2/28/25, 8:36 PM [ G.R. No. 215551.

August 17, 2016 ]

793 Phil. 535 ← click for PDF copy

SPECIAL FIRST DIVISION

[ G.R. No. 215551. August 17, 2016 ]
JAKERSON G. GARGALLO, PETITIONER, VS. DOHLE SEAFRONT
CREWING (MANILA), INC., DOHLE MANNING AGENCIES, INC.,
AND MR. MAYRONILO B. PADIZ, RESPONDENTS.
RESOLUTION

PERLAS-BERNABE, J.:

For the Court's resolution are the Motion for Reconsideration[1] and Motion for Partial
Reconsideration[2] filed by petitioner Jakerson G. Gargallo (petitioner), and respondents
Dohle Seafront Crewing (Manila), Inc. (Dohle Seafront), Dohle Manning Agencies, Inc.
(Dohle Manning), and Mr. Mayronilo B. Padiz (Padiz; collectively, respondents),
respectively, of the Court's Decision[3] dated September 16, 2015, which affirmed the
Decision[4] dated June 10, 2014 and the Resolution[5] dated November 21, 2014 of the Court
of Appeals (CA) in CA-G.R. SP No. 130266, dismissing petitioner's claim for permanent
total disability benefits, but ordered respondents Dohle Seafront and Dohle Manning, jointly
and severally, to pay petitioner his income benefit for one hundred ninety-four (194) days,
plus 10% of the total amount of the income benefit as attorney's fees.

The Facts

On July 20, 2012, petitioner filed a complaint for permanent total disability benefits against
respondents before the National Labor Relations Commission (NLRC).[6] The complaint
stemmed from his claim that: (a) he accidentally fell on deck while lifting heavy loads of
lube oil drum, with his left arm hitting the floor first, bearing his full body weight;[7] (b) he
has remained permanently unfit for further sea service despite major surgery and further
treatment by the company-designated physicians;[8] and (c) his permanent total unfitness to
work was duly certified by his chosen physician whose certification must prevail over the
palpably self-serving and biased assessment of the company-designated physicians.[9]

For their part, respondents countered that the fit-to-work findings of the company-designated
physicians must prevail over that of petitioner's independent doctor, considering that: (a) they
were the ones who continuously treated and monitored petitioner's medical condition; and (b)
petitioner failed to comply with the conflict-resolution procedure under the Philippine
Overseas Employment Administration-Standard Employment Contract (POEA-SEC).
Respondents further averred that the filing of the disability claim was premature since
petitioner was still undergoing medical treatment within the allowable 240-day period at the
time the complaint was filed.[10]

The Labor Arbiter (LA)[11] and the NLRC[12] gave more credence to the medical report of
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petitioner's independent doctor and, thus, granted petitioner's disability claim, and ordered
respondents to jointly and severally pay petitioner his permanent total disability benefits,
albeit at different amounts.[13]

However, the CA disagreed with the conclusions of the LA and the NLRC, and dismissed
petitioner's complaint.[14] It ruled that the claim was premature because at the time the
complaint was filed: (a) petitioner was still under medical treatment by the company-
designated physicians; (b) no medical assessment has yet been issued by the company-
designated physicians as to his fitness or disability since the allowable 240-day treatment
period during which he is considered under temporary total disability has not yet lapsed; and
(c) petitioner has not yet consulted his own doctor, hence, had no sufficient basis to prove his
incapacity.[15] The CA likewise gave more credence to the fit to work assessment of the
company-designated physician who treated and closely monitored petitioner's condition, over
the contrary declaration of petitioner's doctor who attended to him only once, two (2) months
after the filing of the complaint.[16]

In its September 16, 2015 Decision, the Court upheld the CA's dismissal of petitioner's claim
for permanent total disability benefits, but ordered Dohle Seafront and Dohle Manning,
jointly and severally, to pay petitioner the income benefit arising from his temporary total
disability which lasted for 194 days from his repatriation on March 11, 2012 until his last
visit to the company-designated physician on September 21, 2012[17] (the date when he was
declared fit to work)[18] plus 10% of the total amount of the income benefit as attorney's
fees.[19] Meanwhile, the Court found no basis hold Padiz solidarity liable with Dohle
Seafront and Dohle Manning for payment of the monetary awards to petitioner, absent any
showing that acted beyond the scope of his authority or with malice.[20]

