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SECOND DIVISION

[G.R. Nos. 138535-38. April 19, 2001]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. LUZ GONZALES-FLORES, accused-


appellant.

DECISION
MENDOZA, J.:

This is an appeal from the decision[1] of the Regional Trial Court, Branch 77, Quezon City, finding
accused-appellant Luz Gonzalez-Flores guilty of illegal recruitment in large scale and of three counts of
estafa against Felixberto Leongson, Jr., Ronald Frederizo,[2] and Larry Tibor and sentencing her to suffer
four prison terms and to pay indemnity and damages to complainants.
In Criminal Case No. Q-94-59470, the information for estafa against accused-appellant alleged:

That on or about the month of August, 1994, in Quezon City, Philippines, the said accused, conspiring
together, confederating with several persons whose true names and true identities have not as yet been
ascertained, and helping one another, did then and there wilfully, unlawfully and feloniously defraud
FELIXBERTO LEONGSON, JR. y CASTAEDA in the following manner, to wit: the said accused, by
means of false manifestations and fraudulent representation which she made to said complainant to the effect
that they had the power and capacity to recruit and employ complainant abroad as [a] seaman and could
facilitate the processing of the requirements thereof, and by means of other similar deceits, induced and
succeeded in inducing said complainant to give and deliver, as in fact he gave and delivered to said accused
the amount of P45,000.00 on the strength of said manifestations and representations, said accused well
knowing that the same were false and fraudulent and were made solely to obtain, as in fact they did obtain
the amount of P45,000.00, which amount once in possession, with intent to defraud FELIXBERTO
LEONGSON, JR. wilfully, unlawfully and feloniously misappropriated, misapplied and converted to their
own personal use and benefit, to the damage and prejudice of said complainant in the aforesaid amount
of P45,000.00, Philippine Currency.

CONTRARY TO LAW.]

In Criminal Case No. Q-94-59471, also for estafa, the information charged:

That on or about the month of August, 1994, in Quezon City, Philippines, the said accused conspiring
together, confederating with several persons whose true names and true identities have not as yet been
ascertained and helping one another did then and there wilfully, unlawfully and feloniously defraud
RONALD F[R]EDERI[Z]O Y HUSENIA in the following manner, to wit: the said accused, by means of
false manifestations and fraudulent representations which they made to said complainant to the effect that
they had the power and capacity to recruit and employ complainant abroad as [a] seaman and could facilitate
the processing of the pertinent papers if given the necessary amount to meet the requirements thereof, and by
means of other similar deceits, induced and succeeded in inducing said RONALD F[R]EDERI[Z]O Y

1
HUSENIA to give and deliver, as in fact gave and delivered to said accused the amount of P45,000.00 on the
strength of said manifestations and representations, said accused well knowing that the same were false and
fraudulent and were made solely to obtain, as in fact they did obtain the amount of P45,000.00 which amount
once in possession, with intent to defraud complainant wilfully, unlawfully and feloniously misappropriated,
misapplied and converted to their own personal use and benefit, to the damage and prejudice of said
RONALD F[RE]DERI[Z]O Y HUSENIA in the aforesaid amount of P45,000.00, Philippine Currency.

CONTRARY TO LAW.[4]

In Criminal Case No. Q-94-59472, another case for estafa, the information averred:

That on or about the month of August, 1994, in Quezon City, Philippines, the said accused, conspiring
together, confederating with several persons whose true names and whereabouts have not as yet been
ascertained and helping one another, did then and there wilfully, unlawfully and feloniously defraud LARRY
TIBOR Y MABILANGAN in the following manner, to wit: the said accused, by means of false
manifestations and fraudulent representations which they made to said complainant to the effect that they had
the power and capacity to recruit and employ complainant abroad as [a] seaman and could facilitate the
processing of the pertinent papers if given the necessary amount to meet the requirements thereof, and by
means of other similar deceits, induced and succeeded in inducing said complainant to give and deliver, as in
fact gave and delivered to said accused the amount of P38,000.00 on the strength of said manifestations and
representations, said accused well knowing that the same were false and fraudulent and were made solely to
obtain, as in fact they did obtain the amount of P38,000.00 which amount once in possession, with intent to
defraud LARRY TIBOR Y MABILANGAN wilfully, unlawfully and feloniously mis-appropriated,
misapplied and converted to their own personal use and benefit, to the damage and prejudice of said
complainant in the amount of P38,000.00, Philippine Currency.

CONTRARY TO LAW.[5]

On the other hand, in Criminal Case No. Q-94-59473, the information for illegal recruitment in large
scale charged:

That on or about the month of August, 1994, in Quezon City, Philippines, the said accused, conspiring
together, confederating with several persons whose true names and whereabouts have not as yet been
ascertained and helping one another, did then and there, wilfully, unlawfully and feloniously canvass, enlist,
contract and promise employment to the following persons, to wit:

1. RONALD F[R]EDERI[Z]O Y HUSENIA


2. LARRY TIBOR Y MABILANGAN
3. FELIXBERTO LEONGSON, JR. Y CASTAEDA

after requiring them to submit certain documentary requirements and exacting from them the total amount
of P128,000.00, Philippine Currency, as recruitment fees, such recruitment activities being done without the
required license or authority from the Department of Labor.

That the crime described above is committed in large scale as the same was perpetrated against three (3) or
more persons individually or as group as penalized under Articles 38 and 39, as amended by P.D. 2018, of
the Labor Code.[6]

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When arraigned, accused-appellant pleaded not guilty to the criminal charges, whereupon the cases were
jointly tried.
The evidence for the prosecution is as follows:
On August 6, 1994, at around 1:00 p.m., complainant Felixberto Leongson, Jr. chanced upon his
neighbors, Cloyd Malgapo, Jojo Bumatay, and accused-appellant, who were talking in front of his house at
68-C East Riverside, Bgy. Paltok, San Francisco del Monte, Quezon City. Complainant was asked by
accused-appellant if he was interested to work as a seaman in Miami, Florida, United States of America. He
replied that he was interested to work abroad but he had doubts regarding his qualification for the
job. Accused-appellant assured him that this was not a problem because she could fix his application. All he
had to do was payP45,000.00 as processing fee. Accused-appellant told him that Jojo and Cloyd were
departing soon. Complainant told accused-appellant that he would consider the offer.
That night, accused-appellant came to see Felixberto and reiterated her proposal. Felixberto said he
wanted the job but he only had P10,000.00. Accused-appellant told him the amount would be sufficient as an
initial payment.
Accused-appellant came back with Joseph Mendoza, whose brother-in-law, Engr. Leonardo Domingo,
according to accused-appellant, was recruiting seamen. Thereafter, accused-appellant and Mendoza took
complainant, Cloyd, and Jojos wife, Clarita, to a house on Second Street, near Camp Crame in Quezon City,
where the latter were introduced to Andy Baloran.[7] Complainant and his companions were told that Baloran
was an employee of the National Bureau of Investigation and he would take care of processing the
applications for employment. Baloran told complainant and the other job applicants that those who would be
employed would be paid a monthly salary of US$1,000.00, plus tips, and given vacation leaves of 45 days
with pay. Baloran asked complainant to submit his picture, bio-data, and birth certificate, which complainant
later did. Accused-appellant then asked complainant to give her the P10,000.00 as initial
payment.Complainant handed her the money and asked for a receipt, but accused-appellant told him not to
worry and assured him that she would be responsible if anything untoward happened. Complainant,
therefore, did not insist on asking accused-appellant for a receipt. Accused-appellant said she gave the
money to Baloran.
Two days later, Baloran and Domingo went to the compound where Felixberto and accused-appellant
were residing and called Felixberto, Cloyd, and Jojo to a meeting. Domingo told the applicants that he was
the chief engineer of the luxury ocean liner where they would embark and repeated to them the salaries and
other benefits which they would receive. He told them not to get impatient.
Accused-appellant later saw complainant to collect the balance of P35,000.00. Complainant was told to
give the money to accused-appellant at Wendys in Cubao, Quezon City on August 12, 1994.
At the appointed date and place, complainant and his wife delivered the amount to accused-appellant
who, in turn, handed it to Baloran. No receipt was, however, issued to Felixberto.
Another meeting was held on August 16, 1994 at the Mandarin Hotel in Makati City by accused-
appellant, Domingo, Baloran, Mendoza, the Leongson spouses, the Malgapo spouses, and Jojo Bumatay. The
applicants were told by Domingo that they would be employed as waiters and attendants in the luxury liner
and asked them again to wait a while.
On August 18, 1994, accused-appellant saw complainant again to collect the P25,000.00
balance. Felixberto paid the amount to accused-appellant four days later. As in the case of the first two
payments, no receipt was given for the P25,000.00. Accused-appellant told him that she would turn over the
amount to Baloran.Although complainant regularly followed up his application with accused-appellant, he

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was told each time to have patience and to just wait for the call from Domingo or from Baloran. But
Felixberto never heard from either one of these two.[8]
Felixbertos testimony was corroborated by his wife, Maria Luz, who said that accused-appellant claimed
she could help her husband get a job as a seamen despite the latters lack of formal training. She knew of the
three payments made to accused-appellant, totalling P45,000.00, and witnessed the last two payments
of P10,000.00 at Wendys, Cubao, and P25,000.00 at accused-appellants residence. Maria Luz said she met
Baloran, Mendoza, and Domingo and discussed with them the job offered to her husband and the salaries and
benefits appurtenant thereto.[9]
Complainant Ronald Frederizo, a resident of 68-A East Riverside, San Francisco del Monte, Quezon
City, also testified. According to him, in the morning of August 10, 1994, he received a call from his sister,
Elsa Cas, at Far East Bank, Binondo Branch, Manila, asking him to go home because accused-appellant,
their neighbor, was in his house recruiting seaman for employment abroad. Ronald said that when he arrived
home, he was told by accused-appellant that he had to pay P10,000.00 as initial payment for the processing
of his application. Ronald withdrew the amount from Elsas account. Then, Ronald went with accused-
appellant to a house on Second Street near Camp Crame in Quezon City. On the way to that place, accused-
appellant assured him that he would receive a salary of US$1,000.00. At an apartment on Second Street,
Ronald saw his neighbors, complainant Felixberto, Jojo, and Cloyd. Baloran and Mendoza were also
there.Accused-appellant introduced Baloran to Ronald, Cloyd, and Jojo. She told them that Baloran was
going to take care of their applications and that he could pull strings at the NBI. Ronald paid accused-
appellant P10,000.00 for which no receipt was issued. He was assured by accused-appellant that he would be
able to leave for his job abroad in one or two weeks. He was told to be ready with the balance of P35,000.00
for the plane ticket on August 12, 1994.
Hence, on August 15, 1994, Ronald mortgaged his land in Batangas just so he could pay the P35,000.00
remaining balance. Accused-appellant went to Ronalds house to meet him. Thereafter, Ronald, Elsa, and
accused-appellant took a cab to Mandarin Hotel in Makati City. Accused-appellant told Ronald to have no
fear because the persons whom he was dealing with were her relatives. Elsa gave the P35,000.00 to accused-
appellant. Ronald no longer asked for a receipt because he trusted accused-appellant. At the hotel were
Felixberto and his wife, Baloran, and Domingo. Domingo showed Ronald and Felixberto his identification
card and said that he was the captain of a ship. He told them that they would receive a salary of US$1,000.00
plus other benefits. He also assured them that he would inform them of developments in their applications
through accused-appellant. After the meeting, Ronald went to his office and tendered his resignation.Ronald
followed up his application almost every week but every time he was told by accused-appellant to be
patient[10] because Domingo had not yet called.
Complainant Larry Tibor said that on August 10, 1994, he went to the house of his cousin, Elsa Cas, at
68-A East Riverside, Bgy. Paltok, San Francisco del Monte, Quezon City, because accused-appellant was
there recruiting seamen to work abroad. Larry was then looking for a job. Accused-appellant introduced
herself and told him that she could get him a job abroad if he had the necessary documents
and P45,000.00. Larry said he had only P3,000.00. He was told by accused-appellant to bring the amount the
next day for his fare and certification. As instructed, Larry paid the amount in the presence of his sister,
Junet. He asked for a receipt, but accused-appellant told him to trust her. Accused-appellant instructed Larry
to prepare extra money as his initial payment was insufficient. Larry left for the province to get a loan. He
went to accused-appellants house on August 15, 1994 and paid her an additional amount
of P35,000.00. Again, no receipt was issued to him. Thereafter, accused-appellant took him to Mandarin
Hotel where he was introduced to Baloran and Domingo. Larry kept waiting for a call, but none came. He
was later told by accused-appellant that he could not leave yet because Baloran was sick and he had to
postpone his trip.[11]

