FIRST DIVISION

PEOPLE OF THE PHILIPPINES, G.R. No. 171448 Plaintiff-Appellee, Present:

PUNO, C.J., Chairperson, - versus - SANDOVAL-GUTIERREZ,

CORONA, *AZCUNA, and GARCIA, JJ. CHARLIE COMILA and Promulgated: AIDA COMILA, Accused-Appellants. February 28, 2007 x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I O N GARCIA, J.:

On April 5, 1999, in the Regional Trial Court (RTC) of Baguio City, an Information[1] for

Illegal Recruitment committed in large scale by a syndicate, as defined and penalized under

Article 13(6) in relation to Articles 38(b), 34 and 39 of Presidential Decree No. 442, otherwise

known as the New Labor Code, as amended, was filed against Charlie Comila, Aida Comila and

one Indira Ram Singh Lastra, allegedly committed as follows:

That on or about the 7th day of September, 1998, in the City of Baguio, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring, confederating, and mutually aiding one another, did then and there willfully, unlawfully and feloniously offer, recruit, and promise employment as contract workers in Italy, to the herein complainants, namely: MARLYN ARO y PADCAYAN, ANNIE FELIX y BAKISAN, ELEONOR DONGGA-AS y ANGHEL, ESPERANZA BACKIAN y LAD-EY, ZALDY DUMPILES y MALIKDAN, JOEL EDIONG y CALDERON, RICKY WALDO y NICKEY, JEROME MONTAEZ y OSBEN, DOVAL DUMPILES y SAP-AY, JONATHAN NGAOSI y DUMPILES, EDMUND DIEGO y SUBIANGAN and MARLON PETTOCO y SUGOT, without said accused having first secured the necessary license or authority from the Department of Labor and Employment.

CONTRARY TO LAW.

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

Branch 60 thereof.

On the same date April 5, 1999 and in the same court, twelve (12) separate

Informations[2] for Estafa were filed against the same accused at the instance of the same

complainants. Docketed as Criminal Case Nos. 16428-R to 16439-R and likewise raffled to the

same branch of the court, the twelve (12) Informations for Estafa, varying only as regards the

names of the offended parties and the respective amounts involved, uniformly recite: That on or about the 10th day of November, 1998, in the City of Baguio,

Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring, confederating and mutually aiding one another did then and there willfully, unlawfully and feloniously defraud one ZALDY DUMPILES Y MALIKDAN by way of false pretenses, which are executed prior to or simultaneously with the commission of the fraud, as follows, to wit: the accused knowing fully well that he/she/they is/are not AUTHORIZED job RECRUITERS for persons intending to secure work abroad convinced said Zaldy Dumpiles y Malikdan and pretended that he/she/they could secure a job for him/her abroad, for and in consideration of the sum ofP25,000.00 and representing the placement and medical fees when in truth and in fact could not; the said Zaldy Dumpiles y Malikdan deceived and convinced by the false pretenses employed by the accused parted away the total sum of P25,000,00 in favor of the accused, to the damage and prejudice of the said Zaldy Dumpiles y Malikdan in the aforementioned amount of TWENTY FIVE THOUSAND PESOS (P25,000.00), Philippine currency.

CONTRARY TO LAW.

Of the three accused named in all the aforementioned two sets of Informations, only

accused Aida Comila and Charlie Comila were brought under the jurisdiction of the trial court,

the third, Indira Ram Singh Lastra, being then and still is at large.

Arraigned with assistance of counsel, accused Aida Comila and Charlie Comila entered a

plea of NOT GUILTY not only to the Information for Illegal Recruitment (Crim. Case No. 16427-

R) but also to the twelve (12) Informations for Estafa (Crim. Case Nos. 16428-R to 16439-R).

Thereafter, a joint trial of the cases ensued.

Of the twelve (12) complainants in both the illegal recruitment and estafa charges, the

prosecution was able to present only seven (7) of them, namely: Annie Felix y Bakisan; Ricky

Waldo y Nickey; Jonathan Ngaosi y Dumpiles; Marilyn Aro y Padcayan; Edmund Diego y

Subiangan; Jerome Montaez y Osben; and Eleonor Dongga-as y Anghel. A certain Jose Matias of

the Philippine Overseas Employment Administration (POEA) was supposed to testify for the

prosecution but his testimony was dispensed after the defense agreed that he will merely

testify to the effect that as per POEA records, accused Aida Comila and Charlie Comila were not

duly licensed or authorized to recruit workers for overseas employment.

In a consolidated decision[3] dated October 3, 2000, the trial court found both accused GUILTY

beyond reasonable doubt of the crimes of Illegal Recruitment committed in large scale by a

syndicate, as charged in Crim. Case No. 16427-R, and of estafa, as charged in Crim. Case Nos.

16430-R; 16431-R, 16432-R, 16434-R, 16436-R, 16438-R, and 16439-R. The other informations

for estafa in Crim. Case Nos. 16428-R, 16429-R, 16433-R, 16435-R and 16437-R were, however,

dismissed for lack of evidence. We quote the fallo of the trial courts decision: WHEREFORE, premises considered, this court hereby finds the accused, Aida Comila and Charlie Comila:

1. In Criminal Case No. 16427-R, GUILTY beyond

reasonable doubt of the crime of Illegal Recruitment in Large Scale Committed by a Syndicate. They are hereby sentenced to each suffer the penalty of life imprisonment and a fine of P100,000.00;

2. In Criminal Case No. 16430-R, GUILTY beyond

reasonable doubt of the crime of Estafa. There being no mitigating and aggravating circumstances and applying the

provisions of the Indeterminate Sentence Law, they are hereby sentenced to each suffer an indeterminate penalty of four (4) years and two (2) months of prision correccional, as minimum, to eight (8) years of prision mayor, as maximum. They shall also jointly and severally pay the complainant, Marilyn Aro, the sum of P25,500.00 plus interest from the date this Information was filed until it is fully paid;

3. In Criminal Case No. 16431-R, GUILTY beyond

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

4. In Criminal Case No. 16432-R, GUILTY beyond

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

5. In Criminal Case No. 16434-R, GUILTY beyond

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

6. In Criminal Case No. 16436-R, GUILTY beyond

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

7. In Criminal Case No. 16438-R, GUILTY beyond

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

8. In Criminal Case No. 16439-R, GUILTY beyond

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

9. Criminal Cases Nos. 16428-R; 16429-R; 16433-R;

16435-R and 16437-R are hereby DISMISSED for lack of evidence.

In the service of the various prison terms herein imposed upon the accused Aida Comila and Charlie Comila, the provisions of Article 70 of the Revised Penal Code shall be observed.

As to the accused, Indira Sighn Lastra, let all these cases be archived in

the meantime until the said accused is arrested. SO ORDERED.

Pursuant to a Notice of Appeal[4] filed by the two accused, the trial court forwarded the

records of the cases to this Court in view of the penalty of life imprisonment meted in Crim.

Case No. 16427-R (Illegal Recruitment in large scale). In its Resolution[5] of October 3, 2001, the

Court resolved to accept the appeal and the subsequent respective briefs for the

appellants[6] and the appellee[7] as well as the appellants reply brief.[8]

Thereafter, and consistent with its pronouncement in People v. Mateo,[9] the

Court, via its Resolution[10] of September 22, 2004, transferred the cases to the Court of

Appeals (CA) for appropriate action and disposition. In the CA, the cases were assigned one

docket number and thereat docketed as CA-G.R. CR H.C. No. 01615.

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

the trial court, to wit:

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

With costs against the accused-appellants. SO ORDERED.

The cases are again with this Court in view of the Notice of Appeal [12] interposed by the

herein accused-appellants from the aforementioned affirmatory CA decision.

Acting thereon, the Court required the parties to simultaneously submit their respective

supplemental briefs, if they so desire.

In their respective manifestations,[13] the parties opted not to file any supplemental

brief and instead merely reiterated what they have said in their earlier appellants and

appellee's briefs.

The Office of the Solicitor General, in the brief[14] it filed for appellee People,

summarizes the facts of the case in the following manner:

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

Annie met appellant again at the St. Theresas College on or about

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

Annie submitted all her requirements to appellant, along with the

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

Annie went to Manila several times to complete her medical examination

as required (pp. 14-16, tsn, ibid.). Considering appellant Aida Comilas pregnancy at that time, her husband Charlie Comila, also an agent of Lastra, accompanied Annie and the other applicants during their medical check-up (pp. 22-24, ibid.).

On the last week of October, 1998, Annie again paid appellant the total amount of twenty five thousand pesos (P25,000.00) to complete her placement fee of fifty thousand pesos (P50,000.00). Annie was told that her flight to Italy was scheduled on September 14, 1998 (p. 20, ibid.). Later on, Erlinda Ramos told Annie that her flight to Italy was re-scheduled to October, 1998 due to a typhoon (p.20, ibid.).

There were others like Annie Felix who were similarly enticed to apply for

the promised job in Italy (pp. 4-5, tsn, September 22, 1999). Among them were Ricky Waldo, Edmund Diego, Eleanor Donga-as, Jonathan Ngaosi, Marilyn Aro and Jerome Montaez (pp. 4-5; 19-28, tsn, September 22, 1999, afternoon session).

In the briefing at St. Theresas College, Navy Road, Pacdal, Baguio City, (p.

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

After undergoing the required medical examination in Manila, applicants

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

8-23-98, received the amount of P14,000.00 from Ella Bakisan. Signed,

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

Considering the payments they made, Ricky Waldos flight to Italy was

scheduled on September 14, 1999 while those of Marilyn Aro, Edmund Diego, Jerome Montanez, Jonathan Ngaosi, and Eleanor Donga-as were scheduled on October 27, 1999 (pp. 8-9, tsn, September 22, 1999; pp. 32-33, tsn, September 14, 1999; pp. 2-4, tsn, September 15, 1999; p. 24, September 21, 1999; p.10, tsn, September 22, 1999, morning session; p. 27, tsn, September 22, 1999, afternoon session).

Like Annie Felix, Ricky Waldos flight did not push through as scheduled

on September 14, 1999 (pp. 32-34, tsn, September 14, 1999; pp. 2-4, tsn, September 15, 1999). Appellant Aida Comila explained that the re-scheduling was due to typhoon (ibid.). Rickys flight was then re-scheduled to October 7, 1999 but was again moved to October 27, 1999 as, according to appellant Aida Comila, there were some problems in his papers and that of the other applicants (pp. 2-3, ibid.).

On October 25, 1998, appellant Aida Comila called the applicants for a

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

On the first week of November, 1998, appellant Charlie Comila told

Marilyn Aro and several other applicants that their visas would be released (p. 25, September, 21, 1999). Appellant Charlie Comila accompanied them and the others to the Elco Building at Shaw Boulevard, Pasig City purportedly to see Erlinda Ramos (p.25, tsn, September 21, 1999). When Erlinda Ramos arrived, she told Marilyn and the other applicants to wait for the release of their visas, the following day (p.25, ibid.). Marilyn and the rest came back each day for one whole week but the promised visas were not released to them (ibid.).

Marilyn and the other applicants complained to appellant Charlie Comila

about the delay and told him of their doubts about their application and the promised job in Italy (ibid.). At this point, appellant Charlie Comila assured them that they should not worry and that everything will be alright (ibid). Appellant Charlie Comila then brought them to Indira Lastra (p.26, ibid.).

Marilyn Aro, Annie Felix, and the rest were all shocked to find out that

Indira Lastra was actually an inmate of Manila (Quiapo) city jail. (p.26, ibid.; p. 13, tsn, September 14, 1999). They felt at once that they were, indeed, victims of illegal recruitment (ibid.).When they demanded the return of their money from

Indira Lastra, the latter told them to withdraw their money from appellant Aida Comila (p.26. ibid.).

