PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v.

BALTAZAR DE LEON and MARIETTA DE LEON

@ "BENJIE," accused. BALTAZAR DE LEON, Accused-Appellant.

The Solicitor General for plaintiff appellee.

Reynaldo S. Fajardo, Al A. Cosata & Bartolome P. Reus for Accused-Appellant.

DECISION

DAVIDE, JR., J.:

This case involves the crime of illegal recruitment. At its bottom are the hapless citizens in search of a
better life who still fall victim to the false promise of employment in foreign lands and the inhumanity of
illegal recruiters who prey upon the misfortunes of the former and make a mockery of the law.

In an information filed on 28 February 1991 by the Office of the Provincial Prosecutor of Rizal with the
Regional Trial Court (RTC) of Pasig, Metro Manila, and assigned to Branch 156 1 thereof, the accused
Baltazar de Leon and Marietta de Leon, alias "Benjie," who are husband and wife, were charged with "the
crime of Illegal Recruitment under P.D. No. 2018 (Large Scale)" in that: jgc:chan rob les.com. ph

". . . on or about the period comprised of the month of August and September, 1990 in the Municipality
of Tagig, Metro Manila, Philippines, and within the jurisdiction of this Honorable Court the above-named
accused, representing themselves to have the capacity to contract, enlist and transport Filipino workers
[for] employment abroad conspiring and confederating together and mutually helping and aiding with
one another, did then and there willfully, unlawfully and feloniously, for a fee recruit and promise
employment/job placement abroad [to] the following persons to wit: chanro b1es vi rt ual 1aw li bra ry

Francisco Beo P6,380.00

Lourdes Raya Bernabe P6,700.00

Cesar Cortez P4,505.00

Eugenia Panganiban Cruz P6,380.00

Alfredo Gutierrez P4,505.00

Daniel Perez P6,380.00

Lourdes Perez P3,000.00

without first securing the required license or authority from the Department of Labor and Employment,
by falsely representing to the said persons that they were in a position to obtain overseas jobs from them
and in violation of the aforementioned law against Illegal Recruitment committed in large scale and
amounting to economic sabotage. chanrob les vi rtualaw lib rary c hanro bles. com:chan rob les.com. ph

CONTRARY TO LAW." 2

Only Baltazar de Leon was arrested. Marietta de Leon remains at large up to the present. The former
entered a plea of not guilty at his arraignment on 2 April 1991 3 and the trial on the merits proceeded
with respect to him.

In its decision promulgated on 7 April 1992, the trial court 4 found Baltazar de Leon guilty as charged and
decreed as follows: jgc:chanrob les.c om.ph

"WHEREFORE, premises considered, the Court finds the accused BALTAZAR DE LEON guilty beyond
reasonable doubt of the crime of Illegal Recruitment (in Large Scale) constituting economic sabotage and
hereby sentences said accused BALTAZAR DE LEON to suffer the penalty of life imprisonment, to pay a
fine of ONE HUNDRED THOUSAND PESOS (P100,000.00), to reimburse the complainant-victims, namely:
Francisco Beo through Flordeliza Beo in the amount of P6,380.00; Lourdes Raya-Bernabe in the amount
of P6,700.00; Cesar Cortez in the amount of P3,505.00; Eugenia Panganiban-Cruz in the amount of
P6,380.00; Alfredo Gutierrez in the amount of P3,500.00; Daniel and Lourdes Perez in the amount of
P5,000.00 plus P1,380.00 through Noeta Perez and to pay the costs.

In the service of his sentence, the accused shall be credited in full with the period of his preventive
imprisonment.

Let alias warrant be issued for the arrest of accused MARIETTA DE LEON alias `Benjie, the same to be
served by the NBI, PNP/CIS and other national police agencies.

SO ORDERED." 5

The judgment of conviction is based upon the following findings and conclusion of the trial court: jgc:chanrobles. com.ph

"Clearly accused Baltazar De Leon is neither authorized nor licensed to recruit workers for overseas jobs
and yet he and his wife recruited workers, talked to the applicants and collected fees for requirements
that each applicant had to comply with in order that their applications may be processed. Although Mrs.
De Leon was more active in the recruitment, Accused Baltazar played an important part as both spouses
convincingly played out their roles resulting in the applicants reposing their trust and belief in them. It
is of little surprise that the complaining witnesses conclusively identified accused Baltazar as the man
who recruited them or their relatives. Said witnesses even gave in evidence the list of requirements and
fees that they were told to pay. Said lists clearly show that a great deal of money was involved and
received by the accused. The charade played by both accused show a unity of purpose and unity in
execution of their unlawful objective establishing the existence of a conspiracy for which both accused
must suffer the same penalty. (People v. Talla, 181 SCRA 133)." 6

The summary by the People of the prosecutions evidence concerning the recruitment activities of the
appellant is hereby adopted, it being fully supported by the testimonies of the complaining witnesses: jgc:chanroble s.com.p h

"Camila del Rosario, who was a neighbor of appellant, told Noeta Perez, Eugene Panganiban, Elvira
Alonzo, Lourdes Bernabe, and one Ador, all of whom were working for the same employer, that del
Rosarios daughter was able to work abroad through the efforts of appellant and his wife (TSN, N. Perez,
June 26, 1991, p. 4)

On September 16, 1990, del Rosario, together with Noeta Perez and the latters sister Lourdes and
brother Daniel, went to appellants house in Pateros, Rizal. Noeta Perezs purpose in going to appellants
house was to apply for overseas jobs for her brother Daniel and sister Lourdes. When del Rosario, Noeta
Perez and her brother reached appellants house, they met appellant and his wife who informed them
that they have already sent persons to Micronesia who were hired as chambermaids and roomboys.
Noeta Perez then asked her sister and brother to apply, and she gave P1,380.00 to appellants wife (Id.,
pp. 5-6).chanroble s virtual law lib rary

The following day, September 17, 1990, appellants wife asked Daniel to go back together with Lourdes
to file their application and to undergo medical examination. On the same day, Daniel and Lourdes gave
appellant and his wife P2,500.00 for the passport, and, in addition, they paid P5,000.00 to appellant. For
helping Daniel and Lourdes get jobs abroad, appellant demanded P6,380.00 from each of the applicants
allegedly for the processing of the papers, medical examination, pictures and passport. Noeta Perez was
able to give P3,000.00 to appellant for her sister Lourdes application, but she was unable to give any
amount for Daniels application (Id., pp. 6-9).

Sometime in November, 1990, Noeta Perez received a letter from the National Bureau of Investigation
(`NBI) saying that the applications for overseas jobs sent to Micronesia were sent to the NBI because
there were no such job orders from Micronesia. Upon getting this information, Noeta, together with her
sister Lourdes and brother Daniel, went to the NBI which then confirmed the information. Evidently,
Lourdes and Daniel could not have gone to Micronesia since the alleged jobs offered to them by appellant
never existed (Id., pp. 9-11).

Cesar Cortez suffered a similar fate as that of Daniel and Lourdes Perez. Cortez came to know appellant
through a friend, Alfredo Gutierrez, who applied with appellant for an overseas job in Micronesia.
Because his friend applied, Cortez also applied with appellant for a job as roomboy in Micronesia. When
Cortez filed his application, appellant immediately required him to give P680.00 for alleged medical fee,
which Cortez paid. After paying the medical fee, appellants wife asked Cortez to pay P175.00 as
transportation fee for securing the passport. Then appellant asked P1,000.00 as downpayment for the
passport, which amount was paid to and received by appellants wife. In addition, Cortez paid P1,650.00,
which was received by appellants wife in the presence of appellant, for full payment of the passport.
Cortez gave these amounts to appellant or his wife between the second week of August, 1990 and second
week of September, 1990. Appellant promised Cortez that he could leave for Micronesia in the month of
September, 1990, and when this did not materialize, appellant promised again that Cortez could leave by
November, 1990. Cortez, however, was unable to leave for Micronesia for it turned out that appellant had
no business partner in Micronesia (TSN, C. Cortez, October 29, 1991, pp. 2-4). chanrobles law lib rary

Alfredo Gutierrez, a friend of Cortez, also applied with appellant for the job of driver in Guam. Gutierrez
knew appellant because a certain Mila introduced him to appellant who represented that he could send
workers abroad. The introduction occurred at appellants house in the first week of August, 1990.
Appellant asked for P680.00 allegedly for medical fee and pictures, which Gutierrez paid. Gutierrez was
required to give additional amounts, and the total amount he paid reached P3,500.00. He paid this
amount to appellant for the promised job as driver in Guam. Gutierrez, however, was unable to leave for
Guam because it turned out that there was no such job order in Guam (TSN, A. Gutierrez, October 21,
1991, pp. 2-4)." 7

The prosecution further proved through the unrebutted testimony of Elisa Roque, Senior Officer of the
Licensure Division of the Philippine Overseas Employment Administration (POEA), that the appellant
does not have any license or authority from the POEA to recruit workers for overseas employment. 8

On the other hand, there is nothing in the appellants brief testimony except the denial of the separate
accusations of the complaining witnesses and the assertion that he does not know anything about the
transactions between the complainants and his co-accused as he was always out of his residence at
daytime. He declared that he was employed as a driver by Reymar Advertising, which is owned by Mr.
Reynaldo Bucsit. He served as such daily from 8:00 a.m. to 5:00 p.m. and oftentimes worked from 6:30
p.m. to midnight as a driver of a passenger jeepney. 9 Mr. Bucsit testified that the appellant was his
driver from July 1987 to 22 November 1990 and that the latter worked" [s]ometimes four or five days in
a week because he had to rest after driving the whole day." 10

Immediately after the promulgation of the judgment, Baltazar de Leon (hereinafter referred to as the
appellant) filed his notice of appeal 11 and, in his main brief 12 filed on 27 November 1992, raised this
sole error allegedly committed by the trial court: jgc:chanro bles. com.ph

"THE COURT A QUO ERRED IN HOLDING THAT THE GUILT OF ACCUSED BALTAZAR DE LEON FOR THE
CRIME CHARGED WAS PROVEN BEYOND REASONABLE DOUBT." cralaw virtua1aw l ibra ry

We find no merit in this appeal.

Before proceeding any further, some observations on the information filed are in order.

The information charges the appellant with "the crime of Illegal Recruitment under P.D. No. 2018 (Large
Scale)." However, this decree merely further amended Articles 38 and 39 of the Labor Code 13 by making
large-scale illegal recruitment, i.e., committed against three or more persons individually or collectively,
a crime of economic sabotage and punishable with life imprisonment. More precisely then, the
information should have been for the violation of Article 38 in relation to Article 39 of the Labor Code, as
amended. Although this error seems to be innocuous since the body of the complaint recites the elements
of large-scale illegal recruitment, proof beyond reasonable doubt of which would sustain a conviction
under Articles 38 and 39 of the said Code, we, nevertheless, make these observations by way of advice
to prosecutors to exercise the greatest care in the preparation of informations. chanroble s.com:c ralaw:re d

The pertinent portions of Articles 38 and 39 of the Labor Code, as amended by P.D. No. 2018, read as
follows: jgc:chanrob les.co m.ph

"ART. 38. Illegal Recruitment. (a) Any recruitment activities, including the prohibited practices
enumerated under Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority
shall be deemed illegal and punishable under Article 39 of this Code. The Ministry of Labor and
Employment or any law enforcement officer may initiate complaints under this Article.

(b) Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense
involving economic sabotage and shall be penalized in accordance with Article 39 hereof.

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more
persons conspiring and/or confederating with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed
committed in large scale if committed against three (3) or more persons individually or as a group.

x x x
"ART. 39. Penalties. (a) The penalty of life imprisonment and a fine of One Hundred Thousand Pesos
(P100,000) shall be imposed if illegal recruitment constitutes economic sabotage as defined herein:"

x x x

Article 13 (b) of the same Code defines recruitment as follows: jgc:chanrob les.co m.ph

"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." cralaw virtua1aw l ibra ry

While among the prohibited practices enumerated in Article 34 of the said Code is: jgc:chanro bles. com.ph

"(b) To furnish or publish any false notice or information or document in relation to recruitment or
employment." cralaw virtua 1aw lib rary

And now to the merits of this appeal.

In support of the assigned error, the appellant contends that: (a) he did not transact business with any
one of the complaining witnesses nor did he receive any monetary consideration from them; (b) granting
for the sake of argument that his wife was engaged in illegal recruitment, there is no sufficient evidence
to prove that he acted in conspiracy with his wife; (c) he had no opportunity to engage in recruitment
because he was then employed as a driver by one Reynaldo Bucsit with a work schedule from 8:00 a.m.
to 5:00 p.m. and likewise worked as a driver of a passenger jeepney until midnight or the morning of the
following day; and (d) the complaining witnesses implicated him because he is the husband of Marietta
de Leon who allegedly recruited them but who is now at large.

Our own reading and evaluation of the testimonies of the complaining witnesses lead to no other
conclusion than that the appellant and his wife were co-conspirators in the illegal recruitment business
conducted in their residence with each contributing coordinative and cooperative acts to insure the
success of an enterprise that provided them with income for their mutual benefit and advantage. The
complainants separately came to the appellants residence on various dates because they were informed
by their co-workers that he and his wife were known to be recruiting for employment in Micronesia, Guam
and Singapore. In all the occasions when they came to his house, the appellant was always there.
Complainant Noeta Perez categorically declared that the appellant and his wife told her and her
companions that "they sent people abroad, in Micronesia, hired [sic] there as chambermaid and
roomboy" and that she gave the money demanded in connection with the application of her brother and
sister to Marietta in the presence of the appellant. 14 Complainant Eugenia Cruz declared that when she
and her companions, Elma Conde and Adelaida Cabungkay, were in the house of the appellant filling up
the papers in connection with their application for employment abroad, the latter "help [sic] us how to file
the papers given to" them and told them that they "would be receiving salary of $2.15/hour," and that
she gave P6,380.00 to Marietta in the presence of the appellant. 15 Complainant Flordeliza Beo testified
that when she accompanied her husband to apply for employment, the appellant explained to them the
terms of employment and was present when she gave the amount of P6,380.00 to Marietta. 16
Complainant Alfredo Gutierrez was directly introduced to the appellant by Mila and the appellant himself
asked from him various sums, amounting to P3,500.00, ostensibly in connection with his application for
employment, and personally received it from Alfredo. 17 Complainant Cesar Cortez was also directly
introduced to the appellant and paid the various sums demanded from him to Marietta in the presence of
the appellant. 18 Complainant Lourdes Bernabe testified that the appellant offered her the job of
domestic helper in Singapore, informed her of the requirements for her application, and, together with
his wife, received her payment of P2,500.00 purportedly for the processing of her papers. 19

All these acts of the appellant and his wife conclusively established a common criminal design mutually
deliberated upon and accomplished through coordinated moves. chanrobles v irt ual lawl ibra ry

Such acts constitute enlisting, contracting or procuring workers for or promising them overseas
employment, which are among the acts of recruitment embraced in Article 13(b) of the Labor Code, as
amended. The furnishing of the victims with certain documents which they were required to fill up
allegedly in connection with their overseas employment, which actually did not exist, also constitutes the
violation of paragraph (b), Article 34 of the same Code. Since the appellant does not have the license or
authority to recruit and he committed the said acts against at least three individuals, he is guilty of
large-scale illegal recruitment under Article 38, which offense is penalized with life imprisonment and a
fine of P100,000.00 in the succeeding Article 39.

We are not persuaded by the appellants contention that he could not have transacted business with the
complainants and participated in the activities of his wife because he was not in his residence during the
daytime in view of his employment at Reymar Advertising and his driving of a passenger jeepney after
working hours until midnight. He sets up, in effect, the defense of alibi. We have carefully searched for
a statement in his testimony in court as to the specific dates he was employed by Reymar Advertising. We
found none. Rather, it was his witness, Mr. Reynaldo Bucsit, who attempted to do so by claiming that the
appellant was his personal driver from July 1987 to 22 November 1990. 20 We then have a situation
where a party who claimed that it was impossible for him to have committed a crime because he was
somewhere else at the time of its commission did not even specifically and explicitly testify that the dates
when he was allegedly somewhere else coincided with the dates specified in the information and proven
by the evidence as the dates when the crime was committed. This is rather strange and only manifests
the weakness of his plea. In any case, the trial court disregarded the testimony of Mr. Bucsit. Settled is
the rule that a trial courts finding on the credibility of a witness is entitled to the highest degree of
respect and will not be disturbed on appeal in the absence of any showing that the said court overlooked,
misunderstood or misapplied some facts or circumstances of weight and substance which would have
affected the result of the case. 21 But even if Mr. Bucsits testimony were to be given full faith, it discloses
that it was not at all impossible for the appellant to have met and transacted business with the
complainants or to have participated in the business of his wife since he drove for Mr. Bucsit for only four
or five days a week. The latter declared: jgc:chanroble s.com.p h

"Q In a week, how many days did he perform his job?

A Sometimes four or five days in a week because he had to rest after driving the whole day, sir." 22

Moreover, the appellant was positively identified by the complainants. It is axiomatic that alibi cannot
prevail over the positive identification of the accused. 23

Appellants final argument that the complainants filed the case against him in order to harass him and
compel him "to answer their money claims, after failing to recover from the real culprit," 24 is nothing but
a flimsy excuse which we cannot accept. As previously discussed, the appellant is a co-conspirator in the
crime of illegal recruitment, and in conspiracy the act of one is the act of all.25 cralaw:red

The decision appealed from is therefore fully supported by facts which established the guilt of the
appellant beyond reasonable doubt. chanroble s virtualawl ibra ry cha nrob les.co m:chan roble s.com.p h

We cannot end this case without some parting thoughts to conclude what we had stated at the beginning.
Something must be wrong somewhere if, in spite of the stiff penalties for illegal recruitment, some still
brazenly take advantage of the misery of others and profit from their misfortunes while many still fall for
the false promises of illegal recruiters despite the painful lessons the experiences of others have taught.
What is clear to us is that illegal recruiters cannot flout our laws and prey on the hard lot of others if the
Government had the will to resolutely enforce the laws against illegal recruitment and to be merciless
against the violators. They do not deserve any mercy. Large-scale illegal recruitment is a crime which is
not difficult to discover, prosecute and prove, for it cannot be done in absolute secrecy. That there must
be an end to illegal recruitment is a matter of public policy for not only must the State protect those who,
because of economic difficulties or lack of employment opportunities in the country, seek greener
pastures in foreign lands and from whose earnings the State itself benefits, it must also punish to the
fullest extent of the law illegal recruiters, especially those engaged in syndicated or large-scale illegal
recruitment, who continue to wreak havoc on our economy. It is thus earnestly wished that the
Government flex its muscles to eradicate this pernicious evil.

WHEREFORE, the judgment appealed from is hereby AFFIRMED in toto.

Costs against the Appellant.

SO ORDERED.

THIRD DIVISION
 [G.R. No. 142981. August 20, 2002]

PEOPLE OF THE PHILIPPINES, appellee, vs. CARMELITA

ALVAREZ, appellant.

DECISION
PANGANIBAN, J.:

In illegal recruitment, mere failure of the complainant to present written

receipts for money paid for acts constituting recruitment activities is not fatal to
the prosecution, provided the payment can be proved by clear and convincing
testimonies of credible witnesses.

The Case

Before us is an appeal from the January 28, 2000 Decision [1] of the
Regional Trial Court (RTC) of Quezon City, Branch 93, in Criminal Case No.
Q-94-58179. The assailed Decision disposed as follows:

WHEREFORE, the foregoing premises, the court finds the accused

CARMELITA ALVAREZ guilty of Illegal Recruitment committed in large
scale constituting economic sabotage. Accordingly, the court sentences her
to serve [the] penalty of life imprisonment and to pay a fine
[of] P100,000.00. She is further ordered to indemnify the following
complaining witnesses in the amounts indicated opposite their names:

Arnel Damian P 16,500.00

Joel Serna P 18,575 plus US$50.00
Antonio Damian P 6,975.00 plus US$50.00
Roberto Alejandro P 47,320.00 [2]

The July 18, 1994 Information[3] was filed by State Prosecutor Zenaida M.
Lim. It charged Carmelita Alvarez with illegal recruitment committed in large
scale, under Article 13(b) in relation to Articles 38(a), 34 and 39 of the Labor
Code of the Philippines, as follows:

That sometime between the period from November, 1993 to March, 1994, in
Quezon City, Metro Manila, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, did then and there willfully,
unlawfully and feloniously recruit the herein complainants, namely: JESUS
G. ESMA, JR., JOEL G. SERNA, ARNEL C. DAMIAN, ANTONIO C.
DAMIAN, RUBEN F. RIOLA, LORETA S. BOLOTAOLA, EDGAR R.
BARCENAS, DENO A. MANACAP, JERRY NEIL D. ABANILLA,
ROBERTO ALEJANDRO, ESTER S. BONDOC and JOSEPHINE
LOMOCSO as contractworkers in Taiwan for and in consideration of the
sum ranging from P12,300.00 to P48,600.00, as placement and processing
fees, and x x x which the complainants delivered and paid to herein accused
the said amount, without said accused first having secured the necessary
license or authority from the Philippine Overseas Employment
Administration.[4]

On arraignment, appellant, assisted by Atty. Donato Mallabo, pleaded not

guilty.[5] After trial in due course, the RTC rendered the assailed Decision.

The Facts
Version of the Prosecution

The evidence for the prosecution is summarized by the Office of the

Solicitor General (OSG) as follows:

Arnel Damian is one of the complainants in the case at bar. He testified that
he was introduced to appellant by Reynaldo Abrigo, who was then the
boyfriend of Teresita Gonzales (daughter of appellant Carmelita Alvarez) at
appellants house in 25-B West Santiago St., San Francisco del Monte,
Quezon City. During said meeting, appellant convinced complainant that if
he could produce [t]wenty-[f]ive [t]housand [p]esos (P25,000.00), he would
be deployed to Taiwan as a factory worker and would be receiving a salary
of $600.00.

On December 27, 1993, complainant gave appellant [t]welve [t]housand

[f]ive [h]undred [p]esos (P12,500) for which he was issued a receipt
(Exhibit A) with the words FOR PROCESSING FEE written therein by
appellant herself. Aside from the processing fee, complainant also gave
appellant [t]wo [t]housand [f]ive [h]undred [p]esos ([P]2,500.00) for
medical expenses and one thousand five hundred pesos (P1,500.00) for the
passport, but was not issued a receipt for said payments.

According to complainant, while waiting for the results of his medical

examination, he received a call informing him that appellant was arrested.
Becoming suspicious, complainant then went to the Philippine Overseas and
Employment Administration (POEA) to verify whether appellant had a
license to recruit. As per Certification issued by the POEA on June 1, 1994,
he found out that appellant was not licensed to recruit. Realizing that
appellant would never be able to send complainant to Taiwan, he filed a
complaint against appellant with the POEA.

On cross-examination, complainant clarified that Reynaldo Abrigo did not

actually introduce him to appellant, but merely gave appellants address and
telephone number. Thereafter, complainant went to appellants house
together with Ruben Riola and Michael Lumahan. In addition, complainant
stated under cross-examination that appellant told him that according to the
medical examination results, complainant was unfit to work. Consequently,
he demanded the return of his money but appellant failed to do so.

Antonio Damian is also one of the complainants in the case at bar. He

testified that he is the brother of Arnel Damian and that when his brother
failed the medical examination, his brother Arnel immediately demanded
from appellant the return of the processing fee. However, appellant could
not return the money to him anymore. Instead, appellant asked Arnel to look
for another applicant in order to save the processing fee. For which reason,
Arnel asked his brother Antonio to apply in his stead. During his first
meeting with appellant on January 4, 1994, complainant Antonio Damian
was asked to pay [t]wo [t]housand [f]ive [h]undred [p]esos (P2,500.00) for
medical examination. Subsequently, he also gave [n]ine [h]undred [p]esos
(P900.00) for insurance; [s]eventy-[f]ive [p]esos (P75.00) for Pre-departure
Orientation Seminar; [f]ifty [d]ollars ($50.00) as part of the processing fee;
and [t]hree [t]housand [f]ive [h]undred [p]esos (P3,500.00) for the birth
certificate. All of these were personally given to appellant but no receipts
were issued by appellant. As with all the other complainants, appellant
promised Antonio that he would work as factory worker in Taiwan and that
he would receive a salary of [t]wenty-[f]ive [t]housand [p]esos
(P25,000.00). After waiting for two (2) months, Antonio learned that
appellant was arrested. Hence, he filed his complaint with the POEA against
appellant.

Joel Serna came to know of appellant also through Reynaldo Abrigo. He

met appellant at her house at 25-B West Santiago St., San Francisco Del
Monte, Quezon City on February 8, 1994. Like the others, Joel was
promised employment in Taiwan as factory worker and was also asked to
pay various fees. Appellant gave him a list of the fees to be paid which
included: Processing fee P12,500.00; Medical examination P2,395.00;
Passport P1,500.00; Visa fee - $50.00; and Insurance P900.00. Appellants
telephone number was also included in said list. According to complainant
Joel, said list was personally prepared by appellant in his
presence. Complainant Joel paid the various fees but was never issued any
receipt for said payment despite demands from appellant. Upon learning that
appellant was arrested for illegal recruitment, he went to the POEA and filed
his complaint against appellant.

Roberto Alejandro testified that Onofre Ferrer, a provincemate, informed

him that there were applicants needed for the job in Taiwan. On March 6,
1994, both of them went to appellants house where complainant Roberto
was told by appellant that she had the capacity to send him to Taiwan but he
must first undergo medical examination.

Later, when Roberto was informed that he passed the medical examination,
appellant told him to bring [f]orty [t]housand [p]esos (P40,000) as
processing fee and other documentary requirements. A receipt was issued by
appellant for the payment of said amount.

On March 9, 1994 appellant advised him to pay an additional [f]ive

[t]housand (P5,000.00) which he personally delivered to appellant on March
11, 1994. A receipt was also issued by appellant for said amount.

After three (3) months of waiting and follow-up without any positive results,
complainant filed his complaint against appellant with the POEA.

David Umbao was presented on rebuttal by the prosecution and testified

that on June 1, 1994, an entrapment operation was conducted against
Carmelita Alvarez where Jerry Neil Abadilla and an agent by the name of
Conchita Samones gave appellant the amount of P5,000.00 with a P500.00
bill marked as payment for the renewal of the promise of deployment. After
appellant took the money, she was immediately apprehended. Two
witnesses were present during the entrapment operations, one from the
barangay and one from the homeowners association. The affidavit of
arrest setting out the details of the entrapment operation and the arrest was
collectively executed by the entrapment team. (Citations omitted)
[6]

Version of the Defense

In her Brief,[7] appellant submits her own version of the facts as follows:

CARMELITA ALVAREZ testified that sometime in 1991, she met

Director Angeles Wong at the Office of the Deputy Administrator of the
POEA, Manuel Quimson, who happened to be her compadre.Sometime in
November 1993, Director Wong called her about a direct-hire scheme from
Taiwan which is a job order whereby people who want to work abroad can
apply directly with the POEA. The said director told her that there were six
(6) approved job orders from Labor Attache Ellen Canasa. Seeing this as a
good opportunity for her son, Edelito Gonzales, who was then a new
graduate, she recommended him and his sons friends, namely, Reynaldo
Abrigo, Renato Abrigo and two others surnamed Lucena, for
employment. Unfortunately, Director Wong called off the scheduled
departure because the quota of workers for deployment was not met. To
remedy the situation, she approached Josephine Lomocso and a certain
recruiter named Romeo Dabilbil, who also recommends people to Director
Wong with ready passports. When the thirty (30) slots needed for the
direct-hiring scheme were filed up, Director Wong set the tentative schedule
of departure on February 23, 1994. In view of the said development, Mr.
Dabilbil contacted the recruits from Cebu who even stayed at her (Conchitas)
place in Capiz Street, Del Monte, Quezon City for three (3) days to one (1)
week while waiting to be deployed. On the night of their scheduled
departure and while they were having their despidida party, Director Wong
sent a certain Ross to inform them that a telex was received by him
informing him (Director Wong) that the factory where the recruits were
supposed to work was gutted by a fire. She was later advised by Director
Wong to wait for the deployment order to come from Taiwan. While the
people from Cebu were staying in her house waiting for development, the
accused even advised them to file a complaint against Mr. Dabilbil before
the Presidential Anti-Crime Commission at Camp Crame. Surprisingly, she
was also arrested for illegal recruitment on May 31, 1994 and thereafter
learned that on June 1, 1994, the Damian brothers filed a complaint against
her before the POEA. After her apprehension, the accused further testified
that there was some sort of negotiation between her lawyer, Atty. Orlando
Salutandre, and the apprehending officer, Major Umbao, regarding her
release. According to her, if she [would] be able to raise the amount of
[t]hirty [t]housand [p]esos (P30,000.00), Major Umbao [would] not
anymore refer her for inquest, but would only recommend her case for
further investigation and then she would be released.Since she failed to raise
the said amount, she was brought to the inquest fiscal.

REYNALDO ABRIGO testified that it was Director Angeles Wong who

was actually recruiting workers for deployment abroad because of a certain
document which Alvarez showed to them bearing the name of the said
POEA Official.

EDELITO GONZALES testimony merely corroborated the testimony of

defense witnesses Carmencita Alvarez and Reynaldo Abrigo.
 xxxxxxxxx

SUR-REBUTTAL EVIDENCE:

MARITES ABRIGO testified that while she was in the living room and her
mother, accused Carmelita Alvarez, was in her room inside their house on
May 31, 1994, a group of persons arrived and asked where her mother
was. After telling them that her mother was inside her room resting, a
certain Major Umbao, together with some other persons, went straight to her
mothers room and knocked on the door.When her mother opened it and
peeped through the opening of the door, they immediately grabbed her. She
was not able to do anything also, other than to tell them that she has to
consult first her lawyer.When her mother was brought to the POEA office
she was told that they have to produce P30,000.00. (Citations omitted)
[8]

Ruling of the Trial Court

The trial court accorded full credibility to the prosecution witnesses. It held
that complainants had not been impelled by ill motives in filing the case against
appellant. They all positively identified her as the person who, without the
requisite license from the government, had collected from them processing
and placement fees in consideration of jobs in Taiwan.
The trial court was convinced that appellant had deceived complainants by
making them believe that she could deploy them abroad to work, and that she
was thus able to milk them of their precious savings. The lack of receipts for
some amounts that she received from them did not discredit their
testimonies. Besides, her precise role in the illegal recruitment was adequately
demonstrated through other means.
Further affirming her illegal recruitment activities was the entrapment
conducted, in which she was caught receiving marked money from a certain
Jerry Neil Abadilla, to whom she had promised a job abroad.
Her defense that she merely wanted to provide jobs for her son-in-law and
his friends was rejected, because she had subsequently retracted her
allegation implicating Director Wong of the POEA in her illegal recruitment
activities. As she victimized more than three (3) persons, the RTC convicted
her of illegal recruitment committed in large scale.
Hence, this appeal.[9]

Issue
 Appellant submits this lone assignment of error:

The court a quo gravely erred in finding accused-appellant Carmelita

Alvarez guilty beyond reasonable doubt for illegal recruitment in large
scale.
[10]

More specifically, appellant questions the sufficiency of the prosecution

evidence showing the following: (1) that she engaged in acts of illegal
recruitment enumerated in Article 38 of the Labor Code, (2) that she was not
licensed to recruit, (3) that she received money from complainants despite the
absence of receipts, and (4) that her acts constituted illegal recruitment in
large scale.

This Courts Ruling

The appeal has no merit.

Main Issue:
Bases for Her Conviction

Appellant denies that she engaged in any act of illegal recruitment and
claims that she only recommended, through Director Wong of the POEA, her
son-in-law and his friends for a direct-hire job in Taiwan.
We disagree. Prior to the enactment of RA No. 8042, the crime of illegal
recruitment was defined under Article 38(a) in relation to Articles 13(b) and 34
and penalized under Article 39 of the Labor Code. It consisted of any
recruitment activity, including the prohibited practices enumerated under
Article 34 of the Code, undertaken by a non-licensee or non-holder of
authority.It is committed when 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
either any activity within the meaning of recruitment and placement defined
under Article 13(b) or any prohibited practices enumerated under Article 34.[11]
Under Article 13(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. In the simplest terms,
illegal recruitment is committed when a person, who is not authorized by the
government, gives the impression that he or she has the power to send
workers abroad.[12]
It is clear from the testimonies of the prosecution witnesses that appellant
recruited them. On direct examination, Arnel Damian testified thus:
 Q When was that when Reynaldo Abondo introduced you to the accused?
A Last week of November. I cannot remember the exact date.
Q Where were you when you were introduced to the accused?
A At 25 V. West Santiago St., San Francisco del Monte, Quezon City, in the house
of Mrs. Alvarez.
xxxxxxxxx
Q When you arrived at that place, whom did you see?
A Mrs. Alvarez.
Q What happened during your first meeting.
A We were recruited by her.
Q What did she tell you?
A That if we could come up with the amount of P25,000.00 but she was only asking
for P12,500.00 as processing fee.
Q What else did she tell you?
A That we were to act as replacement of three persons who backed out.
Q Did she tell you where were you going?
A We were told to go to Taiwan as factory worker.
Q Did she tell you how much salary will you receive?
A $600.00.[13]
Appellant had also recruited for a similar job in Taiwan, Joel Serna who
testified as follows:
Q Will you please inform the Hon. Court why do you know Carmelita Alvarez?
A I came to know her when her daughter became the girlfriend of my friend and I
was told that she is recruiting workers for Taiwan.
Q After knowing that she was recruiting workers for Taiwan, what did you do, if
any?
A I inquired from her and I was assured that the employment was not fake and I
was told to pay a processing fee.
Q When you said kanya or her to whom are you referring to?
A Carmelita Alvarez.
Q Do you still remember when was that?
A February 8, 1994.
Q Where did you meet?
A In her house at No. 25-B West Santiago St., SFDM, Quezon City.
Q What other things did she told you, if there was any?
A I would subject myself to a medical examination and after this, I would give her a
processing fee.
Q What was the purpose of that processing fee?
A So I could leave immediately for Taiwan.
Q Why are you going to Taiwan?
A I need a job.
Q If you give Mrs. Alvarez the processing fee, she will help you to go to Taiwan?
A Yes, sir.[14]
Antonio Damian, brother of Arnel, also testified to the same effect.
ATTY. DIGNADICE:
Q Will you please tell this Hon. Court the circumstances why you came to know
Carmelita Alvarez?
A I met Carmelita Alvarez on January 4, 1994.
COURT: (to the witness)
Under what circumstances did you happen to know her?
A I went to her house.
ATTY. DIGNADICE:
Q Why did you go to her house?
A Because I applied to her for work abroad.
Q Why did you apply for work abroad to her?
A Because of a brother who applied to her but failed the medical examination.
xxxxxxxxx
Q Arnel Damian applied for work abroad with Carmelita Alvarez?
A Yes, sir.
Q Was he able to leave for abroad?
A No, sir.
Q Why?
A Because he failed the medical examination.
xxxxxxxxx
Q What happened next after that?
A Because my brother failed with the medical examination, Carmelita Alvarez
cannot return the processing fee in the amount of P12,000.00 so she told my
brother to look for another applicant.
ATTY. DIGNADICE:
Q Did your brother look for another applicant as his replacement?
 A He asked me to take my place to save the P12,000.00.[15]
Roberto Alejandro testified that appellant had also told him she could send
him to Taiwan to work.
Q When you reached that place whom did you see there?
A Mrs. Alvarez.
Q And what happened during that first meeting?
A She told me that she has the capacity of sending to Taiwan.[16]
More telling is Ruben Riolas testimony on appellants specific acts
constituting illegal recruitment.
Q Can you tell the Hon. Court what transpired with that first meeting of yours with
Carmelita Alvarez at Capiz District?
A When I got there, I was with two companions, because we were replacements of
the three others who backed out. We were asked by the mother if we were the
friends of her daughter and son-in-law who is from the church?
Q What was your answer?
A I said yes.
Q Was there anything that transpired during that meeting?
A We were asked by her if we were interested to work as Factory workers in
Taiwan.
Q What was your answer, if any?
A We said we are interested if it is true.
Q After knowing that you are interested to work as factory worker in Taiwan, what
did Carmelita Alvarez do if there was any?
A We were shown a document stating that such person was receiving $600.00
salary.
xxxxxxxxx
Q After knowing that you will be receiving the same amount if you work as factory
worker in Taiwan, what did you do, if any?
A We were told to immediately pay the processing fee.
Q Who told you to pay the processing fee?
A Mrs. Carmelita Alvarez.
Q This processing fee is for what?
A So that she could process the papers with the POEA, for the facilitation with the
POEA[,] so that we could be included in the first batch.[17]
Q What happened on that date after paying the tax of P1,500.00.
A We were promised to leave on February 23, 1993.
 Q Will you please elaborate more on the promise, what kind of promise was it, if
you could remember?
A That would be the latest date that we could leave for Taiwan.
Q Would you somehow remember the words of Carmelita Alvarez?
xxxxxxxxx
A Na papaalisin niya kami.
xxxxxxxxx
Q Why did you celebrate a dispededa?
A Because we were about to leave.
Q Who told you?
A Carmelita Alvarez.
xxxxxxxxx
Q Why were you celebrating this party?
A Because we will be leaving the following day.[18]
Furthermore, appellant committed other acts showing that she was
engaged in illegal recruitment. Enumerated in People v. Manungas Jr.[19] as
acts constituting recruitment within the meaning of the law were collecting
pictures, birth certificates, NBI clearances and other necessary documents for
the processing of employment applications in Saudi Arabia; and collecting
payments for passport, training fees, placement fees, medical tests and other
sundry expenses.[20]
In this case, the prosecution proved that appellant had received varying
amounts of money from complainants for the processing of their employment
applications for Taiwan. Arnel Damian paid to appellant P12,500 for the
processing fee,[21] P2,500 for the medical fee and P1,500 for his
passport.[22] Serna paid P12,000 for the processing fee,[23] P3,000 for his birth
certificate and passport,[24] P75 for a Departure and Orientation
Seminar,[25] P900 for the insurance fee and $50 for his visa. [26] Antonio Damian
paid P2,500 for the medical fee,[27] P900 for the insurance, P75 for the
Pre-Departure and Orientation Seminar (PDOS) fee, $50 for the processing
fee and P3,500 for his birth certificate.[28] Roberto Alejandro paid P40,000 for
the processing fee[29] and P5,000 for the insurance.[30] Riola paid P1,900 for his
passport, P12,500 for the processing fee, P900 for the insurance fee, P75 for
the PDOS fee, P1,500 for the insurance and $50 for travel tax.[31]
The trial court found complainants to be credible and convincing
witnesses. We are inclined to give their testimonies due consideration. The
best arbiter of the issue of the credibility of the witnesses and their testimonies
is the trial court. When the inquiry is on that issue, appellate courts will
generally not disturb the findings of the trial court, considering that the latter
was in a better position to decide the question, having heard the witnesses
themselves and observed their deportment and manner of testifying during the
trial. Its finding thereon will not be disturbed, unless it plainly overlooked
certain facts of substance and value which, if considered, may affect the result
of the case.[32] We find no cogent reason to overrule the trial court in this case.
No License
Appellant denies that she engaged in acts of recruitment and placement
without first complying with the guidelines issued by the Department of Labor
and Employment. She contends that she did not possess any license for
recruitment, because she never engaged in such activity.
We are not persuaded. In weighing contradictory declarations and
statements, greater weight must be given to the positive testimonies of the
prosecution witnesses than to the denial of the defendant.[33] Article 38(a)
clearly shows that illegal recruitment is an offense that is essentially committed
by a non-licensee or non-holder of authority. A non-licensee means any
person, corporation or entity to which the labor secretary has not issued a valid
license or authority to engage in recruitment and placement; or whose license
or authority has been suspended, revoked or cancelled by the POEA or the
labor secretary.[34] A license authorizes a person or an entity to operate a
private employment agency, while authority is given to those engaged in
recruitment and placement activities.[35]
Likewise constituting illegal recruitment and placement activities are
agents or representatives whose appointments by a licensee or holder of
authority have not been previously authorized by the POEA. [36]
That appellant in this case had been neither licensed nor authorized to
recruit workers for overseas employment was certified by Veneranda C.
Guerrero, officer-in-charge of the Licensing and Regulation Office; and Ma.
Salome S. Mendoza, manager of the Licensing Branch -- both of the Philippine
Overseas Employment Administration.[37] Yet, as complainants convincingly
proved, she recruited them for jobs in Taiwan.
Absence of Receipts
Appellant contends that the RTC erred when it did not appreciate in her
favor the failure of Complainants Serna and Antonio Damian to present, as
proofs that she had illegally recruited them, receipts that she had allegedly
issued to them.
We disagree. The Court has already ruled that the absence of receipts in a
case for illegal recruitment is not fatal, as long as the prosecution is able to
establish through credible testimonial evidence that accused-appellant has
engaged in illegal recruitment.[38] Such case is made, not by the issuance or the
signing of receipts for placement fees, but by engagement in recruitment
activities without the necessary license or authority.[39]
In People v. Pabalan,[40] the Court held that the absence of receipts for
some of the amounts delivered to the accused did not mean that the appellant
did not accept or receive such payments. Neither in the Statute of Frauds nor
in the rules of evidence is the presentation of receipts required in order to
prove the existence of a recruitment agreement and the procurement of fees in
illegal recruitment cases. Such proof may come from the testimonies of
witnesses.[41]
Besides, the receipts issued by petitioner to Arnel Damian and Roberto
Alejandro already suffice to prove her guilt.[42]
Illegal Recruitment in Large Scale
Since only two complainants were able to show receipts issued by
appellant, petitioner claims that the prosecution failed to prove illegal
recruitment in large scale.
We disagree. The finding of illegal recruitment in large scale is justified
wherever the elements previously mentioned concur with this additional
element: the offender commits the crime against three (3) or more persons,
individually or as a group.[43] Appellant recruited at least three persons. All the
witnesses for the prosecution categorically testified that it was she who had
promised them that she could arrange for and facilitate their employment in
Taiwan as factory workers.
As for the defense that appellant had only referred complainants to
Director Wong, her public apology and retraction[44] belied her denials. After
examining the transcripts, we concur with the RTC that her averment that she
was being prosecuted for her refusal to give grease money to Major Umbao in
exchange for her freedom does not disprove the fact that she was caught
in flagrante delicto in an entrapment operation.
We find appellants conviction for the crime charged sufficiently supported
by evidence; therefore, it should be sustained.
WHEREFORE, the appeal is DENIED and the assailed
Decision AFFIRMED. Costs against appellant.
SO ORDERED.
Puno, (Chairman), and Carpio, JJ., concur.
Sandoval-Gutierrez, J., on leave.

THIRD DIVISION

[G.R. No. 125903. November 15, 2000]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ROMULO
SAULO, AMELIA DE LA CRUZ, and CLODUALDO DE LA
CRUZ, accused.
ROMULO SAULO, accused-appellant.

DECISION
GONZAGA-REYES, J.:

Accused-appellant, together with Amelia de la Cruz and Clodualdo de la

Cruz, were charged with violation of Article 38 (b) of the Labor Code[1] for illegal
recruitment in large scale in an information which states

CRIM. CASE NO. Q-91-21911

The undersigned Assistant City Prosecutor accuses ROMULO

SAULO, AMELIA DE LA CRUZ and CLODUALDO DE LA CRUZ, of
the crime of ILLEGAL RECRUITMENT IN LARGE SCALE (ART. 38(b)
in relation to Art. 39(a) of the Labor Code of the Philippines, as
amended by P.D. No. 2018, committed as follows:

That on or about the period comprised from April 1990 to May 1990 in
Quezon City, Philippines, and within the jurisdiction of the Honorable
Court, the above-named accused, conspiring together, confederating
with and mutually helping one another, by falsely representing
themselves to have the capacity to contract, enlist and recruit workers
for employment abroad, did, then and there, wilfully, unlawfully and
feloniously for a fee, recruit and promise employment/job placement
abroad to LEODEGARIO MAULLON, BENY MALIGAYA and
ANGELES JAVIER, without first securing the required license or
authority from the Department of Labor and Employment, in violation
of said law.

That the crime described above is committed in large scale as the

same was perpetrated against three (3) persons individually or as [a]
group penalized under Articles 38 and 39 as amended by PD 2018 of
the Labor Code (P.D. 442).

CONTRARY TO LAW. [2]

In addition, accused were charged with three counts of estafa (Criminal

Case Nos. Q-91-21908, Q-91-21909 and Q-91-21910). Except for the names
of the complainants, the dates of commission of the crime charged, and the
amounts involved, the informations[3] were identical in their allegations

CRIM. CASE NO. Q-91-21908

The undersigned Assistant City Prosecutor accuses ROMULO

SAULO, AMELIA DE LA CRUZ AND CLODUALDO DE LA CRUZ of
the crime of ESTAFA (Art. 315, par. 2 (a) RPC), committed as follows:

That on or about the period comprised from April 1990 to May 1990,
in Quezon City, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, conspiring together,
confederating with and mutually helping one another, with intent of
gain, by means of false pretenses and/or fraudulent acts executed
prior to or simultaneously with the commission of the fraud, did, then
and there wilfully, unlawfully and feloniously defraud one BENY
MALIGAYA, in the following manner, to wit: on the date and in the
place aforementioned, accused falsely pretended to the offended
party that they had connection and capacity to deploy workers for
overseas employment and that they could secure
employment/placement for said Beny Maligaya and believing said
misrepresentations, the offended party was later induced to give
accused, as in fact she did give the total amount of P35,000.00,
Philippine Currency, and once in possession of the said amount and
far from complying with their commitment and despite repeated
demands made upon them to return said amount, did, then and there
wilfully, unlawfully and feloniously and with intent to defraud,
misappropriate, misapply and convert the same to their own personal
use and benefit, to the damage and prejudice of said offended party in
the aforementioned amount and in such amount as may be awarded
under the provisions of the Civil Code.

CONTRARY TO LAW.

Upon arraignment, accused-appellant pleaded not guilty to all the charges

against him. Meanwhile accused Amelia de la Cruz and Clodualdo de la Cruz
have remained at large.
During trial, the prosecution sought to prove the following material facts
and circumstances surrounding the commission of the crimes:
Benny Maligaya, having learned from a relative of accused-appellant that
the latter was recruiting workers for Taiwan, went to accused-appellants house
in San Francisco del Monte, Quezon City, together with Angeles Javier and
Amelia de la Cruz, in order to discuss her chances for overseas employment.
During that meeting which took place sometime in April or May, 1990,
accused-appellant told Maligaya that she would be able to leave for Taiwan as
a factory worker once she gave accused-appellant the fees for the processing
of her documents. Sometime in May, 1990, Maligaya also met with Amelia de
la Cruz and Clodualdo de la Cruz at their house in Baesa, Quezon City and
they assured her that they were authorized by the Philippine Overseas
Employment Administration (POEA) to recruit workers for Taiwan. Maligaya
paid accused-appellant and Amelia de la Cruz the amount of P35,000.00,
which is evidenced by a receipt dated May 21, 1990 signed by
accused-appellant and Amelia de la Cruz (Exhibit A in Crim. Case No.
Q-91-21908). Seeing that he had reneged on his promise to send her to
Taiwan, Maligaya filed a complaint against accused-appellant with the POEA.[4]
Angeles Javier, a widow and relative by affinity of accused-appellant, was
told by Ligaya, accused-appellants wife, to apply for work abroad through
accused-appellant. At a meeting in accused-appellants Quezon City residence,
Javier was told by accused-appellant that he could get her a job in Taiwan as a
factory worker and that she should give him P35,000.00 for purposes of
preparing Javiers passport. Javier gave an initial amount of P20,000.00 to
accused-appellant, but she did not ask for a receipt as she trusted him. As the
overseas employment never materialized, Javier was prompted to bring the
matter before the POEA.[5]
On April 19, 1990, Leodigario Maullon, upon the invitation of his neighbor
Araceli Sanchez, went to accused-appellants house in order to discuss his
prospects for gaining employment abroad. As in the case of Maligaya and
Javier, accused-appellant assured Maullon that he could secure him a job as a
factory worker in Taiwan if he paid him P30,000.00 for the processing of his
papers. Maullon paid P7,900.00 to accused-appellants wife, who issued a
receipt dated April 21, 1990 (Exhibit A in Crim. Case No. Q-91-21910).
Thereafter, Maullon paid an additional amount of P6,800.00 in the presence of
accused-appellant and Amelia de la Cruz, which payment is also evidenced by
a receipt dated April 25, 1990 (Exhibit B in Crim. Case No.
Q-91-21910). Finally, Maullon paid P15,700.00 to a certain Loreta Tumalig, a
friend of accused-appellant, as shown by a receipt dated September 14, 1990
(Exhibit C in Crim. Case No. Q-91-21910). Again, accused-appellant failed to
deliver on the promised employment. Maullon thus filed a complaint with the
POEA.[6]
The prosecution also presented a certification dated July 26, 1994 issued
by the POEA stating that accused are not licensed to recruit workers for
overseas employment (Exhibit A in Crim. Case No. Q-91-21911).[7]
In his defense, accused-appellant claimed that he was also applying with
Amelia de la Cruz for overseas employment. He asserts that it was for this
reason that he met all three complainants as they all went together to Amelia
de la Cruz house in Novaliches, Quezon City sometime in May, 1990 in order
to follow up their applications. Accused-appellant flatly denied that he was an
overseas employment recruiter or that he was working as an agent for one. He
also denied having received any money from any of the complainants or
having signed any of the receipts introduced by the prosecution in evidence. It
is accused-appellants contention that the complainants were prevailed upon
by accused-appellants mother-in-law, with whom he had a misunderstanding,
to file the present cases against him.[8]
The trial court found accused-appellant guilty of three counts of estafa and
of illegal recruitment in large scale. It adjudged:

WHEREFORE, this Court finds the accused Romulo Saulo:

A. In Criminal Case No. Q-91-21908, guilty beyond reasonable doubt

of Estafa under Article 315, paragraph 2(a) of the Revised Penal
Code as amended, without any mitigating or aggravating
circumstances, and this Court hereby sentences the accused Romulo
Saulo to suffer the indeterminate penalty of imprisonment of three (3)
years, four (4) months and one (1) day of prision correccional as
minimum to seven (7) years and one (1) day of prision mayor as
maximum, and to indemnify the complainant Beny Maligaya in the
amount of P35,000.00, with interest thereon at 12% per annum until
the said amount is fully paid, with costs against the said accused.

B. In Criminal Case No. Q-91-21909, guilty beyond reasonable doubt

of Estafa under Article 315, paragraph 2(a) of the Revised Penal
Code as amended, without any mitigating or aggravating
circumstances, and this Court hereby sentences the accused Romulo
Saulo to suffer the indeterminate penalty of imprisonment of two (2)
years, four (4) months and one (1) day of prision correccional as
minimum to six (6) years and one (1) day of prision mayor as
maximum, and to indemnify the complainant Angeles Javier in the
amount of P20,000.00 with interest thereon at 12% per annum until
the said amount is fully paid, with costs against said accused.

C. In Criminal Case No. Q-91-21910, guilty beyond reasonable doubt

of Estafa under Article 315, paragraph 2(a) of the Revised Penal
Code as amended, without any mitigating or aggravating
circumstances, and this Court hereby sentences the accused Romulo
Saulo to suffer the indeterminate penalty of imprisonment of two (2)
years, four (4) months and one (1) day of prision correccional as
minimum to six (6) years and one (1) day of prision mayor as
maximum, and to indemnify the complainant Leodigario Maullon in
the amount of P30,400.00 with interest thereon at 12% per annum
until the said amount is fully paid, with costs against said accused.

D. In Criminal Case No. Q-91-21911, guilty beyond reasonable doubt

of Illegal Recruitment in Large Scale as defined and punished under
Article 38 (b) in relation to Article 39 (a) of the Labor Code of the
Philippines as amended, and this Court sentences the accused
Romulo Saulo to suffer the penalty of life imprisonment and to pay a
fine of One Hundred Thousand Pesos (P100,000.00).

Being a detention prisoner, the accused Romulo Saulo shall be

entitled to the benefits of Article 29 of the Revised Penal Code as
amended.

SO ORDERED. [9]

The Court finds no merit in the instant appeal.

