Labor Case

G.R. No.
197539
June 2, 2014
PEOPLE
OF
THE
PHILIPPINES, Plaintiff-Appellee,
vs.
ANGELITA I. DAUD, HANELITA M. GALLEMIT and RODERICK GALLEMIT y TOLENTINO, Accused.
RODERICK GALLEMIT y TOLENTINO, Accused-appellant.
DECISION
LEONARDO-DE CASTRO, J.:
For Our consideration is an appeal from the Decision1 dated March 18, 2011 of the Court of
Appeals in CA-G.R. CR.-H.C. No. 03168, which affirmed the Joint Decision2 dated January 15,
2007 of the Regional Trial Court (RTC), Paraaque City, Branch 195, in Criminal Case Nos. 030122 to 30, finding accused-appellant Roderick Gallemit y Tolentino guilty of the crimes of ( 1)
illegal recruitment in large scale, as defined and penalized under Article II, Section 6, in relation
to Section 7(b) of Republic Act No. 8042, otherwise known as the "Migrant Workers and Overseas
Filipinos Act of 1995;" and (2) estafa, as defined and penalized under Article 315, paragraph 2(a)
of the Revised Penal Code, but modified the penalties imposed upon appellant for said crimes.
In an Information dated January 3, 2003, docketed as Criminal Case No. 03-0122, Angelita I.
Daud (Daud), Hanelita M. Gallemit (Hanelita), and appellant Roderick Gallemit y Tolentino were
charged before the RTC with illegal recruitment in large scale, allegedly committed as follows:
That on or about or sometime during the period from February 5, 2001 to August 2001, in the
City of Paraaque, Philippines, and within the jurisdiction of this Honorable Court, the abovenamed accused, conspiring and confederating together and both of them mutually helping and
aiding one another, representing themselves to have the capacity to contract, enlist and
transport Filipino workers for employment abroad, did then and there willfully, unlawfully and
feloniously, for a fee, recruit and promise employment abroad to complainants Marcelo De
Guzman, Evangeline Relox, Maricel Rayo, Brigida Rayo, Gina Decena, Nenita Policarpio, Myrna
Crisostomo and Francisco Poserio, without first securing the required license or authority from
the Department of Labor and Employment thus deemed committed in large scale and therefore
amounting to economic sabotage.3
Eight more Informations, all dated January 3, 2003, docketed as Criminal Case Nos. 03-0123 to
03-0130, charged Daud, Hanelita, and appellant before the RTC with eight counts of Estafa,
committed separately upon eight private complainants, namely, Marcelo I. De Guzman (De
Guzman), Evangeline I. Relox, Marcelo E. Rayo, Brigada A. Rayo, Gina T. Decena (Decena), Nenita
F. Policarpio, Myrna S. Crisostomo and Francisco S. Poserio (Poserio), respectively.
The Information in Criminal Case No. 03-0123 alleged:
That on or about covering the period from February 2001 up to March 2001, in the City of
Paraaque, Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, conspiring and confederating together and all of them mutually helping and aiding one
another, did then and there willfully and feloniously defraud Marcelo de Guzman y Ignacio
pertinent to his overseas job employment if he would deliver to them the amount of P545,000.00
by means of other similar deceit knowing it to be false and only made to induce the
aforementioned complainant to give and deliver the said amount of P545,000.00 and accused
once in possession of the same, did then and there willfully, unlawfully and feloniously misapply
and misappropriate the said amount to their own personal use and benefit to the damage and
prejudice of the said MARCELODE GUZMAN y IGNACIO in the aforementioned amount.4
The seven other Informations in Criminal Case Nos. 03-0124 to 03-0130 were similarly worded as
the aforequoted Information, except as to the name of the private complainant and the amount
purportedly collected from him/her, to wit:
Docket No.
Private Complainant
Amount Collected
Crim. Case No. 03-01245
Evangeline I. Relox,
P25,000.00
Marcelo E. Rayo
P45,000.00
Brigada A. Rayo
P28,000.00
Gina T. Decena
P70,000.00
Nenita F. Policarpio
P50,000.00
Myrna S. Crisostomo
P24,500.00
Francisco S. Poserio
P70,000.00
Only appellant was apprehended, while his co-accused Daud and Hanelita eluded arrest and
remained at large.
The nine criminal cases against appellant before the RTC were consolidated. When arraigned,
appellant pleaded not guilty to all the charges against him. Thereafter, joint trial of the nine
criminal cases ensued.
The prosecution offered as evidence the Philippine Overseas Employment Administration (POEA)
Certification dated September 19, 2002 stating that Green Pasture Worldwide Tour and
Consultancy, with address at India St., Don Bosco, Paraaque City, set up and operated by
appellant and his co-accused, is not licensed to recruit workers for overseas employment.12
Of all the private complainants, only De Guzman, Decena, and Poserio testified against Gallem it.
The presentation of a POEA representative was dispensed with after the defense admitted the
due execution and genuineness of the POEA Certification dated September 19, 2002.13
Evidence for the defense consisted solely of appellants testimony.
After trial on the merits, the RTC rendered its Decision dated January 15, 2007 finding appellant
guilty of Illegal Recruitment in Large Scale and Estafa on three (3) counts. The dispositive portion
of the judgment reads:
WHEREFORE, judgment is hereby rendered as follows:
(1) In Criminal Case No. 03-0122, the Court finds accused Roderick Gallemit y Tolentino, GUILTY
BEYOND REASONABLE DOUBT as principal of the crime of Illegal Recruitment in Large Scale in
violation of Section 6 in relation to Section 7 of RA 8042, otherwise known as the Migrant Workers
and Overseas Filipinos Act of 1995 and hereby sentences him to a penalty of life imprisonment
and a fine of Five Hundred Thousand Pesos (P500,000.00).
(2) In Criminal Case No. 03-0123, the Court finds accused Roderick Gallemit y Tolentino GUILTY
BEYOND REASONABLE DOUBT as principal of the crime of Estafa under Article 315 paragraph
2(a) of the Revised Penal Code and hereby sentences him to suffer the Indeterminate Penalty of
two (2) years and four (4) months as minimum to thirteen (13) years as maximum which carries
with it the accessory penalty of suspension from public office, from the right to follow a
profession or calling, and that of perpetual special disqualification from the right of suffrage. The
accused is further sentenced to pay complaining witness Marcelo De Guzman y Ignacio the
amount of Eighty Thousand Pesos (P80,000.00) plus twelve percent (12%) interest from the date
of the filing of the Information on February 3, 2003, with subsidiary imprisonment in case of
insolvency, plus the costs of suit;
(3) In Criminal Case No. 03-0127,the Court finds accused Roderick Gallemit y Tolentino GUILTY
2(a) of the Revised Penal Code and hereby sentences him to suffer the indeterminate Penalty of
two (2) years, four (4) months as minimum to nine (9) years as maximum which carries with it
the accessory penalty of suspension from public office, from the right to follow a profession or
calling, and that of perpetual special disqualification from the right of suffrage. The accused is
further sentenced to pay the costs of suit; and
(4) In Criminal Case No. 03-0130, the Court finds accused Roderick Gallemit y Tolentino GUILTY
2(a) of the Revised Penal Code and hereby sentences him to suffer the Indeterminate Penalty of
two (2) years and four (4) months as minimum to twelve (12) years and two (2) months as
maximum which carries with it the accessory penalty of suspension from public office, from the
right to follow a profession or calling, and that of perpetual special disqualification from the right
of suffrage. The accused is further sentenced to pay costs of suit.
(5) Criminal Case Nos. 03-0124, 03-0125, 03-0126, 03-0128, and 03-0129, for failure to
prosecute, are hereby ordered Dismissed, as against accused Roderick Gallemit.
Considering that accused ANGELITA I. DAUD and HANELITA M. GALLEMIT remain at large for more
than six (6) months since the issuance and delivery of the warrant of arrest to the proper police
or peace officer, the cases against them are hereby ordered ARCHIVED pursuant to
Administrative Circular No. 7-A-92. Let an alias warrant of arrest be issued against them.14
Following the denial of his Motion for Reconsideration by the RTC in an Order15 dated April 3,
2007, appellant filed an appeal before the Court of Appeals.
The Court of Appeals summarized the private complainants testimonies against appellant, viz:
Marcelo de Guzman[(De Guzman)], a dentist by profession with a clinic in Bulacan, testified that
sometime in January 2001, he was introduced by his patient Modesta Marqueda to her cousin,
accused [Daud]. [Daud] encouraged [De Guzman] to apply for work abroad and convinced him
that she would be able to send him to Korea. To prove to [De Guzman] that she was capable of
sending workers abroad, [Daud] invited him to visit her office located at Taft Avenue, Manila.
A month later, [De Guzman] and his cousins Maricel Rayo, Brigida Rayo, Myrna Crisostomo,
Francisco Poserio, Evangeline Relox, [Decena] and Nenita Policarpio, wentto see [Daud] at the
Jemimah International Manpower Services, located at Taft Avenue, Manila where the latter was
then working as a liaison officer. The group was shown job orders and photos of [Daud] with
Korean employees to prove that she was indeed sending workers abroad. It was at this office that
[De Guzman] first met [appellant] and [Hanelita].
Meanwhile, [Daud], together with [Hanelita] and [appellant], put up their own business named
Green Pastures Worldwide Tours and Consultancy Corporation in their residence at No. 4 Sta.
Maria Apartment, India St., Better Living Subdivision, Barangay Don Bosco, Paraaque City.
Having been convinced by the documents shown to him at the Taft Avenue office, [De Guzman]
paid [Daud] the amount of P35,000[.]00 as initial payment for his placement fee at the latters
office and residence in Paraaque City on February 2, 2001. On February 5, 2001, [De Guzman]
gave [Daud] the amount of P15,000[.]00 which was witnessed by Hanelita. He gave
another P15,000.00 on February 22, 2001. However, he lost the original receipts.
On March 3, 6 and 7, 2001, [De Guzman] again gave [Daud] x x x different amounts consisting
ofP35,000.00, P30,000.00 and P15,000.00, respectively, at her office in Paraaque City (Exhibits
"A" to "C"). In [De Guzman]s presence, [Daud] counted the money, issued receipts therefor as
"processing fees of Nike applicants", affixed her signature after signing the receipts in the name
of "Nimfa Min". [Daud] explained to him that "Nimfa Min" was her contact who happened to be
the wife of a Korean national. [De Guzman] trusted [Daud] and accepted her explanation.
Whenever he gave his payment to [Daud], it was in the presence of Hanelita and [appellant] but
he did not require the two to sign as witnesses because he trusted them as they were members
of the same family. [De Guzman] was told by [Daud] and [appellant] that he and his group would
be leaving in two weeks time.
[De Guzman] and his companions were instructed to appear before the Korean Embassy and
were promised that they would be able to leave on March 11, 2001 as trainee workers in Korea
where they would earn a monthly salary of US$400, overtime pay, with benefits of free board
and lodging and 30-day leave within a year. De Guzmans group were shown photocopies of their
passport and stamped visas for Korea. However, they were not given their working permits and
job contracts.
When their departure date was getting near, [Daud] postponed it thrice. Eventually, [De
Guzman] asked from accused [Daud] a photocopy of his passport with a stamped Korean Visa.
Upon inquiry with the Korean Embassy, [De Guzman] was told that it was fake. He proceeded to
the Philippine Overseas Employment Administration (POEA) and verified the registration of Green
Pastures Worldwide Tour and Consultancy Corporation. The POEA informed them that it was not
registered with the POEA and gave[De Guzman] a certification to the effect that the said agency
was not licensed to recruit employees for abroad (Exhibit D).
Embarrassed because of the money given by his cousins, [De Guzman] verbally asked [Daud],
Hanelita and [appellant] to return the money. They promised him that they would settle the
matter but they failed to return the money. x x x.
Gina Decena, for her part testified that sometime in January 2001, she was introduced by her
cousin, Maricel Rayo, to accused [Daud], [Hanelita] and [appellant], at the Makati Medical Towers
where Maricel had her medical examination. [Decena] again met the three accused at their office
at No. 4 Sta. Maria Apartment, Better Living Subdivision, Paraaque City when Maricel obtained a
copy of her medical certificate. They enticed [Decena] to apply at their agency by showing her
job orders that offered $400 [a] month salary, 150% overtime pay, free board and lodging as well
as photographs of prospective Korean employers. [Appellant] even gave her a copy of the job
order. The three accused assured [Decena] that they had already sent several applicants for
employment abroad. Convinced, [Decena] and her husband Marcelo Rayo applied at their
agency. They were instructed to undergo medical examination, to attend a Korean Language
seminar, and to pay P70,000.00 processing fee.
Thus, on February 15, 2001, [Decena] and her husband each gave accused [Daud] the amount
ofP35,000.00 as placement fees. During trial, [Decena] presented her receipt for P35,000.00
which was received and signed by [Daud].
Thereafter, the couple were told to wait for two weeks for the processing of their visas. As two
weeks have passed and nothing happened to their applications, [Decena] and her husband went
to the POEA to verify the status of the agency. They were informed to the effect that said agency
was not licensed to send workers abroad. [Decena] and her husband went back to the agency
and tried to look for the accused but they were all gone. They later came to know, through [De
Guzman], that [appellant] was apprehended. She identified her sworn statement in court.
Sometime in January 2001, Francisco Poserio [(Poserio)] was brought along by his cousin [De
Guzman] to No. 4 Sta. Maria Apt., India St., Better Living Subdivision, Barangay Don Bosco,
Paraaque City. While thereat, [De Guzman] introduced [Daud], Hanelita and [appellant] as the
owners of Green Pastures Worldwide Tours and Consultancy and that they were sending workers
to Korea. The three accused encouraged [Poserio] to apply for work in Korea where he could get
a job which offered a monthly salary of US$400 with free meals and housing, 150% pay on
overtime work and vacation leave of thirty (30) days in a two-year contract. To convince [Poserio]
that they can send workers to Korea, they showed him job orders from Hyundai Group and Nike
requiring workers for Korea, a copy of a Korean visa of one of their job applicants, and photos of
[Daud] in Korea with a Korean national who would be [Poserio]s prospective employer if he
applied with their agency. Further, he would be able to earn back his placement fee in three
months work.
Enticed, [Poserio] mortgaged his property to get funds for his job application. [Daud] and
Hanelita informed him to undergo a medical examination and seminar and even gave him a
referral. On January 27, 2001, he gave his passport, medical examination result, seminar result
and certification for employment. He was then told to pay P100,000.00 as processing fee for his
job application. On March 3, 2001, he gave his down payment of P25,000.00 to [Daud] in the
presence of Hanelita and [appellant]. He was told to wait for two weeks for the processing of his
papers. On July 2001, he was informed that additional amount was needed to process his papers.
Thus, on July 5, 2001, he gaveP45,000.00 as additional payment to [Daud] in the presence of
Hanelita. He was again told to wait for another three weeks. He was even promised that they
would return his money if he would notbe sent abroad. A year after his payment, [Poserio] was
still not able to leave the country. Upon verification with the POEA, he and the other job
applicants discovered that the said agency was not licensed to recruit workers for overseas
employment. He talked over the phone with the accused and demanded the return of his money.
When they failed to return his money, he filed a complaint with the Paraaque police.
All three complainants positively identified [appellant] in court.16 (Citations omitted.)
The Court of Appeals similarly provided a gist of appellants testimony, thus:
Roderick Gallemit [(appellant)] denied owning the agency, undertaking any recruitment act or
receiving any amount from the complainants considering that his name did not appear in the
receipts. He admitted that he is married to co-accused [Hanelita] and that co-accused [Daud] is
his mother-in-law.
He knew private complainants [De Guzman] and [Poserio] who were introduced to him by [Daud]
who was then working as a liaison officer at Jemimah International Manpower Services located in
Taft Avenue, Manila. [Appellant] denied knowing the other complainants. He was just brought
along by [Daud] since he was also one of the job seekers applying at the Jemimah International
Manpower Services where [Daud] worked. [Daud] told him that private complainant [De Guzman]
is her business partner. [Poserio] was one of those applying for a job abroad and [De Guzman]
would refer them to [Daud]. Thus, [De Guzman] frequented their apartment in Paraaque.
He admitted that, from February 2001 to August 2001, he had been staying at the apartment in
India Street, Better Living Subdivision, Paraaque City he shared with his wife Hanelita, their
child and his mother-in-law [Daud]. He and his wife were not employed since they were applying
for a job abroad. His siblings help him out by sending him money for his job application. He was
aware that his mother-in-law [Daud] was a recruiter and owned an agency named Green Pasture
Worldwide Travel and Tours which she operated in the same apartment.
He claimed that [Daud] has only one employee, a certain Badjong, who processed documents. At
first he did not apply with [Daud] because her business was still new. He applied with her when
she convinced him that she could process his passport and papers to Korea.
He denied he was present when the complainants gave their payments to [Daud]. He insisted
that he was not involved with [Daud]s business and that he was always out of the house as he
would often go to Cavite to ask for financial help from his siblings. x x x.17 (Citations omitted.)
In its Decision dated March 18, 2011,the Court of Appeals affirmed appellants conviction by the
RTC, but modified the indeterminate penalties imposed on appellant for the three counts of
estafa. The appellate court decreed:
WHEREFORE, the appealed decision finding accused-appellant RODERICK GALLEMIT y
TOLENTINO guilty beyond reasonable doubt of Illegal Recruitment in Large Scale and of Estafa is
AFFIRMED with modification with respect to the indeterminate penalties imposed on appellant for
the three counts of estafa, to wit:
(1) In Criminal Case No. 03-0123, appellant is sentenced to suffer the indeterminate penalty of
two (2) years and four (4) months of prision correccional as minimum to thirteen (13) years of
reclusion temporal as maximum.
two (2) years and four (4) months of prision correccional as minimum to nine (9) years of prision
mayor as maximum.
two (2) years and four (4) months of prision correccional as minimum to twelve (12) years of
prision mayor as maximum.
In all other respects, the assailed Decision is AFFIRMED.18
Hence, appellant comes before us via the instant appeal with the same assignment of errors
which he raised before the Court of Appeals:
I
THE TRIAL COURT GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT OF LARGE-SCALE
ILLEGAL RECRUITMENT AND ESTAFA DESPITE THE PROSECUTIONS FAILURE TO PROVE HIS GUILT
BEYOND REASONABLE DOUBT.
II
THE TRIAL COURT GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT OF ESTAFADESPITE
THE ABSENCE [OF] THE ELEMENT OF DECEIT.
Illegal recruitment in large scale
Appellant anchors his bid for acquittal on the failure of the prosecution to prove that he gave
private complainants the distinct impression that he had the power or ability to send them
abroad for work such that they were convinced to part with their money. Any encouragement or
promise of employment abroad was solely made by Daud. Appellant points out that it was only
his alleged presence at the time private complainants were making their payments to Daud that
led said private complainants to believe that appellant participated in the recruitment scheme.
The Office of the Solicitor General, as counsel for the appellee, insists that appellant acted in
conspiracy with his co-accused in engaging in illegal recruitment activities, specifically
performing the following acts: (1) Appellant, together with his co-accused, owned and operated
Green Pasture Worldwide Tour and Consultancy Corporation; (2) Appellant, together with his coaccused, encouraged private complainants to apply for jobs abroad with their agency, promising
private complainants salary of US$400.00, 150% overtime pay, and free board and lodging; (3)
Appellant, together with his co-accused, assured private complainants that they could leave for
Korea within a short period after paying their placement fees; and (4) Appellant was present
everytime private complainants made payments to his co-accused Daud. In addition, private
complainants De Guzman, Decena, and Poserio positively identified and pointed to appellant in
court as one of the persons who recruited them for work abroad.19
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." In the simplest terms, illegal recruitment is committed by persons who, without authority
from the government, give the impression that they have the power to send workers abroad for
employment purposes.20
Republic Act No. 8042 broadened the concept of illegal recruitment under the Labor Code and
provided stiffer penalties, especially for those that constitute economic sabotage, i.e., Illegal
Recruitment in Large Scale and Illegal Recruitment Committed by a Syndicate.
Section 6 of Republic Act No. 8042 defined illegal recruitment as follows:
SEC. 6. Definition. - For purposes of this Act, illegal recruitment shall mean any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring,
contract services, promising or advertising for employment abroad, whether for profit or not,
when undertaken by a non-licensee or non-holder of authority contemplated under Article 13(f)
of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the
Philippines: Provided, That any such non-licensee or non-holder who, in any manner, offers or
promises for a fee employment abroad to two or more persons shall be deemed so engaged. It
shall likewise include the following acts, whether committed by any person, whether a nonlicensee, non-holder, licensee or holder of authority:
xxxx
(m) Failure to reimburse expenses incurred by the worker in connection with his documentation
and processing for purposes of deployment, in cases where the deployment does not actually
take place without the workers fault. Illegal recruitment when committed by a syndicate or in
large scale shall be considered an offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or
more persons conspiring or confederating with one another. It is deemed committed in large
scale if committed against three (3) or more persons individually or as a group.
To constitute illegal recruitment in large scale, three elements must concur: (a) the offender has
no valid license or authority required by law to enable him to lawfully engage in recruitment and
placement of workers; (b) the offender undertakes any of the activities within the meaning of
"recruitment and placement" under Article13(b) of the Labor Code, or any of the prohibited
practices enumerated under Article 34 of the said Code (now Section 6 of Republic Act No. 8042);
and (c) the offender committed the same against three or more persons, individually or as a
group.21
Both the RTC and the Court of Appeals ruled that all the foregoing elements of illegal recruitment
in large scale are present in the case at bar. As the Court of Appeals discussed in detail:
First, neither the agency "Green Pastures World Wide Tours and Consultancy" nor appellant
himself had a valid license or authority to engage in the recruitment and placement of workers.