Upon their return to Baguio, Marilyns group proceeded to appellant Aida

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

In April, 1999, Marilyn Aro, Edmund Diego, Annie Felix, Eleanor Donga-as,

Jerome Montanez, Ricky Waldo and Jonathan Ngaosi filed their complaint against appellants Aida Comila and Charlie Comila before the Criminal Investigation Group (CIG).

In the same month of April 1999, separate Informations for estafa and

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

In their appellants brief, accused-appellants would fault the two courts below in (1)

finding them guilty beyond reasonable doubt of the crimes of illegal recruitment and estafa;

and (2) totally disregarding the defense of denial honestly advanced by them.

It is not disputed that accused-appellants Charlie Comila and Aida Comila are husband-

and-wife. Neither is it disputed that husband and wife knew and are well-acquainted with their

co-accused, Indira Ram Singh Lastra, and one Erlinda Ramos. It is their posture, however, that

from the very beginning, appellant Aida Comila never professed that she had the authority to

recruit and made it clear to the applicants for overseas employment that it was Erlinda Ramos

who had such authority and who issued the job orders fromItaly. Upon this premise, this

appellant contends that the subsequent transactions she had with the applicants negate the

presence of deceit, an essential element of estafa under paragraph 2(a) of Article 315 of the

Revised Penal Code. On the charge of illegal recruitment, this appellant argues that she was

merely trying to help the applicants to process their papers, believing that Indira Ram Sighn

Lastra and Erlinda Ramos would really send the applicants to Italy. With respect to co-appellant

Charlie Comila, the defense submits that the prosecution miserably failed to prove his

participation in the illegal recruitment and estafa.

The appeal must fail.

After a careful and circumspect review of the records, we are fully convinced that both

the trial and appellate courts committed no error in finding both appellants guilty beyond moral

certainty of doubt of the crimes charged against them. Through the respective testimonies of

its witnesses, the prosecution has satisfactorily established that both appellants were then

engaged in unlawful recruitment and placement activities. The combined testimonies of the

prosecution witnesses point to appellant Aida Comila as the one who promised them foreign

employment and assured them of placement overseas through the help of their co-accused

Indira Ram Singh Lastra. For sure, it was Aida herself who informed them of the existence of job

orders from Palermo, Italy, and of the documents needed for the processing of their

applications. Aida, in fact, accompanied the applicants to undergo medical examinations

in Manila. And relying completely on Aidas representations, the applicants-complainants

entrusted their money to her only to discover later that their hopes for an overseas

employment were but vain. In the words of the trial court:

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

to go out of her way to render free services to other people whom she did not know or just met. To be sure, Aida Comila had children to attend to and a husband who was unemployed to be able to conduct such time-consuming charitable activities.[15]

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

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

In fact, even if there is no consideration involved, appellant will still be

deemed as having engaged in recruitment activities, since it was sufficiently demonstrated that she promised overseas employment to private complainants. To be engaged in the practice and placement, it is plain that there must at least be a promise or offer of an employment from the person posing as a recruiter whether locally or abroad.

As regards appellant Charlie Comila, it is inconceivable for him to feign ignorance of the

illegal recruitment activities of his wife Aida, and of his lack of participation therein. Again, we

quote with approval what the trial court has said in its decision:[17]

Charlie Comila could not, likewise, feign ignorance of the illegal transactions. It is contrary to human experience, hence, highly incredible for a husband not to have known the activities of his wife who was living with him under the same roof. In fact, he admitted that when Aida gave birth, he had to accompany the complainants to Manila for their medical examination and again, on another trip, to bring them to the office of Erlinda Ramos to follow-up their visas. The fact that he knew the ins and outs of Manila was a desperate excuse or reason why he accompanied the complainants to Manila considering that, as he and his wife claimed, they have nothing to do with the recruitment activities. Furthermore, if he and his wife had nothing to do with the recruitment of the complainants, why did he have to sign the letter and accommodate the request

of Myra Daluca whom they have not really known. But damning was his statement that he signed the letter because Aida was not there to sign it. Such a statement would only show that they were indeed parties to these illegal transactions. Charlie Comila would even claim that he was just an elementary graduate and so he did not understand what he was asked to sign. But his booking sheet showed that he was a high school graduate. He was a conductor of a bus company who should know and understand how to read and write. Furthermore, he was already a grown up man in his thirties who knew what was right and wrong and what he should or should not do.

It is well established in jurisprudence that a person may be

charged and convicted for both illegal recruitment and estafa. The reason therefor is not hard

to discern: illegal recruitment is malum prohibitum, while estafa is malum in se. In the first, the

criminal intent of the accused is not necessary for conviction. In the second, such an intent is

imperative. Estafa under Article 315, paragraph 2, of the Revised Penal Code, is committed by

any person who defrauds another by using fictitious name, or falsely pretends to possess

power, influence, qualifications, property, credit, agency, business or imaginary transactions,

or by means of similar deceits executed prior to or simultaneously with the commission

of fraud.[18] Here, it has been sufficiently proven that both appellants represented themselves

to the complaining witnesses to have the capacity to send them to Italyfor employment, even

as they do not have the authority or license for the purpose. Doubtless, it is this

misrepresentation that induced the complainants to part with their hard-earned money for

placement and medical fees. Such act on the part of the appellants clearly constitutes estafa

under Article 315, paragraph (2), of the Revised Penal Code.

Appellants next bewail the alleged total disregard by the two courts below their defense

of denial which, had it been duly considered and appreciated, could have merited their

acquittal.

The Court disagrees. The two courts below did consider their defense of

denial. However, given the positive and categorical testimonies of the complainants who were

one in pointing to appellants, in cahoots with their co-accused Indira Ram Singh Lastra, as

having recruited and promised them with overseas employment, appellants defense of denial

must inevitably collapse.

All told, we rule and so hold that the two courts below committed no error in adjudging

both appellants guilty beyond reasonable doubt of the crimes of illegal recruitment committed

by a syndicate in large scale and of estafa in seven (7) counts. We also rule that the penalties

imposed by the court of origin, as affirmed by the CA, accord with law and jurisprudence.

IN VIEW WHEREOF, the instant appeal is DISMISSED and the appealed decision of the

CA, affirmatory of that the trial court, is AFFIRMED in toto.

Costs against appellants.

SO ORDERED.

THIRD DIVISION

BECMEN SERVICE EXPORTER G.R. Nos. 182978-79

AND PROMOTION, INC.,

Petitioner, Present:

Ynares-Santiago, J.(Chairperson),

- versus - Carpio Morales,*

Chico-Nazario,

Nachura, and

Peralta, JJ.

SPOUSES SIMPLICIO and MILA

CUARESMA (for and in behalf of

their daughter, Jasmin G. Cuaresma),

WHITE FALCON SERVICES, INC.

and JAIME ORTIZ (President,

White Falcon Services, Inc.),

Respondents.

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

SPOUSES SIMPLICIO and MILA G.R. Nos. 184298-99

CUARESMA (for and in behalf of

their daughter, Jasmin G. Cuaresma),

Petitioners,

- versus -

WHITE FALCON SERVICES, INC. Promulgated:

and BECMEN SERVICE EXPORTER

AND PROMOTION, INC.,

Respondents. April 7, 2009

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

DECISION

YNARES-SANTIAGO, J.:

These consolidated petitions assail the Amended Decision[1] of the Court of Appeals

dated May 14, 2008 in CA-G.R. SP No. 80619 and CA-G.R. SP No. 81030 finding White Falcon

Services, Inc. and Becmen Service Exporter and Promotion, Inc. solidarily liable to indemnify

spouses Simplicio and Mila Cuaresma the amount of US$4,686.73 in actual damages with

interest.

On January 6, 1997, Jasmin Cuaresma (Jasmin) was deployed by Becmen Service

Exporter and Promotion, Inc.[2] (Becmen) to serve as assistant nurse in Al-Birk Hospital in the

Kingdom of Saudi Arabia (KSA), for a contract duration of three years, with a corresponding

salary of US$247.00 per month.

Over a year later, she died allegedly of poisoning.

Jessie Fajardo, a co-worker of Jasmin, narrated that on June 21, 1998, Jasmin was found

dead by a female cleaner lying on the floor inside her dormitory room with her mouth foaming

and smelling of poison.[3]

Based on the police report and the medical report of the examining physician of the Al-

Birk Hospital, who conducted an autopsy of Jasmins body, the likely cause of her death was

poisoning. Thus:

According to letter No. 199, dated 27.2.1419H, issued by Al-Birk Police

Station, for examining the corpse of Jasmin Cuaresma, 12.20 P.M. 27.2.1419H,

Sunday, at Al-Birk Hospital.

1. The Police Report on the Death

2. The Medical Diagnosis

Sex: Female Age: 25 years Relg: Christian

The said person was brought to the Emergency Room of the hospital;

time 12.20 P.M. and she was unconscious, blue, no pulse, no respiration

and the first aid esd undertaken but without success.

3. Diagnosis and Opinion: Halt in blood circulation respiratory system and

brain damage due to an apparent poisoning which is under

investigation.[4]

Name: Jasmin Cuaresma

Sex: Female

Marital Status: Single Nationality: Philipino (sic)

Religion: Christian Profession: Nurse

Address: Al-Birk Genrl. Hospital Birth Place: The Philippines

On 27.2.1419H, Dr. Tariq Abdulminnem and Dr. Ashoki Komar, both have

examined the dead body of Jasmin Cuaresma, at 12.20 P.M., Sunday,

22.2.14189H, and the result was:

1. Report of the Police on the death

2. Medical Examination: Blue skin and paleness on the Extrimes (sic),

total halt to blood circulation and respiratory system and brain damage.

There were no external injuries. Likelypoisoning by taking poisonous

substance, yet not determined. There was a bad smell in the mouth and

unknown to us.[5] (Emphasis supplied)

Jasmins body was repatriated to Manila on September 3, 1998. The following day, the

City Health Officer of Cabanatuan City conducted an autopsy and the resulting medical report

indicated that Jasmin died under violent circumstances, and not poisoning as originally found

by the KSA examining physician. The City Health Officer found that Jasmin had abrasions at her

inner lip and gums; lacerated wounds and abrasions on her left and right ears; lacerated

wounds and hematoma (contusions) on her elbows; abrasions and hematoma on her thigh and

legs; intra-muscular hemorrhage at the anterior chest; rib fracture; puncture wounds; and

abrasions on the labia minora of the vaginal area.[6]

On March 11, 1999, Jasmins remains were exhumed and examined by the National

Bureau of Investigation (NBI). The toxicology report of the NBI, however, tested negative for

non-volatile, metallic poison and insecticides.[7]

Simplicio and Mila Cuaresma (the Cuaresmas), Jasmins parents and her surviving heirs,

received from the Overseas Workers Welfare Administration (OWWA) the following amounts:

P50,000.00 for death benefits; P50,000.00 for loss of life; P20,000.00 for funeral expenses; and

P10,000.00 for medical reimbursement.

On November 22, 1999, the Cuaresmas filed a complaint against Becmen and its

principal in the KSA, Rajab & Silsilah Company (Rajab), claiming death and insurance benefits, as

well as moral and exemplary damages for Jasmins death.[8]

In their complaint, the Cuaresmas claim that Jasmins death was work-related, having

occurred at the employers premises;[9] that under Jasmins contract with Becmen, she is entitled

to iqama insurance coverage; that Jasmin is entitled to compensatory damages in the amount

of US$103,740.00, which is the sum total of her monthly salary of US$247.00 per month under

her employment contract, multiplied by 35 years (or the remaining years of her productive life

had death not supervened at age 25, assuming that she lived and would have retired at age 60).