The essential elements of illegal recruitment in large scale, as defined in
Art. 38 (b) of the Labor Code and penalized under Art. 39 of the same Code,
are as follows:

(1) the accused engages in the recruitment and placement of workers,

as defined under Article 13 (b) or in any prohibited activities under
Article 34 of the Labor Code;

(2) accused has not complied with the guidelines issued by the
Secretary of Labor and Employment, particularly with respect to the
securing of a license or an authority to recruit and deploy workers,
whether locally or overseas; and

(3) accused commits the same against three (3) or more persons,
individually or as a group. [10]

Under Art. 13 (b) of the Labor Code, 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.
After a careful and circumspect review of the records, the Court finds that
the trial court was justified in holding that accused-appellant was engaged in
unlawful recruitment and placement activities. The prosecution clearly
established that accused-appellant promised the three complainants - Benny
Maligaya, Angeles Javier and Leodigario Maullon employment in Taiwan as
factory workers and that he asked them for money in order to process their
papers and procure their passports. Relying completely upon such
representations, complainants entrusted their hard-earned money to
accused-appellant in exchange for what they would later discover to be a vain
hope of obtaining employment abroad. It is not disputed that
accused-appellant is not authorized[11] nor licensed[12] by the Department of
Labor and Employment to engage in recruitment and placement activities. The
absence of the necessary license or authority renders all of
accused-appellants recruitment activities criminal.
Accused-appellant interposes a denial in his defense, claiming that he
never received any money from the complainants nor processed their papers.
Instead, accused-appellant insists that he was merely a co-applicant of the
complainants and similarly deceived by the schemes of Amelia and Clodualdo
de la Cruz. He contends that the fact that Benny Maligaya and Angleles Javier
went to the house of Amelia and Clodualdo de la Cruz in Novaliches, Quezon
City, to get back their money and to follow-up their application proves that
complainants knew that it was the de la Cruz who received the processing fees,
and not accused-appellant. Further, accused-appellant argues that
complainants could not have honestly believed that he could get them their
passports since they did not give him any of the necessary documents, such
as their birth certificate, baptismal certificate, NBI clearance, and marriage
contract.
Accused-appellants asseverations are self-serving and uncorroborated by
clear and convincing evidence. They cannot stand against the straightforward
and explicit testimonies of the complainants, who have identified
accused-appellant as the person who enticed them to part with their money
upon his representation that he had the capability of obtaining employment for
them abroad. In the absence of any evidence that the prosecution witnesses
were motivated by improper motives, the trial courts assessment of the
credibility of the witnesses shall not be interfered with by this Court.[13]
The fact that accused-appellant did not sign all the receipts issued to
complainants does not weaken the case of the prosecution. A person charged
with illegal recruitment may be convicted on the strength of the testimonies of
the complainants, if found to be credible and convincing. [14] The absence of
receipts to evidence payment does not warrant an acquittal of the accused,
and it is not necessarily fatal to the prosecutions cause.[15]
Accused-appellant contends that he could not have committed the crime of
illegal recruitment in large scale since Nancy Avelino, a labor and employment
officer at the POEA, testified that licenses for recruitment and placement are
issued only to corporations and not to natural persons. This argument is
specious and illogical. The Labor Code states 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. [16] Corrolarily,
a nonlicensee or nonholder of authority is any person, corporation or entity
which has not been issued a valid license or authority to engage in recruitment
and placement by the Secretary of Labor, or whose license or authority has
been suspended, revoked, or canceled by the POEA or the Secretary. [17] It also
bears stressing that agents or representatives appointed by a licensee or a
holder of authority but whose appointments are not previously authorized by
the POEA fall within the meaning of the term nonlicensee or nonholder of
authority.[18] Thus, any person, whether natural or juridical, that engages in
recruitment activities without the necessary license or authority shall be
penalized under Art. 39 of the Labor Code.
It is well established in jurisprudence that a person may be charged and
convicted for both illegal recruitment and estafa. The reason for this is that
illegal recruitment is a malum prohibitum, whereas estafa is malum in se,
meaning that the criminal intent of the accused is not necessary for conviction
in the former, but is required in the latter.[19]
The elements of estafa under Art. 315, paragraph 2 (a), of the Revised
Penal Code are: (1) that the accused has defrauded another by abuse of
confidence or by deceit, and (2) that damage or prejudice capable of pecuniary
estimation is caused to the offended party or third person.[20] The trial court was
correct in holding accused-appellant liable for estafa in the case at bench.
Owing to accused-appellants false assurances that he could provide them with
work in another country, complainants parted with their money, to their
damage and prejudice, since the promised employment never materialized.
Under Art. 315 of the Revised Penal Code, the penalty for the crime of
estafa is as follows:

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
amount 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 under the provisions
of this Code, the penalty shall be termed prision mayor or reclusion
temporal, as the case may be.

xxx xxx xxx

Under the Indeterminate Sentence Law, the maximum term of the penalty
shall be that which, in view of the attending circumstances, could be properly
imposed under the Revised Penal Code, and the minimum shall be within the
range of the penalty next lower to that prescribed for the offense. Since the
penalty prescribed by law for the estafa charge against accused-appellant
is prision correccional maximum to prision mayor minimum, the penalty next
lower in degree is prision correccional minimum to medium. Thus, the
minimum term of the indeterminate sentence should be anywhere within six (6)
months and one (1) day to four (4) years and two (2) months.
In fixing the maximum term, the prescribed penalty of prision
correccional maximum to prision mayor minimum should be divided into three
equal portions of time, each of which portion shall be deemed to form one
period, as follows

Minimum Period : From 4 years, 2 months and 1 day to 5 years, 5

months and 10 days

Medium Period : From 5 years, 5 months and 11 days to 6 years, 8

months and 20 days

Maximum Period : From 6 years, 8 months and 21 days to 8 years

pursuant to Article 65, in relation to Article 64, of the Revised Penal Code.
When the amounts involved in the offense exceeds P22,000, the penalty
prescribed in Article 315 of the Revised Penal Code shall be imposed in its
maximum period, adding one year for each additional P10,000.00, although
the total penalty which may be imposed shall not exceed twenty (20) years. [21]
Accordingly, the following penalties shall be imposed upon
accused-appellant:
In Criminal Case No. Q-91-21908 where accused-appellant defrauded
Benny Maligaya in the amount of P35,000.00, one year for the additional
amount of P13,000.00 in excess of P22,000.00 provided for in Article 315 shall
be added to the maximum period of the prescribed penalty of prision
correccional maximum to prision mayor minimum. Thus, accused-appellant
shall suffer the indeterminate penalty of four (4) years, and two (2) months
of prision correccional medium, as minimum to nine (9) years of prision
mayor as maximum.[22] Accused-appellant shall also pay Benny Maligaya
P35,000.00 by way of actual damages.
In Criminal Case No. Q-91-21909 where accused-appellant defrauded
Angeles Javier in the amount of P20,000.00, accused-appellant shall suffer the
indeterminate penalty of one (1) year, eight (8) months and twenty-one (21)
days of prision correccional minimum to five (5) years, five (5) months and
eleven (11) days of prision correccional maximum. Accused-appellant shall
also pay Angeles Javier P20,000.00 by way of actual damages.
In Criminal Case No. Q-91-21910 where accused-appellant defrauded
Leodigario Maullon in the amount of P30,400.00, accused-appellant shall
suffer the indeterminate penalty of four (4) years and two (2) months of prision
correccional medium, as minimum to eight (8) years of prision mayor, as
maximum.[23] Accused-appellant shall also pay Leodigario Maullon P30,400.00
by way of actual damages.
In addition, for the crime of illegal recruitment in large scale (Criminal Case
No. Q-91-21911) and pursuant to Article 39 (a) of the Labor Code,
accused-appellant shall suffer the penalty of life imprisonment and a fine of
One Hundred Thousand Pesos (P100,000.00).
WHEREFORE, the March 6, 1996 Decision of the trial court finding
accused-appellant guilty beyond reasonable doubt of the crime of illegal
recruitment in large scale and estafa is hereby AFFIRMED subject to the
following modifications:
In Criminal Case No. Q-91-21908 where accused-appellant defrauded
Benny Maligaya in the amount of P35,000.00, one year for the additional
amount of P13,000.00 in excess of P22,000.00 provided for in Article 315 shall
be added to the maximum period of the prescribed penalty of prision
correccional maximum to prision mayor minimum. Thus, accused-appellant
shall suffer the indeterminate penalty of four (4) years, and two (2) months
of prision correccional medium, as minimum to nine (9) years of prision
mayor as maximum. Accused-appellant shall also pay Benny Maligaya
P35,000.00 by way of actual damages.
In Criminal Case No. Q-91-21909 where accused-appellant defrauded
Angeles Javier in the amount of P20,000.00, accused-appellant shall suffer the
indeterminate penalty of one (1) year, eight (8) months and twenty-one (21)
days of prision correccional minimum to five (5) years, five (5) months and
eleven (11) days of prision correccional maximum. Accused-appellant shall
also pay Angeles Javier P20,000.00 by way of actual damages.
In Criminal Case No. Q-91-21910 where accused-appellant defrauded
Leodigario Maullon in the amount of P30,400.00, accused-appellant shall
suffer the indeterminate penalty of four (4) years and two (2) months of prision
correccional medium, as minimum to eight (8) years of prision mayor, as
maximum. Accused-appellant shall also pay Leodigario Maullon P30,400.00
by way of actual damages.
In addition, for the crime of illegal recruitment in large scale (Criminal Case
No. Q-91-21911) and pursuant to Article 39 (a) of the Labor Code,
accused-appellant shall suffer the penalty of life imprisonment and a fine of
One Hundred Thousand Pesos (P100,000.00).
Costs against accused-appellant.
SO ORDERED.
Melo, (Chairman), Vitug, and Panganiban, JJ., concur

[Syllabus]

FIRST DIVISION
 [G.R. Nos. 114011-22. December 16, 1996]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. VEVINA

BUEMIO, accused-appellant.

DECISION
KAPUNAN, J.:

Vevina Buemio, a field officer of a travel agency, appeals from the

decision of the Regional Trial Court in Pasay City, Branch 117,
rendered on January 26, 1994, the dispositive portion of which reads:
WHEREFORE, the Court finds the accused Vevina Buemio
GUILTY beyond reasonable doubt for illegal recruitment on a large
scale under Article 39, of Presidential Decree (P.D.) 2018, and
sentences her to a penalty of life imprisonment and a fine
of P100,000.00 to indemnify Elisio Principe, Eduardo Gutierrez and
Ramon Villanueva the amount of P150,000.00, without subsidiary
imprisonment in case of insolvency and to pay the costs.
SO ORDERED. [1]

The facts as found by the trial court are as follows:

Sometime in September, 1991, Cecilia Baas, a clerical employee
at the Villamor Air Base in Pasay City, learned from Catalina Asis that
Vevina Buemio could send job applcants abroad for
employment. Catalina, an officemate of Vevinas husband at the same
air base, arranged a meeting between Cecilia and Vevina at the office
of the latters husband. When the two met for the second time at the
residence of Vevina in 9 Second St., Villamor Air Base, Vevina
promised to provide Cecilia with a job as a factory worker
in Japan with a minimum salary of 10,000 yen a day. Vevina also
promised to provide Cecilia with all the necessary travel
documents. For her part, Cecilia would give Vevina P60,000.00 as
placement fee and for the expenses in the processing of travel
documents. Cecilia believed Vevina because the latter was the wife of
an official at the Villamor Air Base.
On September 11, 1991, Cecilia, together with her husband and
one Rafael Andres, went to the office of Vevinas husband and
paid P30,000.00 representing half of the fees agreed upon. Cecilia
paid the second half of the fees on September 28, 1991 at Vevinas
residence. In both instances, Vevina issued receipts acknowledging
Cecilias payments.
At the airport on the day when Cecilia, Marilou Gonzales, Rafael
Andres and Armando Garcia were supposed to leave for Japan,
Vevina handed them their pasports and tickets. To their surprise, they
found out that they were bound for Korea, not Japan. Vevina
explained to them that she would be following them in Korea where
they would be getting their plane tickets for Japan. When Cecilia
noticed that the name appearing on the passport given her was that of
Pacita Garcia, Vevina told her that she could use other names in her
passport like other people do. Convinced by Vevinas explanations,
the group took off for Korea.
In Korea, they checked in at the Naiagara Hotel but they just
stayed inside their hotel rooms. They only left their rooms twice after
Vevinas arrival when she took them on a tour. Vevina also got their
pocket money purportedly to buy their food.
Vevina informed them later that the plane tickets to Japan were
expensive in Korea. She proposed that she herself would proceed
to Japan where she would buy their tickets. She left for Japan with
Lito Camora and Sergio Andres who had complete tickets. However,
Vevina came back to Korea without the groups tickets. Instead, she
advised them to go back to the Philippines using their round-trip
tickets. Believing Vevina's promise that she could still send them
to Japan without any expense on their part, the group left for
the Philippines on October 16, 1991 with Vevina staying behind
in Korea.
Since Vevinas arrival in the Philippines on October 22, 1991, the
group frequented Vevinas residence, inquiring about their trip
to Japan. As Vevinas promises remained unfulfilled, the group,
showing their displeasure, demanded that their money be given back
to them. Vevina promised to return their money but when she failed to
do so, they filed their respective complaints before the National
Bureau of Investigation (NBI).[2]

It was sometime in October, 1991 that, through one Elsa Sta. Ana,
Vevina met Elisio Principe, Ramon Villanueva and Eduardo Gutierrez
at Villanuevas residence in Bunlo, Bocaue, Bulacan. Elsa knew that
the three were looking for jobs and that Vevina was also looking for
people interested in working abroad. Vevina explained that she could
send them to Japanwhere they could be factory workers with a
minimum salary of isang lapad or 10,000.00 yen a day. Having
manifested their interest in getting the job, the three were advised by
Vevina to raise right away the placement fee of P60,000.00 each in
order that they could leave for Japan in a weeks time. Vevina told
them to bring to her residence the placement fee and a prepared
receipt.
Because Vevina was leaving for Korea, she instructed each of the
three to give P1,500.00 to one Jenny who would secure their
passports. The three obliged but only Principe and Gutierrez were
given their passports. When Vevina arrived from Korea, she advised
Villanueva to secure his passport himself as there were some
problems. Villanueva did as instructed and personally secured his
passport. The three were then made to sign application forms for
Korean visas upon Vevinas guarantee that the onward visa
from Korea was necessary for them to reach Japan. Unfortunately,
the Korean Embassy denied their visa applications.
Nevertheless, to raise the placement fee, Principe borrowed the
title to the property of her sister-in-law and mortgaged the property
for P200,000.00 with P70,000.00 interest. On October 24, 1991,
Principe, together with Gutierrez and Villanueva, their respective
wives and Elsa Sta. Ana, went to Vevinas house and handed
her P90,000.00 representing half of the placement fee agreed
upon. The balance would be given to Vevina before their departure
for Japan. Vevina then signed the following typewritten receipt which
was prepared by Gutierrezs wife:

10/24/91

ACKNOWLEDGMENT RECEIPT

This is to acknowledge receipt of PESOS: Ninety Thousand &

00/100 (P90,000.00) from the following persons, representing 50%
partial payment for their placement fees:
1. Eliseo Principe P30,000.00
2. Ramon Villanueva 30,000.00
3. Eduardo Gutierrez 30,000.00
-------------
P90,000.00
vvvvvvvvvv

Received by:
(Signature over
printed name)
VEVINA N. BUEMIO

Date Recd. 10/24/91[3]

After a week had gone by without a word from Vevina, Principe,

Villanueva and Gutierrez went to her residence to inquire. Vevina told
them that the money they had given her was insufficient and that she
needed P50,000.00 more. Since they did not have that amount with
them, the three agreed to deliver it to Vevina at Villanuevas residence
that evening. As agreed, they met at Villanuevas residence that same
evening and, after receiving the amount, Vevina signed the receipt
handwritten by Gutierrezs wife which states:

10-31-91

This is to acknowledge receipt the amount of PESOS: Fifty

Thousand and 00/100 (P50,000.-) only, representing 2nd partial
payment for placement fee and other expenses of the following:
1. Eliseo Principe
2. Ramon Villanueva
3. Eduardo Gutierrez

Received by:

(Signature over
printed name)

VEVINA N. BUEMIO

Date Recd. 10/31/91 [4]

Vevina then assured them that they would be leaving

for Japan within a few days.
The three repaired once more to Vevinas residence after several
days. Vevina informed them that they would be leaving for abroad if
not for the problem with the travel tax
amounting P10,000.00. Exhilarated by the prospect of soon leaving
for work abroad, the three gave Vevina the amount on November 12,
1991 at Principes residence in Marilao, Bulacan. Vevina issued them
a handwritten receipt which reads:
 Nov. 12, 1991

Received the amount of Ten Thousand Pesos only (P10,000.00) part

of their partial payment for plane tickets & hotel accommodation.

Received by

(Signature)
VEVINA BUEMIA [5]

The three thereafter went to Vevinas office to inquire why they still
could not leave for Japan. Again, Vevina told them that she still had
some documents to take care of but she assured them that they were
scheduled to depart on November 18, and some other
dates. However, Vevinas promises remained unfulfilled even after
those dates had passed. Thus, the three demanded their money back
and Vevina promised to return it to them.
Having failed to get their money back, the three reported the
matter to the NBI where they were instructed to verify from the
Philippine Overseas Employment Administration (POEA) whether
Vevina was authorized to recruit job applicants for abroad. The POEA
accordingly issued a certification dated June 11, 1992 stating that
VEVINA BUEMIO, in her personal capacity was neither licensed nor
authorized x x x to recruit workers for overseas employment from Jan.,
1991 to the present. [6]

Vevina was apprehended by NBI agents on January 27,

1992. Two days later, an information for illegal recruitment, docketed
as Crim. Case No. 92-0129, was filed against her in the Regional Trial
court in Pasay City for falsely representing and alleging that she could
secure employments as factory workers abroad for Cecilia Baas,
Rose Flores, Marilou Gonzales, Eduardo Prudenciado, Ramon
Villanueva, Leonilo Arganda, Eliseo Principe, Eduardo Gutierrez,
Sergio Andres, Magdalena Arizala and Lito Camora and for having
wilfully, unlawfully and feloniously recruited them and collected from
them the amounts ranging from P20,700.00 to P82,000.00 each, but
which amount she appropriated to herself after failing to deploy the
complainants abroad. [7]

On the same day, eleven (11) informations for estafa, docketed as

Criminal Cases Nos. 92-0130 to 92-0140 were likewise filed in the
same court against Vevina for having allegedly defrauded the
following of the corresponding amounts: Cecilia Baas, P60,000.00;
Rose Flores, P20,700.00; Marilou Gonzales, P60,000.00; Eduardo
Prudenciado, P55,000.00; Ramon Villanueva, P50,000.00; Leonilo
Arganda, P30,000.00; Eliseo Principe, P50,000.00; Eduardo
Gutierrez, P50,000.00; Sergio Andres, P60,000.00; Magdalena
Arizala, P82,000.00, and Lito Camora, P28,600.00 or $1,100.00. A
typical information for estafa filed against Vevina reads as follows:
That on or about the 11th and 28th of September 1991, in Pasay,
Metro Manila, Philippines and within the jurisdiction of this
Honorable Court, the above named accused Vevina Buemio,
defrauded Cecilia Baas, in the following manner, to wit: that said
accused, by means of false representations and fraudulent
allegations to the effect that she could secure employment as factory
workers abroad for said complainant, and that she could facilitate
her working and travel papers, did then and there wilfully,
unlawfully and feloniously ask and demand the amount
of P60,000.00 from the complainant allegedly to be used for the
facilitation of the latters working and travel papers; that
complainant carried away by said misrepresentations, in fact, she
gave and delivered to said accused, the amount of P60,000.00 which
amount, accused misapplied, misappropriated and converted to her
own personal use and benefit, and failed to deploy complainant for
employment abroad, and despite repeated demands, accused failed
and refused to do so, or account for the said amount, to the damage
and prejudice of said complainant, in the said amount
of P60,000.00.
Contrary to law. [8]

On February 11, 1992, the following amended information for

illegal recruitment was filed in Crim. Case. No. 92-0129:
That on or about and during the period comprising from April 1991
to October 1991, in Pasay City, Metro Manila, Philippines, the
above-named accused, by means of false representations and
fraudulent allegations to the effect that she could secure
employments as Factory Workers abroad for Cecilia Baas, Rose
Flores, Marilou Gonzales, Eduardo Prudenicado, Ramon Villanueva,
Leonila Arganda, Elicio Principe, Eduardo Gutierrez, Sergio Andres,
Magdalena Arizala and Lito Camora, did then and there wilfully,
unlawfully and feloniously recruit for a fee aforesaid
persons without corresponding license from the Department of
Labor and Employment.
 Contrary to law. [9]

The defense forthwith filed a motion for reinvestigation in view of

the amendment of the information and, allegedly, the denial of her
right to a preliminary investigation. It prayed further for the court to fix
the bailbond for the liberty of the accused. The court accordingly
[10]

held the arraignment of the accused in abeyance pending the result of

the reinvestigation. At her arraignment on April 22, 1992, Vevina
[11]

pleaded not guilty to the charges against her in Crim. Cases Nos.
92-0129 to 92-0140. The number of complainants, however,
[12]

diminished when some of them executed affidavits of desistance

upon the common allegation that Vevina did not promise them
employment abroad but merely assisted in the processing of their
travel papers.[13]

Testifying in her own defense at the trial, Vevina swore that during
the first week of October, 1991 when she was in Korea, Principe,
Villanueva and Gutierrez went to her residence in Villamor Air Base
requesting for assistance in going to Japan. Jennilyn, her friend who
ran errands for her, accompanied the three who had learned from a
certain Baltazar, Vevinas former client, that Vevina could help them
because of her job as the field officer of the Continental Tour and
Travel Agency. From the telephone conversation with her husband
and Jennilyn, she learned that the three had relatives in Japan who
could provide them employment in that country.
The day after Vevina arrived from Korea on October 23, 1991,
Principe told her by phone that he and his companions would be
arriving at her residence at 6:00 p.m. Since she told them that she
had an appointment at 10:30 p.m., that day being her husbands
birthday, Principe told her that they would be coming to her place
instead at 12:00 midnight.
The three arrived at the appointed time. It was the first time for her
to met them. Principe, who would be shouldering the expenses of
Villanueva and Gutierrez, was the spokesman of the group. As the
three handed her P90,000.00, she emphasized to them that part of
the amount defray the expenses for her own ticket and hotel
accommodations as she would be travelling with them. She signed a
[14]

receipt prepared by the group but she did not read its contents
anymore nor did she count the money which she placed inside a
drawer, as she was busy attending to her husbands guest.
 The three having given her their business registration papers,
income tax returns and calling cards, Vevina immediately processed
their travel documents and passports. She first proposed that the
three go to Thailand but the Thai Airline did not issue tickets for them
because they had not secured an onward visa. Thus, she next
[15]

proposed that since entry to Hongkong would not entail securing a

visa thereto, the three should take a Hongkong-Japan-Korea
route. The three, together with other clients of Vevina, applied for a
Korean visa but only Principe was granted said visa. Vevina then
gave Principe tickets for the Manila-Hongkong, Hongkong-Japan,
Japan-Korea and Korea-Manila trip. Upon her advice, Principe also
applied for a visa at the Japanese embassy. Because Villanueva and
Gutierrez wanted to be sure first that Principe would be granted a
Japanese visa, no tickets were issued to them. However, all three
later decided to give up their travel plans and demanded that she
gave them back their money. She agreed to return the money as soon
as some of the groups gave back the money that they used. She [16]

had received P50,000.00 for Principes ticket at Villanuevas residence,

and P10,000.00 for their hotel accommodations. [17]

On January 26, 1994, the trial court rendered the aforementioned

decision convicting appellant of illegal recruitment. Vevina filed a
motion for its reconsideration but this was denied by the court on
February 3, 1994. Hence, this appeal questioning the trial courts
[18]

giving weight and credence to the testimony of the prosecution

witnesses, and alleging denial of due process to the appellant.
On this issue of denial of due process, appellant contends that she
was not given the opportunity to present additional witnesses. The
records belie such claim. There were three resettings of the [19]

hearings of the case where the defense was given an opportunity to

present additional witnesses before the trial court finally ordered the
case submitted for decision. The defense filed a motion for the
[20]

reconsideration of said order which the trial court granted but still,
[21] [22]

the defense failed to present its promised additional witnesses. Hence,

on November 30, 1993, the trial court issued an order decreeing that
the defense had waived presentation of further evidence and directing
it to make a formal offer of the evidence already presented within ten
days. On January 19, 1994, the defense submitted a motion to defer
[23]

the promulgation of judgment and to reopen the case but the [24]

following day, it nevertheless formally offered its exhibits. [25]

 From the foregoing, it is very clear that appellant was given more
than enough opportunity to fully ventilate her defense and therefore
she was accorded due process of law. There is due process if the
following conditions are present: (1) a court or tribunal clothed with
judicial power to hear and determine the matter before it; (2)
jurisdiction lawfully acquired by the court over the person of the
defendant or over the property subject of the proceedings; (3) the
defendant must be given an opportunity to be heard, and (4) judgment
must be rendered upon lawful hearing. All these conditions have
[26]

been satisfied in the case at bar. What is repugnant to due process is

an absolute lack of opportunity to be heard. Appellants failure to
[27]

present additional witnesses was within her power and that of her
counsel to avert. Verily, her failure to act with prudence and diligence
cannot elicit approval or sympathy from the Court. [28]

On the merits of the appeal, appellant contends in the main that

the testimonies of Principe, Villanueva and Gutierrez are contrary to
ordinary human experience. Thus, they could not have been enticed
to work in factories in Japan as there was no mention of any contracts
of appellant in that country who could provide them employment, nor
were their specific work and workplace as well as the peso equivalent
of their supposed salary ever pointed out by the appellant. Neither
was it proven that appellant enticed them with convincing benefits in
working in Japan which would be enough for them to part with their
money just so they could be TNTs in Japan.
[29]

Appellants contentions boil down to the issue of credibility. As a

rule, appellate courts will not disturb the findings of the trial court on
said issue unless certain facts or circumstances of weight have been
overlooked, misunderstood or misapplied which, if considered, might
affect the result of the case. This is because the trial court heard the
testimony of the witnesses and observed their deportment and
manner of testifying during the trial. No negative circumstances
[30]

attend this case as to warrant departure from the general rule.

In fact, a review of the transcript of stenographic notes in this case
shows that the testimonies of the prosecution witnesses are
credible. Taken as a whole and even under the crucible test of
examination by the defense, said testimonies are not only consistent
on all material respects but also replete with minutiae of the
questioned transactions with the appellant. Inasmuch as the trial
[31]

court found the positive declarations of the complainants more

credible than the sole testimony of the appellant denying said
transactions, there must be a well-founded reason in order to deny
great weight to the trials courts evaluation of the prosecution
witnesses testimonies. The defense has failed to provide that reason
[32]

as it has failed to prove any ill-motive on the part of the

complainant-witnesses in so imputing to appellant such a serious
crime as illegal recruitment.
We find the instant appeal to be without merit. Article 13 (b) of the
Labor Code defines recruitment 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. The pertinent
provisions of the Labor Code on illegal recruitment are as follows:
ART. 38. Illegal Recruitment. (a) Any recruitment activities,
including the prohibited practices enumerated under Article 34 of
this Code, to be undertaken by non-licensees or non-holders of
authority shall be deemed illegal and punishable under Article 39 of
this Code. The Ministry (now Department) of Labor and
Employment or any law enforcement officer may initiate
complaints under this Article.
(b) Illegal recruitment when committed by a syndicate or in large
scale shall be considered an offense involving economic sabotage
and shall be penalized in accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried
out by a group of three (3) or more persons conspiring and/or
confederating with one another in carrying out any unlawful or
illegal transaction, enterprise or scheme defined under the first
paragraph hereof. Illegal recruitment is deemed committed in large
scale if committed against three (3) or more persons individually or
as a group.
xxxxxxxxx
ART. 39. Penalties. (a) The penalty of life imprisonment and a fine
of One Hundred Thousand Pesos (P100,000.00) shall be imposed if
illegal recruitment constitutes economic sabotage as defined herein:
xxx
(Underscoring supplied.)
Recruitment for overseas employment is not in itself necessarily
immoral or unlawful. It is the lack of the necessary license or permit
that renders such recruitment activities unlawful or criminal. When
three or more persons are victimized, the offense becomes illegal
recruitment in large scale, an offense constitute of economic
[33]

sabotage. In other words, the crime of illegal recruitment in large

scale is committed when a person (a) undertakes any recruitment
activity defined under Art. 13(b) or any prohibited practice
enumerated under Art. 34 of the Labor Code; (b) does not have a
license or authority to lawfully engage in the recruitment and
placement of workers; and (c) commits the same against three or
more persons, individually or as a group.[34]

The last two requisites are present in this case. By appellants own
admission, she was a field officer of a travel agency who merely
assisted prospective travellers procure the necessary travel
papers. Her admission is proof that she was not a license recruiter per
the records of the POEA. Although some of the complainants
desisted from pursuing their cases against appellant, it is undeniable
that more than three persons raised claims that they had been
victimized by appellants recruitment activities. What remains to be
determined thereof is whether or not the acts committed by appellant
constituted illegal recruitment as defined by the Labor Code.
The prosecutions theory that appellant promised employment
abroad to the complainants has been proven beyond reasonable
doubt not only by the testimonies of prosecution witnesses but also by
the aforequoted receipts signed by appellant indicating that she
received placement fees. The term placement is defined in the same
way as recruitment under Art. 13(b) of the Labor Code. Obviously, to
deflect the import of the use of the phrase placement fees in the
receipts when she signed them feigning tiredness and pointing to the
late hour of the night when she signed one of them. But her claim
crumbles in the face of her own admissions that as a field officer of a
travel agency, she was well aware of the importance of documents
and that it was not her practice to sign papers without reading
them. Indeed, there is every reason to believe that she had read them
before affixing her signature, but she did not object to the use of
placement fees in the receipts.
That appellants was prevaricating as regards the nature of the
amounts she received from the complainants is manifested by the fact
that while she testified that she demanded and accepted the amount
of P10,000 to solve the travel tax problems of some of he
complainants, the aforequoted handwritten receipt she signed shows
that the same amount was for plane tickets & hotel
accommodations. Moreover, if indeed it is true that the amount she
demanded and collected from the complainants were mere
processing fees needed to secure travel papers, then she would have
received them upon official receipts of the travel agency, in its office
and at the appropriate office hours. The evidence proven, however,
shows that two of the receipts were prepared by a complainants wife
while another appears to be in appellants own handwriting on a yellow
ruled pad paper, and that she received various amounts in places
other than her office including her own residence, and after office
hours. In one instance, a transaction even occurred at midnight in her
own home.
Appellant also claims that the visa applications of the
complainants she had presented in evidenced prove that they were
not as seekers for jobs overseas. This stretches judicial credulity to
the limits. The four complainants who testified for the prosecution
could not have afforded travel abroad, much more as tourist. Cecilia
Baas and the three, Principe, Villanueva and Gutierrez, were all
unemployed. Neither was there proof that complainants had sources
of income which they could rely on even if unemployed or
low-salaried. Furthermore, as regards Cecilia Baas, the use of the
name Pacita Garcia in the passport given her was not even
satisfactorily explained by the appellant. It is of judicial notice,
however, that fake passports are the usual tools of illegal recruiters.
That appellant even accompanied some complainants abroad on
the pretext that she would secure their plane tickets there does not
help her case any. Instead of bolstering her claim that she was merely
helping the complainants secure travel papers, that story instead
undermines the alleged legality of her activities. She did not actually
have to go abroad to secure tickets and travel documents since these
may be obtained just as easily within this country. The rule, therefore,
that for evidence to be believed, it must not only proceed from the
mouth of a credible witness but it must be credible in itself such as the
common experience and observation of mankind can proved as
probable under the circumstances, finds meaning in this case.
[35]

Upon the evidence presented and on record, there is therefore no

reason to disturb the trial courts conclusion that appellant violated the
law against illegal recruitment in large scale.
We note, however, that the trial court omitted Cecilia Baas in its
decision. Since Cecilia Baas is named one of the complainants in the
amended information for illegal recruitment and who testified in court
to prove her charges, her case should have been duly considered.
The trial court stated that the complainants executed affidavits of
desistance except Principe, Villanueva and Gutierez. This, perhaps,
[36]

explains why the trial court did not even mention the testimony of
Cecilia Baas in its decision. However, the records show that the only
the following executed affidavits of desistance: Lito B. Camora (Exh.
8), Roel B. Perez (Exh. 9), Magdalena P. Arizala and Fe P.
Domagtory (Exh. 10), and Eduardo P. Prudenciado, Leonilo D.
Arganda and Rose V. Flores (Exh. 11). Of these seven persons,
[37]

Camora, Arizala, Prudenciado, Arganda and Flores filed complaints

for estafa against appellant while Perez and Domagtory did
not. Affidavits of desistance, however, may not exonerate an accused
from criminal liability, especially when the evidence already adduced
suffices to convict. In People v. Romero, the Court holds:
[38]

The fact that complainants Bernardo Salazar and Richard Quillope

executed a Joint Affidavit of Desistance does not serve to exculpate
accused-appellant from criminal liability insofar as the case for
illegal recruitment is concerned since the Court looks with disfavor
the dropping of criminal complaints upon mere affidavit of
desistance of the complainant, particularly where the commission of
the offense, as is in the case, is duly supported by documentary
evidence.
Generally, the Court attaches no persuasive value to affidavits of
desistance, especially when it is executed as an afterthought. It
would be a dangerous rule for courts to reject testimonies solemnly
taken before the courts of justice simply because the witnesses who
had given them, later on, changed their mind for one reason or
another, for such rule would make solemn trial a mockery and place
the investigation of truth at the mercy of unscrupulous witness(es).
Complaints Bernardo Salazar and Richard Quillope may have a
change of heart insofar as the offense wrought on their person is
concerned when they executed their joint affidavit of desistance but
this will not affect the public prosecution of the offense itself. It is
relevant to note that the right of prosecution and punishment for a
crime is one of the attributes that by a natural law belongs to the
sovereign power instinctly charged by the common will of the
members of society to look after, guard and defend the interest of
the community, the individual and social rights and liberties of
every citizen and the guaranty of the exercise of his rights. The
 cardinal principle which states that to the State belongs the power to
prosecute and punish crimes should not be overlooked since a
criminal offense is an outrage to the sovereign State. As provided
by the Civil Code of the Philippines:
Art. 2034. There may be a compromise upon the civil
liability arising from an offense; but such compromise shall
not extinguish the public action for the imposition of the
legal penalty.
While the trial court included the eleven estafa cases in the docket
numbers appearing on the face of the decision to identify the cases
under consideration, it omitted any mention about them. A thorough
search on the records for a reason for such omission yielded a
negative result. Notably, the Solicitor General failed to notice the
same omission in his brief. The settled rule is that where other crimes
or felonies are found to have been committed by an accused charged
with violation of another law, conviction under the latter law does not
preclude punishment under the other statutes. [39]

WHEREFORE, the Decision of the trial court finding appellant

Vevina Buemio guilty beyond reasonable doubt of the crime of illegal
recruitment in large scale under Arts. 38 and 39 of the Labor Code
and imposing on her the penalty of life imprisonment and the payment
of a fine of P100,000.00 is hereby AFFIRMED, subject to the
modification that she shall refund the amounts she had unlawfully
collected while committing the acts constituting illegal recruitment to
Cecilia Baas, Eliseo Principe, Ramon Villanueva and Eduardo
Gutierrez. Cost against the appellant.
SO ORDERED.
Padilla, Bellosillo, Vitug, and Hermosisima, Jr., JJ., concur.

FIRST DIVISION

[G.R. Nos. 140067-71. August 29, 2002]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. NENITA

MARIA OLIVIA GALLARDO (at large), and REMEDIOS
MALAPIT, accused,
REMEDIOS MALAPIT, accused-appellant.

DECISION
YNARES-SANTIAGO, J.:

Remedios Malapit and Nenita Maria Olivia Gallardo were charged

with one (1) count of illegal recruitment committed in large-scale,
three (3) counts of estafa, and one (1) count of simple illegal
recruitment before the Regional Trial Court of Baguio City, Branch
3. The Informations read as follows:
[1]

Criminal Case No. 15320-R (Illegal Recruitment Committed in Large

Scale) [2]

The undersigned (Public Prosecutor) accuses NENITA MARIA OLIVIA

GALLARDO and REMEDIOS MALAPIT of the crime of ILLEGAL
RECRUITMENT COMMITTED IN LARGE SCALE, defined and
penalized under Article 13(b) in relation to Article 38(b), 34, and 39 of P.D.
No. 442, otherwise known as the New Labor Code of the Philippines, as
amended by P.D. No. 1693, 1920, 2018 and R.A. No. 8042, committed as
follows:

That during the period from January 1997 to June, 1997, 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 for a fee,
recruit and promise employment as contract workers in Canada, to the
herein complainants, namely: Rommel Suni, Myrna Castro, Marilyn
Mariano, Bryna Paul Wong, Mary Grace Lanozo, Ana Liza Aquino, Marie
Purificacion Abenoja, Florence Bacoco and Lorna Domingo, without said
accused having first secured the necessary license or authority from the
Department of Labor and Employment.

Criminal Case No. 15323-R (Estafa) [3]

That in March 1997 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 MARILYN MARIANO 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 Marilyn Mariano and pretended that
he/she/they could secure a job for him/her abroad, for and in consideration
of the sum of P36,500.00, when in truth and in fact they could not; the said
Marilyn Mariano deceived and convinced by the false pretenses employed
by the accused parted away the total sum of P36,500.00, in favor of the
accused, to the damage and prejudice of the said Marilyn Mariano in the
aforementioned amount of THIRTY SIX THOUSAND FIVE HUNDRED
PESOS (P36,500.00), Philippine Currency.

Criminal Case No. 15327-R (Estafa) [4]

That on June 6, 1997 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 MARIE PURIFICACION
ABENOJA 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 Marie
Purificacion Abenoja and pretended that he/she/they could secure a job for
him/her abroad, for and in consideration of the sum of P36,500.00, when in
truth and in fact they could not; the said Marie Purificacion Abenoja
deceived and convinced by the false pretenses employed by the accused
parted away the total sum of P36,500.00 in favor of the accused, to the
damage and prejudice of the said Marie Purificacion Abenoja in the
aforementioned amount of THIRTY SIX THOUSAND FIVE HUNDRED
PESOS (P36,500.00), Philippine currency.

Criminal Case No. 15570-R (Illegal Recruitment) [5]

The under signed (Public Prosecutor) accuses NENITA MARIA

OLIVIA-GALLARDO and REMEDIOS MALAPIT of the crime of
ILLEGAL RECRUITMENT, defined and penalized under Article 13(b) in
relation to Article 38(b), 34, and 39 of Presidential Decree No. 442,
otherwise known as the New Labor Code of the Philippines, as amended by
R.A. No. 8042, committed as follows:

That on or about the 6th day of June, 1997, 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 for a fee, recruit and
promise employment as contract worker in Canada, to the herein
complainant ARACELI D. ABENOJA, without said accused having first
secured the necessary license or authority from the Department of Labor and
Employment.

Criminal Case No. 15571-R (Estafa) [6]

That on or about the 11th day of June, 1997 in the City of Baguio,
Philippines, and within the jurisdiction of this Honorable Court, the
above-named accused, conspiring, confederating & mutually aiding one
another, did then and there willfully, unlawfully and feloniously defraud one
ARACELI D. ABENOJA 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
Araceli D. Abenoja and pretended that he/she/they could secure a job for
him/her abroad, for and in consideration of the sum of P35,000.00, when in
truth and in fact they could not; the said Araceli D. Abenoja deceived and
convinced by the false pretenses employed by the accused parted away the
total sum of P35,000.00 in favor of the accused, to the damage and prejudice
of the said Araceli D. Abenoja in the aforementioned amount of THIRTY
FIVE THOUSAND PESOS (P35,000.00), Philippine currency.

Only accused-appellant Remedios Malapit was brought to the

jurisdiction of the trial court. Her co-accused, Nenita Maria Olivia
Gallardo, remained at large.
Upon arraignment, accused-appellant pleaded not guilty to all
charges. The five (5) cases were consolidated and tried jointly.
Marie Purificacion Abenoja and Marilyn Mariano met
accused-appellant at her beauty parlor in Lopez Building, Session
Road, Baguio City. Marie met accused-appellant sometime in
January 1997 through her friend, Florence Bacoco. A month later,
Marilyn was introduced to accused-appellant by Grace Lanozo, a
fellow nurse at the PMA Hospital.
Marie claims that accused-appellant enticed her to apply for work
as a caregiver in Canada. Accused-appellant showed her a piece of
paper containing a job order saying that Canada was in need of ten
(10) caregivers and some messengers. Accused-appellant also
promised her that she will be receiving a salary of CN$2,700.00
(Canadian Dollars) and will be able to leave for Canada in a months
time. Heeding accused-appellants guaranty, Marie eventually applied
for the overseas job opportunity.
On June 6, 1997, accused-appellant introduced Marie to
co-accused Nenita Maria Olivia-Gallardo in Tandang Sora, Quezon
City. On the same day, Marie submitted herself to a physical
examination and personally handed to Gallardo a partial payment of
P18,000.00, for which the latter issued a receipt. Marie made
[7]

another payment in the amount of P52,000.00, for which

accused-appellant issued a provisional receipt. This amount included
[8]

the placement fee of her sister, Araceli Abenoja, who became

interested in the opportunity to work abroad.Accused-appellant issued
to Marie the receipt for Araceli in the amount of P35,000.00, signed
[9]

by Gallardo.
Three months lapsed without any news on Maries deployment to
Canada. Her sister, Araceli, had already left for work abroad through
the efforts of their other town-mate. The weekly follow-ups made by
Marie to accused-appellant pertaining to her application and that of
Aracelis were to no avail. Accused-appellant just promised Marie that
she will return her money.Realizing that she had been hoodwinked,
Marie decided to file a complaint against the accused-appellant and
Gallardo with the National Bureau of Investigation. She no longer
verified the authority of both accused-appellant and Gallardo in
recruiting workers overseas because she was told by Gallardo that
she is a direct recruiter. [10]

Marilyn Mariano, on the other hand, was told by

accused-appellant that she was recruiting nurses from Baguio City
and was looking for one more applicant to complete the first batch to
fly to Canada. After giving her all the information about the job
opportunity in Canada, accused-appellant encouraged her to meet
Gallardo. Not long after, Grace Lanozo accompanied her to meet
Gallardo at the latters house in Quezon City.
Gallardo required her to undergo a medical check-up, to complete
her application papers within the soonest possible time and to prepare
money to defray the expenses for her deployment to Canada. Upon
the instruction of accused-appellant, Marilyn paid a total amount of
P36,000.00 to Gallardo, which was evidenced by a receipt. Of this
amount, the P1,500.00 was [11]
for her medical
check-up, P20,000.00 for processing of papers and P15,000.00 for
[12] [13]

her visa.
 Marilyn was further made to accomplish a form, prepared by both
accused-appellant and Gallardo, at the residence of
accused-appellant in Baguio City. Thereafter, she was informed that
the processing of her papers abroad shall commence within the next
three months. She was also made to attend a meeting conducted by
both accused-appellant and Gallardo at the formers house in Baguio
City, together with other interested applicants.
After three months of waiting with no forthcoming employment
abroad, Marilyn and the other applicants proceeded to the Philippine
Overseas Employment Agency, Regional Administrative Unit, of the
Cordillera Administrative Region in Baguio City, where they learned
that accused-appellant and Gallardo were not authorized
recruiters. Marilyn confronted accused-appellant about this,
[14]

whereupon the latter assured her that it was a direct hiring

scheme. Thereafter, Marilyn reported accused-appellant and Gallardo
to the NBI. [15]

After trial on the merits, accused-appellant was found guilty of the

crimes of Illegal Recruitment in Large Scale and Estafa on three (3)
counts. The dispositive portion of the decision reads:

WHEREFORE, the Court finds accused Remedios Malapit GUILTY

beyond reasonable doubt with the crimes of Illegal Recruitment in Large
Scale, and Estafa in three (3) counts, and she is hereby sentenced as follows:

1. To suffer Life Imprisonment at the Correctional Institution for Women,

Mandaluyong City in Criminal Cases Nos. 15320-R and 15770-R for
Illegal Recruitment in Large Scale; to pay a Fine to the Government in the
amount of One Hundred Thousand (P100,000.00) Pesos; and to pay
private complainants, Marie Purificacion Abenoja, the amount of Thirty
Five Thousand (P35,000.00) Pesos; Araceli Abenoja also the amount of
Thirty Five Thousand (P35,000.00) Pesos; and Marilyn Mariano, the
amount of Thirty Six Thousand Five Hundred (P36,500.00) Pesos, all
amounts with legal interest.
2. To suffer Imprisonment at the same Institution from Six (6) Years, Five (5)
Months, and Eleven (11) Days as Minimum to Seven (7) Years, Eight (8)
Months, and Twenty (20) Days as Maximum of Prision Mayor for each
Estafa case in Criminal Cases Nos. 15323-R, 15327-R, and 15571-R.
3. To pay costs of suit.[16]

Accused-appellant is now before us on the following assignment

of errors:
I
THE TRIAL COURT ERRED IN CONCLUDING THAT THE
PROSECUTION SUCCEEDED IN PROVING THE GUILT OF
ACCUSED-APPELLANT BEYOND REASONABLE DOUBT FOR THE
CRIME OF ILLEGAL RECRUITMENT.

II

THE TRIAL COURT ERRED IN CONCLUDING THAT THE

PROSECUTION SUCCEEDED IN PROVING THE GUILT OF
ACCUSED-APPELLANT BEYOND REASONABLE DOUBT FOR
THREE COUNTS OF ESTAFA.

III

THE TRIAL COURT ERRED IN NOT DISMISSING CRIMINAL CASES

NOS. 15570-R AND 15571-R FOR ABSENCE OF EVIDENCE
RESULTING FROM THE FAILURE OF THE COMPLAINING
WITNESS TO APPEAR AND SUBSTANTIATE HER COMPLAINT.

IV

GRANTING ARGUENDO THAT ACCUSED-APPELLANT

COMMITTED ILLEGAL RECRUITMENT, THE TRIAL COURT ERRED
IN CONVICTING HER OF ILLEGAL RECRUITMENT IN LARGE
SCALE.

Accused-appellant maintains that she did not commit any of the

activities enumerated in the Labor Code on illegal recruitment in
connection with the applications of the private complainants. It was
Nenita Maria Olivia Gallardo who convinced and promised private
complainants employment overseas. It was also Gallardo who
received and misappropriated the money of private
complainants. Accordingly, she cannot be convicted of estafa.
We do not agree.
Illegal recruitment is committed when two (2) essential elements
concur:
(1) that the offender has no valid license or authority required by law to
enable him to lawfully engage in the recruitment and placement of
workers, and
(2) that the offender undertakes any activity within the meaning of
recruitment and placement defined under Article 13(b), or any prohibited
practices enumerated under Article 34 of the Labor Code.[17]
 Article 13(b) of the Labor Code 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: 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.

In the case at bar, the first element is present. Nonette

Legaspi-Villanueva, the Overall Supervisor of the Regional Office of
the POEA in Baguio City, testified that per records, neither
accused-appellant nor Gallardo were licensed or authorized to recruit
workers for overseas employment in the City of Baguio or in any part
of the Cordillera Region.
The second essential element is likewise present.
Accused-appellant purported to have the ability to send Marie
Purificacion Abenoja, Araceli Abenoja and Marilyn Mariano for
employment abroad through the help of her co-accused Gallardo,
although without any authority or license to do so. Accused-appellant
was the one who persuaded them to apply for work as a caregiver in
Canada by making representations that there was a job market
therefor. She was also the one who helped them meet Gallardo in
[18]

order to process their working papers and personally assisted Marie,

Araceli and Marilyn in the completion of the alleged
requirements. Accused-appellant even provided her house in
[19]

Baguio City as venue for a meeting with other applicants that she and
Gallardo conducted in connection with the purported overseas
employment in Canada. Accused-appellant, therefore, acted as an
[20]

indispensable participant and effective collaborator of co-accused

Gallardo, who at one time received placement fees on behalf of the
[21]

latter from both Marie and Araceli Abenoja. The totality of the
evidence shows that accused-appellant was engaged in the
recruitment and placement of workers for overseas employment
under the above-quoted Article 13 (b) of the Labor Code. Hence, she
cannot now feign ignorance on the consequences of her unlawful
acts.
Accused-appellants claim that the other private complainants in
Criminal Case No. 15320-R, for illegal recruitment in large scale, have
executed their individual affidavits of desistance pointing to Gallardo
as the actual recruiter, deserves scant consideration. The several
Orders issued by the trial court show that the dismissal of the
[22]

complaints of the other private complainants were based on their

failure to substantiate and prosecute their individual complaints
despite due notice. *

The foregoing notwithstanding, the existence of the adverted

affidavits of desistance does not appear in the records of this case
and, thus, may not be given any probative weight by this Court. Any
evidence that a party desires to submit for the consideration of the
court must be formally offered by him, otherwise, it is excluded and
rejected. Evidence not formally offered before the trial court cannot
[23]

be considered on appeal, for to consider them at such stage will deny

the other parties their right to rebut them. By opting not to present
[24]

them in court, such affidavits of desistance are generally hearsay and

have no probative value since the affiants thereof were not placed on
the witness stand to testify thereon. The reason for the rule
[25]

prohibiting the admission of evidence that has not been formally

offered is to afford the other party the chance to object to their
admissibility. [26]

All told, the evidence against accused-appellant has established

beyond a shadow of doubt that she actively collaborated with
co-accused Gallardo in illegally recruiting the complainants in this
case. As correctly pointed out by the trial court, the private
complainants in this case would not have been induced to apply for a
job in Canada were it not for accused-appellants information,
recruitment, and introduction of the private complainants to her
co-accused Gallardo.
Likewise untenable are accused-appellants claims that she did not
represent herself as a licensed recruiter, and that she merely helped
[27]

complainants avail of the job opportunity. It is enough that she gave

the impression of having had the authority to recruit workers for
deployment abroad. In fact, even without consideration for
accused-appellants services, she will still be deemed as having
engaged in recruitment activities, since it was sufficiently
demonstrated that she promised overseas employment to private
complainants. Illegal recruitment is committed when it is shown that
[28]

the accused-appellant gave the private complainants the distinct

impression that she had the power or ability to send complainants
abroad for work such that the latter were convinced to part with their
money in order to be employed. To be engaged in the practice and
[29]
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. [30]

Undoubtedly, the acts of accused-appellant showed unity of

purpose with those of co-accused Gallardo. All these acts establish a
common criminal design mutually deliberated upon and accomplished
through coordinated moves. There being conspiracy,
accused-appellant shall be equally liable for the acts of her
co-accused even if she herself did not personally reap the fruits of
their execution.
While accused-appellant is guilty of illegal recruitment, we do not
agree with the trial court that the same qualifies as large scale.
Accused-appellants conviction of the illegal recruitment in large
scale was based on her recruitment of Marie Purificacion Abenoja and
Marilyn Mariano, private complainants in Criminal Case No. 15320-R,
and Araceli Abenoja, private complainant in Criminal Case No.
15570-R. It was error for the trial court to consider the three private
complainants in the two criminal cases when it convicted
accused-appellant of illegal recruitment committed in large scale. The
conviction of illegal recruitment in large scale must be based on a
finding in each case of illegal recruitment of three or more persons,
whether individually or as a group. In People v. Reichl, et al., we [31]

reiterated the rule we laid down in People v. Reyes that:[32]

x x x When the Labor Code speaks of illegal recruitment committed against

three (3) or more persons individually or as a group, it must be understood
as referring to the number of complainants in each case who are
complainants therein, otherwise, prosecutions for single crimes of illegal
recruitment can be cumulated to make out a case of large scale illegal
recruitment. In other words, a conviction for large-scale illegal recruitment
must be based on a finding in each case of illegal recruitment of three or
more persons whether individually or as a group. (Underscoring ours)

Accused-appellant likewise assails the decision of the trial court in

Criminal Cases Nos. 15570-R and 15571-R for simple illegal
recruitment and estafa, respectively, saying that these two criminal
cases should have been dismissed for lack of evidence. The only
evidence presented in these cases was the testimony of Marie
Purificacion Abenoja, Araceli Abenojas sister, on her alleged payment
of the placement fees for Aracelis application. By Aracelis failure to
testify, she failed to prove the facts and circumstances surrounding
her alleged recruitment and the person accountable therefor.
We are not persuaded. In People v. Gallarde, we held:
[33]

Direct evidence of the commission of a crime is not the only matrix

wherefrom a trial court may draw its conclusion and finding of guilt. The
prosecution is not always tasked to present direct evidence to sustain a
judgment of conviction; the absence of direct evidence does not necessarily
absolve an accused from any criminal liability. Even in the absence of direct
evidence, conviction can be had on the basis of circumstantial evidence,
provided that the established circumstances constitute an unbroken chain
which leads one to one fair and reasonable conclusion which points to the
accused, to the exclusion of all others, as the guilty person, i.e., the
circumstances proved must be consistent with each other, consistent with the
hypothesis that the accused is guilty, and at the same time inconsistent with
any other hypothesis except that of guilty.

The rules on evidence and precedents sustain the conviction of an accused

through circumstantial evidence, as long as the following requisites are
present: (1) there must be more than one circumstance; (2) the inference
must be based on proven facts; and (3) the combination of all circumstances
produces a conviction beyond reasonable doubt of the guilt of the accused.

The circumstantial evidence in the case at bar, when scrutinized

and taken together, leads to no other conclusion than that
accused-appellant and co-accused Gallardo conspired in recruiting
and promising a job overseas to Araceli Abenoja. Moreover, Marie
Purificacion Abenoja had personal knowledge of the facts and
circumstances surrounding the charges filed by her sister, Araceli, for
simple illegal recruitment and estafa. Marie was privy to the
recruitment of Araceli as she was with her when both
accused-appellant and Gallardo required Araceli to undergo physical
examination to find out whether the latter was fit for the job
abroad. Accused-appellant even admitted that she was the one who
[34]

introduced Marie and Araceli to Gallardo when they went to the latters
house. Marie was the one who shouldered the placement fee of her
[35]

sister Araceli. [36]

Furthermore, the private complainants in this case did not harbor

any ill motive to testify falsely against accused-appellant and
Gallardo. Accused-appellant failed to show any animosity or ill-feeling
on the part of the prosecution witnesses which could have motivated
them to falsely accuse her and Gallardo. It would be against human
nature and experience for strangers to conspire and accuse another
stranger of a most serious crime just to mollify their hurt feelings. As[37]

such, the testimony of private complainants that accused-appellant

was the person who transacted with them, promised them jobs and
received money therefor, was correctly given credence and regarded
as trustworthy by the trial court.
In sum, accused-appellant is only guilty of two (2) counts of illegal
recruitment. Under Section 7 of Republic Act No. 8042 otherwise [38]

known as the Migrant Workers Act of 1995, any person found guilty of
illegal recruitment shall suffer the penalty of imprisonment of not less
than six (6) years and one (1) day but not more than twelve (12) years
and a fine of not less than two hundred thousand pesos (P200,000.00)
nor more than five hundred thousand pesos (P500,000.00).
The provisions of the Indeterminate Sentence Law are applicable,
as held in People v. Simon: [39]

It is true that Section 1 of said law, after providing for indeterminate

sentence for an offense under the Revised Penal Code, states that if the
offense is punished by any other law, the court shall sentence the accused to
an indeterminate sentence, the maximum term of which shall not exceed the
maximum fixed by said law and the minimum shall not be less than the
minimum term prescribed by the same. We hold that this quoted portion of
the section indubitably refers to an offense under a special law wherein the
penalty imposed was not taken from and is without reference to the Revised
Penal Code, as discussed in the preceding illustrations, such that it may be
said that the offense is punished under that law.