This was established by the POEA certification stating that the said agency located in that
apartment was not licensed to recruit employees for abroad. A license is a document issued by
the Department of Labor and Employment (DOLE) authorizing a person or entity to operate a
private employment agency, while an authority is a document issued by the DOLE authorizing a
person or association to engage in recruitment and placement activities as a private recruitment
entity. It is the lack of the necessary license or authority that renders the recruitment activity, as
in this case, unlawful or criminal.
Second, despite not having such authority, appellant, along with his co-accused, nevertheless
engaged in recruitment activities, offering and promising jobs to private complainants and
collecting from them various amounts as placement fees. This is substantiated by the respective
testimonies of the three private complainants who fell victim to their illegal activities. Marcelo de
Guzman testified that appellant was physically present during the time that he and his
companions were being shown job orders and while he was paying for the fees for himself and in
behalf of his companions. Francisco Poserio testified that appellant was one of those who
apprised him of job benefits and tried to convince him to apply for overseas employment through
their agency. Gina Decena mentioned that [appellant] even gave her a copy of the job order.
We find no cogent reason to disturb the findings of the lower court that there was conspiracy
among the accused in the commission of the offense. Direct proof of previous agreement to
commit a crime is not necessary. It may be deduced from the mode and manner in which the
offense was perpetrated, or inferred from the acts of the accused which point to a joint purpose
and design, concerted action and community of interest. Conspiracy exists where the
participants performed specific acts with such closeness and coordination as unmistakably to
indicate a common purpose or design in committing the crime.
The testimonies of the complainants on the matter are affirmative in nature and sufficiently
corroborative of each other to be less than credible. It would be contrary to human nature and
experience for several persons to conspire and accuse appellant of a crime and send him to
prison just to appease their feeling of rejection and vindicate the frustration of their dreams to
work abroad if all he did was just to reside in the same apartment where his mother-in-law
[Daud] operated her recruitment agency. It is in this light that We find any inconsistencies that
accused-appellant harps on in the tesimonines of the complainants to be inconsequential. What
is important is that they have positively identified accused-appellant as one of those who enticed
them to part with their money in exchange for promised jobs abroad.
The crime of illegal recruitment, according to the Supreme Court is committed when, among
other things, a person, who without being duly authorized according to law, represents or gives
the distinct impression that he or she has the power or the ability to provide work abroad
convincing those to whom the representation is made or to whom the impression is given to
thereupon part with their money in order to be assured of that employment. This is what obtains
in this case.
Contrary to appellants mistaken notion, it is not the issuance or signing of receipts for the
placement fees that makes a case for illegal recruitment, but rather the undertaking of
recruitment activities without the necessary license or authority. The absence of receipts to
evidence payment is not necessarily fatal to the prosecutions cause. A person charged with the
illegal recruitment may be convicted on the strength of the testimony of the complainants, if
found to be credible and convincing.
Considering the evidence on record, We agree with the trial court that accused-appellant
engaged in recruitment of workers which was illegal and in large scale. Illegal recruitment is
deemed committed in large scale if committed against three or more persons individually or as a
group. In this case, three complainants testified against appellants acts of illegal
recruitment.22 (Citations omitted.)
The Court finds no cogent reason to deviate from the findings and conclusions of the RTC and the
Court of Appeals. The prosecution witnesses were positive and categorical in their testimonies
that they personally met appellant; that they knew appellant was associated with Green Pasture
Worldwide Tour and Consultancy; and that appellant had performed recruitment activities such
as promising employment abroad, encouraging job applications, and providing copies of job
orders. The private complainants testimonies are consistent and corroborate one another on
material points, such as the amount of the placement fees asked, and the purported country of
destination and nature of work.
It was not necessary for the prosecution to still prove that appellant himself received the
placement fees from private complainants and issued receipts for the same, given the finding of
both the RTC and the Court of Appeals of the existence of conspiracy among appellant and his
co-accused Hanelita and Daud, appellants wife and mother-in-law, respectively. When there is
conspiracy, the act of one is the act of all.23 It is not essential that there be actual proof that all
the conspirators took a direct part in every act. It is sufficient that they acted in concert pursuant
to the same objective.24
Between the categorical statements of the private complainants, on the one hand, and the bare
denial of appellant, on the other hand, the former must perforce prevail. An affirmative testimony
is far stronger than a negative testimony especially when the former comes from the mouth of a
credible witness. Denial, same as an alibi, if not substantiated by clear and convincing evidence,
is negative and self-serving evidence undeserving of weight in law. It is considered with suspicion
and always received with caution, not only because it is inherently weak and unreliable, but also
because it is easily fabricated and concocted.25
Furthermore, without any evidence to show that private complainants were propelled by any ill
motive to testify falsely against appellant, their testimonies deserve full faith and credit. After all,
the doctrinal rule is that findings of fact made by the trial court, which had the opportunity to
directly observe the witnesses and to determine the probative value of the other testimonies, are
entitled to great weight and respect because the trial court is in a better position to assess the
same, an opportunity not equally open to the appellate court. The absence of any showing that
the trial court plainly overlooked certain facts of substance and value that, if considered, might
affect the result of the case, or that its assessment was arbitrary, impels us to defer to the trial
courts determination according credibility to the prosecution evidence.26 This is more true if the
findings of the trial court were affirmed by the appellate court, since it is settled that when the
trial courts findings have been affirmed by the appellate court, said findings are generally
binding upon this Court.27
Given the foregoing, we uphold the conviction of appellant for illegal recruitment in a large scale,
which constitutes economic sabotage. The penalty of life imprisonment and the fine
of P500,000.00, imposed upon appellant for the said offense by the RTC, and affirmed by the
Court of Appeals, is in accord with Section 7(b) of Republic Act No. 8042, which provides:
Sec. 7. Penalties.
(a) 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).
(b) The penalty of life imprisonment and a fine of not less than Five hundred thousand pesos
(P500,000.00) nor more than One million pesos (P1,000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as defined herein. (Emphasis ours.)
Estafa
We likewise affirm the conviction of appellant for three counts of estafa committed against the
private complainants in Criminal Case Nos. 03-0123, 03-0127, and 03-0130, based on the very
same evidence that proved appellants criminal liability for illegal recruitment.
It is settled that a person may be charged and convicted separately of illegal recruitment under
Republic Act No. 8042, in relation to the Labor Code, and estafa under Article 315, paragraph
2(a)of the Revised Penal Code. As we explained in People v. Cortez and Yabut28:
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. (Citations omitted.)
Article 315, paragraph 2(a) of the Revised Penal Code defines estafa as:
Art. 315. Swindling (estafa). - Any person who shall defraud another by any of the means
mentioned hereinbelow x x x:
xxxx
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 a 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 elements of estafa are: (a) that the accused defrauded another by abuse of confidence or by
means of deceit, and (b) that damage or prejudice capable of pecuniary estimation is caused to
the offended party or third person.29
Appellant contends that he cannot be convicted of estafa because the element of deceit is
lacking. He insists on the absence of proof that he made any false statement or fraudulent
representation to private complainants.
We are not persuaded. As we had previously discussed herein, private complainants were able to
establish, through their positive and credible testimonies, that appellant acted in conspiracy with
his co-accused to mislead private complainants into believing that appellant and his co-accused,
for a fee, can deploy private complainants abroad for employment. Decena testified that
appellant gave her a copy of the purported job order for Korea, while Poserio avowed that
appellant encouraged him to apply for work abroad. Daud, appellants fellow conspirator,
accepted placement fees from private complainants, even issuing receipts for some; instructed
private complainants to undergo medical examination; and took private complainants passports.
The representations made by appellant and his co-accused to private complainants were actually
false and fraudulent, not only because they were not duly authorized to undertake recruitment
for overseas employment, but also because there were no actual jobs waiting for private
complainants in Korea and private complainants never had a chance to leave for work abroad.
Appellant also argues that the second element of estafa, which is prejudice or pecuniary loss,
was not established during trial as the prosecution was unable to present any receipt signed by
appellant proving that he received money from private complainants.
We disagree once more with appellant. We reiterate that when conspiracy has been established,
the act of one conspirator is the act of all. All three private complainants testified that they paid
placement fees to Daud, who issued receipts for some amounts either in her name or in the
name of one "Nimfa Min." Moreover, the payment of placement fees to illegal recruiters is not
evidenced by receipts alone; it can also be established by testimonies of witnesses. In People v.
Pabalan,30 we held:
Although not all of the amounts testified to by complainants were covered by receipts, the fact
that there were no receipts for some of the amounts delivered to him does not mean that
appellant did not accept or receive such payments. This Court has ruled in several cases that the
absence of receipts in a criminal case for illegal recruitment does not warrant the acquittal of the
accused and is not fatal to the case of the prosecution. As long as the witnesses had positively
shown through their respective testimonies that the accused is the one involved in the prohibited
recruitment, he may be convicted of the offense despite the want of receipts.
The Statute of Frauds and the rules of evidence do not require the presentations of receipts in
order to prove the existence of a recruitment agreement and the procurement of fees in illegal
recruitment cases. The amounts may consequently be proved by the testimony of witnesses.
(Citation omitted.)
Again, there is no cogent reason for us to disturb the finding of the RTC, affirmed by the Court of
Appeals, that both elements of estafa are present in Criminal Case Nos. 03-0123, 03-0127, and
03-0130. Thus, we sustain appellants conviction for estafa, punishable under Article 315,
paragraph 2(a), of the Revised Penal Code.
The penalty for estafa depends on the amount of defraudation.1wphi1 Per Article 315 of the
Revised Penal Code:
Art. 315. Swindling (estafa). Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:
1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum
period, if the amount of the fraud is over 12,000 pesos but does not exceed 22,000 pesos; and if
such 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[.]
The prescribed penalty for estafa under Article 315 of the Revised Penal Code, when the amount
of the fraud is over P12,000.00 but not exceeding P22,000.00, is prision correccional maximum
to prision mayor minimum (i.e., from 4 years, 2 months, and 1 day to 8 years). Under the
Indeterminate Sentence Law, the minimum term shall be within the range of the penalty next
lower to that prescribed by the Revised Penal Code, or anywhere within prision correccional
minimum and medium (i.e., from 6 months and 1 day to 4 years and 2 months).31Consequently,
the minimum terms in Criminal Case Nos. 03-0123,03-127, and 03-0130 were correctly fixed by
the RTC, and affirmed by the Court of Appeals, at 2 years and 4 months of prision correccional.
The maximum term under the Indeterminate Sentence Law shall be that which, in view of
attending circumstances, could be properly imposed under the rules of the Revised Penal Code.
To compute the minimum, medium, and maximum periods of the prescribed penalty for estafa
when the amount of fraud exceedsP12,000.00, the time included in prision correccional
maximum to prision mayor minimum shall be divided into three equal portions, with each portion
forming a period. Following this computation, the minimum period for prision correccional
maximum to prision mayor minimum is from 4 years, 2 months, and 1 day to 5 years, 5 months,
and 10 days; the medium period is from 5 years, 5 months, and 11 days to 6 years, 8 months,
and 20 days; and the maximum period is from 6 years, 8 months, and 21 days to 8 years. Any
incremental penalty (i.e., one year for every P10,000.00 in excess of P22,000.00) shall thus be
added to anywhere from 6 years, 8 months, and 21 days to 8 years, at the discretion of the
court, provided that the total penalty does not exceed 20 years.32
In Criminal Case Nos. 03-0123, 03-127, and 03-0130, the maximum term shall be taken from the
maximum period of the prescribed penalty, which is 6 years, 8 months, and 21 days to 8 years.
The Court of Appeals fixed the maximum term at 8 years.
But then, since private complainants were defrauded in the amounts exceeding P22,000.00,
incremental penalty shall be imposed upon appellant, determined as follows:
1wphi1
Criminal
No.
Complainant)
Case
Amount
(Private
Defrauded
03-0123 (De Guzman)
P80,000.00
Difference
Subtracting
P22,000.00
P58,000.00
After
Quotient
After
Incremental
Dividing
by
Penalty33
P10,000.00
5.8
5 years
03-0127 (Decena)
P35,000.00
P13,000.00
1.3
1 year
03-130 (Poserio)
P70,000.00
P48,000.00
4.8
4 years
The incremental penalty shall be added to the maximum term of 8 years fixed by the Court of
Appeals. Thus, we agree with the Court of Appeals in imposing the maximum penalty in Criminal
Case No. 03-0123at thirteen (13) years of reclusion temporal; in Criminal Case No. 03-0127 at
nine (9) years of prision mayor; and in Criminal Case No. 03-0130 at twelve (12) years of prision
mayor.
Lastly, it is still incumbent upon appellant to indemnify private complainants for the amounts
paid to him and his conspirators, with legal interest at the rate of 6% per annum, from the time
of demand, which, in this case, shall be deemed as the same day the Informations were filed
against appellant, until the said amounts are fully paid.34
WHEREFORE, we AFFIRM with MODIFICATIONS the Decision dated March 18, 2011 of the Court of
Appeals in CA-G.R. CR.-H.C. No. 03168, to read as follows:
1. In Criminal Case No. 03-0122, appellant Roderick T. Gallemit is found GUILTY beyond
reasonable doubt of illegal recruitment in large scale, constituting economic sabotage, as defined
and penalized in Section 6, in relation to Section 7(b), of Republic Act No. 8042, for which he is
sentenced to suffer the penalty of life imprisonment and is ordered to pay a fine of Five Hundred
Thousand Pesos (P500.000.00);
reasonable doubt of the crime of estafa, as defined and penalized in Article 315, paragraph 2(a)
of the Revised Penal Code, for which he is sentenced to a prison term of two (2) years and four
(4) months of prision correccional, as minimum, to thirteen years (13) of reclusion temporal, as
maximum, and ordered to indemnify private complainant Marcelo I. De Guzman in the amount of
Eighty Thousand Pesos (P80,000.00) as actual damages, with legal interest of six percent (6%)
per annum from January 3, 2003, until the said amount is fully paid;
of the Revised Penal C ode, for which he is sentenced to a prison term of two (2) years and four
(4) months of prision correccional, as minimum, to nine (9) years of prision mayor, as maximum,
ordered to indemnify private complainant Gina T. Decena in the amount of Thirty-Five Thousand
Pesos (P35,000.00) as actual damages, with legal interest of six percent (6%) per annum from
January 3, 2003, until the said amount is fully paid; and
of the Revised Penal Code, for which he is sentenced to a prison term of two (2) years and four
(4) months of prision correccional, as minimum, to twelve (12) years of prision mayor, as
maximum, and ordered to indemnify private complainant Francisco S. Poserio in the amount of
Seventy Thousand Pesos (P70,000.00) as actual damages, with legal interest of six percent (6%)
per annum from January 3, 2003, until the said amount is fully paid.
SO ORDERED.
G.R. No. 177498
January 18, 2012
STOLT-NIELSEN
TRANSPORTATION
GROUP,
MANAGEMENT, Petitioners,
vs.
SULPECIO MEDEQUILLO, JR., Respondent.
INC.
AND
CHUNG
GAI
SHIP
DECISION
PEREZ, J.:
1. Civil Law; Obligations; Novation; Novation is the extinguishment of an obligation by
the substitution or change of the obligation by a subsequent one which extinguishes
or modifies the first, either by changing the object or principal conditions, or, by
substituting another in place of the debtor, or by subrogating a third person in the
rights of the creditor.-Novation is the extinguishment of an obligation by the substitution or
change of the obligation by a subsequent one which extinguishes or modifies the first, either by
changing the object or principal conditions, or, by substituting another in place of the debtor, or
by subrogating a third person in the rights of the creditor. In order for novation to take place, the
concurrence of the following requisites is indispensable: 1. There must be a previous valid
obligation, 2. There must be an agreement of the parties concerned to a new contract, 3. There
must be the extinguishment of the old contract, and 4. There must be the validity of the new
contract.
2. Civil Law; Damages; Actual Damages; One is entitled to an adequate compensation
only for such pecuniary loss suffered by him as he has duly proved.-Applying the rules
on actual damages, Article 2199 of the New Civil Code provides that one is entitled to an
adequate compensation only for such pecuniary loss suffered by him as he has duly proved.
Respondent is thus liable to pay petitioner actual damages in the form of the loss of nine (9)
months worth of salary as provided in the contract. This is but proper because of the nondeployment of respondent without just cause.
3. Same; Same; Same; Migrant Workers Act (R.A. No. 8042); The absence of the
Philippine Overseas Employment Administration (POEA) Rules with regard to the
payment of damages to the affected seafarer does not mean that the seafarer is
precluded from claiming the same, the Supreme Court decreed the applicability of
Section 10 of Republic Act No. 8042 (Migrant Workers Act) which provides for money
claims by reason of a contract involving Filipino workers for overseas deployment.-
The POEA Rules Governing the Recruitment and Employment of Seafarers do not provide for the
award of damages to be given in favor of the employees. The claim provided by the same law
refers to a valid contractual claim for compensation or benefits arising from employer-employee
relationship or for any personal injury, illness or death at levels provided for within the terms and
conditions of employment of seafarers. However, the absence of the POEA Rules with regard to
the payment of damages to the affected seafarer does not mean that the seafarer is precluded
from claiming the same. The sanctions provided for non-deployment do not end with the
suspension or cancellation of license or fine and the return of all documents at no cost to the
worker. As earlier discussed, they do not forfend a seafarer from instituting an action for
damages against the employer or agency which has failed to deploy him. We thus decree the
application of Section 10 of Republic Act No. 8042 (Migrant Workers Act) which provides for
money claims by reason of a contract involving Filipino workers for overseas deployment. The
law provides: Sec. 10. Money Claims.Notwithstanding any provision of law to the contrary, the
Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the
complaint, the claims arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including claims for actual, moral,
exemplary and other forms of damages. x x x (Underscoring supplied)
4. Same; Same; Same; Penalties; Failure of the agency to deploy a worker within the
prescribed period without valid reasons shall be a cause for suspension or
cancellation of license or fine. In addition, the agency shall return all documents at no
cost to the worker.-The POEA Rules and Regulations Governing Overseas Employment dated
31 May 1991 provides for the consequence and penalty against in case of non-deployment of the
seafarer without any valid reason. It reads: Section 4. Workers Deployment.An agency shall
deploy its recruits within the deployment period as indicated below: xxx b. Thirty (30) calendar
days from the date of processing by the administration of the employment contracts of seafarers.
Failure of the agency to deploy a worker within the prescribed period without valid reasons shall
be a cause for suspension or cancellation of license or fine. In addition, the agency shall return
all documents at no cost to the worker. (Emphasis and underscoring supplied) The appellate
court correctly ruled that the penalty of reprimand provided under Rule IV, Part VI of the POEA
Rules and Regulations Governing the Recruitment and Employment of Land-based Overseas
Workers is not applicable in this case. The breach of contract happened on February 1992 and
the law applicable at that time was the 1991 POEA Rules and Regulations Governing Overseas
Employment. The penalty for non-deployment as discussed is suspension or cancellation of
license or fine.
5. Same; Same; Same; Employer-Employee Relationship; Even before the start of any
employer-employee relationship, contemporaneous with the perfection of the
employment contract was the birth of certain rights and obligations, the breach of
which may give rise to a cause of action against the erring party.-We rule that
distinction must be made between the perfection of the employment contract and the
commencement of the employer-employee relationship. The perfection of the contract, which in
this case coincided with the date of execution thereof, occurred when petitioner and respondent
agreed on the object and the cause, as well as the rest of the terms and conditions therein. The
commencement of the employer-employee relationship, as earlier discussed, would have taken
place had petitioner been actually deployed from the point of hire. Thus, even before the start of
any employer-employee relationship, contemporaneous with the perfection of the employment
contract was the birth of certain rights and obligations, the breach of which may give rise to a
cause of action against the erring party. Thus, if the reverse had happened, that is the seafarer
failed or refused to be deployed as agreed upon, he would be liable for damages.
6. Same; Seafarers; Recruitment; Philippine Overseas Employment Administration