The Cuaresmas assert that as a result of Jasmins death under mysterious circumstances,

they suffered sleepless nights and mental anguish. The situation, they claim, was aggravated by

findings in the autopsy and exhumation reports which evidently show that a grave injustice has

been committed against them and their daughter, for which those responsible should likewise

be made to pay moral and exemplary damages and attorneys fees.

In their position paper, Becmen and Rajab insist that Jasmin committed suicide, citing a

prior unsuccessful suicide attempt sometime in March or April 1998 and relying on the medical

report of the examining physician of the Al-Birk Hospital. They likewise deny liability because

the Cuaresmas already recovered death and other benefits totaling P130,000.00 from the

OWWA. They insist that the Cuaresmas are not entitled to iqama insurance because this refers

to the issuance not insurance of iqama, or residency/work permit required in the KSA. On the

issue of moral and exemplary damages, they claim that the Cuaresmas are not entitled to the

same because they have not acted with fraud, nor have they been in bad faith in handling

Jasmins case.

While the case was pending, Becmen filed a manifestation and motion for substitution

alleging that Rajab terminated their agency relationship and had appointed White Falcon

Services, Inc. (White Falcon) as its new recruitment agent in the Philippines. Thus, White Falcon

was impleaded as respondent as well, and it adopted and reiterated Becmens arguments in the

position paper it subsequently filed.

On February 28, 2001, the Labor Arbiter rendered a Decision[10] dismissing the complaint

for lack of merit. Giving weight to the medical report of the Al-Birk Hospital finding that Jasmin

died of poisoning, the Labor Arbiter concluded that Jasmin committed suicide. In any case,

Jasmins death was not service-connected, nor was it shown that it occurred while she was on

duty; besides, her parents have received all corresponding benefits they were entitled to under

the law. In regard to damages, the Labor Arbiter found no legal basis to warrant a grant

thereof.

On appeal, the National Labor Relations Commission (Commission) reversed the

decision of the Labor Arbiter. Relying on the findings of the City Health Officer of Cabanatuan

City and the NBI as contained in their autopsy and toxicology report, respectively, the

Commission, via its November 22, 2002 Resolution[11] declared that, based on substantial

evidence adduced, Jasmin was the victim of compensable work-connected criminal aggression.

It disregarded the Al-Birk Hospital attending physicians report as well as the KSA police report,

finding the same to be inconclusive. It declared that Jasmins death was the result of an accident

occurring within the employers premises that is attributable to her employment, or to the

conditions under which she lived, and thus arose out of and in the course of her employment as

nurse. Thus, the Cuaresmas are entitled to actual damages in the form of Jasmins lost earnings,

including future earnings, in the total amount of US$113,000.00. The Commission, however,

dismissed all other claims in the complaint.

Becmen, Rajab and White Falcon moved for reconsideration, whereupon the

Commission issued its October 9, 2003 Resolution[12] reducing the award of US$113,000.00 as

actual damages to US$80,000.00.[13] The NLRC likewise declared Becmen and White Falcon as

solidarily liable for payment of the award.

Becmen and White Falcon brought separate petitions for certiorari to the Court of

Appeals.[14] On June 28, 2006, the appellate court rendered its Decision,[15] the dispositive

portion of which reads, as follows:

WHEREFORE, the subject petitions are DENIED but in the execution of the

decision, it should first be enforced against White Falcon Services and then

against Becmen Services when it is already impossible, impractical and futile to

go against it (White Falcon).

SO ORDERED.[16]

The appellate court affirmed the NLRCs findings that Jasmins death was compensable,

the same having occurred at the dormitory, which was contractually provided by the

employer. Thus her death should be considered to have occurred within the employers

premises, arising out of and in the course of her employment.

Becmen and White Falcon moved for reconsideration. On May 14, 2008, the appellate

court rendered the assailed Amended Decision, the dispositive portion of which reads, as

follows:

WHEREFORE, the motions for reconsideration are GRANTED. Accordingly,

the award of US$80,000.00 in actual damages is hereby reduced to US$4,686.73

plus interest at the legal rate computed from the time it became due until fully

paid. Petitioners are hereby adjudged jointly and solidarily liable with the

employer for the monetary awards with Becmen Service Exporter and

Promotions, Inc. having a right of reimbursement from White Falcon Services,

Inc.

SO ORDERED.[17]

In the Amended Decision, the Court of Appeals found that although Jasmins death was

compensable, however, there is no evidentiary basis to support an award of actual damages in

the amount of US$80,000.00. Nor may lost earnings be collected, because the same may be

charged only against the perpetrator of the crime or quasi-delict. Instead, the appellate court

held that Jasmins beneficiaries should be entitled only to the sum equivalent of the remainder

of her 36-month employment contract, or her monthly salary of US$247.00 multiplied by

nineteen (19) months, with legal interest.

Becmen filed the instant petition for review on certiorari (G.R. Nos. 182978-79). The

Cuaresmas, on the other hand, moved for a reconsideration of the amended decision, but it

was denied. They are now before us via G.R. Nos. 184298-99.

On October 6, 2008, the Court resolved to consolidate G.R. Nos. 184298-99 with G.R.

Nos. 182978-79.

In G.R. Nos. 182978-79, Becmen raises the following issues for our resolution:

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT GAVE MORE

CREDENCE AND WEIGHT TO THE AUTOPSY REPORT CONDUCTED BY THE

CABANATUAN CITY HEALTH OFFICE THAN THE MEDICAL AND POLICE REPORTS

ISSUED BY THE MINISTRY OF HEALTH OF KINGDOM OF SAUDI ARABIA AND AL-

BIRK HOSPITAL.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN ON THE BASIS OF THE

POSITION PAPERS AND ANNEXES THERETO INCLUDING THE AUTOPSY REPORT, IT

CONCLUDED THAT THE DEATH OF JASMIN CUARESMA WAS CAUSED BY

CRIMINAL AGGRESSION.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD THAT THE

DEATH OF JASMIN CUARESMA WAS COMPENSABLE PURSUANT TO THE RULING

OF THE SUPREME COURT IN TALLER VS. YNCHAUSTI, G.R. NO. 35741, DECEMBER

20, 1932, WHICH IT FOUND TO BE STILL GOOD LAW.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD BECMEN

LIABLE FOR THE DEATH OF JASMIN CUARESMA NOTWITHSTANDING ITS

ADMISSIONS THAT IQAMA INSURANCE WAS A TYPOGRAPHICAL ERROR SINCE

IQAMA IS NOT AN INSURANCE.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT CONCLUDED THAT

THE DEATH OF JASMIN WAS WORK RELATED.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD BECMEN

LIABLE TO JASMINS BENEFICIARIES FOR THE REMAINDER OF HER 36-MONTH

CONTRACT COMPUTED IN THIS MANNER: MONTHLY SALARY OF US$246.67

MULTIPLIED BY 19 MONTHS, THE REMAINDER OF THE TERM OF JASMINS

EMPLOYMENT CONTRACT, IS EQUAL TO US$4,686.73.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD BECMEN

LIABLE TO PAY INTEREST AT THE LEGAL RATE FROM THE TIME IT WAS DUE UNTIL

FULLY PAID.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD BECMEN AND

WHITE FALCON JOINTLY AND SEVERALLY LIABLE WITH THE EMPLOYER

NOTWITHSTANDING THE ASSUMPTION OF LIABILITY EXECUTED BY WHITE

FALCON IN FAVOR OF BECMEN.

On the other hand, in G.R. Nos. 184298-99, the Cuaresmas raise the following issues:

(THE COURT OF APPEALS) GRAVELY ERRED IN APPLYING THE PROVISIONS

OF THE CIVIL CODE CONSIDERED GENERAL LAW DESPITE THE CASE BEING

COVERED BY E.O. 247, R.A. 8042 AND LABOR CODE CONSIDERED AS SPECIAL

LAWS.

(THE COURT OF APPEALS) GRAVELY ERRED IN NOT APPLYING THE

DECEASEDS FUTURE EARNINGS WHICH IS (AN) INHERENT FACTOR IN THE

COMPUTATION OF DEATH BENEFITS OF OVERSEAS FILIPINO CONTRACT

WORKERS.

(THE COURT OF APPEALS) GRAVELY ERRED IN REDUCING THE DEATH

BENEFITS AWARDED BY NLRC CONSIDERED FINDINGS OF FACT THAT CANNOT BE

DISTURBED THROUGH CERTIORARI UNDER RULE 65 OF THE RULES OF COURT.

The issue for resolution is whether the Cuaresmas are entitled to monetary claims, by

way of benefits and damages, for the death of their daughter Jasmin.

The terms and conditions of Jasmins 1996 Employment Agreement which she and her

employer Rajab freely entered into constitute the law between them. As a rule, stipulations in

an employment contract not contrary to statutes, public policy, public order or morals have the

force of law between the contracting parties.[18] An examination of said employment

agreement shows that it provides for no other monetary or other benefits/privileges than the

following:

1. 1,300 rials (or US$247.00) monthly salary;

2. Free air tickets to KSA at the start of her contract and to the

Philippines at the end thereof, as well as for her vacation at the end of

each twenty four-month service;

3. Transportation to and from work;

4. Free living accommodations;

5. Free medical treatment, except for optical and dental operations,

plastic surgery charges and lenses, and medical treatment obtained

outside of KSA;

6. Entry visa fees will be shared equally between her and her employer,

but the exit/re-entry visa fees, fees for Iqama issuance, renewal,

replacement, passport renewal, sponsorship transfer and other liabilities

shall be borne by her;

7. Thirty days paid vacation leave with round trip tickets to Manila after

twenty four-months of continuous service;

8. Eight days public holidays per year;

9. The indemnity benefit due her at the end of her service will be

calculated as per labor laws of KSA.

Thus, the agreement does not include provisions for insurance, or for accident, death or

other benefits that the Cuaresmas seek to recover, and which the labor tribunals and appellate

court granted variably in the guise of compensatory damages.

However, the absence of provisions for social security and other benefits does not make

Jasmins employment contract infirm. Under KSA law, her foreign employer is not obliged to

provide her these benefits; and neither is Jasmin entitled to minimum wage unless of course

the KSA labor laws have been amended to the opposite effect, or that a bilateral wage

agreement has been entered into.

Our next inquiry is, should Jasmins death be considered as work-connected and thus

compensable? The evidence indicates that it is not. At the time of her death, she was not on

duty, or else evidence to the contrary would have been adduced. Neither was she within

hospital premises at the time. Instead, she was at her dormitory room on personal time when

she died. Neither has it been shown, nor does the evidence suggest, that at the time she died,

Jasmin was performing an act reasonably necessary or incidental to her employment as nurse,

because she was at her dormitory room. It is reasonable to suppose that all her work is

performed at the Al-birk Hospital, and not at her dormitory room.

We cannot expect that the foreign employer should ensure her safety even while she is

not on duty. It is not fair to require employers to answer even for their employees personal

time away from work, which the latter are free to spend of their own choosing. Whether they

choose to spend their free time in the pursuit of safe or perilous undertakings, in the company

of friends or strangers, lovers or enemies, this is not one area which their employers should be

made accountable for. While we have emphasized the need to observe official work time

strictly,[19] what an employee does on free time is beyond the employers sphere of inquiry.

While the employers premises may be defined very broadly not only to include premises

owned by it, but also premises it leases, hires, supplies or uses,[20] we are not prepared to rule

that the dormitory wherein Jasmin stayed should constitute employers premises as would allow

a finding that death or injury therein is considered to have been incurred or sustained in the

course of or arose out of her employment. There are certainly exceptions,[21] but they do not

appear to apply here. Moreover, a complete determination would have to depend on the

unique circumstances obtaining and the overall factual environment of the case, which are here

lacking.