Guided by the foregoing principle, accused-appellant shall be

made to suffer a prison term of six (6) years and one (1) day, as
minimum, to twelve (12) years, as maximum, and to pay a fine of
P200,000.00, for each count of illegal recruitment.
The Court likewise affirms the conviction of accused-appellant for
estafa on three (3) counts. It is settled that a person may be charged
and convicted separately of illegal recruitment under the Labor Code
and estafa under the Revised Penal Code, Article 315, paragraph
2(a). As we held in People v. Yabut: [40]

In this jurisdiction, it is settled that a person who commits illegal

recruitment may be charged and convicted separately of illegal recruitment
under the Labor Code and estafa under par. 2 (a) of Art. 315 of the Revised
Penal Code. The offense of illegal recruitment is malum prohibitum where
the criminal intent of the accused is not necessary for conviction, while
estafa is malum in se where the criminal intent of the accused is crucial for
conviction. Conviction for offenses under the Labor Code does not bar
conviction for offenses punishable by other laws. Conversely, conviction for
estafa under par. 2 (a) of Art. 315 of the Revised Penal Code does not bar a
conviction for illegal recruitment under the Labor Code. It follows that ones
acquittal of the crime of estafa will not necessarily result in his acquittal of
the crime of illegal recruitment in large scale, and vice versa.

The prosecution has proven beyond reasonable doubt that

accused-appellant was guilty of estafa under the Revised Penal Code,
Article 315 paragraph (2) (a), which provides that estafa is committed:

2. By means of any of the following false pretenses or fraudulent acts

executed prior to or simultaneously with the commission of fraud:

(a) By using fictitious name or falsely pretending to possess power,

influence, qualifications, property, credit, agency, business or
imaginary transactions, or by means of other similar deceits.

The evidence is clear that in falsely pretending to possess the

power to deploy persons for overseas placement, accused-appellant
deceived Marie, Araceli and Marilyn into believing that the recruitment
would give them greener opportunities as caregivers in
Canada. Accused-appellants assurance constrained the private
complainants to part with their hard-earned money in exchange for a
slot in the overseas job in Canada. The elements of deceit and
damage for this form of estafa are indisputably present. Hence, the
conviction of accused-appellant for three (3) counts of estafa in
Criminal Cases Nos. 15323-R, 15327-R and 15571-R should be
upheld.
Under the Revised Penal Code, an accused found guilty of estafa
shall be sentenced to:

x x x 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 but
does not exceed 22,000 pesos, and if such amount 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; x x x.
 In applying the provisions of the Indeterminate Sentence Law, we
had occasion to reiterate our ruling in People v. Ordono in the very
[41]

recent case of People v. Angeles, to wit:

[42]

Under the Indeterminate Sentence Law, the maximum term of the penalty
shall be that which, in view of the attending circumstances, could be
properly imposed under the Revised Penal Code, and the minimum shall be
within the range of the penalty next lower to that prescribed for the
offense. The penalty next lower should be based on the penalty prescribed
by the Code for the offense, without first considering any modifying
circumstances attendant to the commission of the crime. The determination
of the minimum penalty is left by law to the sound discretion of the court
and it can be anywhere within the range of the penalty next lower without
any reference to the periods into which it might be subdivided. The
modifying circumstances are considered only in the imposition of the
maximum term of the indeterminate sentence.

Similarly, in People v. Saulo, we further elucidated on how to

[43]

apply the Indeterminate Sentence Law for the charge of estafa:

Since the penalty prescribed by law for the estafa charge against
accused-appellant is prision correccional maximum to prision
mayor minimum, the penalty next lower in degree is prision
correccionalminimum to medium. Thus, the minimum term of the
indeterminate sentence should be anywhere within six (6) months and one (1)
day to four (4) years and two (2) months.

In fixing the maximum term, the prescribed penalty of prision

correccional maximum to prision mayor minimum should be divided into
three equal portions of time, each of which portion shall be deemed to form
one period, as follows

Minimum Period: From 4 years, 2 months and 1 day to 5 years,

5 months and 10 days

Medium Period: From 5 years, 5 months and 11 days to 6 years,

8 months and 20 days

Maximum Period: From 6 years, 8 months and 21 days to 8

years

pursuant to Article 65, in relation to Article 64, of the Revised Penal Code.
When the amounts involved in the offense exceeds P22,000, the penalty
prescribed in Article 315 of the Revised Penal Code shall be imposed in its
maximum period, adding one year for each additional P10,000.00, although
the total penalty which may be imposed shall not exceed twenty (20) years.

In Criminal Case No. 15323-R, Marilyn Mariano testified that upon

instruction of accused-appellant she gave accused Gallardo a total of
P36,500.00.
In Criminal Case Nos. 15327-R and 15571-R, Marie Purificacion
Abenoja testified that she gave the amounts of P18,000.00 and
P52,000.00 to accused Gallardo and accused-appellant. Out of the
amount of P52,000.00, P35,000.00 was intended to answer for the
placement fee of her sister Araceli Abenoja, the private complainant
in Criminal Case No. 15571-R.The remaining P17,000.00 formed part
of the balance of Maries placement fee. Accordingly,
accused-appellant shall be criminally liable for the amount of
P35,000.00 in Criminal Cases No. 15327-R and P35,000.00 in
Criminal Case No. 15571-R.
WHEREFORE, in view of the foregoing, the appealed Decision of
the Regional Trial Court of Baguio City, Branch 3 is AFFIRMED with
the following MODIFICATIONS:
(1) In Criminal Case No. 15320-R, accused-appellant Remedios Malapit is
found GUILTY beyond reasonable doubt of the crime of Simple Illegal
Recruitment only, and is sentenced to suffer a prison term of six (6) years
and one (1) day, as minimum, to twelve (12) years, as maximum, and to
pay a fine of P200,000.00.
(2) In Criminal Case No. 15323-R, accused-appellant Remedios Malapit is
found GUILTY beyond reasonable doubt of the crime of Estafa and
sentenced to suffer a prison term of four (4) years and two (2) months
of prision correccional, as minimum, to nine (9) years and four (4) months
of prision mayor, as maximum, and is ORDERED to indemnify Marilyn
Mariano the amount of P36,500.00.
(3) In Criminal Case No. 15327-R, accused-appellant Remedios Malapit is
found GUILTY beyond reasonable doubt of the crime of Estafa and
sentenced to suffer a prison term of four (4) years and two (2) months
of prision correccional, as minimum, to nine (9) years and four (4) months
of prision mayor, as maximum, and is ORDERED to indemnify Marie
Purificacion Abenoja the amount of P35,000.00.
(4) In Criminal Case No. 15570-R, accused-appellant Remedios Malapit is
found GUILTY beyond reasonable doubt of the crime of Simple Illegal
Recruitment and is sentenced to suffer a prison term of six (6) years and
one (1) day, as minimum, to twelve (12) years, as maximum, and to pay a
fine of P200,000.00.
 (5) In Criminal Case No. 15571-R, accused-appellant Remedios Malapit is
found GUILTY beyond reasonable doubt of the crime of Estafa and
sentenced to suffer a prison term of four (4) years and two (2) months
of prision correccional, as minimum, to nine (9) years and four (4) months
of prision mayor, as maximum, and is ORDERED to indemnify Araceli
Abenoja the amount of P35,000.00

SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, and Austria-Martinez,
JJ., concur.

SECOND DIVISION

[G.R. Nos. 115338-39. September 16, 1997]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. LANIE

ORTIZ-MIYAKE accused-appellant.

DECISION
REGALADO, J.:

Accused-appellant Lanie Ortiz-Miyake was charged with illegal

recruitment in large scale in the Regional Trial Court of Makati on a
complaint initiated by Elenita Marasigan, Imelda Generillo and
Rosamar del Rosario. In addition, she was indicted for estafa by
means of false pretenses in the same court, the offended party being
Elenita Marasigan alone.
The information in the charge of illegal recruitment in large scale in
Criminal Case No. 92-6153 reads as follows:

That in or about the period comprised from June 1992 to August 1992, in
the Municipality of Paraaque, Metro Manila, Philippines and within the
jurisdiction of this Honorable Court, the above-named accused, falsely
representing herself to have the capacity and power to contract, enlist and
recruit workers for employment abroad did then and there willfully,
unlawfully, and feloniously collect for a fee, recruit and promise
employment/job placement abroad to the following persons, to wit: 1)
Rosamar del Rosario; 2) Elenita Marasigan; 3) Imelda Generillo, without
first securing the required license or authority from the Department of Labor
and Employment, thus amounting to illegal recruitment in large scale, in
violation of the aforecited law.
[1]

The information in the charge for estafa in Criminal Case No.

92-6154 alleges:

That in or about or sometime in the month of August, 1992, in the

Municipality of Paraaque, Metro Manila, Philippines and within the
jurisdiction of this Honorable Court, the above-named accused, by means of
false pretenses executed prior to or simultaneously with the commission of
the fraud, falsely pretending to have the capacity and power to send
complainant Elenita Marasigan to work abroad, succeeded in inducing the
latter to give and deliver to her the total sum of P23,000.00, the accused
knowing fully well that the said manifestations and representation are false
and fraudulent and calculated only to deceive the said complainant to part
with her money, and, once in possession thereof, the said accused did then
and there willfully, unlawfully and feloniously appropriate, apply and
convert the same to her own personal use and benefit, to the damage and
prejudice of the said Elenita Marasigan, in the aforementioned amount
of P23,000.00. [2]

Upon arraignment, appellant pleaded not guilty to the charges and

the cases were tried jointly in Branch 145 of the Regional Trial Court
of Makati.
Of the three complainants in the case for illegal recruitment in
large scale, Marasigan was the only one who testified at the trial. The
two other complainants, Generillo and Del Rosario, were unable to
testify as they were then abroad.
Marasigan testified that she was a 32 year-old unmarried sales
representative in 1992 when she was introduced to appellant by her
co-complainants. Appellant promised Marasigan a job as a factory
[3]

worker in Taiwan for a P5,000.00 fee. At that time, Marasigan had a

pending application for overseas employment pending in a
recruitment agency. Realizing that the fee charged by appellant was
much lower than that of the agency, Marasigan withdrew her money
from the agency and gave it to appellant. [4]

Marasigan paid appellant P5,000.00, but she was later required to

make additional payments. By the middle of the year, she had paid a
total of P23,000.00 on installment basis. Save for two [5]
receipts, Marasigan was not issued receipts for the foregoing
[6]

payments despite her persistence in requesting for the same.

Marasigan was assured by appellant that obtaining a Taiwanese
visa would not be a problem. She was also shown a plane ticket to
[7]

Taiwan, allegedly issued in her name. Appellant issued Marasigan a

[8]

photocopy of her plane ticket, the original of which was promised to

[9]

be given to her before her departure. [10]

Marasigan was never issued a visa. Neither was she given the
[11]

promised plane ticket. Unable to depart for Taiwan, she went to the
travel agency which issued the ticket and was informed that not only
was she not booked by appellant for the alleged flight, but that the
staff in the agency did not even know appellant.
Later, Marasigan proceeded to the supposed residence of
appellant and was informed that appellant did not live there. Upon [12]

verification with the Philippine Overseas Employment Administration

(POEA), it was revealed that appellant was not authorized to recruit
workers for overseas employment. Marasigan wanted to recover
[13]

her money but, by then, appellant could no longer be located.

The prosecution sought to prove that Generillo and Del Rosario,
the two other complainants in the illegal recruitment case, were also
victimized by appellant. In lieu of their testimonies, the prosecution
presented as witnesses Lilia Generillo, the mother of Imelda Generillo,
and Victoria Amin, the sister of Del Rosario.
Lilia Generillo claimed that she gave her daughter P8,000.00 to
cover her application for placement abroad which was made through
appellant. Twice, she accompanied her daughter to the residence of
[14]

appellant so that she could meet her; however, she was not involved
in the transactions between her daughter and appellant. Neither
[15]

was she around when payments were made to appellant. Imelda

Generillo was unable to leave for abroad and Lilia Generillo
concluded that she had become a victim of illegal recruitment.
The prosecution presented Victoria Amin, the sister of Rosamar
Del Rosario, to show that the latter was also a victim of illegal
recruitment. Victoria Amin testified that appellant was supposed to
provide her sister a job abroad. She claimed that she gave her sister a
total of P10,000.00 which was intended to cover the latters
processing fee. [16]
 Victoria Amin never met appellant and was not around when her
sister made payments. She assumed that the money was paid to
appellant based on receipts, allegedly issued by appellant, which her
sister showed her. Del Rosario was unable to leave for abroad
[17]

despite the representations of appellant. Victoria Amin claimed that

her sister, like Marasigan and Generillo, was a victim of illegal
recruitment.
The final witness for the prosecution was Riza Balberte, a [18]

representative of the POEA, who testified that appellant was neither

licensed nor authorized to recruit workers for overseas employment,
POEA certificate certification.
[19]

Upon the foregoing evidence, the prosecution sought to prove that

although two of the three complainants in the illegal recruitment case
were unable to testify, appellant was guilty of committing the offense
against all three complainants and, therefore, should be convicted as
charged.
On the other hand, appellant, who was the sole witness for the
defense, denied that she recruited the complainants for overseas
employment and claimed that the payments made to her were solely
for purchasing plane tickets at a discounted rate as she had
connections with a travel agency. [20]

She denied that she was paid by Marasigan the amount

of P23,000.00, claiming that she was paid only P8,000.00, as shown
by a receipt. She further insisted that, through the travel
agency, she was able to purchase discounted plane tickets for the
[21]

complainants upon partial payment of the ticket prices, the balance of

which she guaranteed. According to her, the complainants were
supposed to pay her the balance but because they failed to do so, she
was obliged to pay the entire cost of each ticket.
The evidence presented by the parties were thus contradictory but
the trial court found the prosecutions evidence more credible. On
December 17, 1993, judgment was rendered by said court convicting
appellant of both crimes as charged. [22]

In convicting appellant of illegal recruitment in large scale, the

lower court adopted a previous decision of Branch 78 of the
Metropolitan Trial Court of Paraaque as a basis for the judgment. Said
previous decision was a conviction for estafa promulgated on July 26,
1993, rendered in Criminal Cases Nos. 74852-53, involving the
[23]

same circumstances in the instant case, wherein complainants

Generillo and Del Rosario charged appellant with two counts of
estafa. This decision was not appealed and had become final and
executory.
In thus convicting appellant in the illegal recruitment case, the
decision therein of the Regional Trial Court stated that the facts in the
foregoing estafa cases were the same as those in the illegal
recruitment case before it. It, therefore, adopted the facts and
conclusions established in the earlier decision as its own findings of
facts and as its rationale for the conviction in the case before it.[24]

In Criminal Case No. 92-6153, the Makati court sentenced

appellant to serve the penalty of life imprisonment for illegal
recruitment in large scale, as well as to pay a fine
of P100,000.00. Appellant was also ordered to reimburse the
complainants the following payments made to her, viz.: (a)
Marasigan, P23,000.00; (b) Generillo, P2,500.00; and (c) Del
Rosario, P2,500.00.
In the same judgment and for the estafa charged in Criminal Case
No. 92-6154, the Makati court sentenced appellant to suffer
imprisonment of four (4) years and two (2) months of prision
correccional, as minimum, to eight (8) years of prision mayor, as
maximum, and to pay the costs.
In the instant petition, appellant seeks the reversal of the
foregoing judgment of the Regional Trial Court of Makati convicting
her of illegal recruitment in large scale and estafa.Specifically, she
insists that the trial court erred in convicting her of illegal recruitment
in large scale as the evidence presented was insufficient.
Moreover, appellant claims that she is not guilty of acts
constituting illegal recruitment, in large scale or otherwise, because
contrary to the findings of the trial court, she did not recruit the
complainants but merely purchased plane tickets for them. Finally,
she contends that in convicting her of estafa, the lower court erred as
she did not misappropriate the money paid to her by Marasigan,
hence there was no damage to the complainants which would
substantiate the conviction.
We uphold the finding that appellant is guilty but we are,
compelled to modify the judgment for the offenses she should be
convicted of and the corresponding penalties therefor.
 Appellant maintains that her conviction for illegal recruitment in
large scale is erroneous. It is her view that in the prosecution of a
case for such offense, at least three complainants are required to
appear as witnesses in the trial and, since Marasigan was the only
complainant presented as a witness, the conviction was groundless.
The Solicitor General also advocates the conviction of appellant
for simple illegal recruitment which provides a lower penalty. The
Court finds the arguments of the Solicitor General meritorious and
adopts his position.
The Labor Code defines recruitment and placement as x x x 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 x x x.[25]

Illegal recruitment is likewise defined and made punishable under

the Labor Code, thus:

Art. 38. Illegal Recruitment. -

(a) Any recruitment activities, including the prohibited practices enumerated

under Article 34 of this Code, to be undertaken by non-licensees or
non-holders of authority shall be deemed illegal and punishable under
Article 39 of this Code. x x x.

(b) Illegal recruitment when committed by a syndicate or in large scale shall

be considered an offense involving economic sabotage and shall be
penalized in accordance with Article 39 hereof.

x x x Illegal recruitment is deemed committed in large scale if committed

against three (3) or more persons individually or as a group.

Art. 39. Penalties. -

(a) The penalty of life imprisonment and a fine of One Hundred Thousand
Pesos (P100,000.00) shall be imposed if Illegal Recruitment constitutes
economic sabotage as defined herein;

xxx

(c) Any person who is neither a licensee nor a holder of authority under this
Title found violating any provision thereof or its implementing rules and
regulations shall, upon conviction thereof, suffer the penalty of
imprisonment of not less than four (4) years nor more than eight (8) years or
a fine of not less than P20,000.00 nor more than P100,000.00, or both such
imprisonment and fine, at the discretion of the court. x x x
[26]

During the pendency of this case, Republic Act No. 8042,

otherwise known as the Migrant Workers and Overseas Filipinos Act
of 1995, was passed increasing the penalty for illegal
recruitment. This new law, however, does not apply to the instant
case because the offense charged herein was committed in 1992,
before the effectivity of said Republic Act No. 8042.Hence, what are
applicable are the aforecited Labor Code provisions.
It is evident that in illegal recruitment cases, the number of
persons victimized is determinative. Where illegal recruitment is
committed against a lone victim, the accused may be convicted of
simple illegal recruitment which is punishable with a lower penalty
under Article 39(c) of the Labor Code. Corollarily, where the offense is
committed against three or more persons, it is qualified to illegal
recruitment in large scale which provides a higher penalty under
Article 39(a) of the same Code.
The position of the Solicitor General is that the conviction of
appellant should be merely for the lesser offense of simple illegal
recruitment. He submits that the Regional Trial Court of Makati erred
in convicting appellant of illegal recruitment in large scale because the
conviction was based on an earlier decision of the Metropolitan Trial
Court of Paraaque where appellant was found guilty of estafa
committed against Generillo and Del Rosario.
It is argued that the Makati court could not validly adopt the facts
embodied in the decision of the Paraaque court to show that illegal
recruitment was committed against Generillo and Del Rosario as
well. Illegal recruitment was allegedly proven to have been committed
against only one person, particularly, Elenita Marasigan. Appellant,
therefore, may only be held guilty of simple illegal recruitment and not
of such offense in large scale.
He further submits that the adoption by the Makati court of the
facts in the decision of the Paraaque court for estafa to constitute the
basis of the subsequent conviction for illegal recruitment is erroneous
as it is a violation of the right of appellant to confront the witnesses,
that is, complainants Generillo and Del Rosario, during trial before
it. He cites the pertinent provision of Rule 115 of the Rules of Court, to
wit:

Section 1. Rights of accused at the trial. In all criminal prosecutions, the

accused shall be entitled:

xxx

(f) To confront and cross-examine the witnesses against him at the

trial. Either party may utilize as part of its evidence the testimony of a
witness who is deceased, out of or cannot, with due diligence be found in
the Philippines, unavailable or otherwise unable to testify, given in another
case or proceeding, judicial or administrative, involving the same parties
and subject matter, the adverse party having had the opportunity to
cross-examine him.

xxx
It will be noted that the principle embodied in the foregoing rule is
likewise found in the following provision of Rule 130:

Section 47. Testimony or deposition at a former proceeding. - The testimony

or deposition of a witness deceased or unable to testify, given in a former
case or proceeding, judicial or administrative, involving the same parties
and subject matter, may be given in evidence against the adverse party who
had the opportunity to cross-examine him.

Under the aforecited rules, the accused in a criminal case is

guaranteed the right of confrontation. Such right has two purposes:
first, to secure the opportunity of cross-examination; and, second, to
allow the judge to observe the deportment and appearance of the
witness while testifying. [27]

This right, however, is not absolute as it is recognized that it is

sometimes impossible to recall or produce a witness who has already
testified in a previous proceeding, in which event his previous
testimony is made admissible as a distinct piece of evidence, by way
of exception to the hearsay rule. The previous testimony is made
[28]

admissible because it makes the administration of justice orderly and

expeditious. [29]

Under these rules, the adoption by the Makati trial court of the
facts stated in the decision of the Paraaque trial court does not fall
under the exception to the right of confrontation as the exception
contemplated by law covers only the utilization of testimonies of
absent witnesses made in previous proceedings, and does not
include utilization of previous decisions or judgments.
In the instant case, the prosecution did not offer the testimonies
made by complainants Generillo and Del Rosario in the previous
estafa case. Instead, what was offered, admitted in evidence, and
utilized as a basis for the conviction in the case for illegal recruitment
in large scale was the previous decision in the estafa case.
A previous decision or judgment, while admissible in evidence,
may only prove that an accused was previously convicted of a
crime. It may not be used to prove that the accused is guilty of a
[30]

crime charged in a subsequent case, in lieu of the requisite evidence

proving the commission of the crime, as said previous decision is
hearsay. To sanction its being used as a basis for conviction in a
subsequent case would constitute a violation of the right of the
accused to confront the witnesses against him.
As earlier stated, the Makati courts utilization of and reliance on
the previous decision of the Paraaque court must be rejected. Every
conviction must be based on the findings of fact made by a trial court
according to its appreciation of the evidence before it. A conviction
may not be based merely on the findings of fact of another court,
especially where what is presented is only its decision sans the
transcript of the testimony of the witnesses who testified therein and
upon which the decision is based.
Furthermore, this is not the only reason why appellant may not be
held liable for illegal recruitment in large scale. An evaluation of the
evidence presented before the trial court shows us that, apart from
the adopted decision in the previous estafa case, there was no other
basis for said trial courts conclusion that illegal recruitment in large
scale was committed against all three complainants.
The distinction between simple illegal recruitment and illegal
recruitment in large scale are emphasized by jurisprudence. Simple
illegal recruitment is committed where a person: (a) undertakes any
recruitment activity defined under Article 13(b) or any prohibited
practice enumerated under Articles 34 and 38 of the Labor Code; and
(b) does not have a license or authority to lawfully engage in the
recruitment and placement of workers. On the other hand, illegal
[31]

recruitment in large scale further requires a third element, that is, the
offense is committed against three or more persons, individually or as
a group. [32]

In illegal recruitment in large scale, while the law does not require
that at least three victims testify at the trial, it is necessary that there is
sufficient evidence proving that the offense was committed against
three or more persons. This Court agrees with the trial court that the
evidence presented sufficiently proves that illegal recruitment was
committed by appellant against Marasigan, but the same conclusion
cannot be made as regards Generillo and Del Rosario as well.
The testimonies of Generillos mother, Lilia Generillo, and Del
Rosarios sister, Victoria Amin, reveal that these witnesses had no
personal knowledge of the actual circumstances surrounding the
charges filed by Generillo and Del Rosario for illegal recruitment in
large scale. Neither of these witnesses was privy to the transactions
between appellant and each of the two complainants. The witnesses
claimed that appellant illegally recruited Generillo and Del
Rosario. Nonetheless, we find their averments to be unfounded as
they were not even present when Generillo and Del Rosario
negotiated with and made payments to appellant.
For insufficiency of evidence and in the absence of the third
element of illegal recruitment in large scale, particularly, that the
offense is committed against three or more persons, we cannot affirm
the conviction for illegal recruitment in large scale. Nonetheless, we
agree with the finding of the trial court that appellant illegally recruited
Marasigan, for which she must be held liable for the lesser offense of
simple illegal recruitment.
Appellants defense that she did not recruit Marasigan but merely
purchased a plane ticket for her is belied by the evidence as it is
undeniable that she represented to Marasigan that she had the ability
to send people to work as factory workers in Taiwan. Her pretext that
the fees paid to her were merely payments for a plane ticket is a
desperate attempt to exonerate herself from the charges and cannot
be sustained.
Furthermore, no improper motive may be attributed to Marasigan
in charging appellant. The fact that Marasigan was poor does not
make her so heartless as to contrive a criminal charge against
appellant. She was a simple woman with big dreams and it was
appellants duplicity which reduced those dreams to
naught. Marasigan had no motive to testify falsely against appellant
except to tell the truth.[33]

Besides, if there was anyone whose testimony needed

corroboration, it was appellant as there was nothing in her testimony
except the bare denial of the accusations. If appellant really
[34]

intended to purchase a plane ticket and not to recruit Marasigan, she

should have presented evidence to support this claim. Also, in her
testimony, appellant named an employee in the travel agency who
was allegedly her contact person for the purchase of the ticket. She
could have presented that person, or some other employee of the
agency, to show that the transaction was merely for buying a
ticket. Her failure to do the foregoing acts belies her pretensions.
The Court likewise affirms the conviction of appellant for estafa
which was committed against Marasigan. Conviction under the Labor
Code for illegal recruitment does not preclude punishment under the
Revised Penal Code for the felony of estafa. This Court is [35]

convinced that the prosecution proved beyond reasonable doubt that

appellant violated Article 315(2)(a) of the Revised Penal Code which
provides that estafa is committed:

2. By means of any of the following false pretenses or fraudulent acts

executed prior to or simultaneously with the commission of the fraud:

(a) By using fictitious name or falsely pretending to possess power,

influence, qualifications, property, credit, agency, business or imaginary
transactions, or by means of other similar deceits.

The evidence is clear that in falsely pretending to possess power

to deploy persons for overseas placement, appellant deceived the
complainant into believing that she would provide her a job in
Taiwan. Her assurances made Marasigan exhaust whatever
resources she had to pay the placement fee required in exchange for
the promised job. The elements of deceit and damage for this form of
estafa are indisputably present, hence the conviction for estafa in
Criminal Case No. 92-6154 should be affirmed.
Under the Revised Penal Code, an accused found guilty of estafa
shall be sentenced to:

x x x 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 but
does not exceed 22,000 pesos, and if such amount 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 x x x.[36]

The amount involved in the estafa case is P23,000.00. Applying

the Indeterminate Sentence Law, the maximum penalty shall be taken
from the maximum period of the foregoing basic penalty, specifically,
within the range of imprisonment from six (6) years, eight (8) months
and twenty-one (21) days to eight (8) years.
On the other hand, the minimum penalty of the indeterminate
sentence shall be within the range of the penalty next lower in degree
to that provided by law, without considering the incremental penalty
for the amount in excess of P22,000.00. That penalty immediately
[37]

lower in degree is prison correccional in its minimum and medium

periods, with a duration of six (6) months and one (1) day to four (4)
years and two (2) months. On these considerations, the trial court
correctly fixed the minimum and maximum terms of the indeterminate
sentence in the estafa case.
While we must be vigilant and should punish, to the fullest extent
of the law, those who prey upon the desperate with empty promises of
better lives, only to feed on their aspirations, we must not be heedless
of the basic rule that a conviction may be sustained only where it is for
the correct offense and the burden of proof of the guilt of the accused
has been met by the prosecution.
WHEREFORE, the judgment of the court a quo finding
accused-appellant Lanie Ortiz-Miyake guilty beyond reasonable doubt
of the crimes of illegal recruitment in large scale (Criminal Case No.
92-6153) and estafa (Criminal Case No. 92-6154) is hereby
MODIFIED, as follows:

1) Accused-appellant is declared guilty beyond reasonable doubt of simple

illegal recruitment, as defined in Article 38(a) of the Labor Code, as
amended. She is hereby ordered to serve an indeterminate sentence of four
(4) years, as minimum, to eight (8) years, as maximum, and to pay a fine
of P100,000.00.

2) In Criminal Case No. 92-6154 for estafa, herein accused-appellant is

ordered to serve an indeterminate sentence of four (4) years and two (2)
months of prision correccional, as minimum, to eight (8) years of prision
mayor, as maximum, and to reimburse Elenita Marasigan the sum
of P23,000.00.
 In all other respects, the aforestated judgment is AFFIRMED, with
costs against accused-appellant in both instances.
SO ORDERED.
Puno, Mendoza, and Torres, Jr., JJ., concur.

FIRST DIVISION

[G.R. No. 121179. July 2, 1998]

PEOPLE OF THE
PHILIPPINES, plaintiff-appellee, vs. ANTONINE B. SALEY
a.k.a. ANNIE B. SALEY, accused-appellant.

DECISION
VITUG, J.:

The case before the Court focuses on the practice of some "illegal
recruiters" who would even go to the extent of issuing forged
tourist visas to aspiring overseas contract workers.These
unsuspecting job applicants are made to pay exorbitant "placement"
fees for nothing really since, almost invariably, they find themselves
unable to leave for their purported country of employment or, if they
are able to, soon find themselves unceremoniously repatriated. This
Court once described their plight in a local proverb as
being naghangad ng kagitna, isang salop ang nawala. [1]

In this appeal from the 3rd March 1995 decision of the Regional
Trial Court of La Trinidad, Benguet, Branch 10, appellant Antonine B.
[2]

Saley, a.k.a. Annie B. Saley, seeks a reversal of the verdict finding

her guilty beyond reasonable doubt of eleven counts
of estafa punishable under the Revised Penal Code and six counts of
illegal recruitment, one committed in large scale, proscribed by the
Labor Code.
Appellant was indicted in eleven separate informations
for estafa under Article 315, paragraph 2(1), of the Revised Penal
Code. The cases (naming the complainants and stating the amounts
therein involved) include: (1) Criminal Case No.
92-CR-1397 (Francisco T. Labadchan P45,000.00); (2) Criminal
[3]
Case No. 92-CR-1414 (Victoria Asil P33,000.00); (3) Criminal Case
No. 92-CR-1415 (Cherry Pi-ay P18,000.00); (4) Criminal Case No.
92-CR-1426 (Corazon del Rosario P40,000.00); (5) Criminal Case No.
92-CR-1428 (Arthur Juan P24,200.00); (6) Criminal Case No.
93-CR-1644 (Alfredo C. Arcega P25,000.00); (7) Criminal Case No.
93-CR-1646 (Brando B. Salbino P25,000.00); (8) Criminal Case No.
93-CR-1647 (Mariano DamologP25,000.00); (9) Criminal Case No.
93-CR-1649 (Lorenzo Belino P25,000.00); (10) Criminal Case No.
93-CR-1651 (Peter Arcega P25,000.00) and (11) Criminal Case No.
93-CR-1652 (Adeline Tiangge P18,500.00).
Except for the name of the offended party, the amount involved
and the date of the commission of the crime, the following information
in Criminal Case No. 93-CR-1652 typified the other informations for
the crime of estafa:
That in or about the month of December, 1991, and sometime prior
to or subsequent thereto, at Buyagan, Municipality of La Trinidad,
Province of Benguet, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, with intent to defraud
ADELINE TIANGGE y MARCOS and by means of deceit through
false representations and pretenses made by her prior to or
simultaneous with the commission of the fraud, did then and there
willfully, unlawfully and feloniously defraud said ADELINE
TIANGGE y MARCOS, by then and there representing herself as a
duly authorized or licensed recruiter for overseas employment, when
in truth and in fact she was not, thereby inducing the said ADELINE
TIANGGE y MARCOS to give and deliver to her the total amount
of EIGHTEEN THOUSAND FIVE HUNDRED PESOS
(P18,500.00), Philippine Currency, for placement abroad and after
having received it, she appropriated and misappropriated the same
for her own use and benefit and despite repeated demands made
upon (her) to return the same, she refused, failed, neglected, and still
refuses, fails and neglects to comply therewith, all to the damage
and prejudice of ADELINE TIANGGE y MARCOS in the total sum
aforesaid.
"Contrary to law. [4]

For the violation of Article 38, in relation to Article 39, of the Labor
Code, five separate informations were also instituted against
appellant on various dates. These cases (with the names of the
complainants) include: (1) Criminal Case No. 92-CR-1396 (Francisco
T. Labadchan); (2) Criminal Case No. 92-CR-1413 (Cherry Pi-ay); (3)
Criminal Case No. 92- CR-1416 (Victoria Asil); (4) Criminal Case No.
92-CR-1425 (Corazon del Rosario) and (5) Criminal Case No.
92-CR-1427 (Arthur Juan). The typical information in these
indictments read:
That sometime in the month of April, 1991 and subsequent thereto at
Buyagan, Municipality of La Trinidad, Province of Benguet,
Philippines, and within the jurisdiction of this Honorable Court, the
above-named accused, did then and there willfully, unlawfully and
knowingly recruit one ARTHUR JUAN for overseas employment,
by then and there ably misrepresenting herself as a duly authorized
or licensed recruiter when in truth and in fact she fully knew it to be
false but by reason of her said misrepresentations which were
completely relied upon by Arthur Juan, she was able to obtain from
the latter the total amount of TWENTY FOUR THOUSAND TWO
HUNDRED PESOS (P24,200.00), Philippine Currency, all to the
damage and prejudice of Arthur Juan in the total sum aforesaid.
"Contrary to Law. [5]

The information in Criminal Case No. 93-CR-1645 for illegal

recruitment in large scale under Article 38, paragraph 1, of
Presidential Decree No. 442 (Labor Code), as amended, filed on 16
April 1993, read:
That in or about the months of August and September, 1992, in the
Municipality of La Trinidad, Province of Benguet, Philippines, and
within the jurisdiction of this Honorable Court, the above-named
accused, did then and there willfully, unlawfully and knowingly
recruit the following: PETER ARCEGA, LORENZO BELINO,
MARIANO DAMOLOG, FIDEL OPDAS, BRANDO B. SALBINO,
DEMBER LEON and ALFREDO C. ARCEGA for overseas
employment, by then and there misrepresenting herself as a duly
authorized or licensed recruiter when in truth and in fact she was not
and by reason of her said misrepresentation which was completely
relied upon by the said complainants whom she recruited, either
individually or as a group amounting to illegal recruitment in large
scale causing economic sabotage, she was able to obtain and
received from them the aggregate total amount of ONE HUNDRED
SEVENTY FIVE THOUSAND PESOS (P175,000.00), Philippine
Currency, all to the damage and prejudice of the foregoing
complainants in the total sum aforesaid.
"Contrary to law. [6]
 Appellant pleaded not guilty to all the charges of illegal recruitment
and estafa. The criminal cases filed were raffled off to two (2)
branches of the Regional Trial Court of Benguet; later, however, the
cases were consolidated at the instance of the prosecution.
Parenthetically, appellant jumped bail pending trial but she was
soon arrested by agents of the Criminal Investigation Service ("CIS").

The Evidence for the Prosecution. -

In Criminal Case No. 92-CR-1397 and Criminal Case No.

92-CR-1396

Francisco Labadchan, a 25-year-old employee in the Navy Base

in Pacdal, Baguio City, was introduced to appellant by Crispin
Perez. In September 1991, the two went to the house of Conchita
Tagle at Kilometer 3, La Trinidad, Benguet, who was known to be
recruiting workers for abroad. After Labadchan had expressed
interest in applying for a job in Korea, Tagle told Labadchan to
prepare P45,000.00, P30,000.00 of which was to be paid that month
and the balance of P15,000.00 before his departure for
abroad. Labadchan paid Tagle the amount of P30,000.00 on 23
September 1991. Appellant, in turn, received that amount when she
went to La Trinidad to "brief" him. She told Labadchan that his flight
would be on the 9th of October 1991 and that he should have paid by
then the balance of P15,000.00 of the fees. He paid Tagle
the P15,000.00 balance on 05 October 1991. When he requested her
to make a receipt, Tagle included the amount in the old receipt for
the P30,000.00 previously given. Appellant handed over to
Labadchan some papers to fill up and gave last-minute instructions
before she boarded a green-colored aircraft.
On 08 October 1991, Labadchan and his wife went to Manila and
stayed, as so instructed by Tagle, at the Prince Hotel near the
terminal of the Dangwa bus company in Dimasalang, Manila. There,
he met other people, among them, his co-complainant Arthur Juan. In
the morning of 09 October 1991, Labadchan and the others were told
to go to the airport with Tagle, where appellant was supposed to give
the travel papers including passports and plane tickets for Korea. At
the airport, however, appellant told the group that their flight had been
re-scheduled for 11 October 1991. Labadchan returned to Baguio
City.
 On 11 October 1991, Labadchan returned to the airport only to be
told this time, however, that his passport was still with the Department
of Foreign Affairs. Appellant told her husband to accompany
Labadchan to the Foreign Affairs office. When Labadchan received
the passport, he saw that while his picture appeared on it, the
passport was made out in the name of a person from Negros
Occidental. Labadchan had to imitate the signature on the passport
just so he could get it. Back at the airport, he was allowed inside the
terminal but only to be later sent out because the ticket he had was
one intended for passage from Korea and not to Korea. Asserting that
he and company were mere "chance passengers," appellant sent
them all home with a promise that another departure date would be
set. She also took back the show money of US$1,000.00.
Appellant would repeatedly schedule a departure date but nothing
tangible came out of her assurances. Finally, Labadchan was able to
get appellant to promise that the money he had given her would be
refunded. When this promise neither materialized, Labadchan finally
reported the matter to the National Bureau of Investigation ("NBI"). In
that office, appellant executed a promissory note stating that she
would return the amount of P46,500.00, which included the amount
of P1,500.00 allegedly used for getting a passport, to Labadchan. [7]

In Criminal Case No. 92-CR-1414 and Criminal Case No.

92-CR-1416

Victoria Asil, a 40-year-old housewife from Imelda Village, Roxas

Street, Baguio City, heard from her elder sister, Feling Derecto, that
appellant was recruiting workers for abroad.During the second week
of January 1992, she, along with her husband Gabriel, went to
appellants house in Buyagan, La Trinidad. Appellant assured her that
she could have a job in a factory in Korea. Appellant asked for an
advance fee of P25,000.00 of the P40,000.00 agreed fee. Victoria
gave appellant the "advance fee" on 13 January 1992 at her (Victorias)
shop in Shoppers Lane, Baguio City which appellant acknowledged
by issuing a receipt for the amount. She told Victoria to be at
appellant's house in Buyagan after three weeks.
When Victoria went to appellants house as so directed, appellant
told her that her flight had been postponed supposedly because prior
applicants had to be accommodated first. Victoria met appellant
seven more times only to be ultimately told that the latter had been
allegedly fooled by the main office in Manila. Appellant, nevertheless,
demanded an additional P5,000.00 from Victoria so that she could
leave on 18 April 1992. Victoria gave appellant the amount
of P5,000.00 at her shop on 31 March 1992 for which appellant gave
a corresponding receipt.
When on 18 April 1992 still nothing happened, Victoria demanded
from appellant a refund. Appellant gave her an advance
of P15,000.00. An acknowledgment receipt with appellants signature
affixed thereon would evidence that payment. Appellant, however,
failed to return the rest of the promised refund. [8]

In Criminal Case No. 92-CR-1413 and Criminal Case No.

92-CR-1415

Cherry Pi-ay, a 26-year-old nursing student from Acop, Tublay,

Benguet, was visited once in March 1991 by appellant who
encouraged Cherry to apply for work in a textile or a plastic factory in
Korea with a monthly salary of US$800.00. Appellant told Cherry that
the moment she would pay the amount of P45,000.00, she could be
deployed in Korea. Cherry prepared her bio-data and gave it to
appellant at the latter's residence during the first week of April 1991.
Cherry was able to leave the country on 04 July 1991 after having
paid the total amount of P45,000.00. Appellant told her that a certain
Ramil would meet her at the airport in Korea. When she arrived, a
Filipina, named Marlyn, instead met her. Marlyn introduced herself as
appellants friend and accompanied Cherry to a certain house owned
by a Korean. There, Cherry met, among other compatriots, Corazon
del Rosario and Jane Kipas. Cherry soon realized that she was not
going to have a job in the factory promised by appellant. Instead, she
was made to work for the Korean applying rugby on and folding
leather jackets. About a month later, men from the Korean
Immigration accosted her and the others. Brought in for questioning
by Immigration officials, Cherry and her companions were informed
that they were illegal workers. After the investigation, Cherry and her
group were allowed to go but on 08 August 1991, all were deported.
Back to the Philippines, the deportees were assured by appellant
that they would get a refund of their money. Cherry executed a sworn
statement narrating her experience in Korea. [9]
 Ayson Acbaya-an, Cherrys "boyfriend" who later was to become
her husband, corroborated Cherrys testimony that appellant first
received P18,000.00 from Cherry. Thereafter, appellant also
received P27,000.00 from Cherry, fifteen thousand pesos
(P15,000.00) of which amount came from him. In both instances,
appellant signed receipts for the payments. The receipts were among
Cherry's papers confiscated in Korea. [10]

In Criminal Case No. 92-CR-1425 and Criminal Case No.

92-CR-1426

Corazon del Rosario, a 34-year-old housemaid from 48 Happy

Homes, Baguio City, had known appellant, an acquaintance, since
1980. One day in December 1990, she happened to chance upon
appellant at a PLDT telephone booth in Kilometer 4, La Trinidad,
Baguio City. Appellant, representing herself to be an authorized
recruiter, tried to persuade Corazon to work abroad. Corazon showed
interest. From then on, appellant would visit Corazon in her brothers
house in Kilometer 4. Ultimately, appellant was able to convince
Corazon that, for a fee of P40,000.00, she could be sent to
Korea. Corazon gave appellant the amount of P15,000.00. She paid
the balance of P25,000.00 in May 1991. The payments were both
made in the presence of Cherry Pi-ay and Jane Kipas. Appellant
issued the corresponding receipts for these amounts.
Corazon took the flight for Korea on 28 June 1991. Appellant had
instructed Corazon, upon landing in Korea, to call up a certain
Ramil. At the airport, Corazon, including her companions among them
Jane Kipas, kept on dialing the number but each time only a Korean
woman would answer the call. Later, that evening, a certain Marlyn,
who introduced herself as appellants friend, took them to a hotel.
There, Marlyn took their show money of US$1,000.00. The group
stayed overnight in the hotel and the following morning, a Korean took
them to a house proximately two hours away by car from the
airport. For about a month, they did nothing but apply rugby on leather
jackets, for which they were not paid, until a policeman arrived and
took all ten of them to the airport. All that the immigration and airport
personnel would tell them was that they should be thankful they were
only being repatriated home. Immigration and airport authorities
confiscated everything that they had.
 At home, appellant promised to return Corazons money. Not
having received the promised refund, Corazon went to the CIS
stationed at Camp Dangwa where, on 28 July 1992, she executed her
sworn statement. [11]

Avelina Velasco Samidan, a friend of Corazon and in whose

house the latter would stay whenever she was in Baguio,
corroborated the testimony of Corazon that she gave to appellant the
amount of P15,000.00, ten thousand pesos of which amount Corazon
borrowed from Avelina, and that some time in April 1991, Corazon
withdrew P25,000.00 from the bank which she likewise paid to
appellant. [12]

In Criminal Case No. 92-CR-1427 and Criminal Case No.

92-CR-1428

Arthur Juan, a 30-year-old farmer from Dumulpot, Tublay,

Benguet, first met appellant in her house at Buyagan, La Trinidad,
Benguet, when he, together with Maxima Gomez, Tirso Gomez and
Francisco Labadchan, went to see appellant who was said to be
recruiting workers for Korea. Juan promptly submitted his bio-data
form after being told that he could work in a factory in Korea at
US$400.00 a month. Appellant quoted a processing fee
of P40,000.00. Juan initially paid the amount of P6,500.00 in April
1991. On 09 October 1991, the scheduled date of the flight, Juan
went to the airport and gave appellant another P15,000.00; the final
balance of the fees were, by their agreement, to be remitted to
appellant on a salary deduction basis. Appellant then told Juan that
he could not leave on that day (09 October 1991) because the
airplane was already full. Appellant took back Juans passport, telling
Juan that he should be able to depart in a few days. Appellant,
however, kept on rescheduling the flight for about five more times until
it became clear to Juan that he had been deceived. Juan paid out a
total amount of P24,200.00, including the US$100.00 that would have
been his pocket money, to appellant. The latter executed receipts for
the amounts.
Juan executed a sworn statement narrating the unfortunate
incident.
[13]

In Criminal Case No. 93-CR-1652

 Adeline Tiangge, a 43-year-old housekeeper from Bangao,
Buguias, Benguet, learned that appellant was recruiting workers for
abroad. Adeline, accompanied by her sister, went to see appellant at
her house in Buyagan some time in December 1991. There were
others, like her, who also went to see appellant. When she produced
the required identification pictures and P1,500.00 for passport
processing, appellant told Adeline that she could be a factory worker
in Korea with a monthly salary of US$350.00. Appellant agreed to be
paid by Adeline the additional P35,000.00 balance by installment. The
first installment of P17,000.00 was paid on 15 February 1992,
evidenced by a receipt signed by Antonine Saley, with the
remaining P18,000.00 being payable before getting on her flight for
abroad.
Adeline waited in Baguio City for word on her departure. Adeline,
together with some other applicants, thrice went to appellants office at
the Shoppers Lane to check. She also went to Dimasalang, Manila, in
front of the Dangwa terminal, for a like purpose. Appellant informed
her that she just had to wait for her flight. Adeline, exasperated, finally
demanded a refund of the amount she had paid but appellant merely
gave her P100.00 for her fare back to Benguet. [14]

-0-
The sum of the evidence, infra., in Criminal Case No.
93-CR-1645 for illegal recruitment in large scale had been submitted
to likewise constitute the evidence to establish the People's case,
respectively, in -

Criminal Case No. 93-CR-1644

Alfredo Arcega, a 42-year-old hotel employee from 16 Q.M.

Subdivision, Baguio City, heard from a former co-worker, Fidel Opdas,
that appellant was recruiting workers for overseas
employment. Interested, he, in the company of his nephew, Peter
Arcega, went to appellants house in Buyagan, La Trinidad. There, he
met job applicants Dembert Leon, Mariano Damolog and Brando
Salbino. Appellant assured the group that they could get employed in
Taiwan for a monthly salary of P12,000.00 to P15,000.00. She told
them that the processing and placement fees would amount
to P40,000.00 each. Arcega and his companions agreed.
 On 17 August 1992, Arcega paid appellant P10,000.00 in
Dimasalang, Manila. Appellant issued a cash voucher for the amount.
She told Arcega to just wait for the results. On 30 September 1992,
appellant asked Arcega for another P15,000.00 which amount he
paid. With him at the time were his nephew Peter Arcega, as well as
Dembert Leon, Mariano Damolog, Lorenzo Belino and Brando
Salbino. Appellant issued a receipt and affixed thereon her
signature. Appellant told Arcega that with the payment, his
employment abroad was assured. She stressed, however, that the
balance of P15,000.00 should be paid before his departure for
Taiwan. After following up the matter with appellant in October 1992
and then in December 1992, he finally gave up. Arcega went to the
POEA office in Magsaysay Avenue, Baguio City, and when he
learned that appellant had pending cases for illegal recruitment, he
also filed his own complaint and executed an affidavit before Atty.
Justinian Licnachan. [15]

Criminal Case No. 93-CR-1646

Brando Salbino, a 36-year-old resident of East Quirino Hill, Baguio

City, used to be a "forester" of the DENR. In July 1992, he met
appellant at her Buyagan residence after his brother-in-law, Fidel
Opdas, had said that she was recruiting workers for abroad. Appellant
told him that she could help him get employed in Taiwan with
a P12,000.00 monthly salary. Salbino submitted various documents
required by appellant. On 11 August 1992, Salbino paid appellant the
amount of P10,000.00 at her Dimasalang "temporary office" so that,
according to her, his travel papers could be processed. The payment
was receipted. On 30 September 1992, he paid her
another P15,000.00, for which appellant again issued an
acknowledgment receipt.
Appellant told Salbino to merely wait in Baguio City. When she
failed to show up, he went to appellants house in Buyagan to
verify. She was not there. The following week, he went to Manila with
Fidel Opdas hoping to see her. Appellant's whereabouts could not be
determined. Having failed to locate her, Salbino and his companions
went to the POEA office in Magsaysay, Baguio City. It was at the
POEA office that they were to learn that appellant was not in the list of
licensed recruiters. He, along with the others, then executed an
affidavit-complaint before Atty. Licnachan. [16]
 Criminal Case No. 93-CR-1647

Mariano Damolog, a 33 year-old farmer from 26 P. Burgos Street,

Baguio City, went to appellants residence in Buyagan in July 1992
when informed by Fidel Opdas, his co-worker at the MIDO Restaurant,
that appellant was recruiting workers for Taiwan. Appellant herself
later told Damolog that she was licensed to recruit workers. He
forthwith applied for a position at a factory in Taiwan with a salary of
between US$400.00 and US$500.00 a month. He, after being
required to pay a processing fee, paid the amount of P10,000.00 to
appellant at her Manila office. Appellant gave him a cash
voucher. Damolog was then supposed to just wait in Baguio City for a
telegram.
When he did not receive word from appellant, Damolog went to
Manila to see what had happened to his application. Appellant was
again told to simply stand by in Baguio City. After several days,
Opdas, who had meanwhile gone to Manila, told Damolog to see
appellant in Manila. In Manila, appellant told Damolog to sign a
bio-data form for screening purposes. Like Peter Arcega, Fred Arcega,
Brando Salbino and Lorenzo Belino, he was also asked to pay
another P15,000.00. The group went back to Baguio City to raise the
amount of P15,000.00 each. On 30 September 1992, he, together
with Fred and Peter Arcega, Brando Salbino and Lorenzo Belino,
returned to Manila. Damolog handed over his P15,000.00 to appellant
who issued an acknowledgment receipt, signed by Annie Saley which,
according to appellant, was her name. Appellant assured him that he
would be among the first to go to Taiwan by December 1992.
December 1992 came but no word was received prompting
Damolog and his companions to repair to appellants house in
Buyagan. She was not home. Damolog proceeded to Manila where
appellant told him to wait a few more days. When still nothing
happened, Damolog and his companions went to the POEA office
where Atty. Licnachan issued a certification stating that appellant was
not authorized to recruit workers. Damolog and his companions filed a
joint affidavit-complaint executed before Atty. Licnachan against
[17]

appellant.

Criminal Case No. 93-CR-1649

 Lorenzo Belino, a 37-year-old farmer from Tawang, La Trinidad,
Benguet, was in Manila in August 1992 looking for employment. Fidel
Opdas, a companion in his trip to Manila, mentioned that perhaps
appellant could help. Belino saw appellant who then told him about
the prospect of getting employed in Taiwan. Appellant invited him to
see her on 20 September 1992 in Buyagan.
On the appointed date, Belino found Mariano Damolog, Fidel
Opdas, Brando Salbino, Dembert Leon, Alfredo Arcega and Peter
Arcega already in appellants residence in Buyagan.Appellant
asked P10,000.00 from each of them if they wanted her to be
responsible for representing them to get themselves employed in
Taiwan with a monthly income of P15,000.00.When the group agreed,
appellant made them fill up and sign a bio-data form. Appellant also
made them understand that they would each have to pay her the total
amount of P40,000.00, P10,000.00 of which was to be forthwith paid
and the balance to be paid as and when everything would have been
arranged for their flight to Taiwan.
On 23 September 1992, Belino paid appellant the amount
of P10,000.00 at her Dimasalang office. Appellant issued a cash
voucher therefor. Belino returned to Baguio City. Five days later,
Belino went down to Manila after appellant had sent word that he had
to come to Manila. On 30 September 1992, Belino paid in Manila the
amount of P15,000.00 demanded by appellant. Appellant signed her
name as Annie Saley on the receipt. Appellant informed Belino that
he should wait for her telephone call regarding the schedule of his
flight. He waited but when no calls came, Belino and Opdas decided
to visit appellant in her house in Buyagan. Appellant asked to be
given until January to deploy them in Taiwan. February 1993 came,
and still there was no news from appellant. In March 1993, Belino and
others, namely, Fidel Opdas, Brando Salbino, Dembert Leon and
Alfredo Arcega, decided to file a complaint against appellant with the
[18]

POEA in Magsaysay Avenue, Baguio City, where their sworn

statements were taken.

