Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 102358 November 19, 1992

SPOUSES VICENTE and GLORIA MANALO, petitioners,
vs.
HON. NIEVES ROLDAN-CONFESOR, in her capacity as
Undersecretary of Labor and Employment, JOSE SARMIENTO
as POEA Administrator, CAREERS PLANNERS SPECIALISTS
INTERNATIONAL, INC., and SPOUSES VICTOR and ELNORA
FERNANDEZ, respondents.

BELLOSILLO, J.:
The Court views with grave concern the alarming incidents of
illegal recruitment which demonstrate all too clearly that
overseas employment has fast developed into a major source
not only of much-needed foreign exchanged but also, for the
cunning and the crafty, of easy money.
In response to a newspaper advertisement looking for a couple
to work as driver and tutor cum baby sitter, petitioners Vicente
and Gloria Manalo went to Career Planners Specialists
International, Inc. (CPSI), a licensed service contracting firm
owned by private respondents, the spouses Victor and Elnora
Fernandez. After the requisite interview and testing, they were
hired to work for a family in Saudi Arabia for a monthly salary of
US$350.00 each. According to petitioners, a placement fee of
P40,000.00 was imposed as a precondition for the processing of
their papers. They paid only P30,000.00 in cash and executed a
promissory note for the balance. Then they were allowed by

respondent Elnora Fernandez to sign their contract papers but

did not issue a receipt for the placement fee despite demand.
Shortly before boarding their flight to Saudi Arabia, petitioners
were handed their contracts. According to Gloria, she was
surprised to discover that her position had been changed to that
of domestic help. However, a CPSI employee assured her that
the change was only for the purpose of facilitating her departure
and did not in any way alter her employment as tutor.
Incidentally, CPSI provided petitioners with the Travel Exit Pass
(TEP) of Filipino Manpower Services, Inc. (FILMAN), a duly
licensed recruitment agency.
Contrary to the representation of her recruiter, Gloria was
actually hired as a domestic help and not as a tutor, so that after
working for only twenty-five (25) days in Jeddah, she returned to
Manila. Soon after, Vicente also resigned from his work and
followed her home. He could not stand the unbearable working
conditions of his employment. However, before leaving, he had
to execute a promissory note to cover his plane fare which
respondent Victor Fernandez advanced. Vicente also had to
sign a quitclaim in favor of CPSI and his employer.
On 29 February 1988, petitioners sued private respondents
before the Philippines Overseas Employment Administration
(POEA) charging them with illegal exaction, 1 false
adverstisement, 2 and violation of other pertinents laws, rules
and regulations. They demanded the refund of the amount
exacted from them, plus payment of moral damages and the
imposition of administrative sanctions. 3
Private respondents countered: (1) that Gloria applied as
domestic help fully aware that she could not be a tutor since she
did not speak Arabic; (2) that the promissory note for
P10,000.00 was required of petitioners because they were hired
without paying placement fees; (3) that it was unlikely for
petitioners, who were mature, educated and experienced in
overseas work, to part with P30,000.00 without securing a

receipt; (4) that Vicente executed a quitclaim in favor of CPSI

duly authenticated by embassy officials in Saudi Arabia; (5) that
there was no impropriety in having the employment papers of
petitioners processed by FILMAN because it was a sister
company of CPSI, and private respondents Victor and Elnora
were officers in both agencies.
Private respondents prayed for the disqualification of petitioners
from overseas employment, and sought to recover from them
the SR 1,150 plane fare advanced by Victor for Vicente,
P10,000.00 as placement fee evidenced by a promissory note,
and attorney's fees.
Mainly, on the basis of the transcripts of petitioners' testimonies
in the clarificatory questioning before the Rizal Provincial
Prosecutor in a related criminal case, 4 the POEA issued its
Order of 7 May 1990 giving more weight and credence to
petitioners' version thus
After a careful evaluation of the facts and the evidence
presented, we are more inclined to give weight to complainants'
posture. Complainants' version of the case spontaneously
presented in their pleadings is, to our mind, more convincing
than respondent's stand. Moreover, the manner by which
complainants narrated the whole incident inspired belief in the
allegation that respondent Career is indeed guilty of illegal
exaction. Thus, the actual expenses incurred by herein
complainants computed hereinbelow less the allowable fees of
P3,000.00 (P1,500.00 per worker, respondent being a service
contractor) should be returned to them.
Actual Expenses
P30,000.00 placement fees
14.00 application form
300.00 psychological test
1,400.00 medical exam
P31,000.00 total