But, did Jasmin commit suicide? Rajab, Becmen and White Falcon vehemently insist that

she did; thus, her heirs may not claim benefits or damages based on criminal aggression. On the

other hand, the Cuaresmas do not believe so.

The Court cannot subscribe to the idea that Jasmin committed suicide while halfway

into her employment contract. It is beyond human comprehension that a 25-year old Filipina, in

the prime of her life and working abroad with a chance at making a decent living with a high-

paying job which she could not find in her own country, would simply commit suicide for no

compelling reason.

The Saudi police and autopsy reports which state that Jasmin is a likely/or

apparent victim of poisoning are patently inconclusive. They are thus unreliable as evidence.

On the contrary, the autopsy report of the Cabanatuan City Health Officer and the

exhumation report of the NBI categorically and unqualifiedly show that Jasmin sustained

external and internal injuries, specifically abrasions at her inner lip and gums; lacerated

wounds and abrasions on her left and right ears; lacerated wounds and hematoma

(contusions) on her elbows; abrasions and hematoma on her thigh and legs; intra-muscular

hemorrhage at the anterior chest; a fractured rib; puncture wounds; and abrasions on the

labia minora of the vaginal area. The NBI toxicology report came up negative on the presence

of poison.

All these show that Jasmin was manhandled and possibly raped prior to her death.

Even if we were to agree with the Saudi police and autopsy reports that indicate Jasmin

was poisoned to death, we do not believe that it was self-induced. If ever Jasmin was poisoned,

the assailants who beat her up and possibly raped her are certainly responsible therefor.

We are not exactly ignorant of what goes on with our OFWs. Nor is the rest of the world

blind to the realities of life being suffered by migrant workers in the hands of some foreign

employers. It is inconceivable that our Filipina women would seek employment abroad and face

uncertainty in a foreign land, only to commit suicide for unexplained reasons. Deciding to leave

their family, loved ones, and the comfort and safety of home, to work in a strange land requires

unrivaled strength and courage. Indeed, many of our women OFWs who are unfortunate to end

up with undesirable employers have been there more times than they care to, beaten up and

broken in body yet they have remained strong in mind, refusing to give up the will to

live. Raped, burned with cigarettes, kicked in the chest with sharp high-heeled shoes, starved

for days or even weeks, stabbed, slaved with incessant work, locked in their rooms, forced to

serve their masters naked, grossly debased, dehumanized and insulted, their spirits fought on

and they lived for the day that they would once again be reunited with their families and loved

ones. Their bodies surrendered, but their will to survive remained strong.

It is surprising, therefore, that Rajab, Becmen and White Falcon should insist on suicide,

without even lifting a finger to help solve the mystery of Jasmins death. Being in the business of

sending OFWs to work abroad, Becmen and White Falcon should know what happens to some

of our OFWs. It is impossible for them to be completely unaware that cruelties and

inhumanities are inflicted on OFWs who are unfortunate to be employed by vicious employers,

or upon those who work in communities or environments where they are liable to become

victims of crime. By now they should know that our women OFWs do not readily succumb to

the temptation of killing themselves even when assaulted, abused, starved, debased and,

worst, raped.

Indeed, what we have seen is Rajab and Becmens revolting scheme of conveniently

avoiding responsibility by clinging to the absurd theory that Jasmin took her own

life.Abandoning their legal, moral and social obligation (as employer and recruiter) to assist

Jasmins family in obtaining justice for her death, they immediately gave up on Jasmins case,

which has remained under investigation as the autopsy and police reports themselves

indicate. Instead of taking the cudgels for Jasmin, who had no relative or representative in the

KSA who would naturally demand and seek an investigation of her case, Rajab and Becmen

chose to take the most convenient route to avoiding and denying liability, by casting Jasmins

fate to oblivion. It appears from the record that to this date, no follow up of Jasmins case was

ever made at all by them, and they seem to have expediently treated Jasmins death as a closed

case. Despite being given the lead via the autopsy and toxicology reports of the Philippine

authorities, they failed and refused to act and pursue justice for Jasmins sake and to restore

honor to her name.

Indeed, their nonchalant and uncaring attitude may be seen from how Jasmins remains

were repatriated. No official representative from Rajab or Becmen was kind enough to make

personal representations with Jasmins parents, if only to extend their condolences or

sympathies; instead, a mere colleague, nurse Jessie Fajardo, was designated to accompany

Jasmins body home.

Of all lifes tragedies, the death of ones own child must be the most painful for a

parent. Not knowing why or how Jasmins life was snuffed out makes the pain doubly

unbearable for Jasmins parents, and further aggravated by Rajab, Becmen, and White Falcons

baseless insistence and accusation that it was a self-inflicted death, a mortal sin by any religious

standard.

Thus we categorically hold, based on the evidence; the actual experiences of our OFWs;

and the resilient and courageous spirit of the Filipina that transcends the vilest desecration of

her physical self, that Jasmin did not commit suicide but a victim of murderous aggression.

Rajab, Becmen, and White Falcons indifference to Jasmins case has caused

unfathomable pain and suffering upon her parents. They have turned away from their moral

obligation, as employer and recruiter and as entities laden with social and civic obligations in

society, to pursue justice for and in behalf of Jasmin, her parents and those she left

behind. Possessed with the resources to determine the truth and to pursue justice, they chose

to stand idly for the sake of convenience and in order that they may avoid pecuniary liability,

turning a blind eye to the Philippine authorities autopsy and toxicology reports instead of taking

action upon them as leads in pursuing justice for Jasmins death. They have placed their own

financial and corporate interests above their moral and social obligations, and chose to secure

and insulate themselves from the perceived responsibility of having to answer for and

indemnify Jasmins heirs for her death.

Under Republic Act No. 8042 (R.A. 8042), or the Migrant Workers and Overseas Filipinos

Act of 1995,[22] the State shall, at all times, uphold the dignity of its citizens whether in country

or overseas, in general, and Filipino migrant workers, in particular.[23] The State shall provide

adequate and timely social, economic and legal services to Filipino migrant workers.[24] The

rights and interest of distressed[25] overseas Filipinos, in general, and Filipino migrant workers,

in particular, documented or undocumented, are adequately protected and safeguarded.[26]

Becmen and White Falcon, as licensed local recruitment agencies, miserably failed to

abide by the provisions of R.A. 8042. Recruitment agencies are expected to extend assistance to

their deployed OFWs, especially those in distress. Instead, they abandoned Jasmins case and

allowed it to remain unsolved to further their interests and avoid anticipated liability which

parents or relatives of Jasmin would certainly exact from them. They willfully refused to protect

and tend to the welfare of the deceased Jasmin, treating her case as just one of those unsolved

crimes that is not worth wasting their time and resources on. The evidence does not even show

that Becmen and Rajab lifted a finger to provide legal representation and seek an investigation

of Jasmins case. Worst of all, they unnecessarily trampled upon the person and dignity of

Jasmin by standing pat on the argument that Jasmin committed suicide, which is a grave

accusation given its un-Christian nature.

We cannot reasonably expect that Jasmins parents should be the ones to actively

pursue a just resolution of her case in the KSA, unless they are provided with the finances to

undertake this herculean task. Sadly, Becmen and Rajab did not lend any assistance at all in this

respect. The most Jasmins parents can do is to coordinate with Philippine authorities as

mandated under R.A. 8042, obtain free legal assistance and secure the aid of the Department of

Foreign Affairs, the Department of Labor and Employment, the POEA and the OWWA in trying

to solve the case or obtain relief, in accordance with Section 23[27] of R.A. 8042. To our mind,

the Cuaresmas did all that was within their power, short of actually flying to the KSA. Indeed,

the Cuaresmas went even further. To the best of their abilities and capacities, they ventured to

investigate Jasmins case on their own: they caused another autopsy on Jasmins remains as soon

as it arrived to inquire into the true cause of her death. Beyond that, they subjected themselves

to the painful and distressful experience of exhuming Jasmins remains in order to obtain

another autopsy for the sole purpose of determining whether or not their daughter was

poisoned. Their quest for the truth and justice is equally to be expected of all loving parents. All

this time, Rajab and Becmen instead of extending their full cooperation to the Cuaresma family

merely sat on their laurels in seeming unconcern.

In Interorient Maritime Enterprises, Inc. v. NLRC,[28] a seaman who was being repatriated

after his employment contract expired, failed to make his Bangkok to Manila connecting flight

as he began to wander the streets of Bangkok aimlessly. He was shot to death by Thai police

four days after, on account of running amuck with a knife in hand and threatening to harm

anybody within sight. The employer, sued for death and other benefits as well as damages,

interposed as defense the provision in the seafarer agreement which provides that no

compensation shall be payable in respect of any injury, incapacity, disability or death resulting

from a willful act on his own life by the seaman. The Court rejected the defense on the view,

among others, that the recruitment agency should have observed some precautionary

measures and should not have allowed the seaman, who was later on found to be mentally ill,

to travel home alone, and its failure to do so rendered it liable for the seamans death. We ruled

therein that

The foreign employer may not have been obligated by its contract to

provide a companion for a returning employee, but it cannot deny that it was

expressly tasked by its agreement to assure the safe return of said worker. The

uncaring attitude displayed by petitioners who, knowing fully well that its

employee had been suffering from some mental disorder, nevertheless still

allowed him to travel home alone, is appalling to say the least. Such attitude

harks back to another time when the landed gentry practically owned the

serfs, and disposed of them when the latter had grown old, sick or otherwise

lost their usefulness.[29] (Emphasis supplied)

Thus, more than just recruiting and deploying OFWs to their foreign principals,

recruitment agencies have equally significant responsibilities. In a foreign land where OFWs

are likely to encounter uneven if not discriminatory treatment from the foreign government,

and certainly a delayed access to language interpretation, legal aid, and the Philippine

consulate, the recruitment agencies should be the first to come to the rescue of our distressed

OFWs since they know the employers and the addresses where they are deployed or

stationed. Upon them lies the primary obligation to protect the rights and ensure the welfare of

our OFWs, whether distressed or not. Who else is in a better position, if not these recruitment

agencies, to render immediate aid to their deployed OFWs abroad?

Article 19 of the Civil Code provides that every person must, in the exercise of his rights

and in the performance of his duties, act with justice, give everyone his due, and observe

honesty and good faith. Article 21 of the Code states that any person who wilfully causes loss or

injury to another in a manner that is contrary to morals, good customs or public policy shall

compensate the latter for the damage. And, lastly, Article 24 requires that in all contractual,

property or other relations, when one of the parties is at a disadvantage on account of his

moral dependence, ignorance, indigence, mental weakness, tender age or other handicap, the

courts must be vigilant for his protection.

Clearly, Rajab, Becmen and White Falcons acts and omissions are against public policy

because they undermine and subvert the interest and general welfare of our OFWs abroad,

who are entitled to full protection under the law. They set an awful example of how foreign

employers and recruitment agencies should treat and act with respect to their distressed

employees and workers abroad. Their shabby and callous treatment of Jasmins case; their

uncaring attitude; their unjustified failure and refusal to assist in the determination of the true

circumstances surrounding her mysterious death, and instead finding satisfaction in the

unreasonable insistence that she committed suicide just so they can conveniently avoid

pecuniary liability; placing their own corporate interests above of the welfare of their

employees all these are contrary to morals, good customs and public policy, and constitute

taking advantage of the poor employee and her familys ignorance, helplessness, indigence and

lack of power and resources to seek the truth and obtain justice for the death of a loved one.

