Jurisprudence

JULY 2019

Labor Laws; Seafarers; Conditional Satisfaction of Judgment; unfair and against public policy.
In a nutshell, the documents above enabled respondents to prevent the execution of the NLRC
Decision, maintain their petition before the CA, and, in the event of an unfavorable outcome,
seek an appeal before Us. Daang, on the other hand, would not only be obliged to return all
settlement money he received in the event that the CA reverses the NLRC, by his waiver of his
claims and right to prosecute any further action, he also gave up on any legal recourse which
would otherwise have been available to him. Clearly, Daang is on the losing end. The terms of
the Conditional Satisfaction of Judgment and the Affidavit, not unlike those considered by this
Court in Hernandez, are highly unfair and prejudicial against him. (Daang v. Skippers United
Pacific, Inc. and Commercial S.A., G.R. No. 191902, 30 July 2019, J. Jardeleza)

Labor Laws; Seafarers; Conditional Satisfaction of Judgment; unfair and against public policy;
effect. Applying Hernandez, We find respondents to be in bad faith and should therefor bear the
consequence of their actions – the conditional payment of the judgment award to Daang will be
treated as a voluntary settlement in full satisfaction of the NLRC’s judgment. With the judgment
award satisfied as of March 10, 2009 – when the parties signed and filed the Conditional
Satisfaction of Judgment with the NLRC, respondent’s petition before the CA became moot and
academic. (Daang v. Skippers United Pacific, Inc. and Commercial S.A., G.R. No. 191902, 30 July
2019, J. Jardeleza)

Procedural Laws; Rule 45; Review of CA decisions in labor cases. The Court’s review of CA
decisions in labor cases is a distinct one. Particularly, the review under Rule 45 endeavors to
assess whether the CA correctly determined the presence or absence of grave abuse of discretion
in the NLRC ruling. It is limited into ascertaining the legal correctness of the CA ruling anent the
NLRC decision, which findings and conclusions must, in turn, be supported by substantial
evidence; for otherwise, grave abuse of discretion will be imputed against it (NRLC). (Inocentes,
et al. v. R. Syjuco Construction, Inc. (RSCI) / Arch. Ryan I. Syjuco, G.R. No. 237020, 29 July 2019, J.
Inting)

Labor Laws; Terms; “Grave abuse of discretion”, “grave”. In a number of cases, the Court
expounded on the concept of “grave abuse of discretion” as the rendition of judgment in a
capricious, whimsical or arbitrary manner tantamount to lack of jurisdiction. Moreover, the
concept of “grave” connotes that the abuse of discretion is so gross and patent that amounts to
“an evasion of a positive duty or to a virtual refusal to perform the duty enjoined by or to act at
all in contemplation of law.” More specifically, in labor cases, as the one at bench, grave abuse
of discretion is present when the NLRC’s ruling is not supported by substantial evidence. Put in
another way, where the NLRC decision has basis in evidence as well as in law and jurisprudence,
no grave abuse of discretion may be imputed against it, and necessarily, the CA must dismiss the
petition for certiorari challenging the NLRC decision. (Inocentes, et al. v. R. Syjuco Construction,
Inc. (RSCI) / Arch. Ryan I. Syjuco, G.R. No. 237020, 29 July 2019, J. Inting)

Labor Laws; Terms; “Regular Employee”. (Inocentes, et al. v. R. Syjuco Construction, Inc. (RSCI) /
Arch. Ryan I. Syjuco, G.R. No. 237020, 29 July 2019, J. Inting)

Labor Laws; Terms; “Project Employee”; Principal Test. (Inocentes, et al. v. R. Syjuco
Construction, Inc. (RSCI) / Arch. Ryan I. Syjuco, G.R. No. 237020, 29 July 2019, J. Inting)

Labor Laws; “Project Employee”; Notice; Summary of project assignments is not the notice
referred to. The Court notes that the summary of project assignments relied by the CA cannot
be considered as the needed notice because it only listed down the projects from where
petitioners were previously assigned but nowhere did it indicate that petitioners were informed
or were aware that they were hired for a project or undertaking only. (Inocentes, et al. v. R. Syjuco
Construction, Inc. (RSCI) / Arch. Ryan I. Syjuco, G.R. No. 237020, 29 July 2019, J. Inting)