Criminal Case No. 93-CR-1651

Peter Arcega, a 27-year-old cashier from 317 Magsaysay Avenue,

Baguio City, also paid the amount of P10,000.00 to appellant for a
promised job overseas. A cash voucher was signed by appellant to
acknowledge the payment. Peter, subsequently, also paid the amount
of P15,000.00 to appellant for which the latter issued a receipt signed
by Annie Saley. He was among those who signed the
affidavit-complaint before the POEA.
Testifying in Criminal Case No. 93-CR-1645, as a corroborative
[19]

witness, Dembert Leon, a 25-year-old unemployed from 52-F

Tandang Sora Street, Baguio City, said that he, desiring to get an
employment abroad, likewise went to see appellant at her residence
in Buyagan. Accompanied by Fidel Opdas, Leon was told by
appellant to complete the necessary papers, including his
bio-data, barangay clearance, ID and NBI clearance. Leon applied to
be a factory worker in Taiwan. He was assured a monthly salary
of P12,000.00, but first, appellant told him, he should commit to pay a
placement fee of P40,000.00 of which amount P10,000.00 had to be
paid forthwith. Leon paid and a cash voucher, dated 08 September
1992, was issued by appellant. On 30 September 1992, he paid
appellant another P15,000.00 for which another acknowledgment
receipt was issued. The remaining P15,000.00 was agreed to be paid
at the airport before his flight to Taiwan. No further word came from
appellant. Finally, in December 1992, when he and the others called
her up, appellant informed them to wait until January 1993. January
came and still nothing happened. In March 1993, Leon and the others
went to the POEA office to lodge a complaint against appellant. [20]

Jose B. Matias, an Attorney II at the POEA Regional Station Unit

in Baguio City, received a request for verification on whether or not
appellant was a licensed recruiter. In response, he advised that
appellant was not authorized to recruit in the City of Baguio and in the
region from 1989 to the present. Atty. Matias issued a certification to
that effect.
-0-

The Case for the Defense. -

The defense posited the theory that appellant merely assisted the
complainants in applying for overseas employment with duly
accredited travel agencies for and from which she derived a
commission. [21]

According to the 37-year-old appellant, she used to be the liaison

officer of the Friendship Recruitment Agency from 1983 to 1986. In
that capacity, she would submit to the POEA contracts for processing
job orders for applicants and assist applicants prior to their departure
at the airport. When the licensed agency closed in 1986, she went to
Baguio where she engaged in the purchase and sale of vegetables
and flowers. Even then, however, she would not hesitate extending
help to applicants for overseas employment by recommending
licensed agencies which could assist said applicants in going
abroad. She named the Dynasty Travel and Tours and the Mannings
International as such licensed agencies. She had, in the process,
been able to help workers, like Cherry Pi-ay, Corazon del Rosario,
Arthur Juan and Francisco Labadchan to name some, sent abroad. [22]

Cherry Pi-ay was able to leave for Kuwait. In 1991, Cherry went to
see her again, this time asking for assistance in getting an
employment in Korea. She accompanied Cherry to the Dynasty
Travel and Tours in Manila that enabled her to get a tourist visa to
Korea. Appellant herself later gave Cherry her tourist visa. For
Cherrys visa and plane ticket, appellant received from
Cherry P15,000.00 and US$250.00. Appellant issued a receipt
therefor and delivered the amounts to the Dynasty Travel and Tours
which, in turn, issued her a receipt. The CIS men who arrested her in
Manila confiscated that receipt. In August 1991, Cherry came back
and asked her to look for another travel agency saying she did not like
the work she had in Korea. [23]

Norma Bao-idang, a former client of the Friendship Recruitment

Agency, introduced Corazon del Rosario to appellant. Since the
agency had already been closed, appellant referred Corazon to
Mannings International in Kalaw Street, Ermita, Manila. Corazon was
able to leave for Abu Dhabi where she worked as a domestic helper.
In 1991, Corazon again sought appellant's assistance in getting an
employment in Korea. Appellant introduced her to Dynasty Travel and
Tours which, in turn, helped Corazon get a tourist visa for Korea. She
did ask for P15,000.00 and US$250.00 from Corazon but these
amounts, being for Corazons ticket and hotel accommodation, were
turned over to Dynasty Travel and Tours. She also knew that Corazon
was able to leave for Korea because she herself handed over to
Corazon her tourist visa and ticket. Appellant received P2,000.00
from Dynasty Travel and Tours by way of commission. She was also
issued a receipt by that travel agency showing that she had turned
over to it the amounts received from Corazon but the CIS men took
the receipts and otherdocuments from her. When Corazon returned
home in 1991 after going to Korea, she again sought appellants help
in looking for a travel agency that could assist her in going back to that
country.[24]

Appellant came to know Arthur Juan through a vegetable vendor

named Maxima Gomez. He asked her for help in securing a
tourist visa. Appellant was able to assist him and others, like
Francisco Labadchan, Tirso Gomez and Romeo Balao, by referring
them to the Dynasty Travel and Tours. Appellant asked from them the
amounts of P15,000.00 and US$250.00 which she turned over to the
travel agency. Again, she was issued a receipt by that agency but that,
too, was confiscated by the CIS agents who arrested her. Of the men
who sought her help in going abroad, seven "were able to leave. The
others had been re-scheduled to leave but they failed to arrive at the
airport.
Labadchan and Juan met appellant during the first week of
January 1993. She gave them back the plane ticket and the amount of
US$250.00 so that they could ask for a refund from the travel
agency. The next time she saw Labadchan was at the NBI office
when NBI Director Limmayog invited her for questioning. Appellant
tried her best to look for a job for Labadchan but the transaction she
had with Fast International failed to push through. [25]

Appellant helped Victoria Asil secure a tourist visa. The latters

sister was a former client at the Friendship Recruitment Agency who
was able to work in Saudi Arabia in 1985. She introduced Victoria to
the Dynasty Travel and Tours. Appellant asked Victoria to
advance P15,000.00 and US$250.00 for her ticket and hotel
accommodation. Victoria gave appellant the amount, and the latter
issued corresponding receipts. She turned over the amount to the
travel agency which, in turn, issued a receipt to appellant. The CIS,
however, confiscated all the documents in
her attache case. Appellant was able to process Victorias visa for
[26]

Korea but when someone informed the latter that she could have
a visa for Taiwan, Victoria opted to change her destination. Appellant
told Victoria that her visa and ticket for Korea had already been
obtained but Victoria insisted on a refund of her money. Appellant
returned to her P15,000.00 that was supposed to be the amount to be
exchanged into dollars for her show money. Victoria issued a receipt
for the amount but appellant entrusted it to her former
lawyer.Appellant handed over the plane ticket to Victoria. [27]
 Mercedes Quimson (Kimson) introduced appellant to Adeline
Tiangge. When Adeline said that she was interested in securing a
tourist visa for Korea, appellant took her to the Dynasty Travel and
Tours. Appellant asked from Adeline the amount of P17,000.00 for
her plane ticket. Appellant was able to buy a plane ticket and to get a
passport for Adeline. The latter, however, later said that she was no
longer interested in going to Korea and that her passport application
should, instead, be diverted to Hongkong. In fact, Adeline was able to
leave for Hongkong. Adeline filed a case against appellant because
when Adeline sought a refund from Dynasty Travel and Tours, the
agency only gave her P5,000.00 or just a half of the P10,000.00 she
wanted. [28]

Fidel Opdas was appellants client at the Friendship Agency who

was able to leave for Saudi Arabia. He asked her if she could find a
job for him in Taiwan. When appellant told him that she knew
someone who could help, Opdas brought along Mariano
Damolog. Appellant introduced them to Marites Tapia and Carol
Cornelio of Dynasty Travel and Tours who told Opdas and Damolog
to submit the necessary documents for their application for work in
Taiwan. In May 1993, Opdas returned with Brando Salbino who also
talked to Marites and Carol. Opdas submitted to appellant the
documents required by Marites and Carol. Appellant, in turn, gave the
papers to Marites and Carol. When, later, Opdas went to see
appellant, he brought along Dembert Leon and Lorenzo
Belino. Appellant requested Opdas to accompany the two to Marites
and Carol with whom they discussed what would be necessary "for
their application for Taiwan. Still later when Opdas came back with
Peter and Alfredo Arcega to see appellant, she again referred them to
Marites and Carol. The job applicants each gave appellant
P10,000.00 which the latter turned over to Marites and Carol. The two
gave her receipts but these were in the same attache case that was
seized by the CIS agents and never returned. The group
subsequently withdrew their applications although it was only Opdas
who received a P15,000.00 refund. [29]

In a bid to prove that CIS agents indeed took away

her attache case containing documents that could bail her out of the
charges, appellant presented Danilo A. Deladia, one of the three
policemen who arrested her. Equipped with a warrant of arrest issued
by Judge Luis Dictado of Branch 8, the policemen went to the house
of appellants cousin at 2320-B San Antonio, Sampaloc, Manila at 3:00
p.m. of 25 August 1993. According to Deladia, however, they did not
get anything from appellant because their mission was only to arrest
her. At the counter intelligence branch of the CIS, he did not even
hear appellant requesting for the return of a brief case. Apparently
[30]

because of what had turned out to be Deladias adverse testimony, the

defense presented George Santiago who claimed to be at the
boarding house when appellant was arrested. Santiago said that he
had allowed the CIS agents to enter the boarding house.Santiago did
not see what might have happened in appellant's room but what he
did see was that when the agents all came out, they had with them
an attache case. Santiago, accompanied by his cousin Atty. Lomboan,
went to the CIS in Camp Crame where one of the men
asked P50,000.00 for the release of appellant. Santiago did not see
any brief case in the office but one of the men told them that they
would "produce" appellant and the attache case if they could
"produce" the amount of P50,000.00. [31]

On cross-examination, however, Santiago admitted that

the P50,000.00 was meant for bonding purposes and that they did not
make a formal request for the release of the brief case. [32]

The defense next attempted to shift, albeit unsuccessfully, the

responsibility for the crime from appellant to Maritess and
Carol. Presented at the witness stand was Oscar Gaoyen, a
30-year-old farmer, who testified that appellant had failed to assist
him in going to Korea to work because it was difficult. While following
up his application in Manila, he met Marites and Carol in front of the
Dangwa station in Dimasalang and he was told that they knew
someone who could "transfer his application to Taiwan." He said that
even after he had paid appellant P50,000.00, nothing happened
constraining him to file charges against her. Appellant
returned P15,000.00 of the money to him. [33]

Appellant filed, before the trial court could promulgate its decision,
a Motion to Reopen Trial with an urgent motion to defer promulgation
on the ground of newly discovered evidence. In its order of 03 March
[34]

1995, the trial court, noting that the newly discovered evidence
consisted of affidavits of desistance of seven complainants, found no
merit in the motion. It held that presentation of the same does not give
valid ground for possible amendment of the decision as the private
complainants had already testified. It agreed with the prosecutor that
the affidavits of desistance only (had) the effect of satisfying the civil
liability.
[35]
 The Judgment of the Trial Court. -

On 03 March 1995, the trial court rendered its decision finding

appellant guilty beyond reasonable doubt of the crimes charged. It
found implausible appellants claim that she was merely an agent of
Dynasty Travel and Tours and/or Maritess Tapia and Carol Cornelio.
If what she claimed were true, said the court, appellant could have
presented her principals; instead, that failure exposed her to the
adverse inference and legal presumption that evidence suppressed
would be adverse if produced. It also found hard to believe, the
"self-serving" claim of appellant that her brief case, supposedly
containing receipts of her remittances to the travel agencies, was
confiscated by the CIS and remained unaccounted for. The trial court
concluded:
In fine, accused gave the distinct assurance, albeit false, that she had
the ability to send the complainants abroad for work deployment,
thereby employing false pretenses to defraud them. This was despite
her knowing very well that she was not legally authorized. The
complainants willingly parted with their money in the hope of
overseas employment deceitfully promised them by the accused.
What makes matters worse is that these amounts given to the
accused come from hard-earned money, or worse, could have been
borrowed from money lenders who have no qualms about collecting
usurious interest rates. Complainants who faithfully relied on the
accused did not hesitate to painstakingly raise or even beg or borrow
money just so they could give a decent future to their families even
to the extent of leaving them for far-off lands. But now, all their
dreams are gone, their hopes shattered. Some may not have even
been able to pay back what they borrowed nor recoup their losses.
Now, more than ever, their future appears bleaker. But this time, a
glimmering light appears at the end of the tunnel as the Court steps
in to lay down the iron fist of the law so as to serve the accused a
lesson, a bitter one, with the hope that those who are trekking or
those who are about to trek the same pilfered path that the accused
took will reconsider their pursuits before it would be too late, and in
the end, this form of fraud which invariably victimizes the poor will
forever be stopped. [36]

All given, the trial court then decreed as follows:

WHEREFORE, in all the above-mentioned cases, the Court finds
accused Antonine B. Saley, also known as Annie B. Saley, GUILTY
 beyond reasonable doubt of the corresponding crime as charged in
the informations and hereby sentences her in each case, except in
Criminal Case NO. 93-CR-1645 where an indeterminate sentence is
not applicable, to suffer an indeterminate sentence for the duration
hereunder given, and to pay the costs, as well as the damages due the
private complainants, to wit:

"Criminal Case No. 92-CR-1396

"Imprisonment from Four (4) Years as MINIMUM to Six (6)

Years as MAXIMUM and to pay Francisco T.
Labadchan P45,000.00 for actual damages, plus costs.

"Criminal Case No. 92-CR-1397

"Imprisonment from Three (3) Years, Six (6) Months and

Twenty-One (21) Days of prision correccional as MINIMUM
to Seven (7) Years, Four (4) Months and One (1) Day
of prision mayoras MAXIMUM and to pay Francisco T.
Labadchan P45,000.00 for actual damages, plus costs.

"Criminal Case No. 92-CR-1413

"Imprisonment from Four (4) Years as MINIMUM to Six (6)

Years as MAXIMUM and to pay Cherry Pi-ay P20,000.00 for
moral damages, plus costs.

"Criminal Case No. 92-CR-1414

"Imprisonment from One (1) Year, Eight (8) Months and

Twenty-One (21) Days of prision correccional as MINIMUM
to Five (5) Years, Five (5) Months and Eleven (11) Days
of prision correccional as MAXIMUM and to pay Victoria
As-il P15,000.00 for actual damages, plus costs.

"Criminal Case No. 92-CR-1415

"Imprisonment from One (1) Year, Eight (8) Months and

Twenty-One (21) Days of prision correccional as MINIMUM
to Five (5) Years, Five (5) Months and Eleven (11) Days
of prision correccional as MAXIMUM and to pay Cherry
Pi-ay P20,000.00 for moral damages, plus costs.
"Criminal Case No. 92-CR-1416

"Imprisonment from Four (4) Years as MINIMUM to Six (6)

Years as MAXIMUM and to pay Victoria As-il P15,000.00
for actual damages, plus costs.

"Criminal Case No. 92-CR-1425

"Imprisonment from Four (4) Years as MINIMUM to Six (6)

Years as MAXIMUM and to pay Corazon del
Rosario P20,000.00 for moral damages, plus costs.

"Criminal Case No. 92-CR-1426

"Imprisonment from One (1) Year, Seven (7) Months and

Eleven (11) Days of prision correccional as MINIMUM to
Six (6) Years, Five (5) Months and Eleven (11) Days
of prision mayor as MAXIMUM and to pay Corazon del
Rosario P20,000.00 for moral damages, plus costs.

"Criminal Case No. 92-CR-1427

"Imprisonment from Four (4) Years as MINIMUM to Six (6)

Years as MAXIMUM and to pay the costs.

"Criminal Case No. 92-CR-1428

"Imprisonment from One (1) Year, Eight (8) Months and

Twenty-One (21) Days of prision correccional as MINIMUM
to Five (5) Years, Five (5) Months and Eleven (11) Days
of prision correccional as MAXIMUM and to pay the costs.

"Criminal Case No. 93-CR-1644

"Imprisonment from One (1) Year, Eight (8) Months and

Twenty-One (21) Days of prision correccional as MINIMUM
to Five (5) Years, Five (5) Months and Eleven (11) Days
of prision correccional as MAXIMUM and to pay Alfredo C.
Arcega P25,000.00 for actual damages, plus costs.

"Criminal Case No. 93-CR-1645

 "To suffer the penalty of life imprisonment and to pay a fine
of One Hundred Thousand Pesos (P100,000.00), with
subsidiary imprisonment in case of insolvency, and to pay the
costs. She shall also pay Twenty-Five Thousand Pesos
(P25,000.00) each to Peter Arcega, Lorenzo Belino, Mariano
Damolog, Brando Salbino, Dembert Leon and Alfredo Arcega
for actual damages, plus costs.

"Criminal Case No. 93-CR-1646

"Imprisonment from One (1) Year, Eight (8) Months and

Twenty-One (21) Days of prision correccional as MINIMUM
to Five (5) Years, Five (5) Months and Eleven (11) Days
of prision correccional as MAXIMUM and to pay Brando B.
Salbino P25,000.00 for actual damages, plus costs.

"Criminal Case No. 93-CR-1647

"Imprisonment from One (1) Year, Eight (8) Months and

Twenty-One (21) Days of prision correccional as MINIMUM
to Five (5) Years, Five (5) Months and Eleven (11) Days
of prision correccional as MAXIMUM and to pay Mariano
Damolog P25,000.00 for actual damages, plus costs.

Criminal Case No. 93-CR-1649

"Imprisonment from One (1) Year, Eight (8) Months and

Twenty-One (21) Days of prision correccional as MINIMUM
to Five (5) Years, Five (5) Months and Eleven (11) Days
of prision correccional as MAXIMUM and to pay Lorenzo
Belino P25,000.00 for actual damages, plus costs.

"Criminal Case No. 93-CR-1651

"Imprisonment from One (1) Year, Eight (8) Months and

Twenty-One (21) Days of prision correccional as MINIMUM
to Five (5) Years, Five (5) Months and Eleven (11) Days
of prision correccional as MAXIMUM and to pay Peter
Arcega P25,000.00 for actual damages, plus costs.

"Criminal Case No. 93-CR-1652

 "Imprisonment from One (1) Year, Eight (8) Months and
Twenty-One (21) Days of prision correccional as MINIMUM
to Five (5) Years, Five (5) Months and Eleven (11) Days
of prision correccional as MAXIMUM and to pay Adeline
Tiangge y Marcos P17,000.00 for actual damages, plus costs.
"With respect to accused Conchita Tagle in Criminal Cases Nos.
92-CR-1396 and 92-CR-1397, let these cases be sent to the files
without prejudice to their revival as soon as she shall have been
arrested and brought to the jurisdiction of this Court.
"In order that Conchita Tagle may not escape the clutches of the law,
let Alias Warrants of Arrest issue addressed to the PNP Chief of
Police, La Trinidad, Benguet and the National Bureau of
Investigation (NBI) in Manila and in Baguio City. Further, the
Commission of Immigration and Deportation (CID), Manila is
ordered to include her name in the its Hold-Departure List.
"SO ORDERED. [37]

Appellant filed a motion for reconsideration of the decision

asserting that the trial court had erred in giving credence to the
testimonies of the complaining witnesses and in finding her guilty of
the crimes charged despite the "failure" of the prosecution to fully
establish the elements of the crimes beyond reasonable
doubt. Finding no merit in the motion, the trial court, on 03 April 1995,
[38]

denied a reconsideration of its decision. The following day, appellant

[39]

filed a notice of appeal. The trial court gave due course to the appeal
[40]

on 17 April 1995.[41]

The Instant Appeal. -

Appellant continues to profess before this Court her innocence of

the accusation. She reiterates her assertion that the trial court has
erred in giving credence to the testimonies of the complaining
witnesses and in finding her guilty beyond reasonable doubt of the
various offenses she has been charged with by the prosecution. She [42]

avers that her transactions with the complainants have been limited to
her assisting them secure their respective travel visa specifically for
tourist and that her assistance to them (has been) only to refer them
to travel agencies such as the Dynasty Travel and Tours and the
Mannings International. She insists that she has remitted the amounts
solicited from the complainants to the travel agencies, or to Maritess
Tapia and Carol Cornelio, earning only the commissions for bringing
in clients interested in getting tourist visas. [43]

At the outset, it might be explained that this appeal involves the

conviction of appellant not only for the crime of illegal recruitment in
large scale for which the penalty of life imprisonment is imposed but
also for other offenses for which lesser penalties have been meted by
the trial court upon appellant. This Court has appellate jurisdiction
over ordinary appeals in criminal cases directly from the Regional
Trial Courts when the penalty imposed is reclusion perpetua or
higher. The
[44]
Rules of Court, allows,
however, the appeal of criminal casesinvolving penalties lower
than reclusion perpetua or life imprisonment under the circumstances
stated in Section 3, Rule 122, of the Revised Rules of Criminal
Procedure. Thus -
(c) The appeal to the Supreme Court in cases where the penalty
imposed is life imprisonment, or where a lesser penalty is imposed
but involving offenses committed on the same occasion or arising
out of the same occurrence that gave rise to the more serious offense
for which the penalty of death or life imprisonment is imposed shall
be by filing a notice of appeal in accordance with paragraph (a) of
this Section.
In giving due course to the notice of appeal filed by appellant, the trial
court has directed that the entire records of the seventeen cases
should be forwarded to this Court. It might be observed that this
[45]

appeal, which has been assigned only one docket number, involves
cases, although spawned under different circumstances could be said
to somehow be linked to the incident giving rise to the case for illegal
recruitment in large scale. The cases have thus been correctly
consolidated and heard jointly below. The appeal made directly to this
Court of the seventeen cases, each of which incidentally should have
been assigned a separate docket number in this Court, is properly
taken.
Article 38(a) of the Labor Code considers illegal any recruitment
activity undertaken by non-licensees or non-holders of authority.
Recruitment is defined by Article 13, paragraph (b), of the same Code
as referring -
x x x 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.
Illegal recruitment is committed when two elements concur:
1) That the offender has no valid license or authority required by
law to enable one to lawfully engage in recruitment and
placement of workers; and
2) That the offender undertakes either any activity within the
meaning of recruitment and placement defined under
Article 13(b), or any prohibited practices enumerated under
Article 34. [46]

Any person who commits the prohibited acts enumerated in Article

13(b) of the Labor Code shall be liable under Article 38(a)
thereof. The proviso in Article 13(b) lays down a rule of evidence
[47]

that where a fee is collected in consideration of a promise or offer of

employment to two or more prospective workers, the individual or
entity dealing with them shall be deemed to be engaged in the act of
recruitment and placement. The article also provides that
[48]

recruitment includes the act of referral or the act of passing along or

forwarding of an applicant for employment after an initial interview of a
selected applicant for employment to a selected employer, placement
officer or bureau. [49]

The Court agrees with the trial court that appellant, indeed,
violated the law against illegal recruitment.
The prosecution was able to prove by overwhelming evidence that
appellant did represent herself as being in a position to get for the
aspiring overseas contract workers good-paying jobs
abroad. Appellant was thus able to demand and receive various
amounts from the applicants. The latter would then be briefed by
appellant on the requirements for employment overseas. Appellant
herself testified, thus:
Q From 1986 when separated from Friendship Recruitment Agency and before
you were put to jail did you have any occupation?
"A Yes, sometimes we brought vegetables and flowers to Manila for resale.
"Q Aside from buying and selling vegetables down in Manila did you have any
other source of income?
 "A Sometimes I helped some applicants who are interested to go abroad and
asked if I know some agencies who can assist them to go abroad.
"Q Were you able to assist some people to look for an agency to assist them to
go abroad?
"A Yes, sir.
"Q Were you being paid when you assist these people applying for overseas
employment?
"A Yes, sir.
"Q By whom?
"A The travel agencies give me some amount of commission.
"Q What are the names of these agencies which you know?
"A Dynasty Travel and Tours and Mannings International.

"x x x x x x x x x.
"Q Do you know also if this Dynasty Travel and Tours and Mannings International
is duly licensed by the government to recruit applicants abroad?
"A Yes, sir.
"Q Do you have any document to prove that it is registered?
"A Yes, sir.
"Q Where is that?
"A Mannings International is a licensed agency and Dynasty Travel and Tours is
licensed to issue tickets for applicants to go abroad.
"Q You said that Dynasty Travel and Tours is licensed to issue tickets for
applicants going abroad what do you mean by applicants going abroad?
"A Those applicants to work as a contract worker and who are ready to leave for
abroad and they are being issued tickets.
"Q Were you actually able to help or assist some overseas worker-applicants?
"A Yes, sir.
"Q Do you remember some of them?
"A Cherry Piay, Corazon del Rosario, Arthur Juan, Francisco Labadchan
and others. (Underscoring supplied.)[50]
Appellant at one point claimed that she had helped complainants only
in acquiring for them plane tickets and tourist visas. On
cross-examination, however, she admitted that she had made
referrals of job applicants to recruitment agencies. She evidently
[51]

knew all along that the persons she was dealing with were applicants
for employment abroad.
 The law requires that the above activities of appellant should have
first been authorized by the POEA. Rule II, Book II, of the POEA
[52]

Rules and Regulations Governing Overseas Employment provides:

SEC. 11. Appointment of Representatives. Every appointment of
representatives or agents of licensed agency shall be subject to prior
approval or authority of the Administration.
"The approval may be issued upon submission of or compliance with
the following requirements:

"a. Proposed appointment or special power of attorney;

"b. Clearances of the proposed representative or agent from NBI;

"c. A sworn or verified statement by the designating or appointing

person or company assuming full responsibility for all acts of
the agent or representative done in connection with the
recruitment and placement of workers.

"Approval by the Administration of the appointment or designation

does not authorize the agent or representative to establish a branch or
extension office of the licensed agency represented.
"Any revocation or amendment in the appointment should be
communicated to the Administration. Otherwise, the designation or
appointment shall be deemed as not revoked or amended.
The claim that appellant did not categorically represent herself as
a licensed recruiter, or that she merely helped the complainants
secure tourist visas, could not make her less guilty of illegal
recruitment, it being enough that he or she gave the impression of
[53]

having had the authority to recruit workers for deployment abroad. [54]

The fact that, with the exception of the cases involving Cherry
Pi-ay and Corazon del Rosario, only the complainant in each of the
cases, have testified against appellant in the illegal recruitment cases
does not thereby make the case for the prosecution weak. The rule
has always been that the testimony of witnesses is to be weighed, not
that the witnesses be numbered, and it is not an uncommon
experience to have a conclusion of guilt reached on the basis of the
testimony of a single witness. Corroborative evidence is necessary
[55]

only when there are reasons to warrant the suspicion that the witness
has perjured himself or that his observations have veered from the
truth.
[56]
 The absence of receipts to evidence payment to an indictee in a
criminal case for illegal recruitment does not warrant an acquittal of
the accused, and it is not necessarily fatal to the prosecution's cause.
As long as the prosecution is able to establish through credible
testimonial evidence that the accused has involved himself in an act
of illegal recruitment, a conviction for the offense can very well be
justified.
[57]

Altogether, the evidence against appellant has established

beyond any discernible shadow of doubt that appellant is indeed guilty
of illegal recruitment on various counts. Being neither a licensee nor a
holder of authority to recruit, appellant must suffer under Article 39(c)
of the Labor Code the penalty of imprisonment of not less than four
years nor more than eight years or a fine of not less than P20,000.00
nor more than P100,000.00 or both such imprisonment and fine, at
the discretion of the court. In imposing the penalty, the provisions of
the Revised Penal Code on the application of the circumstances that
could modify the criminal liability of an accused cannot be considered,
these provisions being inapplicable to special laws. [58]

Under the Indeterminate Sentence Law, whenever the offense is

[59]

punishable by a special law, the court shall impose on the accused an

indeterminate sentence, "the maximum term of which shall not
exceed the maximum fixed by said law and the minimum shall not be
less than the minimum term prescribed by the same." Accordingly, in
[60]

imposing the penalty of four (4) years to six (6) years on appellant for
each of the five cases of illegal recruitment, the trial court has acted
correctly.
Illegal recruitment is committed in large scale if it is perpetrated
against three or more persons "individually or as a group." Its
requisites are that: (1) the person charged with the crime must have
undertaken recruitment activities as so defined by law, (2) the same
person does not have a license or authority to do that, and (3) the
questioned act is committed against three or more persons. The [61]

prosecution has been able to successfully show that, for a fee,

appellant, not being authorized to recruit workers for abroad, did so in
Criminal Case No. 93-CR-1645 against seven complainants. For this
offense, Article 39(a) of the Labor Code imposes the penalty of life
imprisonment and a fine of one hundred thousand pesos
(P100,000.00). This penalty was thus likewise aptly meted out upon
appellant by the trial court.
 Conviction for these various offenses under the Labor Code does
not bar the punishment of the offender for estafa. Illegal recruitment is
a malum prohibitum offense where criminal intent of the accused is
not necessary for conviction while estafa is malum in se which
requires criminal intent to warrant conviction. Under Article 315,
[62]

paragraph 2(a), of the Revised Penal Code, the elements of the

[63]

offense (estafa) are that (1) the accused has defrauded another by
abuse of confidence or by means of deceit and (2) damage or
prejudice capable of pecuniary estimation is caused to the offended
party or third person. Clearly, these elements have sufficiently been
[64]

shown in the cases under review.

The penalty for the crime is prescribed by Article 315, first to fourth
paragraphs, of the Revised Penal Code as follows:
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
amount 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.
2nd. The penalty of prision correccional in its minimum and
medium periods, if the amount of the fraud is over 6,000 pesos but
does not exceed 12,000 pesos;
"3rd. The penalty of arresto mayor in its maximum period to prision
correccional in its minimum period if such amount is over 200 pesos
but does not exceed 6,000 pesos; and
"4th. By arresto mayor in its maximum period, if such amount does
not exceed 200 pesos, provided that in the four cases mentioned, the
fraud be committed by any of the following means: x x x."
In the case of People vs. Gabres, the Court has had occasion to
[65]

so state that -
"Under the Indeterminate Sentence Law, the maximum term of the
penalty shall be `that which, in view of the attending circumstances,
could be properly imposed' under the Revised Penal Code, and the
minimum shall be `within the range of the penalty next lower to that
 prescribed' for the offense. The penalty next lower should be based
on the penalty prescribed by the Code for the offense, without first
considering any modifying circumstance attendant to the
commission of the crime. The determination of the minimum penalty
is left by law to the sound discretion of the court and it can be
anywhere within the range of the penalty next lower without any
reference to the periods into which it might be subdivided. The
modifying circumstances are considered only in the imposition of
the maximum term of the indeterminate sentence.
"The fact that the amounts involved in the instant case
exceed P22,000.00 should not be considered in the initial
determination of the indeterminate penalty; instead, the matter
should be so taken as analogous to modifying circumstances in the
imposition of the maximum term of the full indeterminate sentence.
This interpretation of the law accords with the rule that penal laws
should be construed in favor of the accused. Since the penalty
prescribed by law for the estafa charge against accused-appellant
is prision correccional maximum to prision mayor minimum, the
penalty next lower would then be prision correccional minimum to
medium. Thus, the minimum term of the indeterminate sentence
should be anywhere within six (6) months and one (1) day to four (4)
years and two (2) months x x x."[66]

The Court reiterates the above rule; however, in fixing the maximum
term, the prescribed penalty of prision correccional maximum period
to prision mayor minimum period should be divided into "three equal
portions of time," each of which portion shall be deemed to form one
period; hence -

Minimum Period Medium Period Maximum Period

From 4 years, 2 months From 5 years, 5 months From 6 years, 8 months

and 1 day to 5 years, and 11 days to 6 years, and 21 days to 8 years
5 months and 10 days 8 months and 20 days -
in consonance with Article 65, in relation to Article 64, of the
[67] [68]

Revised Penal Code.

When the amount involved in the offense exceeds P22,000.00,
the penalty prescribed in Article 315 of the Code "shall be imposed in
its maximum period," adding one year for each additional P10,000.00
although the total penalty which may be imposed shall not exceed 20
years. The maximum penalty should then be termed as prision
mayor or reclusion temporal as the case may be. In fine, the one year
period, whenever applicable, shall be added to the maximum period
of the principal penalty of anywhere from 6 years, 8 months and 21
days to 8 years.
Accordingly, with respect to the cases of estafa filed by the
complainants who individually charged appellant with illegal
recruitment, the applicable penalties would, respectively, be, as
follows:
In Criminal Case No. 92-CR-1397 where appellant defrauded
Francisco T. Labadchan in the amount of P45,000.00, two years for
the additional amount of P23,000.00 in excess of P22,000.00
provided for in Article 315 shall be added to the maximum period of
the prescribed penalty of prision correccional maximum to prision
mayor minimum (or added to anywhere from 6 years, 8 months and
21 days to 8 years). As such, aside from paying Labadchan the
amount of P45,000.00 by way of actual damages, the Court deems it
proper to sentence appellant to the indeterminate penalty of three (3)
years, six (6) months and twenty-one (21) days of prision
correccional medium to eight (8) years, eight (8) months and
twenty-one (21) days of prision mayor medium.
In Criminal Case No. 92-CR-1414, appellant defrauded Victoria
Asil in the amount of P15,000.00. Hence, aside from paying Victoria
Asil the amount of P15,000.00 by way of actual damages, appellant
shall also suffer the indeterminate penalty of one (1) year, eight (8)
months and twenty-one (21) days of prision correccional medium to
five (5) years, five (5) months and eleven (11) days of prision
correccional maximum.
In Criminal Case No. 92-CR-1415 where appellant defrauded
Cherry Pi-ay in the amount of P18,000.00, appellant, besides paying
Cherry Pi-ay that amount by way of actual damages, shall also suffer
the indeterminate penalty of one (1) year, eight (8) months and
twenty-one (21) days of prision correccional minimum to five (5) years,
five (5) months and eleven (11) days of prision
correccional maximum.
In Criminal Case No. 92-CR-1426 where appellant defrauded
Corazon del Rosario in the amount of P40,000.00, appellant shall
suffer the indeterminate penalty of two (2) years, four (4) months and
one (1) day of prision correccional medium to seven (7) years, eight
(8) months and twenty-one (21) days of prision mayor minimum.
 In Criminal Case No. 92-CR-1428 where appellant fraudulently
solicited the amount of P24,200.00 from Arthur Juan, appellant shall
pay him actual damages in that amount and shall suffer the
indeterminate penalty of from one (1) year, eight (8) months and
twenty-one (21) days (imposed by the court a quo) of prision
correccional minimum period to six (6) years, eight (8) months and
twenty-one (21) days of prision mayor minimum.
In Criminal Case No. 92-CR-1652 where appellant defrauded
Adeline Tiangge the amount of P18,500.00, appellant shall pay her
the same amount as actual damages and shall suffer the
indeterminate penalty of from one (1) year, eight (8) months and
twenty-one (21) days of prision correccional minimum to five (5) years,
five (5) months and eleven (11) days of prision
correccional maximum.
In Criminal Case No. 93-CR-1645, the prosecution has
successfully established its case against appellant for illegal
recruitment in large scale. Evidently banking on her reputation in the
community as a job recruiter, appellant was able to make the seven
complainants believe that they could land various jobs in
Taiwan. Confident of her assurances, each complainant parted
with P25,000.00 for supposed processing and placement fees.
It would appear that of the seven complainants for illegal
recruitment in large scale, only five of them filed separate charges
[69]

of estafa against appellant. Accordingly, appellant was only and could

only be held liable for five counts of estafa arising from the charge of
illegal recruitment in large scale. Since appellant collected the amount
of P25,000.00 from each of the five (5) victims, she must be held
subject to the penalty in its maximum period or prision mayor in its
minimum period (not any higher on account of the fact that the
amount in excess of P22,000.00 provided for by Article 315 of the
Revised Penal Code is less than P10,000.00). Applying the
[70]

Indeterminate Sentence Law, and there being no attending

circumstances, appellant shall bear, the indeterminate penalty of one
(1) year, eight (8) months and twenty-one (21) days of prision
correccional medium as minimum penalty to six (6) years, eight (8)
months and twenty-one (21) days of prision mayor minimum as
maximum penalty for each offense. In addition, appellant should pay
the five (5) victims the amount of P25,000.00 each as actual
damages.
 The actual damages awarded here shall be subject to diminution
or cancellation should it be shown that appellant had already paid the
complainants.
WHEREFORE, the Decision finding appellant guilty beyond
reasonable doubt of the crimes of illegal recruitment, illegal
recruitment in large scale and estafa is hereby AFFIRMED subject to
the modifications hereunder specified, and only to the extent thereof,
in the following cases:

1) In Criminal Case No. 92-CR-1397, accused-appellant is sentenced to an

indeterminate penalty of imprisonment of from three (3) years, six (6)
months and twenty-one (21) days of prision correccionalmedium period as
MINIMUM, to eight (8) years, eight (8) months and twenty-one (21) days
of prision mayor medium period as MAXIMUM and to pay Francisco T.
Labadchan the amount of P45,000.00 by way of actual damages.

2) In Criminal Case No. 92-CR-1414, accused-appellant is sentenced to an

indeterminate penalty of from one (1) year, eight (8) months and twenty-one
(21) days of prision correccional minimum period as MINIMUM, to five (5)
years, five (5) months and eleven (11) days of prision
correccional maximum period as MAXIMUM and to pay Victoria Asil the
amount of P15,000.00 by way of actual damages.

3) In Criminal Case No. 92-CR-1415, accused-appellant is sentenced to an

indeterminate penalty of from one (1) year, eight (8) months and twenty-one
(21) days of prision correccional minimum period as MINIMUM, to five (5)
years, five (5) months and eleven (11) days of prision
correccional maximum period as MAXIMUM.

4) In Criminal Case No. 92-CR-1426, accused-appellant is sentenced to an

indeterminate penalty of imprisonment of from two (2) years, four (4)
months and one (1) day of prision correccional medium period as
MINIMUM, to seven (7) years, eight (8) months and twenty-one (21) days
of prision mayor minimum period as MAXIMUM.

5) In Criminal Case No. 92-CR-1428, accused-appellant is sentenced to an

indeterminate penalty of from one (1) year, eight (8) months and twenty-one
(21) days of prision correccional minimum period as MINIMUM, to six (6)
years, eight (8) months and twenty-one (21) days of prision
mayor minimum period as MAXIMUM.
6) In Criminal Case No. 93-CR-1644, accused-appellant is sentenced to an
indeterminate penalty of from one (1) year, eight (8) months and twenty-one
(21) days of prision correccional minimum period as MINIMUM, to six (6)
years, eight (8) months and twenty-one (21) days of prision
mayor minimum period as MAXIMUM and to pay Alfredo Arcega the
amount of P25,000.00 by way of actual damages.

7) In Criminal Case No. 93-CR-1646, accused-appellant is sentenced to an

indeterminate penalty of from one (1) year, eight (8) months and twenty-one
(21) days of prision correccional minimum period as MINIMUM, to six (6)
years, eight (8) months and twenty-one (21) days of prision
mayor minimum period as MAXIMUM and to pay Brando Salbino the
amount of P25,000.00 by way of actual damages.

8) In Criminal Case No. 93-CR-1647, accused-appellant is sentenced to an

indeterminate penalty of from one (1) year, eight (8) months and twenty-one
(21) days of prision correccional minimum period as MINIMUM, to six (6)
years, eight (8) months and twenty-one (21) days of prision
mayor minimum period as MAXIMUM and to pay Mariano Damolog the
amount of P25,000.00 by way of actual damages.

9) In Criminal Case No. 93-CR-1649, accused-appellant is sentenced to an

indeterminate penalty of from one (1) year, eight (8) months and twenty-one
(21) days of prision correccional minimum period as MINIMUM, to six (6)
years, eight (8) months and twenty-one (21) days of prision
mayor minimum period as MAXIMUM and to pay Lorenzo Belino the
amount of P25,000.00 by way of actual damages.

10) In Criminal Case No. 93-CR-1651, accused-appellant is sentenced to

an indeterminate penalty of from one (1) year, eight (8) months and
twenty-one (21) days of prision correccional minimum period as
MINIMUM, to six (6) years, eight (8) months and twenty-one (21) days
of prision mayor minimum period as MAXIMUM and to pay Peter Arcega
the amount of P25,000.00 by way of actual damages.

11) In Criminal Case No. 92-CR-1652, accused-appellant is sentenced to

an indeterminate penalty of from one (1) year, eight (8) months and
twenty-one (21) days of prision correccional minimum period as
MINIMUM, to five (5) years, five (5) months and eleven (11) days
of prision correccional maximum period as MAXIMUM and to pay Adeline
Tiangge the amount of P17,000.00 by way of actual damages.
 The awards of damages in Criminal Cases No. 92-CR-1396, No.
92-CR-1413, No. 92-CR-1416, No. 92-CR-1425, and No. 92-CR-1427,
all for illegal recruitment, as well as No. 93-CR-1645 for illegal
recruitment in large scale, except for the award of P25,000.00 by way
of actual damages to Dember Leon (no estafa case having been
instituted), are DELETED, either because similar awards have
already been provided for by the trial court, or for insufficiency of proof,
in the estafa cases aforenumbered.
Costs against accused-appellant.
SO ORDERED.
Davide, Jr., Bellosillo, Panganiban, and Quisumbing, JJ., concur.

FIRST DIVISION

[G.R. No. 119361. February 19, 2001]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. CORAZON

NAVARRA (At Large) RODOLFO NAVARRA, SR. and JOB
NAVARRA, accused.
RODOLFO NAVARRA, SR. and JOB
NAVARRA, accused-appellants.

DECISION
PARDO, J.:

Deceptis non decipientibus, jura subveniunt.*

It is a sad commentary that many of our countrymen migrate to other countries
for work. They leave all that is familiar and endure loneliness and separation from
their families and friends for the coveted dollar hoping that such will better their lot
and ensure their families a modicum of economic stability.
What is more disheartening is that there are those who take advantage of the
hopefuls. These are the illegal recruiters. On them, we must let the full force of the
law fall, and fall heavily.

The Case
 The case is an appeal from the decision of the Regional Trial Court, Branch 90,
Quezon City[1] finding accused Rodolfo Navarra, Sr. and Job Navarra (hereafter
Rodolfo and Job, respectively) guilty beyond reasonable doubt of illegal recruitment
committed in a large scale resulting to economic sabotage and sentencing each of
them to life imprisonment, to pay a fine of one hundred thousand (P100,000.00) pesos,
each, without subsidiary imprisonment in case of insolvency, and to return to
complainants the sums they received from them.

The Facts

Job and Rodolfo, along with Rodolfos wife[2] Corazon, operated an agency which
purported to have the authority to recruit and place workers for employment in
Taiwan. The agency[3] was named Rodolfo Navarras Travel Consultant and General
Services (RNTCGS),[4] which in the course of its operation was able to victimize
several hapless victims who never left Philippine soil, and in due time, filed
complaints with the Philippine Overseas Employment Agency (hereafter POEA)
against accused for illegal recruitment.
Neither RNTCGS nor Rodolfo, Corazon or Job in their personal capacities were
licensed or authorized by the Philippine Overseas Employment Administration to
recruit workers for overseas employment.[5]
The trial court summarized the testimonies of complainants, thus:[6]

MERLIE VILLESCA identified Rodolfo as the one with whom she

applied to for employment in Taiwan on May 6, 1992, at the RNTCGS
office in Novaliches, Quezon City. As placement fee she paid fifteen
thousand pesos (P15,000.00) to Inday Padawan (Rodolfos cook and
laundrywoman,[7] hereafter, Inday), at Corazon and Rodolfos house, and
another fifteen thousand pesos (P15,000.00) on December 22, 1992. She
identified Job as the administrative officer of RNCTGS, who
entertained her and the other applicants during the times she visited the
agencys office to follow up her application.[8]

GLICERIA MARINAS singled out Job as the one who recruited her
for employment in Taiwan as a factory worker. She testified that she
was recruited by Job on April 24, 1992 at RNTCGS where she was told
that she and her co-applicants would leave for Taiwan two months after
they applied on April 24, 1992. She gave Job all the requirements the
agency asked for including her passport and birth certificate. She was
also required to pay a placement fee of twenty thousand pesos
(P20,000.00), although the receipt given to her was only for the amount
of fifteen thousand pesos (P15,000.00). She gave her passport to Job
and she handed the placement fee to Inday who gave it to Corazon in
her presence.[9]

BEINVENIDA AMUTAN testified that while in Rodolfos house in

Novaliches, Quezon City, on May 11, 1992, Rodolfo promised her that
she would be able to leave for Taiwan upon payment of a
twenty thousand pesos (P20,000.00) placement fee. On April 11, 1992,
Beinvenida paid the amount to Inday who gave it to Corazon in
Beinvenidas presence. She never had the chance to go to Taiwan.Upon
investigation with the POEA, she discovered that RNTCGS was not
registered.[10]

ERNESTO AMUTAN testified that in April 1992, he filed an

application to work at a factory in Taiwan before Corazon in the
RNTCGS office. It was Corazon who interviewed him and asked him to
submit some requirements. While at the said office, he saw Rodolfo
there, who gave him the assurance that he would be able to leave for
Taiwan immediately. He was never deployed to Taiwan, despite paying
a placement fee of twenty thousand pesos (P20,000.00).[11]

FLORIE ROSE RAMOS testified that she applied with RNTCGS as a

factory worker for Taiwan and that she paid a placement fee of twenty
five thousand pesos (P25,000.00) and another payment ofone thousand
pesos (P1,000.00) as medical fee. She went to RNTCGS during the last
weeks of February, March and April 1992 and was interviewed by
Job. She was introduced to Rodolfo by her co-complainant Evelyn
Llacas. She was not able to leave for Taiwan, neither was she able to
retrieve her payments from RNTCGS for when she went to the office on
December 23, 1993, it had already been raided by the CIS and POEA
for recruiting for overseas employment without license or authority.[12]

LIWAYWAY CRUZ testified that she visited Rodolfo and Corazons

house and came to know that Rodolfo was the President of RNTCGS,
an agency which deported itself to her as and agency purporting to have
authority to recruit workers for placement in Taiwan. That on April
1993, she went to Rodolfos house to inquire about the processing of her
papers for employment in Taiwan. There she was assured by Rodolfo
that Corazon was in Taiwan and was already taking care of her
application.[13]

LOIDA MACASO testified that she came to know Rodolfo when she
visited Inday on December 3, 1991, at Rodolfos house and Rodolfo and
 Corazon recruited her to work as a factory worker in Taiwan. For this
purpose she paid the spouses ten thousand pesos (P10,000.00)
placement fee on January 8, 1992. She was never sent to Taiwan.[14]

On December 22, 1992, (PC) CIS agents arrested Inday Padawan after she
received placement fees from complainant Merlie Villesca.[15] The amount received
was one thousand pesos (P1,000.00) in one hundred peso (P100.00) bills, which were
dusted with ultraviolet powder.[16]
On February 26, 1993, Assistant Provincial Prosecutor of Bulacan Emily G.
Reyes, on detail with the Department of Justice, filed with the Regional Trial Court,
Quezon City, Branch 90, an information against accused for illegal recruitment
committed in a large scale. We quote:[17]

That on or about February, 1992 and sometime prior and subsequent thereto
in Quezon City, Metro Manila, Philippines, and within the jurisdiction of
this Honorable Court above-named accused conspiring, confederating and
mutually helping one another, representing themselves to have the capacity
to contract, enlist and transport workers for employment abroad, did then
and there willfully, unlawfully and for a fee, recruit and promise
employment/job placement to MERLIE VILLESCA, GLICERIA
MARINAS, JOSE LLORET, BEINVENIDA AMUTAN, MELBA YACAS,
MARITES DE SAGUN, VILMA MARANA, ERNESTO AMUTAN,
FLORIE ROSE RAMOS, RONALD ALLAN SANTOS and HENRY
DELA CRUZ without first securing the required license and/or authority
from Philippine Overseas Employment Administration.

CONTRARY TO LAW.

On April 29, 1993, upon arraignment, Job pleaded not guilty.[18]

On July 14, 1993, upon arraignment, Rodolfo likewise pleaded not guilty.[19]
After due trial, on December 29, 1994, the trial court rendered a decision
convicting Rodolfo and Job, thus:

ACCORDINGLY, the Court hereby finds both accused RODOLFO

NAVARRA, SR. and JOB NAVARRA guilty of the crime of Illegal
Recruitment Committed in a Large Scale Resulting to Economic Sabotage,
as charged in the Information, and hereby sentences each of them to Life
Imprisonment and also each of them to pay a fine of P100,000.00, without
subsidiary imprisonment in case of insolvency pursuant to Art. 39 (a) of the
Labor Code.
They are likewise ordered to return to complainants Florie Rose Ramos the
sum of P25,000.00; to Ernesto Amutan, P15,000.00; to Bienvenida Amutan,
P15,000.00; to Loida (Loyda) Macaso, P10,000.00; to Gliceria Marinas,
P15,000.00; and to Merlie (Merly) Villesca, P30,000.00.

Let alias warrants of arrest be issued for accused Corazon Navarra, said
warrants to be served by both the National Bureau of Investigation and the
Eastern Police District Command.

SO ORDERED. [20]

Hence, this appeal.[21]

Rodolfo and Job submit that the trial court gravely erred in disregarding their
defense of denial and in finding them guilty beyond reasonable doubt of the offense
charged.[22]

The Courts Ruling

We find the appeal without merit.

Bare denials, without clear and convincing evidence to support them,[23] can not
sway judgment. They are self-serving statements,[24] that are inherently weak and can
easily be put forward.[25]
The rule is well-entrenched that as an appellate court, we will not disturb the
findings of the trial court on credibility of witnesses as it was in a better position to
appreciate the same. The rule is specially so given that there is no showing that the
trial court plainly overlooked certain facts of substance or value, which, if considered,
may affect the result of the case.[26]
Illegal recruitment has two essential elements: First, the offender has no valid
license or authority required by law to enable him to lawfully engage in the
recruitment and placement of workers. Second, the offender undertakes any activity
within the meaning of recruitment and placement defined under Article 13 (b), or any
prohibited practices enumerated under Article 34 of the Labor Code.[27]

Recruitment and Placement

A nonlicensee or nonholder of authority means any person, corporation or entity

without a valid license or authority to engage in recruitment or placement from the
Secretary of Labor, or whose license or authority has been suspended, revoked or
cancelled by the Philippine Overseas Employment Administration or the Secretary of
Labor.[28] Under Article 13(b) of the Labor Code, recruitment and placement refer 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.

From the evidence adduced, accused-appellants committed acts of recruitment

and placement, such as promises to the complainants of profitable employment abroad
and acceptance of placement fees.Accused-appellants gave the impression that they
had the power to send the complainants to Taiwan for employment.[29]
With the certification from the Department of Labor and Employment stating that
RNTCGS was not authorized to recruit workers for overseas employment,[30] and
promises by the accused of employment abroad for complainants on payment of
placements fees, the conclusion is inescapable that accused are liable for illegal
recruitment.[31]

Economic Sabotage

Article 38 (b) of the Labor Code, as amended by P. D. No. 2018 provides that
illegal recruitment shall be considered an offense involving economic sabotage if any
of the following qualifying circumstances exists: First, when illegal recruitment is
committed by a syndicate. For purposes of the law, a syndicate exists when three or
more persons conspire or confederate with one another in carrying out any unlawful
or illegal transaction, enterprise or scheme.[32] Second, there is economic sabotage
when illegal recruitment is committed in a large scale, as when it is committed against
three or more persons individually or as a group.[33]
The acts of accused-appellants showed unity of purpose. All these acts establish a
common criminal design mutually deliberated upon and accomplished through
coordinated moves.[34]
Even assuming that there was no conspiracy, the record clearly shows illegal
recruitment committed in a large scale, since at least six (6) complainants were
victims, which is more than the minimum number of persons required by law to
constitute illegal recruitment in a large scale, resulting in economic sabotage.

Penalty Imposable

The penalty imposable on such offense is life imprisonment and a fine of one
hundred thousand pesos (P100,000.00).[35]

The Fallo
 WHEREFORE, the Court AFFIRMS the decision of the Regional Trial Court,
Quezon City, Branch 90 in Criminal Case No. 93-42592, dated December 29, 1994.
Costs against accused-appellants.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Ynares-Santiago, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 113161 August 29, 1995

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
LOMA GOCE y OLALIA, DAN GOCE and NELLY D. AGUSTIN, accused. NELLY D.
AGUSTIN, accused-appellant.

REGALADO, J.:

On January 12, 1988, an information for illegal recruitment committed by a syndicate and
in large scale, punishable under Articles 38 and 39 of the Labor Code (Presidential
Decree No. 442) as amended by Section 1(b) of Presidential Decree No. 2018, was filed
against spouses Dan and Loma Goce and herein accused-appellant Nelly Agustin in the
Regional Trial Court of Manila, Branch 5, alleging

That in or about and during the period comprised between May 1986 and June 25, 1987,
both dates inclusive, in the City of Manila, Philippines, the said accused, conspiring and
confederating together and helping one another, representing themselves to have the
capacity to contract, enlist and transport Filipino workers for employment abroad, did then
and there willfully and unlawfully, for a fee, recruit and promise employment/job placement
abroad, to (1) Rolando Dalida y Piernas, (2) Ernesto Alvarez y Lubangco, (3) Rogelio
Salado y Savillo, (4) Ramona Salado y Alvarez, (5) Dionisio Masaya y de Guzman, (6)
Dave Rivera y de Leon, (7) Lorenzo Alvarez y Velayo, and (8) Nelson Trinidad y Santos,
without first having secured the required license or authority from the Department of
Labor. 1

On January 21, 1987, a warrant of arrest was issued against the three accused but not
one of them was arrested. 2Hence, on February 2, 1989, the trial court ordered the case
archived but it issued a standing warrant of arrest against the accused. 3

Thereafter, on learning of the whereabouts of the accused, one of the offended parties,
Rogelio Salado, requested on March 17, 1989 for a copy of the warrant of
arrest. 4 Eventually, at around midday of February 26, 1993, Nelly Agustin was apprehended
by the Paraaque police. 5 On March 8, 1993, her counsel filed a motion to revive the case and
requested that it be set for hearing "for purposes of due process and for the accused to
immediately have her day in court" 6 Thus, on April 15, 1993, the trial court reinstated the case
and set the arraignment for May 3, 1993, 7 on which date of Agustin pleaded not guilty 8 and
the case subsequently went to trial.