(POEA) Standard Employment Contract; The Philippine Overseas Employment
Administration (POEA) Standard Employment Contract provides that employment
shall commence upon the actual departure of the seafarer from the airport or
seaport in the port of hire.-The POEA Standard Employment Contract provides that
employment shall commence upon the actual departure of the seafarer from the airport or
seaport in the port of hire. We adhere to the terms and conditions of the contract so as to credit
the valid prior stipulations of the parties before the controversy started. Else, the obligatory force
of every contract will be useless. Parties are bound not only to the fulfillment of what has been
expressly stipulated but also to all the consequences which, according to their nature, may be in
keeping with good faith, usage and law.
7. Labor Law; Evidence; Substantial Evidence; Factual findings of labor officials, who
are deemed to have acquired expertise in matters within their jurisdiction, are
generally accorded not only respect but even finality by the courts when supported by
substantial evidence.-Equally settled is the rule that factual findings of labor officials, who
are deemed to have acquired expertise in matters within their jurisdiction, are generally
accorded not only respect but even finality by the courts when supported by substantial
evidence, i.e., the amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion. But these findings are not infallible. When there is a showing
that they were arrived at arbitrarily or in disregard of the evidence on record, they may be
examined by the courts. In this case, there was no showing of any arbitrariness on the part of the
lower courts in their findings of facts. Hence, we follow the settled rule.
Before the Court is a Petition for Review on Certiorari1 of the Decision2 of the First Division of the
Court of Appeals in CA-G.R. SP No. 91632 dated 31 January 2007, denying the petition
for certiorari filed by Stolt-Nielsen Transportation Group, Inc. and Chung Gai Ship Management
(petitioners) and affirming the Resolution of the National Labor Relations Commission (NLRC).
The dispositive portion of the assailed decision reads:
WHEREFORE, the petition is hereby DENIED. Accordingly, the assailed Decision promulgated on
February 28, 2003 and the Resolution dated July 27, 2005 are AFFIRMED.3
The facts as gathered by this Court follow:
On 6 March 1995, Sulpecio Madequillo (respondent) filed a complaint before the Adjudication
Office of the Philippine Overseas Employment Administration (POEA) against the petitioners for
illegal dismissal under a first contract and for failure to deploy under a second contract. In his
complaint-affidavit,4 respondent alleged that:
1. On 6 November 1991(First Contract), he was hired by Stolt-Nielsen Marine Services, Inc on
behalf of its principal Chung-Gai Ship Management of Panama as Third Assistant Engineer
on board the vessel "Stolt Aspiration" for a period of nine (9) months;
2. He would be paid with a monthly basic salary of $808.00 and a fixed overtime pay of
$404.00 or a total of $1,212.00 per month during the employment period commencing on
6 November 1991;
3. On 8 November 1991, he joined the vessel MV "Stolt Aspiration";