Dissatisfied, both parties filed their respective motions for reconsideration of the Court's
September 16, 2015 Decision.[21]

I. Petitioner's Motion for Reconsideration

At the outset, the Court notes that, except as to the issue of respondents' liability for the
payment of income benefit, the arguments propounded in petitioner's Motion for
Reconsideration had been adequately passed upon in its September 16, 2015 Decision. In
essence, petitioner argues that: (a) the lapse of the 120-day period from the onset of disability
rendered him permanently and totally disabled because the extension of the medical
treatment was unjustified;[22] and (b) resort to a third doctor is am directory, not a mandatory
requirement.[23]

Such arguments remain untenable.

The Court had already disposed of the foregoing matters in its September 16, 2015 Decision,
dismissing the complaint on the grounds of: (a) premature filing; and (b) failure to comply
with the mandated conflict-resolution procedure under the POEA-SEC, viz.:

It is undisputed that petitioner was repatriated on March 11, 2012 and

immediately subjected to medical treatment. Despite the lapse of the initial 120-
day period on July 9, 2012, such treatment continued due to persistent pain
complained of by petitioner, which was observed until his 180th day of treatment
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on September 7, 2012. In this relation, the CA correctly ruled that the tiling of the
complaint for permanent total disability benefits on July 20, 2012 was premature,
and should have been dismissed for lack of cause of action, considering that at
that time: (a) petitioner was still under the medical treatment of the company-
designated physicians within the allowable 240-day period; (b) the latter had not
yet issued any assessment as to his fitness or disability; and (c) petitioner had not
yet secured any assessment from his chosen physician, whom he consulted only
more than two (2) months thereafter, or on October 2, 2012.

Moreover, petitioner failed to comply with the prescribed procedure under the
afore-quoted Section 20 (A) (3) of the 2010 POEA-SEC on the joint appointment
by the parties of a third doctor, in case the seafarer's personal doctor disagrees
with the company-designated physician's fit-to-work assessment. The [2008-2011
ver.di. IMEC IBF CBA (IBF CBA)] similarly outlined the procedure, viz.:

25.2 The disability suffered by the seafarer shall be determined by a

doctor appointed by the Company. If a doctor appointed by or on
behalf of the seafarer disagrees with the assessment, a third
doctor may be nominated jointly between the Company and the
Union and the decision of this doctor shall be final and binding
on both parties.
xxxx
25.4.A seafarer whose disability, in accordance with 25.2 above is
assessed at 50% or more shall, for the purpose of this paragraph,
be regarded as permanently unfit for further sea service in any
capacity and be entitled to 100% compensation. Furthermore, any
seafarer assessed at less than 50% disability but certified as
permanently unfit for further sea service in any capacity by the
Company-nominated doctor, shall also be entitled to 100%
compensation. Any disagreement as to the assessment or
entitlement shall be resolved in accordance with clause 25.2
above.

In the recent case of Veritas Maritime Corporation v. Gepanaga, Jr. [(see G.R.
No. 206285, February 4, 2015, 750 SCRA 104, 117-118)], involving an almost
identical provision of the CBA, the Court reiterated the well-settled rule that the
seafarer's non-compliance with the mandated conflict-resolution procedure under
the POEA-SEC and the CBA militates against his claims, and results in the
affirmance of the fit-to-work certification of the company-designated physician,
thus:

The [POEA-SEC] and the CBA clearly provide that when a seafarer
sustains a work-related illness or injury while on board the vessel, his
fitness or unfitness for work shall be determined by the company-
designated physician.

If the physician appointed by the seafarer disagrees with the company-

designated physician's assessment, the opinion of a third doctor may
be agreed jointly between the employer and the seafarer to be the
decision final and binding on them.

Thus, while petitioner had the right to seek a second and even a third
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opinion, the final determination of whose decision must prevail must

be done in accordance with an agreed procedure. Unfortunately, the
petitioner did not avail of this procedure; hence, we have no option but
to declare that the company-designated doctor's certification is the
final determination that must prevail. xxx[24]

There being no cogent reason to depart from the aforementioned ruling, the Court denies
petitioner's Motion for Reconsideration insofar as it seeks to reinstate the NLRC's ruling
finding petitioner entitled to permanent total disability benefits.

