16428-R to
16439-R and likewise raffled to the same branch of the court, the twelve (12) Informations for Estafa, varying only as
regards the names of the offended parties and the respective amounts involved, uniformly recite:

That on or about the 10th day of November, 1998, in the City of Baguio, Philippines, and within the jurisdiction of
this Honorable Court, the above-named accused, conspiring, confederating and mutually aiding one another did
then and there willfully, unlawfully and feloniously defraud one ZALDY DUMPILES Y MALIKDAN by way of false
pretenses, which are executed prior to or simultaneously with the commission of the fraud, as follows, to wit: the
accused knowing fully well that he/she/they is/are not AUTHORIZED job RECRUITERS for persons intending to
secure work abroad convinced said Zaldy Dumpiles y Malikdan and pretended that he/she/they could secure a job
for him/her abroad, for and in consideration of the sum of P25,000.00 and representing the placement and medical
fees when in truth and in fact could not; the said Zaldy Dumpiles y Malikdan deceived and convinced by the false
pretenses employed by the accused parted away the total sum of P25,000,00 in favor of the accused, to the
damage and prejudice of the said Zaldy Dumpiles y Malikdan in the aforementioned amount of TWENTY FIVE
THOUSAND PESOS (P25,000.00), Philippine currency.

CONTRARY TO LAW.

Of the three accused named in all the aforementioned two sets of Informations, only accused Aida Comila and
Charlie Comila were brought under the jurisdiction of the trial court, the third, Indira Ram Singh Lastra, being then
and still is at large.

Arraigned with assistance of counsel, accused Aida Comila and Charlie Comila entered a plea of “NOT GUILTY”
not only to the Information for Illegal Recruitment (Crim. Case No. 16427-R) but also to the twelve (12)
Informations for Estafa (Crim. Case Nos. 16428-R to 16439-R).

Thereafter, a joint trial of the cases ensued.

Of the twelve (12) complainants in both the illegal recruitment and estafa charges, the prosecution was able to
present only seven (7) of them, namely: Annie Felix y Bakisan; Ricky Waldo y Nickey; Jonathan Ngaosi y Dumpiles;
Marilyn Aro y Padcayan; Edmund Diego y Subiangan; Jerome Montañez y Osben; and Eleonor Dongga-as y
Anghel. A certain Jose Matias of the Philippine Overseas Employment Administration (POEA) was supposed to
testify for the prosecution but his testimony was dispensed after the defense agreed that he will merely testify to the
effect that as per POEA records, accused Aida Comila and Charlie Comila were not duly licensed or authorized to
recruit workers for overseas employment.

In a consolidated decision[3] dated October 3, 2000, the trial court found both accused GUILTY beyond
reasonable doubt of the crimes of Illegal Recruitment committed in large scale by a syndicate, as charged in Crim.
Case No. 16427-R, and of estafa, as charged in Crim. Case Nos. 16430-R; 16431-R, 16432-R, 16434-R, 16436-R,
16438-R, and 16439-R. The other informations for estafa in Crim. Case Nos. 16428-R, 16429-R, 16433-R, 16435-R
and 16437-R were, however, dismissed for lack of evidence. We quote the fallo of the trial court’s decision:

WHEREFORE, premises considered, this court hereby finds the accused, Aida Comila and Charlie Comila:
1. In Criminal Case No. 16427-R, GUILTY beyond reasonable doubt of the crime of Illegal Recruitment in
Large Scale Committed by a Syndicate. They are hereby sentenced to each suffer the penalty of life imprisonment
and a fine of P100,000.00;

2. In Criminal Case No. 16430-R, GUILTY beyond reasonable doubt of the crime of Estafa. There being
no mitigating and aggravating circumstances and applying the provisions of the Indeterminate Sentence Law, they
are hereby sentenced to each suffer an indeterminate penalty of four (4) years and two (2) months of prision
correccional, as minimum, to eight (8) years of prision mayor, as maximum. They shall also jointly and severally pay
the complainant, Marilyn Aro, the sum of P25,500.00 plus interest from the date this Information was filed until it is
fully paid;

3. In Criminal Case No. 16431-R, GUILTY beyond reasonable doubt of the crime of Estafa. There being
no mitigating and aggravating circumstances and applying the provisions of the Indeterminate Sentence Law, they
are hereby sentenced to each suffer an indeterminate penalty of four (4) years and two (2) months of prision
correccional, as minimum, to ten (10) years of prision mayor, as maximum. They shall also jointly and severally pay
the complainant, Annie Felix, the sum of P50,000.00 plus interest from the date this Information was filed until it is
fully paid;

4. In Criminal Case No. 16432-R, GUILTY beyond reasonable doubt of the crime of Estafa. There being
no mitigating and aggravating circumstances, and applying the provisions of the Indeterminate Sentence Law, they
are hereby sentenced to each suffer an indeterminate penalty of four (4) years and two (2) months of prision
correccional, as minimum, to ten (10) years of prision mayor, as maximum. They shall also jointly and severally pay
the complainant, Eleanor Dongga-as, the sum of P50,000.00 plus interest from the date this Information was filed
until it is fully paid;

5. In Criminal Case No. 16434-R, GUILTY beyond reasonable doubt of the crime of Estafa. There being
no mitigating and aggravating circumstances and applying the provisions of Indeterminate Sentence Law, they are
hereby sentenced to each suffer an indeterminate penalty of four (4) years and two (2) months of prision
correccional, as minimum, to eight (8) years of prision mayor, as maximum. They shall also jointly and severally pay
the complainant, Edmund Diego, the sum of P25,000.00 plus interest from the date this Information was filed until it
is fully paid;

6. In Criminal Case No. 16436-R, GUILTY beyond reasonable doubt of the crime of Estafa. There being
no mitigating and aggravating circumstances, and applying the provisions of the Indeterminate Sentence Law, they
are hereby sentenced to each suffer an indeterminate penalty of four (4) years and two (2)months of prision
correccional, as minimum, to eight (8) years of prision mayor, as maximum. They shall also jointly and severally pay
the complainant, Jonathan Ngaosi, the sum of P25,000.00 plus interest from the date this Information was filed until
it is fully paid;

7. In Criminal Case No. 16438-R, GUILTY beyond reasonable doubt of the crime of Estafa. There being
no mitigating and aggravating circumstances, and applying the provisions of the Indeterminate Sentence Law, they
are hereby sentenced to each suffer an indeterminate penalty of four (4) years and two (2) months of prision
correccional, as minimum, to eight (8) years of prision mayor as maximum. They shall also jointly and severally pay
the complainant, Ricky Waldo, the sum of P25,000.00 plus interest from the date this Information was filed until it is
fully paid;

8. In Criminal Case No. 16439-R, GUILTY beyond reasonable doubt of the crime of Estafa. There being
no mitigating and aggravating circumstances, and applying the provisions of the Indeterminate Sentence Law, they
are hereby sentenced to each suffer an indeterminate penalty of four (4) years and two (2) months of prision
correccional, as minimum to eight (8) years of prision mayor, as maximum. They shall also jointly and severally pay
the complainant, Jerome Montañez, the sum of P25,000.00 plus interest from the date this Information was filed;
and

9. Criminal Cases Nos. 16428-R; 16429-R; 16433-R; 16435-R and 16437-R are hereby DISMISSED for
lack of evidence.

In the service of the various prison terms herein imposed upon the accused Aida Comila and Charlie Comila, the
provisions of Article 70 of the Revised Penal Code shall be observed.
As to the accused, Indira Sighn Lastra, let all these cases be archived in the meantime until the said accused is
arrested.

SO ORDERED.

Pursuant to a Notice of Appeal[4] filed by the two accused, the trial court forwarded the records of the cases to this
Court in view of the penalty of life imprisonment meted in Crim. Case No. 16427-R (Illegal Recruitment in large
scale). In its Resolution[5] of October 3, 2001, the Court resolved to accept the appeal and the subsequent
respective briefs for the appellants[6] and the appellee[7] as well as the appellants’ reply brief.[8]

Thereafter, and consistent with its pronouncement in People v. Mateo,[9] the Court, via its Resolution[10] of
September 22, 2004, transferred the cases to the Court of Appeals (CA) “for appropriate action and disposition.” In
the CA, the cases were assigned one docket number and thereat docketed as CA-G.R. CR H.C. No. 01615.

In a decision[11] promulgated on December 29, 2005, the appellate court affirmed that of the trial court, to wit:

WHEREFORE, premises considered, the Decision dated October 3, 2000 of the Regional Trial Court of Baguio City,
Branch 60, in Criminal Cases Nos. 16427-R to 16439-R finding accused-appellants guilty of (1) illegal recruitment
committed in large scale; and (2) seven (7) counts of estafa is hereby AFFIRMED and UPHELD.

With costs against the accused-appellants.

SO ORDERED.

The cases are again with this Court in view of the Notice of Appeal [12] interposed by the herein accused-appellants
from the aforementioned affirmatory CA decision.

Acting thereon, the Court required the parties to simultaneously submit their respective supplemental briefs, if they
so desire.

In their respective manifestations,[13] the parties opted not to file any supplemental brief and instead merely
reiterated what they have said in their earlier appellants’ and appellee's briefs.

The Office of the Solicitor General, in the brief[14] it filed for appellee People, summarizes the facts of the case in
the following manner:

Annie Felix was introduced by her sister-in-law, Ella Bakisan, to appellant Aida Comila in August 1998 (pp. 3, 24,
tsn, September 14, 1999). Ella Bakisan told her that appellant Aida Comila could help her find work abroad as she
was recruiting workers for a factory in Palermo, Italy (ibid.). Annie Felix then went to meet appellant Aida Comila at
the Jollibee outlet along Magsaysay Avenue, Baguio City in August, 1998 to inquire about the supposed work in
Italy (pp. 3-4, tsn, ibid.). There were other applicants, aside from Annie at the Jollibee outlet at the time, similarly
inquiring about the prospective jobs abroad (ibid.).

Annie met appellant again at the St. Theresa’s College on or about September 6 or 7, 1998 (p.11, ibid.). there were
around fifty (50) to sixty (60) applicants at that time (ibid.). Appellant introduced them to a certain Erlinda Ramos,
one of the agents of Mrs. Indira Lastra, a representative of the Far East Trading Corporation (p.4,11, ibid.).
Accordingly, Erlinda Ramos would be responsible for the processing of the applicants’ visas (ibid.). Erlinda Ramos
even showed them the copy of the job order from Italy (ibid.). Like Ramos, appellant likewise introduced herself to
Annie and the other applicants as an agent of Lastra (pp. 3-4, ibid.).

Annie submitted all her requirements to appellant, along with the amount of two thousand pesos (P2,000.00) as
processing fee (p.6, tsn, ibid.). She also paid a total of twenty three thousand (P23,000.00) as partial payment of her
placement fee of fifty thousand pesos (P50,000.00) on or about September 6 or 7, 1998. Appellant issued a
common receipt detailing the amounts she received not only from Annie Felix (23,000.00) but also for her fellow
applicants, Zaldy Dumpiles (P23,000.00), Joel Ediong (P25,000.00), and Ricky Baldo (P25, 000.00) (p. 8, tsn, ibid.).

Annie went to Manila several times to complete her medical examination as required (pp. 14-16, tsn, ibid.).
Considering appellant Aida Comila’s pregnancy at that time, her husband Charlie Comila, also an agent of Lastra,
accompanied Annie and the other applicants during their medical check-up (pp. 22-24, ibid.).
On the last week of October, 1998, Annie again paid appellant the total amount of twenty five thousand pesos
(P25,000.00) to complete her placement fee of fifty thousand pesos (P50,000.00). Annie was told that her flight to
Italy was scheduled on September 14, 1998 (p. 20, ibid.). Later on, Erlinda Ramos told Annie that her flight to Italy
was re-scheduled to October, 1998 due to a typhoon (p.20, ibid.).

There were others like Annie Felix who were similarly enticed to apply for the promised job in Italy (pp. 4-5, tsn,
September 22, 1999). Among them were Ricky Waldo, Edmund Diego, Eleanor Donga-as, Jonathan Ngaosi,
Marilyn Aro and Jerome Montañez (pp. 4-5; 19-28, tsn, September 22, 1999, afternoon session).

In the briefing at St. Theresa’s College, Navy Road, Pacdal, Baguio City, (p. 7, tsn, September 22, 1999; pp. 29-30,
tsn, September 14, 1999) appellant briefed Ricky Waldo and the rest of the applicants on their application
requirements (pp. 7-8, tsn, Sept. 22, 1999). The briefing was conducted by appellants Aida Comila, Charlie Comila,
and Erlinda Ramos who alternately talked about the documents to be submitted for the processing of their
applications and the processing fee of fifty thousand pesos (P50,000.00) they have to pay (p.8, tsn, September 22,
1999). In the same briefing, they were also told that Erlinda Ramos was scheduled to go to Italy on September 14,
1998 and that whoever would pay P25,000.00 first, or half of the P50,000.00 processing fee would be able to go
with her to Italy (p. 8. tsn, September 22, 1999). Per the job order shown to Jonathan Ngaosi, for instance, male
workers were to receive a salary of two thousand three hundred dollars ($2,300.00) plus an additional eight dollars
($8.00) for overtime work (p.8, tsn, September 21, 1999, afternoon session).

After undergoing the required medical examination in Manila, applicants Ricky Waldo and company paid the
following amounts for their respective processing fees, which were duly receipted by appellant Aida Comila in three
separate documents, thus:

“8-23-98, received the amount of P14,000.00 from Ella Bakisan. Signed, Aida Comila. The second document again
is a piece of paper of which the following is written: 9-7-98. Received the amount of the following: Philip Waldo,
P20,000.00; Doval Dumpiles, P23,000.00 Edmund Diego, P25,000.00; Jerome Montañez, P25,000.00 Total-
P93,000.00. Received by A. Comila. The 3rd document is ½ page of a yellow pad and it reads 9-7-98, received the
following amounts from Zaldy Dumpiles - P23,000.00; Joel Ediong - P25,000.00; Ricky Waldo- P25,000.00; Annie
Felix - P23,000.00; Marlon Tedoco – P23,000.00. Total – P119,000.00. Received by Aida Comila; witnesses Ella
Bakisan. (p.14, tsn, of witness Edmund Diego, September 22, 1999, morning session).

Considering the payments they made, Ricky Waldo’s flight to Italy was scheduled on September 14, 1999 while
those of Marilyn Aro, Edmund Diego, Jerome Montanez, Jonathan Ngaosi, and Eleanor Donga-as were scheduled
on October 27, 1999 (pp. 8-9, tsn, September 22, 1999; pp. 32-33, tsn, September 14, 1999; pp. 2-4, tsn,
September 15, 1999; p. 24, September 21, 1999; p.10, tsn, September 22, 1999, morning session; p. 27, tsn,
September 22, 1999, afternoon session).

Like Annie Felix, Ricky Waldo’s flight did not push through as scheduled on September 14, 1999 (pp. 32-34, tsn,
September 14, 1999; pp. 2-4, tsn, September 15, 1999). Appellant Aida Comila explained that the re-scheduling
was due to typhoon (ibid.). Ricky’s flight was then re-scheduled to October 7, 1999 but was again moved to October
27, 1999 as, according to appellant Aida Comila, there were some problems in his papers and that of the other
applicants (pp. 2-3, ibid.).

On October 25, 1998, appellant Aida Comila called the applicants for a briefing at the St. Therese Building at the
Navy Base, Baguio City (p.24, tsn, September 21, 1999). In the same briefing, Erlinda Ramos, as representative of
the supposed principal, Indira Lastra, explained to the applicants that their flight on October 27, 1999 was cancelled
but will be re-scheduled (ibid.). Appellant Aida Comila told them that they have to wait for the notice from the Italian
Embassy (ibid.).

On the first week of November, 1998, appellant Charlie Comila told Marilyn Aro and several other applicants that
their visas would be released (p. 25, September, 21, 1999). Appellant Charlie Comila accompanied them and the
others to the Elco Building at Shaw Boulevard, Pasig City purportedly to see Erlinda Ramos (p.25, tsn, September
21, 1999). When Erlinda Ramos arrived, she told Marilyn and the other applicants to wait for the release of their
visas, the following day (p.25, ibid.). Marilyn and the rest came back each day for one whole week but the promised
visas were not released to them (ibid.).
Marilyn and the other applicants complained to appellant Charlie Comila about the delay and told him of their doubts
about their application and the promised job in Italy (ibid.). At this point, appellant Charlie Comila assured them that
they should not worry and that everything will be alright (ibid). Appellant Charlie Comila then brought them to Indira
Lastra (p.26, ibid.).

Marilyn Aro, Annie Felix, and the rest were all shocked to find out that Indira Lastra was actually an inmate of Manila
(Quiapo) city jail. (p.26, ibid.; p. 13, tsn, September 14, 1999). They felt at once that they were, indeed, victims of
illegal recruitment (ibid.).When they demanded the return of their money from Indira Lastra, the latter told them to
withdraw their money from appellant Aida Comila (p.26. ibid.).

Upon their return to Baguio, Marilyn’s group proceeded to appellant Aida Comila’s residence at Km. 6, La Trinidad,
Benguet to demand the return of their money (p. 27, tsn, ibid.). Appellant Aida Comila, however, told them to wait as
Indira Lastra will soon be out of jail and will personally process their papers at the Italian Embassy (ibid.). Marilyn
and the other applicants followed-up several times with appellant Aida Comila the return of the amounts of money
they paid for their supposed placement fee, but were simply told to wait (ibid.). the last time complainants visited
them, appellants Aida Comila and Charlie Comila were already in a Bulacan jail (p. 27, ibid.).

In April, 1999, Marilyn Aro, Edmund Diego, Annie Felix, Eleanor Donga-as, Jerome Montanez, Ricky Waldo and
Jonathan Ngaosi filed their complaint against appellants Aida Comila and Charlie Comila before the Criminal
Investigation Group (CIG).

In the same month of April 1999, separate Informations for estafa and illegal recruitment committed in large scale by
a syndicate or violation of Article 13 (b) in relation to Article 38 (b) 34, and 39 of P.D. No. 442, otherwise known as
the Labor Code of the Philippines were filed against appellants Charlie Comila, Aida Comila and Indira Lastra.

In their appellants’ brief, accused-appellants would fault the two courts below in (1) finding them guilty beyond
reasonable doubt of the crimes of illegal recruitment and estafa; and (2) totally disregarding the defense of denial
“honestly advanced” by them.

It is not disputed that accused-appellants Charlie Comila and Aida Comila are husband-and-wife. Neither is it
disputed that husband and wife knew and are well-acquainted with their co-accused, Indira Ram Singh Lastra, and
one Erlinda Ramos. It is their posture, however, that from the very beginning, appellant Aida Comila never
professed that she had the authority to recruit and made it clear to the applicants for overseas employment that it
was Erlinda Ramos who had such authority and who issued the job orders from Italy. Upon this premise, this
appellant contends that the subsequent transactions she had with the applicants negate the presence of deceit, an
essential element of estafa under paragraph 2(a) of Article 315 of the Revised Penal Code. On the charge of illegal
recruitment, this appellant argues that “she was merely trying to help the applicants to process their papers,
believing that Indira Ram Sighn Lastra and Erlinda Ramos would really send the applicants to Italy.” With respect to
co-appellant Charlie Comila, the defense submits that the prosecution “miserably failed to prove his participation in
the illegal recruitment and estafa.”

The appeal must fail.

After a careful and circumspect review of the records, we are fully convinced that both the trial and appellate courts
committed no error in finding both appellants guilty beyond moral certainty of doubt of the crimes charged against
them. Through the respective testimonies of its witnesses, the prosecution has satisfactorily established that both
appellants were then engaged in unlawful recruitment and placement activities. The combined testimonies of the
prosecution witnesses point to appellant Aida Comila as the one who promised them foreign employment and
assured them of placement overseas through the help of their co-accused Indira Ram Singh Lastra. For sure, it was
Aida herself who informed them of the existence of job orders from Palermo, Italy, and of the documents needed for
the processing of their applications. Aida, in fact, accompanied the applicants to undergo medical examinations in
Manila. And relying completely on Aida’s representations, the applicants-complainants entrusted their money to her
only to discover later that their hopes for an overseas employment were but vain. In the words of the trial court:

Aida Comila cannot escape culpability by the mere assertion that the recruitment activities were done by Ella
Bakisan, Erlinda Ramos and Indira Lastra as if she was just a mere observer of the activities going on right under
her nose, especially so that the seven complainants who testified all pointed to her as their recruiter. She could not
adequately explain why: (1) she had to show and explain the job order and the work and travel requirements to the
complainants; (2) she had to meet the complainants at Jollibee, Magsaysay Ave., Baguio City and in her residence;
(3) she had to be present at the briefings for the applicants; (4) she received the placement fees even if she claims
that she received them from Ella Bakisan; (5) she had to go down to Manila and accompanied the complainants for
their medical examination; and (6) she had to go out of her way to do all these things even when she was pregnant
and was about to give birth. Certainly, she was not a social worker or a humanitarian who had all the time in this
world to go out of her way to render free services to other people whom she did not know or just met. To be sure,
Aida Comila had children to attend to and a husband who was unemployed to be able to conduct such time-
consuming charitable activities.[15]

Running in parallel vein is what the CA wrote in its appealed decision:[16]

As regards appellant Aida Comila’s contention that she did not represent herself as a licensed recruiter, and that
she merely helped complainants avail of the job opportunity on the belief that Indira Lastra and Erlinda Ramos
would really send them to Italy, the same hardly deserves merit. The crime of illegal recruitment is committed when,
among other things, a person who, without being duly authorized according to law represents or gives the distinct
impression that he or she has the power or the ability to provide work abroad convincing those to whom the
representation is made or to whom the impression is given to thereupon part with their money in order to be assured
of that employment.