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Junet T. Lim, Larrys sister, testified that she was present her when brother paid P3,000.00 to accused-
appellant, although no receipt was issued. She stated that she asked accused-appellant questions to make sure
she could help Larry get a job abroad as a seaman. Janet said accused-appellant was able to convince her that
she could do so. Junet also testified that she accompanied her brother in following up his job application for
about three months until November 1994, when they realized they had been defrauded by accused-appellant,
Domingo, and Baloran.[12]
Realizing that they had been deceived, complainants went to the Baler Police Station 2 in Quezon City
on November 11, 1994 to file their complaints for illegal recruitment and estafa against accused-appellant,
Baloran, Domingo, and Mendoza. Felixberto executed his sworn statement [13] on the same day, while Ronald
and Larry gave their respective statements[14] on November 12, 1994.
On November 14, 1994, complainants went to the Philippine Overseas Employment Administration
(POEA) and discovered that accused-appellant and her companions did not have any license or authority to
engage in any recruitment activity.
Felixberto and Ronald asked the court to order accused-appellant to pay them back the placement fees
of P45,000.00 which each of them had paid and moral damages of P200,000.00 for each of them for the
shame, anxiety, and loss of jobs they suffered. They also sought the reimbursement for litigation expenses
they each incurred, amounting to P20,000.00 as attorneys fees and P500.00 per court appearance. Larry, on
the other hand, sought the recovery of the total amount of P150,000.00 for placement fee, travelling expenses
from the province to Manila to follow up his application, and the anguish and shame he suffered.[15]
In her defense, accused-appellant Luz Gonzales-Flores, a resident of 68-B East Riverside, San Francisco
del Monte, Quezon City, testified that she knew Felixberto Leongson, Jr., who was her neighbor and a
nephew of the owner of the house in which they were staying. She came to know Ronald Frederizo and Larry
Tibor through Elsa Cas. Accused-appellant denied having promised complainants overseas employment and
having collected money from them. According to her, she came to know Andy Baloran and Engr. Leonardo
Domingo through Joseph Mendoza, who referred her and her son, Noli, to them in connection with their own
applications for overseas employment. She came to know Joseph Mendoza through Elsa Cas and Felixberto
Leongson, Jr.
Accused-appellant claimed that she and Noli agreed to pay Baloran, Domingo, and Mendoza the total
sum of P90,000.00 for their application fees. Since she did not have enough money to cover the amount, she
asked her neighbors and friends to help her get a loan. Felixberto and his wife offered help and introduced
her to Jenny Tolentino, from whom she got a loan of P15,000.00 guaranteed by Felixbertos wife. Accused-
appellant said she used the amount to pay for her and her sons recruitment fees. Accused-appellant claimed
that she paid the total amount of P46,500.00 for her recruitment fee in three installments, i.e., P10,000.00 to
Mendoza at her house, P10,000.00, and P16,500.00 to Baloran at the Mandarin Hotel. She alleged that she
also gave them several pieces of jewelry worth P10,000.00. According to her, no receipts were issued for the
money and jewelry she gave.
Accused-appellant said that because Domingo, Baloran, and Mendoza did not make good their
promises, accused-appellant filed a complaint for illegal recruitment and estafa against them on November 7,
1994 in the NBI, including as her co-complainants Felixberto Leongson, Jr., Ronald Frederizo, Larry Tibor,
Eduardo Sibbalucas, Har Taccad, Romeo Gallardo, Joseph Mendoza, and her son, Noli Flores.[16]
Accused-appellant was investigated by the Baler Police Station 2 on November 11, 1994 as a result of
the complaints filed against her by Felixberto, Ronald, and Larry. Thereafter, she was detained.[17]

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On November 24, 1994, she appeared before the NBI accompanied by a policewoman to comply with
the subpoena[18] issued regarding her complaint.According to NBI Agent Jesus Manapat, accused-appellants
complaint was dismissed for lack of merit.[19]
Based on the evidence presented, the trial court rendered its assailed decision on November 23, 1998,
the dispositive portion of which reads:

WHEREFORE, the guilt of the accused for illegal recruitment in large scale and estafa in three (3) counts
having been proved beyond reasonable doubt, she is hereby convicted of said crimes and is sentenced:

(1) To suffer the penalty of life imprisonment and pay a fine of P100,000 in Criminal Case No. Q-94-59473;

(2) To suffer the penalty of imprisonment ranging from FOUR (4) YEARS AND THREE (3) MONTHS
of prision correccional, as minimum, and up to TEN (10) YEARS of prision mayor, as maximum, and to
pay the costs in Criminal Case No. Q-94-59470;

(3) To suffer the penalty of imprisonment ranging from FOUR (4) YEARS AND THREE (3) MONTHS
of prision correccional, as minimum, and up to TEN (10) YEARS of prision mayor, as maximum, and to
pay the costs in Criminal Case No. Q-94-59471; and

(4) To suffer the penalty of imprisonment ranging FOUR (4) YEARS AND THREE (3) MONTHS
of prision correccional, as minimum, and up to NINE (9) YEARS of prision mayor, as maximum, and to
pay the costs in Criminal Case No. Q-94-59472.

The accused is also directed to pay: (a) Ronald Federi[z]o, the amount of P45,000.00 as and by way of actual
damages; (b) Felixberto Leongson, Jr. P45,000.00 as and by way of actual damages; and (c) Larry
Tibor, P38,000.00 as and by way of actual damages.

The accused is further directed to pay to the said private complainants moral damages in the sum of
TWENTY THOUSAND PESOS (P20,000.00) each.

SO ORDERED.[20]

Hence, this appeal. Accused-appellant contends that-


I. THE LOWER COURT ERRED IN RELYING UPON THE JURISPRUDENCE AND
AUTHORITIES CITED, I.E., PEOPLE VS. COMIA, PEOPLE VS. MANOZCA, PEOPLE VS.
HONRADA, PEOPLE VS. TAN TIONG MENG, PEOPLE VS. VILLAS AND PEOPLE VS.
SENDON BECAUSE, WITH DUE RESPECT, THE FACTS AND CIRCUMSTANCES
AVAILING IN SAID CASES ARE DIFFERENT AS IN THE PRESENT CASE; AND
II. [THE LOWER COURT] ERRED IN HOLDING THE ACCUSED GUILTY BEYOND
REASONABLE DOUBT ON THE BASIS OF THE EVIDENCE ADDUCED BY THE
PROSECUTION TAKEN IN THE LIGHT OF THE UNREBUTTED EVIDENCE OF THE
ACCUSED ON VERY MATERIAL POINTS.[21]
The contentions are without merit.
In Criminal Case No. Q-94-59473, accused-appellant was charged with illegal recruitment in large
scale, the essential elements of which are: (1) that the accused engages in acts of recruitment and placement

6
of workers defined under Art. 13 (b) or in any of the prohibited activities under Art. 34 of the Labor Code;
(2) that the accused has not complied with the guidelines issued by the Secretary of Labor and Employment,
particularly with respect to the securing of a license or an authority to recruit and deploy workers, either
locally or overseas; and (3) that the accused commits the unlawful acts against three or more persons,
individually or as a group.[22]
In these cases, according to the certification of the POEA, accused-appellant had no license or authority
to engage in any recruitment activities.[23] In fact, this was stipulated at the trial.[24] Accused-appellant claims,
however, that she herself was a victim of illegal recruitment and that she simply told complainants about job
opportunities abroad.
The allegation is untenable. Art. 13 (b) of the Labor Code defines recruitment and placement as
referring to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers,
and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether
for profit or not. The same article further states that any person or entity which, in any manner, offers or
promises for a fee employment to two or more persons shall be deemed engaged in recruitment and
placement.[25]
The evidence for the prosecution shows that accused-appellant sought out complainants and promised
them overseas employment. Despite their initial reluctance because they lacked the technical skills required
of seamen, complainants were led to believe by accused-appellant that she could do something so that their
applications would be approved. Thus, because of accused-appellants misrepresentations, complainants gave
her their moneys. Accused-appellants companions, Domingo, Baloran, and Mendoza, made her ploy even
more plausible.
Accused-appellant contends that all she did was to refer complainants to Domingo, Baloran, and
Mendoza. However, under Art. 13 (b) of the Labor Code, recruitment includes referral, which is defined as
the act of passing along or forwarding an applicant for employment after initial interview of a selected
applicant for employment to a selected employer, placement officer, or bureau. [26] In these cases, accused-
appellant did more than just make referrals. She actively and directly enlisted complainants for supposed
employment abroad, even promising them jobs as seamen, and collected moneys from them.
The failure of complainants to present receipts to evidence payments made to accused-appellant is not
fatal to the prosecution case. The presentation of the receipts of payments is not necessary for the conviction
of accused-appellant. As long as the prosecution is able to establish through credible testimonies and
affidavits that the accused-appellant was involved in the prohibited recruitment, a conviction for the offense
can very well be justified.[27] In these cases, complainants could not present receipts for their payment
because accused-appellant assured them she would take care of their money.
It must be remembered that the trial courts appreciation of complainants testimonies deserves the
highest respect since it was in a better position to assess their credibility. [28] In these cases, complainants
testimonies, to the effect that they paid money to accused-appellant and her companions, Domingo and
Baloran, because the latter promised them overseas employment, were positive, straightforward, and
categorical. They maintained their testimonies despite the lengthy and gruelling cross-examination by the
defense counsel. They have not been shown to have any ill motive to falsely testify against accused-
appellant. Naive, simple-minded, and even gullible as they may have been, it is precisely for people like
complainants that the law was made. Accordingly, their testimonies are entitled to full faith and credit. [29]
In contrast, accused-appellants defense is merely denial. Time and again, this Court has ruled that
denial, being negative evidence which is self-serving in nature, cannot prevail over the positive identification
of prosecution witnesses.[30] Here, complainants positively identified accused-appellant as one of those who
represented that they could be deployed for overseas work upon payment of the fees.

7
Accused-appellant claims that she herself had to borrow P15,000.00 from Jenny Tolentino, guaranteed
by Maria Luz Leongson, to defray her own and her sons application expenses. The claim has no merit. Maria
Luz Leongson, who is Felixbertos wife, testified that accused-appellant sought her help to guarantee a loan to
pay the tuition fees of her daughter and the rent of the apartment in which she and her family were
staying,[31] and not to finance her and her sons overseas job applications.
Accused-appellant likewise testified that she paid in cash a total of P36,500.00 in three
installments, i.e., P10,000.00 to Mendoza at her house, and P10,000.00 and P16,500.00 to Baloran, at the
Mandarin Hotel. This testimony cannot be deemed worthy of belief. When cross-examined, accused-
appellant could not remember the dates when she allegedly made these payments. For someone who was
jobless[32] and looking for employment, it is very doubtful that she would pay considerable sums of money to
strangers without even remembering at least the month or the year when the same were supposed to have
been paid.
Accused-appellant further contends that if she was indeed a conspirator in the illegal recruitment
transactions with complainants, she would not have filed a complaint [33] in the NBI against Domingo and
Baloran. The complaint was, as already stated, dismissed and it is apparent that accused-appellant filed the
complaint only to make it appear that she herself had been the victim of swindling and illegal
recruitment. First, the complaint shows that it was filed on November 7, 1994, even before she was detained
at the Baler Police Station 2 upon the sworn statements of complainants. Complainants were included as
complainants in a complaint filed by accused-appellant. Yet, the complainants were never told, nor did they
ever knew, of the complaint until the trial of these cases. Second, accused-appellant could have easily told
them at least of the complaint because Felixberto Leongson, Jr., Ronald Frederizo and Elsa Cas, a relative of
complainant Larry Tibor, were her immediate neighbors. Third, it is also noteworthy that despite her claim
that she paid P10,000.00 to Mendoza, accused-appellant made the latter a co-complainant in the complaint
she filed with the NBI.
More importantly, accused-appellants defense is uncorroborated. Not one of the persons she included in
her complaint to the NBI was ever presented in her defense in these cases. Nor did she present Domingo,
Baloran, or Mendoza to corroborate her statements. It is probable that had she presented any of these
persons, their testimonies would have been adverse to accused-appellant.[34]
Direct proof of previous agreement to commit a crime is not necessary as it may be deduced from the
mode in which the offense was perpetrated, or inferred from the acts of the accused which point to a joint
purpose and design.[35] In these cases, the fact is that there was conspiracy among accused-appellant,
Domingo, and Baloran in recruiting complainants for employment overseas. The evidence shows that each
had a role in that conspiracy. Domingo posed as a representative of the luxury liner in recruiting crew for the
vessel. Baloran represented himself as the person who would actually process complainants travel
documents, while accused-appellant acted as a scout for job applicants and a collector of their payments. It
was only Mendoza who did not misrepresent himself as someone capable of helping complainants go abroad
nor collect money from them.[36]
In sum, we are of the opinion that the trial court correctly found accused-appellant guilty of illegal
recruitment in large scale. The imposition on accused-appellant of the penalty of life imprisonment and a fine
of P100,000.00 is thus justified.
Accused-appellant was likewise found guilty of estafa under Art. 315 (2) (a) of the Revised Penal Code
committed -

By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with
the commission of the fraud:

8
(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications, property,
credit, agency, business or imaginary transactions, or by means of other similar deceits.