Nonetheless, the Court concurs with petitioner's asseveration that it was erroneous to absolve
Padiz from joint and several liability with Dchle Seafront and Dohle Manning for the
payment of the income benefit arising from his temporary total disability,[25] in view of
Section 10 of Republic Act No. (RA) 8042,[26] otherwise known as the "Migrant Workers
and Overseas Filipinos Act of 1995," as amended by RA 10022[27] (RA 8042, as amended),
which pertinently reads:

SECTION. 10. Money Claims. - xxx

The liability of the principal/employer and the recruitment/placement agency for

any and all claims under this section shall be joint and several. This provision
shall be incorporated in the contract for overseas employment and shall be a
condition precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and
directors and partners as the case may be, shall themselves be jointly and
solidarity liable with the corporation or partnership for the aforesaid claims
and damages.[28] (Emphasis and underscoring supplied)

Section 10 of RA 8042, as amended, expressly provides for joint and solidary liability of
corporate directors and officers with the recruitment/placement agency for all money claims
or damages that may be awarded to Overseas Filipino Workers (OFWs). While a corporate
director, trustee, or officer who entered into contracts in behalf of the corporation generally.
cannot be held personally liable for the liabilities of the latter, in deference to the separate
and distinct legal personality of a corporation from the persons composing it, personal
liability of such corporate director, trustee, or officer, along (although not necessarily) with
the corporation, may validly attach when he is made by a specific provision of law
personally answerable for his corporate action,[29] as in this case. Thus, in the recent case
of Sealanes Marine Services, Inc. v. Dela Torre,[30] the Court had sustained the joint and
solidary liability of the manning agency, its foreign principal and the manning agency's
President in accordance with Section 10 of RA 8042, as amended.

In addition, Dohle Seafront is presumed to have submitted a verified undertaking by its

officers and directors that they will be jointly and severally liable with the company over
claims arising from an employer-employee relationship when it applied for a license to
operate a seafarer's manning agency, as required under the 2003 POEA Rules and
Regulations Governing the Recruitment and Employment of Seafarers (POEA Rules).[31]

"Applicable laws form part of, and are read into, contracts without need for any express
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reference thereto; more so, when it pertains to a labor contract which is imbued with public
interest. Each contract thus contains not only what was explicitly stipulated therein, but also
the statutory provisions that have any bearing on the matter."[32] As applied herein, Section
10 of RA 8042, as amended, and the pertinent POEA Rules are deemed incorporated in
petitioner's employment contract with respondents. These provisions are in line with the
State's policy of affording protection to labor and alleviating the workers' plight,[33] and are
meant to assure OFWs immediate and sufficient payment of what is due them.[34] Thus, as
the law provides, corporate directors and officers are themselves solidarily liable with the
recruitment/placement agency for all money claims or damages that may be awarded to
OFWs.

Based on the foregoing premises, the Court, therefore, finds Padiz jointly and solidarily
liable with Dohle Seafront and Dohle Manning for the payment of the income benefit arising
from petitioner's temporary total disability, and, to such extent, grants petitioner's motion for
reconsideration, and, in consequence, modifies the September 16, 2015 Decision
accordingly.

II. Respondents' Motion for Partial Reconsideration

Petitioner's entitlement to income benefit was clearly shown in this case, in light of the
undisputed fact that he needed continuous medical treatment for 194 days from his
repatriation on March 11, 2012, until his last visit with the company-designated physician on
September 21, 2012,[35] when he was declared fit to work.[36]

In this relation, the Court cannot subscribe to respondents' contention that entitlement to
income benefit is applicable only to land-based employees compulsorily registered with the
Social Security System (SSS),[37] considering that the 2010 POEA-SEC accords upon the
manning agency/foreign principal the duty to cover Filipino seafarers under the SSS and
other social protection government agencies.[38] Neither is the Court persuaded by
respondents' argument that the obligation to pay the same falls on the SSS in view of their
compliance with the above duty,[39] because the income benefit arising from a covered
employee's temporary total disability is to be advanced by the employer, subject to
reimbursement by the SSS[40] upon compliance with the conditions set forth under Section 1,
[41] Rule X of the Rules Implementing Title II, Book IV of the Labor Code. Consequently,
the Court finds no reason to reverse or modify the directive for respondents to jointly and
severally pay petitioner his income benefit for 194 days, save for the inclusion of Padiz as a
solidary debtor.