In fact, even if there is no consideration involved, appellant will still be deemed as having engaged in recruitment
activities, since it was sufficiently demonstrated that she promised overseas employment to private complainants.
To be engaged in the practice and placement, it is plain that there must at least be a promise or offer of an
employment from the person posing as a recruiter whether locally or abroad.

As regards appellant Charlie Comila, it is inconceivable for him to feign ignorance of the illegal recruitment activities
of his wife Aida, and of his lack of participation therein. Again, we quote with approval what the trial court has said
in its decision:[17]

Charlie Comila could not, likewise, feign ignorance of the illegal transactions. It is contrary to human experience,
hence, highly incredible for a husband not to have known the activities of his wife who was living with him under the
same roof. In fact, he admitted that when Aida gave birth, he had to accompany the complainants to Manila for their
medical examination and again, on another trip, to bring them to the office of Erlinda Ramos to follow-up their visas.
The fact that he knew the ins and outs of Manila was a desperate excuse or reason why he accompanied the
complainants to Manila considering that, as he and his wife claimed, they have nothing to do with the recruitment
activities. Furthermore, if he and his wife had nothing to do with the recruitment of the complainants, why did he
have to sign the letter and accommodate the request of Myra Daluca whom they have not really known. But
damning was his statement that he signed the letter because Aida was not there to sign it. Such a statement would
only show that they were indeed parties to these illegal transactions. Charlie Comila would even claim that he was
just an elementary graduate and so he did not understand what he was asked to sign. But his booking sheet
showed that he was a high school graduate. He was a conductor of a bus company who should know and
understand how to read and write. Furthermore, he was already a grown up man in his thirties who knew what was
right and wrong and what he should or should not do.

It is well established in jurisprudence that a person may be charged and convicted for both illegal recruitment
and estafa. The reason therefor is not hard to discern: illegal recruitment is malum prohibitum, while estafa is
malum in se. In the first, the criminal intent of the accused is not necessary for conviction. In the second,
such an intent is imperative. Estafa under Article 315, paragraph 2, of the Revised Penal Code, is committed by any
person who defrauds another by using fictitious name, or falsely pretends to possess power, influence,
qualifications, property, credit, agency, business or imaginary transactions, or by means of similar deceits
executed prior to or simultaneously with the commission of fraud.[18] Here, it has been sufficiently proven that both
appellants represented themselves to the complaining witnesses to have the capacity to send them to Italy for
employment, even as they do not have the authority or license for the purpose. Doubtless, it is this
misrepresentation that induced the complainants to part with their hard-earned money for placement and medical
fees. Such act on the part of the appellants clearly constitutes estafa under Article 315, paragraph (2), of the
Revised Penal Code.

Appellants next bewail the alleged total disregard by the two courts below their defense of denial which, had it been
duly considered and appreciated, could have merited their acquittal.
The Court disagrees. The two courts below did consider their defense of denial. However, given the positive and
categorical testimonies of the complainants who were one in pointing to appellants, in cahoots with their co-accused
Indira Ram Singh Lastra, as having recruited and promised them with overseas employment, appellants’ defense of
denial must inevitably collapse.

All told, we rule and so hold that the two courts below committed no error in adjudging both appellants guilty
beyond reasonable doubt of the crimes of illegal recruitment committed by a syndicate in large scale and of estafa in
seven (7) counts. We also rule that the penalties imposed by the court of origin, as affirmed by the CA, accord with
law and jurisprudence.

IN VIEW WHEREOF, the instant appeal is DISMISSED and the appealed decision of the CA, affirmatory of that the
trial court, is AFFIRMED in toto.

Costs against appellants.

SO ORDERED.

Marsaman Manning Agency v. NLRC

/---!e-library! 6.0 Philippines Copyright © 2000 by Sony Valdez---\

[1999V667] MARSAMAN MANNING AGENCY, INC. and DIAMANTIDES MARITIME, INC., petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION and WILFREDO T. CAJERAS, respondents.1999 Aug 252nd
DivisionG.R. No. 127195D E C I S I O N

BELLOSILLO, J.:

MARSAMAN MANNING AGENCY, INC. (MARSAMAN) and its foreign principal DIAMANTIDES MARITIME, INC.
(DIAMANTIDES) assail the Decision of public respondent National Labor Relations Commission dated 16
September 1996 as well as its Resolution dated 12 November 1996 affirming the Labor Arbiter's decision finding
them guilty of illegal dismissal and ordering them to pay respondent Wilfredo T. Cajeras salaries corresponding to
the unexpired portion of his employment contract, plus attorney's fees.

Private respondent Wilfredo T. Cajeras was hired by petitioner MARSAMAN, the local manning agent of petitioner
DIAMANTIDES, as Chief Cook Steward on the MV Prigipos, owned and operated by DIAMANTIDES, for a contract
period of ten (10) months with a monthly salary of US$600.00, evidenced by a contract between the parties dated
15 June 1995. Cajeras started work on 8 August 1995 but less than two (2) months later, or on 28 September
1995, he was repatriated to the Philippines allegedly by “mutual consent.”

On 17 November 1995 private respondent Cajeras filed a complaint for illegal dismissal against petitioners with the
NLRC National Capital Region Arbitration Branch alleging that he was dismissed illegally, denying that his
repatriation was by mutual consent, and asking for his unpaid wages, overtime pay, damages, and attorney’s fees.
[1] Cajeras alleged that he was assigned not only as Chief Cook Steward but also as assistant cook and messman
in addition to performing various inventory and requisition jobs. Because of his additional assignments he began to
feel sick just a little over a month on the job constraining him to request for medical attention. He was refused at
first by Capt. Kouvakas Alekos, master of the MV Prigipos, who just ordered him to continue working. However a
day after the ship’s arrival at the port of Rotterdam, Holland, on 26 September 1995 Capt. Alekos relented and had
him examined at the Medical Center for Seamen. However, the examining physician, Dr. Wden Hoed, neither
apprised private respondent about the diagnosis nor issued the requested medical certificate allegedly because he
himself would forward the results to private respondent’s superiors. Upon returning to the vessel, private
respondent was unceremoniously ordered to prepare for immediate repatriation the following day as he was said to
be suffering from a disease of unknown origin.

On 28 September 1995 he was handed his Seaman's Service Record Book with the following entry: "Cause of
discharge - Mutual Consent."[2] Private respondent promptly objected to the entry but was not able to do anything
more as he was immediately ushered to a waiting taxi which transported him to the Amsterdam Airport for the return
flight to Manila. After his arrival in Manila on 29 September 1995 Cajeras complained to MARSAMAN but to no
avail.[3]

MARSAMAN and DIAMANTIDES, on the other hand, denied the imputation of illegal dismissal. They alleged that
Cajeras approached Capt. Alekos on 26 September 1995 and informed the latter that he could not sleep at night
because he felt something crawling over his body. Furthermore, Cajeras reportedly declared that he could no
longer perform his duties and requested for repatriation. The following paragraph in the vessel's Deck Log was
allegedly entered by Capt. Alekos, to wit:

Cajeras approached me and he told me that he cannot sleep at night and that he feels something crawling on his
body and he declared that he can no longer perform his duties and he must be repatriated.[4]

Private respondent was then sent to the Medical Center for Seamen at Rotterdam where he was examined by Dr.
Wden Hoed whose diagnosis appeared in a Medical Report as “paranoia” and “other mental problems.”[5]
Consequently, upon Dr. Hoed’s recommendation, Cajeras was repatriated to the Philippines on 28 September 1995.

On 29 January 1996 Labor Arbiter Ernesto S. Dinopol resolved the dispute in favor of private respondent Cajeras
ruling that the latter's discharge from the MV Prigipos allegedly by “mutual consent” was not proved by convincing
evidence. The entry made by Capt. Alekos in the Deck Log was dismissed as of little probative value because it
was a mere unilateral act unsupported by any document showing mutual consent of Capt. Alekos, as master of the
MV Prigipos, and Cajeras to the premature termination of the overseas employment contract as required by Sec. H
of the Standard Employment Contract Governing the Employment of all Filipino Seamen on Board Ocean-Going
Vessels. Dr. Hoed’s diagnosis that private respondent was suffering from “paranoia” and “other mental problems”
was likewise dismissed as being of little evidentiary value because it was not supported by evidence on how the
paranoia was contracted, in what stage it was, and how it affected respondent's functions as Chief Cook Steward
which, on the contrary, was even rated “Very Good” in respondent's Service Record Book. Thus, the Labor Arbiter
disposed of the case as follows:

WHEREFORE, judgment is hereby rendered declaring the repatriation and dismissal of complaint Wilfredo T.
Cajeras as illegal and ordering respondents Marsaman Manning Agency, Inc. and Diamantides Maritime, Inc. to
jointly and severally pay complainant the sum of USD 5,100.00 or its peso equivalent at the time of payment plus
USD 510.00 as 10% attorney’s fees it appearing that complainant had to engage the service of counsel to protect
his interest in the prosecution of this case.

The claims for nonpayment of wages and overtime pay are dismissed for having been withdrawn (Minutes,
December 18, 1995). The claims for damages are likewise dismissed for lack of merit, since no evidence was
presented to show that bad faith characterized the dismissal.[6]

Petitioners appealed to the NLRC.[7] On 16 September 1996 the NLRC affirmed the appealed findings and
conclusions of the Labor Arbiter.[8] The NLRC subscribed to the view that Cajeras’ repatriation by alleged mutual
consent was not proved by petitioners, especially after noting that private respondent did not actually sign his
Seaman’s Service Record Book to signify his assent to the repatriation as alleged by petitioners. The entry made by
Capt. Alekos in the Deck Log was not considered reliable proof that private respondent agreed to his repatriation
because no opportunity was given the latter to contest the entry which was against his interest. Similarly, the
Medical Report issued by Dr. Hoed of Holland was dismissed as being of dubious value since it contained only a
sweeping statement of the supposed ailment of Cajeras without any elaboration on the factual basis thereof.

Petitioners' motion for reconsideration was denied by the NLRC in its Resolution dated 12 November 1996.[9]
Hence, this petition contending that the NLRC committed grave abuse of discretion: (a) in not according full faith
and credit to the official entry by Capt. Alekos in the vessel’s Deck Log conformably with the rulings in Haverton
Shipping Ltd. v. NLRC[10] and Wallem Maritime Services, Inc. v. NLRC;[11] (b) in not appreciating the Medical
Report issued by Dr. Wden Hoed as conclusive evidence that respondent Cajeras was suffering from paranoia and
other mental problems; (c) in affirming the award of attorney’s fees despite the fact that Cajeras' claim for exemplary
damages was denied for lack of merit; and, (d) in ordering a monetary award beyond the maximum of three (3)
months’ salary for every year of service set by RA 8042.
We deny the petition. In the Contract of Employment[12] entered into with private respondent, petitioners
convenanted strict and faithful compliance with the terms and conditions of the Standard Employment Contract
approved by the POEA/DOLE[13] which provides:

1. The employment of the seaman shall cease upon expiration of the contract period indicated in the Crew Contract
unless the Master and the Seaman, by mutual consent, in writing, agree to an early termination x x x x
(underscoring ours).

Clearly, under the foregoing, the employment of a Filipino seaman may be terminated prior to the expiration of the
stipulated period provided that the master and the seaman (a) mutually consent thereto and (b) reduce their consent
in writing.

In the instant case, petitioners do not deny the fact that they have fallen short of the requirement. No document
exists whereby Capt. Alekos and private respondent reduced to writing their alleged “mutual consent” to the
termination of their employment contract. Instead, petitioners presented the vessel's Deck Log wherein an entry
unilaterally made by Capt. Alekos purported to show that private respondent himself asked for his repatriation.
However, the NLRC correctly dismissed its evidentiary value. For one thing, it is a unilateral act which is
vehemently denied by private respondent. Secondly, the entry in no way satisfies the requirement of a bilateral
documentation to prove early termination of an overseas employment contract by mutual consent required by the
Standard Employment Contract. Hence, since the latter sets the minimum terms and conditions of employment for
the protection of Filipino seamen subject only to the adoption of better terms and conditions over and above the
minimum standards,[14] the NLRC could not be accused of grave abuse of discretion in not accepting anything less.

However petitioners contend that the entry should be considered prima facie evidence that respondent himself
requested his repatriation conformably with the rulings in Haverton Shipping Ltd. v. NLRC[15] and Abacast Shipping
and Management Agency, Inc. v. NLRC.[16] Indeed, Haverton says that a vessel’s log book is prima facie evidence
of the facts stated therein as they are official entries made by a person in the performance of a duty required by law.
However, this jurisprudential principle does not apply to win the case for petitioners. In Wallem Maritime Services,
Inc. v. NLRC[17] the Haverton ruling was not given unqualified application because the log book presented therein
was a mere typewritten collation of excerpts from what could be the log book.[18] The Court reasoned that since the
log book was the only piece of evidence presented to prove just cause for the termination of respondent therein, the
log book had to be duly identified and authenticated lest an injustice would result from a blind adoption of its
contents which were but prima facie evidence of the incidents stated therein.

In the instant case, the disputed entry in the Deck Log was neither authenticated nor supported by credible
evidence. Although petitioners claim that Cajeras signed his Seaman’s Service Record Book to signify his
conformity to the repatriation, the NLRC found the allegation to be actually untrue since no signature of private
respondent appeared in the Record Book.

Neither could the “Medical Report” prepared by Dr. Hoed be considered corroborative and conclusive evidence that
private respondent was suffering from “paranoia” and “other mental problems,” supposedly just causes for his
repatriation. Firstly, absolutely no evidence, not even an allegation, was offered to enlighten the NLRC or this Court
as to Dr. Hoed's qualifications to diagnose mental illnesses. It is a matter of judicial notice that there are various
specializations in medical science and that a general practitioner is not competent to diagnose any and all kinds of
illnesses and diseases. Hence, the findings of doctors who are not proven experts are not binding on this Court.[19]
Secondly, the Medical Report prepared by Dr. Hoed contained only a general statement that private respondent was
suffering from “paranoia” and “other mental problems” without providing the details on how the diagnosis was
arrived at or in what stage the illness was. If Dr. Hoed indeed competently examined private respondent then he
would have been able to discuss at length the circumstances and precedents of his diagnosis. Petitioners cannot
rely on the presumption of regularity in the performance of official duties to make the Medical Report acceptable
because the presumption applies only to public officers from the highest to the lowest in the service of the
Government, departments, bureaus, offices, and/or its political subdivisions,[20] which Dr. Wden Hoed was not
shown to be. Furthermore, neither did petitioners prove that private respondent was incompetent or continuously
incapacitated for the duties for which he was employed by reason of his alleged mental state. On the contrary his
ability as Chief Cook Steward, up to the very moment of his repatriation, was rated “Very Good” in his Seaman’s
Service Record Book as correctly observed by public respondent.

Considering all the foregoing we cannot ascribe grave abuse of discretion on the part of the NLRC in ruling that
petitioners failed to prove just cause for the termination of private respondent's overseas employment. Grave abuse
of discretion is committed only when the judgment is rendered in a capricious, whimsical, arbitrary or despotic
manner, which is not true in the present case.[21]

With respect to attorney’s fees, suffice it to say that in actions for recovery of wages or where an employee was
forced to litigate and thus incurred expenses to protect his rights and interests, a maximum award of ten percent
(10%) of the monetary award by way of attorney’s fees is legally and morally justifiable under Art. 111 of the Labor
Code,[22] Sec. 8, Rule VIII, Book III of its Implementing Rules,[23] and par. 7, Art. 2208[24] of the Civil Code.[25]
The case of Albenson Enterprises Corporation v. Court of Appeals[26] cited by petitioners in arguing against the
award of attorney’s fees is clearly not applicable, being a civil action for damages which deals with only one of the
eleven (11) instances when attorney’s fees could be recovered under Art. 2208 of the Civil Code.

Lastly, on the amount of salaries due private respondent, the rule has always been that an illegally dismissed
worker whose employment is for a fixed period is entitled to payment of his salaries corresponding to the unexpired
portion of his employment.[27] However on 15 July 1995, RA 8042 otherwise known as the “Migrant Workers and
Overseas Filipinos Act of 1995” took effect, Sec. 10 of which provides:

Sec. 10. In case of termination of overseas employment without just, valid or authorized cause as defined by law or
contract, the worker shall be entitled to the full reimbursement of his placement fee with interest at twelve percent
(12%) per annum, plus his salaries for the unexpired portion of the employment contract or for three (3) months for
every year of the unexpired term whichever is less (underscoring ours).

The Labor Arbiter, rationalizing that the aforesaid law did not apply since it became effective only one (1) month
after respondent's overseas employment contract was entered into on 15 June 1995, simply awarded private
respondent his salaries corresponding to the unexpired portion of his employment contract, i.e., for 8.6 months. The
NLRC affirmed the award and the Office of the Solicitor General (OSG) fully agreed. But petitioners now insist that
Sec. 10, RA 8042 is applicable because although private respondent’s contract of employment was entered into
before the law became effective his alleged cause of action, i.e., his repatriation on 28 September 1995 without just,
valid or authorized cause, occurred when the law was already in effect. Petitioners' purpose in so arguing is to
invoke the law in justifying a lesser monetary award to private respondent, i.e., salaries for three (3) months only
pursuant to the last portion of Sec. 10 as opposed to the salaries for 8.6 months awarded by the Labor Arbiter and
affirmed by the NLRC.

We agree with petitioners that Sec. 10, RA 8042, applies in the case of private respondent and to all overseas
contract workers dismissed on or after its effectivity on 15 July 1995 in the same way that Sec. 34,[28] RA 6715,[29]
is made applicable to locally employed workers dismissed on or after 21 March 1989.[30] However, we cannot
subscribe to the view that private respondent is entitled to three (3) months’ salary only. A plain reading of Sec. 10
clearly reveals that the choice of which amount to award an illegally dismissed overseas contract worker, i.e.,
whether his salaries for the unexpired portion of his employment contract or three (3) months’ salary for every year
of the unexpired term, whichever is less, comes into play only when the employment contract concerned has a term
of at least one (1) year or more. This is evident from the words “for every year of the unexpired term” which follows
the words “salaries x x x for three months.” To follow petitioners’ thinking that private respondent is entitled to three
(3) months salary only simply because it is the lesser amount is to completely disregard and overlook some words
used in the statute while giving effect to some. This is contrary to the well-established rule in legal hermeneutics
that in interpreting a statute, care should be taken that every part or word thereof be given effect[31] since the law-
making body is presumed to know the meaning of the words employed in the statue and to have used them
advisedly.[32] Ut res magis valeat quam pereat.[33]

WHEREFORE, the questioned Decision and Resolution dated 16 September 1996 and 12 November 1996,
respectively, of public respondent National Labor Relations Commission are AFFIRMED. Petitioners MARSAMAN
MANNING AGENCY, INC., and DIAMANTIDES MARITIME, INC., are ordered, jointly and severally, to pay private
respondent WILFREDO T. CAJERAS his salaries for the unexpired portion of his employment contract or
USD$5,100.00, reimburse the latter's placement fee with twelve percent (12%) interest per annum conformably with
Sec. 10 of RA 8042, as well as attorney's fees of ten percent (10%) of the total monetary award. Costs against
petitioners.

SO ORDERED.

Mendoza, Quisumbing, and Buena, JJ., concur.

Serrano v. Gallant Maritime Services
G.R. No. 167614               March 24, 2009

ANTONIO M. SERRANO, Petitioner, 
vs.
Gallant MARITIME SERVICES, INC. and MARLOW NAVIGATION CO., INC., Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

For decades, the toil of solitary migrants has helped lift entire families and communities out of poverty. Their
earnings have built houses, provided health care, equipped schools and planted the seeds of businesses. They
have woven together the world by transmitting ideas and knowledge from country to country. They have provided
the dynamic human link between cultures, societies and economies. Yet, only recently have we begun to
understand not only how much international migration impacts development, but how smart public policies can
magnify this effect.

United Nations Secretary-General Ban Ki-Moon

Global Forum on Migration and Development
Brussels, July 10, 20071

For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th paragraph of Section 10, Republic Act
(R.A.) No. 8042,2 to wit:

Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just, valid or authorized
cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with
interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term, whichever is less.

x x x x (Emphasis and underscoring supplied)

does not magnify the contributions of overseas Filipino workers (OFWs) to national development, but exacerbates
the hardships borne by them by unduly limiting their entitlement in case of illegal dismissal to their lump-sum salary
either for the unexpired portion of their employment contract "or for three months for every year of the unexpired
term, whichever is less" (subject clause). Petitioner claims that the last clause violates the OFWs' constitutional
rights in that it impairs the terms of their contract, deprives them of equal protection and denies them due process.

By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails the December 8, 2004
Decision3 and April 1, 2005 Resolution4 of the Court of Appeals (CA), which applied the subject clause, entreating
this Court to declare the subject clause unconstitutional.

Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd. (respondents) under a
Philippine Overseas Employment Administration (POEA)-approved Contract of Employment with the following terms
and conditions:

Duration of contract 12 months

Position Chief Officer

Basic monthly salary US$1,400.00

Hours of work 48.0 hours per week

Overtime US$700.00 per month

 Vacation leave with pay 7.00 days per month5

On March 19, 1998, the date of his departure, petitioner was constrained to accept a downgraded employment
contract for the position of Second Officer with a monthly salary of US$1,000.00, upon the assurance and
representation of respondents that he would be made Chief Officer by the end of April 1998. 6

Respondents did not deliver on their promise to make petitioner Chief Officer. 7 Hence, petitioner refused to stay on
as Second Officer and was repatriated to the Philippines on May 26, 1998. 8

Petitioner's employment contract was for a period of 12 months or from March 19, 1998 up to March 19, 1999, but at
the time of his repatriation on May 26, 1998, he had served only two (2) months and seven (7) days of his contract,
leaving an unexpired portion of nine (9) months and twenty-three (23) days.

Petitioner filed with the Labor Arbiter (LA) a Complaint 9 against respondents for constructive dismissal and for
payment of his money claims in the total amount of US$26,442.73, broken down as follows:

May US$ 413.90

27/31,
1998
(5
days)
incl.
Leave
pay

June 2,590.00
01/30,
1998

July 2,590.00
01/31,
1998

August 2,590.00
01/31,
1998

Sept. 2,590.00
01/30,
1998

Oct. 2,590.00
01/31,
1998

Nov. 2,590.00
01/30,
1998

Dec. 2,590.00
01/31,
1998

Jan. 2,590.00
01/31,
 1999

Feb. 2,590.00
01/28,
1999

Mar. 1,640.00
1/19,
1999
(19
days)
incl.
leave
pay

  --------------------------------------------------------------------------------

  25,382.23

Amoun  
t
adjuste
d to
chief
mate's
salary

(March 1,060.5010
19/31,
1998
to April
1/30,
1998)
+

  ----------------------------------------------------------------------------------
------------

TOTAL US$ 26,442.7311

CLAIM

as well as moral and exemplary damages and attorney's fees.

The LA rendered a Decision dated July 15, 1999, declaring the dismissal of petitioner illegal and awarding him
monetary benefits, to wit:

WHEREFORE, premises considered, judgment is hereby rendered declaring that the dismissal of the complainant
(petitioner) by the respondents in the above-entitled case was illegal and the respondents are hereby ordered to pay
the complainant [petitioner], jointly and severally, in Philippine Currency, based on the rate of exchange prevailing at
the time of payment, the amount of EIGHT THOUSAND SEVEN HUNDRED SEVENTY U.S. DOLLARS (US
$8,770.00), representing the complainant’s salary for three (3) months of the unexpired portion of the
aforesaid contract of employment.1avvphi1

The respondents are likewise ordered to pay the complainant [petitioner], jointly and severally, in Philippine
Currency, based on the rate of exchange prevailing at the time of payment, the amount of FORTY FIVE U.S.
DOLLARS (US$ 45.00),12 representing the complainant’s claim for a salary differential. In addition, the respondents
are hereby ordered to pay the complainant, jointly and severally, in Philippine Currency, at the exchange rate
prevailing at the time of payment, the complainant’s (petitioner's) claim for attorney’s fees equivalent to ten percent
(10%) of the total amount awarded to the aforesaid employee under this Decision.

The claims of the complainant for moral and exemplary damages are hereby DISMISSED for lack of merit.

All other claims are hereby DISMISSED.

SO ORDERED.13 (Emphasis supplied)

In awarding petitioner a lump-sum salary of US$8,770.00, the LA based his computation on the salary period of
three months only -- rather than the entire unexpired portion of nine months and 23 days of petitioner's employment
contract - applying the subject clause. However, the LA applied the salary rate of US$2,590.00, consisting of
petitioner's "[b]asic salary, US$1,400.00/month + US$700.00/month, fixed overtime pay, + US$490.00/month,
vacation leave pay = US$2,590.00/compensation per month." 14

Respondents appealed15 to the National Labor Relations Commission (NLRC) to question the finding of the LA that
petitioner was illegally dismissed.

Petitioner also appealed16 to the NLRC on the sole issue that the LA erred in not applying the ruling of the Court
inTriple Integrated Services, Inc. v. National Labor Relations Commission 17 that in case of illegal dismissal, OFWs
are entitled to their salaries for the unexpired portion of their contracts. 18

In a Decision dated June 15, 2000, the NLRC modified the LA Decision, to wit:

WHEREFORE, the Decision dated 15 July 1999 is MODIFIED. Respondents are hereby ordered to pay
complainant, jointly and severally, in Philippine currency, at the prevailing rate of exchange at the time of payment
the following:

1. Three (3) months salary

$1,400 x 3 US$4,200.00

2. Salary differential 45.00

US$4,245.00

3. 10% Attorney’s fees 424.50

TOTAL US$4,669.50

The other findings are affirmed.

SO ORDERED.19

The NLRC corrected the LA's computation of the lump-sum salary awarded to petitioner by reducing the applicable
salary rate from US$2,590.00 to US$1,400.00 because R.A. No. 8042 "does not provide for the award of overtime
pay, which should be proven to have been actually performed, and for vacation leave pay." 20

Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality of the subject
clause.21The NLRC denied the motion.22

Petitioner filed a Petition for Certiorari23 with the CA, reiterating the constitutional challenge against the subject
clause.24After initially dismissing the petition on a technicality, the CA eventually gave due course to it, as directed
by this Court in its Resolution dated August 7, 2003 which granted the petition for certiorari, docketed as G.R. No.
151833, filed by petitioner.

In a Decision dated December 8, 2004, the CA affirmed the NLRC ruling on the reduction of the applicable salary
rate; however, the CA skirted the constitutional issue raised by petitioner. 25
His Motion for Reconsideration 26 having been denied by the CA, 27 petitioner brings his cause to this Court on the
following grounds:

The Court of Appeals and the labor tribunals have decided the case in a way not in accord with applicable decision
of the Supreme Court involving similar issue of granting unto the migrant worker back wages equal to the unexpired
portion of his contract of employment instead of limiting it to three (3) months

II

In the alternative that the Court of Appeals and the Labor Tribunals were merely applying their interpretation of
Section 10 of Republic Act No. 8042, it is submitted that the Court of Appeals gravely erred in law when it failed to
discharge its judicial duty to decide questions of substance not theretofore determined by the Honorable Supreme
Court, particularly, the constitutional issues raised by the petitioner on the constitutionality of said law, which
unreasonably, unfairly and arbitrarily limits payment of the award for back wages of overseas workers to three (3)
months.

III

Even without considering the constitutional limitations [of] Sec. 10 of Republic Act No. 8042, the Court of Appeals
gravely erred in law in excluding from petitioner’s award the overtime pay and vacation pay provided in his contract
since under the contract they form part of his salary.28

On February 26, 2008, petitioner wrote the Court to withdraw his petition as he is already old and sickly, and he
intends to make use of the monetary award for his medical treatment and medication. 29 Required to comment,
counsel for petitioner filed a motion, urging the court to allow partial execution of the undisputed monetary award
and, at the same time, praying that the constitutional question be resolved. 30

Considering that the parties have filed their respective memoranda, the Court now takes up the full merit of the
petition mindful of the extreme importance of the constitutional question raised therein.

On the first and second issues

The unanimous finding of the LA, NLRC and CA that the dismissal of petitioner was illegal is not disputed. Likewise
not disputed is the salary differential of US$45.00 awarded to petitioner in all three fora. What remains disputed is
only the computation of the lump-sum salary to be awarded to petitioner by reason of his illegal dismissal.

Applying the subject clause, the NLRC and the CA computed the lump-sum salary of petitioner at the monthly rate
of US$1,400.00 covering the period of three months out of the unexpired portion of nine months and 23 days of his
employment contract or a total of US$4,200.00.

Impugning the constitutionality of the subject clause, petitioner contends that, in addition to the US$4,200.00
awarded by the NLRC and the CA, he is entitled to US$21,182.23 more or a total of US$25,382.23, equivalent to his
salaries for the entire nine months and 23 days left of his employment contract, computed at the monthly rate of
US$2,590.00.31

The Arguments of Petitioner

Petitioner contends that the subject clause is unconstitutional because it unduly impairs the freedom of OFWs to
negotiate for and stipulate in their overseas employment contracts a determinate employment period and a fixed
salary package.32 It also impinges on the equal protection clause, for it treats OFWs differently from local Filipino
workers (local workers) by putting a cap on the amount of lump-sum salary to which OFWs are entitled in case of
illegal dismissal, while setting no limit to the same monetary award for local workers when their dismissal is declared
illegal; that the disparate treatment is not reasonable as there is no substantial distinction between the two
groups;33 and that it defeats Section 18, 34 Article II of the Constitution which guarantees the protection of the rights
and welfare of all Filipino workers, whether deployed locally or overseas. 35

Moreover, petitioner argues that the decisions of the CA and the labor tribunals are not in line with existing
jurisprudence on the issue of money claims of illegally dismissed OFWs. Though there are conflicting rulings on this,
petitioner urges the Court to sort them out for the guidance of affected OFWs. 36
Petitioner further underscores that the insertion of the subject clause into R.A. No. 8042 serves no other purpose
but to benefit local placement agencies. He marks the statement made by the Solicitor General in his
Memorandum, viz.:

Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the event that
jurisdiction over the foreign employer is not acquired by the court or if the foreign employer reneges on its obligation.
Hence, placement agencies that are in good faith and which fulfill their obligations are unnecessarily penalized for
the acts of the foreign employer. To protect them and to promote their continued helpful contribution in deploying
Filipino migrant workers, liability for money claims was reduced under Section 10 of R.A. No. 8042. 37 (Emphasis
supplied)

Petitioner argues that in mitigating the solidary liability of placement agencies, the subject clause sacrifices the well-
being of OFWs. Not only that, the provision makes foreign employers better off than local employers because in
cases involving the illegal dismissal of employees, foreign employers are liable for salaries covering a maximum of
only three months of the unexpired employment contract while local employers are liable for the full lump-sum
salaries of their employees. As petitioner puts it:

In terms of practical application, the local employers are not limited to the amount of backwages they have to give
their employees they have illegally dismissed, following well-entrenched and unequivocal jurisprudence on the
matter. On the other hand, foreign employers will only be limited to giving the illegally dismissed migrant workers the
maximum of three (3) months unpaid salaries notwithstanding the unexpired term of the contract that can be more
than three (3) months.38

Lastly, petitioner claims that the subject clause violates the due process clause, for it deprives him of the salaries
and other emoluments he is entitled to under his fixed-period employment contract. 39

The Arguments of Respondents

In their Comment and Memorandum, respondents contend that the constitutional issue should not be entertained,
for this was belatedly interposed by petitioner in his appeal before the CA, and not at the earliest opportunity, which
was when he filed an appeal before the NLRC.40

The Arguments of the Solicitor General

The Solicitor General (OSG)41 points out that as R.A. No. 8042 took effect on July 15, 1995, its provisions could not
have impaired petitioner's 1998 employment contract. Rather, R.A. No. 8042 having preceded petitioner's contract,
the provisions thereof are deemed part of the minimum terms of petitioner's employment, especially on the matter of
money claims, as this was not stipulated upon by the parties. 42

Moreover, the OSG emphasizes that OFWs and local workers differ in terms of the nature of their employment, such
that their rights to monetary benefits must necessarily be treated differently. The OSG enumerates the essential
elements that distinguish OFWs from local workers: first, while local workers perform their jobs within Philippine
territory, OFWs perform their jobs for foreign employers, over whom it is difficult for our courts to acquire jurisdiction,
or against whom it is almost impossible to enforce judgment; and second, as held in Coyoca v. National Labor
Relations Commission43 and Millares v. National Labor Relations Commission, 44 OFWs are contractual employees
who can never acquire regular employment status, unlike local workers who are or can become regular employees.
Hence, the OSG posits that there are rights and privileges exclusive to local workers, but not available to OFWs;
that these peculiarities make for a reasonable and valid basis for the differentiated treatment under the subject
clause of the money claims of OFWs who are illegally dismissed. Thus, the provision does not violate the equal
protection clause nor Section 18, Article II of the Constitution. 45

Lastly, the OSG defends the rationale behind the subject clause as a police power measure adopted to mitigate the
solidary liability of placement agencies for this "redounds to the benefit of the migrant workers whose welfare the
government seeks to promote. The survival of legitimate placement agencies helps [assure] the government that
migrant workers are properly deployed and are employed under decent and humane conditions." 46

The Court's Ruling

The Court sustains petitioner on the first and second issues.

When the Court is called upon to exercise its power of judicial review of the acts of its co-equals, such as the
Congress, it does so only when these conditions obtain: (1) that there is an actual case or controversy involving a
conflict of rights susceptible of judicial determination; 47 (2) that the constitutional question is raised by a proper
party48 and at the earliest opportunity; 49 and (3) that the constitutional question is the very lis mota of the
case,50 otherwise the Court will dismiss the case or decide the same on some other ground. 51

Without a doubt, there exists in this case an actual controversy directly involving petitioner who is personally
aggrieved that the labor tribunals and the CA computed his monetary award based on the salary period of three
months only as provided under the subject clause.

The constitutional challenge is also timely. It should be borne in mind that the requirement that a constitutional issue
be raised at the earliest opportunity entails the interposition of the issue in the pleadings before a competent court,
such that, if the issue is not raised in the pleadings before that competent court, it cannot be considered at the trial
and, if not considered in the trial, it cannot be considered on appeal. 52 Records disclose that the issue on the
constitutionality of the subject clause was first raised, not in petitioner's appeal with the NLRC, but in his Motion for
Partial Reconsideration with said labor tribunal, 53 and reiterated in his Petition for Certiorari before the
CA.54 Nonetheless, the issue is deemed seasonably raised because it is not the NLRC but the CA which has the
competence to resolve the constitutional issue. The NLRC is a labor tribunal that merely performs a quasi-judicial
function – its function in the present case is limited to determining questions of fact to which the legislative policy of
R.A. No. 8042 is to be applied and to resolving such questions in accordance with the standards laid down by the
law itself;55 thus, its foremost function is to administer and enforce R.A. No. 8042, and not to inquire into the validity
of its provisions. The CA, on the other hand, is vested with the power of judicial review or the power to declare
unconstitutional a law or a provision thereof, such as the subject clause. 56Petitioner's interposition of the
constitutional issue before the CA was undoubtedly seasonable. The CA was therefore remiss in failing to take up
the issue in its decision.

The third condition that the constitutional issue be critical to the resolution of the case likewise obtains because the
monetary claim of petitioner to his lump-sum salary for the entire unexpired portion of his 12-month employment
contract, and not just for a period of three months, strikes at the very core of the subject clause.

Thus, the stage is all set for the determination of the constitutionality of the subject clause.

Does the subject clause violate Section 10,

Article III of the Constitution on non-impairment
of contracts?

The answer is in the negative.

Petitioner's claim that the subject clause unduly interferes with the stipulations in his contract on the term of his
employment and the fixed salary package he will receive57 is not tenable.

Section 10, Article III of the Constitution provides:

No law impairing the obligation of contracts shall be passed.

The prohibition is aligned with the general principle that laws newly enacted have only a prospective
operation,58 and cannot affect acts or contracts already perfected; 59 however, as to laws already in existence, their
provisions are read into contracts and deemed a part thereof. 60 Thus, the non-impairment clause under Section 10,
Article II is limited in application to laws about to be enacted that would in any way derogate from existing acts or
contracts by enlarging, abridging or in any manner changing the intention of the parties thereto.

As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of the employment
contract between petitioner and respondents in 1998. Hence, it cannot be argued that R.A. No. 8042, particularly
the subject clause, impaired the employment contract of the parties. Rather, when the parties executed their 1998
employment contract, they were deemed to have incorporated into it all the provisions of R.A. No. 8042.

But even if the Court were to disregard the timeline, the subject clause may not be declared unconstitutional on the
ground that it impinges on the impairment clause, for the law was enacted in the exercise of the police power of the
State to regulate a business, profession or calling, particularly the recruitment and deployment of OFWs, with the
noble end in view of ensuring respect for the dignity and well-being of OFWs wherever they may be
employed.61 Police power legislations adopted by the State to promote the health, morals, peace, education, good
order, safety, and general welfare of the people are generally applicable not only to future contracts but even to
those already in existence, for all private contracts must yield to the superior and legitimate measures taken by the
State to promote public welfare.62

Does the subject clause violate Section 1,

Article III of the Constitution, and Section 18,
Article II and Section 3, Article XIII on labor
as a protected sector?

The answer is in the affirmative.

Section 1, Article III of the Constitution guarantees:

No person shall be deprived of life, liberty, or property without due process of law nor shall any person be denied
the equal protection of the law.

Section 18,63 Article II and Section 3,64 Article XIII accord all members of the labor sector, without distinction as to
place of deployment, full protection of their rights and welfare.

To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to economic
security and parity: all monetary benefits should be equally enjoyed by workers of similar category, while all
monetary obligations should be borne by them in equal degree; none should be denied the protection of the laws
which is enjoyed by, or spared the burden imposed on, others in like circumstances. 65

Such rights are not absolute but subject to the inherent power of Congress to incorporate, when it sees fit, a system
of classification into its legislation; however, to be valid, the classification must comply with these requirements: 1) it
is based on substantial distinctions; 2) it is germane to the purposes of the law; 3) it is not limited to existing
conditions only; and 4) it applies equally to all members of the class.66

There are three levels of scrutiny at which the Court reviews the constitutionality of a classification embodied in a
law: a) the deferential or rational basis scrutiny in which the challenged classification needs only be shown to be
rationally related to serving a legitimate state interest; 67 b) the middle-tier or intermediate scrutiny in which the
government must show that the challenged classification serves an important state interest and that the
classification is at least substantially related to serving that interest; 68 and c) strict judicial scrutiny 69 in which a
legislative classification which impermissibly interferes with the exercise of a fundamental right 70 or operates to the
peculiar disadvantage of a suspect class 71 is presumed unconstitutional, and the burden is upon the government to
prove that the classification is necessary to achieve acompelling state interest and that it is the least restrictive
means to protect such interest.72

Under American jurisprudence, strict judicial scrutiny is triggered by suspect classifications 73 based on race74 or
gender75but not when the classification is drawn along income categories. 76

It is different in the Philippine setting. In Central Bank (now Bangko Sentral ng Pilipinas) Employee Association, Inc.
v. Bangko Sentral ng Pilipinas, 77 the constitutionality of a provision in the charter of the Bangko Sentral ng
Pilipinas (BSP), a government financial institution (GFI), was challenged for maintaining its rank-and-file employees
under the Salary Standardization Law (SSL), even when the rank-and-file employees of other GFIs had been
exempted from the SSL by their respective charters. Finding that the disputed provision contained a suspect
classification based on salary grade, the Court deliberately employed the standard of strict judicial scrutiny in its
review of the constitutionality of said provision. More significantly, it was in this case that the Court revealed the
broad outlines of its judicial philosophy, to wit:

Congress retains its wide discretion in providing for a valid classification, and its policies should be accorded
recognition and respect by the courts of justice except when they run afoul of the Constitution. The deference stops
where the classification violates a fundamental right, or prejudices persons accorded special protection by the
Constitution. When these violations arise, this Court must discharge its primary role as the vanguard of
constitutional guaranties, and require a stricter and more exacting adherence to constitutional limitations. Rational
basis should not suffice.

Admittedly, the view that prejudice to persons accorded special protection by the Constitution requires a stricter
judicial scrutiny finds no support in American or English jurisprudence. Nevertheless, these foreign decisions and
authorities are not per se controlling in this jurisdiction. At best, they are persuasive and have been used to support
many of our decisions. We should not place undue and fawning reliance upon them and regard them as
indispensable mental crutches without which we cannot come to our own decisions through the employment of our
own endowments. We live in a different ambience and must decide our own problems in the light of our own
interests and needs, and of our qualities and even idiosyncrasies as a people, and always with our own concept of
law and justice. Our laws must be construed in accordance with the intention of our own lawmakers and such intent
may be deduced from the language of each law and the context of other local legislation related thereto. More
importantly, they must be construed to serve our own public interest which is the be-all and the end-all of all our
laws. And it need not be stressed that our public interest is distinct and different from others.

xxxx

Further, the quest for a better and more "equal" world calls for the use of equal protection as a tool of effective
judicial intervention.

Equality is one ideal which cries out for bold attention and action in the Constitution. The Preamble proclaims
"equality" as an ideal precisely in protest against crushing inequities in Philippine society. The command to promote
social justice in Article II, Section 10, in "all phases of national development," further explicitated in Article XIII, are
clear commands to the State to take affirmative action in the direction of greater equality. x x x [T]here is thus in the
Philippine Constitution no lack of doctrinal support for a more vigorous state effort towards achieving a reasonable
measure of equality.

Our present Constitution has gone further in guaranteeing vital social and economic rights to marginalized groups of
society, including labor. Under the policy of social justice, the law bends over backward to accommodate the
interests of the working class on the humane justification that those with less privilege in life should have more in
law. And the obligation to afford protection to labor is incumbent not only on the legislative and executive branches
but also on the judiciary to translate this pledge into a living reality. Social justice calls for the humanization of laws
and the equalization of social and economic forces by the State so that justice in its rational and objectively secular
conception may at least be approximated.

xxxx

Under most circumstances, the Court will exercise judicial restraint in deciding questions of constitutionality,
recognizing the broad discretion given to Congress in exercising its legislative power. Judicial scrutiny would be
based on the "rational basis" test, and the legislative discretion would be given deferential treatment.