4. On February 1992 or for nearly three (3) months of rendering service and while the vessel
was at Batangas, he was ordered by the ships master to disembark the vessel and
repatriated back to Manila for no reason or explanation;
5. Upon his return to Manila, he immediately proceeded to the petitioners office where he
was transferred employment with another vessel named MV "Stolt Pride" under the same
terms and conditions of the First Contract;
6. On 23 April 1992, the Second Contract was noted and approved by the POEA;
7. The POEA, without knowledge that he was not deployed with the vessel, certified the
Second Employment Contract on 18 September 1992.
8. Despite the commencement of the Second Contract on 21 April 1992, petitioners failed to
deploy him with the vessel MV "Stolt Pride";
9. He made a follow-up with the petitioner but the same refused to comply with the Second
Employment Contract.
10.On 22 December 1994, he demanded for his passport, seamans book and other
employment documents. However, he was only allowed to claim the said documents in
exchange of his signing a document;
11.He was constrained to sign the document involuntarily because without these documents,
he could not seek employment from other agencies.
He prayed for actual, moral and exemplary damages as well as attorneys fees for his illegal
dismissal and in view of the Petitioners bad faith in not complying with the Second Contract.
The case was transferred to the Labor Arbiter of the DOLE upon the effectivity of the Migrant
Workers and Overseas Filipinos Act of 1995.
The parties were required to submit their respective position papers before the Labor Arbiter.
However, petitioners failed to submit their respective pleadings despite the opportunity given to
them.5
On 21 July 2000, Labor Arbiter Vicente R. Layawen rendered a judgment 6 finding that the
respondent was constructively dismissed by the petitioners. The dispositive portion reads:
WHEREFORE, premises considered, judgment is hereby rendered, declaring the respondents
guilty of constructively dismissing the complainant by not honoring the employment contract.
Accordingly, respondents are hereby ordered jointly and solidarily to pay complainant the
following:
1. $12,537.00 or its peso equivalent at the time of payment. 7
The Labor Arbiter found the first contract entered into by and between the complainant and the
respondents to have been novated by the execution of the second contract. In other words,
respondents cannot be held liable for the first contract but are clearly and definitely liable for the
breach of the second contract. 8 However, he ruled that there was no substantial evidence to
grant the prayer for moral and exemplary damages. 9
The petitioners appealed the adverse decision before the National Labor Relations Commission
assailing that they were denied due process, that the respondent cannot be considered as
dismissed from employment because he was not even deployed yet and the monetary award in
favor of the respondent was exorbitant and not in accordance with law. 10
On 28 February 2003, the NLRC affirmed with modification the Decision of the Labor Arbiter. The
dispositive portion reads:
WHEREFORE, premises considered, the decision under review is hereby, MODIFIED BY DELETING
the award of overtime pay in the total amount of Three Thousand Six Hundred Thirty Six US
Dollars (US $3,636.00).
In all other respects, the assailed decision so stands as, AFFIRMED. 11
Before the NLRC, the petitioners assailed that they were not properly notified of the hearings that
were conducted before the Labor Arbiter. They further alleged that after the suspension of
proceedings before the POEA, the only notice they received was a copy of the decision of the
Labor Arbiter.12
The NLRC ruled that records showed that attempts to serve the various notices of hearing were
made on petitioners counsel on record but these failed on account of their failure to furnish the
Office of the Labor Arbiter a copy of any notice of change of address. There was also no evidence
that a service of notice of change of address was served on the POEA. 13
The NLRC upheld the finding of unjustified termination of contract for failure on the part of the
petitioners to present evidence that would justify their non-deployment of the respondent. 14 It
denied the claim of the petitioners that the monetary award should be limited only to three (3)
months for every year of the unexpired term of the contract. It ruled that the factual incidents
material to the case transpired within 1991-1992 or before the effectivity of Republic Act No.
8042 or the Migrant Workers and Overseas Filipinos Act of 1995 which provides for such
limitation.15
However, the NLRC upheld the reduction of the monetary award with respect to the deletion of
the overtime pay due to the non-deployment of the respondent. 16
The Partial Motion for Reconsideration filed by the petitioners was denied by the NLRC in its
Resolution dated 27 July 2005.17
The petitioners filed a Petition for Certiorari before the Court of Appeals alleging grave abuse of
discretion on the part of NLRC when it affirmed with modification the ruling of the Labor Arbiter.
They prayed that the Decision and Resolution promulgated by the NLRC be vacated and another
one be issued dismissing the complaint of the respondent.
Finding no grave abuse of discretion, the Court of Appeals AFFIRMED the Decision of the labor
tribunal.
The Courts Ruling
The following are the assignment of errors presented before this Court:
I.
THE COURT A QUO ERRED IN FINDING THAT THE SECOND CONTRACT NOVATED THE FIRST
CONTRACT.
1. THERE WAS NO NOVATION OF THE FIRST CONTRACT BY THE SECOND CONTRACT; THE
ALLEGATION OF ILLEGAL DISMISSAL UNDER THE FIRST CONTRACT MUST BE RESOLVED
SEPARATELY FROM THE ALLEGATION OF FAILURE TO DEPLOY UNDER THE SECOND
CONTRACT.
2. THE ALLEGED ILLEGAL DISMISSAL UNDER THE FIRST CONTRACT TRANSPIRED MORE THAN
THREE (3) YEARS AFTER THE CASE WAS FILED AND THEREFORE HIS CASE SHOULD HAVE
BEEN DISMISSED FOR BEING BARRED BY PRESCRIPTION.
II.
THE COURT A QUO ERRED IN RULING THAT THERE WAS CONSTRUCTIVE DISMISSAL UNDER THE
SECOND CONTRACT.
1. IT IS LEGALLY IMPOSSIBLE TO HAVE CONSTRUCTIVE DISMISSAL WHEN THE EMPLOYMENT
HAS NOT YET COMMENCED.
2. ASSUMING THERE WAS OMISSION UNDER THE SECOND CONTRACT, PETITIONERS CAN
ONLY BE FOUND AS HAVING FAILED IN DEPLOYING PRIVATE RESPONDENT BUT WITH VALID
REASON.
III.
THE COURT A QUO ERRED IN FAILING TO FIND THAT EVEN ASSUMING THERE WAS BASIS FOR
HOLDING PETITIONER LIABLE FOR "FAILURE TO DEPLOY" RESPONDENT, THE POEA RULES
PENALIZES SUCH OMISSION WITH A MERE "REPRIMAND." 18
The petitioners contend that the first employment contract between them and the private
respondent is different from and independent of the second contract subsequently executed
upon repatriation of respondent to Manila.
We do not agree.
Novation is the extinguishment of an obligation by the substitution or change of the obligation by