Both elements of the crime were established in these cases, namely, (a) accused-appellant defrauded
complainant by abuse of confidence or by means of deceit and (b) complainant suffered damage or prejudice
capable of pecuniary estimation as a result.[37] Complainants parted with their money upon the prodding and
enticement of accused-appellant on the false pretense that she had the capacity to deploy them for
employment abroad. In the end, complainants were neither able to leave for work overseas nor did they get
their money back, thus causing them damage and prejudice.[38]
The issues that misappropriation on the part of accused-appellant of the money paid by complainants
and their demand for the same were not sufficiently established are immaterial and irrelevant, conversion and
demand not being elements of estafa under Art. 315 (2) (a) of the Revised Penal Code.
In Criminal Case Nos. Q-94-59470 and Q-94-59471, the amounts involved are both P45,000.00, as
testified to by complainants Felixberto Leongson, Jr. and Ronald Frederizo. Pursuant to Art. 315, par. 1 of
the Revised Penal Code, the Indeterminate Sentence Law, and the ruling in People v. Gabres,[39] the trial
court correctly meted accused-appellant the maximum penalty of ten (10) years of prision mayor in each
case. This is so considering that the maximum penalty prescribed by law for the felony is six (6) years, eight
(8) months, and 21 days to eight (8) years of prision mayor. The amounts involved in these cases
exceed P22,000.00 by at least P20,000.00, necessitating an increase of one (1) year for
every P10,000.00. Applying the Indeterminate Sentence Law, the minimum of the sentence is thus from six
(6) months and one (1) day to four (4) years and two (2) months of prision correccional. The trial court can
exercise its discretion only within this period. Thus, the minimum penalty imposed by the trial court should
be reduced to four (4) years and two (2) months of prision correccional.
In Criminal Case No. Q-94-59472, where the amount involved is P38,000.00, the indeterminate
sentence which should be imposed on accused-appellant should range from four (4) years and two (2)
months of prision correccional, as minimum, to nine (9) years of prision mayor, as maximum.
In accordance with the ruling in People v. Mercado,[40] the fact that no receipts were presented to prove
the amounts paid by complainants to accused-appellant does not prevent an award of actual damages in view
of the fact that complainants were able to prove by their respective testimonies and affidavits that accused-
appellant was involved in the recruitment process and succeeded in inveigling them to give their money to
her. The award of moral damages should likewise be upheld as it was shown to have factual basis.
WHEREFORE, the decision of the Regional Trial Court, Branch 77, Quezon City, finding accused-
appellant guilty of illegal recruitment in large scale and estafa against complainants Felixberto Leongson, Jr.,
Ronald Frederizo, and Larry Tibor is AFFIRMED, with the MODIFICATIONS that, in the cases for estafa,
accused-appellant is sentenced:
(1) In Criminal Case No. Q-94-59470, to suffer a prison term ranging from four (4) years and two (2)
months of prision correccional, as minimum, to ten (10) years of prision mayor, as maximum;
(2) In Criminal Case No. Q-94-59471, to suffer a prison term ranging from four (4) years and two (2)
months of prision correccional, as minimum, to 10 years of prision mayor, as maximum; and
(3) In Criminal Case No. Q-94-59472, to suffer a prison term ranging from four (4) years and two (2)
months of prision correccional, as minimum, to nine (9) years of prision mayor, as maximum.
SECOND DIVISION

9
G.R. No. 113161 August 29, 1995

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,


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

REGALADO, J.:

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

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

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

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

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

Also in April or May, 1987, Salado, accompanied by five other applicants who were his relatives, went to the
office of the placement agency at Nakpil Street, Ermita, Manila where he saw Agustin and met the spouses
Dan and Loma Goce, owners of the agency. He submitted his bio-data and learned from Loma Goce that he
had to give P12,000.00, instead of the original amount of P5,000.00 for the placement fee. Although

10
surprised at the new and higher sum, they subsequently agreed as long as there was an assurance that they
could leave for abroad.

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

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

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

Complainant Dionisio Masaya, accompanied by his brother-in-law, Aquiles Ortega, applied for a job in
Oman with the Clover Placement Agency at Parañaque, the agency's former office address. There, Masaya
met Nelly Agustin, who introduced herself as the manager of the agency, and the Goce spouses, Dan and
Loma, as well as the latter's daughter. He submitted several pertinent documents, such as his bio-data and
school credentials.

In May, 1986, Masaya gave Dan Goce P1,900.00 as an initial downpayment for the placement fee, and in
September of that same year, he gave an additional P10,000.00. He was issued receipts for said amounts and
was advised to go to the placement office once in a while to follow up his application, which he faithfully
did. Much to his dismay and chagrin, he failed to leave for abroad as promised. Accordingly, he was forced
to demand that his money be refunded but Loma Goce could give him back only P4,000.00 in installments.

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

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

Only herein appellant Agustin testified for the defense. She asserted that Dan and Loma Goce were her
neighbors at Tambo, Parañaque and that they were licensed recruiters and owners of the Clover Placement
Agency. Previously, the Goce couple was able to send her son, Reynaldo Agustin, to Saudi Arabia. Agustin

11
met the aforementioned complainants through Lorenzo Alvarez who requested her to introduce them to the
Goce couple, to which request she acceded.

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

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

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

In her present appeal, appellant Agustin raises the following arguments: (1) her act of introducing
complainants to the Goce couple does not fall within the meaning of illegal recruitment and placement under
Article 13(b) in relation to Article 34 of the Labor Code; (2) there is no proof of conspiracy to commit illegal
recruitment among appellant and the Goce spouses; and (3) there is no proof that appellant offered or
promised overseas employment to the complainants. 22 These three arguments being interrelated, they will
be discussed together.

Herein appellant is accused of violating Articles 38 and 39 of the Labor Code. Article 38 of the Labor Code,
as amended by Presidential Decree No. 2018, provides that any recruitment activity, including the prohibited
practices enumerated in Article 34 of said Code, undertaken by non-licensees or non-holders of authority
shall be deemed illegal and punishable under Article 39 thereof. The same article further provides that illegal
recruitment shall be considered an offense involving economic sabotage if any of these qualifying
circumstances exist, namely, (a) when illegal recruitment is committed by a syndicate, i.e., if it is carried out
by a group of three or more persons conspiring and/or confederating with one another; or (b) when illegal
recruitment is committed in large scale, i.e., if it is committed against three or more persons individually or
as a group.

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

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

12
Under said Code, recruitment and placement refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or not; provided, that any person or entity
which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed
engaged in recruitment and placement. On the other hand, referral is the act of passing along or forwarding
of an applicant for employment after an initial interview of a selected applicant for employment to a selected
employer, placement officer or bureau.

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

As correctly held by the trial court, being an employee of the Goces, it was therefore logical for appellant to
introduce the applicants to said spouses, they being the owners of the agency. As such, appellant was actually
making referrals to the agency of which she was a part. She was therefore engaging in recruitment activity.

Despite Agustin's pretensions that she was but a neighbor of the Goce couple, the testimonies of the
prosecution witnesses paint a different picture. Rogelio Salado and Dionisio Masaya testified that appellant
represented herself as the manager of the Clover Placement Agency. Ramona Salado was offered a job as a
cutter/sewer by Agustin the first time they met, while Ernesto Alvarez remembered that when he first met
Agustin, the latter represented herself as "nagpapaalis papunta sa Oman." Indeed, Agustin played a pivotal
role in the operations of the recruitment agency, working together with the Goce couple.

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

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

Appellant further argues that "there is no evidence of receipts of collections/payments from complainants to
appellant." On the contrary, xerox copies of said receipts/vouchers were presented by the prosecution. For
instance, a cash voucher marked as Exhibit D, showing the receipt of P10,000.00 for placement fee and duly
signed by appellant, was presented by the prosecution. Another receipt, identified as Exhibit E, was issued
and signed by appellant on February 5, 1987 to acknowledge receipt of P4,000.00 from Rogelio and Ramona
Salado for "processing of documents for Oman." Still another receipt dated March 10, 1987 and presented in
evidence as Exhibit F, shows that appellant received from Ernesto Alvarez P2,000.00 for "processing of
documents for Oman."

13
Apparently, the original copies of said receipts/vouchers were lost, hence only xerox copies thereof were
presented and which, under the circumstances, were admissible in evidence. When the original writing has
been lost or destroyed or cannot be produced in court, upon proof of its execution and loss or destruction, or
unavailability, its contents may be proved by a copy or a recital of its contents in some authentic document,
or by the recollection of witnesses.

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

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

The presence of documentary evidence notwithstanding, this case essentially involves the credibility of
witnesses which is best left to the judgment of the trial court, in the absence of abuse of discretion therein.
The findings of fact of a trial court, arrived at only after a hearing and evaluation of what can usually be
expected to be conflicting testimonies of witnesses, certainly deserve respect by an appellate court.
Generally, the findings of fact of the trial court on the matter of credibility of witnesses will not be disturbed
on appeal. In a last-ditch effort to exculpate herself from conviction, appellant argues that there is no proof
of conspiracy between her and the Goce couple as to make her liable for illegal recruitment. We do not
agree. The evidence presented by the prosecution clearly establish that appellant confabulated with the Goces
in their plan to deceive the complainants. Although said accused couple have not been tried and convicted,
nonetheless there is sufficient basis for appellant's conviction as discussed above.

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

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

THIRD DIVISION

PEOPLE OF THE PHILIPPINES, G.R. No. 176264


Appellee, Present:

CARPIO MORALES, J.,

14
Chairperson,
BRION,
BERSAMIN,
- versus - VILLARAMA, JR., and
SERENO, JJ.

TERESITA TESSIE LAOGO, Promulgated:


Appellant.
January 10, 2011
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

VILLARAMA, JR., J.:

This petition assails the July 31, 2006 Decision[1] of the Court of Appeals (CA) in CA-G.R. CR.-H.C. No.
01664, which affirmed the Decision[2] of the Regional Trial Court (RTC), Branch 12, of Malolos, Bulacan in
Criminal Case No. 693-M-2001. The RTC found appellant Teresita Tessie Laogo guilty beyond reasonable
doubt of the crime of illegal recruitment in large scale.

Appellant Teresita Tessie Laogo was the proprietor and manager of Laogo Travel Consultancy, a travel
agency firm located along Padre Faura Street in Manila. On March 7, 2001, an Information[3] was filed
against appellant and a certain Susan Navarro (Susan) in Malolos, Bulacan charging them of the crime of
Illegal Recruitment (Large Scale). The information reads:

INFORMATION

The undersigned Asst. Provincial Prosecutor accuses Susan Navarro and Tessie [Teresita]
Laogo of the crime of illegal recruitment, penalized under Art. 38 in relation to Art[s]. 34 and
39 of the Labor Code of the Philippines, as amended by Presidential Decree No. 1412,
committed as follows:

That in or about and during the months of May and June 2000, in the municipality of
Bulacan, province of Bulacan, Philippines, and within the jurisdiction of this Honorable
Court, the above-named accused, knowing that they are non-licensee or non-holder of
authority from the Department of Labor to recruit and/or place workers in employment either
locally or overseas, conspiring, confederating together and helping each other, did then and
there wi[l]lfully, unlawfully and feloniously engage in illegal recruitment, placement or
deployment activities for a fee, which they received from complainants Edith Bonifacio-
Ulanday, Rogelio Enriquez y Buenavidez, Billy dela Cruz, Jr. y Fernandez, Dante Lopez y
Enriquez, Teodulo dela Cruz y Mendoza, Edwin Enriquez y Panganiban and Gary Bustillos y
de Guzman by recruiting and promising them job placement abroad, more particularly in
Guam, which did not materialize, without first having secured the required license or
authority from the Department of Labor and Employment.

That the crime is committed in a large scale tantamount to economic sabotage as the
aforementioned seven persons were [recruited] individually or as a group.

15
Contrary to law.

The charge stemmed from the following set of facts.

Sometime during the second week of March 2000, Susan invited several individuals including six of
the seven complainants namely, Teodulo dela Cruz, Billy dela Cruz, Jr., Dante Lopez, Edwin Enriquez,
Rogelio Enriquez, and Gary Bustillos to her house in Bulacan, Bulacan to celebrate the town fiesta.
Appellant was among the several guests in Susans house during the said occasion.

According to Teodulo dela Cruz, during the fiesta, Gary Bustillos introduced him to Susan as
somebody who could help him find work abroad. Since Susan was Garys aunt, Teodulo immediately trusted
Susan. Susan told him he can apply as assistant cook and can work in Guam, USA. Upon Susans instruction,
Teodulo filled up an application form[4] and gave her P3,000.00 after the latter promised to process his
application to work abroad.[5] On May 22, 2000, Susan accompanied Teodulo to appellants travel agency
office in Ermita where he paid an additional P15,000.00 for his placement fee.[6] A receipt bearing the logo
and name of Laogo Travel Consultancy was issued to him signed by Susan. [7] Months later, when Susans
promise to send him abroad remained unfulfilled, Teodulo, along with several other applicants, went to
appellants office and to Susans house to follow up their application, but the two always told them that their
visas have yet to be released.[8]

Similarly, Billy dela Cruz, Jr. also met Susan through Gary, who himself was seeking help from
Susan to work in Guam. At Susans house, Billy saw Dante Lopez, Edwin Enriquez, and Rogelio Enriquez.
Like him, the three were also seeking Susans help to work abroad.[9] Susan introduced Billy to appellant,
who promised him that she will send them abroad within three months. [10] After the meeting, Billy issued to
Susan two Metrobank checks, dated March 11 and May 10, 2000, bearing the amounts P23,000.00
and P44,000.00, respectively, as partial payment for his placement fee. [11] On May 19, 2000, Billy also went
to appellants travel agency in Ermita and personally handed an additional cash of P6,000.00 to Susan, who
thereafter gave the money to appellant. Appellant issued a corresponding receipt [12] for the P6,000.00 cash
bearing her signature and the name and logo of Laogo Travel Consultancy. After several months, no word
was heard from either Susan or appellant. Sensing that something was wrong, Billy decided to report the
matter to the authorities in Bulacan, Bulacan and filed the complaint against Susan and appellant. [13]

Dante Lopez testified that he was also introduced by Gary Bustillos to appellant and Susan. Susan identified
herself as an employee of appellants travel agency. The two told him that they can send him and his
companions to Guam within the span of three months.[14] Lopez paid both accused P6,000.00 to process his
papers, covered by a receipt dated May 19, 2000 showing appellants signature.[15] Appellants promise,
however, turned sour after three months. When he confronted appellant, the latter told him that he would be
sent to a different country. Left without a choice, Lopez waited. Again, the promise remained unfulfilled.[16]

According to Rogelio Enriquez, he also met appellant during the town fiesta when Susan invited him to cook
for her guests. Susan introduced appellant as someone who could send him to work abroad. Eager about the
prospect, Rogelio immediately gave his P3,000.00 cash to Susan for the processing of his visa and
employment documents.[17] He saw Susan hand the money to appellant.[18] A week later, Rogelio gave an
additional P900.00 to Susan.[19] No receipts were issued on both payments since Rogelio failed to complete
the required P6,000.00 placement fee.[20] Months passed but Rogelio heard nothing from either Susan or
appellant. Apprehensive, Rogelio verified the status of the Laogo Travel Consultancy with the Philippine

16
Overseas Employment Administration (POEA). From the POEA, Rogelio learned that neither of the accused
nor Laogo Travel was licensed to recruit workers for employment abroad. Aggrieved, Rogelio, together with
his six companions, filed the complaint against Susan and appellant.