Labor Laws; “Project Employee”; Non-submission of a termination report with the DOLE is an
indication that a person is a regular, not a project, employee. The fact that respondents did not
submit a report with the DOLE (anent the termination of petitioners’ employment due to alleged
project completion) further bolsters that petitioners were not project employees. In Freyssinet
Filipinas Corp. v. Lapuz, the Court explained that the failure on the part of the employer to file
with the DOLE a termination report every time a project or its phase is completed is an indication
that the workers are not project employees but regular ones. (Inocentes, et al. v. R. Syjuco
Construction, Inc. (RSCI) / Arch. Ryan I. Syjuco, G.R. No. 237020, 29 July 2019, J. Inting)

Labor Laws; “Project Employee”; Employer has the burden to prove that the employee is a
project employee. Equally important to stress that the employer has the burden to prove that
the employee is indeed a project employee. On this, the employer must establish that (a) the
employee was assigned to carry out a particular project or undertaking; and (b) the duration and
scope of which was specified at the time of engagement. (Inocentes, et al. v. R. Syjuco
Construction, Inc. (RSCI) / Arch. Ryan I. Syjuco, G.R. No. 237020, 29 July 2019, J. Inting)

Labor Laws; “Project Employee”; Employer has the burden to prove that the employee is a
project employee; weight of a written contract. While the lack of a written contract does not
necessarily make one a regular employee, a written contract serves as proof that employees were
informed of the duration and scope of their work and their status as project employee at the
commencement of their engagement. (Inocentes, et al. v. R. Syjuco Construction, Inc. (RSCI) /
Arch. Ryan I. Syjuco, G.R. No. 237020, 29 July 2019, J. Inting)

Labor Laws; “Separation Pay”; When granted. Separation pay is granted since reinstatement is
no longer feasible by reason of strained relations between the parties and the possibility that the
positions previously occupied by petitioners are already being held by employees. (Inocentes, et
al. v. R. Syjuco Construction, Inc. (RSCI) / Arch. Ryan I. Syjuco, G.R. No. 237020, 29 July 2019, J.
Inting)
Civil Laws; Contracts. Under the Civil Code, a contract is a meeting of the minds, with respect to
the other, to give something or to render some service. Article 1318 of the Civil Code provides x
x x. (San Miguel Foods, Inc. and James A. Vinoya v. Magtuto, G.R. No. 225007, 24 July 2019, J.
Cario)

Civil Laws; Contracts; Essential Elements. For a contract to be valid, it must have the following
essential elements: (1) consent of the contracting parties; (2) object certain which is the subject
matter of the contract; and (3) cause of the obligation which is established. (San Miguel Foods,
Inc. and James A. Vinoya v. Magtuto, G.R. No. 225007, 24 July 2019, J. Cario)

Civil Laws; Contracts; Essential Elements; “Consent”. Consent is manifested by the meeting of
the offer and the acceptance of the thing and the cause, which are to constitute the contract.
(San Miguel Foods, Inc. and James A. Vinoya v. Magtuto, G.R. No. 225007, 24 July 2019, J. Cario)

Civil Laws; Contracts; Perfection. The contract is perfected at the moment there is a meeting of
the minds upon the thing that is the object of the contract and the price. (San Miguel Foods, Inc.
and James A. Vinoya v. Magtuto, G.R. No. 225007, 24 July 2019, J. Cario)

Civil Laws; Contracts; Perfection; Generally binding in whatever form. A contract, once
perfected, is generally binding in whatever form, whether written or oral, it may have been
entered into, provided that the essential requisites for its validity are present. Article 1356 of the
Civil Code provides x x x. (San Miguel Foods, Inc. and James A. Vinoya v. Magtuto, G.R. No.
225007, 24 July 2019, J. Cario)

Civil Laws; Contracts; Implied Ratification. SMFI cannot assail the unenforceability of the
agreement entered into between Magtuto and Vinoya on the ground that Vinoya had no
authority to bind the corporation. The contract, assuming Vinoya had no authority to sign for
SMFI, was impliedly ratified whe the broiler chicks subject of the contract were delivered by SMFI,
together with the feeds, medicines and materials, until the grown chickens were harvested by
SMFI. This occurred not only once but five times over the course of nine months. In Prime White
Cement Corp. v. IAC, we held that implied ratification may take various forms – like silence or
acquiescence; by acts showing approval or adoption of the contract; or by acceptance and
retention of benefits flowing therefrom. Under Article 1317 of the Civil Code, the contract is
enforceable against SMFI. The said provision stats: x x x. (San Miguel Foods, Inc. and James A.
Vinoya v. Magtuto, G.R. No. 225007, 24 July 2019, J. Cario)