a subsequent one which extinguishes or modifies the first, either by changing the object or
principal conditions, or, by substituting another in place of the debtor, or by subrogating a third
person in the rights of the creditor. In order for novation to take place, the concurrence of the
following requisites is indispensable:
1. There must be a previous valid obligation,
2. There must be an agreement of the parties concerned to a new contract,
3. There must be the extinguishment of the old contract, and
4. There must be the validity of the new contract. 19
In its ruling, the Labor Arbiter clarified that novation had set in between the first and second
contract. To quote:
xxx [T]his office would like to make it clear that the first contract entered into by and between
the complainant and the respondents is deemed to have been novated by the execution of the
second contract. In other words, respondents cannot be held liable for the first contract but are
clearly and definitely liable for the breach of the second contract. 20
This ruling was later affirmed by the Court of Appeals in its decision ruling that:
Guided by the foregoing legal precepts, it is evident that novation took place in this particular
case. The parties impliedly extinguished the first contract by agreeing to enter into the second
contract to placate Medequillo, Jr. who was unexpectedly dismissed and repatriated to Manila.
The second contract would not have been necessary if the petitioners abided by the terms and
conditions of Madequillo, Jr.s employment under the first contract. The records also reveal that
the 2nd contract extinguished the first contract by changing its object or principal. These
contracts were for overseas employment aboard different vessels. The first contract was for
employment aboard the MV "Stolt Aspiration" while the second contract involved working in
another vessel, the MV "Stolt Pride." Petitioners and Madequillo, Jr. accepted the terms and
conditions of the second contract. Contrary to petitioners assertion, the first contract was a
"previous valid contract" since it had not yet been terminated at the time of Medequillo, Jr.s
repatriation to Manila. The legality of his dismissal had not yet been resolved with finality.
Undoubtedly, he was still employed under the first contract when he negotiated with petitioners
on the second contract. As such, the NLRC correctly ruled that petitioners could only be held
liable under the second contract.21
We concur with the finding that there was a novation of the first employment contract.
We reiterate once more and emphasize the ruling in Reyes v. National Labor Relations
Commission,22 to wit:
x x x [F]indings of quasi-judicial bodies like the NLRC, and affirmed by the Court of Appeals in due
course, are conclusive on this Court, which is not a trier of facts.
xxxx
x x x Findings of fact of administrative agencies and quasi-judicial bodies, which have
acquired expertise because their jurisdiction is confined to specific matters, are
generally accorded not only respect, but finality when affirmed by the Court of
Appeals. Such findings deserve full respect and, without justifiable reason, ought not to be
altered, modified or reversed.(Emphasis supplied) 23
With the finding that respondent "was still employed under the first contract when he negotiated
with petitioners on the second contract",24 novation became an unavoidable conclusion.
Equally settled is the rule that factual findings of labor officials, who are deemed to have
acquired expertise in matters within their jurisdiction, are generally accorded not only respect
but even finality by the courts when supported by substantial evidence, i.e., the amount of
relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion.25 But these findings are not infallible. When there is a showing that they were arrived
at arbitrarily or in disregard of the evidence on record, they may be examined by the courts. 26 In
this case, there was no showing of any arbitrariness on the part of the lower courts in their
findings of facts. Hence, we follow the settled rule.
We need not dwell on the issue of prescription. It was settled by the Court of Appeals with its
ruling that recovery of damages under the first contract was already time-barred. Thus:
Accordingly, the prescriptive period of three (3) years within which Medequillo Jr. may initiate
money claims under the 1st contract commenced on the date of his repatriation. xxx The start of
the three (3) year prescriptive period must therefore be reckoned on February 1992, which by
Medequillo Jr.s own admission was the date of his repatriation to Manila. It was at this point in
time that Medequillo Jr.s cause of action already accrued under the first contract. He had until
February 1995 to pursue a case for illegal dismissal and damages arising from the 1st contract.
With the filing of his Complaint-Affidavit on March 6, 1995, which was clearly beyond the
prescriptive period, the cause of action under the 1st contract was already time-barred. 27
The issue that proceeds from the fact of novation is the consequence of the non-deployment of
respondent.
The petitioners argue that under the POEA Contract, actual deployment of the seafarer is a
suspensive condition for the commencement of the employment. 28 We agree with petitioners on
such point. However, even without actual deployment, the perfected contract gives rise to
obligations on the part of petitioners.
A contract is a meeting of minds between two persons whereby one binds himself, with respect
to the other, to give something or to render some service. 29 The contracting parties may
establish such stipulations, clauses, terms and conditions as they may deem convenient,
provided they are not contrary to law, morals, good customs, public order, or public policy. 30
The POEA Standard Employment Contract provides that employment shall commence "upon the
actual departure of the seafarer from the airport or seaport in the port of hire." 31 We adhere to
the terms and conditions of the contract so as to credit the valid prior stipulations of the parties
before the controversy started. Else, the obligatory force of every contract will be useless. Parties
are bound not only to the fulfillment of what has been expressly stipulated but also to all the
consequences which, according to their nature, may be in keeping with good faith, usage and
law.32
Thus, even if by the standard contract employment commences only "upon actual departure of
the seafarer", this does not mean that the seafarer has no remedy in case of non-deployment
without any valid reason. Parenthetically, the contention of the petitioners of the alleged poor
performance of respondent while on board the first ship MV "Stolt Aspiration" cannot be
sustained to justify the non-deployment, for no evidence to prove the same was presented. 33
We rule that distinction must be made between the perfection of the employment contract and
the commencement of the employer-employee relationship. The perfection of the contract, which
in this case coincided with the date of execution thereof, occurred when petitioner and
respondent agreed on the object and the cause, as well as the rest of the terms and conditions
therein. The commencement of the employer-employee relationship, as earlier discussed, would
have taken place had petitioner been actually deployed from the point of hire. Thus, even before
the start of any employer-employee relationship, contemporaneous with the perfection of the
employment contract was the birth of certain rights and obligations, the breach of which may
give rise to a cause of action against the erring party. Thus, if the reverse had happened, that is
the seafarer failed or refused to be deployed as agreed upon, he would be liable for damages. 34
Further, we do not agree with the contention of the petitioners that the penalty is a mere
reprimand.
The POEA Rules and Regulations Governing Overseas Employment 35 dated 31 May 1991 provides
for the consequence and penalty against in case of non-deployment of the seafarer without any
valid reason. It reads:
Section 4. Workers Deployment. An agency shall deploy its recruits within the deployment
period as indicated below:
xxx
b. Thirty (30) calendar days from the date of processing by the administration of the employment
contracts of seafarers.
Failure of the agency to deploy a worker within the prescribed period without valid
reasons shall be a cause for suspension or cancellation of license or fine. In addition,
the agency shall return all documents at no cost to the worker.(Emphasis and
underscoring supplied)
The appellate court correctly ruled that the penalty of reprimand 36 provided under Rule IV, Part VI
of the POEA Rules and Regulations Governing the Recruitment and Employment of Land-based
Overseas Workers is not applicable in this case. The breach of contract happened on February
1992 and the law applicable at that time was the 1991 POEA Rules and Regulations Governing
Overseas Employment. The penalty for non-deployment as discussed is suspension or