But if the challenge to the statute is premised on the denial of a fundamental right, or the perpetuation of prejudice
against persons favored by the Constitution with special protection, judicial scrutiny ought to be more
strict. A weak and watered down view would call for the abdication of this Court’s solemn duty to strike down any
law repugnant to the Constitution and the rights it enshrines. This is true whether the actor committing the
unconstitutional act is a private person or the government itself or one of its instrumentalities. Oppressive acts will
be struck down regardless of the character or nature of the actor.

xxxx

In the case at bar, the challenged proviso operates on the basis of the salary grade or officer-employee status. It is
akin to a distinction based on economic class and status, with the higher grades as recipients of a benefit
specifically withheld from the lower grades. Officers of the BSP now receive higher compensation packages that are
competitive with the industry, while the poorer, low-salaried employees are limited to the rates prescribed by the
SSL. The implications are quite disturbing: BSP rank-and-file employees are paid the strictly regimented rates of the
SSL while employees higher in rank - possessing higher and better education and opportunities for career
advancement - are given higher compensation packages to entice them to stay. Considering that majority, if not all,
the rank-and-file employees consist of people whose status and rank in life are less and limited, especially in terms
of job marketability, it is they - and not the officers - who have the real economic and financial need for the
adjustment . This is in accord with the policy of the Constitution "to free the people from poverty, provide adequate
social services, extend to them a decent standard of living, and improve the quality of life for all." Any act of
Congress that runs counter to this constitutional desideratum deserves strict scrutiny by this Court before it can pass
muster. (Emphasis supplied)

Imbued with the same sense of "obligation to afford protection to labor," the Court in the present case also employs
the standard of strict judicial scrutiny, for it perceives in the subject clause a suspect classification prejudicial to
OFWs.
Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs. However, a closer
examination reveals that the subject clause has a discriminatory intent against, and an invidious impact on, OFWs at
two levels:

First, OFWs with employment contracts of less than one year vis-à-vis OFWs with employment contracts of one
year or more;

Second, among OFWs with employment contracts of more than one year; and

Third, OFWs vis-à-vis local workers with fixed-period employment;

OFWs with employment contracts of less than one year vis-à-vis OFWs with employment contracts of one
year or more

As pointed out by petitioner, 78 it was in Marsaman Manning Agency, Inc. v. National Labor Relations
Commission79(Second Division, 1999) that the Court laid down the following rules on the application of the periods
prescribed under Section 10(5) of R.A. No. 804, to wit:

A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an illegally dismissed
overseas contract worker, i.e., whether his salaries for the unexpired portion of his employment contract or
three (3) months’ salary for every year of the unexpired term, whichever is less, comes into play only when
the employment contract concerned has a term of at least one (1) year or more. This is evident from the
words "for every year of the unexpired term" which follows the words "salaries x x x for three months." To
follow petitioners’ thinking that private respondent is entitled to three (3) months salary only simply because it is the
lesser amount is to completely disregard and overlook some words used in the statute while giving effect to some.
This is contrary to the well-established rule in legal hermeneutics that in interpreting a statute, care should be taken
that every part or word thereof be given effect since the law-making body is presumed to know the meaning of the
words employed in the statue and to have used them advisedly. Ut res magis valeat quam pereat. 80 (Emphasis
supplied)

In Marsaman, the OFW involved was illegally dismissed two months into his 10-month contract, but was awarded
his salaries for the remaining 8 months and 6 days of his contract.

Prior to Marsaman, however, there were two cases in which the Court made conflicting rulings on Section 10(5).
One wasAsian Center for Career and Employment System and Services v. National Labor Relations
Commission (Second Division, October 1998), 81 which involved an OFW who was awarded a two-year employment
contract, but was dismissed after working for one year and two months. The LA declared his dismissal illegal and
awarded him SR13,600.00 as lump-sum salary covering eight months, the unexpired portion of his contract. On
appeal, the Court reduced the award to SR3,600.00 equivalent to his three months’ salary, this being the lesser
value, to wit:

Under Section 10 of R.A. No. 8042, a worker dismissed from overseas employment without just, valid or authorized
cause is entitled to his salary for the unexpired portion of his employment contract or for three (3) months for every
year of the unexpired term, whichever is less.

In the case at bar, the unexpired portion of private respondent’s employment contract is eight (8) months. Private
respondent should therefore be paid his basic salary corresponding to three (3) months or a total of SR3,600. 82

Another was Triple-Eight Integrated Services, Inc. v. National Labor Relations Commission (Third Division,
December 1998),83 which involved an OFW (therein respondent Erlinda Osdana) who was originally granted a 12-
month contract, which was deemed renewed for another 12 months. After serving for one year and seven-and-a-half
months, respondent Osdana was illegally dismissed, and the Court awarded her salaries for the entire unexpired
portion of four and one-half months of her contract.

The Marsaman interpretation of Section 10(5) has since been adopted in the following cases:

Case Title Contract Period of Unexpired Period Applied in

Period Service Period the Computation
of the Monetary
Award
 Skippers v. 6 months 2 months 4 months 4 months
Maguad84

Bahia Shipping 9 months 8 months 4 months 4 months

v. Reynaldo
Chua 85

Centennial 9 months 4 months 5 months 5 months

Transmarine v.
dela Cruz l86

Talidano v. 12 months 3 months 9 months 3 months

Falcon87

Univan v. CA 88 12 months 3 months 9 months 3 months

Oriental v. 12 months more than 2 10 months 3 months

CA 89 months

PCL v. NLRC90 12 months more than 2 more or less 9 3 months

months months

Olarte v. 12 months 21 days 11 months and 9 3 months

Nayona91 days

JSS v.Ferrer92 12 months 16 days 11 months and 3 months

24 days

Pentagon v. 12 months 9 months and 2 months and 23 2 months and 23

Adelantar93 7 days days days

Phil. Employ v. 12 months 10 months 2 months Unexpired portion

Paramio, et al.94

Flourish 2 years 26 days 23 months and 4 6 months or 3

Maritime v. days months for each
Almanzor 95 year of contract

Athenna 1 year, 10 1 month 1 year, 9 months 6 months or 3

Manpower v. months and and 28 days months for each
Villanos 96 28 days year of contract

As the foregoing matrix readily shows, the subject clause classifies OFWs into two categories. The first category
includes OFWs with fixed-period employment contracts of less than one year; in case of illegal dismissal, they are
entitled to their salaries for the entire unexpired portion of their contract. The second category consists of OFWs with
fixed-period employment contracts of one year or more; in case of illegal dismissal, they are entitled to monetary
award equivalent to only 3 months of the unexpired portion of their contracts.

The disparity in the treatment of these two groups cannot be discounted. In Skippers, the respondent OFW worked
for only 2 months out of his 6-month contract, but was awarded his salaries for the remaining 4 months. In contrast,
the respondent OFWs in Oriental and PCL who had also worked for about 2 months out of their 12-month contracts
were awarded their salaries for only 3 months of the unexpired portion of their contracts. Even the OFWs involved
in Talidanoand Univan who had worked for a longer period of 3 months out of their 12-month contracts before being
illegally dismissed were awarded their salaries for only 3 months.

To illustrate the disparity even more vividly, the Court assumes a hypothetical OFW-A with an employment contract
of 10 months at a monthly salary rate of US$1,000.00 and a hypothetical OFW-B with an employment contract of 15
months with the same monthly salary rate of US$1,000.00. Both commenced work on the same day and under the
same employer, and were illegally dismissed after one month of work. Under the subject clause, OFW-A will be
entitled to US$9,000.00, equivalent to his salaries for the remaining 9 months of his contract, whereas OFW-B will
be entitled to only US$3,000.00, equivalent to his salaries for 3 months of the unexpired portion of his contract,
instead of US$14,000.00 for the unexpired portion of 14 months of his contract, as the US$3,000.00 is the lesser
amount.

The disparity becomes more aggravating when the Court takes into account jurisprudence that, prior to the
effectivity of R.A. No. 8042 on July 14, 1995, 97 illegally dismissed OFWs, no matter how long the period of their
employment contracts, were entitled to their salaries for the entire unexpired portions of their contracts. The matrix
below speaks for itself:

Case Title Contract Period of Unexpired Period Applied in the

Period Service Period Computation of the
Monetary Award

ATCI v. CA, et 2 years 2 months 22 months 22 months

al.98

Phil. Integrated 2 years 7 days 23 months 23 months and 23

v. NLRC99 and 23 days days

JGB v. NLC100 2 years 9 months 15 months 15 months

Agoy v. 2 years 2 months 22 months 22 months

NLRC101

EDI v. NLRC, et 2 years 5 months 19 months 19 months

al.102

Barros v. 12 months 4 months 8 months 8 months

NLRC, et al.103

Philippine 12 months 6 months 5 months and 5 months and 18 days

Transmarine v. and 22 days 18 days
Carilla104

It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the unexpired portions thereof,
were treated alike in terms of the computation of their monetary benefits in case of illegal dismissal. Their claims
were subjected to a uniform rule of computation: their basic salaries multiplied by the entire unexpired portion of
their employment contracts.

The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of computation of the money
claims of illegally dismissed OFWs based on their employment periods, in the process singling out one category
whose contracts have an unexpired portion of one year or more and subjecting them to the peculiar disadvantage of
having their monetary awards limited to their salaries for 3 months or for the unexpired portion thereof, whichever is
less, but all the while sparing the other category from such prejudice, simply because the latter's unexpired
contracts fall short of one year.

Among OFWs With Employment Contracts of More Than One Year

Upon closer examination of the terminology employed in the subject clause, the Court now has misgivings on the
accuracy of the Marsaman interpretation.

The Court notes that the subject clause "or for three (3) months for every year of the unexpired term, whichever is
less" contains the qualifying phrases "every year" and "unexpired term." By its ordinary meaning, the word "term"
means a limited or definite extent of time. 105 Corollarily, that "every year" is but part of an "unexpired term" is
significant in many ways: first, the unexpired term must be at least one year, for if it were any shorter, there would
be no occasion for such unexpired term to be measured by every year; and second, the original term must be more
than one year, for otherwise, whatever would be the unexpired term thereof will not reach even a year.
Consequently, the more decisive factor in the determination of when the subject clause "for three (3) months
for every year of the unexpired term, whichever is less" shall apply is not the length of the original contract period as
held in Marsaman,106 but the length of the unexpired portion of the contract period -- the subject clause applies in
cases when the unexpired portion of the contract period is at least one year, which arithmetically requires that the
original contract period be more than one year.

Viewed in that light, the subject clause creates a sub-layer of discrimination among OFWs whose contract periods
are for more than one year: those who are illegally dismissed with less than one year left in their contracts shall be
entitled to their salaries for the entire unexpired portion thereof, while those who are illegally dismissed with one
year or more remaining in their contracts shall be covered by the subject clause, and their monetary benefits limited
to their salaries for three months only.

To concretely illustrate the application of the foregoing interpretation of the subject clause, the Court assumes
hypothetical OFW-C and OFW-D, who each have a 24-month contract at a salary rate of US$1,000.00 per month.
OFW-C is illegally dismissed on the 12th month, and OFW-D, on the 13th month. Considering that there is at least
12 months remaining in the contract period of OFW-C, the subject clause applies to the computation of the latter's
monetary benefits. Thus, OFW-C will be entitled, not to US$12,000,00 or the latter's total salaries for the 12 months
unexpired portion of the contract, but to the lesser amount of US$3,000.00 or the latter's salaries for 3 months out of
the 12-month unexpired term of the contract. On the other hand, OFW-D is spared from the effects of the subject
clause, for there are only 11 months left in the latter's contract period. Thus, OFW-D will be entitled to
US$11,000.00, which is equivalent to his/her total salaries for the entire 11-month unexpired portion.

OFWs vis-à-vis Local Workers
With Fixed-Period Employment

As discussed earlier, prior to R.A. No. 8042, a uniform system of computation of the monetary awards of illegally
dismissed OFWs was in place. This uniform system was applicable even to local workers with fixed-term
employment.107

The earliest rule prescribing a uniform system of computation was actually Article 299 of the Code of Commerce
(1888),108 to wit:

Article 299. If the contracts between the merchants and their shop clerks and employees should have been made of
a fixed period, none of the contracting parties, without the consent of the other, may withdraw from the fulfillment of
said contract until the termination of the period agreed upon.

Persons violating this clause shall be subject to indemnify the loss and damage suffered, with the exception of the
provisions contained in the following articles.

In Reyes v. The Compañia Maritima, 109 the Court applied the foregoing provision to determine the liability of a
shipping company for the illegal discharge of its managers prior to the expiration of their fixed-term employment.
The Court therein held the shipping company liable for the salaries of its managers for the  remainder of their fixed-
term employment.

There is a more specific rule as far as seafarers are concerned: Article 605 of the Code of Commerce which
provides:

Article 605. If the contracts of the captain and members of the crew with the agent should be for a definite period or
voyage, they cannot be discharged until the fulfillment of their contracts, except for reasons of insubordination in
serious matters, robbery, theft, habitual drunkenness, and damage caused to the vessel or to its cargo by malice or
manifest or proven negligence.
Article 605 was applied to Madrigal Shipping Company, Inc. v. Ogilvie, 110 in

which the Court held the shipping company liable for the salaries and subsistence allowance of its illegally
dismissed employees for the entire unexpired portion of their employment contracts.

While Article 605 has remained good law up to the present, 111 Article 299 of the Code of Commerce was replaced by
Art. 1586 of the Civil Code of 1889, to wit:

Article 1586. Field hands, mechanics, artisans, and other laborers hired for a certain time and for a certain work
cannot leave or be dismissed without sufficient cause, before the fulfillment of the contract. (Emphasis supplied.)

Citing Manresa, the Court in Lemoine v. Alkan 112 read the disjunctive "or" in Article 1586 as a conjunctive "and" so
as to apply the provision to local workers who are employed for a time certain although for no particular skill. This
interpretation of Article 1586 was reiterated in Garcia Palomar v. Hotel de France Company. 113 And in both Lemoine
and Palomar, the Court adopted the general principle that in actions for wrongful discharge founded on Article 1586,
local workers are entitled to recover damages to the extent of the amount stipulated to be paid to them by the terms
of their contract. On the computation of the amount of such damages, the Court in Aldaz v. Gay 114 held:

The doctrine is well-established in American jurisprudence, and nothing has been brought to our attention to the
contrary under Spanish jurisprudence, that when an employee is wrongfully discharged it is his duty to seek other
employment of the same kind in the same community, for the purpose of reducing the damages resulting from such
wrongful discharge. However, while this is the general rule, the burden of showing that he failed to make an effort to
secure other employment of a like nature, and that other employment of a like nature was obtainable, is upon the
defendant. When an employee is wrongfully discharged under a contract of employment his prima facie damage is
the amount which he would be entitled to had he continued in such employment until the termination of the period.
(Howard vs. Daly, 61 N. Y., 362; Allen vs. Whitlark, 99 Mich., 492; Farrell vs. School District No. 2, 98 Mich.,
43.)115 (Emphasis supplied)

On August 30, 1950, the New Civil Code took effect with new provisions on fixed-term employment: Section 2
(Obligations with a Period), Chapter 3, Title I, and Sections 2 (Contract of Labor) and 3 (Contract for a Piece of
Work), Chapter 3, Title VIII, Book IV. 116 Much like Article 1586 of the Civil Code of 1889, the new provisions of the
Civil Code do not expressly provide for the remedies available to a fixed-term worker who is illegally discharged.
However, it is noted that in Mackay Radio & Telegraph Co., Inc. v. Rich, 117 the Court carried over the principles on
the payment of damages underlying Article 1586 of the Civil Code of 1889 and applied the same to a case involving
the illegal discharge of a local worker whose fixed-period employment contract was entered into in 1952, when the
new Civil Code was already in effect.118

More significantly, the same principles were applied to cases involving overseas Filipino workers whose fixed-term
employment contracts were illegally terminated, such as in First Asian Trans & Shipping Agency, Inc. v.
Ople,119 involving seafarers who were illegally discharged. In Teknika Skills and Trade Services, Inc. v. National
Labor Relations Commission,120 an OFW who was illegally dismissed prior to the expiration of her fixed-period
employment contract as a baby sitter, was awarded salaries corresponding to the unexpired portion of her contract.
The Court arrived at the same ruling in Anderson v. National Labor Relations Commission, 121 which involved a
foreman hired in 1988 in Saudi Arabia for a fixed term of two years, but who was illegally dismissed after only nine
months on the job -- the Court awarded him salaries corresponding to 15 months, the unexpired portion of his
contract. In Asia World Recruitment, Inc. v. National Labor Relations Commission, 122 a Filipino working as a security
officer in 1989 in Angola was awarded his salaries for the remaining period of his 12-month contract after he was
wrongfully discharged. Finally, in Vinta Maritime Co., Inc. v. National Labor Relations Commission, 123 an OFW
whose 12-month contract was illegally cut short in the second month was declared entitled to his salaries for the
remaining 10 months of his contract.

In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were illegally discharged
were treated alike in terms of the computation of their money claims: they were uniformly entitled to their salaries for
the entire unexpired portions of their contracts. But with the enactment of R.A. No. 8042, specifically the adoption of
the subject clause, illegally dismissed OFWs with an unexpired portion of one year or more in their employment
contract have since been differently treated in that their money claims are subject to a 3-month cap, whereas no
such limitation is imposed on local workers with fixed-term employment.

The Court concludes that the subject clause contains a suspect classification in that, in the computation of
the monetary benefits of fixed-term employees who are illegally discharged, it imposes a 3-month cap on
the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on the claims
of other OFWs or local workers with fixed-term employment. The subject clause singles out one
classification of OFWs and burdens it with a peculiar disadvantage.

There being a suspect classification involving a vulnerable sector protected by the Constitution, the Court now
subjects the classification to a strict judicial scrutiny, and determines whether it serves a compelling state interest
through the least restrictive means.

What constitutes compelling state interest is measured by the scale of rights and powers arrayed in the Constitution
and calibrated by history.124 It is akin to the paramount interest of the state 125 for which some individual liberties must
give way, such as the public interest in safeguarding health or maintaining medical standards, 126 or in maintaining
access to information on matters of public concern. 127

In the present case, the Court dug deep into the records but found no compelling state interest that the subject
clause may possibly serve.

The OSG defends the subject clause as a police power measure "designed to protect the employment of Filipino
seafarers overseas x x x. By limiting the liability to three months [sic], Filipino seafarers have better chance of
getting hired by foreign employers." The limitation also protects the interest of local placement agencies, which
otherwise may be made to shoulder millions of pesos in "termination pay."128

The OSG explained further:

Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the event that
jurisdiction over the foreign employer is not acquired by the court or if the foreign employer reneges on its obligation.
Hence, placement agencies that are in good faith and which fulfill their obligations are unnecessarily penalized for
the acts of the foreign employer. To protect them and to promote their continued helpful contribution in deploying
Filipino migrant workers, liability for money are reduced under Section 10 of RA 8042.

This measure redounds to the benefit of the migrant workers whose welfare the government seeks to promote. The
survival of legitimate placement agencies helps [assure] the government that migrant workers are properly deployed
and are employed under decent and humane conditions. 129 (Emphasis supplied)

However, nowhere in the Comment or Memorandum does the OSG cite the source of its perception of the state
interest sought to be served by the subject clause.

The OSG locates the purpose of R.A. No. 8042 in the speech of Rep. Bonifacio Gallego in sponsorship of House Bill
No. 14314 (HB 14314), from which the law originated; 130 but the speech makes no reference to the underlying
reason for the adoption of the subject clause. That is only natural for none of the 29 provisions in HB 14314
resembles the subject clause.

On the other hand, Senate Bill No. 2077 (SB 2077) contains a provision on money claims, to wit:

Sec. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within
ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee
relationship or by virtue of the complaint, the claim arising out of an employer-employee relationship or by virtue of
any law or contract involving Filipino workers for overseas employment including claims for actual, moral, exemplary
and other forms of damages.

The liability of the principal and the recruitment/placement agency or any and all claims under this Section shall be
joint and several.

Any compromise/amicable settlement or voluntary agreement on any money claims exclusive of damages under this
Section shall not be less than fifty percent (50%) of such money claims: Provided, That any installment payments, if
applicable, to satisfy any such compromise or voluntary settlement shall not be more than two (2) months. Any
compromise/voluntary agreement in violation of this paragraph shall be null and void.

Non-compliance with the mandatory period for resolutions of cases provided under this Section shall subject the
responsible officials to any or all of the following penalties:

(1) The salary of any such official who fails to render his decision or resolution within the prescribed period shall be,
or caused to be, withheld until the said official complies therewith;
(2) Suspension for not more than ninety (90) days; or

(3) Dismissal from the service with disqualification to hold any appointive public office for five (5) years.

Provided, however, That the penalties herein provided shall be without prejudice to any liability which any such
official may have incurred under other existing laws or rules and regulations as a consequence of violating the
provisions of this paragraph.

But significantly, Section 10 of SB 2077 does not provide for any rule on the computation of money claims.

A rule on the computation of money claims containing the subject clause was inserted and eventually adopted as
the 5th paragraph of Section 10 of R.A. No. 8042. The Court examined the rationale of the subject clause in the
transcripts of the "Bicameral Conference Committee (Conference Committee) Meetings on the Magna Carta on
OCWs (Disagreeing Provisions of Senate Bill No. 2077 and House Bill No. 14314)." However, the Court finds no
discernible state interest, let alone a compelling one, that is sought to be protected or advanced by the adoption of
the subject clause.

In fine, the Government has failed to discharge its burden of proving the existence of a compelling state interest that
would justify the perpetuation of the discrimination against OFWs under the subject clause.

Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the employment of OFWs
by mitigating the solidary liability of placement agencies, such callous and cavalier rationale will have to be rejected.
There can never be a justification for any form of government action that alleviates the burden of one sector, but
imposes the same burden on another sector, especially when the favored sector is composed of private businesses
such as placement agencies, while the disadvantaged sector is composed of OFWs whose protection no less than
the Constitution commands. The idea that private business interest can be elevated to the level of a compelling
state interest is odious.