Edwin Enriquez also paid P12,000.00 to Susan as processing fee for his application to work in
Guam. According to him, Susans husband and appellant were present when he gave the money to Susan
during the town fiesta.[21] Susan issued a receipt dated May 16, 2000 to Edwin. The receipt contained the
logo of Laogo Travel Consultancy and was signed by Susan with a description which says Payment was for
Placement Fee.[22]

Two other persons, namely Edith Bonifacio-Ulanday and Gary Bustillos, Susans nephew, were among the
seven who filed the complaint against Susan and appellant. The two, however, later decided to withdraw
their complaints after executing their respective affidavits of desistance. [23]

On March 15, 2001, warrants of arrest[24] were issued against Susan and appellant. When arraigned,
appellant pleaded not guilty.[25]Susan, meanwhile, remained at large. An alias warrant of arrest[26] was issued
by the trial court against her but to no avail.

During the trial, appellant denied any participation in the illegal activities undertaken by Susan. She insisted
that Susan was not in any way connected with her travel agency and that she confronted the latter when she
came to know of Susans recruitment activities. Appellant claimed that she even had to rename her travel
agency to Renz Consultancy and Employment Services to avoid being associated with Susans recruitment
activities.[27]

Appellant admitted having met Rogelio at Susans house during the town fiesta, but denied knowing the other
complainants. According to appellant, she came to know Rogelio when Susan specifically identified him as
the one who cooked the dishes after some guests prodded Susan.[28]

Unsatisfied with appellants explanation, the trial court promulgated a Decision[29] finding her guilty of large
scale illegal recruitment. The fallo of the trial courts July 16, 2002 Decision reads:

WHEREFORE, finding herein accused Teresita (Tessie) Laogo y Villamor guilty as principal
beyond reasonable doubt of the crime of illegal recruitment in large scale, she is hereby
sentenced to suffer the penalty of life imprisonment and pay a fine of P500,000.00 as
imposed by law[;] to indemnify the private offended parties x x x actual damages, as follows:
Teodulo dela Cruz P15,000.00, Billy dela Cruz P73,000.00, Dante LopezP6,000.00, Rogelio
Enriquez P3,000.00, and Edwin Enriquez P12,000.00[;] and to pay the costs of the
proceedings.

In the service of her sentence the said accused, a detention prisoner, shall be credited with the
full time during which she had undergone preventive imprisonment, pursuant to the
provisions of Art. 29 of the Revised Penal Code.

Pending the actual apprehension of the other accused Susan Navarro, [who is] still at-large,
on the strength of the warrant of arrest earlier issued, let the record be committed to the
archives subject to recall and reinstatement, should circumstances so warrant for due
prosecution against her of this case.

17
SO ORDERED.[30]

Appellant filed an appeal before this Court, but said appeal was transferred to the CA following our
pronouncement in People v. Mateo.[31]

In her Appellants Brief[32] before the CA, appellant insisted that she had no hand in the recruitment of
the complainants and maintains that the recruitment activities were made solely upon the initiative of
accused Susan Navarro.[33] Appellant anchored her defense on the testimonies of the complainants who
declared that the transactions and the payments were made not with her but with Susan.[34]Appellant admitted
that her consultancy firm was merely engaged in the business of assisting clients in the procurement of
passports and visas, and denied that her agency was involved in any recruitment activity as defined under
the Labor Code, as amended.[35]

On July 31, 2006, the appellate court rendered the assailed decision affirming appellants
conviction.[36] The CA noted that although at times, it was Susan with whom the complainants transacted, the
records nevertheless bear that appellant had a hand in the recruitment of the complainants. The CA pointed
out that appellant, together with Susan, repeatedly assured the private complainants that her consultancy firm
could deploy them for overseas employment,[37] leading the appellate court to conclude that appellant
consciously and actively participated in the recruitment of the complainants.[38]

Aggrieved, appellant brought the case to us on appeal, raising the same arguments she had raised at the CA.

We affirm appellants conviction.

Recruitment and placement refers to the act of canvassing, enlisting, contracting, transporting, utilizing,
hiring or procuring workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not. When a person or entity, in any manner, offers or
promises for a fee employment to two or more persons, that person or entity shall be deemed engaged in
recruitment and placement.[39]

Article 38(a) of the Labor Code, as amended, specifies that recruitment activities undertaken by non-
licensees or non-holders of authority are deemed illegal and punishable by law. And when the illegal
recruitment is committed against three or more persons, individually or as a group, then it is deemed
committed in large scale and carries with it stiffer penalties as the same is deemed a form of economic
sabotage.[40]

But to prove illegal recruitment, it must be shown that the accused, without being duly authorized by law,
gave complainants the distinct impression that he had the power or ability to send them abroad for work,
such that the latter were convinced to part with their money in order to be employed. [41] It is important that
there must at least be a promise or offer of an employment from the person posing as a recruiter, whether
locally or abroad.[42]

Here, both the trial court and the CA found that all the five complainants were promised to be sent abroad by
Susan and herein appellant[43]as cooks and assistant cooks. The follow up transactions between appellant and
her victims were done inside the said travel agency. Moreover, all four receipts issued to the victims bear the

18
name and logo of Laogo Travel Consultancy,[44] with two of the said receipts personally signed by appellant
herself.[45] Indubitably, appellant and her co-accused acting together made complainants believe that they
were transacting with a legitimate recruitment agency and that Laogo Travel Consultancy had the authority
to recruit them and send them abroad for work when in truth and in fact it had none as certified by the
POEA.[46] Absent any showing that the trial court and the CA overlooked or misappreciated certain
significant facts and circumstances, which if properly considered, would change the result, we are bound by
said findings.[47]

Appellants contention that she had to change the name of her travel agency to disassociate herself with
Susans recruitment activities is too lame to deserve serious consideration. In light of the testimonies of the
complainants that appellant with her co-accused promised them employment abroad, we find appellants act
of closing Laogo Travel Consultancy and establishing a new one under her husbands name [48]as just an
afterthought, a belated decision which cannot undo the damage suffered by the private offended parties. It
could indeed hardly be construed as a simple reaction of an innocent person, as it in fact smacks of a
desperate attempt of a guilty individual to escape liability or to confuse and dishearten her victims.

WHEREFORE, the appeal is DENIED. The Decision dated July 31, 2006 of the Court of Appeals
in CA-G.R. CR.-H.C. No. 01664 is AFFIRMED in toto.

With costs against the accused-appellant.

SO ORDERED.

PEOPLE V. PANIS, 142 SCRA 664

FIRST DIVISION

[G.R. Nos. 141221-36. March 7, 2002]

19
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. FRANCISCO HERNANDEZ (at large),
KARL REICHL, and YOLANDA GUTIERREZ DE REICHL, accused.
KARL REICHL and YOLANDA GUTIERREZ DE REICHL, accused-appellants.

DECISION
PUNO, J.:

This is an appeal from the Joint Decision of the Regional Trial Court, Batangas City in Criminal Case
Nos. 6428, 6429, 6430, 6431, 6432, 6433, 6434, 6435, 6436, 6437, 6438, 6439, 6528, 6529, 6530 and 6531
finding accused-appellants, Spouses Karl Reichl and Yolanda Gutierrez de Reichl guilty of five (5) counts of
estafa and one (1) count of syndicated and large scale illegal recruitment.[1]
In April 1993, eight (8) informations for syndicated and large scale illegal recruitment and eight (8)
informations for estafa were filed against accused-appellants, spouses Karl and Yolanda Reichl, together
with Francisco Hernandez. Only the Reichl spouses were tried and convicted by the trial court as Francisco
Hernandez remained at large.
The evidence for the prosecution consisted of the testimonies of private complainants; a certification
from the Philippine Overseas Employment Administration (POEA) that Francisco Hernandez, Karl Reichl
and Yolanda Gutierrez Reichl in their personal capacities were neither licensed nor authorized by the POEA
to recruit workers for overseas employment;[2] the receipts for the payment made by private complainants;
and two documents signed by the Reichl spouses where they admitted that they promised to secure Austrian
tourist visas for private complainants and that they would return all the expenses incurred by them if they are
not able to leave by March 24, 1993,[3] and where Karl Reichl pledged to refund to private complainants the
total sum of P1,388,924.00 representing the amounts they paid for the processing of their papers.[4]
Private complainant Narcisa Hernandez, a teacher, was first to testify for the prosecution. She stated that
Francisco Hernandez introduced her to the spouses Karl and Yolanda Reichl at the residence of a certain
Hilarion Matira at Kumintang Ibaba, Batangas City. At the time, she also saw the other applicants Melanie
Bautista, Estela Manalo, Edwin Coleng, Anicel Umahon, Analiza Perez and Maricel Matira. Karl and
Yolanda Reichl told Narcisa that they could find her a job as domestic helper in Italy. They, however,
required her to pay the amount of P150,000.00 for the processing of her papers and travel documents. She
paid the fee in three installments. She paid the first installment of P50,000.00 on July 14, 1992, the second
installment of P25,000.00 on August 6, 1992 and the third in the amount of P75,000.00 on December 27,
1992. She gave the money to Francisco Hernandez in the presence of the Reichl spouses at Matira's
residence. Francisco Hernandez issued a receipt for the first and second installment[5] but not for the
third. Narcisa was scheduled to leave on December 17, 1992 but was not able to do so. Karl Reichl explained
that she would get her transit visa to Italy in Austria, but she could not yet leave for Austria because the
hotels were fully booked at that time because of the Christmas season. Narcisa's departure was again
scheduled on January 5, 1993, but it still did not push through. Narcisa stated that they went to Manila
several times supposedly to obtain a visa from the Austrian Embassy and Karl Reichl assured her that she
would be able to leave once she gets her visa. The accused set the departure of Narcisa and that of the other
applicants several times but these proved to be empty promises. In March 1993, the applicants met with the
three accused at the residence of private complainant Charito Balmes and asked them to refund the payment
if they could not send them abroad. The meeting resulted in an agreement which was reduced into writing
and signed by Karl Reichl. Mr. Reichl promised to ensure private complainants' departure by April,
otherwise, they would return their payment.[6]

20
Private complainant Leonora Perez also gave the following testimony: In July 1992, her sister, Analiza
Perez, introduced her to Francisco Hernandez at their residence in Dolor Subdivision, Batangas
City. Francisco Hernandez convinced her to apply for a job in Italy. When she accepted the offer, Francisco
Hernandez told her to prepare P150,000.00 for the processing of her papers. In August 1992, Leonora,
together with her sister and Francisco Hernandez, went to Ramada Hotel in Manila to meet with Karl and
Yolanda Reichl. At said meeting, Leonora handed her payment of P50,000.00 to Yolanda Reichl. Yolanda
assured her that she would be able to work in Italy. Francisco Hernandez and the Reichl spouses told
Leonora to wait for about three weeks before she could leave. After three weeks, Francisco Hernandez
invited Leonora and the other applicants to the house of Hilarion Matira in Batangas City to discuss some
matters. Francisco Hernandez informed the applicants that their departure would be postponed to December
17, 1992. December 17 came and the applicants were still unable to leave as it was allegedly a
holiday. Yolanda and Karl Reichl nonetheless assured Leonora of employment as domestic helper in Italy
with a monthly salary of $1,000.00. Francisco Hernandez and the Reichl spouses promised the applicants
that they would leave for Italy on January 5, 1993. Some time in January 1993, Francisco Hernandez went to
the residence of Leonora and collected the sum of P50,000.00 purportedly for the plane fare. Francisco
issued a receipt for the payment. When the applicants were not able to leave on the designated date,
Francisco Hernandez and the spouses again made another promise. Tired of the recruiters' unfulfilled
promises, the applicants decided to withdraw their application. However, Karl Reichl constantly assured
them that they would land a job in Italy because he had connections in Vienna. The promised employment,
however, never materialized. Thus, Karl Reichl signed a document stating that he would refund the payment
made by the applicants plus interest and other expenses. The document was executed and signed at the house
of one of the applicants, Charito Balmes, at P. Zamora St., Batangas City. [7]
Janet Perez, Leonora's sister, corroborated the latter's testimony that she paid a total amount
of P100,000.00 to the three accused.[8]
Private complainant Charito Balmes told a similar story when she testified before the court. She said
that Francisco Hernandez convinced her to apply for the job of domestic helper in Italy and required her to
pay a fee of P150,000.00. He also asked her to prepare her passport and other papers to be used to secure a
visa.On November 25, 1992, she gave P25,000.00 to Francisco Hernandez. They proceeded to Kumintang
Ibaba, Batangas City and Francisco Hernandez introduced her to his business partners, spouses Karl and
Yolanda Reichl. Francisco Hernandez turned over the payment to the spouses so that they could secure a visa
for her.The Reichl spouses promised her an overseas job. They said she and the other applicants would leave
on December 17, 1992. On December 11, 1992, Charito paid the amount of P70,300.00 to Francisco
Hernandez in the presence of the Reichls. Francisco Hernandez again handed the money to the spouses. On
February 16, 1993, Charito paid P20,000.00 to Francisco Hernandez who delivered the same to the
spouses. Francisco Hernandez did not issue a receipt for the payment made by Charito because he told her
that he would not betray her trust. Like the other applicants, Charito was not able to leave the country despite
the numerous promises made by the accused. They gave various excuses for their failure to depart, until
finally the Reichls told the applicants that Karl Reichl had so many business transactions in the Philippines
that they would not be able to send them abroad and that they would refund their payment instead. Hence,
they executed an agreement which was signed by Karl Reichl and stating that they would return the amounts
paid by the applicants. The accused, however, did not comply with their obligation.[9]
Mrs. Elemenita Bautista, the mother of private complainant Melanie Bautista, also took the witness
stand. She stated that in May 1992, Melanie applied for an overseas job through Francisco
Hernandez. Francisco Hernandez told her to prepare P150,000.00 to be used for the processing of her papers
and plane ticket. On June 26, 1992, Melanie made the initial payment of P50,000.00 to Francisco Hernandez
who was then accompanied by Karl and Yolanda Reichl.[10] Upon receipt of the payment, Francisco
Hernandez gave the money to Yolanda Reichl. Melanie made two other payments: one on August 6, 1992 in