cancellation of license or fine.
Now, the question to be dealt with is how will the seafarer be compensated by reason of the
unreasonable non-deployment of the petitioners?
The POEA Rules Governing the Recruitment and Employment of Seafarers do not provide for the
award of damages to be given in favor of the employees. The claim provided by the same law
refers to a valid contractual claim for compensation or benefits arising from employer-employee
relationship or for any personal injury, illness or death at levels provided for within the terms and
conditions of employment of seafarers. However, the absence of the POEA Rules with regard to
the payment of damages to the affected seafarer does not mean that the seafarer is precluded
from claiming the same. The sanctions provided for non-deployment do not end with the
suspension or cancellation of license or fine and the return of all documents at no cost to the
worker. As earlier discussed, they do not forfend a seafarer from instituting an action for
damages against the employer or agency which has failed to deploy him. 37
We thus decree the application of Section 10 of Republic Act No. 8042 (Migrant Workers Act)
which provides for money claims by reason of a contract involving Filipino workers for overseas
deployment.lavvphil The law provides:
Sec. 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters
of the National Labor Relations Commission (NLRC) shall have the original and exclusive
jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint,
the claims arising out of an employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment including claims for actual, moral, exemplary
and other forms of damages. x x x (Underscoring supplied)
Following the law, the claim is still cognizable by the labor arbiters of the NLRC under the second
phrase of the provision.
Applying the rules on actual damages, Article 2199 of the New Civil Code provides that one is
entitled to an adequate compensation only for such pecuniary loss suffered by him as he has
duly proved. Respondent is thus liable to pay petitioner actual damages in the form of the loss of
nine (9) months worth of salary as provided in the contract. 38 This is but proper because of the
non-deployment of respondent without just cause.
WHEREFORE, the appeal is DENIED. The 31 January 2007 Decision of the Court of Appeals in
CA-G.R. SP. No. 91632 is hereby AFFIRMED. The Petitioners are hereby ordered to pay Sulpecio
Medequillo, Jr., the award of actual damages equivalent to his salary for nine (9) months as
provided by the Second Employment Contract.
SO ORDERED.
G.R. No. 197303
June 4, 2014
APQ SHIPMANAGEMENT CO., LTD., and APQ CREW MANAGEMENT USA,

INC., Petitioners,
vs.
ANGELITO L. CASEAS, Respondent.
DECISION
1. Labor Law; Seafarers; Disability Benefits; Temporary Total Disability; For the
duration of the treatment but in no case to exceed 120 days, the seaman is on
temporary total disability as he is totally unable to work. He receives his basic wage
during this period until he is declared fit to work or his temporary disability is
acknowledged by the company to be permanent, either partially or totally.-In
Magsaysay Maritime Corporation vs. NLRC, 699 SCRA 197 (2013), citing Vergara vs. Hammonia
Maritime Services, Inc., 567 scra 610 (2008), the Court reiterated that the seafarer, upon sign-off
from his vessel, must report to the company-designated physician within three (3) days from
arrival for diagnosis and treatment. For the duration of the treatment but in no case to exceed
120 days, the seaman is on temporary total disability as he is totally unable to work. He receives
his basic wage during this period until he is declared fit to work or his temporary disability is
acknowledged by the company to be permanent, either partially or totally, as his condition is
defined under the POEA-SEC and by applicable Philippine laws. If the 120 days initial period is
exceeded and no such declaration is made because the seafarer requires further medical
attention, then the temporary total disability period may be extended up to a maximum of 240
days, subject to the right of the employer to declare within this period that a partial or total
disability already exists. The seaman may, of course, also be declared fit to work at any time
such declaration is justified by his medical condition.
2. Remedial Law; Civil Procedure; Appeals; Supreme Court; The Supreme Court (SC) is
not a trier of facts and, thus, its jurisdiction is limited only to reviewing errors of law.At the outset, it is to be emphasized that the Court is not a trier of facts and, thus, its
jurisdiction is limited only to reviewing errors of law. The rule, however, admits of certain
exceptions, one of which is where the findings of fact of the lower tribunals and the appellate
court are contradictory. Such is the case here. Thus, the Court is constrained to review and
resolve the factual issue in order to settle the controversy.
3. Labor Law; Seafarers; Philippine Overseas Employment Administration-Standard
Employment Contract; While the seafarer and his employer are governed by their
mutual agreement, the Philippine Overseas Employment Administration (POEA) Rules
and Regulations require that the Philippine Overseas Employment AdministrationStandard Employment Contract (POEA-SEC) be integrated in every seafarers
contract.-Employment contracts of seafarers on board foreign ocean-going vessels are not
ordinary contracts. They are regulated and an imprimatur by the State is necessary. While the
seafarer and his employer are governed by their mutual agreement, the POEA Rules and
Regulations require that the POEA-SEC be integrated in every seafarers contract. In this case,
there is no dispute that Caseas employment contract was duly approved by the POEA and that
it incorporated the provisions of the POEA-SEC.
4. Remedial Law; Evidence; Theory of Imputed Knowledge; Agency; The theory of
imputed knowledge ascribed the knowledge of the agent to the principal, not the
other way around.-In Sunace International Management Services, Inc. v. NLRC, 480 SCRA
146 (2006), the Court ruled that the theory of imputed knowledge ascribed the knowledge of the
agent to the principal, not the other way around. The knowledge of the principal-foreign
employer could not, therefore, be imputed to its agent. As there was no substantial proof that
Sunace knew of, and consented to be bound under, the 2-year employment contract extension, it
could not be said to be privy thereto. As such, it and its owner were not held solidarily liable for
any of the complainants claims arising from the 2-year employment extension.
5. Labor Law; Seafarers; Termination of Employment; In a nutshell, there are three (3)
requirements necessary for the complete termination of the employment contract: 1]
termination due to expiration or other reasons/causes; 2] signing off from the
vessel; and 3] arrival at the point of hire.-It is to be observed that both provisions require
the seafarer to arrive at the point of hire as it signifies the completion of the employment
contract, and not merely its expiration. Similarly, a seafarers employment contract is terminated
even before the contract expires as soon as he arrives at the point of hire and signs off for
medical reasons, due to shipwreck, voluntary resignation or for other just causes. In a nutshell,
there are three (3) requirements necessary for the complete termination of the employment
contract: 1] termination due to expiration or other reasons/causes; 2] signing off from the vessel;
and 3] arrival at the point of hire. In this case, there was no clear showing that Caseas signed
off from the vessel upon the expiration of his employment contract, which was in February or
April 2005. He did not arrive either in Manila, his point of hire, because he was still on board the
vessel MV Haitien Pride on the supposed date of expiration of his contract. It was only on August
14, 2006 that he signed off from MV Haitien Pride and arrived in Manila on August 30, 2006. In
Interorient Maritime Enterprises, Inc. v. NLRC, 261 SCRA 757 (1996), the Court held that the
obligations and liabilities of the local agency and its foreign principal do not end upon the
expiration of the contracted period as they were duty bound to repatriate the seaman to the
point of hire to effectively terminate the contract of employment.
6. Maritime Law; Seaworthiness; While seaworthiness is commonly equated with the
physical aspect and condition of the vessel for voyage as its ability to withstand the
rigors of the sea, it must not be forgotten that a vessel should be armed with the
necessary documents required by the maritime rules and regulations, both local and
international.-Caseas claimed that his transfer was due to the fact that MV Perseverance
could not leave port because of incomplete documents for its operation. This was not disputed.
To the mind of the Court, having incomplete documents for the vessels operation renders it
unseaworthy. While seaworthiness is commonly equated with the physical aspect and condition
of the vessel for voyage as its ability to withstand the rigors of the sea, it must not be forgotten
that a vessel should be armed with the necessary documents required by the maritime rules and
regulations, both local and international. It has been written that vessel seaworthiness further
extends to cover the documents required to ensure that the vessel can enter and leave ports
without problems. Accordingly, Caseas contract should have been terminated and he should
have been repatriated to the Philippines because a seafarer cannot be forced to sail with an
unseaworthy vessel, pursuant to Section 24 of the POEA-SEC. There was, however, no showing
that his contract was terminated by reason of such transfer. It is necessary to reiterate that MV
Haitien Pride appears to be manned by, and accredited with, the same principal/agency. His
joining the said vessel could only mean that it was for the purpose of completing his contract as
the transfer was made well within the period of his employment contract on board MV
Perseverance.
MENDOZA, J.:
This petition for review on certiorari under Rule 45 of the Rules of Court seeks to review, reverse
and set aside the January 24, 2011 Decision1 and the June 1, 2011 Resolution2 of the Court of
Appeals (CA). in CA-GR. SP No. 112997, which annulled and set aside the October 14, 2009
Decision of the National Labor Relations Commission (NLRCJ in NLRC LAC No. 04-000220-09,
where respondent Angelito L. Caseas (Caseas) was seeking disability and other benefits
against petitioner APQ Shipmanagement Co., Ltd. (APQ) and petitioner-principal APQ Crew
Management USA, Inc. (Crew Management).3
It appears from the records that in June 2004, Casenas was hired by APQ, acting for and in behalf
of its principal, Crew Management, as Chief Mate for vessel MV Perseverance for a period of eight
(8) months starting from June 16, 2004 to February 16, 2005,with a basic monthly salary of
US$840.00, for forty-eight (48) hours a week, with US$329.00 as overtime pay.
In his Position Paper,4 Casenas further alleged that on June 16, 2004, he left Manila to join his
assigned vessel in Miami, Florida, USA, though the vessel could not leave the Florida port
because of its incomplete documents for operation; that consequently, he was transferred to
another vessel, MV HAITIEN PRIDE, which was in Haiti, although again because of incomplete
documents, the vessel could not leave the port and remained at Cap Haitien; that together with
the rest of the vessel's officers and crew, he was left to fend for himself; that they were not
provided food and water and had to fish for their own food and were not paid their salaries; that
he suffered extreme stress and anxiety because of the uncertainty of the situation; that his
employment contract was extended by APQ from the original eight (8) months to twenty-six (26)
months; that the vessel eventually left for Bahamas; that he felt he became weaker and got tired
easily; that despite his unpaid wages and weakened condition, he performed his duties as Chief
Mate diligently; that in August 2006, he began to suffer shortness of breath, headache and chest
pains; that he was then brought to the Grand Bahamas Health Services and was diagnosed with
hypertension and was given medicines; that he was then repatriated due to his condition and he
arrived in the Philippines on August 30, 2006; that within three (3) days thereafter, he reported
to APQ for post-employment medical examination where the company-designated physician later
diagnosed him with Ischemic Heart Disease; that a certain Dr. Ariel G. Domingo likewise
examined him, confirming and certifying that he was suffering from Essential Hypertension and
Ischemic Heart Disease; that he was declared "unfit for sea service"; that as a result, he was not
able to work for more than 120 days from his repatriation; that another medical examination was
conducted by Dr. Lina R. Cero, showing that he was suffering from Essential Hypertension with
Cariomegally Ischemic Heart Disease and Indirect Inguinal Hernia Right; that he was then
advised to take his maintenance medications for life; that APQ refused to provide him further
medical attention, thus, he incurred medical expenses in the amount of 6,390.00 by November
2006; that he demanded payment of permanent total disability benefits, sickness allowance and
medical expenses to which he was entitled under the POEA Standard Employment Contract
(POEA-SEC), but APQ refused to pay; that he, together with other crew members, sent a series of
letters and e-mails to the representatives of the shipowners regarding their unpaid wages, but
despite efforts, APQ still refused to pay their salaries; that demands for payment were also made
to the president of APQ, but the same were refused; and that ultimately, he was compelled to
seek redress and filed a complaint for permanent total disability benefits, reimbursement of
medical expenses, sickness allowance, non-payment of salaries representing the extended
portion of the employment contract, damages, and attorney's fees.
APQ, on the other hand, alleged in its Position Paper5 that upon expiration of the contract,
Caseas refused to return to the Philippines until he finally did on August 30, 2006; 6 that
thereafter, Caseas demanded payment of his wages, overtime and vacation pay for the alleged
extended portion of the contract; that it could not be held liable for claims pertaining to the
extended portion of the contract for it did not consent to it; that, in fact, as early as January
2005, it had been making arrangements, through American Airlines/American Eagle, for Caseas
repatriation at the end of his contract in February 2005; that Caseas was fully paid of his wages
and other benefits for the duration of his 8-month contract; and that Caseas suffered illness
after the expiration of the contract, hence, it could not be made liable to pay him any benefits for
his injury/illness.7
Caseas, however, disputed the position of APQ, claiming that his contract of employment was
duly extended.8He denied that APQ had been making arrangements for his repatriation as early
as January 2005. To prove that his contract was extended, he submitted the following
documents:
1. Deck Logbook, dated 14 August 2006;
2. Report of Mr. Steve Mastroropolous, dated 16 May 2006;
3. Letter, dated 24 April 2006 of Mr. Alex P. Quillope, President of the respondent APQ to OWWA,
admitting that there was no food and water for the crew of MV "HAITIEN PRIDE."9
APQ countered that the abovementioned documents did not prove mutual consent of the parties
as provided in Caseas employment contract. His contract expired on August 1, 2005 and, thus,
he had no legal basis to claim any salary after the said period.10 Caseas became ill in August
2006 or more than one (1) year after the expiration of his employment contract.11
Labor Arbiter Decision