Moreover, even if the purpose of the subject clause is to lessen the solidary liability of placement agencies  vis-a-
vis their foreign principals, there are mechanisms already in place that can be employed to achieve that purpose
without infringing on the constitutional rights of OFWs.

The POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers,
dated February 4, 2002, imposes administrative disciplinary measures on erring foreign employers who default on
their contractual obligations to migrant workers and/or their Philippine agents. These disciplinary measures range
from temporary disqualification to preventive suspension. The POEA Rules and Regulations Governing the
Recruitment and Employment of Seafarers, dated May 23, 2003, contains similar administrative disciplinary
measures against erring foreign employers.

Resort to these administrative measures is undoubtedly the less restrictive means of aiding local placement
agencies in enforcing the solidary liability of their foreign principals.

Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right of petitioner and
other OFWs to equal protection.1avvphi1

Further, there would be certain misgivings if one is to approach the declaration of the unconstitutionality of the
subject clause from the lone perspective that the clause directly violates state policy on labor under Section
3,131 Article XIII of the Constitution.

While all the provisions of the 1987 Constitution are presumed self-executing, 132 there are some which this Court
has declared not judicially enforceable, Article XIII being one,133 particularly Section 3 thereof, the nature of which,
this Court, in Agabon v. National Labor Relations Commission,134 has described to be not self-actuating:

Thus, the constitutional mandates of protection to labor and security of tenure may be deemed as self-executing in
the sense that these are automatically acknowledged and observed without need for any enabling legislation.
However, to declare that the constitutional provisions are enough to guarantee the full exercise of the rights
embodied therein, and the realization of ideals therein expressed, would be impractical, if not unrealistic. The
espousal of such view presents the dangerous tendency of being overbroad and exaggerated. The guarantees of
"full protection to labor" and "security of tenure", when examined in isolation, are facially unqualified, and the
broadest interpretation possible suggests a blanket shield in favor of labor against any form of removal regardless of
circumstance. This interpretation implies an unimpeachable right to continued employment-a utopian notion,
doubtless-but still hardly within the contemplation of the framers. Subsequent legislation is still needed to define the
parameters of these guaranteed rights to ensure the protection and promotion, not only the rights of the labor
sector, but of the employers' as well. Without specific and pertinent legislation, judicial bodies will be at a loss,
formulating their own conclusion to approximate at least the aims of the Constitution.

Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source of a positive enforceable
right to stave off the dismissal of an employee for just cause owing to the failure to serve proper notice or hearing.
As manifested by several framers of the 1987 Constitution, the provisions on social justice require legislative
enactments for their enforceability. 135 (Emphasis added)

Thus, Section 3, Article XIII cannot be treated as a principal source of direct enforceable rights, for the violation of
which the questioned clause may be declared unconstitutional. It may unwittingly risk opening the floodgates of
litigation to every worker or union over every conceivable violation of so broad a concept as social justice for labor.

It must be stressed that Section 3, Article XIII does not directly bestow on the working class any actual enforceable
right, but merely clothes it with the status of a sector for whom the Constitution urges protection through executive or
legislative action and judicial recognition. Its utility is best limited to being an impetus not just for the executive and
legislative departments, but for the judiciary as well, to protect the welfare of the working class . And it was in fact
consistent with that constitutional agenda that the Court in Central Bank (now Bangko Sentral ng Pilipinas)
Employee Association, Inc. v. Bangko Sentral ng Pilipinas, penned by then Associate Justice now Chief Justice
Reynato S. Puno, formulated the judicial precept that when the challenge to a statute is premised on the
perpetuation of prejudice against persons favored by the Constitution with special protection -- such as the working
class or a section thereof -- the Court may recognize the existence of a suspect classification and subject the same
to strict judicial scrutiny.

The view that the concepts of suspect classification and strict judicial scrutiny formulated in  Central Bank Employee
Association exaggerate the significance of Section 3, Article XIII is a groundless apprehension. Central Bank applied
Article XIII in conjunction with the equal protection clause. Article XIII, by itself, without the application of the equal
protection clause, has no life or force of its own as elucidated in Agabon.

Along the same line of reasoning, the Court further holds that the subject clause violates petitioner's right to
substantive due process, for it deprives him of property, consisting of monetary benefits, without any existing valid
governmental purpose.136

The argument of the Solicitor General, that the actual purpose of the subject clause of limiting the entitlement of
OFWs to their three-month salary in case of illegal dismissal, is to give them a better chance of getting hired by
foreign employers. This is plain speculation. As earlier discussed, there is nothing in the text of the law or the
records of the deliberations leading to its enactment or the pleadings of respondent that would indicate that there is
an existing governmental purpose for the subject clause, or even just a pretext of one.

The subject clause does not state or imply any definitive governmental purpose; and it is for that precise reason that
the clause violates not just petitioner's right to equal protection, but also her right to substantive due process under
Section 1,137 Article III of the Constitution.

The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire unexpired period of nine
months and 23 days of his employment contract, pursuant to law and jurisprudence prior to the enactment of R.A.
No. 8042.

On the Third Issue

Petitioner contends that his overtime and leave pay should form part of the salary basis in the computation of his
monetary award, because these are fixed benefits that have been stipulated into his contract.

Petitioner is mistaken.

The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like petitioner, DOLE
Department Order No. 33, series 1996, provides a Standard Employment Contract of Seafarers, in which salary is
understood as the basic wage, exclusive of overtime, leave pay and other bonuses; whereas overtime pay is
compensation for all work "performed" in excess of the regular eight hours, and holiday pay is compensation for any
work "performed" on designated rest days and holidays.
By the foregoing definition alone, there is no basis for the automatic inclusion of overtime and holiday pay in the
computation of petitioner's monetary award, unless there is evidence that he performed work during those periods.
As the Court held in Centennial Transmarine, Inc. v. Dela Cruz,138

However, the payment of overtime pay and leave pay should be disallowed in light of our ruling in Cagampan v.
National Labor Relations Commission, to wit:

The rendition of overtime work and the submission of sufficient proof that said was actually performed are conditions
to be satisfied before a seaman could be entitled to overtime pay which should be computed on the basis of 30% of
the basic monthly salary. In short, the contract provision guarantees the right to overtime pay but the entitlement to
such benefit must first be established.

In the same vein, the claim for the day's leave pay for the unexpired portion of the contract is unwarranted since the
same is given during the actual service of the seamen.

WHEREFORE, the Court GRANTS the Petition. The subject clause "or for three months for every year of the
unexpired term, whichever is less" in the 5th paragraph of Section 10 of Republic Act No. 8042
is DECLAREDUNCONSTITUTIONAL; and the December 8, 2004 Decision and April 1, 2005 Resolution of the
Court of Appeals areMODIFIED to the effect that petitioner is AWARDED his salaries for the entire unexpired
portion of his employment contract consisting of nine months and 23 days computed at the rate of US$1,400.00 per
month.

No costs.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

PERT/CPM Manpower Exponent v. Vinuya

G.R. No. 197528               September 5, 2012

PERT/CPM MANPOWER EXPONENT CO., INC., Petitioner, 

vs.
ARMANDO A. VINUY A, LOUIE M. ORDOVEZ, ARSENIO S. LUMANTA,. JR., ROBELITO S. ANIPAN, VIRGILIO
R. ALCANTARA, MARINO M. ERA, SANDY 0. ENJAMBRE and NOEL T. LADEA, Respondents.

DECISION

BRION, J.:
We resolve the present petition for review on certiorari1 assailing the decision2 dated May 9, 2011 and the
resolution3dated June 23, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 114353.

The Antecedents

On March 5, 2008, respondents Armando A. Vinuya, Louie M. Ordovez, Arsenio S. Lumanta, Jr., Robelito S.
Anipan, Virgilio R. Alcantara, Marino M. Era, Sandy O. Enjambre and Noel T. Ladea (respondents) filed a complaint
for illegal dismissal against the petitioner Pert/CPM Manpower Exponent Co., Inc. (agency), and its President
Romeo P. Nacino.

The respondents alleged that the agency deployed them between March 29, 2007 and May 12, 2007 to work as
aluminum fabricator/installer for the agency’s principal, Modern Metal Solution LLC/MMS Modern Metal Solution
LLC (Modern Metal) in Dubai, United Arab Emirates.

The respondents’ employment contracts,4 which were approved by the Philippine Overseas Employment
Administration (POEA), provided for a two-year employment, nine hours a day, salary of 1,350 AED with overtime
pay, food allowance, free and suitable housing (four to a room), free transportation, free laundry, and free medical
and dental services. They each paid a P 15,000.00 processing fee.5

On April 2, 2007, Modern Metal gave the respondents, except Era, appointment letters 6 with terms different from
those in the employment contracts which they signed at the agency’s office in the Philippines. Under the letters of
appointment, their employment was increased to three years at 1,000 to 1,200 AED and food allowance of 200
AED.

The respondents claimed that they were shocked to find out what their working and living conditions were in Dubai.
They were required to work from 6:30 a.m. to 6:30 p.m., with a break of only one hour to one and a half hours.
When they rendered overtime work, they were most of the time either underpaid or not paid at all. Their housing
accommodations were cramped and were shared with 27 other occupants. The lodging house was in Sharjah,
which was far from their jobsite in Dubai, leaving them only three to four hours of sleep a day because of the long
hours of travel to and from their place of work; there was no potable water and the air was polluted.

When the respondents received their first salaries (at the rates provided in their appointment letters and with
deductions for placement fees) and because of their difficult living and working conditions, they called up the agency
and complained about their predicament. The agency assured them that their concerns would be promptly
addressed, but nothing happened.

On May 5, 2007, Modern Metal required the respondents to sign new employment contracts, 7 except for Era who
was made to sign later. The contracts reflected the terms of their appointment letters. Burdened by all the expenses
and financial obligations they incurred for their deployment, they were left with no choice but to sign the contracts.
They raised the matter with the agency, which again took no action.

On August 5, 2007, despondent over their unbearable living and working conditions and by the agency’s inaction,
the respondents expressed to Modern Metal their desire to resign. Out of fear, as they put it, that Modern Metal
would not give them their salaries and release papers, the respondents, except Era, cited personal/family problems
for their resignation.8Era mentioned the real reason – "because I dont (sic) want the company policy" 9 – for his
resignation.

It took the agency several weeks to repatriate the respondents to the Philippines. They all returned to Manila in
September 2007. Except for Ordovez and Enjambre, all the respondents shouldered their own airfare.

For its part, the agency countered that the respondents were not illegally dismissed; they voluntarily resigned from
their employment to seek a better paying job. It claimed that the respondents, while still working for Modern Metal,
applied with another company which offered them a higher pay. Unfortunately, their supposed employment failed to
materialize and they had to go home because they had already resigned from Modern Metal.
The agency further alleged that the respondents even voluntarily signed affidavits of quitclaim and release after they
resigned. It thus argued that their claim for benefits, under Section 10 of Republic Act No. (R.A.) 8042, damages
and attorney’s fees is unfounded.

The Compulsory Arbitration Rulings

On April 30, 2008, Labor Arbiter Ligerio V. Ancheta rendered a Decision 10 dismissing the complaint, finding that the
respondents voluntarily resigned from their jobs. He also found that four of them – Alcantara, Era, Anipan and
Lumanta – even executed a compromise agreement (with quitclaim and release) before the POEA. He considered
the POEA recourse a case of forum shopping.

The respondents appealed to the National Labor Relations Commission (NLRC). They argued that the labor arbiter
committed serious errors in (1) admitting in evidence the quitclaims and releases they executed in Dubai, which
were mere photocopies of the originals and which failed to explain the circumstances behind their execution; (2)
failing to consider that the compromise agreements they signed before the POEA covered only the refund of their
airfare and not all their money claims; and (3) ruling that they violated the rule on non-forum shopping.

On May 12, 2009, the NLRC granted the appeal. 11 It ruled that the respondents had been illegally dismissed. It
anchored its ruling on the new employment contracts they were made to sign in Dubai. It stressed that it is illegal for
an employer to require its employees to execute new employment papers, especially those which provide benefits
that are inferior to the POEA-approved contracts.

The NLRC rejected the quitclaim and release executed by the respondents in Dubai. It believed that the
respondents executed the quitclaim documents under duress as they were afraid that they would not be allowed to
return to the Philippines if they did not sign the documents. Further, the labor tribunal disagreed with the labor
arbiter’s opinion that the compromise agreement they executed before the POEA had effectively foreclosed the
illegal dismissal complaint before the NLRC and that the respondents had been guilty of forum shopping. It pointed
out that the POEA case involved pre-deployment issues; whereas, the complaint before the NLRC is one for illegal
dismissal and money claims arising from employment.

Consequently, the NLRC ordered the agency, Nacino and Modern Metal to pay, jointly and severally, the
respondents, as follows:

WHEREFORE, the Decision dated 30 April 2008 is hereby REVERSED and SET ASIDE, a new Decision is hereby
issued ordering the respondents PERT/CPM MANPOWER EXPONENTS CO., INC., ROMEO NACINO, and
MODERN METAL SOLUTIONS, INC. to jointly and severally, pay the complainants the following:
Salary for
the
unexpired
Underpaid Placement Exemplary
Employee portion of
Salary fee Damages
the contract
(1350 x 6
months)

Vinuya,
150 x 6 = 900 AED USD 400 8100 AED P 20,000.00
ARMANDO

Alcantara
150 X 4 = 600 AED USD 400 8100 AED P 20,000.00
VIRGILIO

Era,
350 x 4 = 1400 AED USD 400 8100 AED P 20,000.00
MARINO

Ladea,
150 x 5 = 750 AED USD 400 8100 AED P 20,000.00
NOEL

Ordovez,
250 X 3 = 750 AED USD 400 8100 AED P 20,000.00
LOUIE
 Anipan,
150 x 4 = 600 AED USD 400 8100 AED P 20,000.00
ROBELITO

Enjambre,
150 x 4 = 600 AED USD 400 8100 AED P 20,000.00
SANDY

Lumanta,
250 x 5 = 1250 AED USD 400 8100 AED P 20,000.00
ARSENIO

64,800
TOTAL: 6,850 AED US$3,200 P 400,000.00
AED

or their peso equivalent at the time of actual payment plus attorney‘s fees equivalent to 10% of the judgment
award.12

The agency moved for reconsideration, contending that the appeal was never perfected and that the NLRC gravely
abused its discretion in reversing the labor arbiter’s decision.The respondents, on the other hand, moved for partial
reconsideration, maintaining that their salaries should have covered the unexpired portion of their employment
contracts, pursuant to the Court’s ruling in Serrano v. Gallant Maritime Services, Inc.13

The NLRC denied the agency’s motion for reconsideration, but granted the respondents’ motion. 14 It sustained the
respondents’ argument that the award needed to be adjusted, particularly in relation to the payment of their salaries,
consistent with the Court’s ruling in Serrano. The ruling declared unconstitutional the clause, "or for three (3) months
for every year of the unexpired term, whichever is less," in Section 10, paragraph 5, of R.A. 8042, limiting the
entitlement of illegally dismissed overseas Filipino workers to their salaries for the unexpired term of their contract or
three months, whichever is less. Accordingly, it modified its earlier decision and adjusted the respondents’ salary
entitlement based on the following matrix:

Unexpired
Duration of
Employee Departure date Date dismissed portion of
Contract
contract

Vinuya, 19 months
2 years 29 March 2007 8 August 2007
ARMANDO and 21 days

Alcantara, 20 months
2 years 3 April 2007 8 August 2007
VIRGILIO and 5 days

Era, 21 months
2 years 12 May 2007 8 August 2007
MARINO and 4 days

Ladea, 19 months
2 years 29 March 2007 8 August 2007
NOEL and 21 days

Ordovez, 21 months
2 years 3 April 2007 26 July 2007
LOUIE and 23 days

Anipan, 20 months
2 years 3 April 2007 8 August 2007
ROBELITO and 5 days
 Enjambre, 20 months
2 years 29 March 2007 26 July 2007
SANDY and 3 days

Lumanta, 19 months
2 years 29 March 2007 8 August 2007
ARSENIO and 21 days15

Again, the agency moved for reconsideration, reiterating its earlier arguments and, additionally, questioning the
application of the Serrano ruling in the case because it was not yet final and executory. The NLRC denied the
motion, prompting the agency to seek recourse from the CA through a petition for certiorari.

The CA Decision

The CA dismissed the petition for lack of merit. 16 It upheld the NLRC ruling that the respondents were illegally
dismissed. It found no grave abuse of discretion in the NLRC’s rejection of the respondents’ resignation letters, and
the accompanying quitclaim and release affidavits, as proof of their voluntary termination of employment.

The CA stressed that the filing of a complaint for illegal dismissal is inconsistent with resignation. Moreover, it found
nothing in the records to substantiate the agency’s contention that the respondents’ resignation was of their own
accord; on the contrary, it considered the resignation letters "dubious for having been lopsidedly-worded to ensure
that the petitioners (employers) are free from any liability." 17

The appellate court likewise refused to give credit to the compromise agreements that the respondents executed
before the POEA. It agreed with the NLRC’s conclusion that the agreements pertain to the respondents’ charge of
recruitment violations against the agency distinct from their illegal dismissal complaint, thus negating forum
shopping by the respondents.

Lastly, the CA found nothing legally wrong in the NLRC correcting itself (upon being reminded by the respondents),
by adjusting the respondents’ salary award on the basis of the unexpired portion of their contracts, as enunciated in
the Serrano case.

The agency moved for, but failed to secure, a reconsideration of the CA decision. 18

The Petition

The agency is now before the Court seeking a reversal of the CA dispositions, contending that the CA erred in:

1. affirming the NLRC’s finding that the respondents were illegally dismissed;

2. holding that the compromise agreements before the POEA pertain only to the respondents’ charge of
recruitment violations against the agency; and

3. affirming the NLRC’s award to the respondents of their salaries for the unexpired portion of their
employment contracts, pursuant to the Serrano ruling.

The agency insists that it is not liable for illegal dismissal, actual or constructive. It submits that as correctly found by
the labor arbiter, the respondents voluntarily resigned from their jobs, and even executed affidavits of quitclaim and
release; the respondents stated family concerns for their resignation. The agency posits that the letters were duly
proven as they were written unconditionally by the respondents. It, therefore, assails the conclusion that the
respondents resigned under duress or that the resignation letters were dubious.

The agency raises the same argument with respect to the compromise agreements, with quitclaim and release, it
entered into with Vinuya, Era, Ladea, Enjambre, Ordovez, Alcantara, Anipan and Lumanta before the POEA,
although it submitted evidence only for six of them. Anipan, Lumanta, Vinuya and Ladea signing one
document;19 Era20 and Alcantara21 signing a document each. It points out that the agreement was prepared with the
assistance of POEA Conciliator Judy Santillan, and was duly and freely signed by the respondents; moreover, the
agreement is not conditional as it pertains to all issues involved in the dispute between the parties.

On the third issue, the agency posits that the Serrano ruling has no application in the present case for three
reasons. First, the respondents were not illegally dismissed and, therefore, were not entitled to their money claims.
Second, the respondents filed the complaint in 2007, while the Serrano ruling came out on March 24, 2009. The
ruling cannot be given retroactive application. Third, R.A. 10022, which was enacted on March 8, 2010 and which
amended R.A. 8042, restored the subject clause in Section 10 of R.A. 8042, declared unconstitutional by the Court.

The Respondents’ Position

In their Comment (to the Petition) dated September 28, 2011, 22 the respondents ask the Court to deny the petition
for lack of merit. They dispute the agency’s insistence that they resigned voluntarily. They stand firm on their
submission that because of their unbearable living and working conditions in Dubai, they were left with no choice but
to resign. Also, the agency never refuted their detailed narration of the reasons for giving up their employment.

The respondents maintain that the quitclaim and release affidavits, 23 which the agency presented, betray its
desperate attempt to escape its liability to them. They point out that, as found by the NLRC, the affidavits are ready-
made documents; for instance, in Lumanta’s 24 and Era’s25 affidavits, they mentioned a certain G & A International
Manpower as the agency which recruited them — a fact totally inapplicable to all the respondents. They contend
that they had no choice but to sign the documents; otherwise, their release papers and remaining salaries would not
be given to them, a submission which the agency never refuted.

On the agency’s second line of defense, the compromise agreement (with quitclaim and release) between the
respondents and the agency before the POEA, the respondents argue that the agreements pertain only to their
charge of recruitment violations against the agency. They add that based on the agreements, read and considered
entirely, the agency was discharged only with respect to the recruitment and pre-deployment issues such as
excessive placement fees, non-issuance of receipts and placement misrepresentation, but not with respect to post-
deployment issues such as illegal dismissal, breach of contract, underpayment of salaries and underpayment and
nonpayment of overtime pay. The respondents stress that the agency failed to controvert their contention that the
agreements came about only to settle their claim for refund of their airfare which they paid for when they were
repatriated.

Lastly, the respondents maintain that since they were illegally dismissed, the CA was correct in upholding the
NLRC’s award of their salaries for the unexpired portion of their employment contracts, as enunciated in Serrano.
They point out that the Serrano ruling is curative and remedial in nature and, as such, should be given retroactive
application as the Court declared in Yap v. Thenamaris Ship’s Management. 26 Further, the respondents take
exception to the agency’s contention that the Serrano ruling cannot, in any event, be applied in the present case in
view of the enactment of R.A. 10022 on March 8, 2010, amending Section 10 of R.A. 8042. The amendment
restored the subject clause in paragraph 5, Section 10 of R.A. 8042 which was struck down as unconstitutional in
Serrano.