21
the amount of P25,000.00,[11] and another on January 3, 1993 in the amount of P51,000.00.[12] Three receipts
were issued for the payments.[13]
Rustico Manalo, the husband of private complainant Estela Abel de Manalo, testified that his wife
applied for the job of domestic helper abroad. In June 1992, Francisco Hernandez introduced them to Karl
and Yolanda Reichl who were allegedly sending workers to Italy. Rustico and his wife prepared all the
relevant documents, i.e., passport, police clearance and marriage contract, and paid a total placement fee
of P130,000.00.[14] They paid P50,000.00 on June 5, 1992, P25,000.00 on August 8, 1992, and P55,000.00
on January 3, 1993. The payments were made at the house of Hilarion Matira and were received by
Francisco Hernandez who, in turn, remitted them to the Reichl spouses. Francisco Hernandez issued a receipt
for the payment. The Reichls promised to take care of Estela's papers and to secure a job for her abroad. The
Reichls vowed to return the payment if they fail on their promise. As with the other applicants, Estela was
also not able to leave the country.[15]
The defense interposed denial and alibi.
Accused-appellant Karl Reichl, an Austrian citizen, claimed that he entered the Philippines on July 29,
1992. Prior to this date, he was in various places in Europe. He came to the country on July 29, 1992 to
explore business opportunities in connection with the import and export of beer and sugar. He also planned
to establish a tourist spot somewhere in Batangas. Upon his arrival, he and his wife, Yolanda Reichl, stayed
at the Manila Intercontinental Hotel. On August 3, 1992, they moved to Manila Midtown Hotel. They stayed
there until August 26, 1992. After they left Manila Midtown Hotel, they went to another hotel in Quezon
City.Karl Reichl returned to Vienna on September 19, 1992.[16]
Mr. Reichl stated that he first met Francisco Hernandez through a certain Jimmy Pineda around August
1992 at Manila Midtown Hotel. Francisco Hernandez was allegedly looking for a European equipment to be
used for the quarrying operation of his friend. Before accepting the deal, he made some research on the
background of the intended business. Realizing that said business would not be viable, Karl Reichl advised
Francisco Hernandez to instead look for a second-hand equipment from Taiwan or Japan. He never saw
Francisco Hernandez again until he left for Vienna in September 1992.[17]
Karl Reichl returned to the Philippines on October 21, 1992. Francisco Hernandez allegedly approached
him and sought his help in securing Austrian visas purportedly for his relatives. Karl Reichl refused and told
him that he was planning to stay permanently in the Philippines. On one occasion, Francisco Hernandez
invited him to an excursion at Sombrero Island. Francisco Hernandez told him that he would also bring some
of his relatives with him and he would introduce him to them. There he met Narcisa Hernandez and Leonora
Perez. Leonora Perez, together with Francisco Hernandez, later went to see Mr. Reichl at the house of his in-
laws at No. 4 Buenafe Road, Batangas City and asked him if he could help her obtain an Austrian visa. Karl
Reichl, however, was firm on his refusal.[18]
In his testimony before the trial court, Karl Reichl denied any knowledge about Francisco Hernandez's
recruitment activities. He said that Francisco Hernandez merely told him that he wanted to help his relatives
go to Europe. He further denied that he promised private complainants that he would give them overseas
employment.[19] As regards the document where Mr. Reichl undertook to pay P1,388,924.00 to private
complainants, he claimed that he signed said document under duress. Francisco Hernandez allegedly told
him that private complainants would harm him and his family if he refused to sign it. He signed the
document as he felt he had no other option.[20]
Yolanda Gutierrez de Reichl corroborated the testimony of her husband and denied the charges against
her. She claimed that she was in Manila on the dates alleged in the various informations, thus, she could not
have committed the acts charged therein. Yolanda Reichl further stated that she did not know of any reason

22
why private complainants filed these cases against her and her husband. She said that several persons were
harassing her and pressuring her to pay private complainants the sum of at least P50,000.00.[21]
After assessing the evidence presented by the parties, the trial court rendered a decision convicting
accused-appellants of one (1) count of illegal recruitment in large scale and six (6) counts of estafa. The
dispositive portion of the decision reads:

WHEREFORE, judgment is hereby rendered finding the accused spouses KARL REICHL and YOLANDA
GUTIERREZ REICHL -

1. NOT GUILTY of the crime of syndicated and large-scale illegal recruitment as charged in the
above-mentioned Criminal Cases Nos. 6435, 6437 and 6529;
2. NOT GUILTY of the crime of estafa as charged in the above-mentioned Criminal Cases Nos.
6434, 6436 and 6528;
3. GUILTY beyond reasonable doubt of the crime of syndicated and large-scale illegal recruitment,
as charged, in the above-mentioned Criminal Cases Nos. 6429, 6431, 6433, 6439 and 6531;
4. GUILTY beyond reasonable doubt of the crime of estafa, as charged, in the above-mentioned
Criminal Cases Nos. 6428, 6430, 6432, 6438 and 6530.
The Court hereby imposes upon the accused-spouses KARL REICHL and YOLANDA GUTIERREZ
REICHL the following sentences:
1. For the 5 offenses, collectively, of syndicated and large-scale illegal recruitment in Criminal
Cases Nos. 6429, 6431, 6433, 6438 and 6531, to suffer the penalty of life imprisonment, and to
pay a fine of One Hundred Thousand Pesos (P100,000.00);
2. In Criminal Case No. 6428, there being no mitigating or aggravating circumstance, to suffer the
indeterminate sentence of Six (6) Years of prision correctional, as minimum to Sixteen (16)
Years of reclusion temporal, as maximum, and to indemnify the complainant Narcisa Hernandez
in the amount of P150,000.00;
3. In Criminal Case No. 6430, there being no mitigating or aggravating circumstance, to suffer the
indeterminate sentence of six (6) years of prision correctional as minimum to eleven (11) years
of prision mayor, as maximum and to indemnify the complainant Leonora Perez in the amount
of P100,000.00;
4. In Criminal Case No. 6432, there being no mitigating or aggravating circumstance, to suffer the
indeterminate sentence of six (6) years of prision correctional as minimum to sixteen (16) years
of reclusion temporal, as maximum and to indemnify the complainant Melanie Bautista in the
amount of P150,000.00;
5. In Criminal Case No. 6438, there being no mitigating or aggravating circumstance, to suffer the
indeterminate sentence of six (6) years of prision correctional as minimum to fourteen (14) years
of reclusion temporal as maximum and to indemnify the complainant Estela Abel de Manalo in
the amount of P130,000.00;
6. In Criminal Case No. 6530, there being no mitigating or aggravating circumstance, to suffer the
indeterminate sentence of six (6) years or prision correctional as minimum to thirteen (13) years
of reclusion temporal as maximum and to indemnify the complainant Charito Balmes in the
amount of P121,300.00; and

23
7. To pay the costs.

SO ORDERED.

Accused-appellants appealed from the decision of the trial court. They raise the following errors:
1. The trial court erred in finding accused-appellant Karl Reichl guilty of the crimes of estafa and
illegal recruitment committed by syndicate and in large scale based on the evidence presented by
the prosecution which miserably failed to establish guilt beyond reasonable doubt.
2. The trial court erred in convicting the accused-appellant of the crime of illegal recruitment on a
large scale by cummulating five separate cases of illegal recruitment each filed by a single
private complainant.
3. The trial court erred in rendering as a matter of course an automatic guilty verdict against
accused-appellant for the crime of estafa after a guilty verdict in a separate crime for illegal
recruitment. It is submitted that conviction in the latter crime does not ipso facto result in
conviction in the former.[22]
The appeal is bereft of merit.
Article 38 of the Labor Code defines illegal recruitment as "any recruitment activities, including the
prohibited practices enumerated under Article 34 of (the Labor Code), to be undertaken by non-licensees or
non-holders of authority." The term "recruitment and placement" refers to any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, including referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not, provided that any
person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall
be deemed engaged in recruitment and placement.[23] The law imposes a higher penalty when the illegal
recruitment is committed by a syndicate or in large scale as they are considered an offense involving
economic sabotage. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three
(3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme. It is deemed committed in large scale if committed against three (3) or
more persons individually or as a group.[24]
In the case at bar, the prosecution was able to prove beyond reasonable doubt that accused-appellants
engaged in activities that fall within the definition of recruitment and placement under the Labor Code. The
evidence on record shows that they promised overseas employment to private complainants and required
them to prepare the necessary documents and to pay the placement fee, although they did not have any
license to do so. There is illegal recruitment when one who does not possess the necessary authority or
license gives the impression of having the ability to send a worker abroad. [25]
Accused-appellants assert that they merely undertook to secure Austrian visas for private complainants,
which act did not constitute illegal recruitment. They cite the document marked at Exhibit "J" stating that
they promised to obtain Austrian tourist visas for private complainants. We are not convinced. Private
complainants Narcisa Hernandez, Leonora Perez and Charito Balmes categorically stated that Karl and
Yolanda Reichl told them that they would provide them overseas employment and promised them that they
would be able to leave the country on a specified date. We do not see any reason to doubt the truthfulness of
their testimony. The defense has not shown any ill motive for these witnesses to falsely testify against
accused-appellants if it were not true that they met with the Reichl spouses and the latter represented
themselves to have the capacity to secure gainful employment for them abroad. The minor lapses in the
testimony of these witnesses pointed out by accused-appellants in their brief do not impair their credibility,
especially since they corroborate each other on the material points, i.e., that they met with the three accused

24
several times, that the three accused promised to give them overseas employment, and that they paid the
corresponding placement fee but were not able to leave the country. It has been held that truth-telling
witnesses are not always expected to give error-free testimonies considering the lapse of time and the
treachery of human memory.[26] Moreover, it was shown that Karl Reichl signed a document marked as
Exhibit "C" where he promised to refund the payments given by private complainants for the processing of
their papers. We are not inclined to believe Mr. Reichl's claim that he was forced by Francisco Hernandez to
sign said document. There is no showing, whether in his testimony or in that of his wife, that private
complainants threatened to harm them if he did not sign the document. Mr. Reichl is an educated man and it
cannot be said that he did not understand the contents of the paper he was signing. When he affixed his
signature thereon, he in effect acknowledged his obligation to ensure the departure of private complainants
and to provide them gainful employment abroad. Such obligation arose from the promise of overseas
placement made by him and his co-accused to private complainants. The admission made by accused-
appellants in Exhibit "J" that they promised to obtain Austrian visas for private complainants does not negate
the fact that they also promised to procure for them overseas employment. In fact, in Exhibit "J", accused-
appellants admitted that each of the private complainants paid the amount of P50,000.00. However, in
Exhibit "C", which was executed on a later date, accused-appellants promised to refund to each complainant
an amount exceeding P150,000.00. This is an acknowledgment that accused-appellants received payments
from the complainants not only for securing visas but also for their placement abroad.
Accused-appellants' defense of denial and alibi fail to impress us. The acts of recruitment were
committed from June 1992 until January 1993 in Batangas City.Karl Reichl was in Manila from July 29,
1992 until September 19, 1992, and then he returned to the Philippines and stayed in Batangas from October
21, 1992.Yolanda Reichl, on the other hand, claimed that he was in Manila on the dates alleged in the
various informations. It is of judicial notice that Batangas City is only a few hours drive from Manila. Thus,
even if the spouses were staying in Manila, it does not prevent them from going to Batangas to engage in
their recruitment business. Furthermore, it appears that the three accused worked as a team and they
conspired and cooperated with each other in recruiting domestic helpers purportedly to be sent to Italy.
Francisco Hernandez introduced Karl and Yolanda Reichl to the job applicants as his business partners. Karl
and Yolanda Reichl themselves gave assurances to private complainants that they would seek employment
for them in Italy. Francisco Hernandez remitted the payments given by the applicants to the Reichl spouses
and the latter undertook to process the applicants' papers. There being conspiracy, each of the accused shall
be equally liable for the acts of his co-accused even if he himself did not personally take part in its execution.
Accused-appellants argue that the trial court erred in convicting accused-appellants of illegal
recruitment in large scale by cummulating the individualinformations filed by private complainants. The
eight informations for illegal recruitment are worded as follows:
Criminal Case No. 6429

That on or about July 14, 1992 and sometime prior and subsequent thereto at Hilltop, Brgy. Kumintang
Ibaba, Batangas City, Philippines and within the jurisdiction of this Honorable Court, the above-named
accused, knowing fully well that they are non-licensees nor holders of authority from the Department of
Labor and Employment or any other authorized government entity, conspiring and confederating together,
did then and there, wilfully, unlawfully and feloniously engage in syndicated and large scale recruitment and
placement activities by enlisting, contracting, procuring, offering and promising for a fee to one Narcisa
Autor de Hernandez and to more than three other persons, job placement abroad, by reason of which said
Narcisa Autor de Hernandez relying on these misrepresentations, paid and/or gave the amount of ONE
HUNDRED FIFTY THOUSAND (P150,000.00) PESOS, Philippine Currency, to said accused, which acts
constitute a violation of the said law.