Giving in handily to the idea that Jasmin committed suicide, and adamantly insisting on

it just to protect Rajab and Becmens material interest despite evidence to the contrary is

against the moral law and runs contrary to the good custom of not denouncing ones fellowmen

for alleged grave wrongdoings that undermine their good name and honor.[30]

Whether employed locally or overseas, all Filipino workers enjoy the protective mantle

of Philippine labor and social legislation, contract stipulations to the contrary

notwithstanding. This pronouncement is in keeping with the basic public policy of the State to

afford protection to labor, promote full employment, ensure equal work opportunities

regardless of sex, race or creed, and regulate the relations between workers and

employers. This ruling is likewise rendered imperative by Article 17 of the Civil Code which

states that laws which have for their object public order, public policy and good customs shall

not be rendered ineffective by laws or judgments promulgated, or by determinations or

conventions agreed upon in a foreign country.[31]

The relations between capital and labor are so impressed with public interest,[32] and

neither shall act oppressively against the other, or impair the interest or convenience of the

public.[33] In case of doubt, all labor legislation and all labor contracts shall be construed in favor

of the safety and decent living for the laborer.[34]

The grant of moral damages to the employee by reason of misconduct on the part of the

employer is sanctioned by Article 2219 (10)[35] of the Civil Code, which allows recovery of such

damages in actions referred to in Article 21.[36]

Thus, in view of the foregoing, the Court holds that the Cuaresmas are entitled to moral

damages, which Becmen and White Falcon are jointly and solidarily liable to pay, together with

exemplary damages for wanton and oppressive behavior, and by way of example for the public

good.

Private employment agencies are held jointly and severally liable with the foreign-based

employer for any violation of the recruitment agreement or contract of employment. This joint

and solidary liability imposed by law against recruitment agencies and foreign employers is

meant to assure the aggrieved worker of immediate and sufficient payment of what is due

him.[37] If the recruitment/placement agency is a juridical being, the corporate officers and

directors and partners as the case may be, shall themselves be jointly and solidarily liable with

the corporation or partnership for the aforesaid claims and damages.[38]

White Falcons assumption of Becmens liability does not automatically result in Becmens

freedom or release from liability. This has been ruled in ABD Overseas Manpower Corporation

v. NLRC.[39] Instead, both Becmen and White Falcon should be held liable solidarily, without

prejudice to each having the right to be reimbursed under the provision of the Civil Code that

whoever pays for another may demand from the debtor what he has paid.[40]

WHEREFORE, the Amended Decision of the Court of Appeals dated May 14, 2008 in CA-

G.R. SP No. 80619 and CA-G.R. SP No. 81030 is SET ASIDE. Rajab & Silsilah Company, White

Falcon Services, Inc., Becmen Service Exporter and Promotion, Inc., and their corporate

directors and officers are found jointly and solidarily liable and ORDERED to indemnify the

heirs of Jasmin Cuaresma, spouses Simplicio and Mila Cuaresma, the following amounts:

1) TWO MILLION FIVE HUNDRED THOUSAND PESOS (P2,500,000.00) as moral damages;

2) TWO MILLION FIVE HUNDRED THOUSAND PESOS (P2,500,000.00) as exemplary

damages;

3) Attorneys fees equivalent to ten percent (10%) of the total monetary award; and,

4) Costs of suit.

SO ORDERED.

Republic of the Philippines SUPREME COURT

Manila

THIRD DIVISION

G.R. No. 136821 October 17, 2002

ROVELS ENTERPRISES, INC., petitioner, vs. EMMANUEL B. OCAMPO, JOSE M. SILVA, SR., THE HEIRS OF EXPEDITO LEVISTE, SR.,* CONRADO CALALANG, and FRANCISCO CARREON, SR., respondents.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

Assailed in this petition for review on certiorari1 is the Decision of the Court of Appeals dated June 5, 19982 in CA-G.R. SP No. 43260, affirming the Decision of the Securities and Exchange Commission (SEC) in SEC Case No. 09-95-5135 dismissing the petition to be declared the majority stockholder of Tagaytay Taal Tourist Development Corporation (TTTDC). The petition was filed by Rovels Enterprises, Inc. (Rovels), herein petitioner. Rovels is a domestic corporation engaged in construction work. Its President is Eduardo Santos. TTTDC was among Rovels’ clients.

In payment for the services rendered by Rovels, the Board of Directors of TTTDC passed a Resolution on December 29, 1975 providing as follows:

"RESOLVED, as it is hereby resolved that payment for professional fees and services rendered by x x x Rovels’ Enterprises x x x be made in cash if funds are available, or its equivalent number of shares of stock of the corporation at par value, and should said creditors elect the latter mode of payment, it is further resolved that the President and/or his Secretary be authorized as they are hereby authorized, to issue the corresponding unissued shares of stock of the corporation."3 (emphasis added)

The Resolution was signed by three of TTTDC’s directors, namely, Victoriano Leviste, Bienvenido Cruz, Jr., and Roberto Roxas. Roberto Roxas is the President of TTTDC and stockholder of Rovels at the same time. Noticeably, the signatures of the other two (2) TTTDC directors – Jose Silva, Jr. and Emmanuel Ocampo – do not appear in the subject Resolution despite their presence in the December 29, 1975 Board meeting.4

On February 23, 1976, Eduardo Santos, President of Rovels, on behalf of TTTDC, filed with the SEC an application for exemption from registration of TTTDC’s unissued shares of stock transferred to it (Rovels) as payment for its services worth One Hundred Eight Thousand Pesos

(P108,000.00). This was done because under Section 4 (a) of the Revised Securities Act, no shares of stocks shall be transferred unless first registered with the SEC or permitted to be sold.5

On May 7, 1976, the SEC, in its Resolution No. 260,6 granted Eduardo Santos’ application.

On March 1, 1976, the TTTDC Board of Directors passed another Resolution7 repealing its Resolution of December 29, 1975, thus:

"RESOLVED, as it is hereby resolved, that the Resolution of December 29, 1975 authorizing the payment of creditors with unissued shares of the corporation be as it is hereby repealed: Resolved further that the matter as well as the amount of the creditors’ claims be given adequate study and consideration by the Board." (emphasis added)

In view of the December 29, 1975 TTTDC Board Resolution transferring to Rovels the said shares of stock as construction fee, TTTDC Directors Jose Silva, Jr. and Emmanuel Ocampo filed a complaint with the SEC against Roberto Roxas, TTTDC President, and Eduardo Santos, Rovels’ President, docketed as SEC Case No. 1322. In their complaint, Silva and Ocampo alleged that there was no meeting of the TTTDC’s Board of Directors on December 29, 1975; that they did not authorize the transfer of TTTDC’s shares of stock to Rovels; that they never signed the alleged minutes of the meeting; and that the signatures of the other two (2) Directors, Victoriano Leviste and Bienvenido Cruz, Jr., as well as that of TTTDC’s Secretary Francisco Carreon, Jr., were obtained through fraud and misrepresentation. They also alleged that the TTTDC Board Resolution dated December 29, 1975 was repealed by the March 1, 1976 Resolution. They thus prayed that the transfer of TTTDC’s shares of stock to Rovels pursuant to Resolution dated December 29, 1975 be annulled.

On March 17, 1979, SEC Hearing Officer Eugenio E. Reyes issued a Decision8 in favor of Silva and Ocampo, the dispositive portion of which reads:

"Considering that the (December 29, 1975) board resolution which authorizes the corporation to pay its creditors with its unissued shares of stock x x x had been expressly revoked or repealed on March 1, 1976 as earlier pointed out, Commission Resolution No. 260 (granting Santos’ application for exemption from registration of the unissued shares), when issued on May 7, 1976 x x x had lost its legal basis. Consequently, the corresponding issuance of shares was without authority of the board of directors."

x x x x x x x x x

"WHEREFORE, premises considered, this Commission finds and so holds that the purported board resolution of December 29, 1975, not having been properly passed upon at a duly constituted board meeting, cannot be recognized as valid and hence, without legal force and effect. Consequently, the issuance of shares of stock to corporate creditors of the Tagaytay Taal Tourist Development Corporation is null and void. In view thereof, the shares in question are

still considered unissued and remain part of the authorized capital stocks of the Tagaytay Taal Tourist Development Corporation. This is without prejudice to the rights of said corporate creditors as against Tagaytay Taal Tourist Development Corporation for the latter’s contractual obligations." (emphasis added)

On appeal by Roberto Roxas and Eduardo Santos, the SEC en banc, in its Decision dated September 2, 1982 in SEC-AC No. 049,9 affirmed the Decision of the SEC Hearing Officer. This Court, in its Decision of June 20, 1983 in G.R. No. 61863,10 likewise affirmed the Decision of the SEC en banc. The Decision of this Court became final and executory on September 2, 1983.11

Subsequently, TTTDC, Jose Silva, Emmanuel Ocampo, Victoriano Leviste, Francisco Carreon, Jr., and Expedito Leviste, Sr., another stockholder of TTTDC, (the SILVA GROUP, now respondents), filed with the SEC a petition against Eduardo Santos, Sylvia S. Veloso, Josefina Carballo, Augusto del Rosario, Reynaldo Alcantara and Lauro Sandoval (the SANTOS GROUP), docketed as SEC Case No. 3806. (The SANTOS GROUP were nominees of Rovels who, by virtue of the shares of stock issued pursuant to the December 29, 1975 Resolution, proceeded to act as directors and officers of TTTDC). In their petition, the SILVA GROUP prayed that they be declared the true and lawful stockholders and incumbent directors and officers of TTTDC.

On July 6, 1993, SEC Hearing Officer Alberto P. Atas rendered a Decision12 in favor of the SILVA GROUP, thus:

"WHEREFORE, judgment is hereby rendered in favor of the petitioners (SILVA GROUP) and against the respondents (SANTOS GROUP), as follows:

a. Declaring petitioners as the lawful stockholders, directors and officers of Tagaytay Taal Tourist Development Corporation;

b. Declaring respondents, to be not stockholders of Tagaytay Taal Tourist Development Corporation;

c. Declaring respondents to be not directors or officers of Tagaytay Taal Tourist Development Corporation;

d. The writ of preliminary injunction issued on November 6, 1990 is hereby made permanent; and

e. Ordering the Records Division of this Commission to purge the records of Tagaytay Taal Tourist Development Corporation of all papers and documents filed by respondents purportedly in behalf of Tagaytay Taal Tourist Development Corporation." (emphasis and words in parentheses added)

The above Decision became final and executory on September 1, 199413 as no appeal was interposed by either the SILVA GROUP or the SANTOS GROUP.

However, Rovels, to whom the TTTDC shares of stock (worth P108,000.00) were transferred, claimed that it became aware of the July 6, 1993 SEC Decision only in June of 1995. So on September 6, 1995, it filed a petition with the SEC,14 docketed as SEC Case No. 09-95-5135, praying that it be declared the majority stockholder of TTTDC as against respondents Ocampo, Silva, Leviste, Sr., Calalang and Carreon (belonging to the SILVA GROUP). The material allegations of the petition state that: (1) TTTDC passed a Resolution dated December 29, 1975 authorizing the transfer of its unissued shares to Rovels as the latter’s construction fee;15 (2) Pursuant to that Resolution, TTTDC shares of stock worth P692,000.00 were transferred to Rovels;16 (3) While TTTDC, in its March 1, 1976 Resolution, repealed the December 29, 1975 Resolution, such repeal does not bind Rovels for lack of notice;17 (4) Several "interrelated cases" (SEC Case Nos. 1322 and 3806) were filed with the SEC involving the SILVA and SANTOS GROUPS;18 (5) Rovels is not bound by the SEC Decisions since it was not impleaded as a party in said cases.19

Forthwith, the SILVA GROUP filed a motion to dismiss20 the petition on the following grounds: (1) Rovels has no cause of action since TTTDC’s December 29, 1975 Board Resolution was repealed by its March 1, 1976 Resolution;21 (2) the petition is barred by the prior SEC Decisions in SEC Case No. 1322 declaring that the issuance of TTTDC’s shares of stock to Rovels is valid, and the SEC Decision in 3806 declaring the SILVA GROUP as the lawful stockholders of TTTDC;22 and (3) the petition is barred by estoppel, prescription and laches since it was filed long after Rovels was notified of the repeal of the December 29, 1975 TTTDC Resolution.23

In an Order dated April 22, 199624 in SEC Case No. 09-95-5135, SEC Hearing Officer Manuel P. Perea dismissed Rovel’s petition on the grounds of lack of cause of action, res judicata, estoppel, laches and prescription. This Order was affirmed by the SEC en banc in its Decision dated January 20, 199725 in SEC AC No. 560.