less 3,000.00 processing fees at

P1,500.00 per applicant
P28,714.00 amount to be refunded
It appearing, however, that only respondent Career Planners
Specialist(s) Int'l. Inc., took part in the collection of the aforesaid
amount, the same should be solely held liable.
We cannot likewise give credence to the Final Quitclaim signed
by complainant Vicente Manalo before he left for the Philippines
and presented by respondent as defense. While its genuineness
may not be in question, we believe that it has no bearing on the
issue at bar. The aforesaid Quitclaim deals more with matters
concerning complainants' employment abroad. However, the
subject of the instant claim is the refund of complainants'
expenses prior to their deployment to Saudi Arabia.
On the other hand, we hold FILMAN liable for allowing its
document such as the TEP to be used by other agency.
Respondent's defense that there is nothing wrong in this
because FILMAN is a sister company of CAREER does not
merit consideration because such practice is not allowed under
the POEA Rules and Regulations. A check with our records,
however, showed that respondent FILMAN had been put in the
list of forever banned agencies effective April 5, 1989.
Anent the claim for moral damages, this Office has no
jurisdiction to entertain the same.
WHEREFORE, . . . the Authority of Career Planners
Specialist(s) International is hereby suspended for four (4)
months or in lieu thereof, a fine of P40,000.00 is hereby
imposed for illegal exaction on two counts plus restitution of the
amount of P28,714.00 to herein complainants in both instances.
Filipino Manpower Services, Inc. is hereby meted a fine of
P40,000.00 for two counts of misrepresentation. Its perpetual
disqualification from recruitment activities is hereby reiterated.

The claim for moral damages is dismissed for lack of

jurisdiction.

We find . . . no cogent reason or sufficient justification to reverse

or modify the assailed Order.

Respondent Career's counterclaim is likewise dismissed or lack

of merit. 5

Records reveal that the only basis for holding respondent

Career Planners Specialist(s) International, Inc., liable for illegal
exaction, as held in the previous POEA Order dated May 7,
1990 was the uncorroborated testimony of the complainants.
There was no concrete evidence or proof to support the POEA
Administrator's initial findings.

Private respondents filed a motion for reconsideration and on 4

February 1991, POEA issued a resolution setting arise its earlier
order stating that
It is worth mentioning at this point that our sole basis for holding
respondent Career liable for illegal exaction was the
uncorroborated testimony of the complainants.
As we have consistently held, (the) charge of illegal exaction is
a serious charge which may cause the suspension or
cancellation of the authority or license of the offending agency.
Hence, it should be proven and substantiated by a clear and
convincing evidence. Mere allegation of complainant that the
agency charged more than the authorized fee will not suffice to
indict the agency for illegal exaction unless the allegation is
supported by other corroborative circumstantial evidence.
Thus, for lack of concrete evidence or proof to support our initial
findings, we are inclined to reconsider the penalty imposed upon
respondent.
Foregoing premises, the penalty of suspension imposed upon
respondent Career Planners Specialist(s) International, Inc.
pursuant to our Order dated May 7, 1990 is hereby LIFTED.
Accordingly, the alternative fine of P40,000.00 which was paid
under protest by respondent is hereby ordered refunded to
them. 6
Petitioners appealed to the Secretary of Labor. On 5 July 1991,
then Undersecretary of Labor Ma. Nieves Roldan-Confesor
(now Secretary of Labor) sustained the reconsideration of
POEA. Her Order reads in part