25
Contrary to Law.

Criminal Case No. 6431

That on or about July 1992 and sometime prior and subsequent thereto at Dolor Subdivision, Batangas City,
Philippines and within the jurisdiction of this Honorable Court, the above-named accused, knowing fully
well that they are non-licensees nor holders of authority from the Department of Labor and Employment or
any other authorized government entity, conspiring and confederating together, did then and there, wilfully,
unlawfully and feloniously engage in syndicated and large scale recruitment and placement activities by
enlisting, contracting, procuring, offering and promising for a fee to one Leonora Perez y Atienza and to
more than three other persons, job placement abroad, by reason of which said Leonora Perez y Atienza
relying on these misrepresentations, paid and/or gave the amount of ONE HUNDRED THOUSAND
(P100,000.00) PESOS, Philippine Currency, to said accused, which acts constitute a violation of the said
law.

Contrary to Law.

Criminal Case No. 6433

That on or about June 26, 1992 and sometime prior and subsequent thereto at Hilltop, Brgy. Kumintang
Ibaba, Batangas City, Philippines and within the jurisdiction of this Honorable Court, the above-named
accused, knowing fully well that they are non-licensees nor holders of authority from the Department of
Labor and Employment or any other authorized government entity, conspiring and confederating together,
did then and there, wilfully, unlawfully and feloniously engage in syndicated and large scale recruitment and
placement activities by enlisting, contracting, procuring, offering and promising for a fee to one Melanie
Bautista y Dolor and to more than three other persons, job placement abroad, by reason of which said
Melanie Bautista y Dolor relying on these misrepresentations, paid and/or gave the amount of ONE
HUNDRED FIFTY THOUSAND (P150,000.00) PESOS, Philippine Currency, to said accused, which acts
constitute a violation of the said law.

Contrary to Law.

Criminal Case No. 6435

That on or about July 12, 1992 and sometime prior and subsequent thereto at Hilltop, Brgy. Kumintang
Ibaba, Batangas City, Philippines and within the jurisdiction of this Honorable Court, the above-named
accused, knowing fully well that they are non-licensees nor holders of authority from the Department of
Labor and Employment or any other authorized government entity, conspiring and confederating together,
did then and there, wilfully, unlawfully and feloniously engage in syndicated and large scale recruitment and
placement activities by enlisting, contracting, procuring, offering and promising for a fee to one Annaliza
Perez y Atienza and to more than three other persons, job placement abroad, by reason of which said
Annaliza Perez y Atienza relying on these misrepresentations, paid and/or gave the amount of ONE
HUNDRED SIXTY THOUSAND (P160,000.00) PESOS, Philippine Currency, to said accused, which acts
constitute a violation of the said law.

Contrary to Law.

Criminal Case No. 6437

26
That on or about August 15, 1992 and sometime prior and subsequent thereto at Hilltop, Brgy. Kumintang
Ibaba, Batangas City, Philippines and within the jurisdiction of this Honorable Court, the above-named
accused, knowing fully well that they are non-licensees nor holders of authority from the Department of
Labor and Employment or any other authorized government entity, conspiring and confederating together,
did then and there, wilfully, unlawfully and feloniously engage in syndicated and large scale recruitment and
placement activities by enlisting, contracting, procuring, offering and promising for a fee to one Edwin
Coling y Coling and to more than three other persons, job placement abroad, by reason of which said Edwin
Coling y Coling relying on these misrepresentations, paid and/or gave the amount of ONE HUNDRED
FIFTY THOUSAND (P150,000.00) PESOS, Philippine Currency, to said accused, which acts constitute a
violation of the said law.

Contrary to Law.

Criminal Case No. 6439

That on or about June 5, 1992 and sometime prior and subsequent thereto at Hilltop, Brgy. Kumintang Ibaba,
Batangas City, Philippines and within the jurisdiction of this Honorable Court, the above-named accused,
knowing fully well that they are non-licensees nor holders of authority from the Department of Labor and
Employment or any other authorized government entity, conspiring and confederating together, did then and
there, wilfully, unlawfully and feloniously engage in syndicated and large scale recruitment and placement
activities by enlisting, contracting, procuring, offering and promising for a fee to one Estela Abel de
Manaloand to more than three other persons, job placement abroad, by reason of which said Estela Abel de
Manalo relying on these misrepresentations, paid and/or gave the amount of ONE HUNDRED THIRTY
THOUSAND (P130,000.00) PESOS, Philippine Currency, to said accused, which acts constitute a violation
of the said law.

Contrary to Law.

Criminal Case No. 6529

That on or about July 1992 and sometime prior and subsequent thereto at Brgy. Sta. Rita Karsada, Batangas
City, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, knowing
fully well that they are non-licensees nor holders of authority from the Department of Labor and
Employment or any other authorized government entity, conspiring and confederating together, did then and
there, wilfully, unlawfully and feloniously engage in syndicated and large scale recruitment and placement
activities by enlisting, contracting, procuring, offering and promising for a fee to one Anicel Umahon y
Delgado and to more than three other persons, job placement abroad, by reason of which said Anicel
Umahon y Delgado relying on these misrepresentations, paid and/or gave the amount of ONE HUNDRED
THIRTY THOUSAND (P130,000.00) PESOS, Philippine Currency, to said accused, which acts constitute a
violation of the said law.

Contrary to Law.

Criminal Case No. 6531

That on or about November 25, 1992 and sometime prior and subsequent thereto at No. 40 P. Zamora Street,
Batangas City, Philippines and within the jurisdiction of this Honorable Court, the above-named accused,
knowing fully well that they are non-licensees nor holders of authority from the Department of Labor and

27
Employment or any other authorized government entity, conspiring and confederating together, did then and
there, wilfully, unlawfully and feloniously engage in syndicated and large scale recruitment and placement
activities by enlisting, contracting, procuring, offering and promising for a fee to one Charito Balmes y
Cantos and to more than three other persons, job placement abroad, by reason of which said Charito Balmes
y Cantos relying on these misrepresentations, paid and/or gave the amount of ONE HUNDRED TWENTY
ONE THOUSAND THREE HUNDRED PESOS (P121,300.00), Philippine Currency, to said accused, which
acts constitute a violation of the said law.

Contrary to Law.

We note that each information was filed by only one complainant. We agree with accused-appellants
that they could not be convicted for illegal recruitment committed in large scale based on several
informations filed by only one complainant. The Court held in People vs. Reyes:[27]

x x x When the Labor Code speaks of illegal recruitment committed against three (3) or more persons
individually or as a group, it must be understood as referring to the number of complainants in each case who
are complainants therein, otherwise, prosecutions for single crimes of illegal recruitment can be cummulated
to make out a case of large scale illegal recruitment. In other words, a conviction for large scale illegal
recruitment must be based on a finding in each case of illegal recruitment of three or more persons whether
individually or as a group.[28]

This, however, does not serve to lower the penalty imposed upon accused-appellants. The charge was
not only for illegal recruitment committed in large scale but also for illegal recruitment committed by a
syndicate. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or
more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme defined under the first paragraph of Article 38 of the Labor Code. It has
been shown that Karl Reichl, Yolanda Reichl and Francisco Hernandez conspired with each other in
convincing private complainants to apply for an overseas job and giving them the guaranty that they would
be hired as domestic helpers in Italy although they were not licensed to do so. Thus, we hold that accused-
appellants should be held liable for illegal recruitment committed by a syndicate which is also punishable by
life imprisonment and a fine of one hundred thousand pesos (P100,000.00) under Article 39 of the Labor
Code.
Finally, we hold that the prosecution also proved the guilt of accused-appellants for the crime of
estafa. A person who is convicted of illegal recruitment may, in addition, be convicted of estafa under Art.
315 (2) of the Revised Penal Code provided the elements of estafa are present. Estafa under Article 315,
paragraph 2 of the Revised Penal Code is committed by any person who defrauds another by using a
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 the fraud. The offended party must have relied on the false pretense, fraudulent act or
fraudulent means of the accused-appellant and as a result thereof, the offended party suffered damages.[29] It
has been proved in this case that accused-appellants represented themselves to private complainants to have
the capacity to send domestic helpers to Italy, although they did not have any authority or license. It is by this
representation that they induced private complainants to pay a placement fee of P150,000.00. Such act
clearly constitutes estafa under Article 315 (2) of the Revised Penal Code.
IN VIEW WHEREOF, the appeal is DISMISSED. The Decision appealed from is hereby AFFIRMED.
Cost against appellants.

28
SO ORDERED.

THIRD DIVISION

G.R. No. 169076 January 23, 2007

PEOPLE OF THE PHILIPPINES, Appellee,


vs.
JOSEPH JAMILOSA, Appellant.

DECISION

CALLEJO, SR., J.:

This is an appeal from the Decision1 of the Regional Trial Court (RTC) of Quezon City in Criminal Case No.
Q-97-72769 convicting appellant Joseph Jamilosa of large scale illegal recruitment under Sections 6 and 7 of
Republic Act (R.A.) No. 8042, and sentencing him to life imprisonment and to pay a P500,000.00 fine.

29
The Information charging appellant with large scale illegal recruitment was filed by the Senior State
Prosecutor on August 29, 1997. The inculpatory portion of the Information reads:

That sometime in the months of January to February, 1996, or thereabout in the City of Quezon, Metro
Manila, Philippines, and within the jurisdiction of this Honorable Court, representing to have the capacity,
authority or license to contract, enlist and deploy or transport workers for overseas employment, did then and
there, willfully, unlawfully and criminally recruit, contract and promise to deploy, for a fee the herein
complainants, namely, Haide R. Ruallo, Imelda D. Bamba, Geraldine M. Lagman and Alma E. Singh, for
work or employment in Los Angeles, California, U.S.A. in Nursing Home and Care Center without first
obtaining the required license and/or authority from the Philippine Overseas Employment Administration
(POEA).

Contrary to law.2

On arraignment, the appellant, assisted by counsel, pleaded not guilty to the charge.

The case for the prosecution, as synthesized by the Court of Appeals (CA), is as follows:

The prosecution presented three (3) witnesses, namely: private complainants Imelda D. Bamba, Geraldine M.
Lagman and Alma E. Singh.

Witness Imelda D. Bamba testified that on January 17, 1996, she met the appellant in Cubao, Quezon City on
board an aircon bus. She was on her way to Shoemart (SM), North EDSA, Quezon City where she was
working as a company nurse. The appellant was seated beside her and introduced himself as a recruiter of
workers for employment abroad. The appellant told her that his sister is a head nurse in a nursing home in
Los Angeles, California, USA and he could help her get employed as a nurse at a monthly salary of Two
Thousand US Dollars ($2,000.00) and that she could leave in two (2) weeks time. He further averred that he
has connections with the US Embassy, being a US Federal Bureau of Investigation (FBI) agent on official
mission in the Philippines for one month. According to the appellant, she has to pay the amount of
US$300.00 intended for the US consul. The appellant gave his pager number and instructed her to contact
him if she is interested to apply for a nursing job abroad.

On January 21, 1996, the appellant fetched her at her office. They then went to her house where she gave
him the photocopies of her transcript of records, diploma, Professional Regulatory Commission (PRC)
license and other credentials. On January 28 or 29, 1996, she handed to the appellant the amount of
US$300.00 at the McDonalds outlet in North EDSA, Quezon City, and the latter showed to her a photocopy
of her supposed US visa. The appellant likewise got several pieces of jewelry which she was then selling and
assured her that he would sell the same at the US embassy. However, the appellant did not issue a receipt for
the said money and jewelry. Thereafter, the appellant told her to resign from her work at SM because she
was booked with Northwest Airlines and to leave for Los Angeles, California, USA on February 25, 1996.

The appellant promised to see her and some of his other recruits before their scheduled departure to hand to
them their visas and passports; however, the appellant who was supposed to be with them in the flight failed
to show up. Instead, the appellant called and informed her that he failed to give the passport and US visa
because he had to go to the province because his wife died. She and her companions were not able to leave
for the United States. They went to the supposed residence of the appellant to verify, but nobody knew him
or his whereabouts. They tried to contact him at the hotel where he temporarily resided, but to no avail. They

30
also inquired from the US embassy and found out that there was no such person connected with the said
office. Thus, she decided to file a complaint with the National Bureau of Investigation (NBI).

Prosecution witness Geraldine Lagman, for her part, testified that she is a registered nurse by profession. In
the morning of January 22, 1996, she went to SM North EDSA, Quezon City to visit her cousin Imelda
Bamba. At that time, Bamba informed her that she was going to meet the appellant who is an FBI agent and
was willing to help nurses find a job abroad. Bamba invited Lagman to go with her. On the same date at
about 2:00 o’clock in the afternoon, she and Bamba met the appellant at the SM Fast-Food Center,
Basement, North EDSA, Quezon City. The appellant convinced them of his ability to send them abroad and
told them that he has a sister in the United States. Lagman told the appellant that she had no working
experience in any hospital but the appellant assured her that it is not necessary to have one. The appellant
asked for US$300.00 as payment to secure an American visa and an additional amount of Three Thousand
Four Hundred Pesos (P3,400.00) as processing fee for other documents.

On January 24, 1996, she and the appellant met again at SM North EDSA, Quezon City wherein she handed
to the latter her passport and transcript of records. The appellant promised to file the said documents with the
US embassy. After one (1) week, they met again at the same place and the appellant showed to her a
photocopy of her US visa. This prompted her to give the amount of US$300.00 and two (2) bottles of Black
Label to the appellant. She gave the said money and liquor to the appellant without any receipt out of trust
and after the appellant promised her that he would issue the necessary receipt later. The appellant even went
to her house, met her mother and uncle and showed to them a computer printout from Northwest Airlines
showing that she was booked to leave for Los Angeles, California, USA on February 25, 1996.

Four days after their last meeting, Extelcom, a telephone company, called her because her number was
appearing in the appellant’s cellphone documents. The caller asked if she knew him because they were trying
to locate him, as he was a swindler who failed to pay his telephone bills in the amount of P100,000.00. She
became suspicious and told Bamba about the matter. One (1) week before her scheduled flight on February
25, 1996, they called up the appellant but he said he could not meet them because his mother passed away.
The appellant never showed up, prompting her to file a complaint with the NBI for illegal recruitment.