On November 20, 2008, the Labor Arbiter (LA)rendered the Decision12 dismissing Caseas'
complaint. He was of the view that the employment contract was not extended pursuant to the
terms and conditions of the contract. Caseas failed to prove mutual consent of the parties to
the extension of the contract. He rendered services on MV Haitien Pride from August 1, 2005 to
April 30, 2006, after the expiration of his contract with APQ on board the vessel MV Perseverance
on February 15, 2005.
The LA pointed out that the illness/disease suffered by Caseas was sustained while serving on
board MVCap Haitien Pride, which was outside the period of his contractual employment. Thus,
Caseas' claims could not be awarded.
NLRC Resolution
On June 22, 2009, the NLRC resolved the appeal by reversing and setting aside the LA decision.
Based on the records, it found that the employment contract was extended. The illness, Essential
Hypertension, suffered by Caseas was a compensable disease under Section 32-A, No. 20 of the
POEA-SEC. Hence, NLRC ruled that Caseas was entitled to his claims because the illness was
sustained within the duration of his employment contract.
On October 14, 2009, the NLRC, acting on the motion for reconsideration filed by APQ,
reconsidered and set aside the June 22, 2009 NLRC Resolution. It explained that the documentary
evidence presented only proved the extension of contract but not the consent given to it by APQ.
Caseas failed to present the new contract duly signed by APQ or Crew Management, or any
proof that they consented to the extension. The NLRC explained that Caseas directly dealt with
the shipowner to the exclusion of APQ and Crew Management, hence, his recourse was against
the shipowner. Thus, APQ could not be held liable for the unpaid salaries, as well as the
permanent disability benefits, because these were claims that accrued after the expiration of the
employment contract.
Caseas moved for a reconsideration, but the NLRC denied his motion in its Resolution, dated
November 27, 2009.
CA Decision
Caseas filed a petition for certiorari under Rule 65 before the CA, assailing the October 14, 2009
decision and the November 27, 2009 resolution of the NLRC. On January 24, 2011, the CA
granted the petition and nullified and set aside the questioned NLRC decision and resolution.
The CA reinstated the earlier June 22, 2009 NLRC Resolution. In so ruling, the CA cited the case of
Place well International Services Corporation v. Camote,13 where it was written:
xxx a subsequently executed side agreement of an overseas contract worker with the foreign
employer is void, simply because it is against our existing laws, morals and public policy. The
subsequent agreement cannot supersede the terms of the standard employment contract
approved by the POEA. Assuming arguendo that petitioner entered into an agreement with the
foreign principal for an extension of his contract of employment, sans approval by the POEA, the
contract that governs petitioner's employment is still the POEA-SEC until his repatriation. As far
as Philippine law is concerned, petitioner's contract of employment with respondents was