We take this opportunity to inform the complainants that the

charge of illegal exaction is a serious charge which may cause
the suspension or cancellation of the authority or license of a
recruitment agency. Therefore, said charge must be proven and
substantiated by clear and convincing evidence. A mere
allegation will not suffice to find an agency liable for illegal
exaction unless said allegation is supported by other
corroborative circumstantial evidence. In this connection,
records show that complainants could not narrate the specific
circumstances surrounding their alleged payment of the amount
of P30,000.00. They could not even remember the specific date
when said amount was paid to respondent agency. In addition,
when complainants were separately questioned as to how the
money was kept bundled together prior to being handed to
respondent agency for payment, Gloria Manalo said it was
wrapped in a piece of paper while Vicente Manalo said it was
placed inside an envelope. 7
On the charge of petitioners that they were given jobs
(driver/domestic help) different from those advertised by private
respondents, the Undersecretary ruled that there was no
misrepresentation by way of false advertisement because it was
established that private respondents also caused to be printed
in the same newspaper page a second box looking for a couple
driver/domestic help.

In her Order of 9 October 1991, then Undersecretary Ma.

Nieves Roldan-Confesor denied petitioners' motion for
reconsideration. 8
In the present recourse, petitioners claim that public respondent
POEA committed a fatal jurisdictional error when it resolved
private respondents' motion for reconsideration in violation of
Rule V, Book VI of the 1985 POEA Rules and Regulations
directing the transmittal of motions for reconsideration to the
National Labor Relations Commission (NLRC) for determination.
Consequently, for want of legal competence to act on said
motion, the Order of 4 February 1991, as well as the
subsequent orders of public respondent Undersecretary of
Labor dated 5 July 1991 and 9 October 1991, is null and void.
In Aguinaldo Industries Corporation v. Commissioner of Internal
Revenue 9 We ruled
To allow a litigant to assume a different posture when he comes
before the court and challenge the position he had accepted at
the administrative level, would be to sanction a procedure
whereby the court which is supposed to review administrative
determinations would not review, but determine and decide
for the first time, a question not raised at the administrative
forum. This cannot be permitted, for the same reason that
underlies the requirement of prior exhaustion of administrative
remedies to give administrative authorities the prior opportunity
to decide controversies within its competence, and in much the
same way that, on the judicial level, issues not raised in the
lower court cannot be raised for the first time on appeal.
The alleged procedural lapse by respondent POEA was raised
by petitioners only before Us, notwithstanding that such ground
was already existing when they appealed to the Secretary of
Labor. Ironically, petitioners now question the jurisdiction of the
Secretary of Labor over the appeal which they themselves
elevated to that office. When petitioners filed their motion for
reconsideration with the Undersecretary of Labor, this

procedural issue was not even mentioned. Clearly, it would be

the height of unfairness and inequity if We now allow petitioners
to backtrack after getting an unfavorable verdict from public
respondents whose authority they themselves involved. In Tijam
v. Sibonghanoy 10 We said: ". . . we frown upon the
"undesirable practice" of a party submitting his case for decision
and then accepting the judgment, only if favorable, and
attacking it for lack of jurisdiction, when adverse . . . ."
In this regard, however, We find no procedural infirmity
constituting reversible error.
The 1985 POEA Rules and Regulations 11 is divided into eight
(8) Books. Book VI, cited by petitioners, is entitled "Adjudication
Rules". The procedure outlined therein relates to the original
and exclusive jurisdiction exercised by POEA through its
Adjudication Department "to hear and decide all cases involving
employer-employee relations arising out of or by virtue of a law
or contact involving Filipino workers for overseas employment,"
involving "[v]iolation of the terms and conditions of employment .
. . . [d]isputes relating to the implementation and interpretation
of employment contracts . . . [m]oney claims of workers against
their employers and/or their duly authorized agents in the
Philippines or vice versa . . . . [c]laims for death, disability and
other benefits arising out of employment . . . . and . . . .
[v]iolations of our non-compliance with any compromise
agreement entered into by and between the parties in an
overseas employment contract."
On the other hand, Book II entitled "Licensing and Regulations"
of the 1985 POEA Rules and Regulations, notably Rule VI cited
by private respondents, refers particularly to the procedure for
suspension, cancellation and revocation of Authority or License
12 through the POEA Licensing and Regulation Office (LRO).
The controversy in the present case centers on the liability of
private respondents for illegal exaction, false advertisement and
violation of pertinent laws and rules on recruitment of overseas