Lastly, witness Alma Singh who is also a registered nurse, declared that she first met the appellant on
February 13, 1996 at SM North EDSA, Quezon City when Imelda Bamba introduced the latter to her. The
appellant told her that he is an undercover agent of the FBI and he could fix her US visa as he has a contact
in the US embassy. The appellant told her that he could help her and her companions Haidee Raullo,
Geraldine Lagman and Imelda Bamba find jobs in the US as staff nurses in home care centers.

On February 14, 1996 at about 6:30 in the evening, the appellant got her passport and picture. The following
day or on February 15, 1996, she gave the appellant the amount of US$300.00 and a bottle of cognac as
"grease money" to facilitate the processing of her visa. When she asked for a receipt, the appellant assured
her that there is no need for one because she was being directly hired as a nurse in the United States.

She again met the appellant on February 19, 1996 at the Farmers Plaza and this time, the appellant required
her to submit photocopies of her college diploma, nursing board certificate and PRC license. To show his
sincerity, the appellant insisted on meeting her father. They then proceeded to the office of her father in
Barrio Ugong, Pasig City and she introduced the appellant. Thereafter, the appellant asked permission from
her father to allow her to go with him to the Northwest Airlines office in Ermita, Manila to reserve airline
tickets. The appellant was able to get a ticket confirmation and told her that they will meet again the
following day for her to give P10,000.00 covering the half price of her plane ticket. Singh did not meet the

31
appellant as agreed upon. Instead, she went to Bamba to inquire if the latter gave the appellant the same
amount and found out that Bamba has not yet given the said amount. They then paged the appellant through
his beeper and told him that they wanted to see him. However, the appellant avoided them and reasoned out
that he could not meet them as he had many things to do. When the appellant did not show up, they decided
to file a complaint for illegal recruitment with the NBI.

The prosecution likewise presented the following documentary evidence:

Exh. "A" – Certification dated February 23, 1998 issued by Hermogenes C. Mateo, Director II, Licensing
Branch, POEA.

Exh. "B" – Affidavit of Alma E. Singh dated February 23, 1996.3

On the other hand, the case for the appellant, as culled from his Brief, is as follows:

Accused JOSEPH JAMILOSA testified on direct examination that he got acquainted with Imelda Bamba
inside an aircon bus bound for Caloocan City when the latter borrowed his cellular phone to call her office at
Shoe Mart (SM), North Edsa, Quezon City. He never told Bamba that he could get her a job in Los Angeles,
California, USA, the truth being that she wanted to leave SM as company nurse because she was having a
problem thereat. Bamba called him up several times, seeking advice from him if Los Angeles, California is a
good place to work as a nurse. He started courting Bamba and they went out dating until the latter became
his girlfriend. He met Geraldine Lagman and Alma Singh at the Shoe Mart (SM), North Edsa, Quezon City
thru Imelda Bamba. As complainants were all seeking advice on how they could apply for jobs abroad, lest
he be charged as a recruiter, he made Imelda Bamba, Geraldine Lagman and Alma Singh sign separate
certifications on January 17, 1996 (Exh. "2"), January 22, 1996 (Exh. "4"), and February 19, 1996 (Exh. "3"),
respectively, all to the effect that he never recruited them and no money was involved. Bamba filed an Illegal
Recruitment case against him because they quarreled and separated. He came to know for the first time that
charges were filed against him in September 1996 when a preliminary investigation was conducted by Fiscal
Dañosos of the Department of Justice. (TSN, October 13, 1999, pp. 3-9 and TSN, December 8, 1999, pp. 2-
9)4

On November 10, 2000, the RTC rendered judgment finding the accused guilty beyond reasonable doubt of
the crime charged.5 The fallo of the decision reads:

WHEREFORE, judgment is hereby rendered finding accused guilty beyond reasonable doubt of Illegal
Recruitment in large scale; accordingly, he is sentenced to suffer the penalty of life imprisonment and to pay
a fine of Five Hundred Thousand Pesos (P500,000.00), plus costs.

Accused is ordered to indemnify each of the complainants, Imelda Bamba, Geraldine Lagman and Alma
Singh the amount of Three Hundred US Dollars ($300.00).

SO ORDERED.6

In rejecting the defenses of the appellant, the trial court declared:

To counter the version of the prosecution, accused claims that he did not recruit the complainants for work
abroad but that it was they who sought his advice relative to their desire to apply for jobs in Los Angeles,
California, USA and thinking that he might be charged as a recruiter, he made them sign three certifications,

32
Exh. "2," "3" and "4," which in essence state that accused never recruited them and that there was no money
involved.

Accused’s contention simply does not hold water. Admittedly, he executed and submitted a counter-affidavit
during the preliminary investigation at the Department of Justice, and that he never mentioned the aforesaid
certifications, Exhibits 2, 3 and 4 in said counter-affidavit. These certifications were allegedly executed
before charges were filed against him. Knowing that he was already being charged for prohibited
recruitment, why did he not bring out these certifications which were definitely favorable to him, if the same
were authentic. It is so contrary to human nature that one would suppress evidence which would belie the
charge against him.

Denials of the accused can not stand against the positive and categorical narration of each complainant as to
how they were recruited by accused who had received some amounts from them for the processing of their
papers. Want of receipts is not fatal to the prosecution’s case, for as long as it has been shown, as in this case,
that accused had engaged in prohibited recruitment. (People v. Pabalan, 262 SCRA 574).

That accused is neither licensed nor authorized to recruit workers for overseas employment, is shown in the
Certification issued by POEA, Exh. "A."

In fine, the offense committed by the accused is Illegal Recruitment in large scale, it having been committed
against three (3) persons, individually.7

Appellant appealed the decision to this Court on the following assignment of error:

THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF THE CRIME OF


ILLEGAL RECRUITMENT IN LARGE SCALE DESPITE THE FACT THAT THE LATTER’S GUILT
WAS NOT PROVED BEYOND REASONABLE DOUBT BY THE PROSECUTION.8

According to appellant, the criminal Information charging him with illegal recruitment specifically
mentioned the phrase "for a fee," and as such, receipts to show proof of payment are indispensable. He
pointed out that the three (3) complaining witnesses did not present even one receipt to prove the alleged
payment of any fee. In its eagerness to cure this "patent flaw," the prosecution resorted to presenting the oral
testimonies of complainants which were "contrary to the ordinary course of nature and ordinary habits of life
[under Section 3(y), Rule 131 of the Rules on Evidence] and defied credulity." Appellant also pointed out
that complainants’ testimony that they paid him but no receipts were issued runs counter to the presumption
under Section [3](d), Rule 131 of the Rules on Evidence that persons take ordinary care of their concern. The
fact that complainants were not able to present receipts lends credence to his allegation that it was they who
sought advice regarding their desire to apply for jobs in Los Angeles, California, USA. Thus, thinking that he
might be charged as a recruiter, he made them sign three (3) certifications stating that he never recruited
them and there was no money involved. On the fact that the trial court disregarded the certifications due to
his failure to mention them during the preliminary investigation at the Department of Justice (DOJ),
appellant pointed out that there is no provision in the Rules of Court which bars the presentation of evidence
during the hearing of the case in court. He also pointed out that the counter-affidavit was prepared while he
was in jail "and probably not assisted by a lawyer."9

Appellee, through the Office of the Solicitor General (OSG), countered that the absence of receipts signed by
appellant acknowledging receipt of the money and liquor from the complaining witnesses cannot defeat the
prosecution and conviction for illegal recruitment. The OSG insisted that the prosecution was able to prove

33
the guilt of appellant beyond reasonable doubt via the collective testimonies of the complaining witnesses,
which the trial court found credible and deserving of full probative weight. It pointed out that appellant failed
to prove any ill-motive on the part of the complaining witnesses to falsely charge him of illegal recruitment.

On appellant’s claim that the complaining witness Imelda Bamba was his girlfriend, the OSG averred:

Appellant’s self-serving declaration that Imelda is his girlfriend and that she filed a complaint for illegal
recruitment after they quarreled and separated is simply preposterous. No love letters or other documentary
evidence was presented by appellant to substantiate such claim which could be made with facility. Imelda
has no reason to incriminate appellant except to seek justice. The evidence shows that Alma and Geraldine
have no previous quarrel with appellant. Prior to their being recruited by appellant, Alma and Geraldine have
never met appellant. It is against human nature and experience for private complainants to conspire and
accuse a stranger of a most serious crime just to mollify their hurt feelings. (People v. Coral, 230 SCRA 499,
510 [1994])10

The OSG posited that the appellant’s reliance on the certifications11 purportedly signed by the complaining
witnesses is misplaced, considering that the certifications are barren of probative weight.

On February 23, 2005, the Court resolved to transfer the case to the CA.12 On June 22, 2005, the CA
rendered judgment affirming the decision of the RTC.13

The OSG filed a Supplemental Brief, while the appellant found no need to file one.

The appeal has no merit.

Article 13(b) of the Labor Code of the Philippines defines recruitment and placement as follows:

(b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not. Provided, That any person or entity which, in any
manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in
recruitment and placement.

Section 6 of R.A. No. 8042 defined when recruitment is illegal:

SEC. 6. Definition. – For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services,
promising or advertising for employment abroad, whether for profit or not, when undertaken by a non-
licensee or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as
amended, otherwise known as the Labor Code of the Philippines: Provided, That any such non-licensee or
non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall
be deemed so engaged. x x x

Any recruitment activities to be undertaken by non-licensee or non-holder of contracts shall be deemed


illegal and punishable under Article 39 of the Labor Code of the Philippines.14 Illegal recruitment is deemed
committed in large scale if committed against three (3) or more persons individually or as a group. 15

34
To prove illegal recruitment in large scale, the prosecution is burdened to prove three (3) essential elements,
to wit: (1) the person charged undertook a recruitment activity under Article 13(b) or any prohibited practice
under Article 34 of the Labor Code; (2) accused did not have the license or the authority to lawfully engage
in the recruitment and placement of workers; and (3) accused committed the same against three or more
persons individually or as a group.16 As gleaned from the collective testimonies of the complaining witnesses
which the trial court and the appellate court found to be credible and deserving of full probative weight, the
prosecution mustered the requisite quantum of evidence to prove the guilt of accused beyond reasonable
doubt for the crime charged. Indeed, the findings of the trial court, affirmed on appeal by the CA, are
conclusive on this Court absent evidence that the tribunals ignored, misunderstood, or misapplied substantial
fact or other circumstance.

The failure of the prosecution to adduce in evidence any receipt or document signed by appellant where he
acknowledged to have received money and liquor does not free him from criminal liability. Even in the
absence of money or other valuables given as consideration for the "services" of appellant, the latter is
considered as being engaged in recruitment activities.

It can be gleaned from the language of Article 13(b) of the Labor Code that the act of recruitment may be for
profit or not. It is sufficient that the accused promises or offers for a fee employment to warrant conviction
for illegal recruitment.17 As the Court held in People v. Sagaydo:18

Such is the case before us. The complainants parted with their money upon the prodding and enticement of
accused-appellant on the false pretense that she had the capacity to deploy them for employment abroad. In
the end, complainants were neither able to leave for work abroad nor get their money back.

The fact that private complainants Rogelio Tibeb and Jessie Bolinao failed to produce receipts as proof of
their payment to accused-appellant does not free the latter from liability. The absence of receipts cannot
defeat a criminal prosecution for illegal recruitment. As long as the witnesses can positively show through
their respective testimonies that the accused is the one involved in prohibited recruitment, he may be
convicted of the offense despite the absence of receipts.19

Appellant’s reliance on the certifications purportedly signed by the complaining witnesses Imelda Bamba,
Alma Singh and Geraldine Lagman20 is misplaced. Indeed, the trial court and the appellate court found the
certifications barren of credence and probative weight. We agree with the following pronouncement of the
appellate court:

Anent the claim of the appellant that the trial court erred in not giving weight to the certifications (Exhs. "2,"
"3" & "4") allegedly executed by the complainants to the effect that he did not recruit them and that no
money was involved, the same deserves scant consideration.

The appellant testified that he was in possession of the said certifications at the time the same were executed
by the complainants and the same were always in his possession; however, when he filed his counter-
affidavit during the preliminary investigation before the Department of Justice, he did not mention the said
certifications nor attach them to his counter-affidavit.lavvphil.net

We find it unbelievable that the appellant, a college graduate, would not divulge the said certifications which
would prove that, indeed, he is not an illegal recruiter. By failing to present the said certifications prior to the
trial, the appellant risks the adverse inference and legal presumption that, indeed, such certifications were not
genuine. When a party has it in his possession or power to produce the best evidence of which the case in its

35
nature is susceptible and withholds it, the fair presumption is that the evidence is withheld for some sinister
motive and that its production would thwart his evil or fraudulent purpose. As aptly pointed out by the trial
court:

"x x x These certifications were allegedly executed before charges were filed against him. Knowing that he
was already being charged for prohibited recruitment, why did he not bring out these certifications which
were definitely favorable to him, if the same were authentic. It is so contrary to human nature that one would
suppress evidence which would belie the charge against him." (Emphasis Ours) 21

At the preliminary investigation, appellant was furnished with copies of the affidavits of the complaining
witnesses and was required to submit his counter-affidavit. The complaining witnesses identified him as the
culprit who "recruited" them. At no time did appellant present the certifications purportedly signed by the
complaining witnesses to belie the complaint against him. He likewise did not indicate in his counter-
affidavit that the complaining witnesses had executed certifications stating that they were not recruited by
him and that he did not receive any money from any of them. He has not come forward with any valid excuse
for his inaction. It was only when he testified in his defense that he revealed the certifications for the first
time. Even then, appellant lied when he claimed that he did not submit the certifications because the State
Prosecutor did not require him to submit any counter-affidavit, and that he was told that the criminal
complaint would be dismissed on account of the failure of the complaining witnesses to appear during the
preliminary investigation. The prevarications of appellant were exposed by Public Prosecutor Pedro Catral
on cross-examination, thus:

Q Mr. Witness, you said that a preliminary investigation [was] conducted by the Department of Justice
through State Prosecutor Dañosos. Right?