concluded only at the time of his repatriation on August 30, 2006.
Further, the CA explained that a declaration from the company designated physician as to the
fitness or unfitness of a seafarer to continue his sea-duties is sanctioned by Section 20(B)(3) of
the POEA-SEC. There being no declaration made by the company-designated physician within the
120-day period as to the fitness of Caseas, the CA opined that he was undoubtedly entitled to
disability benefits.
APQ filed a motion for reconsideration, while Caseas filed his Comment/Opposition. On June 1,
2011, the CA denied the motion for lack of merit.
Hence, this petition.
GROUNDS
THE HONORABLE COURT OF APPEALS ERRED IN REVERSING AND SETTING ASIDE THE DECISION
AND RESOLUTION OF THE NLRC DATED 14 OCTOBER 2009 AND 27 NOVEMBER 2009, AND
REINSTATING THE NLRCS RESOLUTION DATED 22 JUNE 2009, CONSIDERING THAT:
A. PRIVATE RESPONDENTS CONTRACT OF EMPLOYMENT WAS NEVER EXTENDED BY THE
COMPANY NOR BY THE PRINCIPAL
B. PRIVATE RESPONDENTS CLAIM FOR DISABILITY BENEFITS, SICKNESS ALLOWANCE AND UNPAID
WAGES ALL ACCRUED AFTER THE EXPIRATION OF THE CONTRACT OF EMPLOYMENT14
The pivotal issue for resolution is whether or not the employment contract of Caseas was
extended with the consent of APQ/Crew Management.
The Court rules in the affirmative.
At the outset, it is to be emphasized that the Court is not a trier of facts and, thus, its jurisdiction
is limited only to reviewing errors of law. The rule, however, admits of certain exceptions, one of
which is where the findings of fact of the lower tribunals and the appellate court are
contradictory. Such is the case here. Thus, the Court is constrained to review and resolve the
factual issue in order to settle the controversy.
Employment contracts of seafarers on board foreign ocean-going vessels are not ordinary
contracts. They are regulated and an imprimatur by the State is necessary. While the seafarer
and his employer are governed by their mutual agreement, the POEA Rules and Regulations
require that the POEA-SEC be integrated in every seafarers contract.15 In this case, there is no
dispute that Caseas employment contract was duly approved by the POEA and that it
incorporated the provisions of the POEA-SEC.
As earlier stated, the controversy started when Caseas claimed sickness and disability benefits
as well as unpaid wages from the petitioners upon his return to the Philippines. The petitioners,
on the other hand, refused to pay, arguing that Caseas sickness was contracted after his
employment contract expired.
Regarding the issue of extension and its corresponding consequences, two cases were cited by
the parties in their pleadings. The first was Sunace International Management Services, Inc. v.
NLRC16 (Sunace)and the second was Placewell International Services Corporation v.
Camote17 (Placewell).
In Sunace, the Court ruled that the theory of imputed knowledge ascribed the knowledge of the
agent to the principal, not the other way around. The knowledge of the principal-foreign
employer could not, therefore, be imputed to its agent. As there was no substantial proof that
Sunace knew of, and consented to be bound under, the 2-year employment contract extension, it
could not be said to be privy thereto. As such, it and its owner were not held solidarily liable for
any of the complainants claims arising from the 2-year employment extension.18
In Placewell, the Court concluded that the original POEA-approved employment contract
subsisted and, thus, the solidary liability of the agent with the principal continued. It ruled that:
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. Thus, we held in
Chavez v. Bonto-Perez,19 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.
xxx
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.
8042.20
APQs primary argument revolves around the fact of expiration of Caseas employment
contract, which it claims was not extended as it was without its consent. While the contract
stated that any extension must be made by mutual consent of the parties, it, however,
incorporated Department Order (DO)No. 4 and Memorandum Circular No. 09, both series of 2000,
which provided for the Standard Terms and Conditions Governing the Employment of Filipino
Seafarers on Board Ocean Going Vessels. Sections 2 and 18 thereof provide:
SECTION 2. COMMENCEMENT/ DURATION OF CONTRACT
A. The Employment contract between the employer and the seafarer shall commence upon
actual departure of the seafarer from the airport or seaport in the point of hire and with a POEA
approved contract. It shall be effective until the seafarers date of arrival at the point of hire upon
termination of his employment pursuant to Section 18 of this Contract.
B. The period of employment shall be for a period mutually agreed upon by the seafarer and the
employer but not to exceed 12 months. Any extension of the contract shall be subject to the
mutual consent of both parties.
xxx
SECTION 18. TERMINATION OF EMPLOYMENT
A. The employment of the seafarer shall cease when the seafarer completes his period of
contractual service aboard the vessel, signs off from the vessel and arrives at the point of hire.
B. The employment of the seafareris also terminated when the seafarer arrives at the point of
hire for any of the following reasons:
1. When the seafarer signs off and is disembarked for medical reasons pursuant to Section 20 (B)
[5] of this Contract.
xxx
[Emphases supplied]
It is to be observed that both provisions require the seafarer to arrive at the point of hire as it
signifies the completion of the employment contract, and not merely its expiration. Similarly, a
seafarers employment contract is terminated even before the contract expires as soon as he
arrives at the point of hire and signs off for medical reasons, due to shipwreck, voluntary
resignation or for other just causes. In a nutshell, there are three (3) requirements necessary for
the complete termination of the employment contract: 1]termination due to expiration or other
reasons/causes; 2]signing off from the vessel; and 3]arrival at the point of hire. In this case, there
was no clear showing that Caseas signed off from the vessel upon the expiration of his
employment contract, which was in February or April 2005. He did not arrive either in Manila, his
point of hire, because he was still on board the vessel MV Haitien Pride on the supposed date of
expiration of his contract. It was only on August 14, 2006 that he signed off 21 from MV Haitien
Pride and arrived in Manila on August 30, 2006.
In Interorient Maritime Enterprises, Inc. v. NLRC,22 the Court held that the obligations and
liabilities of the local agency and its foreign principal do not end upon the expiration of the
contracted period as they were duty bound to repatriate the seaman to the point of hire to
effectively terminate the contract of employment.23
APQ avers that Caseas transferred from MV Perseverance to MV Haitien Pride, which was not
the ship specifically mentioned in his contract. Section 15 of the POEA-SEC guides the Court on
this. It reads:
Section 15. Transfer Clause The seafarer agrees to be transferred at any port to any vessel
owned or operated, manned or managed by the same employer, provided it is accredited to the
same manning agent and provided further that the position of the seafarer and the rate of his
wages and terms of services are in no way inferior and the total period of employment shall not
exceed that originally agreed upon.
Any form of transfer shall be documented and made available when necessary.
APQ did not argue that MV Haitien Pride was not operated or managed by Crew Management. It
did not claim either that said vessel was not accredited by it. The logical conclusion, therefore, is
that MV Haitien Pride was operated/managed by Crew Management and accredited by APQ.
Thus, Caseas transfer should have been documented and made part of its records for future
purposes, but no documentation has been shown.
Even assuming arguendo that MV Haitien Pride was not related in any way with either Crew
Management or APQ, it is with more reason that the transfer should have been properly
documented pursuant to the above provision because it necessitated the termination of his
employment contract and his repatriation to the Philippines, pursuant to Section 26(A) of the
POEA-SEC. The said provision specifically provides that:
Section 26. Change of Principal.
A. When there is change of principal of the vessel necessitating the termination of employment
of the seafarer before the date indicated in the Contract, the seafarer shall be entitled to earned
wages, repatriation at employers expense and one month basic pay as termination pay.
B. If by mutual agreement, the seafarer continues his service on board the same vessel, such
service shall be treated as a new contract. The seafarer shall be entitled to earned wages only.
C. In case arrangement has been made for the seafarer to join another vessel to complete his
contract, the seafarer shall be entitled to basic wage until the date joining the other vessel.
Meanwhile, Caseas claimed that his transfer was due to the fact that MV Perseverance could not
leave port because of incomplete documents for its operation. This was not disputed. To the mind
of the Court, having incomplete documents for the vessels operation renders it unseaworthy.
While seaworthiness is commonly equated with the physical aspect and condition of the vessel
for voyage as its ability to withstand the rigors of the sea, it must not be forgotten that a vessel
should be armed with the necessary documents required by the maritime rules and regulations,
both local and international. It has been written that vessel seaworthiness further extends to
cover the documents required to ensure that the vessel can enter and leave ports without
problems.24
Accordingly, Caseas contract should have been terminated and he should have been
repatriated to the Philippines because a seafarer cannot be forced to sail with an unseaworthy
vessel, pursuant to Section 24 of the POEA-SEC.25 There was, however, no showing that his
contract was terminated by reason of such transfer. It is necessary to reiterate that MV Haitien
Pride appears to be manned by, and accredited with, the same principal/ agency. His joining the
said vessel could only mean that it was for the purpose of completing his contract as the transfer
was made well within the period of his employment contract on board MV Perseverance.
APQ further claims that that there was an agreement between Caseas and the shipowner, but
there was no concrete proof adduced to show that indeed a new agreement for the extension of
the contract was ever made. Granting that a new agreement for the extension was made, the
acts of APQ and Crew Management proved that there was implied consent to the extension.
APQ attempts to impress upon the Court that Caseas contract already expired and that he had
a new employer during the alleged extension of the contract by relying on the December 16,
2005 Letter of the POEA. APQ alleged in its Memorandum26 that:
In a letter dated 16 December 2005 letter, the POEA confirmed that the Contract expired on April
2005 but he was not allowed repatriation by the owner of the Vessel, his new employer [See
Annex "6" of Comment attached as Annex "z" of this Petition.] A perusal of the said letter,
however, discloses that nowhere was it stated that Caseas was allowed repatriation by the
owner of the vessel, his new employer. What was clearly stated therein was that Caseas was
not allowed repatriation by his employer for some reason. Insofar as Philippine law is concerned,
the employer referred to in the said letter remains to be the foreign principal/manning agency as
stated in the POEA-approved employment contract.
Finally, there was no showing as to why Caseas was not repatriated to the Philippines upon the
expiration of his contract. It was expressly provided therein that the contract was for eight (8)
months, plus or minus two (2) months, that is, until February 2005 or at most, April 2005.
On its claim of lack of consent, APQ insists that as proof of its intention not to extend Caseas
contract, it already arranged his plane ticket as early as January & February 2005, in anticipation
of the expiration of the contract, attaching the e-mail copy of the American Airlines E-ticket &
Itinerary.
Again, a scrutiny of the records reveals otherwise. The e-mail and eticket consistently relied upon
by the petitioners clearly showed that the eticket was issued on January 18, 2006, which flight
was scheduled on January 23 (Monday) bound for Miami and January 25 (Wednesday) bound for
Manila. There were two (2) other e-tickets arranged for Caseas which showed a flight schedule
on February 8 (Wednesday) and February 15 (Wednesday), both bound for Manila from Miami.
These e-mails and etickets were sent by Crew Management to APQ viafax. Crew Management
also executed the letter,27 dated February 24, 2006, addressed to DOLEOWWA in response to
the report of the wife of Caseas to DOLE regarding his repatriation. Crew Management stated in
said letter, copy furnished APQ, that it had already issued an air ticket to Caseas, but he failed
to claim it. The same letter assured the DOLE-OWWA of its arranging the payment of wages and
repatriation of the crew members on-board MV Haitien Pride, as well as its arranging another
plane ticket for Caseas, if necessary. Thus, these communications reveal that APQ had actual
knowledge that Caseas continued working on board the said vessel after February/April 2005.
Despite such knowledge, APQ neither posed any objection to the extension of the contract nor
make any effort to protect itself from any responsibility that might arise from the extension, if it
did not indeed intend to extend the employment contract. Tokeep on notifying a person/party
who was not anymore privy to any contract at all makes no sense. Also, APQ sent OWWA another
letter,28 dated April 24, 2006, giving information on the status of MV Haitien Pride. The same
letter confirmed that APQ and Crew Management had constant communication with each other
regarding the said vessel and its crew. Alex P. Quillope, APQs President, even stated in the same
letter that:
Soon as I receive any information from them, I will at once inform your good office as I have then
already prepared my travel again to Miami, Florida once MV Haitien Pride be on her sailing to
Miami.29
APQ cannot now feign ignorance of any extension of the contract and claim that it did not
consent to it.1wphi1 As it had knowledge of the extended contract, APQ is solidarily liable with
Crew Management for Caseas claims. Caseas is, therefore, entitled to the unpaid wages
during the extended portion of his contract.
As to his claim for medical and other benefits, there is no dispute that the symptoms of Caseas
illness began to manifest during the term of his employment contract. The fact that the
manifestations of the illness only came about in August 2006 will not bar a conclusion that he
contracted the ailment while the contract was subsisting. The overall state and condition that he
was exposed to over time was the very cause of his illness. Thus, the CA was correct in
reinstating the NLRC resolution awarding sickness allowance as well as disability benefits in favor
of Caseas. Section 20(B)(3) of the 2000 POEA Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean Going Vessels provides:
B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
xxx
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.
xxx
In Magsaysay Maritime Corporation vs. NLRC,30 citing Vergara vs. Hammonia Maritime Services,
Inc.,31the Court reiterated that the seafarer, upon sign-off from his vessel, must report to the
company-designated physician within three (3) days from arrival for diagnosis and treatment. For
the duration of the treatment but in no case to exceed 120 days, the seaman is on temporary
total disability as he is totally unable to work. He receives his basic wage during this period until
he is declared fit to work or his temporary disability is acknowledged by the company to be
permanent, either partially or totally, as his condition is defined under the POEA-SEC and by
applicable Philippine laws. If the 120 days initial period is exceeded and no such declaration is
made because the seafarer requires further medical attention, then the temporary total disability
period may be extended up to a maximum of 240 days, subject to the right of the employer to
declare within this period that a partial or total disability already exists. The seaman may, of
course, also be declared fit to work at any time such declaration is justi1ied by his medical
condition.32
In this case, Casenas immediately reported to APQ for the required post-employment medical
examination upon his return to the Philippines. He was referred to the company-designated
physician, who diagnosed him to be suffering from lschemic Heart Disease, which was a
manifestation of organ damage.33 Caseas likewise consulted two (2) other physicians who
certified him to be suffering from Essential Hypertension aside from Ischemic Heart
Disease.34 From the time of Caseas' diagnosis by the company-designated physician, he was
under the state of temporary total disability, which lasted for at least 120 days as provided by
law. Such period could be extended up to 240 days, if further medical attention was required.
There was, however, no showing of any justification to extend said period. As the law requires,
within 120 days from the time he was diagnosed of his illness, the company-designated
physician must make a declaration as to the fitness or unfitness of Caseas As correctly
observed by the CA, however, the 120 day period lapsed without such a declaration being
made.35 Caseas is now deemed to be in a state of permanent total disability and, thus, clearly
entitled to the total disability benefits provided by law.
WHEREFORE, the petition is DENIED.
SO ORDERED.

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G.R. No.

Crim. Case No. 03-01245

Crim. Case No. 03-01256

Crim. Case No. 03-01267

Crim. Case No. 03-01278

Crim. Case No. 03-01289

Crim. Case No. 03-012910

Crim. Case No. 03-013011

03-0123 (De Guzman)

G.R. No. 177498

January 18, 2012

6. Same; Seafarers; Recruitment; Philippine Overseas Employment Administration

3. On 8 November 1991, he joined the vessel MV "Stolt Aspiration";

Novation is the extinguishment of an obligation by the substitution or change of the obligation by

Overseas Employment. The penalty for non-deployment as discussed is suspension or

G.R. No. 197303

APQ SHIPMANAGEMENT CO., LTD., and APQ CREW MANAGEMENT USA,

Labor Arbiter Decision

as Philippine law is concerned, petitioner's contract of employment with respondents was

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