workers and the resulting imposition of penalty of suspension of

the Authority of respondent CPSI. Quite plainly, We are not
concerned here with employer-employee relations, the
procedure of which is outlined in Book VI; rather, with the
suspension or revocation of Authority embodied in Book II.
Evidently, no jurisdictional error was accordingly committed
because in cases affecting suspension, revocation or
cancellation of Authority, the POEA has authority under Sec. 18,
Rule VI, Book II, to resolve motions for reconsideration which
may thereafter be appealed to the Secretary of Labor. Section
18, provides: "A motion for reconsideration of an order o
suspension (issued by POEA) or an appeal to the Minister (now
Secretary of Labor) from an order cancelling a license or
authority may be entertained only when filed with the LRO within
ten (10) working days from the service of the order or decision"
(parenthesis supplied).
Petitioners also argue that public respondents gravely abused
their discretion when they violated petitioners' right to
administrative due process by requiring clear and convincing
evidence to establish the charge illegal exaction. This point is
well taken. There was grave abuse of discretion.
In the administrative proceedings for cancellation, revocation or
suspension of Authority or License, no rule requires that
testimonies of complainants be corroborated by documentary
evidence, if the charge of unlawful exaction is substantially
proven. All administrative determinations require only
substantial proof and not clear and convincing evidence as
erroneously contended by pubic respondents.
Clear and convincing proof is ". . . more than mere
preponderance, but not to extent of such certainty as is required
beyond reasonable doubt as in criminal cases . . ." 13 while
substantial evidence ". . . consists of more than a mere scintilla
of evidence but may be somewhat less than a preponderance . .
. ." 14 Consequently, in the hierarchy of evidentiary values, We

find proof beyond reasonable doubt at the highest level,

followed by clear and convincing evidence, preponderance of
evidence, and substantial evidence, in that order.
That the administrative determination of facts may result in the
suspension or revocation of the authority of CPSI does not
require a higher degree of proof. The proceedings are
administrative, and the consequent imposition of
suspension/revocation of Authority/License does not make the
proceedings criminal. Moreover, the sanctions are
administrative and, accordingly, their infliction does not give rise
to double jeopardy when a criminal action is instituted for the
same act.
Thus We held in Atlas Consolidated Mining and Development
Corporation v. Factoran, Jr. 15
. . . it is sufficient that administrative findings of fact are
supported by evidence, or negatively stated, it is sufficient that
findings of fact are not shown to be unsupported by evidence.
Substantial evidence is all that is needed to support an
administrative finding of fact, and substantial evidence is such
relevant evidence as a reasonable mind might accept as
adequate to support a conclusion (Ang Tibay v. Court of
Industrial Relations, 69 Phil. 635, 642; Police Commission v.
Lood, 127 SCRA 762 [1984].
The POEA, after assessing the evidence of both parties, found
that private respondents collected from petitioners P30,000.00
as placement fees; consequently, it ruled that there was illegal
exaction. Surprisingly, without altering its findings of fact, POEA
reconsidered its order. It held that uncorroborated testimonies
were not enough to conclude that illegal exaction was
committed, particularly so that this might result in the
suspension or revocation of respondents' authority to engage in
recruitment activities. The premise that testimonies of petitioners
should be supported by some other form of evidence is, to say
the least, fallacious. In Castillo v. Court of Appeals, 16 where the

appellate court reversed the findings of fact of the trial court by

requiring a higher degree of proof, We held

and a bare denial on the other, the former is generally held to

prevail . . . ." 17 applies.

. . . we find no strong and cogent reason which justifies the

appellate court's deviation from the findings and conclusions of
the trial court. As pointed out in Hernandez v. Intermediate
Appellate Court (189 SCRA 758 [1990]), in agrarian cases, all
that is required is mere substantial evidence. Hence, the
agrarian court's findings of fact which went beyond the minimum
evidentiary support demanded by law, that is, supported by
substantial evidence, are final and conclusive and cannot be
reversed by the appellate tribunal.