Upon a petition for review, docketed as CA-G.R. SP. No. 43260, the Court of Appeals, in its Decision dated June 5, 1998,26 affirmed the January 20, 1997 SEC en banc Decision. Rovels’ motion for reconsideration was likewise denied.27

Hence, the instant petition for review on certiorari,28 alleging that the Court of Appeals erred:

I

IN HOLDING THAT PETITIONER ROVELS HAS NO CAUSE OF ACTION AGAINST PRIVATE RESPONDENTS; and

II

IN HOLDING THAT THE PETITION IN SEC CASE NO. 09-95-5135 IS BARRED BY PRIOR JUDGMENT (RES JUDICATA), LACHES, PRESCRIPTION AND ESTOPPEL.29

The petition is unmeritorious.

On the first assigned error, we find that the Court of Appeals is correct in affirming the dismissal of Rovels’ petition in SEC Case No. 09-955135 for lack of cause of action.

A cause of action is defined as the delict or wrongful act or omission committed by a person in violation of the right of another.30 A cause of action exists if the following elements are present: (1) a right in favor of the plaintiff, (2) the correlative obligation of the defendant to respect such right, and (3) the act or omission of the defendant in violation of plaintiff’s right.31 The test is whether the material allegations of the complaint, assuming them to be true, state ultimate facts which constitute plaintiff’s cause of action, such that plaintiff is entitled to a favorable judgment as a matter of law.32

The pertinent portions of Rovels petition filed with the SEC read:

x x x x x x x x x

"5. x x x. On December 29, 1975, TTTDC in a Resolution signed by majority members of the Board of Directors resolved that TTTDC pay its creditors through a ‘debt-to-equity swap;’

x x x x x x x x x

"9. x x x the relation between the Silva faction and the Santos faction became adversarial. The Silva faction attempted to form an alleged new board of directors and repealed the Board Resolution dated December 29, 1975 Resolution regarding the ‘debt’ to equity swap. Thus, it resolved:

‘RESOLVED, as it is hereby resolved, that the Resolution of December 29, 1975 authorizing the payment of creditors with unissued shares of the corporation be as it is hereby repealed: Resolved further that the matter as well as the amount of the creditor’s claims be given adequate study and consideration by the Board. x x x’

"10. That what is clear from the above Resolution of March 1, 1976 is the admission that indeed TTTDC owes certain amount of money from its creditors. The creditors became stockholders of record as a result of shares of stock issued in implementation of the ‘debt to equity’ conversion. Corresponding shares of stock were issued and signed by then president of the corporation Roberto Roxas and then corporate secretary Francisco N. Carreon, Jr.

"Copy of said Certificate of Stocks are hereto attached and marked as Annexes ‘D’ to ‘P’ and made an integral part hereof.

x x x x x x x x x

"12. That several interrelated cases were filed by Eduardo L. Santos (SEC Case No. 1322), on one hand, and Expedito M. Leviste, Francisco Carreon, Felicisimo Ocampo and Jose M. Silva (SEC Case No. 3806) and vice versa on the other. Petitioner, Rovels Enterprises, Inc. was never made

a party in any of these cases and its nominees in the Board of Directors of TTTDC continued to exercise its function from 1976.

x x x x x x x x x

"19. That to implement the decision in SEC CASE 3806, which declared the Silva Group as the duly authorized directors and officers, without looking deeply into the records of the case, i.e. the sub-poened authentic ‘Stock and Transfer Book’ of TTTDC and the earlier decision in PED Case No. 89-0644, will constitute irreparable damage to the petitioner. Specially so, Silva executed an affidavit showing 5 Directors of TTTDC but the stock certificates were not signed by the corporate secretary who died in 1982.

x x x x x x x x x

"21. That petitioner which became duly registered majority stockholder thru ‘debt to equity swap’ had been an innocent party to such controversy between the aforesaid 2 ruling thereof, hence, petitioner remains as is on a status quo basis as majority stockholder of TTTDC.

x x x x x x x x x

"PRAYER

"WHEREFORE, premises considered, petitioner prays that this Honorable Commission render judgment in favor of petitioner and against respondents (SILVA GROUP):

x x x x x x x x x

"2. After due notice and hearing, re-declaring petitioner lawful registered majority stockholder of TTTDC x x x;

"3. Ordering respondents to desist from sitting in the Board of Directors of TTTDC as they are not lawful registered stockholders in the books of the said corporation.

x x x x x x x x x33

A reading of the above petition (paragraph 5) shows that Rovels’ prayer to be declared the majority stockholder of TTTDC is anchored on the December 29, 1975 TTTDC Board Resolution transferring its shares of stock to Rovels as construction fee. This Resolution could have vested in Rovels a right to be declared a stockholder of TTTDC. However, the same petition (paragraphs 9 and 10) concedes that the December 29, 1975 Resolution was repealed by the March 1, 1976 Resolution. The petition likewise alleges (paragraphs 12 and 19) that there were prior "interrelated cases" filed with the SEC between the SILVA and SANTOS GROUPS, namely: (1) SEC Case No. 1322 (wherein the SEC en banc in its Decision dated September 2, 1982 nullified the TTTDC Board Resolution dated December 29, 1975, which Decision was affirmed

with finality by this Court in G.R. No. 61863) and (2) SEC Case No. 3806 (wherein the SEC declared the SILVA GROUP as the legitimate stockholders of TTTDC, not Rovels’ nominees [the SANTOS GROUP]). Clearly, on the face of its petition, Rovels cannot claim to be the majority stockholder of TTTDC.

Relative to the second assigned error, Rovels contends that it is not bound by the SEC Decision in SEC Case Nos. 1322 and 3806 and in G.R. No. 61863 as it was "never a party in any of these cases." This contention brings us to the issue of res judicata.

The requisites of res judicata,34 also known as the rule on bar by prior judgment, are:

1) the former judgment must be final;

2) the court which rendered it had jurisdiction over the subject matter and the parties;

3) the judgment must be on the merits; and

4) there must be between the first and the second actions, identity of parties, subject matter and causes of action.

The first three (3) requisites of res judicata are present in this case. This is not disputed by the parties and is, in fact, established by the record. The controversy arises as to whether there is identity of the parties in the present SEC Case No. 09-95-5135, on the one hand, and in prior SEC Case Nos. 1322 and 3806, on the other.

Contrary to its claim, Rovels is bound by the previous SEC Decisions. It must be noted that Eduardo Santos, President of Rovels, was one of the respondents in both SEC Case Nos. 1322 and 3806. Clearly, Rovels and Eduardo Santos, being its President, share an identity of interests sufficient to make them privies-in-law, as correctly found by the Court of Appeals in its assailed Decision, thus:

"In the case at bench, there can be no question that the rights claimed by petitioner and its stockholders/directors/officers who were parties in SEC Case Nos. 1322 and 3806 are identical in that they are both based on the December 29, 1975 Resolution. Stated differently, they shared an identity of interest from which flowed an identity of relief sought, namely, to be declared owners of the stocks of TTTDC, premised on the same December 29, 1975 Resolution. x x x. This ‘identity of interest is sufficient to make them privies-in-law, one to the other, and meets the requisite of substantial identity of parties.’"35

It bears stressing that absolute identity of parties is not required for the principle of res judicata, or the rule on bar by prior judgment, to apply. Mere substantial identity of parties, or a community of interests between a party in the first case and a party in the subsequent case even if the latter was not impleaded in the first case, is sufficient.36

Rovels cannot take refuge in the argument that, as a corporation, it is imbued with personality separate and distinct from that of the respondents in SEC Case Nos. 1322 and 3806. The legal fiction of separate corporate existence is not at all times invincible and the same may be pierced when employed as a means to perpetrate a fraud, confuse legitimate issues, or used as a vehicle to promote unfair objectives or to shield an otherwise blatant violation of the prohibition against forum-shopping. While it is settled that the piercing of the corporate veil has to be done with caution, this corporate fiction may be disregarded when necessary in the interest of justice.37

The doctrine of res judicata states that a final judgment on the merits rendered by a court of competent jurisdiction is conclusive as to the rights of the parties and their privies, and constitutes an absolute bar to subsequent actions involving the same claim, demand or cause of action.38 This is founded on public policy and necessity, which makes it to the interest of the State that there should be an end to litigations, and on the principle that an individual should not be vexed twice for the same cause.39

Just recently, we emphatically declared in In Re: Petition Seeking for Clarification as to the Validity and Forceful Effect of Two (2) Final and Executory but Conflicting Decisions of the Honorable Supreme Court:40 "Every litigation must come to an end once a judgment becomes final, executory and unappealable. This is a fundamental and immutable legal principle. For ‘(j)ust as a losing party has the right to file an appeal within the prescribed period, the winning party also has the correlative right to enjoy the finality of the resolution of his case’ by the execution and satisfaction of the judgment, which is the ‘life of the law.’ Any attempt to thwart this rigid rule and deny the prevailing litigant his right to savour the fruit of his victory, must immediately be struck down."

Finally, this Court sustains the Appellate Court’s finding that the filing of Rovels petition in the instant SEC Case No. 09-95-5135 is barred by estoppel, prescription and laches. There is no merit to Rovels’ claim that it was only in June of 199541 when it became aware of the repeal of the December 29, 1975 TTTDC Resolution and of the consequent nullification of the transfer of its shares of stock.

It is undisputed that Eduardo Santos was present in the March 1, 1976 TTTDC Board meeting wherein the December 29, 1975 Resolution was repealed. We hold that Eduardo Santos, being the President of Rovels, is considered as its (Rovels’) agent. As such, his knowledge of the repeal of the December 29, 1975 Resolution, under the theory of imputed knowledge, is ascribed to his principal (Rovels).

It was only on September 6, 1995, or almost twenty (20) years from the time Eduardo Santos learned of the March 1, 1976 Resolution, that Rovels filed its petition in SEC Case No. 09-95-5135. Within that long period of time, Rovels did nothing to contest the March 1, 1976 TTTDC Resolution to protect its rights, if any. Obviously, such inaction constitutes estoppel, prescription and laches. As stated by Rovels itself, Article 1149 of the New Civil Code limits the filing of actions, whose periods are not fixed therein or in any other laws, to only five (5) years.

In addition, the principle of laches or "stale demands" provides that the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier, or the negligence or omission to assert a right within a reasonable time, warrants a presumption that the party entitled to assert it either has abandoned it or declined to assert it.42

In sum, this Court finds that the Court of Appeals did not commit any reversible error in its challenged Decision.

WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals dated June 5, 1998 and its Resolution dated December 21, 1998 in CA-G.R. SP. No. 43260, are AFFIRMED.

SO ORDERED.