The respondents maintain that the agency cannot raise the issue for the first time before this Court when it could
have raised it before the CA with its petition for certiorari which it filed on June 8, 2010; 27 otherwise, their right to due
process will be violated. The agency, on the other hand, would later claim that it is not barred by estoppel with
respect to its reliance on R.A. 10022 as it raised it before the CA in CA-G.R. SP No. 114353. 28 They further argue
that RA 10022 cannot be applied in their case, as the law is an amendatory statute which is, as a rule, prospective
in application, unless the contrary is provided. 29 To put the issue to rest, the respondents ask the Court to also
declare unconstitutional Section 7 of R.A. 10022.

Finally, the respondents submit that the petition should be dismissed outright for raising only questions of fact, rather
than of law.

The Court’s Ruling

The procedural question

We deem it proper to examine the facts of the case on account of the divergence in the factual conclusions of the
labor arbiter on the one hand, and, of the NLRC and the CA, on the other. 30 The arbiter found no illegal dismissal in
the respondents’ loss of employment in Dubai because they voluntarily resigned; whereas, the NLRC and the CA
adjudged them to have been illegally dismissed because they were virtually forced to resign.

The merits of the case

We find no merit in the petition. The CA committed no reversible error and neither did it commit grave
abuse of discretion in affirming the NLRC’s illegal dismissal ruling.

The agency and its principal, Modern Metal, committed flagrant violations of the law on overseas employment, as
well as basic norms of decency and fair play in an employment relationship, pushing the respondents to look for a
better employment and, ultimately, to resign from their jobs.

First. The agency and Modern Metal are guilty of contract substitution. The respondents entered into a POEA-
approved two-year employment contract,31 with Modern Metal providing among others, as earlier discussed, for a
monthly salary of 1350 AED. On April 2, 2007, Modern Metal issued to them appointment letters 32 whereby the
respondents were hired for a longer three-year period and a reduced salary, from 1,100 AED to 1,200 AED, among
other provisions. Then, on May 5, 2007, they were required to sign new employment contracts 33 reflecting the same
terms contained in their appointment letters, except that this time, they were hired as "ordinary laborer," no longer
aluminum fabricator/installer. The respondents complained with the agency about the contract substitution, but the
agency refused or failed to act on the matter.

The fact that the respondents’ contracts were altered or substituted at the workplace had never been denied by the
agency.On the contrary, it admitted that the contract substitution did happen when it argued, "as to their claim for
underpayment of salary, their original contract mentioned 1350 AED monthly salary, which includes allowance while
in their Appointment Letters, they were supposed to receive 1,300 AED. While there was a difference of 50 AED
monthly, the same could no longer be claimed by virtue of their Affidavits of Quitclaims and Desistance." 34

Clearly, the agency and Modern Metal committed a prohibited practice and engaged in illegal recruitment under the
law. Article 34 of the Labor Code provides:

Art. 34. Prohibited Practices. It shall be unlawful for any individual, entity, licensee, or holder of authority:

xxxx

(i) To substitute or alter employment contracts approved and verified by the Department of Labor from the time of
actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of
the Secretary of Labor.

Further, Article 38 of the Labor Code, as amended by R.A. 8042, 35 defined "illegal recruitment" to include the
following act:

(i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the
Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the
period of the expiration of the same without the approval of the Department of Labor and Employment.

Second. The agency and Modern Metal committed breach of contract. Aggravating the contract substitution
imposed upon them by their employer, the respondents were made to suffer substandard (shocking, as they put it)
working and living arrangements. Both the original contracts the respondents signed in the Philippines and the
appointment letters issued to them by Modern Metal in Dubai provided for free housing and transportation to and
from the jobsite. The original contract mentioned free and suitable housing. 36 Although no description of the housing
was made in the letters of appointment except: "Accommodation: Provided by the company," it is but reasonable to
think that the housing or accommodation would be "suitable."

As earlier pointed out, the respondents were made to work from 6:30 a.m. to 6:30 p.m., with a meal break of one to
one and a half hours, and their overtime work was mostly not paid or underpaid. Their living quarters were cramped
as they shared them with 27 other workers. The lodging house was in Sharjah, far from the jobsite in Dubai, leaving
them only three to four hours of sleep every workday because of the long hours of travel to and from their place of
work, not to mention that there was no potable water in the lodging house which was located in an area where the
air was polluted. The respondents complained with the agency about the hardships that they were suffering, but the
agency failed to act on their reports. Significantly, the agency failed to refute their claim, anchored on the ordeal that
they went through while in Modern Metal’s employ.

Third. With their original contracts substituted and their oppressive working and living conditions unmitigated or
unresolved, the respondents’ decision to resign is not surprising. They were compelled by the dismal state of their
employment to give up their jobs; effectively, they were constructively dismissed. A constructive dismissal or
discharge is "a quitting because continued employment is rendered impossible, unreasonable or unlikely, as, an
offer involving a demotion in rank and a diminution in pay."37

Without doubt, the respondents’ continued employment with Modern Metal had become unreasonable. A
reasonable mind would not approve of a substituted contract that pays a diminished salary — from 1350 AED a
month in the original contract to 1,000 AED to 1,200 AED in the appointment letters, a difference of 150 AED to 250
AED (not just 50 AED as the agency claimed) or an extended employment (from 2 to 3 years) at such inferior terms,
or a "free and suitable" housing which is hours away from the job site, cramped and crowded, without potable water
and exposed to air pollution.

We thus cannot accept the agency’s insistence that the respondents voluntarily resigned since they personally
prepared their resignation letters 38 in their own handwriting, citing family problems as their common ground for
resigning. As the CA did, we find the resignation letters "dubious," 39 not only for having been lopsidedly worded to
ensure that the employer is rendered free from any liability, but also for the odd coincidence that all the respondents
had, at the same time, been confronted with urgent family problems so that they had to give up their employment
and go home. The truth, as the respondents maintain, is that they cited family problems as reason out of fear that
Modern Metal would not give them their salaries and their release papers. Only Era was bold enough to say the real
reason for his resignation — to protest company policy.

We likewise find the affidavits 40of quitclaim and release which the respondents executed suspect. Obviously, the
affidavits were prepared as a follow through of the respondents’ supposed voluntary resignation. Unlike the
resignation letters, the respondents had no hand in the preparation of the affidavits. They must have been prepared
by a representative of Modern Metal as they appear to come from a standard form and were apparently introduced
for only one purpose — to lend credence to the resignation letters. In Modern Metal’s haste, however, to secure the
respondents’ affidavits, they did not check on the model they used. Thus, Lumanta’s affidavit 41 mentioned a G & A
International Manpower as his recruiting agency, an entity totally unknown to the respondents; the same thing is
true for Era’s affidavit. 42 This confusion is an indication of the employer’s hurried attempt to avoid liability to the
respondents.

The respondents’ position is well-founded. The NLRC itself had the same impression, which we find in order and
hereunder quote:

The acts of respondents of requiring the signing of new contracts upon reaching the place of work and requiring
employees to sign quitclaims before they are paid and repatriated to the Philippines are all too familiar stories of
despicable labor practices which our employees are subjected to abroad. While it is true that quitclaims are
generally given weight, however, given the facts of the case, We are of the opinion that the complainants-appellants
executed the same under duress and fear that they will not be allowed to return to the Philippines. 43

Fourth. The compromise agreements (with quitclaim and release) 44 between the respondents and the agency
before the POEA did not foreclose their employer-employee relationship claims before the NLRC. The respondents,
except Ordovez and Enjambre, aver in this respect that they all paid for their own airfare when they returned
home45 and that the compromise agreements settled only their claim for refund of their airfare, but not their other
claims.46 Again, this submission has not been refuted or denied by the agency.

On the surface, the compromise agreements appear to confirm the agency’s position, yet a closer examination of
the documents would reveal their true nature. Copy of the compromise agreement is a standard POEA document,
prepared in advance and readily made available to parties who are involved in disputes before the agency, such as
what the respondents filed with the POEA ahead (filed in 2007) of the illegal dismissal complaint before the NLRC
(filed on March 5, 2008).

Under the heading "Post-Deployment," the agency agreed to pay Era 47 and Alcantara48 P 12,000.00 each,
purportedly in satisfaction of the respondents’ claims arising from overseas employment, consisting of unpaid
salaries, salary differentials and other benefits, including money claims with the NLRC. The last document was
signed by (1) Anipan, (2) Lumanta, (3) Ladea, (4) Vinuya, (5) Jonathan Nangolinola, and (6) Zosimo Gatchalian (the
last four signing on the left hand side of the document; the last two were not among those who filed the illegal
dismissal complaint).49

The agency agreed to pay them a total of P 72,000.00. Although there was no breakdown of the entitlement for
each of the six, but guided by the compromise agreement signed by Era and Alcantara, we believe that the agency
paid them P12,000.00 each, just like Era and Alcantara.

The uniform insubstantial amount for each of the signatories to the agreement lends credence to their contention
that the settlement pertained only to their claim for refund of the airfare which they shouldered when they returned to
the Philippines. The compromise agreement, apparently, was intended by the agency as a settlement with the
respondents and others with similar claims, which explains the inclusion of the two (Nangolinola and Gatchalian)
who were not involved in the case with the NLRC. Under the circumstances, we cannot see how the compromise
agreements can be considered to have fully settled the respondents’ claims before the NLRC — illegal dismissal
and monetary benefits arising from employment. We thus find no reversible error nor grave abuse of discretion in
the rejection by the NLRC and the CA of said agreements.

Fifth. The agency’s objection to the application of the Serrano ruling in the present case is of no moment. Its
argument that the ruling cannot be given retroactive effect, because it is curative and remedial, is untenable. It
points out, in this respect, that the respondents filed the complaint in 2007, while the Serrano ruling was handed
down in March 2009. The issue, as the respondents correctly argue, has been resolved in Yap v. Thenamaris Ship’s
Management,50 where the Court sustained the retroactive application of the Serrano ruling which declared
unconstitutional the subject clause in Section 10, paragraph 5 of R.A. 8042, limiting to three months the payment of
salaries to illegally dismissed Overseas Filipino Workers.

Undaunted, the agency posits that in any event, the Serrano ruling has been nullified by R.A. No. 10022, entitled
"An Act Amending Republic Act No. 8042, Otherwise Known as the Migrant Workers and Overseas Filipinos Act of
1995, As Amended, Further Improving the Standard of Protection and Promotion of the Welfare of Migrant Workers,
Their Families and Overseas Filipinos in Distress, and For Other Purposes." 51 It argues that R.A. 10022, which
lapsed into law (without the Signature of the President) on March 8, 2010, restored the subject clause in the 5th
paragraph, Section 10 of R.A. 8042. The amendment, contained in Section 7 of R.A. 10022, reads as follows:

In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract,
or any unauthorized deductions from the migrant worker’s salary, the worker shall be entitled to the full
reimbursement "of" his placement fee and the deductions made with interest at twelve percent (12%) per annum,
plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the
unexpired term, whichever is less.52 (emphasis ours)

This argument fails to persuade us. Laws shall have no retroactive effect, unless the contrary is provided. 53 By its
very nature, the amendment introduced by R.A. 10022 — restoring a provision of R.A. 8042 declared
unconstitutional — cannot be given retroactive effect, not only because there is no express declaration of
retroactivity in the law, but because retroactive application will result in an impairment of a right that had accrued to
the respondents by virtue of the Serrano ruling - entitlement to their salaries for the unexpired portion of their
employment contracts.

All statutes are to be construed as having only a prospective application, unless the purpose and intention of the
legislature to give them a retrospective effect are expressly declared or are necessarily implied from the language
used.54 We thus see no reason to nullity the application of the Serrano ruling in the present case. Whether or not
R.A. 1 0022 is constitutional is not for us to rule upon in the present case as this is an issue that is not squarely
before us. In other words, this is an issue that awaits its proper day in court; in the meanwhile, we make no
pronouncement on it.
WHEREFORE, premises considered, the petition is DENIED. The assailed Decision dated May 9, 2011 and the
Resolution dated June 23, 2011 of the Court of Appeals in CA-G.R. SP No. 114353 are AFFIRMED. Let this
Decision be brought to the attention of the Honorable Secretary of Labor and Employment and the Administrator of
the Philippine Overseas Employment Administration as a black mark in the deployment record of petitioner
Pert/CPM Manpower Exponent Co., Inc., and as a record that should be considered in any similar future violations.

Costs against the petitioner.

SO ORDERED.

New Life Enterprises v. CA

G.R. No. 94071 March 31, 1992

NEW LIFE ENTERPRISES and JULIAN SY, petitioners, 

vs.
HON. COURT OF APPEALS, EQUITABLE INSURANCE CORPORATION, RELIANCE SURETY AND
INSURANCE CO., INC. and WESTERN GUARANTY CORPORATION, respondents.

REGALADO, J.:

This appeal by certiorari seeks the nullification of the decision  1 of respondent Court of Appeals in CA-G.R. CV No.
13866 which reversed the decision of the Regional Trial Court, Branch LVII at Lucena City, jointly deciding Civil
Cases Nos. 6-84, 7-84 and 8-84 thereof and consequently ordered the dismissal of the aforesaid actions filed by
herein petitioners.

The undisputed background of this case as found by the court a quo and adopted by respondent court, being
sustained by the evidence on record, we hereby reproduce the same with approval. 2

The antecedents of this case show that Julian Sy and Jose Sy Bang have formed a business
partnership inthe City of Lucena. Under the business name of New Life Enterprises, the partnership
engaged in the sale of construction materials at its place of business, a two storey building situated
at Iyam, Lucena City. The facts show that Julian Sy insured the stocks in trade of New Life
Enterprises with Western Guaranty Corporation, Reliance Surety and Insurance. Co., Inc., and
Equitable Insurance Corporation.

On May 15, 1981, Western Guaranty Corporation issued Fire Insurance Policy No. 37201 in the

amount ofP350,000.00. This policy was renewed on May, 13, 1982.

On July 30,1981, Reliance Surety and Insurance Co., Inc. issued Fire Insurance Policy No.
69135 in the amount of P300,000.00 (Renewed under Renewal
Certificate No. 41997) An additional insurance was issued by the same company on
November 12, 1981 under Fire Insurance Policy No. 71547 in the amount of P700,000.00.

On February 8, 1982, Equitable Insurance Corporation issued Fire Insurance Policy No. 39328 in
the amount of P200,000.00.

Thus when the building occupied by the New Life Enterprises was gutted by fire at about 2:00

o'clock in the morning of October 19, 1982, the stocks in the
trade inside said building were insured against fire in the total amount of P1,550,000.00.
According to the certification issued by the Headquarters, Philippine Constabulary /Integrated
 National Police, Camp Crame, the cause of fire was electrical in nature. According to the plaintiffs,
the building and the stocks inside were burned. After the fire, Julian Sy went to the agent of
Reliance Insurance whom he asked to accompany him to the
office of the company so that he can file his claim. He averred that in support of his claim, he
submitted the fire clearance, the insurance policies and inventory of stocks. He further testified
that the three insurance companies are sister companies, and as a matter of fact when he was
following-up his claim with Equitable Insurance, the Claims Manager told him to go first to Reliance
Insurance and if said company agrees to pay, they would also pay. The same treatment was given
him by the other insurance companies. Ultimately, the three insurance companies denied plaintiffs'
claim for payment.

In its letter of denial dated March 9, 1983, (Exhibit "C" No. 8-

84) Western Guaranty Corporation throughClaims Manager Bernard S. Razon told the plaintiff that
his claim "is denied for breach of policy conditions."Reliance Insurance purveyed the same
message in its letter dated November 23, 1982 and signed by Executive Vice-President Mary Dee
Co (Exhibit "C" No. 7-84) which said that "plaintiff's claim is denied forbreach of policy conditions."
The letter of denial received by the plaintiff from Equitable Insurance Corporation(Exhibit "C" No.
6-84) was of the same tenor, as said letter dated February 22, 1983, and signed by Vice-President
Elma R. Bondad, said "we find that certain policy conditions were violated, therefore, we regret,
we have to deny your claim, as it is hereby denied in its entirety."

In relation to the case against Reliance Surety and Insurance Company, a certain Atty. Serafin
D. Dator, acting in behalf of the plaintiff, sent a letter dated February 13, 1983 (Exhibit "G-l" No 7-
84) to Executive Vice-President Mary Dee Co asking that he be informed as to the specific policy
conditions allegedly violated by the plaintiff. In her reply-letter dated March
30, 1983, Executive Vice-President Mary Dee Co informed Atty. Dator that Julian Sy violated
Policy Condition No. "3" which requires the insured to give notice of any
insurance or insurances already effected covering the stocks in trade. 3

Because of the denial of their claims for payment by the three (3) insurance companies, petitioner filed separate

civil actions against the former before the Regional Trial Court of Lucena City, which cases were consolidated for
trial, and thereafter the court below rendered its decision on December 19, l986 with the following disposition:

WHEREFORE, judgment in the above-entitled cases is rendered in the following manner, viz:

1. In Civil Case No. 6-84, judgment is rendered for the plaintiff New Life Enterprises and against

the defendant Equitable Insurance Corporation ordering the latter to pay the former the sum of
Two Hundred Thousand (P200,000.00) Pesos and
considering that payment of the claim of the insured has beenunreasonably denied, pursuant to S
ec. 244 of the Insurance Code, defendant is further ordered to pay theplaintiff attorney's fees in
the amount of Twenty Thousand (P20,000.00) Pesos. All sums of money to be paid by virtue
hereof shall bear interest at 12% per annum (pursuant to Sec. 244 of the Insurance Code) from
February 14, 1983, (91st day from November 16, 1982, when Sworn Statement of Fire Claim
was received from the insured) until they are fully paid;

2. In Civil Case No. 7-84, judgment is rendered for the plaintiff Julian Sy and against
the defendant Reliance Surety and Insurance Co., Inc., ordering the latter to pay the former the
sum of P1,000,000.00 (P300,000.00 under Policy
No. 69135 and P700,000.00 under Policy No. 71547) and considering that payment of the claim
of the insured has been unreasonably denied, pursuant to
Sec. 244 of the Insurance Code, defendant is further ordered to pay the plaintiff the amount of
P100,000.00 as attorney's fees.

All sums of money to be paid by virtue hereof shall bear interest at 12% per annum (pursuant to

Sec. 244 of the Insurance Code) from February 14, 1983, (91st day from November 16,
1982 when Sworn Statement of Fire Claim was received from the insured) until they are fully paid;
 3. In Civil Case No. 8-84, judgment is rendered for
the plaintiff New Life Enterprises and against the defendant Western Guaranty Corporation
ordering the latter to pay the sum of P350,000.00 to the
Consolidated Bank and Trust Corporation, Lucena Branch, Lucena City, as stipulated on the
face of Policy No. 37201, and considering that payment of the
aforementioned sum of money has been unreasonably
denied, pursuant to Sec. 244 of the Insurance Code, defendant is further ordered to pay the
plaintiff attorney's fees in the amount of P35,000.00.

All sums of money to be paid by virtue hereof shall bear interest at 12% per

annum (pursuant to Sec. 244 of the Insurance Code) from February 5, 1982, (91st day from 1st
week of November 1983 when insured filed formal claim for full indemnity according to adjuster
Vetremar Dela Merced) until they are fully paid. 4

As aforestated, respondent Court of Appeals reversed said judgment of the trial court, hence this petition the

crux wherein is whether or not Conditions Nos. 3 and 27 of
the insurance contracts were violated by petitioners thereby resulting in their
forfeiture of all the benefits thereunder.

Condition No. 3 of said insurance policies, otherwise known as
the "Other Insurance Clause," is uniformly contained in all the aforestated
insurance contracts of herein petitioners, as follows:

3. The insured shall give notice to the Company of any insurance or insurances already

effected, or which may subsequently be effected, covering any of the property or properties
consisting of stocks in trade, goods in process and/or inventories only hereby insured, and unless
such notice be given and the particulars of such insurance or insurances be stated therein or
endorsed on this policy pursuant to Section 50 of the Insurance
Code, by or on behalf of the Company before the occurrence of any loss or damage, all benefits
under this policy shall be deemed forfeited, provided however, that this condition shall not apply
when the total insurance or insurances in force at the time of loss or damage not more than
P200,000.00. 5

Petitioners admit that the respective insurance policies issued by private respondents did not state or endorse
thereon the other insurance coverage obtained or subsequently effected on the same stocks in trade for the loss of
which compensation is claimed by petitioners.  6 The policy
issued by respondent Western Guaranty Corporation (Western) did not
declare respondent Reliance Surety and Insurance Co., Inc. (Reliance) and respondent Equitable Insurance
Corporation(Equitable) as co-insurers on the same stocks,
while Reliance's Policies covering the same stocks did not likewise declare Western and Equitable as such co-
insurers. It is further admitted by petitioners that Equitable's policy stated "nil" in the space thereon requiring
indication of any co-insurance although there were three (3) policies subsisting on the same stocks in trade
at the time of the loss, namely, that of Western in the amount of P350,000.00 and two (2) policies of Reliance in
the total amount of P1,000,000.00. 7

In other words, the coverage by other insurance or co-insurance effected or subsequently arranged by petitioners

were neither stated nor endorsed in the policies of the three (3) private respondents, warranting forfeiture of all
benefits thereunder if we are to follow the express stipulation in the aforequoted Policy Condition No. 3.