Four of the complainants testified for the prosecution. Rogelio Salado was the first to take
the witness stand and he declared that sometime in March or April, 1987, he was
introduced by Lorenzo Alvarez, his brother-in-law and a co-applicant, to Nelly Agustin in
the latter's residence at Factor, Dongalo, Paraaque, Metro Manila. Representing herself
as the manager of the Clover Placement Agency, Agustin showed him a job order as proof
that he could readily be deployed for overseas employment. Salado learned that he had to
pay P5,000.00 as processing fee, which amount he gave sometime in April or May of the
same year. He was issued the corresponding receipt. 9

Also in April or May, 1987, Salado, accompanied by five other applicants who were his
relatives, went to the office of the placement agency at Nakpil Street, Ermita, Manila
where he saw Agustin and met the spouses Dan and Loma Goce, owners of the agency.
He submitted his bio-data and learned from Loma Goce that he had to give P12,000.00,
instead of the original amount of P5,000.00 for the placement fee. Although surprised at
the new and higher sum, they subsequently agreed as long as there was an assurance
that they could leave for abroad. 10

Thereafter, a receipt was issued in the name of the Clover Placement Agency showing
that Salado and his aforesaid co-applicants each paid P2,000.00, instead of the
P5,000.00 which each of them actually paid. Several months passed but Salado failed to
leave for the promised overseas employment. Hence, in October, 1987, along with the
other recruits, he decided to go to the Philippine Overseas Employment Administration
(POEA) to verify the real status of Clover Placement Agency. They discovered that said
agency was not duly licensed to recruit job applicants. Later, upon learning that Agustin
had been arrested, Salado decided to see her and to demand the return of the money he
had paid, but Agustin could only give him P500.00. 11

Ramona Salado, the wife of Rogelio Salado, came to know through her brother, Lorenzo
Alvarez, about Nelly Agustin. Accompanied by her husband, Rogelio, Ramona went to
see Agustin at the latter's residence. Agustin persuaded her to apply as a cutter/sewer in
Oman so that she could join her husband. Encouraged by Agustin's promise that she and
her husband could live together while working in Oman, she instructed her husband to
give Agustin P2,000.00 for each of them as placement fee, or the total sum of
P4,000.00. 12

Much later, the Salado couple received a telegram from the placement agency requiring
them to report to its office because the "NOC" (visa) had allegedly arrived. Again, around
February, or March, 1987, Rogelio gave P2,000.00 as payment for his and his wife's
passports. Despite follow-up of their papers twice a week from February to June, 1987, he
and his wife failed to leave for abroad. 13

Complainant Dionisio Masaya, accompanied by his brother-in-law, Aquiles Ortega,

applied for a job in Oman with the Clover Placement Agency at Paraaque, the agency's
former office address. There, Masaya met Nelly Agustin, who introduced herself as the
manager of the agency, and the Goce spouses, Dan and Loma, as well as the latter's
daughter. He submitted several pertinent documents, such as his bio-data and school
credentials. 14
In May, 1986, Masaya gave Dan Goce P1,900.00 as an initial downpayment for the
placement fee, and in September of that same year, he gave an additional P10,000.00.
He was issued receipts for said amounts and was advised to go to the placement office
once in a while to follow up his application, which he faithfully did. Much to his dismay and
chagrin, he failed to leave for abroad as promised. Accordingly, he was forced to demand
that his money be refunded but Loma Goce could give him back only P4,000.00 in
installments. 15

As the prosecution's fourth and last witness, Ernesto Alvarez took the witness stand on
June 7, 1993. He testified that in February, 1987, he met appellant Agustin through his
cousin, Larry Alvarez, at her residence in Paraaque. She informed him that "madalas
siyang nagpapalakad sa Oman" and offered him a job as an ambulance driver at the
Royal Hospital in Oman with a monthly salary of about $600.00 to $700.00. 16

On March 10, 1987, Alvarez gave an initial amount of P3,000.00 as processing fee to
Agustin at the latter's residence. In the same month, he gave another P3,000.00, this time
in the office of the placement agency. Agustin assured him that he could leave for abroad
before the end of 1987. He returned several times to the placement agency's office to
follow up his application but to no avail. Frustrated, he demanded the return of the money
he had paid, but Agustin could only give back P500.00. Thereafter, he looked for Agustin
about eight times, but he could no longer find her. 17

Only herein appellant Agustin testified for the defense. She asserted that Dan and Loma
Goce were her neighbors at Tambo, Paraaque and that they were licensed recruiters
and owners of the Clover Placement Agency. Previously, the Goce couple was able to
send her son, Reynaldo Agustin, to Saudi Arabia. Agustin met the aforementioned
complainants through Lorenzo Alvarez who requested her to introduce them to the Goce
couple, to which request she acceded. 18

Denying any participation in the illegal recruitment and maintaining that the recruitment
was perpetrated only by the Goce couple, Agustin denied any knowledge of the receipts
presented by the prosecution. She insisted that the complainants included her in the
complaint thinking that this would compel her to reveal the whereabouts of the Goce
spouses. She failed to do so because in truth, so she claims, she does not know the
present address of the couple. All she knew was that they had left their residence in
1987. 19

Although she admitted having given P500.00 each to Rogelio Salado and Alvarez, she
explained that it was entirely for different reasons. Salado had supposedly asked for a
loan, while Alvarez needed money because he was sick at that time. 20

On November 19, 1993, the trial court rendered judgment finding herein appellant guilty
as a principal in the crime of illegal recruitment in large scale, and sentencing her to serve
the penalty of life imprisonment, as well as to pay a fine of P100,000.00. 21

In her present appeal, appellant Agustin raises the following arguments: (1) her act of
introducing complainants to the Goce couple does not fall within the meaning of illegal
recruitment and placement under Article 13(b) in relation to Article 34 of the Labor Code;
(2) there is no proof of conspiracy to commit illegal recruitment among appellant and the
Goce spouses; and (3) there is no proof that appellant offered or promised overseas
employment to the complainants. 22 These three arguments being interrelated, they will be
discussed together.
Herein appellant is accused of violating Articles 38 and 39 of the Labor Code. Article 38 of
the Labor Code, as amended by Presidential Decree No. 2018, provides that any
recruitment activity, including the prohibited practices enumerated in Article 34 of said
Code, undertaken by non-licensees or non-holders of authority shall be deemed illegal
and punishable under Article 39 thereof. The same article further provides that illegal
recruitment shall be considered an offense involving economic sabotage if any of these
qualifying circumstances exist, namely, (a) when illegal recruitment is committed by a
syndicate, i.e., if it is carried out by a group of three or more persons conspiring and/or
confederating with one another; or (b) when illegal recruitment is committed in large
scale, i.e., if it is committed against three or more persons individually or as a group.

At the outset, it should be made clear that all the accused in this case were not authorized
to engage in any recruitment activity, as evidenced by a certification issued by Cecilia E.
Curso, Chief of the Licensing and Regulation Office of the Philippine Overseas
Employment Administration, on November 10, 1987. Said certification states that Dan and
Loma Goce and Nelly Agustin are neither licensed nor authorized to recruit workers for
overseas
employment. 23 Appellant does not dispute this. As a matter of fact her counsel agreed to
stipulate that she was neither licensed nor authorized to recruit applicants for overseas
employment. Appellant, however, denies that she was in any way guilty of illegal
recruitment. 24

It is appellant's defensive theory that all she did was to introduce complainants to the
Goce spouses. Being a neighbor of said couple, and owing to the fact that her son's
overseas job application was processed and facilitated by them, the complainants asked
her to introduce them to said spouses. Allegedly out of the goodness of her heart, she
complied with their request. Such an act, appellant argues, does not fall within the
meaning of "referral" under the Labor Code to make her liable for illegal recruitment.

Under said Code, 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. 25 On the other hand, referral is the act of passing along or forwarding of an
applicant for employment after an initial interview of a selected applicant for employment to a
selected employer, placement officer or bureau. 26

Hence, the inevitable query is whether or not appellant Agustin merely introduced
complainants to the Goce couple or her actions went beyond that. The testimonial
evidence hereon show that she indeed further committed acts constitutive of illegal
recruitment. All four prosecution witnesses testified that it was Agustin whom they initially
approached regarding their plans of working overseas. It was from her that they learned
about the fees they had to pay, as well as the papers that they had to submit. It was after
they had talked to her that they met the accused spouses who owned the placement
agency.

As correctly held by the trial court, being an employee of the Goces, it was therefore
logical for appellant to introduce the applicants to said spouses, they being the owners of
the agency. As such, appellant was actually making referrals to the agency of which she
was a part. She was therefore engaging in recruitment activity. 27
Despite Agustin's pretensions that she was but a neighbor of the Goce couple, the
testimonies of the prosecution witnesses paint a different picture. Rogelio Salado and
Dionisio Masaya testified that appellant represented herself as the manager of the Clover
Placement Agency. Ramona Salado was offered a job as a cutter/sewer by Agustin the
first time they met, while Ernesto Alvarez remembered that when he first met Agustin, the
latter represented herself as "nagpapaalis papunta sa Oman." 28 Indeed, Agustin played a
pivotal role in the operations of the recruitment agency, working together with the Goce couple.

There is illegal recruitment when one gives the impression of having the ability to send a
worker abroad." 29 It is undisputed that appellant gave complainants the distinct impression
that she had the power or ability to send people abroad for work such that the latter were
convinced to give her the money she demanded in order to be so employed. 30

It cannot be denied that Agustin received from complainants various sums for purpose of
their applications. Her act of collecting from each of the complainants payment for their
respective passports, training fees, placement fees, medical tests and other sundry
expenses unquestionably constitutes an act of recruitment within the meaning of the law.
In fact, appellant demanded and received from complainants amounts beyond the
allowable limit of P5,000.00 under government regulations. It is true that the mere act of a
cashier in receiving money far exceeding the amount allowed by law was not
considered per se as "recruitment and placement" in contemplation of law, but that was
because the recipient had no other participation in the transactions and did not conspire
with her co-accused in defrauding the victims. 31 That is not the case here.

Appellant further argues that "there is no evidence of receipts of collections/payments

from complainants to appellant." On the contrary, xerox copies of said receipts/vouchers
were presented by the prosecution. For instance, a cash voucher marked as Exhibit
D, 32 showing the receipt of P10,000.00 for placement fee and duly signed by appellant, was
presented by the prosecution. Another receipt, identified as Exhibit E, 33 was issued and
signed by appellant on February 5, 1987 to acknowledge receipt of P4,000.00 from Rogelio
and Ramona Salado for "processing of documents for Oman." Still another receipt dated
March 10, 1987 and presented in evidence as Exhibit F, shows that appellant received from
Ernesto Alvarez P2,000.00 for "processing of documents for Oman." 34

Apparently, the original copies of said receipts/vouchers were lost, hence only xerox
copies thereof were presented and which, under the circumstances, were admissible in
evidence. When the original writing has been lost or destroyed or cannot be produced in
court, upon proof of its execution and loss or destruction, or unavailability, its contents
may be proved by a copy or a recital of its contents in some authentic document, or by the
recollection of witnesses. 35

Even assuming arguendo that the xerox copies presented by the prosecution as
secondary evidence are not allowable in court, still the absence thereof does not warrant
the acquittal of appellant. In People vs. Comia, 36where this particular issue was involved,
the Court held that the complainants' failure to ask for receipts for the fees they paid to the
accused therein, as well as their consequent failure to present receipts before the trial court as
proof of the said payments, is not fatal to their case. The complainants duly proved by their
respective testimonies that said accused was involved in the entire recruitment process. Their
testimonies in this regard, being clear and positive, were declared sufficient to establish
that factum probandum.

Indeed, the trial court was justified and correct in accepting the version of the prosecution
witnesses, their statements being positive and affirmative in nature. This is more worthy of
credit than the mere uncorroborated and self-serving denials of appellant. The lame
defense consisting of such bare denials by appellant cannot overcome the evidence
presented by the prosecution proving her guilt beyond reasonable doubt. 37

The presence of documentary evidence notwithstanding, this case essentially involves the
credibility of witnesses which is best left to the judgment of the trial court, in the absence
of abuse of discretion therein. The findings of fact of a trial court, arrived at only after a
hearing and evaluation of what can usually be expected to be conflicting testimonies of
witnesses, certainly deserve respect by an appellate court. 38 Generally, the findings of fact
of the trial court on the matter of credibility of witnesses will not be disturbed on appeal. 39

In a last-ditch effort to exculpate herself from conviction, appellant argues that there is no
proof of conspiracy between her and the Goce couple as to make her liable for illegal
recruitment. We do not agree. The evidence presented by the prosecution clearly
establish that appellant confabulated with the Goces in their plan to deceive the
complainants. Although said accused couple have not been tried and convicted,
nonetheless there is sufficient basis for appellant's conviction as discussed above.

In People vs. Sendon, 40 we held that the non-prosecution of another suspect therein
provided no ground for the appellant concerned to fault the decision of the trial court convicting
her. The prosecution of other persons, equally or more culpable than herein appellant, may
come later after their true identities and addresses shall have been ascertained and said
malefactors duly taken into custody. We see no reason why the same doctrinal rule and
course of procedure should not apply in this case.

WHEREFORE, the appealed judgment of the court a quo is hereby AFFIRMED in toto,
with costs against accused-appellant Nelly D. Agustin.

SO ORDERED.

Narvasa, C.J., Puno, Mendoza and Francisco, JJ., concur.

THIRD DIVISION

SUNACE INTERNATIONAL G.R. No. 161757

MANAGEMENT SERVICES, INC.
Petitioner, Present:

QUISUMBING, J.,
- versus - Chairperson,
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, Promulgated:
Respondents.
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 effective February 1, 1997. The [1]

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 before the National Labor Relations Commission (NLRC)
[2]

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 to the Manager of Sunace,
[3]

furnishing it with a copy of Divinas 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 claiming that [4]

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, claiming as follows, quoted verbatim:
[6]

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 SUNACEs
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 ATTORNEYS 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 attorneys 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 attorneys 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 Divinas Position Paper, Sunace filed on April 25,

2000 an . . . ANSWER TO COMPLAINANTS POSITION PAPER alleging that [7]

Divinas 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 COMPLAINANTS POSITION PAPER.

To Sunaces . . . ANSWER TO COMPLAINANTS POSITION PAPER, Divina filed

a 2-page reply, without, however, refuting Sunaces disclaimer of
[8]

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 Sunaces claim that the extension of Divinas
contract for two more years was without its knowledge and consent in
this wise:
 We reject Sunaces 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 contracts extension and Sunaces 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 Sunaces argument that it is not liable on
account of Divinas 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, the dispositive portion of which reads:
[12]

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
attorneys 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, affirmed the Labor Arbiters decision.
[14]

Via petition for certiorari, Sunace elevated the case to the Court
[15]

of Appeals which dismissed it outright by Resolution of November 12,

2002, the full text of which reads:
[16]

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 Arbiters 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 respondents 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, Sunace filed the present petition for
[18]

review on certiorari.

The Court of Appeals affirmed the Labor Arbiter and NLRCs

finding that Sunace knew of and impliedly consented to the extension of
Divinas 2-year contract. It went on to state that It is undisputed that
[Sunace] was continually communicating with [Divinas] 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
Divinas allegedly withheld savings does not necessarily mean that Sunace
ratified the extension of the contract. As Sunace points out in its
Reply filed before the Court of Appeals,
[20]

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 petitioners 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 Divinas 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 [Divinas] 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. The knowledge of the principal-foreign employer cannot,
[23]

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 Divinas 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 REVERSED and SET
ASIDE. The complaint of respondent Divina A. Montehermozo against
petitioner is DISMISSED.

SO ORDERED.

G.R. No. 109808 March 1, 1995

ESALYN CHAVEZ, petitioner,

vs.
HON. EDNA BONTO-PEREZ, HON. ROGELIO T. RAYALA, HON. DOMINGO H.
ZAPANTA, HON. JOSE N. SARMIENTO, CENTRUM PROMOTIONS PLACEMENT
CORPORATION, JOSE A. AZUCENA, JR., and TIMES SURETY & INSURANCE
COMPANY, INC. respondents.

PUNO, J.:

One of the anguished cries in our society today is that while our laws appear to protect the
poor, their interpretation is sometimes anti-poor. In the case at bench, petitioner, a poor,
uncounselled entertainment dancer signed a contract with her Japanese employer calling
for a monthly salary of One Thousand Five Hundred U.S. Dollars (US$1,500) but later had
to sign an immoral side agreement reducing her salary below the minimum standard set
by the POEA. Petitioner invoked the law to collect her salary differentials, but incredibly
found public respondent straining the seams of our law to disfavor her. There is no greater
disappointment to the poor like petitioner than to discover the ugly reality behind the
beautiful rhetoric of laws. We will not allow this travesty.

This is a petition for certiorari to review the Decision of the National Labor Relations
Commission (NLRC), 1 dated December 29, 1992, which affirmed the Decision of public
respondent Philippine Overseas Employment Agency (POEA) Administrator Jose N.
Sarmiento, dated February 17, 1992, dismissing petitioner's complaint for unpaid salaries
amounting to Six Thousand Dollars (US$6,000.00).

The facts are undisputed.

On December 1, 1988, petitioner, an entertainment dancer, entered into a standard

employment contract for overseas Filipino artists and entertainers with Planning Japan
Co., Ltd., 2 through its Philippine representative, private respondent Centrum Placement &
Promotions Corporation. The contract had a duration of two (2) to six (6) months, and
petitioner was to be paid a monthly compensation of One Thousand Five Hundred Dollars
(US$1,5000.00). On December 5, 1888, the POEA approved the contract. Subsequently,
petitioner executed the following side agreement with her Japanese employer through her
local manager, Jaz Talents Promotion:

Date: Dec. 10, 1988

SUBJECT: Salary Deduction

MANAGERIAL COMMISSION

DATE OF DEPARTURE: _________________

ATTENTION: MR. IWATA

I, ESALYN CHAVEZ, DANCER, do hereby with my own free will and voluntarily have the
honor to authorize your good office to please deduct the amount of TWO HUNDRED
FIFTY DOLLARS ($250) from my contracted monthly salary of SEVEN HUNDRED
FIFTY DOLLARS ($750) as monthly commission for my Manager, Mr. Jose A. Azucena,
Jr.

That, my monthly salary (net) is FIVE HUNDRED DOLLARS ($500).

(sgd. by petitioner) 3

On December 16, 1988, petitioner left for Osaka, Japan, where she worked for six (6)
months, until June 10, 1989. She came back to the Philippines on June 14, 1989.

Petitioner instituted the case at bench for underpayment of wages with the POEA on
February 21, 1991. She prayed for the payment of Six Thousand U.S. Dollars
(US$6,000.00), representing the unpaid portion of her basic salary for six months.
Charged in the case were private respondent Centrum Promotions and Placement
Corporation, the Philippine representative of Planning Japan, Co., Inc., its insurer, Times
Surety and Insurance Co., Inc., and Jaz Talents Promotion.
The complaint was dismissed by public respondent POEA Administrator on February 17,
1992. He ratiocinated, inter alia:

. . . Apparently and from all indications, complainant (referring to petitioner herein) was
satisfied and did not have any complaint (about) anything regarding her employment in
Japan until after almost two (2) years (when) she filed the instant complaint on February
21, 1991. The records show that after signing the Standard Employment Contract on
December 1, 1988, she entered into a side agreement with the Japanese employer thru
her local manager, Jaz Talents Promotion consenting to a monthly salary of US$750.00
which she affirmed during the conference of May 21, 1991. Respondent agency had no
knowledge nor participation in the said agreement such that it could not be faulted for
violation of the Standard Employment Contract regarding the stipulated salary. We cannot
take cognizance of such violation when one of the principal party (sic) thereto opted to
receive a salary different from what has been stipulated in their contract, especially so if
the contracting party did not consent/participate in such arrangement. Complainant
(petitioner) cannot now demand from respondent agency to pay her the salary based (on)
the processed Employment Contract for she is now considered in bad faith and hence,
estopped from claiming thereto thru her own act of consenting and agreeing to receive a
salary not in accordance with her contract of employment. Moreover, her self-imposed
silence for a long period of time worked to her own disadvantage as she allowed laches to
prevail which barred respondent from doing something at the outset. Normally, if a
person's right (is) violated, she/he would immediately react to protect her/his rights which
is not true in the case at bar.

The term laches has been defined as one's negligence or failure to assert his right in due
time or within reasonable time from the accrual of his cause of action, thus, leading
another party to believe that there is nothing wrong with his own claim. This resulted in
placing the negligent party in estoppel to assert or enforce his right. . . . Likewise, the
Supreme Court in one case held that not only is inaction within reasonable time to enforce
a right the basic premise that underlies a valid defense of laches but such inaction evinces
implied consent or acquiescence to the violation of the right . . .

Under the prevailing circumstances of this case, it is outside the regulatory powers of the
Administration to rule on the liability of respondent Jaz Talents Promotions, if any, (it) not
being a licensed private agency but a promotion which trains entertainers for abroad.

xxx xxx xxx

(Citations omitted.)

On appeal, the NLRC upheld the Decision, thus:

We fail to see any conspiracy that the complainant (petitioner herein) imputes to the
respondents. She has, to put it bluntly, not established and/or laid the basis for Us to
arrive at a conclusion that the respondents have been and should be held liable for her
claims.

The way We see it, the records do not at all indicate any connection between respondents
Centrum Promotion & Placement Corporation and Jaz Talents Promotion.

There is, therefore, no merit in the appeal. Hence, We affirmed. 4

Dissatisfied with the NLRC's Decision, petitioner instituted the present petition, alleging
that public respondents committed grave abuse of discretion in finding: that she is guilty of
laches; that she entered into a side contract on December 10, 1988 for the reduction of
her basic salary to Seven Hundred Fifty U.S. Dollars (US$750.00) which superseded,
nullified and invalidated the standard employment contract she entered into on December
1, 1988; and that Planning Japan Co., Ltd. and private respondents are not solidarily liable
to her for Six Thousand US Dollars (US$6,000.00) in unpaid wages. 5

The petition is meritorious.

Firstly, we hold that the managerial commission agreement executed by petitioner to

authorize her Japanese Employer to deduct Two Hundred Fifty U.S. Dollars (US$250.00)
from her monthly basic salary is void because it is against our existing laws, morals and
public policy. It cannot supersede the standard employment contract of December 1, 1988
approved by the POEA with the following stipulation appended thereto:

It is understood that the terms and conditions stated in this Employment Contract are in
conformance with the Standard Employment Contract for Entertainers prescribed by the
POEA under Memorandum Circular No. 2, Series of 1986. Any alterations or changes
made in any part of this contract without prior approval by the POEA shall be null and
void; 6 (Emphasis supplied.)

The stipulation is in line with the provisions of Rule II, Book V and Section 2(f), Rule I,
Book VI of the 1991 Rules and Regulations Governing Overseas Employment, thus:

Book V, Rule II

Sec. 1. Employment Standards. The Administration shall determine, formulate and review
employment standards in accordance with the market development and welfare
objectives of the overseas employment program and the prevailing market conditions.

Sec. 2. Minimum Provisions for Contract. The following shall be considered the minimum
requirements for contracts of employment:

a. Guaranteed wages for regular working hours and overtime pay for services rendered
beyond regular working hours in accordance with the standards established by the
Administration;

xxx xxx xxx

Sec. 3. Standard Employment Contract. The administration shall undertake development

and/or periodic review of region, country and skills specific employment contracts for
landbased workers and conduct regular review of standard employment contracts (SEC)
for seafarers. These contracts shall provide for minimum employment standards herein
enumerated under Section 2, of this Rule and shall recognize the prevailing labor and
social legislations at the site of employment and international conventions. The SEC shall
set the minimum terms and conditions of employment. All employers and principals shall
adopt the SEC in connection with the hiring of workers without prejudice to their adoption
of other terms and conditions of employment over and above the minimum standards of
the Administration. (Emphasis supplied.)

and
 BOOK VI, RULE I

Sec. 2. Grounds for suspension/cancellation of license.

xxx xxx xxx

f. Substituting or altering employment contracts and other documents approved and

verified by the Administration from the time of actual signing thereof by the parties up to
and including the period of expiration of the same without the Administration's approval.

xxx xxx xxx

(Emphasis supplied.)

Clearly, the basic salary of One Thousand Five Hundred U.S. Dollars (US$1,500.00)
guaranteed to petitioner under the parties' standard employment contract is in accordance
with the minimum employment standards with respect to wages set by the POEA, Thus,
the side agreement which reduced petitioner's basic wage to Seven Hundred Fifty U.S.
Dollars (US$750.00) is null and void for violating the POEA's minimum employment
standards, and for not having been approved by the POEA. Indeed, this side agreement is
a scheme all too frequently resorted to by unscrupulous employers against our helpless
overseas workers who are compelled to agree to satisfy their basic economic needs.

Secondly. The doctrine of laches or "stale demands"' cannot be applied to petitioner.

Laches has been defined as the failure or neglect for an unreasonable and
unexplained length time to do that which, by exercising due diligence, could or should
have been done earlier, 7 thus giving rise to a presumption that the party entitled to assert it
either has abandoned or declined to assert it. 8 It is not concerned with mere lapse of time; the
fact of delay, standing alone, is insufficient to constitute laches. 9

The doctrine of laches is based upon grounds of public policy which requires, for the
peace of society, the discouragement of stale claims, and is principally a question of the
inequity or unfairness of permitting a right or claim to be enforced or asserted. 10 There is
no absolute rule as to what constitutes laches; each case is to be determined according to its
particular circumstances. The question of laches is addressed to the sound discretion of the
court, and since it is an equitable doctrine, its application is controlled by equitable
considerations. It cannot be worked to defeat justice or to perpetrate fraud and injustice. 11

In the case at bench, petitioner filed her claim well within the three-year prescriptive period
for the filing of money claims set forth in Article 291 of the Labor Code. 12 For this reason,
we hold the doctrine of laches inapplicable to petitioner. As we ruled in Imperial Victory
Shipping Agency v. NLRC, 200 SCRA 178 (1991):

. . . Laches is a doctrine in equity while prescription is based on law. Our courts are
basically courts of law not courts of equity. Thus, laches cannot be invoked to resist the
enforcement of an existing legal right. We have ruled in Arsenal v. Intermediate Appellate
Court . . . that it is a long standing principle that equity follows the law. Courts exercising
equity jurisdiction are bound by rules of law and have no arbitrary discretion to disregard
them. In Zabat, Jr. v. Court of Appeals . . ., this Court was more emphatic upholding the
rules of procedure. We said therein:

As for equity, which has been aptly described as a "justice outside legality," this applied
only in the absence of, and never against, statutory law or, as in this case, judicial rules of
procedure. Aequetas nunguam contravenit legis. The pertinent positive rules being
present here, they should pre-empt and prevail over all abstract arguments based only on
equity.

Thus, where the claim was filed within the three-year statutory period, recovery therefore
cannot be barred by laches. Courts should never apply the doctrine of laches earlier than
the expiration of time limited for the commencement of actions at law.

xxx xxx xxx

(Emphasis supplied. Citations omitted.)

Thirdly, private respondents Centrum and Times as well as Planning Japan Co., Ltd.
the agency's foreign principal are solidarily liable to petitioner for her unpaid wages.
This is in accordance with stipulation 13.7 of the parties' standard employment contract
which provides:

13.7. The Employer (in this case, Planning Japan Co., Ltd. ) and its locally (sic)
agent/promoter/representative (private respondent Centrum Promotions & Placement
Corporation) shall be jointly and severally responsible for the proper implementation of the
terms and conditions in this Contract. 13 (Emphasis supplied.)

This solidary liability also arises from the provisions of Section 10(a)(2), Rule V, Book I of
the Omnibus Rules Implementing the Labor Code, as amended, thus:

Sec. 10. Requirement before recruitment. Before recruiting any worker, the private
employment agency shall submit to the Bureau the following documents:

a) A formal appointment or agency contract executed by a foreign-based employer in

favor of the license holder to recruit and hire personnel for the former . . . . Such formal
appointment or recruitment agreement shall contain the following provisions, among
others:

xxx xxx xxx

2. Power of the agency to sue and be sued jointly and solidarily with the principal or
foreign based employer for any of the violations of the recruitment agreement and the
contracts of employment.

xxx xxx xxx

(Emphasis supplied.)

Our overseas workers constitute an exploited class. Most of them come from the poorest
sector of our society. They are thoroughly disadvantaged. Their profile shows they live in
suffocating slums, trapped in an environment of crime. Hardly literate and in ill health, their
only hope lies in jobs they can hardly find in our country. Their unfortunate circumstance
makes them easy prey to avaricious employers. They will climb mountains, cross the seas,
endure slave treatment in foreign lands just to survive. Out of despondence, they will work
under sub-human conditions and accept salaries below the minimum. The least we can do
is to protect them with our laws in our land. Regretfully, respondent public officials who
should sympathize with the working class appear to have a different orientation.
IN VIEW WHEREOF, the petition is GRANTED. The Decisions of respondent POEA
Administrator and NLRC Commissioners in POEA Case No. Adj. 91-02-199 (ER),
respectively dated February 17 and December 29, 1992, and the Resolution of the NLRC,
dated March 23, 1993, are REVERSED and SET ASIDE. Private respondents are held
jointly and severally liable to petitioner for the payment of SIX THOUSAND US DOLLARS
(US$6,000.00) in unpaid wages. Costs against private respondents.

SO ORDERED.

Narvasa, C.J., Bidin, Regalado and Mendoza, JJ., concur.

FIRST DIVISION

PLACEWELL INTERNATIONAL G.R. No. 169973

SERVICES CORPORATION,
Petitioner, Present:
Panganiban, C.J. (Chairperson),
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo, Sr., and
Chico-Nazario, JJ.
IRENEO B. CAMOTE,
Respondent. Promulgated:

June 26, 2006

x
----------------------------------------------------------------------------------------
x

DECISION
YNARES-SANTIAGO, J.:

This Petition for Review on Certiorari under Rule 45 of the Rules

of Court assails the September 27, 2005 Decision[1] of the Court of
Appeals in CA-G.R. SP No. 77145, which set aside the November 20,
2002 Resolution[2] of the National Labor Relations Commission (NLRC)
and reinstated with modifications the May 31, 2002 Decision [3] of Labor
Arbiter Arturo L. Gamolo.

The records show that on August 15, 1999, petitioner Placewell

International Services Corporation (PISC) deployed respondent Ireneo B.
Camote to work as building carpenter for SAAD Trading and Contracting
Co. (SAAD) at the Kingdom of Saudi Arabia (KSA) for a contract
duration of two years, with a corresponding salary of US$370.00 per
month.

At the job site, respondent was allegedly found incompetent by his

foreign employer; thus the latter decided to terminate his
services. However, respondent pleaded for his retention and consented to
accept a lower salary of SR 800.00 per month. Thus, SAAD retained
respondent until his return to the Philippines two years after.
On November 27, 2001, respondent filed a sworn Complaint[4] for
monetary claims against petitioner alleging that when he arrived at the
job site, he and his fellow Filipino workers were required to sign another
employment contract written in Arabic under the constraints of losing
their jobs if they refused; that for the entire duration of the new contract,
he received only SR 590.00 per month; that he was not given his overtime
pay despite rendering nine hours of work everyday; that he and his
co-workers sought assistance from the Philippine Embassy but they did
not succeed in pursuing their cause of action because of difficulties in
communication.

On May 31, 2002, the labor arbiter rendered a decision holding that
the modification of respondents employment contract is not allowed
under Section 10 of Republic Act No. 8042 (R.A. No. 8042);[5] thus, he
should have received the original contracted salary of US$370.00 per
month instead of the new rate given by SAAD. It was also noted that
respondent did not refute petitioners allegation regarding the
non-payment of placement and other processing fees prior to
deployment. The labor arbiter also found that there is no differential as
far as respondents overtime pay is concerned considering that he was
given overtime pay based on the new rate of SR 800.00. Since respondent
rendered one hour of overtime work per day for only 18 months, and not
the entire 24 months as claimed, the total overtime pay he received is
more or less equivalent to the amount he ought to have received if the
original contracted rate of US$370.00 was used. Finally, the labor arbiter
awarded respondent attorneys fees equivalent to 10% of the total
judgment award for being compelled to hire a counsel to protect his rights
and interests. The dispositive portion of the Decision reads:

WHEREFORE, premises considered, judgment is hereby

rendered ORDERING respondent PLACEWELL INTERNATIONAL
SERVICES CORPORATION to pay complainant IRENEO B.
CAMOTE the amount of PESOS: TWO HUNDRED FIFTEEN
THOUSAND FOUR HUNDRED TWENTY FOUR ONLY
(P215,424.00) representing underpayment of wages and attorneys fees.

SO ORDERED.[6]

On appeal by the petitioner, the NLRC set aside the Decision of the
Labor Arbiter, to wit:

WHEREFORE, premises considered, the appealed decision

is Vacated and Set Aside. In lieu thereof, a new judgment is rendered,
dismissing the above-entitled case for lack of cause of action.

SO ORDERED.[7]

Aggrieved, respondent filed a Petition for Certiorari under Rule 65

in the Court of Appeals which set aside the Resolution of the NLRC, and
reinstated with modifications the Decision of the labor arbiter. The
appellate court held that there was a diminution of respondents salary
from a rate of US$370.00 to SR 800.00 per month in clear violation of
Section 10 of R.A. No. 8042.

As to the alleged incompetence of respondent, the appellate court

noted that said allegation has not been substantiated hence should not be
given any credence. Thus, for failure of petitioner to show just cause for
the demotion of respondent, the appellate court granted the petition, set
aside resolution dated November 24, 2000 of the NLRC, and reinstated
the decision of the Labor Arbiter dated May 31, 2002, the dispositive
portion of which follows:

WHEREFORE, premises considered, the petition

is GRANTED. The assailed Resolution dated 24 November 2000 of
the NLRC, Fifth Division is SET ASIDE and the Decision of the
Labor Arbiter dated 31 May 2002 is REINSTATED and AFFIRMED
with modifications. The exchange rate shall be that prevailing at the
time of actual payment. Private respondent, PLACEWELL
 INTERNATIONAL SERVICES CORPORATION is hereby ordered
jointly and severally liable to pay petitioner, IRENEO B. CAMOTE
the following:

Per POEA approved contract or $370.00 x (rate of exchange at the

time of actual payment) x 24 months = Total salary in the original
contract
Less:
Salary as Modified or SR 800 x P12.00 x 24 months = P230,400.00
Less:
Unauthorized Deductions or SR 4,885 x P12 = P171,780.00
P 58,620.00
Less:
Unpaid placement fee
Equals:
Total unpaid salary
Add:
Attorneys fees or 5% of the total unpaid salary
Equals:
Total Money Claims.

SO ORDERED.[8]
Hence, this petition.

Petitioner avers that respondent failed to substantiate the allegation

that he was forced to enter into the new employment contract with SAAD
which proves that the new contract was actually voluntarily entered and
agreed upon between said parties; that if respondent was indeed forced to
sign the new contract, his claims are now barred by laches because
respondent never informed petitioner of any problem at the job site until
two years after his deployment; that the appellate courts award for
unauthorized deductions in the amount of P171,780.00 should be deleted
for lack of legal or factual basis; that respondent is not entitled to
attorneys fees.

R.A. No. 8042 explicitly prohibits the substitution or alteration to

the prejudice of the worker, of employment contracts already approved
and verified by the Department of Labor and Employment (DOLE) 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
DOLE.[9] Thus, we held in Chavez v. Bonto-Perez[10] that the
subsequently executed side agreement of an overseas contract worker
with her foreign employer which reduced her salary below the amount
approved by the POEA is void because it is against our existing laws,
morals and public policy. The said side agreement cannot supersede her
standard employment contract approved by the POEA.[11]

Applying the same rule in the case at bar, the unauthorized

alteration in the employment contract of respondent, particularly the
diminution in his salary from US$370.00 to SR 800.00 per month, is void
for violating the POEA-approved contract which set the minimum
standards, terms, and conditions of his employment.

Moreover, we find that there was no proper dismissal of respondent

by SAAD; the termination of respondent was clearly a ploy to pressure
him to agree to a lower wage rate for continued employment. Thus, the
original POEA-approved employment contract of respondent subsists
despite the so-called new agreement with SAAD. Consequently, the
solidary liability of petitioner with SAAD for respondents money claims
continues in accordance with Section 10 of R.A. 8042.[12]

Petitioners contention that respondent is guilty of laches is without

basis. Laches has been defined as the failure of or neglect for an
unreasonable and unexplained length of time to do that which by
exercising due diligence, could or should have been done earlier, or to
assert a right within reasonable time, warranting a presumption that the
party entitled thereto has either abandoned it or declined to assert
it. Thus, the doctrine of laches presumes that the party guilty of
negligence had the opportunity to do what should have been done, but
failed to do so. Conversely, if the said party did not have the occasion to
assert the right, then, he can not be adjudged guilty of laches. Laches is
not concerned with the mere lapse of time, rather, the party must have
been afforded an opportunity to pursue his claim in order that the delay
may sufficiently constitute laches.[13]

The doctrine of laches is based upon grounds of public policy

which requires, for the peace of society, the discouragement of stale
claims, and is principally a question of the inequity or unfairness of
permitting a right or claim to be enforced or asserted. There is no absolute
rule as to what constitutes laches; each case is to be determined according
to its particular circumstances. The question of laches is addressed to the
sound discretion of the court, and since it is an equitable doctrine, its
application is controlled by equitable considerations. It cannot be worked
to defeat justice or to perpetrate fraud and injustice.[14]
 In the instant case, respondent filed his claim within the three-year
prescriptive period for the filing of money claims set forth in Article 291
of the Labor Code from the time the cause of action accrued. Thus, we
find that the doctrine of laches finds no application in this case.

The labor arbiter and the Court of Appeals did not err in awarding
attorneys fees to respondent. It is settled that in actions for recovery of
wages or where an employee was forced to litigate and incur expenses to
protect his rights and interests, he is entitled to an award of attorneys
fees.[15] However, with regard to Unauthorized Deductions amounting to
P171,780.00;[16] we note that the appellate court did not state any basis
for its award, thus, the same is deleted for lack of factual and legal basis.

WHEREFORE, the instant petition is PARTLY GRANTED. The

Decision of the Court of Appeals in CA-G.R. SP No. 77145 dated
September 27, 2005 is AFFIRMED with MODIFICATION that the
amount of P171,780 representing Unauthorized Deductions
is DELETED for lack of basis.
SO ORDERED.

ANTONIO M. SERRANO, G.R. No. 167614

Petitioner,
Present:

PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
CARPIO,
AUSTRIA-MARTINEZ,
- versus - CORONA,
CARPIO MORALES,
TINGA,
CHICO-NAZARIO,
VELASCO, Jr.,
NACHURA,
LEONARDO-DE CASTRO,
 BRION, and
GALLANT MARITIME SERVICES, PERALTA, JJ.
INC. and MARLOW NAVIGATION
CO., INC., Promulgated:
Respondents. March 24, 2009
x---------------------------------------------------------
-x

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, 2007[1]

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

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 Decision[3] and April 1, 2005
Resolution[4] 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 month[5]

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 27/31, 1998 (5 days) incl. Leave pay US$ 413.90

June 01/30, 1998 2,590.00
July 01/31, 1998 2,590.00
August 01/31, 1998 2,590.00
Sept. 01/30, 1998 2,590.00
Oct. 01/31, 1998 2,590.00
Nov. 01/30, 1998 2,590.00
Dec. 01/31, 1998 2,590.00
Jan. 01/31, 1999 2,590.00
Feb. 01/28, 1999 2,590.00
Mar. 1/19, 1999 (19 days) incl. leave pay 1,640.00
--------------------------------------------------------------------------------

25,382.23
Amount adjusted to chief mate's salary
(March 19/31, 1998 to April 1/30, 1998) + 1,060.50[10]
----------------------------------------------------------------------------------------------

TOTAL CLAIM US$ 26,442.73[11]

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 $8,770.00), representing the complainants salary for three (3)
months of the unexpired portion of the aforesaid contract of
employment.
 The respondents are likewise ordered to pay the complainant
[petitioner], jointly and severally, in Philippine Currency, based on
the rate of exchange prevailing at the time of payment, the amount of
FORTY FIVE U.S. DOLLARS (US$ 45.00),[12] representing the
complainants 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 complainants (petitioner's) claim for
attorneys 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 appealed[15] to the National Labor Relations Commission

(NLRC) to question the finding of the LA that petitioner was illegally dismissed.

Petitioner also appealed[16] to the NLRC on the sole issue that the LA
erred in not applying the ruling of the Court in Triple 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% Attorneys 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.[21] The NLRC denied the
motion.[22]

Petitioner filed a Petition for Certiorari[23] with the CA, reiterating the
constitutional challenge against the subject clause.[24] After 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:

I
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 petitioners 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
[43] [44]
Commission and Millares v. National Labor Relations Commission, 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 party[48] 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.[56] Petitioner'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 receive[57] 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 a compelling 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 race[74] or gender[75] but 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 Courts 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--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--vis local workers with fixed-period

employment;

OFWs with employment contracts

of less than one year vis--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 Commission[79] (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 was Asian 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 respondents

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:

Period Applied in
Case Title Contract Period of Unexpired the Computation
Period Service Period of the Monetary
Award
Skippers v. 6 months 2 months 4 months 4 months
Maguad[84]
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 l[86]
Talidano v. 12 months 3 months 9 months 3 months
Falcon[87]
Univan v. 12 months 3 months 9 months 3 months
CA [88]
Oriental v. 12 months more than 2 10 months 3 months
CA [89] months
PCL v. 12 months more than 2 more or less 9 3 months
NLRC[90] months months
Olarte v. 12 months 21 days 11 months and 9 3 months
Nayona[91] days
JSS v. 12 months 16 days 11 months and 3 months
Ferrer[92] 24 days
Pentagon v. 12 months 9 months 2 months and 23 2 months and 23
[93]
Adelantar and 7 days days days
Phil. Employ 12 months 10 months 2 months Unexpired portion
 v. 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 Talidano and 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, 2 years 2 months 22 months 22 months
et al.[98]
Phil. Integrated 2 years 7 days 23 months and 23 months and 23
v. NLRC[99] 23 days days
JGB v. NLC[100] 2 years 9 months 15 months 15 months
Agoy v. 2 years 2 months 22 months 22 months
NLRC[101]
EDI v. NLRC, 2 years 5 months 19 months 19 months
et 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
Carilla[104]

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 contractsfall 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--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 Compaia 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.
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 DECLARED UNCONSTITUTIONAL; and the December 8, 2004
Decision and April 1, 2005 Resolution of the Court of Appeals
are MODIFIED 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.

COMPENSABILITY OF INJURY FOR OVERSEAS WORKERS

ANTONIO M. SERRANO, G.R. No. 167614

Petitioner,
Present:

PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
CARPIO,
AUSTRIA-MARTINEZ,
- versus - CORONA,
CARPIO MORALES,
TINGA,
CHICO-NAZARIO,
VELASCO, Jr.,
NACHURA,
LEONARDO-DE CASTRO,
 BRION, and
GALLANT MARITIME SERVICES, PERALTA, JJ.
INC. and MARLOW NAVIGATION
CO., INC., Promulgated:
Respondents. March 24, 2009
x---------------------------------------------------------
-x

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, 2007[1]

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

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 Decision[3] and April 1, 2005
Resolution[4] 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 month[5]

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 27/31, 1998 (5 days) incl. Leave pay US$ 413.90

June 01/30, 1998 2,590.00
July 01/31, 1998 2,590.00
August 01/31, 1998 2,590.00
Sept. 01/30, 1998 2,590.00
Oct. 01/31, 1998 2,590.00
Nov. 01/30, 1998 2,590.00
Dec. 01/31, 1998 2,590.00
Jan. 01/31, 1999 2,590.00
Feb. 01/28, 1999 2,590.00
Mar. 1/19, 1999 (19 days) incl. leave pay 1,640.00
--------------------------------------------------------------------------------

25,382.23
Amount adjusted to chief mate's salary
(March 19/31, 1998 to April 1/30, 1998) + 1,060.50[10]
----------------------------------------------------------------------------------------------

TOTAL CLAIM US$ 26,442.73[11]

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 $8,770.00), representing the complainants salary for three (3)
months of the unexpired portion of the aforesaid contract of
employment.
 The respondents are likewise ordered to pay the complainant
[petitioner], jointly and severally, in Philippine Currency, based on
the rate of exchange prevailing at the time of payment, the amount of
FORTY FIVE U.S. DOLLARS (US$ 45.00),[12] representing the
complainants 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 complainants (petitioner's) claim for
attorneys 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 appealed[15] to the National Labor Relations Commission

(NLRC) to question the finding of the LA that petitioner was illegally dismissed.

Petitioner also appealed[16] to the NLRC on the sole issue that the LA
erred in not applying the ruling of the Court in Triple 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% Attorneys 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.[21] The NLRC denied the
motion.[22]

Petitioner filed a Petition for Certiorari[23] with the CA, reiterating the
constitutional challenge against the subject clause.[24] After 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:

I
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 petitioners 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
[43] [44]
Commission and Millares v. National Labor Relations Commission, 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 party[48] 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.[56] Petitioner'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 receive[57] 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 a compelling 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 race[74] or gender[75] but 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 Courts 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--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--vis local workers with fixed-period

employment;

OFWs with employment contracts

of less than one year vis--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 Commission[79] (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 was Asian 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 respondents

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:

Period Applied in
Case Title Contract Period of Unexpired the Computation
Period Service Period of the Monetary
Award
Skippers v. 6 months 2 months 4 months 4 months
Maguad[84]
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 l[86]
Talidano v. 12 months 3 months 9 months 3 months
Falcon[87]
Univan v. 12 months 3 months 9 months 3 months
CA [88]
Oriental v. 12 months more than 2 10 months 3 months
CA [89] months
PCL v. 12 months more than 2 more or less 9 3 months
NLRC[90] months months
Olarte v. 12 months 21 days 11 months and 9 3 months
Nayona[91] days
JSS v. 12 months 16 days 11 months and 3 months
Ferrer[92] 24 days
Pentagon v. 12 months 9 months 2 months and 23 2 months and 23
[93]
Adelantar and 7 days days days
Phil. Employ 12 months 10 months 2 months Unexpired portion
 v. 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 Talidano and 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, 2 years 2 months 22 months 22 months
et al.[98]
Phil. Integrated 2 years 7 days 23 months and 23 months and 23
v. NLRC[99] 23 days days
JGB v. NLC[100] 2 years 9 months 15 months 15 months
Agoy v. 2 years 2 months 22 months 22 months
NLRC[101]
EDI v. NLRC, 2 years 5 months 19 months 19 months
et 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
Carilla[104]

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 contractsfall 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--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 Compaia 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.
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 DECLARED UNCONSTITUTIONAL; and the December 8, 2004
Decision and April 1, 2005 Resolution of the Court of Appeals
are MODIFIED 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.

COMPENSABILITY OF INJURY FOR OVERSEAS WORKERS

THIRD DIVISION

SPOUSES PONCIANO G.R. No. 155359

AYA-AY, SR. and CLEMENCIA
AYA-AY, Present:
Petitioners,
QUISUMBING, Chairperson ,
CARPIO,
-versus- CARPIO MORALES, and
TINGA, JJ.

ARPAPHIL SHIPPING CORP.,

and MAGNA MARINE, INC., Promulgated:
Respondents.
 January 31, 2006
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

CARPIO MORALES, J.:

Challenged via petition for review on certiorari is the January 24,

2002 Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. 50576
which denied due course to the petition for certiorari filed by
spouses Ponciano, Sr. and Clemencia Aya-ay (petitioners), a
[2]
reconsideration of which decision was denied by Resolution of
September 10, 2002.

The facts as culled from the records are as follows:

Respondent Arpaphil Shipping Corporation (Arpaphil), a domestic

manning corporation, engaged the services of Ponciano Aya-ay, Jr.
(Aya-ay) to work as seaman for respondent Magna Marine, Inc. (Magna
Marine), a Greek shipping company.
After the parties executed an 11-month Contract of
Employment[3] dated October 15, 1994 which bore the approval of the
Philippine Overseas Employment Administration (POEA), Aya-ay
departed on October 26, 1994 from the Philippines on board the vessel
M/V Panoria.[4]

On June 1, 1995, as Aya-ay was cleaning the vessels air

compressor, a sudden backflow of compressed air containing sand and
rust hit his right eye. As the vessel was then plying near
the Port of Hawaii on its way to Australia, Aya-ay asked the vessels
captain, G. Livarados, that he be brought to a hospital for medical
treatment, but the captain advised to just relax and take it easy. His eye
was washed with salt water and treated with eye drops, and he was given
oral antibiotics.

On arrival of the vessel at the Port of Brisbane, Australia on June 16,

1995, Aya-ay was referred to Dr. Lawrence W. Hirst of
the University of Queensland who performed a corneal graft
and vitrectomy.

In his Medical Report[5] dated June 20, 1995, Dr. Hirst stated
that Aya-ay had a large central corneal perforation with
iris prolapse which appeared to be a result of a severe corneal
infection. He concluded that there was evidence of infection in the front of
the eye although the back of the eye was not grossly infected.[6]

On examination on July 4, 1995 by Dr. John S. Ambler, also of

the University of Queensland, the doctor, in his Medical Certificate[7] of
even date, opined that Aya-ay had been totally incapacitated for work
since June 16, 1995 and would remain to be so until August 16, 1995.

On examination by Dr. Michael Whitby, consultant physician for

infectious diseases at Brisbane, Australia, who was requested to be
involved in the management of the eye injury of Aya-ay, the doctor, in
his letter[8] to Dr. Hirst dated July 10, 1995, noted the details of the
continued treatment of Aya-ays eye injury and stated that he had not
made any further arrangements to follow the patient further.

On July 5, 1995, Ponciano was repatriated to Manila.[9]

In a Medical Report[10] dated September 7, 1995, Dr. Ramon J. Ongsiako,

Jr. and Dr. Carmela Ongsiako-Isabela stated that Ponciano repaired to
their clinic on August 1, 1995for redness and blurring of vision of his
right eye, and that upon examination, they found that there was corneal
graft rejection in Aya-ays affected area. They thus recommended a repeat
corneal transplant once the inflammation in his eye had subsided, and
expenses to be incurred therefor were, upon Aya-ays request, therein
itemized.

In a Medical Report[11] dated November 21, 1995,

Dr. Ongsiako-Isabela stated that Aya-ay was awaiting a corneal donor
and directed that in the meantime he is to be cleared cardiopulmonary
wise for surgery.
By still another Medical Report[12] dated November 27, 1996,
Dr. Ongsiako-Isabela stated that:

Mr. Ponciano Aya-ay, Jr., was referred to Dr. Anthony

King last November 21, 1995 for cardiac clearance prior to
corneal transplant. At that time, he was not complaining of any
symptoms referrable to the heart, like chest pains, palpitations,
difficulty of breathing. Past medical history and family history
was (sic) unremarkable.

His physical exam showed a normal blood pressure of

130/85, normal cardiac rate of 62 per minute. Cardiac exam
was negative for murmurs or abnormal heart sounds. There
were norales or wheezes. An electrocardiogram (ECG) showed
sinus arrhythmia which is a finding compatible with his
age. Attached is a copy of his ECG.

With these findings, Dr. Anthony King said that there

was no evidence of an active heart disease and granted
Mr. Aya-ay cardiac clearance for the
[13]
procedure. (Underscoring supplied)

Aya-ays corneal transplant was thus scheduled on December 7,

1995.[14] On December 1, 1995, however, Aya-ay died. The Certificate of
Death[15] issued by Dr. Isidoro A. Ayson, Medical Officer IV of
the Caloocan Health Department, indicates that the immediate cause of
death was cerebro-vascular accident (CVA).

Having died without issue, Aya-ays parents, herein petitioners, claimed

death benefits from herein respondents Arpaphil and Magna Marine
which claims were rejected.

Petitioners thereupon filed on August 2, 1996 an

[16]
Affidavit/Complaint before the National Labor Relations Commission
(NLRC), docketed as NLRC OCW Case No. 00-08-2327-96, praying that
respondents Arpaphil and Magna Marine be ordered to pay them death
compensation benefits in the amount of USD 50,000 under the POEA
Standard Employment Contract;[17] burial assistance in the amount of
USD 1,000; moral, actual and exemplary damages in an amount not less
than P300,000; and attorneys fees equivalent to 10% of the total claim.

Respondents in their Answer[18] contended that

since Aya-ays contractual relationship with them had already ceased at
the time of his death, the cause of which was in no way related to the eye
injury, they could not be held liable for any death benefits.

After the parties had filed their respective position papers,[19] Labor
Arbiter Renell Joseph R. Dela Cruz, by Decision[20] of July 4, 1997,
ordered Arpaphil to indemnify herein petitioners death benefits in the
amount of USD 50,000 and an additional USD 1,000 as burial assistance
for the death of their son.

In granting death benefits and burial assistance to petitioners, the

Labor Arbiter held:

The death of complainants son is compensable. It is

sufficient that the risk of contracting the cause of death was set
in motion or aggravated by a work-related injury sustained
during the lifetime of their sons contract of employment.

Otherwise stated, where the primary injury is shown to

have been suffered in the course of employment, every natural
consequences (sic) that flows from the injury likewise arises
out of employment.

In the case at bar, there is a proximate connection of the

primary injury sustained by the deceased to the cause of his
death. The risk of contracting cerebro-vascular accident (CVA)
is greater during state of depression like what the deceased
was suffering and complaining before his untimely demise.

As what actually happened the deceased felt so sorry for

himself having been deprived of his only means of livelihood
at the prime of his youth and for having to think that had the
master of the vessel gave (sic) him prompt and proper medical
treatment he could have probably been saved from the
misfortune that befell upon him; a circumstance that alone
 should make the respondents answerable.[21] (Underscoring
supplied)

On appeal, the NLRC, by Decision[22] of October 31, 1997, set

aside the July 4, 1997 Decision of the labor arbiter but ordered
respondents to pay petitioners the amount of P20,000 for humanitarian
considerations in light of the following considerations:
It is clear from the records that the deceased seaman
sustained an injury to his right eye while on board the
MV Panoria. It is equally true that no competent evidence has
been adduced by the complainants to bolster their contention
that the work-sustained injury has a direct bearing and/or
influence on the cause of death. As the respondents have so
aptly discussed, and with which We agree, to wit:

CVA or Cerebro-Vascular Accident, or stroke, is defined in

the text Principles of Internal Medicine (International Student Edition,
McGraw Hill Book Company, New York, 1966 Ed., Chap. 204, p.
1146) as follows:

The clinical picture resulting from vascular disease is in

most instances so distinctive that the diagnosis is more readily
made than any other in the realm of neurology. The cardinal
feature is the stroke, a term which connotes the sudden and
dramatic development of a focal neurologic deficit. In its severest
forms, the patient falls hemiplegic and even unconscious an event
so striking as to deserve its own separate designation, namely,
apoplexy, stroke, shock, cerebrovascular accident. x x x.

xxx

The neurologic deficit in a stroke depends, of course, on

the location of the infarct or hemorrhage in the brain and the size
of the lesion. Hemiplegia is the classical sign of vascular disease
and occurs chiefly with massive lesions of the brainstem. In the
most serious cases of hemorrhage, the patient literally falls in his
tracks, paralyzed on one side, and soon passes into deep coma and
dies within a few hours.

CVA is classified under the broad umbrella of the

term Cerebrovascular Diseases, which is defined and the underlying
causes for which are discussed in the same above-cited text (Id. at p.
1146) as follows:

The term cerebrovascular disease is intended here to denote

any disease in which one or more of the blood vessels of the brain
are primarily implicated in a pathologic process. By pathologic
process is meant any abnormality of the vessel wall, an occlusion
 by thrombus or embolus, rupture of a vessel, a failure of cerebral
flow due to a fall in blood pressure, a change in the caliber of the
lumen, altered permeability of the vascular wall, or increased
viscosity or other quality of the blood. The pathologic process
within the vessel may be described not only according to its
grosser aspects thrombosis, embolism, rupture of a vessel, etc. but
also in terms of the more basic vascular disorders,
i.e., hypertensive arteriosclerosis, arteritis, trauma, aneurism,
developmental malformation, etc.