Republic of the Philippines SUPREME COURT

Manila

FIRST DIVISION

G.R. No. 153031 December 14, 2006

PCL SHIPPING PHILIPPINES, INC. and U-MING MARINE TRANSPORT CORPORATION, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and STEVE RUSEL, respondents.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the Decision1 of the Court of Appeals (CA) dated December 18, 2001 in CA-G.R. SP No. 59976, which affirmed the Decision of the National Labor Relations Commission (NLRC) dated March 22, 2000 in NLRC NCR CA No. 018120-99; and the Resolution of the CA dated April 10, 2002, denying petitioners' motion for reconsideration.2

The facts of the case, as found by the CA, are as follows:

In April 1996, Rusel was employed as GP/AB seaman by manning agency, PCL Shipping Philippines, Inc. (PCL Shipping) for and in behalf of its foreign principal, U-Ming Marine Transport Corporation (U-Ming Marine). Rusel thereby joined the vessel MV Cemtex General (MV Cemtex) for the contract period of twelve (12) months with a basic monthly salary of US$400.00, living allowance of US$140.00, fixed overtime rate of US$120.00 per month, vacation leave with pay of US$40.00 per month and special allowance of US$175.00.

On July 16, 1996, while Rusel was cleaning the vessel's kitchen, he slipped, and as a consequence thereof, he suffered a broken and/or sprained ankle on his left foot. A request for medical examination was flatly denied by the captain of the vessel. On August 13, 1996, feeling an unbearable pain in his ankle, Rusel jumped off the vessel

using a life jacket and swam to shore. He was brought to a hospital where he was confined for eight (8) days.

On August 22, 1996, a vessel's agent fetched Rusel from the hospital and was required to board a plane bound for the Philippines.

On September 26, 1996, Rusel filed a complaint for illegal dismissal, non-payment of wages, overtime pay, claim for medical benefits, sick leave pay and damages against PCL Shipping and U-Ming Marine before the arbitration branch of the NLRC. In their answer, the latter alleged that Rusel deserted his employment by jumping off the vessel.

On July 21, 1998, the labor arbiter rendered his decision, the dispositive portion of which reads as follows:

Wherefore, above premises duly considered we find the respondent liable for unjust repatriation of the complainant.

Accordingly, the following award is hereby adjudged against the respondent:

1. The amount of $2,625.00 or its peso equivalent at the time of payment representing three (3) months salary of the complainant due to his illegal dismissal.

2. The amount of $1,600.00 or its peso equivalent, representing sick wage benefits.

3. The amount of $550.00 or its peso equivalent, representing living allowance, overtime pay and special allowance for two (2) months.

4. The amount of $641.66 or its peso equivalent, representing unpaid wages from August 11 to 22, 1996.

5. Attorney's fees equivalent to 10% of the total monetary award.

The rest of the claims are dismissed for lack of merit.

SO ORDERED.3

Aggrieved by the Decision of the Labor Arbiter, herein petitioners appealed to the NLRC. In its Decision dated March 22, 2000, the NLRC affirmed the findings of the Labor Arbiter but modified the appealed Decision, disposing as follows:

WHEREFORE, premises considered, the assailed decision is as it is hereby ordered MODIFIED in that the amount representing three months salary of the complainant due

to his illegal dismissal is reduced to US$1,620.00. Further the award of sick wage benefit is deleted.

All other dispositions are AFFIRMED.

SO ORDERED.4

Petitioners filed a Motion for Reconsideration but the NLRC denied the same in its Decision of May 3, 2000.5

Petitioners filed a petition for certiorari with the CA.6 In its Decision dated December 18, 2001, the CA dismissed the petition and affirmed the NLRC Decision.7

Petitioners filed a Motion for Reconsideration but it was denied by the CA in its Resolution dated April 10, 2002.8

Hence, the instant petition with the following assignment of errors:

I. The Court of Appeals erred in ruling that private respondent was illegally dismissed from employment.

x x x x

II. Likewise, the Court of Appeals erred in not upholding petitioners' right to pre-terminate private respondent's employment.

x x x x

III. The private respondent is not entitled to other money claims, particularly as to the award of attorney's fees.9

As to their first assigned error, petitioners contend that the CA erred in affirming the findings of the NLRC that Rusel's act of jumping ship does not establish any intent on his part to abandon his job and never return. Petitioners argue that Rusel's very act of jumping from the vessel and swimming to shore is evidence of highest degree that he has no intention of returning to his job. Petitioners further contend that if Rusel was indeed suffering from unbearable and unmitigated pain, it is unlikely that he is able to swim two (2) nautical miles, which is the distance between their ship and the shore, considering that he needed to use his limbs in swimming. Petitioners further assert that it is error on the part of the CA to disregard the entries contained in the logbook and in the Marine Note Protest evidencing Rusels' offense of desertion because while these pieces of evidence were belatedly presented, the settled rule is that additional evidence may be admitted on appeal in labor cases. Petitioners also contend that Rusel's act of desertion is a grave and serious offense and considering the nature and situs

of employment as well as the nationality of the employer, the twin requirements of notice and hearing before an employee can be validly terminated may be dispensed with.

As to their second assigned error, petitioners contend that assuming, for the sake of argument, that Rusel is not guilty of desertion, they invoked the alternative defense that the termination of his employment was validly made pursuant to petitioners' right to exercise their prerogative to pre-terminate such employment in accordance with Section 19(C) of the Standard Terms and Conditions Governing the Employment of Filipino Seafarers On-Board Ocean-Going Vessels, which provision was incorporated in Rusel's Contract of Employment with petitioners. Petitioners assert that despite the fact that this issue was raised before the CA, the appellate court failed to resolve the same.

Anent the last assigned error, petitioners argue that it is error on the part of the CA to affirm the award of living allowance, overtime pay, vacation pay and special allowance for two months because Rusel failed to submit substantial evidence to prove that he is entitled to these awards. Petitioners further argue that these money claims, particularly the claim for living allowance, should not be granted because they partake of the nature of earned benefits for services rendered by a seafarer. Petitioners also contend that the balance of Rusel's wages from August 11-22, 1996 should be applied for the payment of the costs of his repatriation, considering that under Section 19(E) of the Standard Terms and Conditions Governing the Employment of Filipino Seafarers On-Board Ocean-Going Vessels, when a seafarer is discharged for any just cause, the employer shall have the right to recover the costs of his replacement and repatriation from the seafarer's wages and other earnings. Lastly, petitioners argue that the award of attorney's fees should be deleted because there is nothing in the decision of the Labor Arbiter or the NLRC which states the reason why attorney's fees are being awarded.

In his Comment, private respondent contends that petitioners are raising issues of fact which have already been resolved by the Labor Arbiter, NLRC and the CA. Private respondent argues that, aside from the fact that the issues raised were already decided by three tribunals against petitioners' favor, it is a settled rule that only questions of law may be raised in a petition for review on certiorari under Rule 45 of the Rules of Court. While there are exceptions to this rule, private respondent contends that the instant case does not fall under any of these exceptions. Private respondent asserts that petitioners failed to substantiate their claim that the former is guilty of desertion. Private respondent further contends that the right to due process is available to local and overseas workers alike, pursuant to the provisions of the Constitution on labor and equal protection as well as the declared policy contained in the Labor Code. Private respondent argues that petitioners' act of invoking the provisions of Section 19(C) of the POEA Contract as an alternative defense is misplaced and is inconsistent with their primary defense that private respondent was dismissed on the ground of desertion. As to the award of attorney's fees, private respondent contends that since petitioners' act compelled the former to incur expenses to protect his interest and enforce his lawful claims, and because petitioners acted in gross and evident bad faith in refusing to satisfy private respondent's lawful claims, it is only proper that attorney's fees be awarded in favor of the latter. Anent the other monetary

awards, private respondent argues that these awards are all premised on the findings of the Labor Arbiter, NLRC and the CA that private respondent's dismissal was improper and illegal.

The Court finds the petition without merit.

Anent the first assigned error, it is a settled rule that under Rule 45 of the Rules of Court, only questions of law may be raised in this Court.10 Judicial review by this Court does not extend to a re-evaluation of the sufficiency of the evidence upon which the proper labor tribunal has based its determination.11 Firm is the doctrine that this Court is not a trier of facts, and this applies with greater force in labor cases.12 Factual issues may be considered and resolved only when the findings of facts and conclusions of law of the Labor Arbiter are inconsistent with those of the NLRC and the CA.13 The reason for this is that the quasi-judicial agencies, like the Arbitration Board and the NLRC, have acquired a unique expertise because their jurisdiction are confined to specific matters.14 In the present case, the question of whether private respondent is guilty of desertion is factual. The Labor Arbiter, NLRC and the CA are unanimous in their findings that private respondent is not guilty of desertion and that he has been illegally terminated from his employment. After a review of the records of the instant case, this Court finds no cogent reason to depart from the findings of these tribunals.

Petitioners assert that the entries in the logbook of MV Cemtex General15 and in the Marine Note Protest16 which they submitted to the NLRC confirm the fact that private respondent abandoned the vessel in which he was assigned. However, the genuineness of the Marine Note Protest as well as the entries in the logbook are put in doubt because aside from the fact that they were presented only during petitioners' Motion for Reconsideration filed with the NLRC, both the Marine Note Protest and the entry in the logbook which were prepared by the officers of the vessel were neither notarized nor authenticated by the proper authorities. Moreover, a reading of these entries simply shows that private respondent was presumed to have deserted his post on the sole basis that he was found missing while the MV Cemtex General was anchored at the port of Takehara, Japan. Hence, without any corroborative evidence, these documents cannot be used as bases for concluding that private respondent was guilty of desertion.

Petitioners also question the findings and conclusion of the Labor Arbiter and the NLRC that what caused private respondent in jumping overboard was the unmitigated pain he was suffering which was compounded by the inattention of the vessel's captain to provide him with the necessary treatment inspite of the fact that the ship was moored for about two weeks at the anchorage of Takehara, Japan; and, that private respondent's act was a desperate move to protect himself and to seek relief for his physical suffering. Petitioners contend that the findings and conclusions of the Labor Arbiter and the NLRC which were affirmed by the CA are based on conjecture because there is no evidence to prove that, at the time he jumped ship, private respondent was really suffering from an ankle injury.

It is true that no substantial evidence was presented to prove that the cause of private respondent's confinement in a hospital in Takehara, Japan was his ankle injury. The Court may

not rely on the letter marked as Annex "B" and attached to private respondent's Position Paper because it was unsigned and it was not established who executed the same.17 However, the result of the x-ray examination conducted by the LLN Medical Services, Inc. on August 26, 1996, right after private respondent was repatriated to the Philippines, clearly showed that there is a soft-tissue swelling around his ankle joint.18 This evidence is consistent with private respondent's claim that he was then suffering from an ankle injury which caused him to jump off the ship.

As to petitioners' contention that private respondent could not have traversed the distance between the ship and the shore if he was indeed suffering from unbearable pain by reason of his ankle injury, suffice it to say that private respondent is an able-bodied seaman and that with the full use of both his arms and the help of a life jacket, was able to reach the shore.

As correctly defined by petitioners, desertion, in maritime law is:

The act by which a seaman deserts and abandons a ship or vessel, in which he had engaged to perform a voyage, before the expiration of his time, and without leave. By desertion, in maritime law, is meant, not a mere unauthorized absence from the ship, without leave, but an unauthorized absence from the ship with an intention not to return to her service; or as it is often expressed, animo non revertendi, that is, with an intention to desert.19 (emphasis supplied)

Hence, for a seaman to be considered as guilty of desertion, it is essential that there be evidence to prove that if he leaves the ship or vessel in which he had engaged to perform a voyage, he has the clear intention of abandoning his duty and of not returning to the ship or vessel. In the present case, however, petitioners failed to present clear and convincing proof to show that when private respondent jumped ship, he no longer had the intention of returning. The fact alone that he jumped off the ship where he was stationed, swam to shore and sought medical assistance for the injury he sustained is not a sufficient basis for petitioners to conclude that he had the intention of deserting his post. Settled is the rule that in termination cases, the burden of proof rests upon the employer to show that the dismissal is for a just and valid cause.20 The case of the employer must stand or fall on its own merits and not on the weakness of the employee's defense.21 In the present case, since petitioners failed to discharge their burden of proving that private respondent is guilty of desertion, the Court finds no reason to depart from the conclusion of the Labor Arbiter, NLRC and the CA that private respondent's dismissal is illegal.