Petitioners contend that they are not to be blamed for the omissions, alleging that insurance agent Leon Alvarez

(for Western) and Yap Kam Chuan (for Reliance and Equitable) knew about the existence of the additional
insurance coverage and that they were not informed about the requirement that such other or additional insurance
should be stated in the policy, as they have not even read policies. 8 These contentions cannot pass judicial
muster.

The terms of the contract are clear and unambiguous. The insured is specifically required to disclose to the

insurer any other insurance and its particulars which he may have effected on the
same subject matter. The knowledge of such insurance by the insurer's agents, even assuming the acquisition
thereof by the former, is not the "notice" that would estop the insurers from denying the claim. Besides, the so-
called theory of imputed knowledge, that is, knowledge of the agent is knowledge of the principal, aside from being
of dubious applicability here has likewise been roundly refuted by respondent
court whose factual findings we find acceptable.

Thus, it points out that while petitioner Julian Sy claimed that he had informed insurance agent Alvarez regarding

the co-insurance on the property, he contradicted himself by inexplicably claiming that he had not read the
terms of the policies; that Yap Dam Chuan could not likewise have obtained such
knowledge for the same reason, aside from the fact that the insurance with Western was obtained before those of
Reliance and Equitable; and that the conclusion of the trial court that Reliance and Equitable are "sister
companies" is an unfounded conjecture drawn from the mere fact that Yap Kam Chuan was
an agent for both companies which also had the same insurance claims adjuster. Availment of the services of the
same agents and adjusters by different companies is a common practice in the insurance business and such facts
do not warrant the speculative conclusion of the trial court.

Furthermore, when the words and language of documents are clear and plain or readily understandable by an

ordinary reader thereof, there is absolutely no room for interpretation or construction anymore.  9 Courts are not
allowed to make contracts for the parties; rather, they will intervene
only when the terms of the policy are ambiguous, equivocal, or uncertain.10 The parties must abide by the
terms of the contract because such terms constitute the measure of the insurer's liability and
compliance therewith is a condition precedent to the insured's right of recovery from the insurer.  11

While it is a cardinal principle of insurance law that a policy or contract of insurance is to be construed liberally

in favor of the insured and strictly against the insurer company, yet contracts of insurance, like other contracts,
are to be construed according to the sense and meaning of the terms which
the parties themselves have used. If such terms are clear and unambiguous, they must be taken and understood
in their plain, ordinary and popular sense. 12 Moreover, obligations arising from contracts have the force of law
between the contracting parties and should be complied with in good faith.  13

Petitioners should be aware of the fact that a party is not relieved of the duty to exercise the ordinary care and
prudence that would be exacted in relation to other contracts. The conformity of the insured to the terms of the
policy is implied from his failure to express any disagreement with what is provided for. 14 It may be true that
the majority rule, as cited by petitioners, is that injured persons may accept policies without reading them, and
that this is not negligence per se. 15 But, this is not without any exception. It is and was incumbent upon petitioner
Sy to read the insurance contracts, and this can be reasonably expected of him considering that he has been a
businessman since 1965 16 and the contract concerns indemnity in case of loss in his money-
making trade of which important consideration he could not have been unaware as it was precisely the reason for
his procuring the same.

We reiterate our pronouncement in Pioneer Insurance and Surety Corporation vs. Yap: 17

. . .
And considering the terms of the policy which required the insured to declare other insurances, th
e statement in question must be deemed to be a statement (warranty) binding on both insurer and
insured, that there were no other insurance on the property. . . .

The annotation then, must be deemed to be a warranty that the property was not insured by any

other policy. Violation thereof entitled the insurer to rescind (Sec. 69, Insurance
Act). Such misrepresentation is fatal in the light of our views in Santa Ana vs. Commercial Union
Assurance Company, Ltd., 55 Phil. 329. The materiality of non-disclosure of other insurance
policies is not open to doubt.

xxx xxx xxx

The obvious purpose of the aforesaid requirement in the policy is to prevent over-insurance and

thus avert the perpetration of fraud. The public, as well as the insurer, is interested in preventing the
situation in which afire would be profitable to the insured. According to Justice Story: "The insured
has no right to complain, forhe assents to comply with all the stipulations on
 his side, in order to entitle himself to the benefit of thecontract, which, upon reason or principle,
he has no right to ask the court to dispense with the performanceof his own part of the agreement,
and yet to bind the other party to obligations, which, but for thosestipulations, would not have been
entered into."

Subsequently, in the case of Pacific Banking Corporation vs. Court of Appeals, et al., 18 we held:

It is not disputed that the insured failed to reveal before the loss three other insurances. As found

by the Court of Appeals, by reason of said unrevealed insurances, the insured had been guilty of a
false declaration; a clear misrepresentation and a vital one because where
the insured had been asked to reveal but did not, that was deception. Otherwise stated, had the
insurer known that there were many co-insurances, it could have hesitated or plainly desisted from
entering into such contract. Hence, the insured was guilty of clear fraud(Rollo, p. 25).

Petitioner's contention that the allegation of fraud is but

a mere inference or suspicion is untenable. In fact, concrete evidence of fraud or false declaration
by the insured was furnished by the petitioner itself when the facts alleged in the policy
under clauses "Co-Insurances Declared" and "Other Insurance Clause" are materially different
from the actual number of co-insurances taken over the subject property. Consequently, "the whole
foundation of the contract fails, the risk does not attach and the policy never becomes a contract
between the parties." Representations of facts are the foundation of the contract and if
the foundation does not exist, the superstructure does
not arise. Falsehood in such representations is not shown to vary or add tothe contract, or to
terminate a contract which has once been made, but to show that no contract has ever
existed (Tolentino, Commercial Laws of the Philippines, p.
991, Vol. II, 8th Ed.,) A void or inexistent contract is one which has no force and effect from the
very beginning, as if it had never been entered into, and which cannot be
validated either by time or by ratification (Tongoy vs. C.A., 123 SCRA 99 (1983); Avila v. C.A., 145
SCRA, 1986).

As the insurance policy against fire expressly required that notice should be given by

the insured of other insurance upon the same property, the total absence of such notice nullifies
the policy.

To further warrant and justify the forfeiture of the benefits under the insurance contracts involved, we need
merely to turn to Policy Condition No. 15 thereof, which reads in part:

15. . . . if any false declaration be made or used in support thereof, . . . all benefits under this

Policy shall be forfeited . . . . 19

Additionally, insofar as the liability of respondent Reliance is concerned, it is not denied that the complaint for

recovery was filed in court by petitioners only on January 31, 1984, or after more than one (1) year had
elapsed from petitioners' receipt of the insurers' letter of
denial on November 29, 1982. Policy Condition No. 27 of their insurance contract with Reliance provides:

27. Action or suit

clause. — If a claim be made and rejected and an action or suit be not commenced either
in the Insurance Commission or any court of competent jurisdiction of notice of such
rejection, or in case of arbitration taking place as provided herein, within twelve (12) months after
due notice of the award made by the arbitrator or arbitrators or umpire, then the claim shall for all
purposes be deemed to have been abandoned and shall not thereafter be recoverable
hereunder.  20

On this point, the trial court ruled:

. . . However, because of the peculiar circumstances of this case, we hesitate

in concluding that plaintiff'sright to ventilate his claim in court has been barred by reason of the ti
 me constraint provided in the insurancecontract. It is evident that after the plaintiff had received
the letter of denial, he still found it necessary to beinformed of the specific causes or reasons for
the denial of his claim, reason for which his lawyer, Atty. Dator deemed it wise to send a
letter of inquiry to the defendant which was answered by defendant's Executive Vice-
President in a letter
dated March 30, 1983, . . . . Assuming, gratuitously, that the letter of Executive Vice-President
Mary Dee Co dated March 30, 1983, was received by plaintiff on the same date, the period of
limitation should start to run only from said date in the spirit of fair play and equity. . . . 21

We have perforce to reject this theory of the court below for being contrary to what we have heretofore declared:

It is important to note the principle laid down by this Court in the case of Ang vs. Fulton Fire

Insurance Co. (2 SCRA 945 [1961]) to wit:

The condition contained in an insurance policy that claims must be presented
within one year
after rejection is not merely a procedural requirement but an important matter
essential to a prompt settlement of claims against insurance companies as it
demands that insurance suits be brought by
the insured while the evidence as to the origin and cause of destruction have not
yet disappeared.

In enunciating the above-cited principle, this Court had definitely settled the rationale for the

necessity of bringing suits against the Insurer within one year from the rejection of the claim. The
contention of the respondents that the one-year prescriptive period does
not start to run until the petition for reconsiderationhad been resolved by the insurer, runs counter 
to the declared purpose for requiring that an action or suit be filed in the Insurance
Commission or in a court of competent jurisdiction from the denial of the claim. To uphold
respondents' contention would contradict and defeat the very principle which this Court had
laid down.Moreover, it can easily be used by insured persons as a scheme or device to waste time
until any evidencewhich may be considered against them is destroyed.

xxx xxx xxx

While in the Eagle Star case (96 Phil. 701), this Court uses the phrase "final rejection", the

same cannot betaken to mean the rejection of a petition for reconsideration as insisted by
respondents.
Such was clearly notthe meaning contemplated by this Court. The insurance policy in said
case provides that the insured shouldfile his claim first, with the carrier and then with the insurer.
The "final rejection" being referred to in said case is the rejection by the insurance company. 22

Furthermore, assuming arguendo that petitioners felt the legitimate need to be clarified as to the policy condition

violated,there was a considerable lapse of time from their receipt of the insurer's clarificatory letter dated March 30,
1983, up to the time the complaint was filed in court on January 31, 1984. The one-
year prescriptive period was yet to expire on November29, 1983, or about eight (8) months from the
receipt of the clarificatory letter, but petitioners let the period lapse without bringing their action in court.
We accordingly find no "peculiar circumstances" sufficient to relax the enforcement of the one-
year prescriptive period and we, therefore, hold that petitioners' claim was definitely filed out of time.

WHEREFORE, finding no cogent reason to disturb the judgment

of respondent Court of Appeals, the same is hereby AFFIRMED.

SO ORDERED.

Melencio-Hererra and Nocon, JJ., concur.

Paras, J., took no part.

Padilla, J., took no part.

Sunace International Management v. NLRC

THIRD DIVISION
 
 SUNACE   INTERNATIONAL G.R. No. 161757
 MANAGEMENT SERVICES, INC.  
                                      Petitioner, Present:
   
  QUISUMBING, J., Chairperson,
- versus - CARPIO,
CARPIO MORALES, and
  TINGA,  JJ.
NATIONAL LABOR RELATIONS  
COMMISSION, Second Division;HON.  
ERNESTO S. DINOPOL, in his capacity as  
Labor Arbiter, NLRC; NCR, Arbitration  
Branch, Quezon City and DIVINA A.  
MONTEHERMOZO,       
                                      Respondents. Promulgated:
   
January 25, 2006
 
x - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
 
 
DECISION
 
 
CARPIO MORALES, J.:
 
 
Petitioner, Sunace International Management Services (Sunace),  a corporation duly organized and existing
under the laws of the Philippines, deployed to Taiwan Divina A. Montehermozo (Divina) as a domestic helper under
a 12-month contract effectiveFebruary  1, 1997.[1]  The deployment was with the assistance of a Taiwanese broker,
Edmund Wang, President of Jet Crown International Co., Ltd.
 
After her 12-month contract expired on February 1, 1998, Divina continued working for her Taiwanese
employer, Hang Rui Xiong, for two more years, after which she returned to the Philippines on February 4, 2000. 
 
Shortly after her return or on February 14, 2000, Divina filed a complaint[2] before the National Labor
Relations Commission (NLRC) against Sunace, one Adelaide Perez, the Taiwanese broker, and the employer-
foreign principal alleging that she was jailed for three months and that she was underpaid. 
 
The following day or on February 15, 2000, Labor Arbitration Associate Regina T. Gavin issued
Summons[3] to the Manager of Sunace, furnishing it with a copy of Divina’s complaint and directing it to appear for
mandatory conference on February 28, 2000.
 
The scheduled mandatory conference was reset.  It appears to have been concluded, however.
 
 On April 6, 2000, Divina filed her Position Paper [4] claiming that under her original one-year contract and the
2-year extended contract which was with the knowledge and consent of Sunace, the following amounts representing
income tax and savings were deducted: 
 
 
Year Deduction for Deduction for Savings
Income Tax  
 
1997 NT10,450.00 NT23,100.00
1998 NT9,500.00 NT36,000.00
1999 NT13,300.00 NT36,000.00;[5]
 
 
 
and while the amounts deducted in 1997 were refunded to her, those deducted in 1998 and 1999 were not.     On
even date, Sunace, by its Proprietor/General Manager Maria Luisa Olarte, filed its Verified Answer and Position
Paper,[6] claiming as follows,  quotedverbatim:
 
 
            COMPLAINANT IS NOT ENTITLED
            FOR THE REFUND OF HER 24 MONTHS
            SAVINGS
 
                        3.  Complainant could not anymore claim nor entitled for the refund of her 24 months savings
as she already took back her saving already last year and the employer did not deduct any money
from her salary, in accordance with a Fascimile Message from the respondent SUNACE’s
employer, Jet Crown International Co. Ltd., a xerographic copy of which is herewith attached
as ANNEX “2” hereof;
 
            COMPLAINANT IS NOT ENTITLED
            TO REFUND OF HER 14 MONTHS TAX
            AND PAYMENT OF ATTORNEY’S FEES
 
                        4.  There is no basis for the grant of tax refund to the complainant as the she finished
her one year contract and hence, was not illegally dismissed by her employer .  She could only lay
claim over the tax refund or much more be awarded of damages such as attorney’s fees as said
reliefs are available only when the dismissal of a migrant worker is without just valid or lawful cause
as defined by law or contract.
 
                        The rationales behind the award of tax refund and payment of attorney’s fees is not to enrich
the complainant but to compensate him for actual injury suffered.  Complainant did not suffer injury,
hence, does not deserve to be compensated for whatever kind of damages.
 
                        Hence, the complainant has NO cause of action against respondent SUNACE for monetary
claims, considering that she has been totally paid of all the monetary benefits due her under her
Employment Contract to her full satisfaction.
 
6.      Furthermore, the tax deducted from her salary is in compliance with the Taiwanese
law, which respondent SUNACE has no control and complainant has to obey and this Honorable
Office has no authority/jurisdiction to intervene because the power to tax is a sovereign power
which the Taiwanese Government is supreme in its own territory.  The sovereign power of taxation
of a state is recognized under international law and among sovereign states.
 
 
 
 
                        7.  That respondent SUNACE respectfully reserves the right to file supplemental Verified
Answer and/or Position Paper to substantiate its prayer for the dismissal of the above case against
the herein respondent.  AND BY WAY OF -
 
                        x x x x  (Emphasis and underscoring supplied)
 
 
          Reacting to Divina’s Position Paper, Sunace filed on April 25, 2000 an  “. . . ANSWER TO COMPLAINANT’S
POSITION PAPER”[7]alleging that Divina’s 2-year extension of her contract was without its knowledge and consent,
hence, it had no liability attaching to any claim arising therefrom, and Divina in fact executed a Waiver/Quitclaim and
Release of Responsibility and an Affidavit of Desistance, copy of each document was annexed to said “. . . ANSWER
TO COMPLAINANT’S POSITION PAPER.”
 
          To Sunace’s “. . . ANSWER TO COMPLAINANT’S POSITION PAPER,” Divina filed a 2-page reply,[8] without, however,
refuting Sunace’s disclaimer of knowledge of the extension of her contract and without saying anything about the
Release, Waiver and Quitclaim and Affidavit of Desistance.
 
          The Labor Arbiter, rejected Sunace’s claim that the extension of Divina’s contract for two more years was
without its knowledge and consent in this wise: 
 
We reject Sunace’s submission that it should not be held responsible for the amount
withheld because her contract was extended for 2 more years without its knowledge and
consent because as Annex “B”[9] shows, Sunace and Edmund Wang have not stopped
communicating with each other  and yet the matter of the contract’s extension and Sunace’s
alleged non-consent thereto has not been categorically established.
 
What Sunace should have done was to write to POEA about the extension and its
objection thereto, copy furnished the complainant herself, her foreign employer, Hang Rui
Xiong and the Taiwanese broker, Edmund Wang.
 
And because it did not, it is presumed to have consented to the extension and
should be liable for anything that resulted thereform (sic).[10]  (Underscoring supplied)
 
          The Labor Arbiter rejected too Sunace’s argument that it is not liable on account of Divina’s execution of a
Waiver and Quitclaim and an Affidavit of Desistance.  Observed the Labor Arbiter:
 
Should the parties arrive at any agreement as to the whole or any part of the dispute, the
same shall be reduced to writing and signed by the parties and their respective counsel (sic), if any,
before the Labor Arbiter.
 
The settlement shall be approved by the Labor Arbiter after being satisfied that it was
voluntarily entered into by the parties and after having explained to them the terms and
consequences thereof.
 
A compromise agreement entered into by the parties not in the presence of the Labor Arbiter
before whom the case is pending shall be approved by him, if after confronting the parties,
particularly the complainants, he is satisfied that they understand the terms and conditions of the
settlement and that it was entered into freely voluntarily (sic) by them and the agreement is not
contrary to law, morals, and public policy.
 
            And because no consideration is indicated in the documents, we strike them down as
contrary to law, morals, and public policy.[11]  
 
 
 
He accordingly decided in favor of Divina, by decision of October 9, 2000, [12] the dispositive portion of which reads:
 
 
Wherefore, judgment is hereby rendered ordering respondents SUNACE INTERNATIONAL
SERVICES and its owner ADELAIDA PERGE, both in their personal capacities and as agent of
Hang Rui Xiong/Edmund Wang  to jointly and severally pay complainant DIVINA A.
MONTEHERMOZO the sum of NT91,950.00 in its peso equivalent at the date of payment, as refund
 for the amounts which she is hereby adjudged entitled to as earlier discussed plus 10% thereof as
attorney’s fees since compelled to litigate, complainant had to engage the services of counsel.
 
SO ORDERED.[13]  (Underescoring supplied)
 
 
On appeal of Sunace, the NLRC, by Resolution of April 30, 2002, [14] affirmed the Labor Arbiter’s decision.
 
Via petition for certiorari, [15] Sunace elevated the case to the Court of Appeals which dismissed it outright by
Resolution of November 12, 2002,[16] the full text of which reads:
 
          The petition for certiorari faces outright dismissal.
The petition failed to allege facts constitutive of grave abuse of discretion on the part of the
public respondent amounting to lack of jurisdiction when the NLRC affirmed the Labor Arbiter’s
finding that petitioner Sunace International Management Services impliedly consented to the
extension of the contract of private respondent Divina A. Montehermozo.  It is undisputed
that petitioner was continually communicating with private respondent’s foreign employer (sic).  As
agent of the foreign principal, “petitioner cannot profess ignorance of such extension as
obviously, the act of the principal extending complainant  (sic) employment contract
necessarily bound it.”  Grave abuse of discretion is not present in the case at bar.
 
ACCORDINGLY, the petition is hereby DENIED DUE COURSE and DISMISSED.[17] 
 
SO ORDERED.
 
(Emphasis on words in capital letters in the original; emphasis on words in small letters and
underscoring supplied)
 
 
Its Motion for Reconsideration having been denied by the appellate court by Resolution of January 14, 2004,
[18]
 Sunace filed the present petition for review on certiorari.
 
The Court of Appeals affirmed the Labor Arbiter and NLRC’s finding  that Sunace knew of and impliedly
consented to the extension of Divina’s    2-year contract.  It went on to state that “It is undisputed that [Sunace] was
continually communicating with [Divina’s] foreign employer.”  It  thus concluded that  “[a]s agent of the foreign
principal, ‘petitioner cannot profess ignorance of such extension as obviously, the act of the principal extending
complainant (sic) employment contract necessarily bound it.’”
 
Contrary to the Court of Appeals finding, the alleged continuous communication was with the
Taiwanese broker Wang, not with the foreign employer Xiong. 
 
The February 21, 2000 telefax message from the Taiwanese broker to Sunace, the only basis of a finding of
continuous communication, reads verbatim:
 
xxxx
 
Regarding to Divina, she did not say anything about her saving in police
station.  As we contact with her employer, she took back her saving already last
years.  And they did not deduct any money from her salary.  Or she will call back her
employer to check it again.  If her employer said yes! we will get it back for her.
 
 
 
Thank you and best regards.
(sgd.)
Edmund Wang
President[19]
 
 
 The finding of the Court of Appeals solely on the basis of the above-quoted telefax message, that Sunace
continually communicated with the foreign “principal” (sic) and therefore was aware of and had consented to the
execution of the extension of the contract is misplaced.  The message does not provide evidence that Sunace was
privy to the new contract executed after the expiration on February 1, 1998 of the original contract. That Sunace and
the Taiwanese broker communicated regarding Divina’s allegedly withheld savings does not necessarily mean that
Sunace ratified the extension of the contract.  As Sunace points out in its Reply[20] filed before the Court of Appeals,
 
As can be seen from that letter communication, it was just an information given to
the petitioner that the private respondent had t[aken] already her savings from her foreign
employer and that no deduction was made on her salary.  It contains nothing about the
extension or the petitioner’s consent thereto.[21]
 
 
Parenthetically, since the telefax message is dated February 21, 2000, it is safe to assume that it was sent
to enlighten Sunace who had been directed, by Summons issued on February 15, 2000, to appear on February 28,
2000 for a mandatory conference following Divina’s filing of the complaint on February 14, 2000.
 