But even on the supposition that there was no payment of

P30,000.00, it cannot be denied that private respondents
required petitioners to execute a promissory note for
P10,000.00 purportedly because petitioners were hired without
paying placement fees. The mere charging of P10,000.00,
standing alone, is enough to hold private respondents
answerable for illegal exaction because the allowable amount to
be collected per contract worker according to respondent POEA
was only P1,500.00, or P3,000.00 for both petitioners.

The seeming discrepancy in the statements of the witnesses

(one saying the money was wrapped in paper, the other, that the
money was in an envelope; neither testified on the specific date
of the exaction), refers only to minor details. Perhaps it would be
different if the variance refers to essential points, e.g., whether
the amount of P30,000.00 was actually paid by petitioners to
private respondents. Consequently, whether the money was
wrapped in paper, or placed in an envelope, or unwrapped or
whether the parties could not recall when there payment was
effected is unimportant. After all, the money could have been
wrapped in paper and placed in the envelope, or placed in the
envelope without being wrapped, or wrapped with use of an
unpasted envelope that appeared to be the envelope itself. In
either case, petitioners, could have viewed them differently; but
the difference is ultimately inconsequential. The crucial point to
consider is that the petitioners categorically and unequivocally
testified that respondents collected from them the amount of
P30,000.00 as their placement fees and that they paid the
amount demanded. In this regard, it may be worth to emphasize
that only substantial evidence, not necessarily clear and
convincing evidence, is required. Moreover, when confronted
with conflicting assertions, the rule that "as between a positive
and categorical testimony which has a ring of truth on one hand,

WHEREFORE, the petition is GRANTED. The challenged

Orders of respondent Undersecretary of Labor dated 5 July
1991 and 9 October 1991, as well as the Resolution of
respondent POEA dated 4 February 1991, having been issued
with grave abuse of discretion amounting to lack or excess of
jurisdiction are SET ASIDE, and the original Order of respondent
POEA dated 7 May 1990 is ordered REINSTATED and
AFFIRMED.
SO ORDERED.

DIGEST
Spouses Vicente and Gloria Manalo vs. Hon. Nieves
Roldan-Confessor et.al
FACTS: Petitioners sued private respondents for illegal
exaction, false advertisement and violation of other pertinent
labor laws, rules and regulations. In its May 7, 1990 Order,
POEA suspended the authority of Career Planners Specialists
International, Inc. (CAREER), for four months for illegal exaction
or in lieu thereof, a fine of P 40,000.00 was imposed plus
restitution of P 28,714.00 to petitioner spouses, meted on
respondent therein Filipino Manpower Services Inc. (FILMAN),

also a fine of P 40,000.00 for misrepresentation, and reiterated

its perpetual disqualification from recruitment activities.
However, the POEA reversed itself on the penalty imposed on
illegal exaction reasoning that clear and convincing evidence
was necessary to justify the suspension of the authority/license
of CPSI. On appeal, Undersecretary Confessor sustained POEA
in reversing itself and held that the charge of illegal exaction
should be supported by other corroborative circumstantial
evidence and denied the motion for reconsideration of the
petitioners as well.
ISSUES: 1. What evidence is necessary to establish
administrative findings of fact?
2. Whether or not the failure of the petitioners to state
in their testimonies the exact date of payment of the recruitment
fee is to be considered?
3. Whether or not POEA committed grave abuse of
discretion in reversing its decision?

RULINGS: 1. Only substantial evidence is required to establish

administrative findings of fact. This holds true even if the
determination may result in the suspension of authority or
license to operate a particular line of business and will not justify
requiring a higher degree of proof.
2. NO. What is important is that peso bills were
delivered to and received by respondent-spouses. Further
stated, with the payment of a check for P10, 000.00, charge of
unlawful exaction was clearly established since according to the
POEA only P 3,000.00 was legally chargeable.
3. YES. In this case, public respondent reversed the
penalty, not on the basis that one version is more believable
than the other, but that the testimonies of complainants, after
describing them to be more convincing that respondents stand
and which inspired belief, were not clear and convincing. Thus,
to that extent, public respondents committed grave abuse of
discretion correctable by certiorari.