In their second assigned error, petitioners cite Section 19(C) of POEA Memorandum Circular No. 055-9622 known as the Revised Standard Employment Terms and Conditions Governing the Employment of Filipino Seafarers On Board Ocean-Going Vessels as their alternative basis in terminating the employment of private respondent. Said Section provides as follows:

Section 19. REPATRIATION

x x x x

C. If the vessel arrives at a convenient port within a period of three months before the expiration of his contract, the master/ employer may repatriate the seafarer from such port provided that the seafarer shall be paid all his earned wages. In addition, the seafarer shall also be paid his leave pay for the entire contract period plus a termination pay equivalent to one (1) month of his basic pay, provided, however, that this mode of termination may only be exercised by the master/employer if the original contract period of the seafarer is at least ten (10) months; provided, further, that the conditions for this mode of termination shall not apply to dismissal for cause.

The Court is not persuaded. POEA Memorandum Circular No. 055-96 took effect on January 1, 1997 while the contract of employment entered into by and between private respondent and petitioners was executed on April 10, 1996. Hence, it is wrong for petitioners to cite this particular Memorandum because at the time of petitioners' and private respondent's execution of their contract of employment Memorandum Circular No. 055-96 was not yet effective.

What was in effect at the time private respondent's Contract of Employment was executed was POEA Memorandum Circular No. 41, Series of 1989. It is clearly provided under the second paragraph of private respondent's Contract of Employment that the terms and conditions provided under Memorandum Circular No. 41, Series of 1989 shall be strictly and faithfully observed. Hence, it is Memorandum Circular No. 41, Series of 1989 which governs private respondent's contract of employment.

Section H (6), Part I of Memorandum Circular No. 41, which has almost identical provisions with Section 19 (C) of Memorandum Circular No. 055-96, provides as follows:

SECTION H. TERMINATION OF EMPLOYMENT

x x x x

6. If the vessel arrives at a convenient port within a period of three (3) months before the expiration of the Contract, the master/employer may repatriate the seaman from such port provided that the seaman shall be paid all his earned wages. In addition, the seaman shall also be paid his leave pay for the entire contract period plus a termination pay equivalent to one (1) month of his basic pay, provided, however, that this mode of termination may only be exercised by the master/employer if the original contact period of the seaman is at least ten (10) months; provided, further, that the conditions for this mode of termination shall not apply to dismissal for cause.

The Court agrees with private respondent's contention that petitioners' arguments are misplaced. Petitioners may not use the above-quoted provision as basis for terminating private respondent's employment because it is incongruent with their primary defense that the latter's dismissal from employment was for cause. Petitioners may not claim that they ended private

respondent's services because he is guilty of desertion and at the same time argue that they exercised their option to prematurely terminate his employment, even without cause, simply because they have the right to do so under their contract. These grounds for termination are inconsistent with each other such that the use of one necessarily negates resort to the other. Besides, it appears from the records that petitioners' alternative defense was pleaded merely as an afterthought because it was only in their appeal with the NLRC that they raised this defense. The only defense raised by petitioners in their Answer with Counterclaim filed with the office of the Labor Arbiter is that private respondent was dismissed from employment by reason of desertion.23 Under the Rules of Court,24 which is applicable in a suppletory character in labor cases before the Labor Arbiter or the NLRC pursuant to Section 3, Rule I of the New Rules of Procedure of the NLRC25, defenses which are not raised either in a motion to dismiss or in the answer are deemed waived.26

Granting, for the sake of argument, that petitioners may use Section H (6), Part I of Memorandum Circular No. 41 or Section 19(C) of Memorandum Circular No. 055-96 as basis for terminating private respondent's employment, it is clear that one of the conditions before any of these provisions becomes applicable is when the vessel arrives at a convenient port within a period of three (3) months before the expiration of the contract of employment. In the present case, private respondent's contract was executed on April 10, 1996 for a duration of twelve months. He was deployed aboard MV Cemtex General on June 25, 1996 and repatriated to the Philippines on August 22, 1996. Hence, it is clear that petitioners did not meet this condition because private respondent's termination was not within a period of three months before the expiration of his contract of employment.

Moreover, the Court finds nothing in the records to show that petitioners complied with the other conditions enumerated therein, such as the payment of all of private respondent's earned wages together with his leave pay for the entire contract period as well as termination pay equivalent to his one month salary.

Petitioners admit that they did not inform private respondent in writing of the charges against him and that they failed to conduct a formal investigation to give him opportunity to air his side. However, petitioners contend that the twin requirements of notice and hearing applies strictly only when the employment is within the Philippines and that these need not be strictly observed in cases of international maritime or overseas employment.

The Court does not agree. The provisions of the Constitution as well as the Labor Code which afford protection to labor apply to Filipino employees whether working within the Philippines or abroad. Moreover, the principle of lex loci contractus (the law of the place where the contract is made) governs in this jurisdiction.27 In the present case, it is not disputed that the Contract of Employment entered into by and between petitioners and private respondent was executed here in the Philippines with the approval of the Philippine Overseas Employment Administration (POEA). Hence, the Labor Code together with its implementing rules and regulations and other laws affecting labor apply in this case.28 Accordingly, as to the requirement of notice and hearing in the case of a seafarer, the Court has already ruled in a

number of cases that before a seaman can be dismissed and discharged from the vessel, it is required that he be given a written notice regarding the charges against him and that he be afforded a formal investigation where he could defend himself personally or through a representative.29 Hence, the employer should strictly comply with the twin requirements of notice and hearing without regard to the nature and situs of employment or the nationality of the employer. Petitioners failed to comply with these twin requirements.

Petitioners also contend that the wages of private respondent from August 11-22, 1996 were applied to the costs of his repatriation. Petitioners argue that the off-setting of the costs of his repatriation against his wages for the aforementioned period is allowed under the provisions of Section 19(E) of Memorandum Circular No. 055-96 which provides that when the seafarer is discharged for any just cause, the employer shall have the right to recover the costs of his replacement and repatriation from the seafarer's wages and other earnings.

The Court does not agree. Section 19(E) of Memorandum Circular No. 055-96 has its counterpart provision under Section H (2), Part II of Memorandum Circular No. 41, to wit:

SECTION H. REPATRIATION

x x x x

2. When the seaman is discharged for disciplinary reasons, the employer shall have the right to recover the costs of maintenance and repatriation from the seaman's balance of wages and other earnings.

x x x x

It is clear under the above-quoted provision that the employer shall have the right to recover the cost of repatriation from the seaman's wages and other earnings only if the concerned seaman is validly discharged for disciplinary measures. In the present case, since petitioners failed to prove that private respondent was validly terminated from employment on the ground of desertion, it only follows that they do not have the right to deduct the costs of private respondent's repatriation from his wages and other earnings.

Lastly, the Court is not persuaded by petitioners' contention that the private respondent is not entitled to his money claims representing his living allowance, overtime pay, vacation pay and special allowance as well as attorney's fees because he failed to present any proof to show that he is entitled to these awards.

However, the Court finds that the monetary award representing private respondent's three months salary as well as the award representing his living allowance, overtime pay, vacation pay and special allowance should be modified.

The Court finds no basis in the NLRC's act of including private respondent's living allowance as part of the three months salary to which he is entitled under Section 10 of Republic Act (RA) No. 8042, otherwise known as the "Migrant Workers and Overseas Filipinos Act of 1995." The pertinent provisions of the said Act provides:

Sec. 10. Money Claims –

x x x x

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

x x x x

It is clear from the above-quoted provision that what is included in the computation of the amount due to the overseas worker are only his salaries. Allowances are excluded. In the present case, since private respondent received a basic monthly salary of US$400.00, he is, therefore, entitled to receive a sum of US$1200.00, representing three months of said salary.

As to the awards of living allowance, overtime pay, vacation pay and special allowance, it is clearly provided under private respondent's Contract of Employment that he is entitled to these benefits as follows: living allowance of US$140.00/month; vacation leave with pay equivalent to US$40.00/month; overtime rate of US$120.00/month; and, special allowance of US$175.00/month.30

With respect, however, to the award of overtime pay, the correct criterion in determining whether or not sailors are entitled to overtime pay is not whether they were on board and can not leave ship beyond the regular eight working hours a day, but whether they actually rendered service in excess of said number of hours.31 In the present case, the Court finds that private respondent is not entitled to overtime pay because he failed to present any evidence to prove that he rendered service in excess of the regular eight working hours a day.

On the basis of the foregoing, the remaining benefits to which the private respondent is entitled is the living allowance of US$140.00/month, which was removed in the computation of private respondent's salary, special allowance of US$175.00/month and vacation leave with pay amounting to US$40.00/month. Since private respondent rendered service for two months these benefits should be doubled, giving a total of US$710.00.

As to the award of attorney's fees, this Court ruled in Reyes v. Court of Appeals,32 as follows:

x x x [T]here are two commonly accepted concepts of attorney's fees, the so-called ordinary and extraordinary. In its ordinary concept, an attorney's fee is the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. The basis of this compensation is the fact of his employment by and his agreement with the client. In its extraordinary concept, attorney's fees are deemed indemnity for damages ordered by the court to be paid by the losing party in a litigation. The instances where these may be awarded are those enumerated in Article 2208 of the Civil Code, specifically par. 7 thereof which pertains to actions for recovery of wages, and is payable not to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof. The extraordinary concept of attorney's fees is the one contemplated in Article 111 of the Labor Code, which provides:

Art. 111. Attorney's fees. – (a) In cases of unlawful withholding of wages, the culpable party may be assessed attorney's fees equivalent to ten percent of the amount of wages recovered x x x

The afore-quoted Article 111 is an exception to the declared policy of strict construction in the awarding of attorney's fees. Although an express finding of facts and law is still necessary to prove the merit of the award, there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. There need only be a showing that the lawful wages were not paid accordingly, as in this case.

In carrying out and interpreting the Labor Code's provisions and its implementing regulations, the employee's welfare should be the primordial and paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided in Article 4 of the Labor Code which states that "[a]ll doubts in the implementation and interpretation of the provisions of [the Labor] Code including its implementing rules and regulations, shall be resolved in favor of labor", and Article 1702 of the Civil Code which provides that "[i]n case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer."33 (Emphasis supplied)

In the present case, it is true that the Labor Arbiter and the NLRC failed to state the reasons why attorney's fees are being awarded. However, it is clear that private respondent was illegally terminated from his employment and that his wages and other benefits were withheld from him without any valid and legal basis. As a consequence, he is compelled to file an action for the recovery of his lawful wages and other benefits and, in the process, incurred expenses. On these bases, the Court finds that he is entitled to attorney's fees.

WHEREFORE, the petition is PARTLY GRANTED. The Court of Appeals' Decision dated December 18, 2001 and Resolution dated April 10, 2002 are AFFIRMED with MODIFICATION to the effect that the award of US$1620.00 representing private respondent's three months salary is

reduced to US$1200.00. The award of US$550.00 representing private respondent's living allowance, overtime pay, vacation pay and special allowance for two months is deleted and in lieu thereof, an award of US$710.00 is granted representing private respondent's living allowance, special allowance and vacation leave with pay for the same period.

No costs.

SO ORDERED.