Nothing therein can in any way support the complainants

submission and the Honorable Arbiters conclusion that CVA may
result from an eye injury, or from infection (which incidentally was
already corrected), or from depression. Thus, it is clear that
respondents are not liable for death benefits arising from
seaman Aya-ays death.

Be that as it may, We are of the opinion that on grounds

of humanitarian considerations, the deceased seaman having,
in his own little way, dedicated his efforts to respondents
endeavors, that the latter be ordered to grant the complainants
financial assistance in the amount of Twenty Thousand Pesos
(P20,000.00). (Underscoring in the original)

Petitioners Motion for Reconsideration[23] of the October 31, 1997

NLRC Decision having been denied for lack of merit by Resolution[24] of
January 27, 1998, they filed a Petition for Certiorari with Prayer for the
Issuance of a Writ of Preliminary Injunction and/or Temporary
Restraining Order[25] before this Court, docketed as G.R. No. 133524.

After respondents and the NLRC, through the Office of the Solicitor
General, filed their respective Comments,[26] this Court referred the
petition to the CA by Resolution[27] of December 9, 1998, in view of its
ruling in St. Martin Funeral Homes v. NLRC.[28]

By Decision of January 24, 2002,[29] the CA denied due course to

the petition, it finding that indeed no substantial evidence enough to
establish petitioners entitlement to the various benefits and damages
claimed was presented.
 Their Motion for Reconsideration[30] having been denied by the CA
by Resolution[31] of September 10, 2002, petitioners filed the present
petition for review on certiorari[32] raising the following issue:

WHETHER THE PETITIONERS ARE ENTITLED TO

CLAIM THE BENEFITS UNDER THE POEA CONTRACT
WHICH AROSE FROM THE DEATH OF THE SEAFARER
PONCIANO AYA-AY, JR. AND WHAT AMOUNT OF
EVIDENCE IS REQUIRED FROM THE PETITIONERS TO
PROVE THEIR ENTITLEMENT THERETO.[33]

The pivotal issue for resolution is whether petitioners are entitled

to the death benefits provided for under the POEA Standard Employment
Contract.

Part II, Section C, Nos. 1 and 3 of the POEA Standard

Employment Contract Governing the Employment of All Filipino
Seamen on Board Ocean-Going Vessels provide:

C. Compensation and Benefits

1. In case of death of the seaman during the term of his

Contract, the employer shall pay his beneficiaries the
Philippine Currency equivalent to the amount of US$50,000
and an additional amount of US$7,000 to each child under the
age of twenty-one (21) but not exceeding four children at the
exchange rate prevailing during the time of payment.

xxxx

3. The other liabilities of the employer when the seaman

dies as a result of injury or illness during the term of
employment are as follows:

a. The employer shall pay the deceaseds beneficiary all

outstanding obligations due the seaman under this Contract.

xxxx
 c. In all cases, the employer shall pay the beneficiaries
of seamen the Philippine Currency equivalent to the amount of
US$1,000 for burial expenses at exchange rate prevailing
during the time of payment. (Underscoring supplied)

In order to give effect to the aforequoted benefits, it must be

shown that the employee died during the effectivity of the contract of
employment.[34]

Part I, Section H, Nos. 1 and 2(a) of the POEA Standard

Employment Contract provide:

Section H. Termination of Employment

1. The employment of the seaman shall cease on

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 in which case the
seaman is entitled to earned wages and benefits only.

2. The master shall have the right to discharge or sign

off the seaman at any place abroad in accordance with the
terms and conditions of this Contract and specifically for the
following reasons:

a. If the seaman is incompetent, or is continuously

incapacitated for the duties for which he was employed by
reason of illness or injury (Underscoring supplied)

Upon mutual consent of Aya-ay and respondents, he was on July 5,

1995 repatriated on account of his eye injury. Thus his employment had
been effectively terminated on that particular date.[35]

At all events, under the October 15, 1994 Contract of

Employment, Aya-ay ceased to be an employee on September 26,
1995,[36] hence, he was no longer an employee when he died on
December 1, 1995.
 It is, therefore, crucial to determine whether Aya-ay died as a
result of, or in relation to, the eye injury he suffered during the term of
his employment. If the injury is the proximate cause,[37] or at least
increased the risk, of his death for which compensation is sought,
recovery may be had for said death.[38]

Unless there is substantial evidence showing that: (a) the cause

of Aya-ays death was reasonably connected with his work; or (b) the
sickness/ailment for which he died is an accepted occupational disease;
or (c) his working conditions increased the risk of contracting the disease
for which he died, death compensation benefits cannot be awarded.[39]

Aya-ay died due to CVA or stroke, a disease not listed as a

compensable illness under Appendix 1 of the POEA Standard
Employment Contract.

Hence, it was incumbent on petitioners to present substantial

evidence, or such relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion,[40] that the eye injury sustained
by Aya-ay during the term of his employment with respondents caused,
or increased the risk of, CVA.

Substantial evidence is more than a mere scintilla.[41] 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.[42]

To buttress their position that there is a causal link

between Aya-ays eye injury and his death, petitioners argue as follows:

If only Aya-ay, Jr. was immediately medically treated

by a competent doctor and not by the respondents Captain with,
among others, salt water, severe corneal infection (admitted
and stated in paragraph 11 of the respondents Answer) could
have been prevented. If the same was prevented, there will be
no need for a corneal graft (Annex 2, respondents Answer). If
corneal graft have (sic) been unnecessary, there will be no
corneal graft rejection and repeat corneal transplantation
(Annex 4, respondents Answer). If not because of the
 recommended repeat corneal transplantation, Dr. Anthony
King could not have granted cardiac clearance. The seafarer
was subjected to extreme anxiety and depression about the
thought of totally losing his right eye. His blood pressure
would not have risen and would not have suffered from CVA
or stroke. He would not have died on December 1,
1995. Clearly, it is the negligence and fault of the respondents
in taking for granted the situation of Aya-ay, Jr. that led to his
untimely demise. The complications in his eye triggered the
series of infections and operations and other procedures on the
poor seafarer. These (sic) series of events logically presented,
were (sic) more than enough to constitute substantial
evidence.[43]

Refuting petitioners arguments, respondents aver that, among

other things, there is no established link between seaman Aya-ays eye
injury and the CVA that killed him; otherwise stated, the former is not
the cause of the latter. CVA is not a natural consequence of such an
injury.

That a seaman died several months after his repatriation for illness
does not necessarily mean that: (a) he died of the same illness; (b) his
working conditions increased the risk of contracting the illness which
caused his death; and (c) the death is compensable, unless there is some
reasonable basis to support otherwise.[44]

This Court finds that under the circumstances petitioners bare

allegations do not suffice to discharge the required quantum of proof of
compensability. Awards of compensation cannot rest on speculations or
presumptions.[45] The beneficiaries must present evidence to prove a
positive proposition.[46]

While petitioners attempted to scientifically establish

that Aya-ays eye injury resulted to, or increased the risk of, CVA by
resorting to a detailed medical discussion lifted from medical sources
and subjecting them to their own laymans interpretation and randomly
applying them to the circumstances attendant to the case, the same
fails. Without an expert witness to evaluate and explain how the
statements contained in such medical sources actually relate to the facts
surrounding the case, they are insufficient to establish the nexus to
support their claims.

Petitioners nevertheless argue that there is no need to resort to the

intricacies of the Rules on Evidence to establish that the death of Aya-ay
was caused by the eye injury, citing Section 10, Rule VII of the Rules of
Procedure of the NLRC:

Section 10. Technical rules not binding. The rules of

procedure and evidence prevailing in courts of law and equity
shall not be controlling and the Commission shall use every
and all reasonable means to ascertain the facts in each case
speedily and objectively, without regard to technicalities of
law or procedure, all in the interest of due process.

That administrative quasi-judicial bodies like the NLRC are not

bound by technical rules of procedure in the adjudication of
cases[47] does not mean that the basic rules on proving allegations should
be entirely dispensed with. A party alleging a critical fact must still
support his allegation with substantial evidence. Any decision based on
unsubstantiated allegation cannot stand as it will offend due process.[48]

xxx the liberality of procedure in administrative actions

is subject to limitations imposed by basic requirements of due
process. As this Court said in Ang Tibay v. CIR, the provision
for flexibility in administrative procedure does not go so far as
to justify orders without a basis in evidence having rational
probative value. More specifically, as held in Uichico v.
NLRC:

It is true that administrative and quasi-judicial bodies like the

NLRC are not bound by the technical rules of procedure in the
adjudication of cases. However, this procedural rule should not be
construed as a license to disregard certain fundamental evidentiary
rules.[49]

While this Court commiserates with petitioners plight, absent

substantial evidence from which reasonable basis for the grant of death
benefits prayed for can be drawn, it is left with no alternative but to deny
their petition.

WHEREFORE, the petition is DENIED. The Decision

dated January 24, 2002 and the Resolution dated September 10, 2002 of
the Court of Appeals are AFFIRMED.

Costs against petitioners.

SO ORDERED.

THIRD DIVISION

[G.R. No. 142049. January 30, 2001]

GERMAN MARINE AGENCIES, INC. and LUBECA MARINE

MANAGEMENT HK LTD., petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION and FROILAN S. DE
LARA, respondents.

DECISION
GONZAGA-REYES, J.:

On 17 October 1994, private respondent was hired by petitioners to work as a

radio officer on board its vessel, the M/V T.A. VOYAGER. Sometime in June, 1995,
while the vessel was docked at the port of New Zealand, private respondent was taken
ill. His worsening health condition was brought by his crewmates to the attention of
the master of the vessel. However, instead of disembarking private respondent so that
he may receive immediate medical attention at a hospital in New Zealand, the master
of the vessel proceeded to Manila, a voyage of ten days, during which time the health
of private respondent rapidly deteriorated. Upon arrival in Manila, private respondent
was not immediately disembarked but was made to wait for several hours until a
vacant slot in the Manila pier was available for the vessel to dock. Private respondent
was confined in the Manila Doctors Hospital, wherein he was treated by a team of
medical specialists from 24 June 1995 to 26 July 1995.
After private respondent was discharged from the hospital, he demanded from
petitioners the payment of his disability benefits and the unpaid balance of his
sickness wages, pursuant to the Standard Employment Contract of the parties. Having
been assured by petitioners that all his benefits would be paid in time, private
respondent waited for almost a year, to no avail. Eventually, petitioners told private
respondent that, aside from the sickness wages that he had already received, no other
compensation or benefit was forthcoming.[1] Private respondent filed a complaint with
the National Labor Relations Commission (NLRC) for payment of disability benefits
and the balance of his sickness wages. On 31 July 1997, the labor arbiter rendered a
decision,[2] the pertinent parts of which are quoted hereunder

In the case at bar, there is no issue on the propriety or illegality of

complainants discharge or release from employment as Radio
Operator. What complainant is pursuing is limited to compensation benefits
due a seaman pursuant to POEA Standard Employment Contract, Part II,
Section C, paragraph 4(c) and paragraph 5, which reads:

SECTION C. COMPENSATION BENEFIT

xxx

4. The liabilities of the employer when the seaman suffers injury or illness
during the term of his contract are as follows:

xxx

c. The employer shall pay the seaman his basic wages from the time he
leaves the vessel for medical treatment. After discharge from the vessel, the
seaman is entitled to one hundred percent (100%) of his basic wages until he
is declared fit to work or the degree of permanent disability has been
assessed by the company-designated physician, but is [sic] no case shall this
period exceed one hundred twenty (120) days. For this purpose, the seaman
shall submit himself to a post-employment medical examination by the
company-designated physician within three working days upon his return,
except when he is physically incapacitated to do so, in which case the
written notice to the agency within the same period is deemed as compliance
x x x.

5. In case of permanent total or partial disability of the seamen [sic] [during]

the term of employment caused by either injury or illness, the seamen [sic]
shall be compensated in accordance with the schedule of benefits
enumerated in Appendix 1 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 of [sic] the illness or disease was
contracted.
The aforecited provisions of the POEA Standards [sic] Employment
Contract is clear and unmistakable that its literal meaning should be
preserved.

Thus, the only question at which the liability of respondents is anchored is

whether complainant was really fit to work in his position as radio
operator. If this is so, it could mean that he is not entitled to disability
compensation which respondents vigorously disputed, citing in support the
certification made by Dra. Victoria Forendo [sic] Cayabyab, allegedly the
officially accredited and designated physician of respondents, which is
likewise, accredited with the Philippine Overseas Employment
Administration where it is stated that Nothing [sic] his job description as a
radio operator, Mr. de Lara may be allowed to go back to work. (Annex D &
E). Complainant on the other hand disputes respondents above posture
contending that the more persuasive and authentic evidence for purposes of
deciding his fitness or lack of fitness to work is the certificate issued by Ms.
Naneth [sic] Domingo-Reyes, MD, FPMA where it appears that after
submitting himself to another medical examination by his attending
physicians at the Manila Doctors Hospital on December 4, 1996, to verify
possible mistake in his post treatment examination on March 25, 1996,
firmly was classified under partial permanent disability and is not fit to go
back to his previous work due to mental state. (Annex C, complainants reply
to respondents position paper).

We have gone into a judicious study and analysis of the arguments and
exhibits particularly the ones relied upon by the parties and find that of the
complainant worthy of consideration. Looking closely at Annexes D and E
of respondents position paper, there is hardly any clear affirmation that
complainant was fully fit to resume his work as radio operator. Although the
document alluded to, declares that complainant may be allowed to go back
to work, the tenor of the same seems uncertain that complainant is fit to
resume his work, and that assuming that such was the message, the words
may be can not be taken as overriding that coming from the Manila Doctor
Hospital which in the beginning handled the medical case of complainant
and to which respondents unconditionally referred him and by reason of
which six or seven medical especialists [sic] of the hospital took turn[s]
studying and reviewing his uncertain ailment after release by
respondents. Otherwise stated, unlike the message of annexes D to E of
respondents, annex C of complainant is clear and unmistakable and confirm
complainants partial permanent disability and his definite unfitness to go
back to his previous work due to his mental health. Some pronouncements
in this exhibit mentions also that when complainant was admitted an
emerging basis for drowsiness, behavioral change and off and on fever and
different procedures were resorted along his case, like emergency CT scan
on the brain and his admission in June 24, 1995 was catastropic, whereas,
more could be said in three document[s] issued by Dra. Victoria Florendo
Cayabyab.

Finally, respondents contend that the annexes issued by Dr. Domingo-Reyes

of the Manila Doctors Hospital should not be given weight because it is not
issued by the hospital or doctor duly accredited by the POEA. Neither would
a close look on the applicable provision for seamen show that a duly
accredited hospital or doctor is needed for purposes of the grant of
compensation benefits to a such [sic] or ailing seamen. We are more
persuaded based on the arguments of the complainant among others, that it
is absurd to require an ailing seaman in high seas or in a foreign land to still
wait until the ship where he is working land in the country to secure
treatment in a duly accredited hospital or doctor.

On the basis of the above therefore, and convinced that complainants partial
permanent disability which was contracted in the course or on account of his
employment as radio operator in foreign principals vessel, he is entitled to
disability benefit in accordance with the schedule of benefits enumerated in
Appendix 1 of the Contract, the maximum of which is US $50,000. But
since the amount prayed for is US$25,000.00 which we presume has a more
realistic basis, the same is hereby granted.

Concerning the sickness wage, respondents averred that the same had
already been paid. However, there is no evidence that the same has been
paid except the payment to the complainant of P49,546.00. Since
complainants salary as US$870 and a seamans sick wage entitlement is
fixed to a maximum of 120 days, his sickness wages would rest to a total
sum of US$3,480 or its peso equivalent. On this, complainant has been paid
only [P]49,546.00 (US$1,943), thereby leaving for complainant a balance of
US$1,537. Finally, it is also argued that as regards the balance, the same has
been paid citing as proof the Sickness Release and Quitclaim signed by
complainant (Annexes C & C-1). Complainant, on the other hand denied
this, and contended that the quitclaim and release is invalid. Considering
that there is no proof on record that this balance of US$1,537 was paid,
unlike the P49,546.00, the same is granted.

WHEREFORE, premises above-considered, a decision is hereby issued

ordering respondent German Marine Agencies Inc. to pay complainant the
following sums:
(a) Disability benefit - - - - - - - - - - - - - - US$25,000.00

(b) Sickness wage balance - - - - - - - - - - US$1,137.00

all in the aggregate of Twenty Six Thousand One Hundred Thirty Seven
Dollars (US$26,137.00) or its peso equivalent, the claim for damages being
hereby dismissed for lack of merit, plus ten (10%) percent attorneys fees.

SO ORDERED.

On 29 July 1998, the NLRC[3] affirmed the labor arbiters decision in toto and
declared that the latters findings and conclusions were supported by substantial
evidence.[4] After its motion for reconsideration was denied by the NLRC on 20 May
1999, petitioners repaired to the Court of Appeals.[5] The appellate courts assailed
decision was promulgated on 1 December 1999, upholding the decision of the NLRC,
with the modification that petitioners were ordered to pay private respondent
exemplary damages in the amount of P50,000.00. The appellate court reasoned out its
decision,[6] thus -

The basic issue here is: Whether or not petitioner is liable to pay private
respondents claim as awarded by the NLRC, and whether or not there was
abuse of discretion on the part of the NLRC in affirming such decision on
appeal? To resolve this issue, this Court took time in looking closely at the
pertinent provision of the Standard Employment Contract Governing the
Employment of Filipino Seafarers on Board Ocean-Going Vessels,
particularly PART II, SECTION C, par. no. 4 (c), and par. no. 5, which
states as follows:

SECTION C. COMPENSATION AND BENEFITS

4. The liabilities of the employer when the seaman suffers injury or illness
during the term of his contract are as follows:

xxxx

c. The employer shall pay the seaman his basic wages from the time he
leaves the vessel for medical treatment. After discharge from the vessel the
seaman is entitled to hundred percent (100%) of his basic wages until he is
declared fit to work or his 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. x x x x

5. In case of permanent total or partial disability of the seaman during the

term of his employment caused by either injury or illness the seaman shall
be compensated in accordance with the schedule of benefits enumerated in
Appendix 1 of his 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.

xxx...

A cursory reading of these applicable contractual provisions and a thorough

evaluation of the supporting evidence presented by both parties, lends strong
credence to the contentions and arguments presented by private respondent.

The award of disability compensation has a clear and valid basis in the
Standard Employment Contract and the facts as supported by the medical
certificate issued by Dr. Nannette Domingo-Reyes of the Manila Doctors
Hospital. Petitioners contention, that Dr. Domingo-Reyes is not company
designated is far from the truth. The designation of the Manila Doctors
Hospital by petitioners as the company doctor for private respondent cannot
be denied. Their very act of committing private respondent for treatment at
the Manila Doctors Hospital under the care of its physician is tantamount to
company designation.The very act of paying the hospital bills by the
petitioners constitutes their confirmation of such designation. Hence,
petitioners cannot resort to the convenience of denying this fact just to evade
their obligation to pay private respondent of his claims for disability benefit.

This Court also finds no basis on (sic) the petitioners contention that the
company-designated [physician] must also be accredited with the POEA
before he can engage in the medical treatment of a sick seaman. There is
nothing in the Standard Employment Contract that provides this
accreditation requirement, and even if there is, this would be absurd and
contrary to public policy as its effect will deny and deprive the ailing
seaman of his basic right to seek immediate medical attention from any
competent physician. The lack of POEA accreditation of a physician who
actually treated the ailing seaman does not render the findings of such
physician (declaring the seaman permanently disabled) less authoritative or
credible. To our mind, it is the competence of the attending physician, not
the POEA accreditation, that determines the true health status of the
patient-seaman, which in this instant case, is [sic] the attending physicians
from the Manila Doctors Hospital.

As to the award of the balance of wages, this Court is inclined not to disturb
the factual findings of the NLRC. The failure of the petitioners to present a
strong and credible evidence supporting the fact of alleged payment of the
balance of sickness justifies the award of such claim. The long standing
doctrine in labor cases that in case of doubt, the doubt is resolved in favor of
labor applies. For there are indications that the evidence presented by
petitioners appears to be of dubious origin as private respondent challenged
the petitioners to present the original copy of the quitclaim and the vouchers
in a motion demanding from petitioners to produce the original copy of
those documents purporting to show that he had received the alleged sum
of P39,803.30, which allegedly shows the payment of the balance of his
sickness wages. This motion was vehemently opposed by petitioners. To our
mind, such opposition only created more doubts and eroded the veracity and
credence of petitioners documentary evidence.

As to the award of attorneys fees, the same is justified by the fact that
private respondent actually hired the services of a lawyer to vindicate his
right to claim for his disability benefit which is being arbitrarily denied to
him by petitioners. Had it not been for the arbitrary denial of petitioners,
private respondent could not have been compelled to hire the services of a
lawyer to pursue his claims in court, for which he is presumed to have
incurred costs.

With respect to private respondents claim for damages, this Court finds that
the NLRC overlooked the attendance of negligence on the part of petitioners
in their failure to provide immediate medical attention to private
respondent. It further appears that negligence not only exists but was
deliberately perpetrated by petitioners by its arbitrary refusal to commit the
ailing private respondent to a hospital in New Zealand or at any nearest port
deprived of his right to immediate medical attention by petitioners, which
resulted to the serious deterioration of his health that caused his permanent
partial disability. Such deprivation of immediate medical attention appears
deliberate by the clear manifestation from petitioners own words which
states that, the proposition of the complainant that respondents should have
taken the complainant to the nearest port of New Zealand is easier said than
done. It is worthy to note that deviation from the route of the vessel will
definitely result to loss of a fortune in dollars not only to the respondents but
likewise to the owners of the cargoes being shipped by the said vessel.

By petitioners own statement, they reveal their utter lack of concern for their
Filipino crew. This kind of attitude cannot be taken to pass by this Court
without appropriate sanction by way of payment of exemplary damages, if
only to show that the life of a Filipino crew must be accorded due attention
and respect by the petitioners. For after all, had it not been for the toils of
this crew, among others, petitioners would not be doing as good in their
business and making fortunes in dollars.

In affirming the decision of the Labor Arbiter, this Court finds that the
NLRC never abused its discretion nor exceeded its jurisdiction.

Hence, this Court finds no valid basis to disturb the findings of the NLRC.

WHEREFORE, the decision of the NLRC dated 29 July 1998, and the Order
dated 20 May 1999, are hereby AFFIRMED, and in addition thereto,
petitioners are ordered to pay exemplary damages to private respondent in
the sum of Fifty Thousand Pesos (P50,000.00).

SO ORDERED.

Petitioners motion for reconsideration was denied by the Court of Appeals in its
Resolution of 11 February 2000. Hence, the present appeal.
Disability Benefits
Petitioners contend that the existence and degree of a seamans disability must be
declared by a company-designated physician who must be accredited with the
POEA. Following this line of reasoning, petitioners claim that private respondent is
not entitled to disability benefits because he was found fit to return to work by Dr.
Victoria Florendo Cayabyab, the designated physician of petitioners, who is also
accredited with the POEA.[7]
Disagreeing with petitioners stand, the labor arbiter ruled that, for purposes of
determining compensation benefits under the Standard Employment Contract, an
ailing seaman need not have his condition assessed by a doctor or hospital accredited
with the POEA. Consequently, the labor arbiter gave more weight to the opinion of
the specialists from the Manila Doctors Hospital who treated private respondent and
declared him as having sustained a partial permanent disability and unfit to go back to
his previous work.[8] Meanwhile, the Court of Appeals held that petitioners act of
committing private respondent for treatment at the Manila Doctors Hospital and of
paying his hospital bills therein is tantamount to company-designation, and therefore,
the certificate issued by Dr. Nanette Domingo-Reyes of the Manila Doctors Hospital
describing private respondent as suffering from a partial permanent disability should
be construed as decisive in the matter of private respondents entitlement to disability
benefits. The appellate court also declared that nothing in the Standard Employment
Contract requires the company-designated physician or hospital to also be accredited
with the POEA.[9]
In the case at bar, the parties are at odds as to the proper interpretation of the
POEA Standard Employment Contract Governing the Employment of All Filipino
Seamen On Board Ocean-Going Vessels (Standard Employment Contract),
particularly Part II, Section C thereof, which provides that
 xxx xxx xxx

4. The liabilities of the employer when the seaman suffers injury or illness
during the term of his contract are as follows:

a. The employer shall continue to pay the seaman his basic wages during the
time he is on board the vessel;

b. If the injury or illness requires medical and/or dental treatment in a

foreign port, the employer shall be liable for the full cost of such medical,
dental, surgical and hospital treatment as well as board and lodging until the
seaman is declared fit to work or to be repatriated.

However, if after repatriation the seaman still requires medical attention

arising from said injury or illness, he shall be so provided at cost to the
employer until such time he is declared fit or the degree of his disability has
been established by the company-designated physician.

c. The employer shall pay the seaman his basic wages from the time he
leaves the vessel for medical treatment. After discharge from the vessel the
seaman is entitled to one hundred percent (100%) of his basic wages 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 seaman
shall submit himself to a post-employment medical examination by the
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 seaman to comply with the mandatory reporting requirement
shall result in his forfeiture of the right to claim the above benefits.

xxx xxx xxx

5. In case of permanent total or partial disability of the seaman during the

term of employment caused by either injury or illness the seaman shall be
compensated in accordance with the schedule of benefits enumerated in
Appendix 1 of his 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.

xxx xxx xxx

Petitioners contention that the existence and grade of a seamans disability must
be pronounced by a physician accredited by the POEA does not find any support in
the abovecited provision, nor in any other portion of the Standard Employment
Contract. In order to claim disability benefits under the Standard Employment
Contract, it is the company-designated physician who must proclaim that the seaman
suffered a permanent disability, whether total or partial, due to either injury or illness,
during the term of the latters employment. There is no provision requiring
accreditation by the POEA of such physician.In fact, aside from their own gratuitous
allegations, petitioners are unable to cite a single provision in the said contract in
support of their assertions or to offer any credible evidence to substantiate their
claim.If accreditation of the company-designated physician was contemplated by the
POEA, it would have expressly provided for such a qualification, by specifically
using the term accreditation in the Standard Employment Contract, to denote its
intention. For instance, under the Labor Code it is expressly provided that physicians
and hospitals providing medical care to an injured or sick employee covered by the
Social Security System or Government Service Insurance System must be accredited
by the Employees Compensation Commission.[10] It is a cardinal rule in the
interpretation of contracts that if the terms of a contract are clear and leave no doubt
upon the intention of the contracting parties, the literal meaning of its stipulation shall
control.[11] There is no ambiguity in the wording of the Standard Employment Contract
the only qualification prescribed for the physician entrusted with the task of assessing
the seamans disability is that he be company-designated. When the language of the
contract is explicit, as in the case at bar, leaving no doubt as to the intention of the
drafters thereof, the courts may not read into it any other intention that would
contradict its plain import.[12]
The word designate means to specify, to mark out and make known, to identify
by name, to indicate, to show, to distinguish by mark or description, or to set apart for
a purpose or duty.[13] The Court agrees with the appellate courts ruling that petitioners
act of committing private respondent for treatment at the Manila Doctors Hospital and
paying the hospital bills therein is tantamount to company-designation. By such
unequivocal acts, petitioners clearly set apart and distinguished the Manila Doctors
Hospital, together with its team of specialists, as the ones qualified to assess the
existence and degree of private respondents disability and thereby resolve the
question of the latters entitlement to disability benefits under the Standard
Employment Contract.
In addition to their having been effectively designated by petitioners, it was the
physicians from the Manila Doctors Hospital who examined and treated private
respondent for a little more than one month, subjecting the latter to a series of medical
procedures, such as medical therapy, neurological surgical drainage for brain abscess,
bilateral thalamic area S/P craniotomy (Burr Hole), and opthalmological (orbit)
surgery for socket revision and reconstruction of his left eye. The extensive medical
attention given to private respondent enabled the Manila Doctors Hospital specialists
to acquire a detailed knowledge and familiarity with private respondents medical
condition.[14] No doubt such specialized knowledge enabled these physicians to arrive
at a much more accurate appraisal of private respondents condition, including the
degree of any disability which he might have sustained, as compared to another
physician not privy to private respondents case from the very beginning. Thus, the
appellate court was not mistaken in giving more weight to the certificate issued by Dr.
Nanette Domingo-Reyes of the Manila Doctors Hospital dated December 4, 1996,
than to the one issued by Dr. Victoria Florendo Cayabyab.
On the strength of Dr. Domingo-Reyess medical certificate which stated that
private respondent can be classified under partial permanent disability and is not fit to
go back to his previous work due to his mental state, the labor arbiter awarded
$25,000.00 as disability benefits, which award was upheld by the NLRC and the
appellate court. Petitioners insist that there is no factual basis for the award of
$25,000.00 since there is no finding as to the grade of permanent partial disability
sustained by private respondent, in accordance with Appendix 1 of the Standard
Employment Contract (Schedule of Disability or Impediment For Injuries Suffered
and Diseases or Illness Contracted), and therefore, no means of determining the exact
amount of compensation to which private respondent may be entitled.[15]
The Court does not agree with petitioners position. Under the Standard
Employment Contract the grade of disability suffered by the seaman must be
ascertained in accordance with Appendix 1 of such contract, which is partially
reproduced herein -

Appendix 1

SCHEDULE OF DISABILITY OR IMPEDIMENT

FOR INJURIES SUFFERED AND OR ILLNESS CONTRACTED

HEAD

Traumatic head injuries that result to:

1. Apperture unfilled with bone not over

three (3) inches without brain injury . . . . . . . . . . . . . . . . Gr. 9
2. Apperture unfilled with bone over
three (3) inches without brain injury . . . . . . . . . . . . . . . . Gr. 3
3. Severe paralysis of both upper or
lower extremities or one upper and one
lower extremity . . . . . . . . . . . . . . . . . . . . . . . Gr. 1
4. Moderate paralysis of two (2) extremities
producing moderate difficulty in
movements with self care activities . . . . . . . . . . . . . . . . Gr. 6
5. Slight paralysis affecting one extremity
producing slight difficulty with self-care
 activities . . . . . . . . . . . . . . . . . Gr. 10
6. Severe mental disorder or Severe Complex
Cerebral function disturbance or post
traumatic psychoneurosis which require
regular aid and attendance as to render worker
permanently unable to perform any work . . . . . . . . . . Gr. 1
7. Moderate mental disorder or moderate brain
functional disturbance which limits worker
to the activities of daily living with some
directed care or attendance . . . . . . . . . . . . . . . Gr. 6
8. Slight mental disorder or disturbance that
requires little attendance or aid and which
interferes to a slight degree with the working
capacity of the claimant . . . . . . . . . . . . . . . Gr. 10
9. Incurable imbecility . . . . . . . . . . . . . . . . . . . . . Gr. 1
Each grade under Appendix 1 has an equivalent disability allowance or benefit
expressed in terms of a percentage of the maximum amount of $50,000.00. This is
specified in Appendix 1-A of the Standard Employment Contract -

APPENDIX 1-A

SCHEDULE OF DISABILITY ALLOWANCES

Impediment Grace Impediment

1 Maximum Rate x 120.00%

2 x 88.81%

3 x 78.36%

4 x 68.66%

5 x 58.96%

6 x 50.00%

7 x 41.80%

8 x 33.59%
9 x 26.12%

10 x 20.15%

11 x 14.93%

12 x 10.45%

13 x 6.72%

14 x 3.74%

Maximum Rate: US$50,000.

To be paid in Philippine Currency equivalent at the exchange rate prevailing

during the time of payment.

Private respondent asked petitioner for disability benefits in the amount of

$25,000.00, or fifty percent (50%) of the maximum rate of $50,000.00, which, under
Appendix 1-A, is awarded when the seaman sustains a grade 6 disability. One of the
grade 6 head injuries listed in Appendix 1, specifically number seven (7), is described
as a moderate mental disorder or moderate brain functional disturbance which limits
worker to the activities of daily living with some directed care or attendance. This
coincides with Dr. Domingo-Reyes diagnosis of private respondents condition, as
follows -
xxx xxx xxx

Work-ups and Management:

Patient was admitted on an emergency bases for drowsiness, behavioral

change and on and off fever. This started with headaches since the first
week of June 1995 while on duty (on voyage). Patient progressively
deteriorated and arrived here already dehydrated with high grade
fever. (emphasis supplied)

Emergency CT Scan of the brain revealed rounded masses in both thalamus

on the brain; the larger mass was situated at the right.

Burr hole at the right parietal and drainage of the right thalamic abscess was
done on June 26, 1995. Repair of shallow fornix of left eye and biopsy was
done for culture studies thereafter.
Mr. De Lara stayed in the hospital for 33 days and was still in bedridden
state when discharge. He became ambulant on mid-August 1996 but his
cerebral functions (cognitive and behavioral) remain impaired.

This is his 18th month of illness. His admission last June 24, 1995 is
considered catastrophic. He now can be classified under partial permanent
disability and is not fit to go back to his previous work due to his mental
state.[16] (emphasis supplied)

xxx xxx xxx

Thus, the medical certificate of Dr. Domingo-Reyes is more than sufficient basis for
the award of disability benefits in the amount of $25,000.00 in favor of private
respondent.

Sickness wages

Petitioners assert that the award of $1,137.00, representing the balance of the
sickness wages owed to private respondent, is erroneous and in absolute disregard of
their documentary evidence - particularly the three check vouchers in the total amount
of P89,354.80, all issued in 1995 in favor of either private respondent or his wife, and
the Sickwages Release & Quitclaim - which, according to petitioners, taken together
would prove that they had paid private respondent the total amount of P89,354.80, or
$3,480.00, corresponding to the 120 days sickness wages as required under the
Standard Employment Contract.
Contrary to petitioners assertions, the labor arbiter held that only P49,546.00
($1,943.00) was paid by petitioners and that private respondent is still entitled to the
balance of the sickness wages in the amount of $1,537.00. According to the labor
arbiter, petitioners failed to prove that they had paid this amount to private respondent,
notwithstanding the document entitled Sickness Release & Quitclaim introduced by
petitioners in evidence, which was not given credence.[17] The NLRC and the Court of
Appeals concurred with the labor arbiter on this issue. The appellate court held that
the documentary evidence of petitioners was insufficient to support their
contentions.[18]
The Supreme Court has always accorded respect and finality to the findings of
fact of the NLRC, particularly if they coincide with those of the Labor Arbiter, when
supported by substantial evidence. The reason for this is that a quasi-judicial agency
like the NLRC has acquired a unique expertise because its jurisdiction is confined to
specific matters.[19] Whether or not petitioners actually paid the balance of the sickness
wages to private respondent is a factual question. In the absence of proof that the
labor arbiter or the NLRC had gravely abused their discretion, the Court shall deem
conclusive and cannot be compelled to overturn this particular factual finding.[20]
Damages

We affirm the appellate courts finding that petitioners are guilty of negligence in
failing to provide immediate medical attention to private respondent. It has been
sufficiently established that, while the M/V T.A. VOYAGER was docked at the port
of New Zealand, private respondent was taken ill, causing him to lose his memory and
rendering him incapable of performing his work as radio officer of the vessel. The
crew immediately notified the master of the vessel of private respondents worsening
condition. However, instead of disembarking private respondent so that he may
receive immediate medical attention at a hospital in New Zealand or at a nearby port,
the master of the vessel proceeded with the voyage, in total disregard of the urgency
of private respondents condition. Private respondent was kept on board without any
medical attention whatsoever for the entire duration of the trip from New Zealand to
the Philippines, a voyage of ten days. To make matters worse, when the vessel finally
arrived in Manila, petitioners failed to directly disembark private respondent for
immediate hospitalization. Private respondent was made to suffer a wait of several
more hours until a vacant slot was available at the pier for the vessel to dock. It was
only upon the insistence of private respondents relatives that petitioners were
compelled to disembark private respondent and finally commit him to a
hospital.[21] There is no doubt that the failure of petitioners to provide private
respondent with the necessary medical care caused the rapid deterioration and
inevitable worsening of the latters condition, which eventually resulted in his
sustaining a permanent disability.
In light of the foregoing, petitioners are liable for moral damages for the physical
suffering and mental anguish caused to private respondent.[22] There is no hard and
fast rule in the determination of what would be a fair amount of moral damages, since
each case must be governed by its own peculiar circumstances.[23] In the present case,
the Court considers the amount of P50,000.00 in moral damages as proper.[24]
Meanwhile, exemplary damages are imposed by way of example or correction for
the public good, pursuant to Article 2229 of the Civil Code. They are imposed not to
enrich one party or impoverish another but to serve as a deterrent against or as a
negative incentive to curb socially deleterious actions. While exemplary damages
cannot be recovered as a matter of right, they need not be proved, although plaintiff
must show that he is entitled to moral, temperate, or compensatory damages before
the court may consider the question of whether or not exemplary damages should be
awarded.[25] In quasi-delicts, exemplary damages may be granted if the defendant
acted with gross negligence.[26] Coming now to the case at bar, the appellate court
found that

negligence not only exists but was deliberately perpetrated by

petitioners by its arbitrary refusal to commit the ailing private
respondent to a hospital in New Zealand or at any nearest port which
resulted to the serious deterioration of his health that caused his
permanent partial disability. Such deprivation of immediate medical
 attention appears deliberate by the clear manifestation from petitioners
own words which states that, the proposition of the complainant that
respondents should have taken the complainant to the nearest port of
New Zealand is easier said than done. It is worthy to note that deviation
from the route of the vessel will definitely result to loss of a fortune in
dollars not only to the respondents [petitioners herein] but likewise to
the owners of the cargoes being shipped by the said vessel.

Petitioners never denied making this statement. Given the prevailing circumstances,
the appellate courts award of P50,000.00 as exemplary damages is adequate, fair, and
reasonable.[27]
Although the labor arbiter awarded attorneys fees, which award was subsequently
affirmed by the NLRC and the Court of Appeals, the basis for the same was not
discussed in his decision nor borne out by the records of this case, and should
therefore be deleted. There must always be a factual basis for the award of attorneys
fees.[28] This is consistent with the policy that no premium should be placed on the
right to litigate.[29]
WHEREFORE, the 1 December 1999 Decision and 11 February 2000
Resolution of the Court of Appeals are AFFIRMED, with the modification that
petitioners must also pay private respondent P50,000.00 as moral damages and the
award of attorneys fees is deleted.
SO ORDERED.
Melo, (Chairman), Vitug, Panganiban, and Sandoval-Gutierrez, JJ., concur.

SECOND DIVISION

EDGARDO M. PANGANIBAN , G.R. No. 187032

Petitioner,

Present:

CARPIO, J., Chairperson,

- versus - NACHURA,
LEONARDO-DE CASTRO,
PERALTA, and
MENDOZA, JJ.
TARA TRADING
SHIPMANAGEMENT INC.
Promulgated:
AND SHINLINE SDN BHD,
Respondents. October 18, 2010

x
--------------------------------------------------------------------------------------------
------------x

DECISION

MENDOZA, J.:

While it is true that labor contracts are impressed

with public interest and the provisions of the POEA Standard
Employment Contract must be construed logically and
liberally in favor of Filipino seamen in the pursuit of their
employment on board ocean-going vessels, absent
substantial evidence from which reasonable basis for the
grant of benefits prayed for can be drawn, We are left with
no choice but to deny the claims of the employee, lest We
cause injustice to the employer. We must always remember
that justice is in every case for the deserving, to be dispensed
with in the light of established facts, the applicable law, and
existing jurisprudence.[1]

This is a petition for review under Rule 45 of the Rules of Court

challenging the October 29, 2008 Decision[2] of the Court of
Appeals (CA), and its March 4, 2009 Resolution,[3] in CA-G.R. SP No.
104343, reversing the March 25, 2008 Decision[4] and April 30, 2008
Resolution[5] of the National Labor Relations Commission (NLRC)which
affirmed the decision of the Labor Arbiter (LA) favoring the petitioner.

THE FACTS:

In November 2005, petitioner was hired by respondent Tara

Trading Shipmanagement, Inc. (Tara), in behalf of its foreign principal,
respondent Shinline SDN BHD (Shinline) to work as an Oiler on board
MV Thailine 5[6] with a monthly salary of US$409.00.
 Sometime in April 2006, petitioner began exhibiting signs of
mental instability. He was repatriated on May 24, 2006 for further
medical evaluation and management.[7]

Petitioner was referred by respondents to

the Metropolitan Medical Center where he was diagnosed to be suffering
from brief psychotic disorder.[8]

Despite his supposed total and permanent disability and despite

repeated demands for payment of disability compensation, respondents
allegedly failed and refused to comply with their contractual
obligations.[9]

Hence, petitioner filed a Complaint against respondents praying for

the payment of US$60,000.00 as total and permanent disability benefits,
reimbursement of medical and hospital expenses, moral and exemplary
damages, and attorneys fees equivalent to 10% of total claims.[10]

Respondents, on the other hand, maintained that petitioner

requested for an early repatriation and arrived at the point of hire on May
24, 2006; that while on board the vessel, he confided to a co-worker,
Henry Santos, that his eating and sleeping disorders were due to some
family problems; that Capt. Zhao, the master of the vessel, even asked
him if he wanted to see a doctor; that he initially declined; that on May 22,
2006, petitioner approached Capt. Zhao and requested for a vacation and
early repatriation; that the said request was granted; that upon arrival,
petitioner was subjected to a thorough psychiatric evaluation; and that
after a series of check-ups, it was concluded that his illness did not appear
to be work-related. Respondents argued that petitioner was not entitled to
full and permanent disability benefits under the Philippine Overseas
Employment Administration Standard Employment Contract (POEA
SEC) because there was no declaration from the company-designated
physician that he was permanently and totally disabled and that the claim
for damages was without basis as no bad faith can be attributed to
them.[11]

On September 17, 2007, the LA ruled in favor of the

petitioner.[12] Specifically, the LA held that:

The claim for total and permanent disability benefits is

resolved in favor of complainant. Respondents have stated that
the cause of complainants illness, brief psychotic disorder, is
largely unknown. This being the case, it is not therefore right to
bluntly claim that the same is not work-related because it is also
possible that the illness may be caused by or aggravated by his
employment. As alleged by respondents, there are certain factors
which may bring about brief psychotic disorder such
as biological or psychological vulnerability toward the
development of psychotic symptoms. Complainant, and all
seamen for that matter, are subjected to stress because of the
rigorous and strenuous demands of being at sea for prolonged
periods of time, causing sensory deprivation and continuous
isolation, to borrow the words of complainants attending
psychiatrist. As correctly argued by complainant, while all
seamen may be subjected to the same or greater degree of stress,
their respective abilities to cope with these factors are different.
There is therefore the risk that seamen, not only complainant,
are prone to contract brief psychotic disorder since they are most
of the time at sea and away from their loved ones.

As early as 27 June 2006, respondents designated

physicians have declared that complainants condition does not
appear to be work-related. With this declaration, respondents
are bound to deny complainants claim for disability benefits. He
cannot therefore be faulted for filing the instant case in October
2006 without waiting for the evaluation of his disability
impediment by the company designated doctors. Moreover, the
120 days period lapsed without the latter having declared the
degree of complainants disability, if any.

Complainant is thus considered to be totally and

permanently disabled as he is no longer capable of earning wages
 in the same kind of work, or work of similar nature that he was
trained for or accustomed to perform. He is now incapacitated to
work, hence, his earning capacity is impaired. Jurisprudence has
declared that disability should not be understood more on its
medical significance but on loss of earning capacity.

With the foregoing, complainant is awarded total and

permanent disability benefits in the amount of US$ 60,000.00
or its equivalent in Philippine Currency at the time of payment.

Complainant cannot however be awarded his claim for

medical and hospitalization expenses. He did not anymore
pursue this charge in his pleadings, hence, the same remained
unsubstantiated. The same holds true with his claim for moral
and exemplary damages. Complainant failed to prove bad faith
or malice on respondents part in denying his claims.

Complainant is entitled to attorneys fees as he sought the

assistance of his counsel in pursuing his claims against
respondents for his total and permanent disability benefits. He is
thus awarded an equivalent of ten percent (10%) of his total
claims as and by way of attorneys fees.

WHEREFORE, in view of the foregoing, respondents Tara

Trading Shipmanagement, Inc. and/or Shinline SDN. BHD, are
hereby ordered to pay complainant Edgardo M. Panganiban his
total and permanent disability benefit in the amount of
US$60,000.00 plus US$6,000.00 attorneys fees, in Philippine
Currency, at the prevailing rate of exchange at the time of
payment.

All other claims are denied.

SO ORDERED.[13]

Respondents appealed to the NLRC. On March 25, 2008,

the NLRC affirmed the decision of the LA.[14] The appeal of respondents
was dismissed for lack of merit.[15]The NLRC reasoned out that All
material averments on appeal are mere rehash or amplification of the
substantive allegations propounded in the proceedings below which were
already discerned and judiciously passed upon by the Labor Arbiter. [16]
Respondents filed a motion for reconsideration but it was denied in
a resolution dated April 30, 2008.
 Aggrieved, respondents filed a Petition for Certiorari with prayer
for the issuance of a writ of preliminary injunction and/or temporary
restraining order[17] with the CA. In their petition, respondents presented
the following grounds:

A. Public respondent gravely abused its discretion and

committed serious error in ruling that the petitioners are
liable to private respondent for the payment of disability
compensation in the amount of US$ 60,000.00
considering the facts as borne out by the evidence on
record and the applicable laws.

1. Public respondent committed grave abuse of discretion in

arriving at the findings of fact which are not substantiated
by the evidence on record.

2. Public respondent committed grave abuse of discretion

when it failed to consider the evidence which proves the
illness is not work related, thereby violating petitioners
right to procedural due process.

3. Public respondent erred in not finding in favor of the

expert opinion of the company-designated doctor on the
nature of the illness as against that of complainants doctor
in utter disregard of rules on evidence.

Without concrete proof that his assessment is biased and

self-serving, the medical opinion of the company-designate
physician should be accorded probative value and not
discarded merely on the basis of unfounded allegation.
4. Public respondent committed grave abuse of discretion when it
affirmed the award of attorneys fees.

B. Public respondent committed grave abuse of

discretion when it affirmed the award of attorneys
fees.[18]

On October 29, 2008, the CA reversed the decision of the

NLRC.[19] Pertinently, the CA held that:
 We find that the NLRC (Sixth Division) committed grave
abuse of discretion in affirming the Decision of Labor Arbiter
Cellan which awarded US$60,000.00 total and permanent
disability benefits and US$6,000.00 attorneys fees in favor of
private respondent, as the findings of both the Labor Arbiter and
the NLRC (Sixth Division) are not anchored on substantial
evidence.

It is basic that a contract is the law between the parties.

Obligations arising from contracts have the force of law between
the contracting parties and should be complied with in good faith.
Unless the stipulations in a contract are contrary to law, morals,
good customs, public order or public policy, the same are binding
as between the parties.

A seafarer is a contractual, not a regular employee, and his

employment is contractually fixed for a certain period of time.
His employment, including claims for death or illness
compensations, is governed by the contract he signs every time
he is hired, and is not rooted from the provisions of the Labor
Code.

The Contract of Employment entered into by petitioners

and private respondent, and approved by the POEA on 25
October 2005, provides:

The herein terms and conditions in accordance

with Department Order No. 4 and Memorandum
Circular No. 09, both Series of 2000, shall be
strictly and faithfully observed.
x x x Upon approval, the same shall be deemed an
integral part of the: Standard Terms and Conditions
Governing the Employment of Filipino Seafarers On
Board Ocean-Going Vessels.

Section 20-B of the POEA Amended Standard Terms and

Conditions Governing the Employment of Filipino Seafarers on
Board Ocean Going Vessels (POEA-SEC for brevity) provides
that 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: x x x

Under the Definition of Terms found in the Standard

Contract, a work related illness is defined as any sickness
resulting to disability or death as a result of an occupational
disease listed under Section 32-A of this contract with the
conditions set therein satisfied. In the instant case, the illness
brief psychotic disorder is not listed as an occupational disease.

In the instant case, it is an undisputed fact that private

respondents illness occurred during the term of his contract. The
remaining issue to be determined is whether or not private
respondents illness of brief psychotic disorder is work-related.

We find that private respondents brief psychotic disorder

was not contracted as a result of or caused by the seafarers work
as an Oiler on board the vessel M.V. Thailine 5.

A review of the evidence shows that the

company-designated physician Dr. Mylene Cruz-Balbon (Dr.
Balbon, for brevity) issued a certification dated 26 June 2006
certifying that private respondent has undergone medical
evaluation treatment at Robert D. Lim, M.D. Marine Medical
Services, Metropolitan Medical Center from 26 May 2006 up to
the date of the certification, due to Brief Psychotic Disorder. x x
x.

xxxxxxxxx

On the psychological test done on 30 May 2006 on private

respondent, Dr. Raymond L. Rosales (Dr. Rosales, for brevity)
Diplomate in Neurology and Psychiatry and Associate Professor
of the University of Santo Tomas Hospital, who is the specialist
to whom private respondent was referred by the
company-designated physician, commented that private
respondent suffered from hallucinations, persecutory delusions
and paranoia; at present, he does not exhibit these symptoms; no
definite mood disturbance; no suicidal intent; fair judgment and
insight; the working diagnosis is brief psychotic disorder; at this
point, his condition does not appear to be work-related since he
claims to have no significant stressor at work and his symptoms
were most likely triggered by personal family problems; and he
needs to be followed up for atleast 3 months with regular intake
of medications.

As to the question of which findings should prevail, that of

the company-designated physician or the private respondents
personal physician, Section 20-B of the POEA-SEC provides:

2. x x x x x x
 However, if after repatriation, the seafarer
still requires medical attention arising from
said injury or illness, he shall be so provided at
cost to the employer until such time he is
declared fit or the degree of his disability has
been established by the company-designated
physician.

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.

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
doctors decision shall be final and binding on both
parties. (Emphasis supplied)

In order to claim disability benefits under the Standard

Employment Contract, it is the company-designated physician
who must proclaim that the seaman suffered a permanent
disability, whether total or partial, due to either injury or illness,
during the term of the latters employment. It is a cardinal rule in
the interpretation of contracts that if the terms of a contract are
clear and leave no doubt upon the intention of the contracting
parties, the literal meaning of its stipulation shall control. There
is no ambiguity in the wording of the Standard Employment
Contract the only qualification prescribed for the physician
entrusted with the task of assessing the seamans disability is that
he be company-designated.

xxxxxxxxx

[E]ven private respondents co-employee Oiler Henry

Santos stated in his letter to the Master of the vessel that private
respondent could not eat and sleep because of a family
problem. X x x.

xxxxxxxxx

From the foregoing disquisitions, private respondent is

neither entitled to a total and permanent disability of
US$60,000.00 nor to attorneys fees of US$6,000.00. Petitioners
did not act with gross or evident bad faith in denying the claim of
private respondent. Thus, We find that the NLRC (Sixth Division)
acted with grave abuse of discretion in dismissing petitioners
appeal, affirming the Decision of Labor Arbiter Cellan, and
denying petitioners Motion for Reconsideration.

While it is true that labor contracts are impressed with

public interest and the provisions of the POEA Standard
Employment Contract must be construed fairly, reasonably and
liberally in favor of Filipino seamen in the pursuit of their
employment on board ocean-going vessels, we should always be
mindful that justice is in every case for the deserving, to be
dispensed with in the light of established facts, the applicable law,
and existing jurisprudence. x x x.

xxxxxxxxx

WHEREFORE, premises considered, the Petition

is GRANTED. The Decision dated 25 March 2008 and
Resolution dated 30 April 2008 of the National Labor Relations
Commission (Sixth Division) in NLRC LAC NO. 11-000311-07;
NLRC NCR OFW (M) CASE NO.
06-10-03278-00 are REVERSED and SET ASIDE and private
respondents complaint is hereby DISMISSED.

However, solely for humanitarian considerations,

petitioners are hereby ORDERED to grant private respondent
the amount of Php50,000.00 by way of financial assistance, and
to continue, at their expense, the medical treatment of private
respondent until the final evaluation or assessment could be
made, with regard to private respondents medical condition.
 SO ORDERED.[20]

Petitioners Motion for Reconsideration was denied by the CA in its

Resolution dated March 4, 2009.[21]

Hence, this Petition anchored on the following grounds---

THE COURT OF APPEALS COMMITTED

SERIOUS ERROR OF LAW IN IGNORING THE
OVERWHELMING EVIDENCE THAT SUPPORTS
PETITIONERS ENTITLEMENT TO MAXIMUM
DISABILITY BENEFITS IN THE AMOUNT OF
USD60,000.00

II

THE HONORABLE COURT OF APPEALS

COMMITTED GRAVE ABUSE OF DISCRETION IN
DENYING THE COMPLAINANTS DISABILITY
BENEFITS SOLELY BECAUSE THE
COMPANY-DESIGNATED PHYSICIAN HAS
DECLARED PETITIONERS ILLNESS AS NOT
WORK-RELATED

III

THE HONORABLE COURT OF APPEALS

COMMITTED GRAVE ABUSE OF DISCRETION IN
NOT CONSIDERING THAT COMPLAINANT COULD
NO LONGER RETURN TO ACTIVE SEA DUTIES, A
JOB HE WAS TRAINED AND ACCUSTOMED TO
PERFORM WITHOUT ENDANGERING HIS HEALTH
AND LIFE

IV
 THE HONORABLE COURT OF APPEALS
COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN DISMISSING PETITONERS
SEPARATE CLAIMS FOR DAMAGES AND
ATTORNEYS FEES.[22]

The Court denies the petition.

Preliminarily, considering the grounds raised by petitioner, it

appears that he denominated this petition as one under Rule 45, but he
filed it as both a petition for review under Rule 45 and a petition for
certiorari under Rule 65 of the Rules of Court. The applicable rule is Rule
45, which clearly provides that decisions, final orders or resolutions of
the CA in any case, regardless of the nature of the action or proceeding
involved, may be appealed to this Court through a petition for
review. This remedy is a continuation of the appellate process over the
original case. Recourse under Rule 65 cannot be allowed either as an
add-on or as a substitute for appeal.[23]

The procedural infirmity notwithstanding, the Court shall treat

this petition as one filed under Rule 45 only and shall consider the alleged
grave abuse of discretion on the part of the CA as an allegation of
reversible error.

The pivotal issue to be resolved is whether or not the CA is correct

in denying petitioners entitlement to full and total disability benefits
amounting to US$60,000.00 and attorneys fees in the amount of
US$6,000.00.