Civil Laws; Contracts; Lease with a definite period; Akin to a lease without a written contract
where the basis of the lease is on a month to month basis. In the present case, Vinoya and
Magtuto arrived at an agreement that SMFI would supply day-old chicks which Magtuto would
grow for a certain period. Afterwards, SMFI would harvest the grown chickens and Magtuto
would be paid a grower’s fee. Both fulfilled their obligations on four occasions in a span of less
than a year. However, on the fifth delivery, SMFI failed to complete the 36,000 heads and was
only able to deliver 32,000. Given that the parties did not execute any written contract and their
verbal agreement involved growing chicks which starts from delivery of the day-old chicks until
the grown chickens are harvested, then it is clearly understood that the contract entered into by
Vinoya and Magtuto was on a “per grow basis,” the duration of which is for one growing season.
This case is akin to a lease without a written contract where the basis of the lease is on a month
to month basis. This is called a lease with definite period which is provided for in Article 1687 of
the Civil Code. The provision reads: x x x. (San Miguel Foods, Inc. and James A. Vinoya v. Magtuto,
G.R. No. 225007, 24 July 2019, J. Cario)

Civil Laws; Damages; Actual or Compensatory Damages. An award of actual or compensatory

damages requires proof of pecuniary loss. Under Articles 2199 and 2200 of the Civil Code, actual
or compensatory damages are those awarded in satisfaction of or in recompense for loss or injury
sustained. They proceed from a sense of natural justice and are designed to repair the wrong
that has been done. (San Miguel Foods, Inc. and James A. Vinoya v. Magtuto, G.R. No. 225007,
24 July 2019, J. Cario)

Civil Laws; Damages; Actual or Compensatory Damages; Two kinds. In Terminal Facilities and
Services Corporation v. Philippine Ports Authority, we explained that there are two kinds of actual
or compensatory damages: (1) the loss of what a person already possesses, and (2) the failure to
receive as a benefit that which would have pertained to him. (San Miguel Foods, Inc. and James
A. Vinoya v. Magtuto, G.R. No. 225007, 24 July 2019, J. Cario)

Civil Laws; Damages; Actual or Compensatory Damages; Two kinds; Unrealized Profits. In the
latter instance, the familiar rule is that damages consisting of unrealized profits, frequently
referred to as ganacias frustrados or lucrum cessans, are not to be granted on the basis of mere
speculation, conjecture, or surmise, but rather by reference to some reasonably definite standard
such as market value, established experience, or direct inference from known circumstances. It
is not necessary to prove with absolute certainty the amount of ganacias frustradas or lucrum
cessans. (San Miguel Foods, Inc. and James A. Vinoya v. Magtuto, G.R. No. 225007, 24 July 2019,
J. Cario)

Civil Laws; Damages; Actual or Compensatory Damages; How to prove entitlement. To be

entitled to compensatory damages, the amount of loss must be capable of proof and actually
proven with a reasonable degree of certainty, premised upon competent proof or the best
evidence obtainable. The burden of proof of the damage suffered is imposed on the party
claiming the same, who should adduce the best evidence available in support thereof. (San
Miguel Foods, Inc. and James A. Vinoya v. Magtuto, G.R. No. 225007, 24 July 2019, J. Cario)

Civil Laws; Damages; Actual or Compensatory Damages; Interest. In Nacar v. Gallery Frames,
we held that an award of interest in the concept of actual or compensatory damages is imposed
when an obligation, not constituting a loan or forbearance of money, is breached, then an
interest on the amount of damages awarded may be imposed at the discretion of the court at
the rate of 6% per annum. (San Miguel Foods, Inc. and James A. Vinoya v. Magtuto, G.R. No.
225007, 24 July 2019, J. Cario)
Procedural Laws; Power to Review; the Supreme Court has the authority to review matters not
specifically raised or assigned as error by the parties. Even if petitioner raises only one issue in
this case, which is a question of law, we deem it necessary to review other issues that have not
been settled as a result of the conflicting rulings of the tribunals a quo. After all, it is settled that
an appeal throws the entire case open for review. The Court has the authority to review matters
not specifically raised or assigned as error by the parties if their consideration is necessary in
arriving at a just resolution of the case. (Cuartocruz v. Active Works, Inc. and Ma. Isabel E.
Hermosa, Branch Manager, G.R. No. 209072, 24 July 2019, J. Jardeleza)

Procedural Laws; Power to Review; Rule 45; the Supreme Court may delve into the records and
examine the facts for itself when the factual findings of the LA, NLRC, and the CA are conflicting.
While the general rule is that the jurisdiction of the Court under Rule 45, Section 1 of the Rules
of Court is limited to the review of errors of law committed by the appellate court, the Court may
delve into the records and examine the facts for itself when the factual findings of the LA, NLRC,
and the CA are conflicting. Such is the case here. x x x. These conflicting factual findings are not
binding on the Court, and the Court retains the authority to pass upon the evidence presented
and draw conclusions therefrom. (Cuartocruz v. Active Works, Inc. and Ma. Isabel E. Hermosa,
Branch Manager, G.R. No. 209072, 24 July 2019, J. Jardeleza)