However, after surveying existing jurisprudence on the matter, the Court finds merit in
respondents' supplication[42] that the award of attorney's fees must be deleted. As a rule, the
mere fact of having been forced to litigate to protect one's interest does not amount to a
compelling legal reason to justify an award of attorney's fees in the claimant's favor.[43]
Verily, jurisprudence is replete with cases holding that attorney's fees may be awarded to a
claimant who is compelled to litigate with third persons or incur expenses to protect his
interest by reason of an unjustified act or omission on the part of the party from whom it is
sought only when there is sufficient showing of bad faith on the part of the latter in refusing
to pay.[44]

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However, in the case of Montierro v. Rickmers Marine Agency Phils., Inc. (Montierro),[45]
similarly involving a claim for permanent total disability benefits filed by a seafarer, the
Court had pronounced that in labor cases, the withholding of wages and benefits need not be
coupled with malice or bad faith to warrant the grant of attorney's fees since all that is
required is that the refusal to pay was without justification, thus, compelling the employee to
litigate.[46] Nonetheless, since the complaint in Montierro was filed: (a) when the petitioner
therein was still under treatment; (b) prior to the assessment of the company-designated
physician within the allowable 240-day period; and (c) without complying with the
prescribed conflict-resolution procedure, the Court declared that there was no unlawful
withholding of benefits, rendering the award of attorney's fees to be improper. Thus,
considering that similar circumstances obtain in the present case, the Court finds it proper to
rule in the same way.

WHEREFORE, the Court hereby RESOLVES to:

1. PARTLY GRANT petitioner Jakerson G. Gargallo's (petitioner) Motion for

Reconsideration and, hereby, DECLARE respondent Mr. Mayronilo B. Padiz (Padiz) jointly
and severally liable with respondents Dohle Seafront Crewing (Manila), Inc. (Dohle
Seafront) and Dohle Manning Agencies, Inc. (Dohle Manning), to pay petitioner his income
benefit for one hundred ninety-four (194) days; and

2. PARTLY GRANT the Motion for Partial Reconsideration fi ed by respondents Dohle

Seafront, Dohle Manning, and Padiz, thereby, deleting the award of attorney's fees equivalent
to 10% of the adjudged income benefit in favor of petitioner.

The rest of the Court's September 16, 2015 Decision stands.

SO ORDERED.

Sereno, C. J., (Chairperson), Leonardo-De Castro, Bersamin, and Perez, JJ., concur.

[1] Dated November 25, 2015. Rollo, pp. 139-147.

[2] Dated November 17, 2015. Id. at 148-159.

[3] See id. at 126-137.

[4]
Id. at 14-34. Penned by Associate Justice Marlene Gonzales-Sison with Associate Justices
Rosmari D. Carandang and Edwin D. Sorongon concurring.

[5] Id. at 36-37.

[6] See September 16, 2015 Decision; id. at 128.

[7] Id. at 127.

[8] Id. at 128.

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[9] Id.

[10] Id.

[11] See id. at 129.

[12] See id. at 129-130.

[13] The LA ordered respondents, jointly and severally, to pay petitioner US$ 156,816.00 or
its peso equivalent as his permanent total disability benefits, while the NLRC reduced said
amount to US$125,000.00 (see id. at 129).

[14] See id. at 130.

[15] Id; underscoring supplied.

[16] Id. at 130-131.

[17] Id. at 136.

[18] Id. at 135.

[19] Id. at 136.

[20] Id.

[21] See id. at 139-147 and 148-159.

[22] Id. at 143.

[23] Id. at 144.

[24] Id. at 134-135.

[25] See id. at 145-146.