Respecting the Court of Appeals following dictum:
 
As agent of its foreign principal, [Sunace] cannot profess ignorance of such an extension as
obviously, the act of its principal extending [Divina’s] employment contract necessarily bound it, [22]
 
 
it too is a misapplication, a misapplication of the theory of imputed knowledge. 
 
          The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal, employer
Xiong, not the other way around.[23] The knowledge of the principal-foreign employer cannot, therefore, be imputed
to its agent Sunace. 
 
There being no substantial proof that Sunace knew of and consented to be bound under the 2-year
employment contract extension, it cannot be said to be privy thereto.  As such, it and its “owner” cannot be held
solidarily liable for any of Divina’s claims arising from the 2-year employment extension.  As the New Civil Code
provides,
 
Contracts take effect only between the parties, their assigns, and heirs, except in
case where the rights and obligations arising from the contract are not transmissible by their
nature, or by stipulation or by provision of law.[24]
 
 
Furthermore, as Sunace correctly points out, there was an implied revocation of its agency relationship with
its foreign principal when, after the termination of the original employment contract, the foreign principal directly
negotiated with Divina and entered into a new and separate employment contract in Taiwan.   Article 1924 of the
New Civil Code reading
 
The agency is revoked if the principal directly manages the business entrusted to the agent,
dealing directly with third persons.
 
 
thus applies.
 
In light of the foregoing discussions, consideration of the validity of the Waiver and Affidavit of Desistance
which Divina executed in favor of Sunace is rendered unnecessary. 
 
WHEREFORE, the petition is GRANTED.  The challenged resolutions of the Court of Appeals are
hereby REVERSEDand SET ASIDE.  The complaint of respondent Divina A. Montehermozo against petitioner
is DISMISSED.     
 
SO ORDERED.
 
  

CF Sharp v. Pioneer Insurance and Surety Corp.

SECOND DIVISION
 
C.F. SHARP & CO. INC. and JOHN J.    G.R. No. 179469
ROCHA,  
                                         Petitioners,  
      Present:
   
      CARPIO, J.,
                   Chairperson,
-versus-     VILLARAMA, JR.,*
      PEREZ,
      SERENO, and
      REYES, JJ.
   
PIONEER INSURANCE & SURETY  
CORPORATION, WILFREDO C.  
AGUSTIN and HERNANDO G. MINIMO,    Promulgated:
                                     Respondents.  
   February 15, 2012
x ----------------------------------------------------------------------------------------x
 
DECISION
 
PEREZ, J.:
 
          Whether a local private employment agency may be held liable for breach of contract for failure to deploy a
seafarer, is the bone of contention in this case.
 
          Assailed in this petition for review are the Decision [1] dated 30 October 2003 and the 29 August 2007
Resolution of the Court of Appeals in CA-G.R. CV No. 53336 finding petitioners C.F. Sharp Co. Inc. (C.F. Sharp)
and John J. Rocha (Rocha) liable for damages.
 
          Responding to a newspaper advertisement of a job opening for sandblasters and painters in Libya,
respondents Wilfredo C. Agustin and Hernando G. Minimo applied with C.F. Sharp sometime in August 1990.  After
passing the interview, they were required to submit their passports, seaman’s book, National Bureau of Investigation
clearance, employment certificates, certificates of seminars attended, and results of medical examination.  Upon
submission of the requirements, a Contract of Employment was executed between respondents and C.F.
Sharp.  Thereafter, respondents were required to attend various seminars, open a bank account with the
corresponding allotment slips, and attend a pre-departure orientation.  They were then advised to prepare for
immediate deployment and to report to C.F. Sharp to ascertain the schedule of their deployment.
 
          After a month, respondents were yet to be deployed prompting them to request for the release of the
documents they had submitted to C.F. Sharp.  C.F. Sharp allegedly refused to surrender the documents which led to
the filing of a complaint by respondents before the Philippine Overseas Employment Administration (POEA) on 21
January 1991.
 
          On 30 October 1991, POEA issued an Order finding C.F. Sharp guilty of violation of Article 34(k) of the Labor
Code, which makes it unlawful for any entity “to withhold or deny travel documents from applicant workers before
departure for monetary or financial considerations other than those authorized under this Code and its implementing
rules and regulations.”  Consequently, C.F. Sharp’s license was suspended until the return of the disputed
documents to respondents.  POEA likewise declared that it has no jurisdiction to adjudicate the monetary claims of
respondents. 
          On 10 March 1995, respondents filed a Complaint for breach of contract and damages against C.F. Sharp
and its surety, Pioneer Insurance and Surety Corporation (Pioneer Insurance), before the Regional Trial Court
(RTC) of Pasay City.  Respondents claimed that C.F. Sharp falsely assured them of deployment and that its refusal
to release the disputed documents on the ground that they were already bound by reason of the Contract of
Employment, denied respondents of employment opportunities abroad and a guaranteed income.   Respondents
also prayed for damages.  Pioneer Insurance filed a cross claim against C.F. Sharp and John J. Rocha, the
executive vice-president of C.F. Sharp, based on an Indemnity Agreement which substantially provides that the duo
shall jointly and severally indemnify Pioneer Insurance for damages, losses, and costs which the latter may incur as
surety.  The RTC rendered judgment on 27 June 1996 favoring respondents, to wit:
 
WHEREFORE, plaintiffs’ causes of action having been proved with a preponderance of
evidence, judgment is hereby ordered as follows:
 
a.       Declaring the non-deployment of plaintiffs and the refusal to release documents as
breach of contract;
b.      By way of compensatory damages, awarding $450 per month and $439 overtime per
month, which should have been received by plaintiffs from other employers, making a
joint and solidary obligation on the part of the two defendants – C.F. Sharp and Pioneer
for the period covered by the employment contracts;
c.       Ordering each defendant to pay each plaintiff P50,000.00 as moral damages and
another P50,000.00 each as exemplary damages;
d.      Ordering defendants to share in the payment to plaintiffs of P50,000.00 attorney’s
fees;
e.       Defendants to pay litigation expenses and costs of suit. [2]
 
The trial court ruled that there was a violation of the contract when C.F. Sharp failed to deploy and release
the papers and documents of respondents, hence, they are entitled to damages.  The trial court likewise upheld the
cause of action of respondents against Pioneer Insurance, the former being the actual beneficiaries of the surety
bond.
 
On appeal, C.F. Sharp and Rocha raise a jurisdictional issue — that the RTC has no jurisdiction over the
instant case pursuant to Section 4(a) of Executive Order No. 797 which vests upon the POEA the jurisdiction over
all cases, including money claims, arising out of or by virtue of any contract involving workers for overseas
employment.  C.F. Sharp and Rocha refuted the findings of the trial court and maintained that the perfection and
effectivity of the Contract of Employment depend upon the actual deployment of respondents.
 
The Court of Appeals upheld the jurisdiction of the trial court by ruling that petitioners are now estopped from
raising such question because they have actively participated in the proceedings before the trial court.   The Court of
Appeals further held that since there is no perfected employment contract between the parties, it is the RTC and not
the POEA, whose jurisdiction pertains only to claims arising from contracts involving Filipino seamen, which has
jurisdiction over the instant case.
 
Despite the finding that no contract was perfected between the parties, the Court of Appeals adjudged C.F.
Sharp and Rocha liable for damages, to wit:
 
WHEREFORE, the Appeal of C.F. Sharp Co Inc. and John J. Rocha is PARTIALLY
GRANTED only insofar as We declare that there is no breach of contract because no contract of
employment was perfected.  However, We find appellants C.F. Sharp Co. Inc. and John J. Rocha
liable to plaintiff-appellees for damages pursuant to Article 21 of the Civil Code and award each
plaintiff-appellees temperate damages amounting toP100,000.00, and moral damages in the
increased amount of P100,000.00.  The award of exemplary damages and attorney’s fees
amounting toP50,000.00, respectively, is hereby affirmed.[3]
 
The Court of Appeals limited the liability of Pioneer Insurance to the amount of P150,000.00 pursuant to the
Contract of Suretyship between C.F. Sharp and Pioneer Insurance.
 
 Rocha filed the instant petition on the submission that there is no basis to hold him liable for damages under
Article 21 of the Civil Code because C.F. Sharp has signified its intention to return the documents and had in fact
informed respondents that they may, at any time of the business day, withdraw their documents.  Further,
respondents failed to establish the basis for which they are entitled to moral damages.  Rocha refuted the award of
exemplary damages because the act of requiring respondents to sign a quitclaim prior to the release of their
documents could not be considered bad faith.  Rocha also questions the award of temperate damages on the
ground that the act of withholding respondents’ documents could not be considered “chronic and continuing.” [4] 
 
          Right off, insofar as Pioneer Insurance is concerned, the petition should be dismissed against it because the
ruling of the Court of Appeals limited its liability to P150,000.00 was not assailed by Rocha, hence the same has
now attained finality. 
         
Before us, respondents maintain that they are entitled to damages under Article 21 of the Civil Code for C.F.
Sharp’s unjustified refusal to release the documents to them and for requiring them to sign a quitclaim which would
effectively bar them from seeking redress against petitioners.  Respondents justify the award of other damages as
they suffered pecuniary losses attributable to petitioner’s malice and bad faith. 
 
          In his Reply, Rocha introduced a new argument, i.e., that he should not be held jointly liable with C.F. Sharp
considering that the company has a separate personality.  Rocha argues that there is no showing in the Complaint
that he had participated in the malicious act complained.  He adds that his liability only stems from the Indemnity
Agreement with Pioneer Insurance and does not extend to respondents.
 
          Records disclose that Rocha was first impleaded in the case by Pioneer Insurance.  Pioneer Insurance, as
surety, was sued by respondents together with C.F. Sharp.  Pioneer Insurance in turn filed a third party complaint
against Rocha on the basis of an Indemnity Agreement whereby he bound himself to indemnify and hold harmless
Pioneer Insurance from and against any and all damages which the latter may incur in consequence of having
become a surety.[5]  The third party complaint partakes the nature of a cross-claim. 
 
C.F. Sharp, as defendant-appellant and Rocha, as third-party defendant-appellant, filed only one brief before
the Court of Appeals essentially questioning the declaration of the trial court that non-deployment is tantamount to
breach of contract and the award of damages.  The Court of Appeals found them both liable for damages.  Both C.F.
Sharp and Rocha sought recourse before this Court via a Motion for Extension of Time (To File a Petition for
Review) on 19 September 2007. [6]  In the Petition for Review, however, C.F. Sharp was noticeably dropped as
petitioner.  Rocha maintains essentially the same argument that he and C.F. Sharp were wrongfully adjudged liable
for damages.
 
It was only in its Reply dated 25 March 2008 that Rocha, through a new representation, suddenly forwarded
the argument that he should not be held liable as an officer of C.F. Sharp.  It is too late in the day for Rocha to
change his theory.  It is doctrinal that defenses not pleaded in the answer may not be raised for the first time on
appeal.  A party cannot, on appeal, change fundamentally the nature of the issue in the case. When a party
deliberately adopts a certain theory and the case is decided upon that theory in the court below, he will not be
permitted to change the same on appeal, because to permit him to do so would be unfair to the adverse party.
[7]
  More so in this case, where Rocha introduced a new theory at the Reply stage.  Disingenuousness may even be
indicated by the sudden exclusion of the name of C.F. Sharp from the main petition even as Rocha posited
arguments not just for himself and also in behalf of C.F. Sharp.
 
The core issue pertains to damages. 
 
The bases of the lower courts’ award of damages differ.  In upholding the perfection of contract between
respondents and C.F. Sharp, the trial court stated that the unjustified failure to deploy and subsequently release the
documents of respondents entitled them to compensatory damages, among others.  Differently, the appellate court
found that no contract was perfected between the parties that will give rise to a breach of contract.   Thus, the
appellate court deleted the award of actual damages.  However, it adjudged other damages against C.F. Sharp for
its unlawful withholding of documents from respondents.
 
          We sustain the trial court’s ruling.
 
          On the issue of whether respondents are entitled to relief for failure to deploy them, the RTC ruled in this wise:
 
           The contract of employment entered into by the plaintiffs and the defendant C.F. Sharp is an
actionable document, the same contract having the essential requisites for its validity.  It is worthy to
note that there are three stages of a contract: (1) preparation, conception, or generation which is the
period of negotiation and bargaining ending at the moment of agreement of the parties.
(2)  Perfection or birth of the contract, which is the moment when the parties come to agree on the
terms of the contract. (3) Consummation or death, which is the fulfillment or performance of the
terms agreed upon in the contract.
           
Hence, it is imperative to know the stage reached by the contract entered into by the plaintiffs
and C.F. sharp.  Based on the testimonies of the witnesses presented in this Court, there was
already a perfected contract between plaintiffs and defendant C.F. Sharp.  Under Article 1315 of the
New Civil Code of the Philippines, it states that:
 
xxxx
 
Thus, when plaintiffs signed the contract of employment with C.F. Sharp (as agent of the principal
WB Slough) consequently, the latter is under obligation to deploy the plaintiffs, which is the natural
effect and consequence of the contract agreed by them. [8]
 
We agree.
 
As correctly ruled at the trial, contracts undergo three distinct stages, to wit: negotiation; perfection or birth;
and consummation. Negotiation begins from the time the prospective contracting parties manifest their interest in
the contract and ends at the moment of agreement of the parties. Perfection or birth of the contract takes place
when the parties agree upon the essential elements of the contract. Consummation occurs when the parties fulfill or
perform the terms agreed upon in the contract, culminating in the extinguishment thereof. [9]
 
Under Article 1315 of the Civil Code, a contract is perfected by mere consent and from that moment the
parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences
which, according to their nature, may be in keeping with good faith, usage and law. [10]
 
An employment contract, like any other contract, is perfected at the moment (1) the parties come to agree
upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties, (b) object
certain which is the subject matter of the contract and (c) cause of the obligation. [11]
 
We have scoured through the Contract of Employment and we hold that it is a perfected contract of
employment.  We reproduce below the terms of the  Contract of Employment for easy reference:
 
WITNESSETH
 
That the Seafarer shall be employed on board under the following terms and conditions:
 
1.1  Duration of Contract: 3 month/s
1.2  Position:  SANDBLASTER/PAINTER
1.3  Basic Monthly Salary:   $450.00 per month
1.4  Living Allowances:   $0.00 per month
1.5  Hours of Work:  48 per week
1.6  Overtime Rate:  $439.00 per month
1.7  Vacation Leave with Pay: 30.00 day/s per month on board
 
The terms and conditions of the Revised Employment Contract for seafarers governing the
employment of all Filipino seafarers approved by the POEA/DOLE on July 14, 1989 under
Memorandum Circular No. 41  series of 1989 and amending circulars relative thereto shall be strictly
and faithfully observed.
 
Any alterations or changes, in any part of this Contract shall be evaluated, verified,
processed and approved by the Philippine Overseas Employment Administration (POEA).  Upon
approval, the same shall be deemed an integral part of the Standard Employment Contract (SEC) for
seafarers.
  
All claims, complaints or controversies relative to the implementation and interpretation of
this overseas employment contract shall be exclusively resolved through the established Grievance
Machinery in the Revised Employment Contract for seafarers, the adjudication procedures of the
Philippine Overseas Employment Administration and the Philippine Courts of Justice, in that order.
 
Violations of the terms and conditions of this Contract with its approved addendum shall
warrant the imposition of appropriate disciplinary or administrative sanctions against the erring party.
 
The Employee hereby certifies that he had received, read or has had explained to him and
fully understood this contract as well as the POEA revised Employment Contract of 1989 and the
Collective Bargaining Agreement (CBA) and/or company terms and conditions of employment
covering this vessel and that he is fully aware of and has head or has had explained to him the terms
and conditions including those in the POEA Employment Contract, the CBA and this contract which
constitute his entire agreement with the employer.
 
The Employee also confirms that no verbal or other written promises other than the terms
and conditions of this Contract as well as the POEA Revised Employment Contract, the CBA and/or
company terms and conditions had been given to the Employee.  Therefore, the Employee cannot
claim any additional benefits or wages of any kind except those which have been provided in this
Contract Agreement.[12]
 
By the contract, C.F. Sharp, on behalf of its principal, International Shipping Management, Inc., hired
respondents as Sandblaster/Painter for a 3-month contract, with a basic monthly salary of US$450.00.   Thus, the
object of the contract is the service to be rendered by respondents on board the vessel while the cause of the
contract is the monthly compensation they expect to receive.  These terms were embodied in the Contract of
Employment which was executed by the parties.  The agreement upon the terms of the contract was manifested by
the consent freely given by both parties through their signatures in the contract.  Neither parties disavow the consent
they both voluntarily gave.  Thus, there is a perfected contract of employment.
 
The Court of Appeals agreed with the submission of C.F. Sharp that the perfection and effectivity of the
Contract of Employment depend upon the actual deployment of respondents.  It based its conclusion that there was
no perfected contract based on the following rationale:
 
The commencement of the employer-employee relationship between plaintiffs-appellees and
the foreign employer, as correctly represented by C.F. Sharp requires that conditions under Sec. D
be met.  The Contract of Employment was duly “Verified and approved by the POEA.” Regrettably,
We have painfully scrutinized the Records and find no evidence that plaintiffs-appellees were
cleared for travel and departure to their port of embarkation overseas by government
authorities.  Consequently, non-fulfillment of this condition negates the commencement and
existence of employer-employee relationship between the plaintiffs-appellees and C.F.
Sharp.  Accordingly, no contract between them was perfected that will give rise to plaintiffs-
appellees’ right of action.  There can be no breach of contract when in the first place, there is no
effective contract to speak of. For the same reason, and finding that the award of actual damages
has no basis, the same is hereby deleted. [13]
 
The Court of Appeals erred.
 
The commencement of an employer-employee relationship must be treated separately from the perfection of
an employment contract.  Santiago v. CF Sharp Crew Management, Inc.,[14] which was promulgated on 10 July
2007, is an instructive precedent on this point.  In said case, petitioner was hired by respondent on board “MSV
Seaspread” for US$515.00 per month for nine (9) months, plus overtime pay.  Respondent failed  to deploy
petitioner from the port of Manila to Canada.   We made a distinction between the perfection of the employment
contract and the commencement of the employer-employee relationship, thus:
 
The perfection of the contract, which in this case coincided with the date of execution
thereof, occurred when petitioner and respondent agreed on the object and the cause, as well as the
rest of the terms and conditions therein. The commencement of the employer-employee relationship,
as earlier discussed, would have taken place had petitioner been actually deployed from the point of
 hire. Thus, even before the start of any employer-employee relationship, contemporaneous with the
perfection of the employment contract was the birth of certain rights and obligations, the breach of
which may give rise to a cause of action against the erring party. [15]
         
Despite the fact that the employer-employee relationship has not commenced due to the failure to deploy
respondents in this case, respondents are entitled to rights arising from the perfected Contract of Employment, such
as the right to demand performance by C.F. Sharp of its obligation under the contract. 
 
The right to demand performance was a categorical pronouncement in Santiago which ruled that failure to
deploy constitutes breach of contract, thereby entitling the seafarer to damages:
 
Respondent’s act of preventing petitioner from departing the port of Manila and boarding
“MSV Seaspread”   constitutes a breach of contract, giving rise to petitioner’s cause of action.
Respondent unilaterally and unreasonably reneged on its obligation to deploy petitioner and must
therefore answer for the actual damages he suffered.
We take exception to the Court of Appeals’ conclusion that damages are not recoverable by
a worker who was not deployed by his agency. The fact that the POEA Rules are silent as to the
payment of damages to the affected seafarer does not mean that the seafarer is precluded from
claiming the same.  The sanctions provided for non-deployment do not end with the suspension or
cancellation of license or fine and the return of all documents at no cost to the worker.  They do not
forfend a seafarer from instituting an action for damages against the employer or agency which has
failed to deploy him.[16]
 
The appellate court could not be faulted for its failure to adhere to Santiago considering that the Court of
Appeals Decision was promulgated way back in 2003 while Santiago was decided in 2007.  We now
reiterate Santiago and, accordingly, decide the case at hand.
 
We respect the lower courts’ findings that C.F. Sharp unjustifiably refused to return the documents submitted
by respondent. The finding was that C.F. Sharp would only release the documents if respondent would sign a
quitclaim.  On this point, the trial court was affirmed by the Court of Appeals.  As a consequence, the award by the
trial court of moral damages must likewise be affirmed.
 
Moral damages may be recovered under Article 2219 of the Civil Code in relation to Article 21. The pertinent
provisions read:
 
Art. 2219. Moral damages may be recovered in the following and analogous cases:
 
xxxx
 
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.
 
xxxx
 
Art. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage.
 
 
We agree with the appellate court that C.F. Sharp committed an actionable wrong when it unreasonably
withheld documents, thus preventing respondents from seeking lucrative employment elsewhere.  That C.F. Sharp
arbitrarily imposed a condition that the documents would only be released upon signing of a quitclaim is tantamount
to bad faith because it effectively deprived respondents of resort to legal remedies.
Furthermore, we affirm the award of exemplary damages and attorney’s fees.  Exemplary damages may be
awarded when a wrongful act is accompanied by bad faith or when the defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner which would justify an award of exemplary damages under Article 2232
of the Civil Code.  Since the award of exemplary damages is proper in this case, attorney’s fees and cost of the suit
may also be recovered as provided under Article 2208 of the Civil Code. [17]
 
 WHEREFORE, the petition is DENIED.  The Decision dated 27 June 1996 of the Regional Trial Court of
Pasay City isREINSTATED. Accordingly, the Decision dated 30 October 2003 of the Court of Appeals
is MODIFIED. 
 
SO ORDERED.