The Court resolves the issue in the affirmative.

It need not be overemphasized that in the absence of substantial

evidence, working conditions cannot be accepted to have caused or at
least increased the risk of contracting the disease, in this case, brief
psychotic disorder. 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.[24]

Even in case of death of a seafarer, the grant of benefits in favor of

the heirs of the deceased is not automatic. As in the case
of Rivera v. Wallem Maritime Services, Inc.,[25] without a post-medical
examination or its equivalent to show that the disease for which the
seaman died was contracted during his employment or that his working
conditions increased the risk of contracting the ailment, the employer/s
cannot be made liable for death compensation.

In fact, in Mabuhay Shipping Services, Inc. v. NLRC,[26] the Court

held that the death of a seaman even during the term of employment does
not automatically give rise to compensation. Several factors must be
taken into account such as the circumstances which led to the
death, the provisions of the contract, and the right and obligation of the
employer and the seaman with due regard to the provisions of the
Constitution on the due process and equal protection clauses.

Petitioner points out that his illness is work-related simply because

had it been a land-based employment, petitioner would have easily gone
home and attended to the needs of his family.[27]

The Court cannot submit to this argument. This is not the

work-related instance contemplated by the provisions of the employment
contract in order to be entitled to the benefits. Otherwise, every seaman
would automatically be entitled to compensation because the nature of his
work is not land-based and the submission of the seaman to the
company-designated physician as to the nature of the illness suffered by
him would just be an exercise of futility.
The fact is that the petitioner failed to establish, by substantial evidence,
that his brief psychotic disorder was caused by the nature of his work as
oiler of the company-owned vessel. In fact, he failed to elaborate on the
nature of his job or to specify his functions as oiler of respondent
company. The Court, therefore, has difficulty in finding any link between
his position as oiler and his illness.
 The Court cannot give less importance either to the fact that
petitioner was a seaman for 10 years serving 10 to 18-month contracts
and never did he have any problems with his earlier contracts.[28] The
Court can only surmise that the brief psychotic disorder suffered by him
was brought about by a family problem. His daughter was sick and, as a
seafarer, he could not just decide to go home and be with his
family.[29] Even the psychiatric report[30] prepared by the evaluating
private psychiatrist of petitioner shows that the hospitalization of
petitioners youngest daughter caused him poor sleep and appetite. Later,
he started hearing voices and developed fearfulness.

Although strict rules of evidence are not applicable in claims for

compensation and disability benefits, the Court cannot just disregard the
provisions of the POEA SEC. Significantly, a seaman is a contractual and
not a regular employee. His employment is contractually fixed for a
certain period of time. Petitioner and respondents entered into a contract
of employment. It was approved by the POEA on October 25, 2005 and,
thus, served as the law between the parties. Undisputedly, Section 20-B
of the POEA Amended Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean-Going Vessels
(POEA-SEC) provides for compensation and benefits for injury or illness
suffered by a seafarer. It says that, in order to claim disability benefits
under the Standard Employment Contract, it is the company-designated
physician who must proclaim that the seaman suffered a permanent
disability, whether total or partial, due to either injury or illness, during
the term of the latters employment. In German Marine Agencies, Inc. v.
NLRC,[31] the Courts discussion on the seafarers claim for disability
benefits is enlightening. Thus:
[In] order to claim disability benefits under the Standard
Employment Contract, it is the company-designated physician
who must proclaim that the seaman suffered a permanent
disability, whether total or partial, due to either injury or illness,
during the term of the latters employment. There is no
provision requiring accreditation by the POEA of such
physician. In fact, aside from their own gratuitous allegations,
petitioners are unable to cite a single provision in the said
contract in support of their assertions or to offer any credible
evidence to substantiate their claim. If accreditation of the
company-designated physician was contemplated by the POEA,
 it would have expressly provided for such a qualification, by
specifically using the term accreditation in the Standard
Employment Contract, to denote its intention. For instance,
under the Labor Code, it is expressly provided that physicians
and hospitals providing medical care to an injured or sick
employee covered by the Social Security System or the
Government Service Insurance System must be accredited by
the Employees Compensation Commission. It is a cardinal rule
in the interpretation of contracts that if the terms of a contract
are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulation shall
control. There is no ambiguity in the wording of the
Standard Employment Contract the only qualification
prescribed for the physician entrusted with the task of
assessing the seamans disability is that he be
company-designated. When the language of the contract is
explicit, as in the case at bar, leaving no doubt as to the
intention of the drafters thereof, the courts may not read
into it any other intention that would contradict its plain
import. [Emphasis supplied]

In this case, the findings of respondents designated physician that

petitioner has been suffering from brief psychotic disorder and that it is
not work-related must be respected.

The Court commiserates with the petitioner, but absent substantial

evidence from which reasonable basis for the grant of benefits prayed for
can be drawn, the Court is left with no choice but to deny his petition,
lest an injustice be caused to the employer. Otherwise stated, while it is
true that labor contracts are impressed with public interest and the
provisions of the POEA SEC must be construed logically and liberally in
favor of Filipino seamen in the pursuit of their employment on board
ocean-going vessels, still the rule is that justice is in every case for the
deserving, to be dispensed with in the light of established facts, the
applicable law, and existing jurisprudence.[32]

Lastly, it appears premature at this time to consider petitioners

disability as permanent and total because the severity of his ailment has
not been established with finality to render him already incapable of
performing the work of a seafarer. In fact, the medical expert termed his
condition as brief psychotic disorder. The Court also takes note, as the
CA correctly did, that petitioner did not finish his treatment with the
company-designated physician, hence, there is no final evaluation yet on
petitioner.

All told, no reversible error was committed by the CA in rendering

the assailed Decision and issuing the questioned Resolution.

WHEREFORE, the October 29, 2008 Decision of the Court of

Appeals and its March 4, 2009 Resolution in CA-G.R. SP No. 104343,
are AFFIRMED.

SO ORDERED.

SECOND DIVISION

NYK-FIL SHIP MANAGEMENT G.R. No. 175894

INC., and/or JOSEPHINE J.
FRANCISCO and TMM CO. Present:
LTD, TOKYO, JAPAN,
Petitioners, QUISUMBING, Acting CJ.,
Chairperson,
CARPIO MORALES,
TINGA,
- versus - VELASCO, JR., and
BRION, JJ.

ALFONSO T. TALAVERA, Promulgated:

Respondent. November 14, 2008
x-------------------------------------------------
-x

DECISION
CARPIO MORALES, J.:

Alfonso T. Talavera (respondent) entered into a nine-month

contract of employment with petitioner NYK-Fil Ship Management, Inc.
(NYK-Fil) and/or Josephine J. Francisco, acting for and in behalf of
petitioner TMM Co., Ltd. Tokyo, Japan, as a fitter on board the M.T.
Tachiho vessel. As a fitter, he performed repair and maintenance and
welding works which called for him to move heavy equipment and
materials.

After respondent started working in June 2003, he, on several

occasions, felt slight pains in his back and other parts of his body. He thus
had frequent consultations with the ship medical officer who gave him
analgesics. The pain persisted and became more severe as it radiated to his
feet, hence, he consulted a clinic in Oman on August 16, 2003 and was
diagnosed to have ureteric colic with urinary tract infection.

The following day or on August 17, 2003, respondent was

repatriated to the Philippines following which he consulted the Sachly
International Health Partners, Inc. (SHIP), a company-designated clinic,
which diagnosed him to have lumbar strain with plantar fascitis and
urinary tract infection.

Respondent thus went through daily physical rehabilitation

therapy. After undergoing a Magnetic Resonance Imaging (MRI) and
other tests, he was finally diagnosed to have chronic bilateral L6
radiculopathies probably secondary to a lumbar canal and motility-like
dyspepsia. He was later deemed fit to resume sea duties by specialists of
the SHIP.[1]

Respondent sought a second opinion from an orthopedic expert who

diagnosed him to have lumbar spondylopathy, lumbar disk protrusion,
L5-S1 and declared him unfit for further sea duties.[2] The doctor
recommended a partial permanent disability with Grade 8 impediment
based on the Philippine Overseas Employment Administration
(POEA)Contract.[3]
 Respondent thereupon sought to claim illness allowance and
disability benefits from petitioners. His claim was denied in view of the
declaration by the company-designated physicians that he was fit to work,
drawing respondent to file a complaint[4] against petitioners, docketed as
NLRC-NCR Case No. (M) 04-05-01242-00, for disability benefits, illness
allowance, damages and attorneys fees, invoking Sections 1 and 3 of
Article XXI of the Collective Bargaining Agreement (CBA) between the
All Japan Seamens Union/Associated Marine Officers and Seamens
Union of the Philippines and Global Marine Co., Ltd. as well as Sections
20 (B) (3) and 20 (B) (6) of the POEA Standard Employment Contract.[5]

By Decision[6] of June 28, 2005, the Labor Arbiter, finding that

respondent was not yet fit to perform his usual task as fitter and noting
that he had been declared unfit for further sea duty, awarded him 100%
compensation as disability benefit in the amount of $88,000 inclusive of
attorneys fees. It denied, however, his prayer for illness allowance and
damages, such allowance having already been paid and the claim for
damages not having been justified.[7]

Petitioners alleged to have received the Labor Arbiters decision on

July 13, 2005 and thus had until July 23, 2005 to file their memorandum
on appeal. July 23, 2005 being a Saturday and the following Monday, July
25, 2005, being a special non-working holiday, petitioners filed their
Memorandum on Appeal[8] on July 26, 2005 before the National Labor
Relations Commission (NLRC).

The NLRC dismissed petitioners appeal for having been filed out of
[9]
time, it finding that per Registry Receipt address[ed] to [petitioners
counsel], copy of the Labor Arbiters decision was received by them on
July 12, 2005, hence, the ten (10) day reglementary period within which to
perfect an appeal was up to July 22, 2005.

Petitioners filed a Motion for Reconsideration of the NLRC order,

their counsel contending that:

x x x The aforementioned decision by the Labor Arbiter

was received by the Makati Central Post Office on 12 July
2005 but the same was not delivered to the undersigned law
office until 13 July 2005 by Letter Carrier JACOB
 ZETA. Attached hereto as Annex A is a certification issued by
Ms. Emily A. Gianan, Chief, Administrative Unit of the
Makati Central Post Office stating that the records of their
office reflect the undersigneds manifestation that the decision
was received by JANICE CANTALOPEZ [of the office of
petitioners counsel] on 13 July 2005, as stated in [petitioners]
Memorandum on Appeal dated 26 July 2005.

As the Honorable Commission is well aware, 25 July

2005 was declared a special non-working holiday. Thus, the
filing by the Respondents-Appellants of their Memorandum on
Appeal on the next working day, 26 July 2005, was timely and
indubitably within the reglementary period.[10] (Underscoring
supplied)

The NLRC denied petitioners Motion for Reconsideration by

Resolution of January 31, 2006, declaring that:

x x x [T]he appeal was filed out of time based on the

Registry Return Receipt returned by the Post Office to this
Commission, which forms part of the records of the case
showing that a copy of the decision was received by
respondents[] counsel on July 12, 2005, and not on July 13,
2005 as alleged in respondents Motion for
Reconsideration. The certification of Ms. Emily A. Gianan of
the Makati Central Post office cannot invalidate the same
official Registry Return Receipt that the very same post office
sent back to this Commission showing the date of receipt by
respondents[] counsel as July 12, 2005 on the face
thereof.[11] (Emphasis and underscoring supplied)

Petitioners thereupon filed a Petition for Certiorari before the Court

of Appeals,[12] their counsel alleging that:

x x x Upon being confronted with the registry return

card after the denial of Petitioners Motion for Reconsideration
by Public Respondent, Ms. Cantalopez [of the office of
petitioners counsel] realized that she had inadvertently and
mistakenly entered the date 12 and not 13. She had actually
 received the decision of the Labor Arbiter on 13 July 2005 and
had later that same day recorded that date accurately on the
undersigneds copy of the Decision and in an incoming logbook,
along with other incoming correspondences addressed to the
undersigned law firm, before routing these to the appropriate
attorneys, as is the Firms standard practice and internal
operating procedure. This may be considered as akin to a mere
typographical error and should not be given the extreme
punishment of dismissal of Petitioners Appeal. x x
x[13] (Underscoring supplied)
Attached to the petition was the affidavit of Cantalopez of the office of
petitioners counsel and a copy of the pertinent page of the logbook of the
same office[14] reflecting the receipt on July 13, 2005 of the Labor Arbiters
decision.

The Court of Appeals dismissed the petition for, inter alia, failure
to show that Marcelo R. Raenes (Raeses), Vice President of petitioner
NYK-FIL Ship Management who signed the verification and certification
of non-forum shopping, was authorized to sign for and in behalf of the
said company.[15] Petitioners filed a Motion for
[16]
Reconsideration, attaching a copy of the Board Resolution of NYK-Fil
Ship Management, Inc. authorizing Raeses to sign the required
verification and certification at any stage of the subject case. Their motion
was denied,[17] hence, the present Petition[18] raising the sole issue of:

WHETHER A TOTALLY NEW BOARD

RESOLUTION AUTHORIZING A CORPORATE OFFICER
TO SIGN THE VERIFICATION AND CERTIFICATION OF
NON-FORUM SHOPPING IS SPECIFICALLY REQUIRED
IN THE FILING OF A PETITION FOR REVIEW ON
CERTIORARI UNDER RULE 65, BEFORE THE COURT
OF APPEALS, EVEN IF A PREVIOUS BOARD
RESOLUTION HAD ALREADY BEEN ISSUED IN FAVOR
OF THE VERY SAME CORPORATE OFFICER
AUTHORIZING HIM TO SIGN FOR AND IN BEHALF OF
THE COMPANY AT ANY STAGE OF THE CASE.[19]

Annexed to the petition is a Secretarys Certificate attesting to the

conduct of a special meeting of the Board of Directors of petitioner
NYK-Fil Ship Management, Inc. in which said petitioner is now ratifying
the actions of its Vice President Raeses and submit such ratification to this
Honorable Supreme Court.[20]
The law allows a corporation to ratify the unauthorized acts of its
corporate officer.[21] With the ratification by petitioner NYK-Fil of
Raeses accomplishing of the verification and certification of non-forum
shopping which accompanied petitioners petition for certiorari before the
Court of Appeals, said petitioner had substantially complied with the
requirements of the law. Any defect in the signing of the verification and
certification of non-forum shopping is thus deemed cured. If this Court
had, in some instances, allowed the belated filing of the certification
against forum shopping, or even excused the non-compliance therewith,
this Court a fortiori should allow the timely submission of such
requirements, albeit the proof of the authority of the signatory was put
forward only after.[22]

While the normal course of action would be to remand the case to

the appellate court for decision on the merits, it is well within the
conscientious exercise of this Courts broad review powers to choose to
render judgment on the merits, all material facts having been duly laid
before it as would buttress its ultimate conclusion, in the public interest
and for the expeditious administration of justice.

Petitioners insist that they received notice of the Labor Arbiters

decision on July 13, 2005 and not on July 12, 2005 as indicated by their
counsels employee Cantalopez in the Registry Return Card. It is a
generally accepted rule that when service is made by registered mail, the
service is deemed complete and effective upon actual receipt by the
addressee as shown by the Registry Return Card.[23] Between the Registry
Return Card on one hand, and the Certification issued by Ms. Emily A.
Gianan, Chief, Administrative Unit of the Makati Central Post Office that
copy of the Labor Arbiters decision was served on petitioners counsel on
July 13, 2005 and the entry of petitioners counsels office logbook stating
that copy of the decision was received on July 13, 2005, on the other, the
Registry Return Card commands more weight.[24] The Registry Return
Card is considered as the official record of the NLRC. It is presumed to
be accurate, unless proven otherwise, unlike a written record or note of a
party which is often self-serving and easily fabricated.[25]
 Nevertheless, this Court deems it proper to relax procedural rules
in the interest of substantial justice[26] in view of the partial merit of
petitioners appeal before the NLRC.

Before the NLRC petitioners raised the following issues:

WHETHER THE COMPLAINANT-APPELLEE IS

ENTITLED TO DISABILITY BENEFITS, DESPITE THE
FACT THAT THE COMPANY-DESIGNATED PHYSICIAN
HAD ASSESSED HIM AS FIT TO RESUME SEA DUTIES.

II

WHETHER THE COMPLAINANT-APPELLEE IS

ENTITLED TO DISABILITY BENEFITS, DESPITE THE
FACT THAT HIS ILLNESS OR INJURY IS NOT
WORK-RELATED.

III

WHETHER THE COMPLAINANT-APPELLEE IS

ENTITLED TO DISABILITY BENEFITS, DESPITE THE
FACT THAT HIS ILLNESS OR INJURY WAS NOT
CAUSED BY AN ACCIDENT.

IV

WHETHER COMPLAINANT-APPELLEE IS ENTITLED

TO ATTORNEYS FEES.[27]

Respecting petitioners argument that a company-designated

physician declared respondent fit to resume sea duties, the right of a
seafarer to seek a second opinion is recognized by the POEA Standard
Employment Contract of 2000, the CBA governing the relationship
between petitioners and respondent, and jurisprudence.
 Section 20 (B) (3) of the POEA Standard Employment Contract of
2000 provides:

SECTION 20. COMPENSATION AND BENEFITS

FOR INJURY AND ILLNESS

The liabilities of the employer when the seafarer

suffers work-related injury or illness during the term of his
contract are as follows:

xxxx

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.

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 doctors decision shall be final and binding on
both parties. (Emphasis and underscoring supplied)

This provision substantially incorporates the 1996 POEA Standard

Employment Contract. Passing on the 1996 POEA Standard Employment
Contract, this Court held that [w]hile it is the company-designated
physician who must declare that the seaman suffers a permanent
disability during employment, it does not deprive the seafarer of his right
to seek a second opinion, hence, the Contract recognizes the prerogative
of the seafarer to request a second opinion and, for this purpose, to
consult a physician of his choice.[28]

The CBA governing the relationship between petitioners and

respondent contains provisions similar to the aforecited provision of the
POEA Standard Employment Contract of 2000, thus:

SECTION 2. The disability suffered by the Seafarer

shall be determined by a doctor appointed by the Company,
and the Company shall provide disability compensation to the
Seafarer in accordance with the percentage specified in the
table below which is appropriate to this disability.

xxxx

SECTION 5. If a doctor appointed by the Union

disagrees with the assessment of the Company doctor in
SECTION 2, 3, or 4, a third doctor shall be mutually agreed
between the Company and the Union, and the decision of this
doctor shall be binding on both parties.[29]

From the following findings of respondents physician, respondent

is entitled to the benefits under the POEA Standard Employment Contract
of 2000:

IMPRESSION:

Lumbar spondylopathy
Lumbar disc protrusion, L5-S1

Mr. Talaveras back pain has improved since his physical

therapy. However, he still experiences pain and discomfort
with exertion. He also now has started to complain of
numbness that radiates down his thighs. His diagnostic tests
are significant for degenerative changes and disc protrusion
which are conditions due to wear and tear. That is, with more
exposure to activities producing back stress, more injuries, and
disability are to be expected. He has lost his pre-injury capacity,
and I now recommend a partial permanent
disability with Grade 8 Impediment based on the POEA
contract. He is UNFIT for further sea duties.

xxxx

Degenerative disc disease is a wear and tear condition and is

associated with degenerative changes in the articular
cartilage. In the vertebral column, the fact joints are involved.
A single episode of trauma may not initially be significant,
but repeated trauma, such as excessive and strenuous physical
activities may play a role.

Through degeneration, wear and tear or trauma, the annulus

fibrosus containing the soft disc material (nucleus pulposus)
may tear. This results in protrusion of the disc or even
extrusion of disc material into the spinal canal or neural
foramen. In addition, the nerve fibers of the affected root are
also compressed and this situation leads to radiculopathy in the
appropriate muscles. When the nerve roots become
compressed, the herniated disc becomes significant. The most
common complaint in patients with a herniated disc is that of
severe low back pain developing immediately or within a few
hours after an injury.

The mainstay of therapy for a herniated lumbar disc is

conservative treatment, that is, nonsurgical. The mechanism of
injury is often an episode of trauma or a continued mechanical
stress of postural or occupational type. Therefore, torsional
stresses on the back, and activities such as lifting and repetitive
bending should be avoided. The more these patients do, the
more they hurt.

Prolonged relief is less likely if no permanent modification in

the patients activities is made. Over time, as the patient
resumes his normal work of increased loading, twisting, or
bending and extension of the back, the patient exposes himself
to dangers of enhancing the herniated disc to a more severe
form.
 Mr. Talavera should therefore refrain from activities producing
torsional stress on the back and those that require repetitive
bending and lifting. His symptoms are also heightened by
prolonged sitting and standing. His functional capacity has
diminished making it unsafe for him to work at his previous
occupation. He is UNFIT to resume his sea
[30]
duties. (Emphasis in the original;underscoring supplied)

Petitioners argue, however, that respondents injury or illness is not

work-related.[31] They rely on their designated physicians Reply to
Medical Query, stating that respondents conditions could also be
attributed to age, genetics, weight, bone diseases, infections, and
unknown factors.[32] They also call attention to Article XXI, Section 1 of
the CBA which requires that disability be the result of an accident to be
compensable.[33]

Indeed, under Section 1 of the CBA which reads:

SECTION 1: A Seafarer who suffers permanent
disability as a result of an accident, regardless of fault but
excluding injuries caused by a Seafarers willful act, whilst in
the employment of the Company, including accidents
occurring while traveling to or from the Ship, and whose
ability to work is reduced as a result thereof, shall in addition
to sick pay, be entitled to compensation according to the
provisions of the Agreement. The copy/ies of the medical
certificate and other relevant medical reports shall be made
available by the Company to the Seafarer,[34]

disability must be the result of an accident to be compensable.

There is no proof that respondent incurred disability as a result of

an accident. Neither is there proof, however, that, following Section 3 of
Article XXI of the CBA which reads:

xxxx

SECTION 3: Permanent Medical Unfitness A Seafarer

whose disability, in accordance with SECTION 1, is assessed
 at 50% or more under the attached APPENDIX B shall, for the
purpose of this section be regarded as permanently unfit for
further sea service in any capacity and entitled to 100%
compensation, i.e. US$80,000 for officers and ratings above
AB and US$60,000 for ratings, AB and below. Furthermore,
any Seafarer assessed at less than 50% disability under the
Contract but certified as permanently unfit for further sea
service in any capacity by the Company doctor, shall also be
entitled to 100% compensation[35] (Underscoring supplied),

respondent had a rating above AB and that his disability was assessed at
50% or more under Appendix B of the CBA to merit the award of 100%
compensation or $80,000 disability benefit and 10% thereof or $8,000
attorneys fees.

For disability to be compensable under Section 20 (B) of the 2000

POEA Standard Employment Contract, it must be the result of
a work-related injury or illness,[36]unlike the 1996 POEA Standard
Employment Contract in which it was sufficient that the seafarer suffered
injury or illness during the term of his employment.[37] The 2000 POEA
Standard Employment Contract 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 to
disability or death as a result of an occupational disease listed under
Section 32-A of this contract with the conditions set therein satisfied.

In More Maritime Agencies, Inc. v. NLRC,[38] this Court, noting

that the therein private respondents job required him to enter a manhole
accessible only in a crouching position and carry a 20-liter canister to
collect carbon, mud, and oil deposited inside the cylinders of the ships air
trunk,[39] found that his chronic low back pain, which indicated a slipped
disc, was work-related. This Court, addressing the therein petitioners
argument that the therein respondents chronic low back pain was due to a
pre-existing condition, expounded on the nature of a work-related injury
or illness:

x x x Compensability of an ailment does not depend on

whether the injury or disease was pre-existing at the time of the
 employment but rather if the disease or injury
is work-related or aggravated his condition. It is indeed safe
to presume that, at the very least, the arduous nature of
Hormicilladas employment had contributed to the aggravation
of his injury, if indeed it was pre-existing at the time of his
employment. Therefore, it is but just that he be duly
compensated for it. It is not necessary, in order for an
employee to recover compensation, that he must have been in
perfect condition or health at the time he received the injury, or
that he be free from disease. Every workman brings with him
to his employment certain infirmities, and while the employer
is not the insurer of the health of his employees, he takes them
as he finds them, and assumes the risk of having a weakened
condition aggravated by some injury which might not hurt or
bother a perfectly normal, healthy person.[40] (Underscoring,
emphasis, and italics supplied)
In the case at bar, a reasonable connection between the respondents
injuries and the nature of his job has been established. Thus, as in the
above cited case, it is safe to presume that the arduous nature of the
respondents job caused the respondents illness or at least aggravated any
pre-existing condition he might have had, and is thus work-related.

The earlier-quoted findings of respondents physician indicate that

repeated trauma such as excessive and strenuous physical activities may
play a role in producing back stress, more injuries and disability, hence,
his advice for respondent to refrain from activities producing torsional
stress on the back and those that require repetitive bending and lifting as
he is UNFIT to resume his sea duties.

Petitioners physician herself stated that among the causes of

respondents conditions are trauma, biomechanical stress, and repeated
motion on a joint.[41] Her observation that there was no overt and direct
assault or physical injury that may have contributed to the MRI findings
of Mr. Talaveras lumbar spine[42] and petitioners argument that no record
of an accident was presented[43] do not persuade. As respondents
physician explained, A single episode of trauma may not initially be
significant, but repeated trauma, such as excessive and strenuous physical
activities may play a role.[44]
 In their Reply[45] to respondents Position Paper, petitioners did not
contest or disprove respondents claim that prior to June 2003, he had
concluded three contracts with them and that every time he was
scheduled for deployment, he was subjected to medical examination by
petitioners designated physician and had always been declared fit to
work.[46] Petitioners failed too to refute, respondents following claims:

Complainant Talavera as Fitter performed repair and

maintenance works, like hydraulic line return and other supply
lines of the vessel; he did all the welding works and assist[ed]
the First and Second Engineer during overhauling works of
generators, engines and others [sic] engineering works as
directed by lifting, carrying, pushing, pulling and moving
heavy equipment and materials and constantly performed
overtime works because the ship was old and always repair
jobs are almost anywhere inside the vessel. He found himself
with very few hours rest period.

On several occasions due to his excessive arduous and

stressful, both physical and mental works, he felt slight pains
in his back and other parts of his body, [b]ut ignored the same
due to the demands of his works and because his superiors are
very strict with regards to [the] time table in a given
task.[47] (Underscoring supplied)

Undoubtedly then, respondent is, under the 2000 POEA Standard

Employment Contract, entitled to compensation. His disability benefit, on
account of the priorly stated partial permanent disability with Grade
8 Impediment based on the 2000 POEA Standard Employment Contract,
computed in accordance with Section 20 (B) (6)[48] vis a vis Section
32[49] of the 2000 Standard Employment Contract, thus:
US$50,000 x 33.59%

amounts to US$16,795. The attorneys fees awarded by the labor arbiter

equivalent to ten percent (10%) of the judgment award[50] is thus reduced
to US$1,679.50.
 WHEREFORE, the assailed Resolutions of the Court of Appeals
dated May 19, 2006 and December 4, 2006 are SET ASIDE.

The Decision of the Labor Arbiter dated June 28, 2005 is

AFFIRMED with MODIFICATION. The disability benefit awarded to
the respondent Alfonso T. Talavera is reduced to US$16,795 in
accordance with Section 20 (B) (6) vis a vis Section 32 of the 2000
Philippine Overseas Employment Administration Standard Terms and
Conditions Governing the Employment of Seafarers on Board Ocean
Going Vessels, as amended by Department Order No. 4 and
Memorandum Circular No. 9, both series of 2000. The award of attorneys
fees is correspondingly reduced to US$1,679.50.

SO ORDERED.

VIRGEN SHIPPING G.R. No. 178127

CORPORATION,
CAPT. RENATO MORENTE & Present:
ODYSSEY MARITIME PTE.
LTD., NATIONAL LABOR QUISUMBING, J., Chairperson
RELATIONS COMMISSION, CARPIO MORALES,
Petitioners, TINGA,
VELASCO, JR., and
BRION, JJ.
- versus -

JESUS B. BARRAQUIO,
Respondent. Promulgated:

April 16, 2009

x--------------------------------------------------
x

DECISION

CARPIO MORALES, J.
Assailed via petition for review on certiorari is the Court of
Appeals[1] Decision of November 13, 2006 holding Virjen Shipping
Corporation, Capt. Renato Morente and Odyssey Maritime PTE. Ltd.
(petitioners) liable to Jesus B. Barraquio (respondent) for payment of
sickness allowance equivalent to 120 days, disability benefits, accrued
interest, moral damages, exemplary damages and attorneys fees.

By a contract forged on February 29, 2000, petitioner Odyssey Maritime,

PTE. Ltd., through its local manning agent co-petitioner Virjen Shipping
Corporation, hired respondent as chief cook on board the vessel
M/T Golden Progress for a period of ten (10) months.

Before the contract was executed, respondent was made to undergo the
routine Pre-Employment Medical Examination (PEME) at S.M. Lazo
Medical Clinic, Inc. and was found to be fit to work by the attending
physician Dr. Jose Dante V. Jacinto.

On March 23, 2000, respondent boarded the above-named vessel and

commenced to perform his duty as chief cook.

Twenty one (21) days later or on April 13, 2000, while the vessel was
docked in Korea, respondent requested medical attention due to chest
pains and hypertension and was brought to the Hyundai Surgical Center.
The attending physician made no pronouncement as to respondents
fitness for work but made the following diagnosis:

Impression) (1) Suspected ischemic heart

disease (2) Hypertension
Treatment) Calcium channel block
[2]
medication. Jao Ho Lee (Emphasis and
underscoring supplied)
Subsequently or on April 26, 2000, respondent, by letter of even date
addressed to Captain Thomas Cristino, Crewing Manager of petitioner
Virjen, wrote, quoted verbatim:
 With much regret, I would like to say my
sincere sorry for having me decided to quit my
job. Poor Health is the main reason and thus
affecting the performance of my duty.

However too, if somebody is going to disembark

this coming May in Singapore may I respectfully
request your permission to allow me to join said
disembarkation crew. Just in case it is not
possible, then I will patiently wait to those are
scheduled by early June.

As well, it is clear to me that I am responsible for

my airfare and to joining crew as my replacement
since I have not complied with the terms of the
contract.

Thank you very much to your kind consideration

& understanding & hope this irrevocable
resignation be granted on proper time so as to
allow me to accommodate the due expenses for
repatriation.[3] (Emphasis and underscoring
supplied)

Upon arrival of the vessel in Singapore and prior to his disembarkation,

respondent again requested on May 13, 2000 medical treatment for
abscess in his left thumb. Dr. Ivan Chan of Gleneagles Maritime Medical
Centre who attended to respondent stated in his report:

Name/Age: Jesus B. Barraquio/50

Rank/Nationality: CCK/Filipino
Agent/Vessel: Heng Fu Kot/Golden Progress
Allergy: Nil

HISTORY: Painful swelling left thumb for 10

days. History of hypertension for 3 years, on
calciblock. Medication finished. Cholesterol
normal.
 xxxx

DIAGNOSIS: ABSCESS LEFT THUMB;

HYPERTENSION

xxxx

RECOMMENDATIONS:

DISPOSITION: Fit to sail.[4] (Emphasis and

underscoring in the original; italics supplied)

Respondent was allowed by petitioners to disembark. He arrived in

the Philippines on May 15, 2000. On August 2, 2000, respondent signed a
Statement of Account acknowledging set-off of his vacation leave pay in
the amount of P15,188.75 from the cost of finding respondents
replacement and the cost of repatriation in the amount of P38, 373.65. For
the balance of P23, 184.90, respondent signed a promissory note in favor
of petitioner Virjen.

A year later or on August 1, 2001, respondent filed a complaint for

non-payment of 120 days sickness allowance under Section 20 (B)
paragraph 2 of the Standard Employment Contract for Seafarers[5],
disability benefits, legal interest computed from date of formal demand,
reimbursement of medical expenses, and damages.

In his Complaint, respondent alleged that due to constant verbal abuse

from the ship master, Captain Marino Kasala, he suffered dizziness, chest
pains, headaches and irregular sleep leading to hypertension; that he was
forced to execute the request for disembarkation for fear that his health
would worsen; and that medical findings in his PEME that he was fit to
sail is binding upon petitioners and proof that his condition developed
while on board.
Taking a contrary stand, petitioners countered that hypertension cannot
develop in a short span of time; and in any event, respondent committed
misrepresentation in his PEME as to his health.

By Decision of April 1, 2002, Labor Arbiter Renaldo O.

Hernandez rendered judgment in favor of respondent, disposing as
follows:

WHEREFORE, premises considered,

judgment is entered finding respondents foreign
principal and manning agency and its
president/chairman Eng. Emilio A. Santiago and
the rest of the corporate officers liable to pay to
complainant his money claims as above discussed,
thus ORDERING said respondents and officers in
solido:

1) to reimburse to complainant his receipted

cost of medical expenses incurred to Annex
J-8. Complainants Affidavit dated 01 July
2002) of P1,270.00;
2) to pay complainant his sickness allowance up
to maximum equivalent of basic wage x 120
days or US $ 2,320.00 under Sec. 20 (B) in
par. 2, Standard Employment Contract for
Seafarers;
3) to pay complainant his disability benefits in
accordance with the schedule of benefits in
Sec. 30 of the Contract with disability rating
of Grade 6 pursuant to Schedule of Disability
Allowance in Sec. 30-A of the POEA SEC,
with impediment percentage of 50%
equivalent to US $25,000.00; and finally,
4) to pay complainant moral and exemplary
damages in the combined amount of two
hundred thousand pesos (P200,000.00) and
10% of the entire award as attorneys fees.
 SO ORDERED.[6]

On appeal, the National Labor Relations Commission (NLRC) First

Division by Decision of August 30, 2002 reversed the ruling of the Labor
Arbiter and dismissed the complaint for lack of merit.[7] Albeit echoing
the same factual background, the NLRC found respondents resignation
voluntary, hence, he cannot claim entitlement to the benefits under the
Standard Employment Contract of the Philippine Overseas Employment
Administration (POEA). Thus, the NLRC First Division declared:

The aforequoted handwritten resignation, the

terms and conditions of which are very clear and
explicit that he is quitting his job and even
executed a promissory note to pay the amount of
P23,184.90 representing the balance of his
repatriation and his replacements expenses.

Further, complainant-appellee (respondent) even

signed the Statement of Account after he
signed-off from the vessel on August 02,
2000. The same shows the balance due Virjen
Shipping Corporation which apparently may be
construed that complainant-appellee knew from
the beginning that he is liable for his and his
replacement transportation because he
pre-terminated his employment contract.
(Underscoring supplied)

On respondents petition for certiorari, the Court of Appeals reversed the

NLRC Decision in light of the observation that respondents hypertension
probably developed while on board the vessel, viz:

Thus, We are constrained to declare

compensability primarily because evidence points
that petitioners hypertension
was probably developed while on board the
 vessel. After all, strict rules of evidence are not
applicable in claims for compensation. In fact,
in NFD International Manning Agents, Inc. vs.
NLRC, the High Court held that probability and
not the ultimate degree of certainty is the test of
proof in compensation proceedings.[8] (Citations
omitted, italics in the original, emphasis and
underscoring supplied)

The appellate court thus disposed:

WHEREFORE, the petition is GRANTED. The

assailed NLRC Decision is
hereby NULLIFIED and the Labor Arbiter
Decision REINSTATED with the
MODIFICATIONthat the name Engr.
Emilio Santiago and the rest of the corporate
officers are ordered deleted from its dispositive
portion.

SO ORDERED.[9] (Emphasis in the original;

underscoring supplied)

Hence, the present petition, petitioners positing the following arguments:

1. . That there is no disharmony between the

factual findings of the Labor Arbiter and those
of the NLRC. The findings of the NLRC are
more in accord with the evidence presented in
the proceedings.
2. That private respondents resignation letter
was voluntary and made upon his own
instance, the petitioners (sic) argument of
involuntariness has no factual basis and is a
mere afterthought. Having resigned from his
position, private respondent is not entitled to
his monetary claims.
3. Assuming, without admitting, that private
respondent was medically repatriated as poor
health was stated as the reason for his
 resignation only bolsters the view that private
respondent knew of his history of
hypertension prior to boarding the MV Golden
Progress and that he concealed such material
information in his pre-employment medical
examination (PEME for brevity).
4. Private respondents PEME is not binding
against the petitioners with respect to the
determination of his true state of health and
that petitioners willful and fraudulent
concealment of his known pre-existing
medical condition bars him from receiving
disability benefits. (Underscoring supplied)

As a general rule, only questions of law may be raised and resolved by

the Court as regards petitions brought under Rule 45 of the Rules of
Court. The reason being that the Court is not a trier of facts, hence, it is
not duty bound to re-examine the evidence on record.

Where, as in the present case, the NLRC and the Labor Arbiter arrived
at conflicting decisions and the findings of the Labor Arbiter, as partly
affirmed by the appellate court, appear to be contrary to the evidence at
hand, the Court finds the need to review the records to distill the facts.

From a considered review, the Court finds that respondents resignation

was voluntary.

Resignation is defined as the voluntary act of an employee who finds

himself in a situation where he believes that personal reasons cannot be
sacrificed in favor of the exigency of the service and he has no other
choice but to disassociate himself from his employment.[10]

Respondents resignation can be gleaned from the unambiguous terms of

his letter to Captain Cristino.

As earlier reflected, respondent returned home upon docking

in Singapore on May 13, 2000 after he was treated for the abscess in his
left thumb and diagnosed with hypertension. His return home is in
consonance with his request in his letter of April 26, 2000 to the crewing
manager.

Respondents bare claim that he was forced to execute his resignation

letter deserves no merit. Bare allegations of threat or force do not
constitute substantial evidence to support a finding of forced
resignation.[11] That such claim was proferred a year later all the more
renders his contention bereft of merit.

It bears noting that in respondents previous contract with petitioner

aboard another accredited vessel, M/T Ocean Blossom, he also requested
for early repatriation, citing domestic reasons. Respondent is thus charged
with awareness of the consequences of pre-termination, this being his
second time to so request. Captain Cristinos alleged statement that
respondent had to shoulder the repatriation expenses cannot thus be
construed as compulsion.

Respondent claims entitlement under Section 20 (B) [2] of the Standard

Employment Contract of the POEA, which must be read in conjunction
with Section 20 (B) [3], viz:

SECTION 20. COMPENSATION AND

BENEFITS

B. x x x

(2) If the injury or illness requires medical and/or

dental treatment in a foreign port, the employer
shall be liable for the full cost of such medical,
serious, dental, surgical and hospital treatment as
well as board and lodging until the seafarer is
declared fit to work or to be repatriated.

However, if after repatriation, the seafarer still

requires medical attention arising from said injury
or illness, he shall be provided at cost to the
employer until such time he is declared fit and the
 degree of his disability has been established by
the company-designated physician.

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 the forfeiture of his
right to claim the above benefits.

If the doctor appointed by the seafarer disagrees

with the assessment, a third doctor may be agreed
jointly between the Employer and the seafarer.
The third doctors decision shall be final and
binding on both parties. (Underscoring supplied)

If respondent was indeed repatriated for medical reasons, he was, under

the above-said provision, required to undergo post-employment medical
examination by a company-designated physician within three working
days from arrival. Contending that he complied therewith, he invites
attention to the written annotation Reported To Office May 17/00 on the
medical report from Gleneagles Maritime Medical Centre.

The provision requires respondent to submit himself to a post-medical

employment examination by a company designated physician within
three working days from arrival or, in respondents case, three working
days after May 15, 2000, a Monday, when he arrived by ship or not later
than May 18, 2000. Respondent sought examination-treatment on May
17 June 30, 2000 from Dr. Romina Alpasan who appears to be a
physician of his choice.[12] He only tried to look for a
company-designated physician after treatment by Dr. Alpasan. Clearly,
he did not comply with the 3-day requirement to seek the services of a
company-designated physician for purposes of post-employment medical
examination.

Respondent goes on to claim that he underwent treatment for Ischemic

heart disease which developed while employed by petitioners. Ischemic
heart disease is a condition in which fatty deposits (atheroma) accumulate
in the cells lining the wall of the coronary arteries. These fatty deposits
build up gradually and irregularly, however, in the large branches of
the two main coronary arteries which encircle the heart and are the main
source of its blood supply. This process, called atherosclerosis, leads
to narrowing or hardening of the blood vessels supplying blood to the
heart muscle (the coronary arteries) resulting in ischemia - or the inability
to provide adequate oxygen - to heart muscle and this can cause damage
to the heart muscle . Complete occlusion of the blood vessel leads to a
heart attack.

Finally, respondent claims that in light of the opinion of the physician

in Korea that he had suspected ischemic heart, petitioners affirmed his
medical repatriation. As reflected in the immediately preceding paragraph,
however, ischemic heart disease cannot develop in a short span of time
that respondent served as chief cook for petitioners. In fact, as indicated
above, the Gleneagles Maritime Medical Centre doctor who treated
respondent in May 2000 for abscess in his left hand had noted
respondents [h]istory of hypertension for 3 years. Moreover, the Korean
physician did not make any recommendation as to respondents bill of
health for petitioners to assume that he was fit for repatriation.
IN FINE, respondents actions show that he voluntarily resigned.
WHEREFORE, the Court of Appeals Decision of November 13,
2006 is REVERSED and the NLRC Decision of August 30,
2002 is REINSTATED.
SO ORDERED.

PHILIPPINE TRANSMARINE G.R. No. 190804

CARRIERS, INC., GLOBAL
NAVIGATION, LTD., Present:
Petitioners,
CARPIO MORALES, J., Chairperson,
BRION,
BERSAMIN,
- versus - VILLARAMA, JR., and
SERENO, JJ.

Promulgated:
SILVINO A. NAZAM, October 11, 2010
Respondent.

x--------------------------------------------------
-x

DECISION

CARPIO MORALES, J.:

Seafarer Silvino Nazam (respondent) was hired by petitioner

Philippine Transmarine Carriers, Inc. (Transmarine) on behalf of its
principal-co-petitioner Global Navigation, Ltd. for the position of Bosun
under a 9-month contract,[1] with a salary of US$535 per month.

Respondent was deployed on August 26, 2004 at Ulsan, South

Korea on board the vessel M/V Maersk Durban, but was repatriated to the
Philippines twenty three days later or on September 18, 2004, pursuant to
his handwritten letter[2] dated September 16, 2004 requesting that he be
relieved. The letter stated, quoted verbatim:

SEPT 16 2004

TO MASTER: T.H. GEMULLA

MAERSK DURBAN
 RELIEV [sic] REQUEST

I AM BOSUN SILVINO A. NAZAM REQUEST MY

RELIEVE BECAUSE OF PERSONAL REASONS

__________(SGD)__________________
BOSUN SILVINO A. NAZAM

On October 5, 2004, respondent filed with the National Labor

Relations Commission (NLRC) a complaint[3] for payment of disability
benefits, sickness allowance, damages, and attorneys fees, alleging that
the hostile working conditions at the vessel exposed him to humiliation
and verbal and mental abuse from the Chief Officer and Master, causing
him to suffer hypertension and depression.

Respondent further alleged that he was made to sign blank

documents by the Master of the vessel; he was ousted from his post as
Bosun; his request for medical assistance on reaching the port of
Yokohama, Japan was not granted; and his request for post-employment
medical examination upon repatriation was denied by petitioner
Transmarine.

Three weeks after filing his complaint or on October 27, 2004,

respondent consulted with an independent physician, Dr. Jesus Alberto Q.
Poblete (Dr. Poblete), who diagnosed[4] him to be suffering from Major
Depression with Psychotic Features R/O Traumatic Disorder.

Dr. Raymond Rosales (Dr. Rosales) of the Metropolitan Hospital

who examined respondent on March 19, 2005 diagnosed him too to be
suffering from Depressive Disorder and issued a Medical
Certification[5] that respondent was unfit for sea duty.

Petitioners maintained in its Position Paper[6] that respondents

repatriation was due to his letter-request to be relieved from work; and
that respondents alleged hypertension could not have been acquired
during his brief stay on board the vessel.
 By Decision[7] of August 29, 2006, Labor Arbiter Ramon Valentin
C. Reyes found for respondent and directed petitioners to pay him
permanent total disability benefits amounting to US$60,000; sickness
allowance of US$2,140; and moral and exemplary damages of P50,000
each and 10% of the total award by way of attorneys fees.

In finding for respondent, the arbiter held that since respondents

pre-medical employment records showed that he was fit for sea duty, he
could only have acquired the illnesses complained of during his duty at
the vessel. The Arbiter added that while major depression is not listed as
an occupational disease respondent had proven that it was work-related
and the risk of contracting it was increased by the working conditions
aboard the vessel.

On appeal, the NLRC set aside the Labor Arbiters Decision by

Decision[8] of January 31, 2008 and dismissed respondents complaint,
noting that respondent indeed made a request to be relieved; that
respondent failed to undergo the mandatory post-employment medical
examination; that respondent failed to show that his repatriation was due
to a work-related illness; and that depression is not an occupational
disease, hence, not compensable.

The NLRC further noted that respondent sought medical assistance

only a month after his repatriation, and the certification issued by Dr.
Poblete did not include a disability assessment. Respondents motion for
reconsideration was denied by Resolution[9] of April 25, 2008, hence, he
appealed to the Court of Appeals.

By Decision[10] of September 30, 2009, the appellate

court reversed the decision of the NLRC and reinstated that of the Labor
Arbiter, holding that respondents depression which rendered him unfit to
work was a direct result of the demands of his shipboard employment and
the harsh and inhumane treatment of the vessels officers towards him.

Petitioners motion for reconsideration was denied by the appellate

court by Resolution[11] dated December 17, 2009, hence, the present
petition for review on certiorari.
 The petition is meritorious.

For an injury or illness to be duly compensated under the terms of

the Philippine Overseas Employment Administration-Standard
Employment Contract (POEA-SEC), there must be a showing that the
injury or illness and the ensuing disability occurred during the effectivity
of the employment contract. Additionally, Section 20(B) of the
POEA-SEC, paragraph (3) requires:

xxxx

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. (emphasis and underscoring
supplied)

Respondent was thus required to undergo post-employment medical

examination by a company-designated physician within three working
days from arrival. He failed to comply with the requirement, however,
without explanation or justification therefor. Hence, he forfeited his right
to claim disability benefits.

Respondents claim of having reported to petitioner Transmarines

office within three days from his arrival in the Philippines remains just
that. As duly observed by the NLRC, respondent merely consulted a
private practitioner more than one month after his arrival three weeks
after he had already filed his complaint for disability benefits; and he
secured a medical certification that he was unfit for sea duty from another
private physician only on March, 2005 or six months after his arrival.

Technicality aside, for a disease to be compensable Section 32-A

of the POEA-SEC requires proof of the existence of the following
conditions:

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 describe 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. (emphasis supplied)

Specifically with respect to mental diseases, for the same to be

compensable, the POEA-SEC requires that it must be due to traumatic
injury to the head[12] which did not occur in this case. While disability
should be understood less on its medical significance but more on the loss
of earning capacity, the appellate courts sweeping observations that the
hostile working environment and the emotional turmoil suffered by
[herein] respondent from his employers caused him mental and emotional
stress that led to severe mental disorder and rendered him permanently
unable to perform any work, and that his working condition increased the
risk of sustaining the illness complained of do not lie.
 By respondents claim, he became depressed due to the frequent
verbal abuse he received from his German superiors within less than one
month that he was on board the vessel. Aside from a To whom it may
concern handwritten letter of respondent[13] attached to his Position Paper
filed before the arbiter detailing the alleged instances of verbal abuse,
which letter bears the alleged signatures of some of respondents
colleagues, respondent failed to proffer concrete proof that, if indeed he
was subjected to abuse, it directly resulted in his depression.

WHEREFORE, the petition is GRANTED. The Court of Appeals

Decision dated September 30, 2009 and the Resolution dated December
17, 2009 are REVERSED AND SET ASIDE and the National Labor
Relations Commission Decision dated January 31, 2008 and Resolution
dated April 25, 2008 dismissing respondents
complaint are REINSTATED.

SO ORDERED.

THIRD DIVISION

LEONIS NAVIGATION CO., INC. and G.R. No. 179169

WORLD MARINE PANAMA, S.A.,
Petitioners, Present:

CORONA, J.,
- versus - Chairperson,
VELASCO, JR.,
NACHURA,
PERALTA, and
CATALINO U. VILLAMATER and/or MENDOZA, JJ.
The Heirs of the Late Catalino U.
Villamater, represented herein by Sonia
Mayuyu Villamater; and NATIONAL Promulgated:
LABOR RELATIONS COMMISSION,
Respondents. March 3, 2010

x-----------------------------------------------------------------------------------
-x
 DECISION

NACHURA, J.:

This is a petition for review on certiorari[1] under Rule 45 of the

Rules of Court, seeking to annul and set aside the Decision[2] dated May 3,
2007 and the Resolution[3]dated July 23, 2007 of the Court of Appeals
(CA) in CA-G.R. SP No. 85594, entitled Leonis Navigation Co., Inc., et
al. v. Catalino U. Villamater, et al.

The antecedents of this case are as follows:

Private respondent Catalino U. Villamater (Villamater) was hired

as Chief Engineer for the ship MV Nord Monaco, owned by petitioner
World Marine Panama, S.A., through the services of petitioner Leonis
Navigation Co., Inc. (Leonis), as the latters local manning
agent. Consequent to this employment, Villamater, on June 4, 2002,
executed an employment contract,[4] incorporating the Standard Terms
and Conditions Governing the Employment of Filipino Seafarers on
Board Ocean-Going Vessels as prescribed by the Philippine Overseas
Employment Administration (POEA).

Prior to his deployment, Villamater underwent the required

Pre-Employment Medical Examination (PEME). He passed the PEME
and was declared Fit to Work.[5]Thereafter, Villamater was deployed on
June 26, 2002.

Sometime in October 2002, around four (4) months after his

deployment, Villamater suffered intestinal bleeding and was given a
blood transfusion. Thereafter, he again felt weak, lost considerable weight,
and suffered intermittent intestinal pain. He consulted a physician
in Hamburg, Germany, who advised hospital confinement. Villamater
was diagnosed with Obstructive Adenocarcinoma of the Sigmoid, with
multiple liver metastases, possibly local peritoneal carcinosis and
infiltration of the bladder, possibly lung metastasis, and anemia; Candida
Esophagitis; and Chronic Gastritis. He was advised to undergo
chemotherapy and continuous supportive treatment, such as pain-killers
and blood transfusion.[6]

Villamater was later repatriated, under medical escort, as soon as

he was deemed fit to travel. As soon as he arrived in the Philippines,
Villamater was referred to company-designated physicians. The diagnosis
and the recommended treatment abroad were confirmed. He was advised
to undergo six (6) cycles of chemotherapy. However, Dr. Kelly Siy
Salvador, one of the company-designated physicians, opined that
Villamaters condition appears to be not work-related, but suggested a
disability grading of 1.[7]

In the course of his chemotherapy, when no noticeable

improvement occurred, Villamater filed a complaint[8] before the
Arbitration Branch of the National Labor Relations Commission (NLRC)
for payment of permanent and total disability benefits in the amount of
US$80,000.00, reimbursement of medical and hospitalization expenses in
the amount of P11,393.65, moral damages in the sum of P1,000,000.00,
exemplary damages in the amount of P1,000,000.00, as well as attorneys
fees.

After the submission of the required position papers, the Labor

Arbiter rendered a decision[9] dated July 28, 2003 in favor of Villamater,
holding that his illness was compensable, but denying his claim for moral
and exemplary damages. The Labor Arbiter disposed as follows

WHEREFORE, foregoing premises considered,

judgment is hereby rendered declaring complainants illness to
be compensable and ordering respondents LEONIS
NAVIGATION CO., INC. and WORLD MARINE PANAMA,
S.A. liable to pay, jointly and severally, complainant
CATALINO U. VILLAMATER, the amount of US$60,000.00
or its Philippine Peso equivalent at the time of actual payment,
representing the latters permanent total disability benefits plus
ten percent (10%) thereof as Attorneys Fees.
 All other claims are dismissed for lack of merit.

SO ORDERED.[10]

Petitioners appealed to the NLRC. Villamater also filed his own

appeal, questioning the award of the Labor Arbiter and claiming that the
100% degree of disability should be compensated in the amount of
US$80,000.00, pursuant to Section 2, Article XXI of the
ITF-JSU/AMOSUP Collective Bargaining Agreement (CBA) between
petitioners and Associated Marine Officers & Seamens Union of the
Philippines, which covered the employment contract of Villamater.

On February 4, 2004, the NLRC issued its resolution,[11] dismissing

the respective appeals of both parties and affirming in toto the decision of
the Labor Arbiter.

Petitioners filed their motion for reconsideration of the February 4,

2004 resolution, but the NLRC denied the same in its resolution dated
June 15, 2004.

Aggrieved, petitioners filed a petition for certiorari under Rule 65

of the Rules of Court before the CA. After the filing of the required
memoranda, the CA rendered its assailed May 3, 2007 Decision,
dismissing the petition. The appellate court, likewise, denied petitioners
motion for reconsideration in its July 23, 2007 Resolution.

Hence, this petition based on the following grounds, to wit:

First, the Court of Appeals erroneously held that [the]
Commissions Dismissal Decision does not constitute grave
abuse of discretion amounting to lack or excess of jurisdiction
but mere error of judgment, considering that the decision lacks
evidentiary support and is contrary to both evidence on record
and prevailing law and jurisprudence.

Second, the Court of Appeals seriously erred in

upholding the NLRCs decision to award Grade 1 Permanent
and Total Disability Benefits in favor of seaman Villamater
despite the lack of factual and legal basis to support such
award, and more importantly, when it disregarded undisputed
 facts and substantial evidence presented by petitioners which
show that seaman Villamaters illness was not work-related and
hence, not compensable, as provided by the Standard Terms of
the POEA Contract.

Third, the Court of Appeals erred in holding that

non-joinder of indispensable parties warrant the outright
dismissal of the Petition for Review on Certiorari.

Fourth, the Court of Appeals erroneously held that final

and executory decisions or resolutions of the NLRC render
appeals to superior courts moot and academic.

Last, the Court of Appeals seriously erred in upholding

the award of attorneys fees considering that the grant has
neither factual nor legal basis.[12]

Before delving into the merits of this petition, we deem it fit to

discuss the procedural issues raised by petitioners.