[26]Entitled "AN ACT TO INSTITUTE THE POLICIES OF OVERSEAS EMPLOYMENT

AND ESTABLISH A HIGHER STANDARD OF PROTECTION AND PROMOTION OF
THE WELFARE OF MIGRANT WORKERS, THEIR FAMILIES AND OVERSEAS
FILIPINOS IN DISTRESS, AND FOR OTHER PURPOSES," approved on June 7, 1995.

[27]
Entitled "AN ACT AMENDING REPUBLIC ACT NO. 8042, OTHERWISE KNOWN
AS THE MIGRANT WORKERS AND OVERSEAS FILIPINOS ACT OF 1995, AS
AMENDED, FURTHER IMPROVING THE STANDARD OF PROTECTION AND
PROMOTION OF THE WELFARE OF MIGRANT WORKERS, THEIR FAMILIES AND
OVERSEAS FILIPINOS IN DISTRESS, AND FOR OTHER PURPOSES," approved on

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March 8, 2010.

[28] See Section 7 of RA 10022.

[29] See Queensland-Tokyo Commodities, Inc. v. George, 644 Phil. 574, 584 (2010).

[30] See G.R. No. 214132, February 18, 2015, 751 SCRA 243, 254-255.

[31] See Section 1 (f), Rule II, Part II of the POEA Rules.

[32] See Halili v. Justice for Children International, G.R. No. 194906, September 9, 2015.

[33] See Section 18, Article II, and Section 3, Article XIII of the 1987 Constitution.

[34]See Sameer Overseas Placement Agency, Inc. v. Cabiles, G.R. No. 170139, August 5,
2014, 732 SCRA 22, 69-70.

[35] Rollo, p. 336.

[36] Id. at 135.

[37] Id. at 153.

[38] Section 1 (A) (2) of the 2030 POEA-SEC provides:

SECTION 1. DUTIES

A. Duties of the Principal/Employer/Master/Company:

xxxx

2. To extend coverage to the seafarers under the Philippine Social Security System
(SSS), Philippine Health Insurance Corporation (PhilHealth), Employees'
Compensation Commission (ECC) and Home Development Mutual Fund (Pag-IBIG
Fund), unless otherwise provided in multilateral or bilateral agreements entered into by
the Philippine government with other countries. (Emphases supplied)

[39] Rollo, p. 155. Respondents claimed that they have already reported petitioner for
coverage under the SSS, and duly remitted his monthly SSS and ECC contributions from
October 2013 to February 2012. See Annexes 3-MR to 3-S attached to respondents' Motion
for Partial Reconsideration; id. at 167-186.

[40] <https://www.sss.gov.ph/sss/appmanager/pages.jsp?page=employeescompensation>
(visited August 12, 2016).

[41]
Rule X
TEMPORARY TOTAL DISABILITY

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SECTION. 1. Condition to Entitlement — An employee shall be entitled to an income

benefit for temporary total disability if all of the following conditions are satisfied:

(1) He has been duly reported to the System;

(2) He sustains the temporary total disability as a result of the injury or sickness; and

(3) The System has been duly notified of the injury or sickness which caused his disability.

His employer shall be liable for the benefit if such illness or injury occurred before the
employee is duly reported for coverage to the system. (Emphasis supplied)

See also https://www.sss.gov.ph/sss/appmanager/pages.jsp?page=employeescompensation

(visited August 12, 2016).

[42] See Rollo, pp. 156-158.

[43]See Asian Terminals, Inc. v. Allied Guarantee Insurance, Co., Inc., G.R. No. 182208,
October 14, 2015, citing Philippine National Construction Corporation v. APAC Marketing
Corporation, 710 Phil. 389, 395-396 (2013).

[44]See Asian Terminals, Inc. v. Allied Guarantee Insurance, Co., Inc.; id. See also Diaz v.
Encanto, G.R. No. 171303, January 20, 2016; Malayan Insurance Company, Inc. v. St.
Francis Square Realty Corporation, G.R. Nos. 198916-17 and 198920-21, January 11, 2016;
and CCC Insurance Corporation v. Kawasaki Steel Corporation, G.R. No. 156162, June 22,
2015, 759 SCRA 332.

[45] G.R. No. 210634, January 14, 2015, 746 SCRA 287.

[46] Id. at 299.

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