Civil Laws; Contracts; Liberality of contracts. A contract freely entered into is considered the law
between the parties who can establish stipulations, clauses, terms and conditions as they may
deem convenient, including the laws which they wish to govern their respective obligations, as
long as they are not contrary to law, morals, good customs, public order or public policy.
(Cuartocruz v. Active Works, Inc. and Ma. Isabel E. Hermosa, Branch Manager, G.R. No. 209072,
24 July 2019, J. Jardeleza)

Procedural Laws; Evidence; Judicial Notice; The foreign law is treated as a question of fact to
be properly pleaded and proved. The party invoking the application of a foreign law has the
burden of proving the law. The foreign law is treated as a question of fact to be properly pleaded
and proved as the judge or labor arbiter cannot take judicial notice of it. He is presumed to know
only domestic or forum law. (Cuartocruz v. Active Works, Inc. and Ma. Isabel E. Hermosa, Branch
Manager, G.R. No. 209072, 24 July 2019, J. Jardeleza)

Procedural Laws; Evidence; Presumed-Identity Approach or Processual Presumption. The

international law doctrine of presumed-identity approach or processual presumption applies.
Where a foreign law is not pleaded or, even if pleaded, is not proved, the presumption is that
foreign law is the same as ours. Consequently, we apply Philippine labor laws in determining the
issues in this case. (Cuartocruz v. Active Works, Inc. and Ma. Isabel E. Hermosa, Branch Manager,
G.R. No. 209072, 24 July 2019, J. Jardeleza)

Labor Laws; Termination; Right of workers to substantive and procedural due process. Workers
are entitled to substantive and procedural due process before the termination of their
employment. They may not be removed from employment without a valid or just cause as
determined by law, and without going through the proper procedure. The purpose of these two-
pronged qualifications is to protect the working class from the employer’s arbitrary and
unreasonable exercise of its right to dismiss. (Cuartocruz v. Active Works, Inc. and Ma. Isabel E.
Hermosa, Branch Manager, G.R. No. 209072, 24 July 2019, J. Jardeleza)

Labor Laws; Termination; Just Causes. The grounds cited for the termination of petitioner’s
employment contract are considered just causes under Article 282 of the Labor Code, but only if
respondents were able to prove them. The burden of proving that there is just cause for
termination is on the employer, who must affirmatively show rationally adequate evidence that
the dismissal was for a justifiable cause. Failure to show that there was valid or just cause for
termination would necessarily mean that the dismissal was illegal. (Cuartocruz v. Active Works,
Inc. and Ma. Isabel E. Hermosa, Branch Manager, G.R. No. 209072, 24 July 2019, J. Jardeleza)

Labor Laws; Termination; Illegal Dismissal. Where there is no showing of a clear, valid, and legal
cause for the termination of employment, the law considers the matter a case for illegal
dismissal. (Cuartocruz v. Active Works, Inc. and Ma. Isabel E. Hermosa, Branch Manager, G.R. No.
209072, 24 July 2019, J. Jardeleza)

Labor Laws; Termination; Procedural Due Process. Procedural due process requires the
employer to give the concerned employee at least two notices before terminating his
employment. The first is the notice which apprises the employee of the particular acts or
omissions for which his dismissal is being sought along with the opportunity for the employee to
air his side, while the second is the subsequent notice of the employer’s decision to dismiss him.
(Cuartocruz v. Active Works, Inc. and Ma. Isabel E. Hermosa, Branch Manager, G.R. No. 209072,
24 July 2019, J. Jardeleza)

Labor Laws; Presumption in favor of labor. In her position paper, petitioner alleged that on
August 6, 2007, she was sent by her employer to a recruitment agency in Hong Kong supposedly
for retraining, and returned on August 12, 2007. However, no retraining was conducted. We hold
that the period that petitioner was away from her workplace pursuant to her employer’s
instruction should be considered as days worked for the employer. In the first place, retraining
was not provided for in the employment contract. Petitioner was even oblivious of the reason
why she had to undergo retraining. Moreover, petitioner was ready, willing, and able to work,
but her employer prevented her from doing so by unreasonably sending her away from her
workplace. The employer’s actions should not be taken to prejudice petitioner. It is a time-
honored rule that in controversies between a laborer and his master, doubts reasonably arising
from the evidence or, in the interpretation of agreements and writings, should be resolved in the
former’s favor. (Cuartocruz v. Active Works, Inc. and Ma. Isabel E. Hermosa, Branch Manager,
G.R. No. 209072, 24 July 2019, J. Jardeleza)