First. It is worthy to note that the CA dismissed the petition,

considering that (1) the June 15, 2004 Resolution of the NLRC had
already become final and executory on June 26, 2004, and the same was
already recorded in the NLRC Book of Entries of Judgments; and that (2)
the award of the Labor Arbiter was already executed, thus, the case was
closed and terminated.

According to Sections 14 and 15, Rule VII of the 2005 Revised

Rules of Procedure of the NLRC

Section 14. Finality of decision of the commission and

entry of judgment. a) Finality of the Decisions, Resolutions or
Orders of the Commission. Except as provided in Section 9 of
Rule X, the decisions, resolutions or orders of the Commission
shall become final and executory after ten (10) calendar days
from receipt thereof by the parties.

b) Entry of Judgment. Upon the expiration of the ten

(10) calendar day period provided in paragraph (a) of this
 Section, the decision, resolution, or order shall be entered
in a book of entries of judgment.

The Executive Clerk or Deputy Executive Clerk shall

consider the decision, resolution or order as final and
executory after sixty (60) calendar days from date of mailing in
the absence of return cards, certifications from the post office,
or other proof of service to parties.

Section 15. Motions for reconsideration. Motion for

reconsideration of any decision, resolution or order of the
Commission shall not be entertained except when based on
palpable or patent errors; provided that the motion is under
oath and filed within ten (10) calendar days from receipt of
decision, resolution or order, with proof of service that a copy
of the same has been furnished, within the reglementary period,
the adverse party; and provided further, that only one such
motion from the same party shall be entertained.

Should a motion for reconsideration be entertained

pursuant to this SECTION, the resolution shall be
executory after ten (10) calendar days from receipt
thereof.[13]

Petitioners received the June 15, 2004 resolution of the NLRC, denying
their motion for reconsideration, on June 16, 2004. They filed their
petition for certiorari before the CA only on August 9, 2004,[14] or 54
calendar days from the date of notice of the June 15, 2004
resolution. Considering that the above-mentioned 10-day period had
lapsed without petitioners filing the appropriate appeal, the NLRC issued
an Entry of Judgment dated June 28, 2004.
Moreover, by reason of the finality of the June 15, 2004 NLRC resolution,
the Labor Arbiter issued on July 29, 2004 a Writ of
Execution.[15] Consequently, Leonis voluntarily paid Villamaters widow,
Sonia M. Villamater (Sonia), the amount of P3,649,800.00, with Rizal
Commercial and Banking Corporation (RCBC) Managers Check No.
0000008550[16] dated August 12, 2004, as evidenced by the
Acknowledgment Receipt[17] dated August 13, 2004, and the Cheque
Voucher[18] dated August 12, 2004.Following the complete satisfaction of
the judgment award, the Labor Arbiter issued an Order[19] dated
September 8, 2004 that reads

There being complete satisfaction of the judgment award as

shown by the record upon receipt of the complainant of the
amount of P3,649,800.00, voluntarily paid by the respondent,
as full and final satisfaction of the Writ of Execution dated July
29, 2004; and finding the same to be not contrary to law,
morals, good custom, and public policy, and pursuant to
Section 14, Rule VII of the Rules of Procedure of the National
Labor Relations Commission (NLRC), this case is hereby
ordered DISMISSED with prejudice, and
considered CLOSED and TERMINATED.

SO ORDERED.

Petitioners never moved for a reconsideration of this Order regarding the

voluntariness of their payment to Sonia, as well as the dismissal with
prejudice and the concomitant termination of the case.

However, petitioners argued that the finality of the case did not render the
petition for certiorari before the CA moot and academic. On this point,
we agree with petitioners.

In the landmark case of St. Martin Funeral Home v. NLRC,[20] we ruled

that judicial review of decisions of the NLRC is sought via a petition
for certiorari under Rule 65 of the Rules of Court, and the petition should
be filed before the CA, following the strict observance of the hierarchy of
courts. Under Rule 65, Section 4,[21] petitioners are allowed sixty (60)
days from notice of the assailed order or resolution within which to file
the petition. Thus, although the petition was not filed within the 10-day
period, petitioners reasonably filed their petition for certiorari before the
CA within the 60-day reglementary period under Rule 65.

Further, a petition for certiorari does not normally include an inquiry into
the correctness of its evaluation of the evidence. Errors of judgment, as
distinguished from errors of jurisdiction, are not within the province of a
special civil action for certiorari, which is merely confined to issues of
jurisdiction or grave abuse of discretion. It is, thus, incumbent upon
petitioners to satisfactorily establish that the NLRC acted capriciously
and whimsically in order that the extraordinary writ of certiorari will
lie. By grave abuse of discretion is meant such capricious and whimsical
exercise of judgment as is equivalent to lack of jurisdiction, and it must
be shown that the discretion was exercised arbitrarily or despotically.

The CA, therefore, could grant the petition for certiorari if it finds that
the NLRC, in its assailed decision or resolution, committed grave abuse
of discretion by capriciously, whimsically, or arbitrarily disregarding
evidence that is material to or decisive of the controversy; and it cannot
make this determination without looking into the evidence of the
parties. Necessarily, the appellate court can only evaluate the materiality
or significance of the evidence, which is alleged to have been
capriciously, whimsically, or arbitrarily disregarded by the NLRC, in
relation to all other evidence on record.[22] Notably, if the CA grants the
petition and nullifies the
decision or resolution of the NLRC on the ground of grave abuse of
discretion amounting to excess or lack of jurisdiction, the decision or
resolution of the NLRC is, in contemplation of law, null and void ab
initio; hence, the decision or resolution never became final and
executory.[23]

In the recent case Bago v. National Labor Relations Commission,[24] we

had occasion to rule that although the CA may review the decisions or
resolutions of the NLRC on jurisdictional and due process considerations,
particularly when the decisions or resolutions have already been executed,
this does not affect the statutory finality of the NLRC decisions or
resolutions in view of Rule VIII, Section 6 of the 2002 New Rules of
Procedure of the NLRC, viz.:

RULE VIII

xxxx

SECTION 6. EFFECT OF FILING OF PETITION FOR

CERTIORARI ON EXECUTION. A petition for certiorari with
the Court of Appeals or the Supreme Court shall not stay the
execution of the assailed decision unless a temporary
 restraining order is issued by the Court of Appeals or the
Supreme Court.[25]

Simply put, the execution of the final and executory decision or

resolution of the NLRC shall proceed despite the pendency of a petition
for certiorari, unless it is restrained by the proper court. In the present
case, petitioners already paid Villamaters widow, Sonia, the amount
of P3,649,800.00, representing the total and permanent disability award
plus attorneys fees, pursuant to the Writ of Execution issued by the Labor
Arbiter. Thereafter, an Order was issued declaring the case as closed and
terminated. However, although there was no motion for reconsideration
of this last Order, Sonia was, nonetheless, estopped from claiming that
the controversy had already reached its end with the issuance of the Order
closing and terminating the case. This is because the Acknowledgment
Receipt she signed when she received petitioners payment was without
prejudice to the final outcome of the petition for certiorari pending
before the CA.

Second. We also agree with petitioners in their position that the CA erred
in dismissing outright their petition for certiorari on the ground of
non-joinder of indispensable parties.It should be noted that petitioners
impleaded only the then deceased Villamater[26] as respondent to the
petition, excluding his heirs.

Rule 3, Section 7 of the Rules of Court defines indispensable

parties as those who are parties in interest without whom there can be no
final determination of an action.[27]They are those parties who possess
such an interest in the controversy that a final decree would necessarily
affect their rights, so that the courts cannot proceed without their
presence.[28] A party is indispensable if his interest in the subject matter of
the suit and in the relief
[29]
sought is inextricably intertwined with the other parties interest.

Unquestionably, Villamaters widow stands as an indispensable party to

this case.

Under Rule 3, Section 11 of the Rules of Court, neither misjoinder

nor non-joinder of parties is a ground for the dismissal of an action, thus:
 Sec. 11. Misjoinder and non-joinder of parties. Neither
misjoinder nor non-joinder of parties is ground for dismissal of
an action. Parties may be dropped or added by order of the
court on motion of any party or on its own initiative at any
stage of the action and on such terms as are just. Any claim
against a misjoined party may be severed and proceeded with
separately.

The proper remedy is to implead the indispensable party at any

stage of the action. The court, either motu proprio or upon the motion of a
party, may order the inclusion of the indispensable party or give the
plaintiff an opportunity to amend his complaint in order to include
indispensable parties. If the plaintiff ordered to include the indispensable
party refuses to comply with the order of the court, the complaint may be
dismissed upon motion of the defendant or upon the court's own motion.
Only upon unjustified failure or refusal to obey the order to include or to
amend is the action dismissed.[30]

On the merits of this case, the questions to be answered are: (1) Is

Villamater entitled to total and permanent disability benefits by reason of
his colon cancer? (2) If yes, would he also be entitled to attorneys fees?
As to Villamaters entitlement to total and permanent disability benefits,
petitioners argue, in essence, that colon cancer is not among the
occupational diseases listed under Section 32-A of the POEA Standard
Terms and Conditions Governing the Employment of Filipino Seafarers
On-Board Ocean Going Vessels (POEA Standard Contract), and that the
risk of contracting the same was not increased by Villamaters working
conditions during his deployment. Petitioners posit that Villamater had
familial history of colon cancer; and that, although dietary considerations
may be taken, his diet -- which might have been high in fat and low in
fiber and could have thus increased his predisposition to develop colon
cancer -- might only be attributed to him, because it was he who chose
what he ate on board the vessels he was assigned to. Petitioners also cited
the supposed declaration of their company-designated physicians who
attended to Villamater that his disease was not work-related.

We disagree.
It is true that under Section 32-A of the POEA Standard Contract, only
two types of cancers are listed as occupational diseases (1) Cancer of the
epithelial lining of the bladder (papilloma of the bladder); and (2) cancer,
epithellematous or ulceration of the skin or of the corneal surface of the
eye due to tar, pitch, bitumen, mineral oil or paraffin, or compound
products or residues of these substances. Section 20 of the same Contract
also states that those illnesses not listed under Section 32 are disputably
presumed as work-related. Section 20 should, however, be read together
with Section 32-A on the conditions to be satisfied for an illness to be
compensable,[31] to wit:

For an occupational disease and the resulting disability or

death to be compensable, all the following conditions must be
established:

1. The seafarers work must involve the risk described herein;

2. The disease was contracted as a result of the seafarers

exposure to the described risks;

3. The disease was contracted within a period of exposure and

under such other factors necessary to contract it;

4. There was no notorious negligence on the part of the

seafarer.

Colon cancer, also known as colorectal cancer or large bowel

cancer, includes cancerous growths in the colon, rectum and appendix.
With 655,000 deaths worldwide per year, it is the fifth most common
form of cancer in the United States of America and the third leading
cause of cancer-related deaths in the Western World. Colorectal cancers
arise from adenomatous polyps in the colon. These mushroom-shaped
growths are usually benign, but some develop into cancer over
time. Localized colon cancer is usually diagnosed through
colonoscopy.[32]
 Tumors of the colon and rectum are growths arising from the inner
wall of the large intestine. Benign tumors of the large intestine are called
polyps. Malignant tumors of the large intestine are called cancers. Benign
polyps can be easily removed during colonoscopy and are not
life-threatening. If benign polyps are not removed from the large intestine,
they can become malignant (cancerous) over time. Most of the cancers of
the large intestine are believed to have developed as polyps. Colorectal
cancer can invade and damage adjacent tissues and organs. Cancer cells
can also break away and spread to other parts of the body (such as liver
and lung) where new tumors form. The spread of colon cancer to distant
organs is called metastasis of the colon cancer. Once metastasis has
occurred in colorectal cancer, a complete cure of the cancer is unlikely.[33]

Globally, colorectal cancer is the third leading cause of cancer in

males and the fourth leading cause of cancer in females. The frequency of
colorectal cancer varies around the world. It is common in the Western
world and is rare in Asia and in Africa. In countries where the people
have adopted western diets, the incidence of colorectal cancer is
increasing.[34]

Factors that increase a persons risk of colorectal cancer include

high fat intake, a family history of colorectal cancer and polyps, the
presence of polyps in the large intestine, and chronic ulcerative colitis.[35]

Diets high in fat are believed to predispose humans to colorectal

cancer. In countries with high colorectal cancer rates, the fat intake by the
population is much higher than in countries with low cancer rates. It is
believed that the breakdown products of fat metabolism lead to the
formation of cancer-causing chemicals (carcinogens). Diets high in
vegetables and high-fiber foods may rid the bowel of these carcinogens
and help reduce the risk of cancer.[36]

A persons genetic background is an important factor in colon

cancer risk. Among first-degree relatives of colon-cancer patients, the
lifetime risk of developing colon cancer is 18%. Even though family
history of colon cancer is an important risk factor, majority (80%) of
colon cancers occur sporadically in patients with no family history of
it.Approximately 20% of cancers are associated with a family history of
colon cancer. And 5% of colon cancers are due to hereditary colon cancer
syndromes. Hereditary colon cancer syndromes are disorders where
affected family members have inherited cancer-causing genetic defects
from one or both of the parents.[37]
In the case of Villamater, it is manifest that the interplay of age,
hereditary, and dietary factors contributed to the development of colon
cancer. By the time he signed his employment contract on June 4, 2002,
he was already 58 years old, having been born on October 5, 1943, [38] an
age at which the incidence of colon cancer is more likely.[39]He had a
familial history of colon cancer, with a brother who succumbed to death
and an uncle who underwent surgery for the same illness.[40] Both the
Labor Arbiter and the NLRC found his illness to be compensable for
permanent and total disability, because they found that his dietary
provisions while at sea increased his risk of contracting colon cancer
because he had no choice of what to eat on board except those provided
on the vessels and these consisted mainly of high-fat, high-cholesterol,
and low-fiber foods.

While findings of the Labor Arbiter, which were affirmed by the

NLRC, are entitled to great weight and are binding upon the courts,
nonetheless, we find it also worthy to note that even during the
proceedings before the Labor Arbiter, Villamater cited that the foods
provided on board the vessels were mostly meat, high in fat and high in
cholesterol.On this matter, noticeably, petitioners were silent when they
argued that Villamaters affliction was brought about by diet and
genetics. It was only after the Labor Arbiter issued his Decision, finding
colon cancer to be compensable because the risk was increased by the
victuals provided on board, that petitioners started claiming that the foods
available on the vessels also consisted of fresh fruits and vegetables, not
to mention fish and poultry. It is also worth mentioning that while Dr.
Salvador declared that Villamaters cancer appears to be not work-related,
she nevertheless suggested to petitioners Disability Grade 1, which, under
the POEA Standard Contract, shall be considered or shall constitute total
and permanent disability.[41] During his confinement
in Hamburg, Germany, Villamater was diagnosed to have colon cancer
and was advised to undergo chemotherapy and medical treatment,
including blood transfusions. These findings were, in fact, confirmed by
the findings of the company-designated physicians. The statement of Dr.
Salvador that Villamaters colon cancer appears to be not work-related
remained at that, without any medical explanation to support the
same. However, this statement, not definitive as it is, was negated by the
same doctors suggestion of Disability Grade 1. Under Section 20-B of the
Philippine Overseas Employment Administration-Standard Employment
Contract (POEA-SEC), it is the company-designated physician who must
certify that the seafarer has suffered a permanent disability, whether total
or partial, due to either injury or illness, during the term of his
employment.[42]

On these points, we sustain the Labor Arbiter and the NLRC in

granting total and permanent disability benefits in favor of Villamater, as
it was sufficiently shown that his having contracted colon cancer was, at
the very least, aggravated by his working conditions,[43] taking into
consideration his dietary provisions on board, his age, and his job as
Chief Engineer, who was primarily in charge of the technical and
mechanical operations of the vessels to ensure voyage
safety. Jurisprudence provides that to establish compensability of a
non-occupational disease, reasonable proof of work-connection and not
direct causal relation is required. Probability, not the ultimate degree of
certainty, is the test of proof in compensation proceedings.[44]
The Labor Arbiter correctly awarded Villamater total and
permanent disability benefits, computed on the basis of the schedule
provided under the POEA Standard Contract, considering that the
schedule of payment of benefits under the ITF-JSU/AMOSUP CBA
refers only to permanent disability as a result of an accident or injury.[45]

By reason of Villamaters entitlement to total and permanent

disability benefits, he (or in this case his widow Sonia) is also entitled to
the award of attorneys fees, not under Article 2208(2) of the Civil Code,
[w]hen the defendants act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest, but
under Article 2208(8) of the same Code, involving actions for indemnity
under workmens compensation and employers liability laws.

WHEREFORE, the petition is DENIED and the assailed May 3, 2007

Decision and the July 23, 2007 Resolution of the Court of Appeals
are AFFIRMED. Costs against petitioners.
 SO ORDERED.

SOUTHEASTERN SHIPPING, G.R. No. 167678

SOUTHEASTERN SHIPPING
GROUP, LTD.,
Petitioners, Present:

CORONA, C.J., Chairperson,

VELASCO, JR.,
- versus - LEONARDO-DE CASTRO,
DEL CASTILLO, and
PEREZ, JJ.

FEDERICO U. NAVARRA, JR., Promulgated:

Respondent. June 22, 2010
x---------------------------------------------------------
----------x

DECISION

DEL CASTILLO, J.:

Money claims arising from employer-employee relations, including those

specified in the Standard Employment Contract for Seafarers, prescribe within
three years from the time the cause of action accrues.[1] However, for death
benefit claims to prosper, the seafarers death must have occurred during the
effectivity of said contract.

This Petition for Review assails the January 31, 2005 Decision[2] and the April
4, 2005 Resolution[3] of the Court of Appeals (CA) in CA-G.R. SP. No.
85584. The CA dismissed the petition for certiorari filed before it assailing the
May 7, 2003 Decision[4] of the National Labor Relations Commission (NLRC)
ordering petitioners to pay to Evelyn J. Navarra (Evelyn), the surviving spouse
of deceased Federico U. Navarra, Jr. (Federico), death compensation,
allowances of the three minor children, burial expenses plus 10% of the total
monetary awards as and for attorney's fees.
Factual Antecedents

Petitioner Southeastern Shipping, on behalf of its foreign principal, petitioner

Southeastern Shipping Group, Ltd., hired Federico to work on board the vessel
"George McLeod." Federico signed 10 successive separate employment
contracts of varying durations covering the period from October 5, 1995 to
March 30, 1998. His latest contract was approved by the Philippine Overseas
Employment Administration (POEA) on January 21, 1998 for 56 days
extendible for another 56 days. He worked as roustabout during the first
contract and as a motorman during the succeeding contracts.

On March 6, 1998, Federico, while on board the vessel, complained of having

a sore throat and on and off fever with chills. He also developed a soft mass on
the left side of his neck. He was given medication.

On March 30, 1998, Federico arrived back in the Philippines. On April 21,
1998 the specimen excised from his neck lymph node was found negative for
malignancy.[5] On June 4, 1998, he was diagnosed at the Philippine General
Hospital to be suffering from a form of cancer called Hodgkin's Lymphoma,
Nodular Sclerosing Type (also known as Hodgkin's Disease). This diagnosis
was confirmed in another test conducted at the Medical Center Manila on June
8, 1998.

On September 6, 1999, Federico filed a complaint against petitioners with the

arbitration branch of the NLRC claiming entitlement to disability benefits, loss
of earning capacity, moral and exemplary damages, and attorney's fees.

During the pendency of the case, on April 29, 2000, Federico died. His widow,
Evelyn, substituted him as party complainant on her own behalf and in behalf
of their three children. The claim for disability benefits was then converted into
a claim for death benefits.

Ruling of the Labor Arbiter

On May 10, 2000, Labor Arbiter Ermita T. Abrasaldo-Cuyuca rendered a

Decision dismissing the complaint on the ground that "Hodgkin's Lymphoma
is not one of the occupational or compensable diseases or the exact cause is not
known," the dispositive portion of which states:

WHEREFORE, premises considered judgment is hereby rendered

dismissing the complaint for lack of merit.

SO ORDERED.[6]

Evelyn appealed the Decision to the NLRC.

Ruling of the NLRC

On May 7, 2003, the NLRC rendered a Decision reversing that of the Labor
Arbiter, the dispositive portion of which provides:

WHEREFORE, the appealed decision is REVERSED and SET

ASIDE. Judgment is hereby rendered ordering the respondents
Southeastern Shipping/Southeastern Shipping Group Ltd. jointly
and severally, to pay complainant Evelyn J. Navarra the following:

Death compensation - US$ 50,000.00

Minor child allowance
(3 x US$ 7,000) - 21,000.00
Burial expense - 1,000.00
Total US$ 72,000.00

Plus 10% of the total monetary awards as and for attorney's

fees.

SO ORDERED.[7]

Petitioners filed a Motion for Reconsideration which was denied by the

NLRC. They, thus, filed a petition for certiorari with the CA.
Ruling of the Court of Appeals

The CA found that the claim for benefits had not yet prescribed despite the
complaint being filed more than one year after Federico's return to the
Philippines. It also found that although Federico died 17 months after his
contract had expired, his heirs could still claim death benefits because the cause
of his death was the same illness for which he was repatriated. The dispositive
portion of the CA Decision states:

WHEREFORE, premises considered, petition is hereby

DISMISSED for lack of merit and the May 7, 2003 Decision of the
National Labor Relations Commission is hereby AFFIRMED en
toto.

SO ORDERED.[8]

After the denial by the CA of their motion for reconsideration, petitioners filed
the present petition for review.

Issues

Petitioners raise the following issues:

I
THE HON. COURT OF APPEALS ERRED IN RULING THAT
PRESCRIPTION DOES NOT APPLY DESPITE THE LATE
FILING OF THE COMPLAINT OF THE RESPONDENT
FEDERICO U. NAVARRA, JR.

II
THE HONORABLE COURT OF APPEALS ERRED IN
RULING THAT HODGKIN'S DISEASE IS A COMPENSABLE
ILLNESS.

III
THE HON. COURT OF APPEALS ERRED IN ITS
CONCLUSION THAT PETITIONERS ARE LIABLE FOR THE
DEATH OF THE RESPONDENT AS SUCH DEATH WAS
DURING THE TERM OF HIS EMPLOYMENT CONTRACT.[9]

Petitioners' Arguments
Petitioners contend that the factual findings of the CA were not supported by
sufficient evidence. They argue that as can be seen from the medical report of
Dr. Salim Marangat Paul, Federico suffered from and was treated for Acute
Respiratory Tract Infection, not Hodgkin's Disease, during his employment in
March 1998. They further contend that Federico returned to the Philippines on
March 30, 1998 because he had already finished his contract, not because he
had to undergo further medical treatment.

They also insist that the complaint has already prescribed. Despite having been
diagnosed on June 4, 1998 of Hodgkin's Disease, the complaint was filed only
on September 6, 1999, one year and five months after Federico arrived in
Manila from Qatar.

They also posit that respondents are not entitled to the benefits claimed because
Federico did not die during the term of his contract and the cause of his death
was not contracted by him during the term of his contract.

Respondents' Arguments

Respondents on the other hand contend that the complaint has not prescribed
and that the prescriptive period for filing seafarer claims is three years from the
time the cause of action accrued. They claim that in case of conflict between
the law and the POEA Contract, it is the law that prevails.

Respondents also submit that Federico contracted on board the vessel the
illness which later caused his death, hence it is compensable.

Our Ruling

The petition is partly meritorious.

Prescription

The employment contract signed by Federico stated that "the same shall be
deemed an integral part of the Standard Employment Contract for Seafarers,"
Section 28 of which states:

SECTION 28. JURISDICTION

 The Philippine Overseas Employment Administration (POEA) or
the National Labor Relations Commission (NLRC) shall have
original and exclusive jurisdiction over any and all disputes or
controversies arising out of or by virtue of this Contract.

Recognizing the peculiar nature of overseas shipboard employment,

the employer and the seafarer agree that all claims arising from this
contract shall be made within one (1) year from the date of the
seafarer's return to the point of hire.

On the other hand, the Labor Code states:

Art. 291. Money claims.-All money claims arising from

employer-employee relations during the effectivity of this Code
shall be filed within three (3) years from the time the cause of action
accrued; otherwise they shall forever be barred.

The Constitution affirms labor as a primary social economic force.[10] Along

this vein, the State vowed to afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all.[11]

"The employment of seafarers, including claims for death benefits, is governed

by the contracts they sign every time they are hired or rehired; and as long as
the stipulations therein are not contrary to law, morals, public order or public
policy, they have the force of law between the parties."[12]

In Cadalin v. POEA's Administrator,[13] we held that Article 291 of the Labor

Code covers all money claims from employer-employee relationship. It is not
limited to money claims recoverable under the Labor Code, but applies
also to claims of overseas contract workers.[14]

Based on the foregoing, it is therefore clear that Article 291 is the law
governing the prescription of money claims of seafarers, a class of overseas
contract workers. This law prevails over Section 28 of the Standard
Employment Contract for Seafarers which provides for claims to be brought
only within one year from the date of the seafarers return to the point of
hire. Thus, for the guidance of all, Section 28 of the Standard Employment
Contract for Seafarers, insofar as it limits the prescriptive period within which
the seafarers may file their money claims, is hereby declared null and void. The
applicable provision is Article 291 of the Labor Code, it being more favorable
to the seafarers and more in accord with the States declared policy to afford full
protection to labor. The prescriptive period in the present case is thus three
years from the time the cause of action accrues.

In the present case, there is no exact showing of when the cause of action
accrued. Nevertheless, it could not have accrued earlier than January 21, 1998
which is the date of his last contract.Hence, the claim has not yet prescribed,
since the complaint was filed with the arbitration branch of the NLRC on
September 6, 1999.

Compensability and Liability

In petitions for review on certiorari, only questions of law may be raised, the
only exceptions being when the factual findings of the appellate court are
erroneous, absurd, speculative, conjectural, conflicting, or contrary to the
findings culled by the court of origin. Considering the conflicting findings of
the NLRC, the CA and the Labor Arbiter, we are impelled to resolve the
factual issues in this case along with the legal ones.[15]

Section 20 of the Standard Terms and Conditions Governing the Employment

of Filipino Seafarers On-Board Ocean-Going Vessels states:

A. COMPENSATION AND BENEFITS FOR DEATH

1. In case of death of the seafarer during the term of his

contact, the employer shall pay his beneficiaries the
Philippine currency equivalent to the amount of Fifty
Thousand US Dollars (US$50,000) and an additional
amount of Seven Thousand US Dollars (US$7,000)
to each child under the age of twenty-one (21) but not
exceeding four children, at the exchange rate
 prevailing during the time of payment. (Emphasis
supplied)

Thus, as we declared in Gau Sheng Phils., Inc. v. Joaquin, Hermogenes v.

Oseo Shipping Services, Inc., Prudential Shipping and Management
Corporation v. Sta. Rita, Klaveness Maritime Agency, Inc. v. Beneficiaries of
Allas, in order to avail of death benefits, the death of the employee should
occur during the effectivity of the employment contract.[16] For emphasis, we
reiterate that the death of a seaman during the term of employment makes the
employer liable to his heirs for death compensation benefits, but if the seaman
dies after the termination of his contract of employment, his beneficiaries are
not entitled to the death benefits.[17] Federico did not die while he was under the
employ of petitioners. His contract of employment ceased when he arrived in
the Philippines on March 30, 1998, whereas he died on April 29, 2000. Thus,
his beneficiaries are not entitled to the death benefits under the Standard
Employment Contract for Seafarers.

Moreover, there is no showing that the cancer was brought about by Federico's
stint on board petitioners' vessel. The records show that he got sick a month
after he boarded M/V George Mcleod. He was then brought to a doctor who
diagnosed him to have acute respiratory tract infection. It was only on June 6,
1998, more than two months after his contract with petitioners had expired, that
he was diagnosed to have Hodgkin's Disease. There is no proof and we are not
convinced that his exposure to the motor fumes of the vessel, as alleged by
Federico, caused or aggravated his Hodgkin's Disease.

While the Court adheres to the principle of liberality in favor of the seafarer in
construing the Standard Employment Contract, we cannot allow claims for
compensation based on surmises. When the evidence presented negates
compensability, we have no choice but to deny the claim, lest we cause
injustice to the employer.

The law in protecting the rights of the employees, authorizes neither oppression
nor self-destruction of the employer there may be cases where the
circumstances warrant favoring labor over the interests of management but
never should the scale be so tilted as to result in an injustice to the employer.[18]
WHEREFORE, the petition is PARTLY GRANTED. The January 31, 2005
Decision of the Court of Appeals in CA-G.R. SP No. 85584 holding that the
claim for death benefits has not yet prescribed
is AFFIRMED with MODIFICATION that petitioners are not liable to pay
to respondents death compensation benefits for lack of showing that Federicos
disease was brought about by his stint on board petitioners vessels and also
considering that his death occurred after the effectivity of his contract.

SO ORDERED.

LOURDES D. RIVERA, G.R. No. 160315

Petitioner,

Present:
PUNO, J., Chairman,
- versus - AUSTRIA-MARTINEZ,
CALLEJO, SR.,
TINGA, and
CHICO-NAZARIO,* JJ.
WALLEM MARITIME
SERVICES, INC., and WALLEM Promulgated:
SHIPMANAGEMENT, LTD.,
Respondents. November 11, 2005
x--------------------------------------------------
x
DECISION

CALLEJO, SR., 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 (CA)
dated April 23, 2003, in CA-G.R. SP No. 71807, as well as the
Resolution[2] dated October 8, 2003 denying the motion for
reconsideration thereof.

The antecedents are as follows:

 Spouses Rodolfo and Lourdes Rivera were residents of
Meycauayan, Bulacan. Rodolfo had been working as a seaman since 1989,
and had been repeatedly hired by Wallem Maritime Services, Inc. with
Wallem Shipmanagement Ltd., as principal.

On January 25, 1997, Rodolfo signed a Contract of

Employment[3] as messman on board the Crown Jade with a basic
monthly salary of US$390.00 on a 44-hour work week, and guaranteed
monthly overtime pay of US$217 for 85 hours. As required by the
contract, Rodolfo was subjected to a pre-employment medical
examination[4] where he was declared fit to work. He joined the crew of
Crown Jade on February 3, 1997 for a nine-month voyage.

Before the expiration of his contract and prior to disembarkation,

Rodolfo thrice sought medical attention for various complaints: on March
4, 1997, for swelling on the left ankle at the port of Santa Marta; [5] on
August 3, 1997, for rashes on the right calf at the port of Gothenburg
where he was declared unfit to work and was advised bed rest for three to
five days;[6] and on November 17, 1997, also at the port of Gothenburg,
for testicular pain on right side, where he was again advised to rest for
three to four days.[7] He signed off from the vessel on November 19,
1997.

On December 5, 1997, Rodolfo claimed his leave pay and one day
travel allowance from Wallem Shipping.[8]

On December 24, 1997, Rodolfo, having suffered some weakness,

was brought to the University of Santo Tomas Hospital.

In a Letter[9] dated January 13, 1998, Lourdes informed Wallem

Shipping that her husband was confined and was suffering from end-stage
renal disease 2nd degree Tubulo-interstitial nephritis. She then requested
for assistance in claiming her husbands retirement pay. Accordingly,
Rodolfos benefits amounting to US$371.80 were released.[10]

In January 1998, Lourdes filed a grievance complaint against

Wallem Shipping for non-payment of disability benefits before the
Associated Marine Officers and Seamens Union of the
Philippines-PTGWO-ITF. The parties did not reach a settlement, and the
complaint was declared a deadlock on January 28, 1998.[11]

Rodolfo eventually succumbed to congestive heart failure

secondary to chronic renal disease and died on April 28, 1999.[12]

On July 26, 1999, Lourdes filed a claim for death benefits, burial
assistance, moral and exemplary damages, as well as attorneys fees
before the National Labor Relations Commission (NLRC). The case was
docketed as NLRC-NCR Case No. OFW (M)99-07-1152.[13]

Lourdes alleged that her husband had served the respondents in

separate and successive contracts for more than eight years. He was,
likewise, a messman for many years, and often helped in cooking
different styles of food. The complainant surmised that the spicy
ingredients and other food garnishes to which her husband as a Filipino
was unaccustomed to, along with his continuous exposure to heat,
humidity, smoke, fumes and physical exhaustion contributed to the illness
that caused his death. She pointed out that her husbands illness was
acknowledged by the respondents as shown in the Masters Report.[14] She
insisted that the respondents did not bother to extend medical and
financial assistance to her husband, because of which the latter failed to
comply with the physicians advice to undergo several laboratory tests.
The familys finances were completely depleted and she could no longer
borrow money to defray the mounting medical hospitalization expenses,
so she was forced to bring her husband home.

According to Lourdes, despite her repeated pleas for the release of

her husbands compensation, the respondents refused to give any form of
financial aid. She prayed that judgment be rendered in her favor awarding
death compensation benefits of US$50,000.00 and US$7,000.00 for her
minor child, Ryan Louie; US$1,000.00 as burial assistance; P500,000.00
as moral damages; P250,000.00 as exemplary damages; and attorneys
fees equivalent to 10% of the judgment award.[15]

For their part, the respondents alleged that the complaint stated no
cause of action. They pointed out that in response to the
complainants pro-forma Complaint dated July 19, 1999, they filed a
Motion for Bill of Particulars, to which the complainant failed to respond,
much less appear at the scheduled hearings of the case. When she
appeared on October 13, 1999, she manifested that the parties be required
to simultaneously file their respective position papers.

On December 11, 2000, the Labor Arbiter dismissed the complaint

for lack of merit and want of basis. The Labor Arbiter ruled that the
complainant was not entitled to death benefits or burial expenses,
considering that her husband died more than one year after he arrived in
the Philippines. The Labor Arbiter also took note that Rodolfo was never
confined or advised shore treatment during the course of his employment,
but was merely directed to rest for three to five days. Moreover, Rodolfo
failed to comply with the mandatory reporting requirement under Section
20(B) of the Standard Terms and Conditions Governing the Employment
of Filipino Seafarers On-Board Ocean-Going Vessels.

Lourdes appealed the matter to the NLRC, which, after due

proceedings, reversed the decision of the Labor Arbiter.[16] According to
the NLRC, Wallem Shipping could not be faulted for not extending the
necessary medical examination upon disembarkation because, in the first
place, the deceased failed to comply with what was required of him under
the contract, i.e., to submit himself to medical check-up within 72 hours
upon arrival. However, this was not a bar for Lourdes to claim death
benefits due her on account of her husbands death. Citing Wallem
Maritime Services, Inc. v. National Labor Relations Commission,[17] the
NLRC ruled that it is not required that employment be the sole factor in
the acceleration of the illness as to entitle the claimant to death benefits.
The dispositive portion of the decision reads:

WHEREFORE, the decision appealed from is REVERSED and

SET ASIDE and a new one ENTERED ordering the respondents,
jointly and severally, to pay the complainant the following:

1. Death compensation Benefits

For complainant US$50,000.00

For Ryan Rivera 7,000.00
(minor child)

2. Burial assistance 1,000.00

3. Attorneys fees equivalent

to 10% of the total monetary
awards

SO ORDERED.[18]

Unsatisfied, Wallem Shipping elevated the matter to the CA.

According to the appellate court, there was no basis to grant

Lourdes claim for disability benefits because her husband was repatriated
not because he was ill but because his contract had been completed. It
stressed that Rodolfo failed to comply with the reporting requirement
under paragraph 3, Section 20(B). Moreover, the medical certificate
relied upon by the NLRC did not sufficiently prove that Rodolfos illness
was work-related.[19] Thus, the CA ruled

WHEREFORE, premises considered, the Petition is

hereby GRANTED. The assailed decision and resolution of the NLRC
are hereby SET ASIDE and the decision of the Labor Arbiter
is REINSTATED dismissing the complaint.

SO ORDERED.[20]
The petitioner now comes before the Court on the following sole
issue:
 Whether the petitioner is entitled to claim the death benefits
under the POEA Contract which arose from the death of seafarer
Rodolfo Rivera and what amount of evidence is required from the
petitioner to prove her entitlement thereto.[21]

According to the petitioner, the CA decided factual questions of

substance not in accord with the law and settled jurisprudence. She points
out that her deceased husband died of congestive heart failure with
chronic renal disease as the underlying cause. He could not have acquired
the illness elsewhere since he was diagnosed with end-stage renal disease
a month after he returned to the Philippines. The petitioner further points
out that her husband had been employed by the respondents from 1989 to
1997. She insists that there is a medical connection between the
infirmities which the deceased seaman previously suffered while he was
on board and the very cause of his death. While Rodolfo died after the
employment contract had
already expired, the signs and symptoms of the disease which ultimately
led to his death were already present at the time he was still under the
respondents employ. The petitioner insists that it has been clearly
established that her husband died of a work-related disease.

Citing Wallem Maritime Services Inc. v. NLRC,[22] the petitioner

claims that, like her husband, the seafarer therein died after the term of
his employment contract, but the Court granted the benefits being
recovered notwithstanding the argument of the employers that such death
occurred after the expiration of the contract. The petitioner further insists
that she is entitled to attorneys fees under Article 2208 of the Civil Code
of the Philippines, considering that the respondents act or omission
compelled her to incur expenses to enforce her lawful claims.

For their part, the respondents claim that the instant petition
involves a pure question of fact, outside the scope of Rule 45 of the Rules
of Court. Moreover, the findings of facts of the Labor Arbiter and the CA
are supported by evidence sufficient to justify the decision. The
respondents also point out that the petitioner received a copy of the CA
Decision on May 13, 2003, and filed the Motion for Reconsideration only
on May 29, 2003; thus, the requisite motion for reconsideration initiated
by the petitioner before the CA was filed out of time (one day late).
Consequently, the instant petition for review was, likewise, filed out of
time.

The respondents also claim that the validity, legality and

applicability of the POEA standard employment contract has been upheld
by this Court, and under Article 1315 of the Civil Code, the contract is
the law between the parties.

The respondents also point out that the deceased seafarer died more
than one year after the termination of the employment contract. They
allege that death benefits claims will only prosper if the seafarer died
during the term of the contract. Assuming that the instant claim had been
anchored on a disability or ailment acquired during the term of the
contract, the ailing seaman is still required to report for a medical
check-up within three working days from the date of arrival, otherwise,
benefits under the POEA standard employment contract would be
nullified. The respondents point out that in this case, the deceased seaman
failed to report within the said period. Thus, the respondents pray that the
instant petition for review be dismissed for utter lack of merit and for
being filed out of time.

The petitioner counters that, contrary to the respondents

contentions, the Court has the power to review findings of facts under
certain exceptions. In this case, it is very clear that the decision appealed
from was based on a misapprehension of facts and that the conclusion
arrived at by the appellate court was manifestly mistaken and impossible.
The petitioner admits that the diagnosis was made a month after the
contract ended, but insists that her husband could not have acquired the
disease in only one month. The primary consideration in this case should
be the chain of events and not the strict wordings of the contract. To
support her contention, the petitioner cites Wallem Maritime Services, Inc.
v. NLRC,[23] where the Court held that the POEA standard employment
contract was designed primarily for the protection and benefit of the
Filipino seamen; as such, its provisions must be construed and applied
fairly for the benefit of seamen and their dependents.

The petition must fail.

The applicable provision in the Standard Terms and Conditions

Governing the Employment of Filipino Seafarers On-Board Ocean-Going
Vessel is not Section 20(A)[24]on compensation and benefits for death, but
Section 20(B)3, to wit:

B. COMPENSATION AND BENEFITS FOR INJURY OR

ILLNESS:

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.

In this case, it is not disputed that Rodolfo failed to submit himself

to the mandatory post-employment medical examination. The respondent
manning agency found out about his confinement only through the
petitioner, who asked for assistance in claiming her husbands retirement
benefits. Indeed, while compliance with the reporting requirement under
the Standard Employment Contract can be dispensed with, there must
likewise be basis for the award of death compensation. Without a
post-medical examination or its equivalent to show that the disease for
which the seaman died was contracted during his employment or that his
working conditions increased the risk of contracting the ailment, the
respondents cannot be made liable for death compensation. Thus, in the
absence of substantial evidence, working conditions cannot be presumed
to have increased the risk of contracting the disease, in this case, chronic
renal failure.

In fact, in Mabuhay Shipping Services, Inc. v. NLRC,[25] the Court

held that the death of a seaman even during the term of employment does
not automatically give rise to compensation. The circumstances which led
to the
death as well as the provisions of the contract, and the right and
obligation of the employer and the seaman must be taken into
consideration, in consonance with the due process and equal protection
clauses of the Constitution.[26]

The case of Wallem v. NLRC[27] is not applicable here. In that case,

the deceased seaman was signed-off from the vessel two months from the
expiration of the employment contract and was already seriously ill when
discharged from the vessel. The Court held that the deceased seaman in
that case failed to comply with the 72-hour reporting requirement under
the POEA Standard Employment Contract since he was already
physically incapacitated to do so. In this case, the deceased was not
similarly physically incapacitated. In fact, the records show that Rodolfo
himself claimed his leave pay and one-day travel allowance on December
5, 1997.[28] While strict rules of evidence are not applicable in claims for
compensation and disability benefits,[29] the Court cannot altogether
disregard the provisions of the Standard Employment Contract.

In German Marine Agencies, Inc. v. NLRC,[30] the Court resolved

the issue of whether the physician, who makes the pronouncement as to
the existence and grade of the seafarers disability, should be POEA
accredited. The Courts discussion therein is quite instructive:

In order to claim disability benefits under the Standard

Employment Contract, it is the company-designated physician who
must proclaim that the seaman suffered a permanent disability,
whether total or partial, due to either injury or illness, during the term
 of the latters employment. There is no provision requiring
accreditation by the POEA of such physician. In fact, aside from their
own gratuitous allegations, petitioners are unable to cite a single
provision in the said contract in support of their assertions or to offer
any credible evidence to substantiate their claim. If accreditation of
the company-designated physician was contemplated by the POEA, it
would have expressly provided for such a qualification, by
specifically using the term accreditation in the Standard Employment
Contract, to denote its intention. For instance, under the Labor Code,
it is expressly provided that physicians and hospitals providing
medical care to an injured or sick employee covered by the Social
Security System or the Government Service Insurance System must
be accredited by the Employees Compensation Commission. It is a
cardinal rule in the interpretation of contracts that if the terms of a
contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulation shall control.
There is no ambiguity in the wording of the Standard Employment
Contract the only qualification prescribed for the physician entrusted
with the task of assessing the seamans disability is that he be
company-designated. When the language of the contract is explicit, as
in the case at bar, leaving no doubt as to the intention of the drafters
thereof, the courts may not read into it any other intention that would
contradict its plain import.[31]

The Court agrees with the following pronouncement of the CA in

its decision:

Based on the foregoing, the Court does not find any basis to
grant private respondents claim for disability benefits. Rivera was
repatriated after the completion of his contract and not because he was
ill. The procedure provided for under Paragraph 3, Section 20(B) was
not also complied with. Moreover, the Medical Certificate submitted
by private respondent does not sufficiently prove Riveras sickness was
work-related. As such, the NLRC gravely abused its discretion when it
reversed the findings of the Labor Arbiter.[32]

IN LIGHT OF ALL THE FOREGOING, the instant petition

is DENIED for lack of merit. The assailed Decision and Resolution of
the Court of Appeals in CA-G.R. SP No. 71807 are AFFIRMED.

SO ORDERED.
ATCI OVERSEAS G.R. No. 178551
CORPORATION, AMALIA
G. IKDAL and MINISTRY Present:
OF PUBLIC
HEALTH-KUWAIT CARPIO MORALES, Chairperson, J.,
Petitioners, BRION,
BERSAMIN,
VILLARAMA, JR., and
- versus - SERENO, JJ.

Promulgated:
October 11, 2010
MA. JOSEFA ECHIN,
Respondent.

x--------------------------------------------------
-x

DECISION

CARPIO MORALES, J.:

Josefina Echin (respondent) was hired by petitioner ATCI

Overseas Corporation in behalf of its principal-co-petitioner, the Ministry
of Public Health of Kuwait (the Ministry), for the position of medical
technologist under a two-year contract, denominated as a Memorandum
of Agreement (MOA), with a monthly salary of US$1,200.00.

Under the MOA,[1] all newly-hired employees undergo a

probationary period of one (1) year and are covered by Kuwaits Civil
Service Board Employment Contract No. 2.

Respondent was deployed on February 17, 2000 but was

terminated from employment on February 11, 2001, she not having
allegedly passed the probationary period.
 As the Ministry denied respondents request for reconsideration, she
returned to the Philippines on March 17, 2001, shouldering her own air
fare.

On July 27, 2001, respondent filed with the National Labor

Relations Commission (NLRC) a complaint[2] for illegal dismissal against
petitioner ATCI as the local recruitment agency, represented by petitioner,
Amalia Ikdal (Ikdal), and the Ministry, as the foreign principal.

By Decision[3] of November 29, 2002, the Labor Arbiter, finding

that petitioners neither showed that there was just cause to warrant
respondents dismissal nor that she failed to qualify as a regular employee,
held that respondent was illegally dismissed and accordingly
ordered petitioners to pay her US$3,600.00, representing her salary for
the three months unexpired portion of her contract.

On appeal of petitioners ATCI and Ikdal, the NLRC affirmed the

Labor Arbiters decision by Resolution[4] of January 26, 2004. Petitioners
motion for reconsideration having been denied by Resolution[5] of April
22, 2004, they appealed to the Court of Appeals, contending that their
principal, the Ministry, being a foreign government agency, is immune
from suit and, as such, the immunity extended to them; and that
respondent was validly dismissed for her failure to meet the performance
rating within the one-year period as required under Kuwaits Civil Service
Laws. Petitioners further contended that Ikdal should not be liable as an
officer of petitioner ATCI.

By Decision[6] of March 30, 2007, the appellate court affirmed the

NLRC Resolution.

In brushing aside petitioners contention that they only acted as

agent of the Ministry and that they cannot be held jointly and solidarily
liable with it, the appellate court noted that under the law, a
private employment agency shall assume all responsibilities for the
implementation of the contract of employment of an overseas worker,
hence, it can be sued jointly and severally with the foreign principal for
any violation of the recruitment agreement or contract of employment.
 As to Ikdals liability, the appellate court held that under Sec. 10 of
Republic Act No. 8042, the Migrant and Overseas Filipinos Act of 1995,
corporate officers, directors and partners of a recruitment agency may
themselves be jointly and solidarily liable with the recruitment agency for
money claims and damages awarded to overseas workers.

Petitioners motion for reconsideration having been denied by the

appellate court by Resolution[7] of June 27, 2007, the present petition for
review on certiorari was filed.

Petitioners maintain that they should not be held liable because

respondents employment contract specifically stipulates that her
employment shall be governed by the Civil Service Law and Regulations
of Kuwait. They thus conclude that it was patent error for the labor
tribunals and the appellate court to apply the Labor Code provisions
governing probationary employment in deciding the present case.

Further, petitioners argue that even the Philippine Overseas

Employment Act (POEA) Rules relative to master employment contracts
(Part III, Sec. 2 of the POEA Rules and Regulations) accord respect to the
customs, practices, company policies and labor laws and legislation of the
host country.

Finally, petitioners posit that assuming arguendo that Philippine

labor laws are applicable, given that the foreign principal is a government
agency which is immune from suit, as in fact it did not sign any document
agreeing to be held jointly and solidarily liable, petitioner ATCI cannot
likewise be held liable, more so since the Ministrys liability had not been
judicially determined as jurisdiction was not acquired over it.

The petition fails.

Petitioner ATCI, as a private recruitment agency, cannot evade

responsibility for the money claims of Overseas Filipino workers (OFWs)
which it deploys abroad by the mere expediency of claiming that its
foreign principal is a government agency clothed with immunity from suit,
or that such foreign principals liability must first be established before it,
as agent, can be held jointly and solidarily liable.
 In providing for the joint and solidary liability of private
recruitment agencies with their foreign principals, Republic Act No. 8042
precisely affords the OFWs with a recourse and assures them of
immediate and sufficient payment of what is due them. Skippers United
Pacific v. Maguad[8] explains:

. . . [T]he obligations covenanted in the recruitment

agreement entered into by and between the local agent and
its foreign principal are not coterminous with the term of
such agreement so that if either or both of the parties decide
to end the agreement, the responsibilities of such parties
towards the contracted employees under the agreement do not
at all end, but the same extends up to and until the expiration
of the employment contracts of the employees recruited and
employed pursuant to the said recruitment
agreement. Otherwise, this will render nugatory the very
purpose for which the law governing the employment of
workers for foreign jobs abroad was enacted. (emphasis
supplied)

The imposition of joint and solidary liability is in line with the policy of
the state to protect and alleviate the plight of the working class.[9] Verily,
to allow petitioners to simply invoke the immunity from suit of its foreign
principal or to wait for the judicial determination of the foreign principals
liability before petitioner can be held liable renders the law on joint and
solidary liability inutile.

As to petitioners contentions that Philippine labor laws on probationary

employment are not applicable since it was expressly provided in
respondents employment contract, which she voluntarily entered into, that
the terms of her engagement shall be governed by prevailing Kuwaiti
Civil Service Laws and Regulations as in fact POEA Rules accord respect
to such rules, customs and practices of the host country, the same was not
substantiated.

Indeed, a contract freely entered into is considered the law between

the parties who can establish stipulations, clauses, terms and conditions as
they may deem convenient, including the laws which they wish to govern
their respective obligations, as long as they are not contrary to law,
morals, good customs, public order or public policy.

It is hornbook principle, however, that the party invoking the

application of a foreign law has the burden of proving the law, under the
doctrine of processual presumptionwhich, in this case, petitioners failed
to discharge. The Courts ruling in EDI-Staffbuilders Intl., v.
NLRC[10] illuminates:

In the present case, the employment contract signed by Gran

specifically states that Saudi Labor Laws will govern
matters not provided for in the contract (e.g. specific causes
for termination, termination procedures, etc.). Being the law
intended by the parties (lex loci intentiones) to apply to the
contract, Saudi Labor Laws should govern all matters relating
to the termination of the employment of Gran.

In international law, the party who wants to have a foreign

law applied to a dispute or case has the burden of proving
the foreign law. The foreign law is treated as a question of
fact to be properly pleaded and proved as the judge or
labor arbiter cannot take judicial notice of a foreign
law. He is presumed to know only domestic or forum law.

Unfortunately for petitioner, it did not prove the pertinent

Saudi laws on the matter; thus, the International Law
doctrine of presumed-identity approach or processual
presumptioncomes into play. Where a foreign law is not
pleaded or, even if pleaded, is not proved, the presumption
is that foreign law is the same as ours. Thus, we apply
Philippine labor laws in determining the issues presented
before us. (emphasis and underscoring supplied)

The Philippines does not take judicial notice of foreign laws,

hence, they must not only be alleged; they must be proven. To prove a
foreign law, the party invoking it must present a copy thereof and comply
with Sections 24 and 25 of Rule 132 of the Revised Rules of Court which
reads:
 SEC. 24. Proof of official record. The record of public
documents referred to in paragraph (a) of Section 19, when
admissible for any purpose, may be evidenced by an official
publication thereof or by a copy attested by the officer having
the legal custody of the record, or by his deputy, and
accompanied, if the record is not kept in the Philippines, with a
certificate that such officer has the custody. If the office in
which the record is kept is in a foreign country, the
certificate may be made by a secretary of the embassy or
legation, consul general, consul, vice consul, or consular
agent or by any officer in the foreign service of the
Philippines stationed in the foreign country in which the
record is kept, and authenticated by the seal of his
office. (emphasis supplied)

SEC. 25. What attestation of copy must state. Whenever

a copy of a document or record is attested for the purpose of
the evidence, the attestation must state, in substance, that the
copy is a correct copy of the original, or a specific part thereof,
as the case may be. The attestation must be under the official
seal of the attesting officer, if there be any, or if he be the clerk
of a court having a seal, under the seal of such court.

To prove the Kuwaiti law, petitioners submitted the

following: MOA between respondent and the Ministry, as represented by
ATCI, which provides that the employee is subject to a probationary
period of one (1) year and that the host countrys Civil Service Laws and
Regulations apply; a translated copy[11] (Arabic to English) of the
termination letter to respondent stating that she did not pass the probation
terms, without specifying the grounds therefor, and a translated copy of
the certificate of termination,[12] both of which documents were certified
by Mr. Mustapha Alawi, Head of the Department of Foreign
Affairs-Office of Consular Affairs Inslamic Certification and Translation
Unit; and respondents letter[13] of reconsideration to the Ministry, wherein
she noted that in her first eight (8) months of employment, she was given
a rating of Excellent albeit it changed due to changes in her shift of work
schedule.

These documents, whether taken singly or as a whole, do not

sufficiently prove that respondent was validly terminated as a
probationary employee under Kuwaiti civil service laws. Instead of
submitting a copy of the pertinent Kuwaiti labor laws duly
authenticated and translated by Embassy officials thereat, as
required under the Rules, what petitioners submitted were mere
certifications attesting only to the correctness of the translations of
the MOA and the termination letter which does not prove at all that
Kuwaiti civil service laws differ from Philippine laws and that under
such Kuwaiti laws, respondent was validly terminated. Thus the
subject certifications read:

xxxx

This is to certify that the herein attached translation/s from

Arabic to English/Tagalog and or vice versa was/were
presented to this Office for review and certification and the
same was/were found to be in order. This Office, however,
assumes no responsibility as to the contents of the
document/s.

This certification is being issued upon request of the interested

party for whatever legal purpose it may serve. (emphasis
supplied)

Respecting Ikdals joint and solidary liability as a corporate officer,

the same is in order too following the express provision of R.A. 8042 on
money claims, viz:

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.
The liability of the principal/employer and the
recruitment/placement agency for any and all claims under this
section shall be joint and several. This provision shall be
incorporated in the contract for overseas employment and shall
be a condition precedent for its approval. The performance
bond to be filed by the recruitment/placement agency, as
provided by law, shall be answerable for all money claims or
damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the
corporate officers and directors and partners as the case
may be, shall themselves be jointly and solidarily liable
with the corporation or partnership for the aforesaid
claims and damages. (emphasis and underscoring supplied)

WHEREFORE, the petition is DENIED.

SO ORDERED.