Labor Laws; Section 10, RA 8042; the proviso “for three months for every year of unexpired
term, whichever is less” is unconstitutional. The proviso “for three months for every year of the
unexpired term [of the employment contract], whichever is less” has been declared
unconstitutional by this Court for violating the equal protection clause and substantive due
process. In Serrano v. Gallant Maritime Services, Inc., we explained that the said clause contains
a suspect classification in that, in the computation of the monetary benefits of fixed-term
employees who are illegally discharged, it imposes a three-month cap on the claim of OFWs with
an unexpired portion of one year or more in their contracts, but none on the claims of other
OFWs or local workers with fixed-term employment. The subject clause singles out one
classification of OFWs and burdens it with a peculiar disadvantage. Moreover, there is no
compelling state interest that the subject clause may possibly serve. (Cuartocruz v. Active Works,
Inc. and Ma. Isabel E. Hermosa, Branch Manager, G.R. No. 209072, 24 July 2019, J. Jardeleza)

JUNE 2019
Civil Laws; Family Code; Marriage; Doubts are resolved in favor of the continuance and validity
of the marriage; Petitioner has burden to prove the nullity of marriage. Jurisprudence states
that the validity of marriage and the unity of the family are enshrined in our Constitution and
statutory laws; hence, any doubts attending the same are to be resolved in favor of the
continuance and validity of the marriage and the burden of proving the nullity of the same rests
at all times upon the petitioner. The policy of the Constitution is to protect and strengthen the
family as the basic social institution and marriage as the foundation of the family. As such, the
Constitution decrees marriage as legally inviolable and protects it from dissolution at the whim
of the parties. (Cahapisan-Santiago v. Santiago, G.R. No. 241144, 26 June 2019, J. Perlas-
Bernabe)

Civil Laws; Family Code; Marriage; Ground to Nullify Marriage; Psychological Incapacity.
Psychological incapacity does not merely pertain to any psychological condition; otherwise, it
would be fairly easy to circumvent our laws on marriage so much so that we would be practically
condoning a legal subterfuge for divorce. According to case law, psychological incapacity should
be confined to the most serious cases of personality disorders that clearly manifest utter
insensitivity or inability to give meaning and significance to the marriage. It should refer to no
less than a mental – nor merely physical – incapacity that causes a party to be truly incognitive
of the basic marital covenants that concomitantly must be assumed and discharged by the
parties to the marriage, which, as provided under Article 68 of the Family Code, among others,
include their mutual obligations to live together, observe love, respect and fidelity, and render
help and support. (Cahapisan-Santiago v. Santiago, G.R. No. 241144, 26 June 2019, J. Perlas-
Bernabe)

Civil Laws; Family Code; Marriage; Ground to Nullify Marriage; Psychological Incapacity; Three
(3) traits. Psychological incapacity must be characterized by three (3) traits: (a) gravity, i.e., it
must be grave and serious such that the party would be incapable of carrying out the ordinary
duties required in a marriage; (b) juridical antecedence, i.e., it must be rooted in the history of
the party antedating the marriage, although the overt manifestations may emerge only after the
marriage; and (c) incurability, i.e., it must be incurable, or even if it were otherwise, the cure
would be beyond the means of the party involved. (Cahapisan-Santiago v. Santiago, G.R. No.
241144, 26 June 2019, J. Perlas-Bernabe)

Civil Laws; Family Code; Marriage; Ground to Nullify Marriage; Psychological Incapacity;
Gravity; Psychological Report. In determining the existence of psychological incapacity, a clear
and understandable causation between the party’s condition and the party’s inability to
perform the essential marital covenants must be shown. A psychological report that is
essentially comprised of mere platitudes, however speckled with technical jargon, would not cut
the marriage tie. (Cahapisan-Santiago v. Santiago, G.R. No. 241144, 26 June 2019, J. Perlas-
Bernabe)

Civil Laws; Family Code; Marriage; Ground to Nullify Marriage; Psychological Incapacity; Sexual
infidelity by it self is not proof of psychological incapacity. Sexual infidelity, by itself, is not
sufficient proof that petitioner is suffering from psychological incapacity. It must be shown that
the acts of unfaithfulness are manifestations of a disordered personality which make the spouse
completely unable to discharge the essential obligations of marriage. (Cahapisan-Santiago v.
Santiago, G.R. No. 241144, 26 June 2019, J. Perlas-Bernabe)