A Yes, Sir.

Q Were you requested to file your Counter-Affidavit?

A Yes, Sir. I was required.

Q Did you file your Counter-Affidavit?

A Yes, Sir, but he did not accept it.

Q Why?

A Because he said "never mind" because the witness is not appearing so he dismissed the case.

Q Are you sure that he did not accept your Counter-Affidavit, Mr. Witness?

A I don’t know of that, Sir.

Q If I show you that Counter-Affidavit you said you prepared, will you be able to identify the same, Mr.
Witness?

A Yes, Sir.

36
Q I will show you the Counter-Affidavit dated June 16, 1997 filed by one Joseph J. Jamilosa, will you please
go over this and tell if this is the same Counter-Affidavit you said you prepared and you are going to file
with the investigating state prosecutor?

A Yes, Sir. This the same Counter-Affidavit.

Q There is a signature over the typewritten name Joseph J. Jamilosa, will you please go over this and tell this
Honorable Court if this is your signature, Mr. Witness?

A Yes, Sir. This is my signature.

Q During the direct examination you were asked to identify [the] Certification as Exh. "2" dated January 17,
1996, allegedly issued by Bamba, one of the complainants in this case, when did you receive this
Certification issued by Imelda Bamba, Mr. Witness?

A That is the date, Sir.

Q You mean the date appearing in the Certification.

A Yes, Sir.

Q Where was this handed to you by Imelda Bamba, Mr. Witness?

A At SM North Edsa, Sir.

Q During the direct examination you were also asked to identify a Certification Exh. "3" for the defense
dated February 19, 1996, allegedly issued by Alma Singh, one of the complainants in this case, will you
please go over this and tell us when did Alma Singh allegedly issue to you this Certification?

A On February 19, 1996, Sir.

Q And also during the direct examination, you were asked to identify a Certification which was already
marked as Exh. "4" for the defense dated January 22, 1996 allegedly issued by Geraldine M. Lagman, one of
the complainants in this case, will you please tell the court when did Geraldine Lagman give you this
Certification?

A January 22, 1996, Sir.

Q During that time, January 22, 1996, January 17, 1996 and February 19, 1996, you were in possession of all
these Certification. Correct, Mr. Witness?

A Yes, Sir.

Q These were always in your possession. Right?

A Yes, Sir, with my papers.

37
Q Do you know when did the complainants file cases against you?

A I don’t know, Sir.

Q Alright. I will read to you this Counter-Affidavit of yours, and I quote "I, Joseph Jamilosa, of legal age,
married and resident of Manila City Jail, after having duly sworn to in accordance with law hereby depose
and states that: 1) the complainants sworn under oath to the National Bureau of Investigation that I recruited
them and paid me certain sums of money assuming that there is truth in those allegation of this (sic)
complainants. The charge filed by them should be immediately dismissed for certain lack of merit in their
Sworn Statement to the NBI Investigator; 2) likewise, the complainants’ allegation is not true and I never
recruited them to work abroad and that they did not give me money, they asked me for some help so I
[helped] them in assisting and processing the necessary documents, copies for getting US Visa; 3) the
complainant said under oath that they can show a receipt to prove that they can give me sums or amount of
money. That is a lie. They sworn (sic), under oath, that they can show a receipt that I gave to them to prove
that I got the money from them. I asked the kindness of the state prosecutor to ask the complainants to show
and produce the receipts that I gave to them that was stated in the sworn statement of the NBI; 4) the
allegation of the complainants that the charges filed by them should be dismissed because I never [received]
any amount from them and they can not show any receipt that I gave them," Manila City Jail, Philippines,
June 16, 1997. So, Mr. Witness, June 16, 1997 is the date when you prepared this. Correct?

A Yes, Sir.

Q Now, my question to you, Mr. Witness, you said that you have with you all the time the Certification
issued by [the] three (3) complainants in this case, did you allege in your Counter-Affidavit that this
Certification you said you claimed they issued to you?

A I did not say that, Sir.

Q So, it is not here in your Counter-Affidavit?

A None, Sir.

Q What is your educational attainment, Mr. Witness?

A I am a graduate of AB Course Associate Arts in 1963 at the University of the East.

Q You said that the State Prosecutor of the Department of Justice did not accept your Counter-Affidavit, are
you sure of that, Mr. Witness?

A Yes, Sir.

Q Did you receive a copy of the dismissal which you said it was dismissed?

A No, Sir. I did not receive anything.

Q Did you receive a resolution from the Department of Justice?

A No, Sir.

38
Q Did you go over the said resolution you said you received here?

A I just learned about it now, Sir.

Q Did you read the content of the resolution?

A Not yet, Sir. It’s only now that I am going to read.

COURT

Q You said it was dismissed. Correct?

A Yes, Your Honor.

Q Did you receive a resolution of this dismissal?

A No, Your Honor.

FISCAL CATRAL

Q What did you receive?

A I did not receive any resolution, Sir. It’s just now that I learned about the finding.

Q You said you learned here in court, did you read the resolution filed against you, Mr. Witness?

A I did not read it, Sir.

Q Did you read by yourself the resolution made by State Prosecutor Dañosos, Mr. Witness?

A Not yet, Sir.

Q What did you take, if any, when you received the subpoena from this court?

A I was in court already when I asked Atty. Usita to investigate this case.

Q You said a while ago that your Affidavit was not accepted by State Prosecutor Dañosos. Is that correct?

A Yes, Sir.

Q Will you please read to us paragraph four (4), page two (2) of this resolution of State Prosecutor Dañosos.

(witness reading par. 4 of the resolution)

Alright. What did you understand of this paragraph 4, Mr. Witness?

A Probably, guilty to the offense charge.22

39
It turned out that appellant requested the complaining witnesses to sign the certifications merely to prove that
he was settling the cases:

COURT

Q These complainants, why did you make them sign in the certifications?

A Because one of the complainants told me to sign and they are planning to sue me.

Q You mean they told you that they are filing charges against you and yet you [made] them sign
certifications in your favor, what is the reason why you made them sign?

A To prove that I’m settling this case.

Q Despite the fact that they are filing cases against you and yet you were able to make them sign
certifications?

A Only one person, Your Honor, who told me and he is not around.

Q But they all signed these three (3) certifications and yet they filed charges against you and yet you made
them sign certifications in your favor, so what is the reason why you made them sign?

(witness can not answer)23

The Court notes that the trial court ordered appellant to refund US$300.00 to each of the complaining
witnesses. The ruling of the appellate court must be modified. Appellant must pay only the peso equivalent
of US$300.00 to each of the complaining witnesses. IN LIGHT OF ALL THE FOREGOING, the appeal is
DISMISSED. The Decision of the Court of Appeals affirming the conviction of Joseph Jamilosa for large
scale illegal recruitment under Sections 6 and 7 of Republic Act No. 8042 is AFFIRMED WITH
MODIFICATION. The appellant is hereby ordered to refund to each of the complaining witnesses the peso
equivalent of US$300.00. Costs against appellant. SO ORDERED.

SECOND DIVISION

G.R. No. 94071 March 31, 1992

NEW LIFE ENTERPRISES and JULIAN SY, petitioners,


vs.
HON. COURT OF APPEALS, EQUITABLE INSURANCE CORPORATION, RELIANCE SURETY
AND INSURANCE CO., INC. and WESTERN GUARANTY CORPORATION, respondents.

REGALADO, J.:

This appeal by certiorari seeks the nullification of the decision 1 of respondent Court of Appeals in CA-G.R.
CV No. 13866 which reversed the decision of the Regional Trial Court, Branch LVII at Lucena City,

40
jointly deciding Civil Cases Nos. 6-84, 7-84 and 8-84 thereof and consequently ordered the dismissal of the
aforesaid actions filed by herein petitioners.

The undisputed background of this case as found by the court a quo and adopted by respondent court, being
sustained by the evidence on record, we hereby reproduce the same with approval. 2

The antecedents of this case show that Julian Sy and Jose Sy Bang have formed a business
partnership in the City of Lucena. Under the business name of New Life Enterprises, the
partnership engaged in the sale of construction materials at its place of business, a two storey
building situated at Iyam, Lucena City. The facts show that Julian Sy insured the stocks
in trade of New Life Enterpriseswith Western Guaranty Corporation, Reliance Surety and
Insurance. Co., Inc., and Equitable Insurance Corporation.

On May 15, 1981, Western Guaranty Corporation issued Fire Insurance Policy No. 37201 in
the amount of P350,000.00. This policy was renewed on May, 13, 1982.

On July 30,1981, Reliance Surety and Insurance Co., Inc. issued Fire Insurance Policy No.
69135 inthe amount of P300,000.00 (Renewed under Renewal
Certificate No. 41997) An additional insurancewas issued by the same company on
November 12, 1981 under Fire Insurance Policy No. 71547 in the amount of P700,000.00.

On February 8, 1982, Equitable Insurance


Corporation issued Fire Insurance Policy No. 39328 in the amount of P200,000.00.

Thus when the building occupied by the New Life Enterprises


was gutted by fire at about 2:00 o'clock inthe morning of October 19, 1982, the stocks in the
trade inside said building were insured against fire inthe total amount of P1,550,000.00.
According to the certification issued by the Headquarters, Philippine Constabulary
/Integrated National Police, Camp Crame, the cause of fire was
electrical in nature.According to the plaintiffs,
the building and the stocks inside were burned. After the fire, Julian Sy wentto the agent of
Reliance Insurance whom he asked to accompany him to the
office of the company sothat he can file his claim. He averred that in support of his claim, he
submitted the fire clearance, the insurance policies and inventory of stocks. He further
testified that the three insurance companies are sister companies, and as a matter of
fact when he was following-up his claim with Equitable Insurance, the
Claims Manager told him to go first to Reliance Insurance and if said company
agrees to pay, they would also pay. The same treatment was given him by the other insurance
companies. Ultimately, thethree insurance companies denied plaintiffs' claim for payment.

In its letter of denial dated March 9, 1983, (Exhibit "C" No. 8-


84) Western Guaranty Corporationthrough Claims Manager Bernard S. Razon told the
plaintiff that his claim "is
denied for breach of policyconditions." Reliance Insurance purveyed the same message in its
letter dated November 23, 1982and signed by Executive Vice-President Mary Dee
Co (Exhibit "C" No. 7-84) which said that "plaintiff's claim is denied for breach of policy
conditions." The letter of denial received by the plaintiff fromEquitable Insurance
Corporation (Exhibit "C" No. 6-84) was of the same tenor, as said letter dated February 22,

41
1983, and signed by Vice-President Elma R. Bondad, said "we find that certain
policyconditions were violated, therefore, we regret, we have to deny your claim, as it is
hereby denied in its entirety."

In relation to the case against Reliance


Surety and Insurance Company, a certain Atty. Serafin D.Dator, acting in behalf of the
plaintiff, sent a letter dated February 13, 1983 (Exhibit "G-l" No 7-84) toExecutive Vice-
President Mary Dee Co asking that he be informed as to the specific policy conditions
allegedly violated by the plaintiff. In her reply-letter dated March 30, 1983, Executive Vice-
PresidentMary Dee Co informed Atty. Dator that Julian Sy violated Policy Condition No.
"3" which requires theinsured to give notice of any insurance or insurances already effected
covering the stocks in trade. 3

Because of the denial of their claims for payment by the three (3) insurance
companies, petitioner filed separate civilactions against the former before the Regional Trial
Court of Lucena City, which cases were consolidated for trial,
and thereafter the court below rendered its decision on December 19, l986 with the following disposition:

WHEREFORE, judgment in the above-entitled cases is rendered in the following manner,


viz:

1. In Civil Case No. 6-84, judgment is rendered for the


plaintiff New Life Enterprises and against the defendant Equitable Insurance Corporation
ordering the latter to pay the former the sum of TwoHundred Thousand (P200,000.00) Pesos
and
considering that payment of the claim of the insured hasbeen unreasonably denied, pursuant t
o Sec. 244 of the Insurance Code, defendant is further ordered topay the plaintiff attorney's fe
es in the amount of Twenty Thousand (P20,000.00)
Pesos. All sums ofmoney to be paid by virtue hereof shall bear interest at 12% per
annum (pursuant to Sec. 244 of theInsurance Code) from
February 14, 1983, (91st day from November 16, 1982, when Sworn Statementof Fire Claim
was received from the insured) until they are fully paid;

2. In Civil Case No. 7-84, judgment is rendered for the plaintiff Julian Sy and against
the defendantReliance Surety and Insurance Co.,
Inc., ordering the latter to pay the former the sum
of P1,000,000.00(P300,000.00 under Policy
No. 69135 and P700,000.00 under Policy No. 71547)
and considering thatpayment of the claim of the
insured has been unreasonably denied, pursuant to
Sec. 244 of theInsurance Code, defendant is further ordered to pay the plaintiff the amount of
P100,000.00 as attorney's fees.

All sums of money to be paid by virtue hereof shall bear interest at 12% per
annum (pursuant to Sec. 244 of the Insurance Code) from February 14, 1983,
(91st day from November 16,
1982 when SwornStatement of Fire Claim was received from the insured) until they are fully
paid;

42
3. In Civil Case No. 8-84, judgment is rendered for
the plaintiff New Life Enterprises and against thedefendant Western Guaranty Corporation
ordering the latter to pay the sum of P350,000.00
to theConsolidated Bank and Trust Corporation,
Lucena Branch, Lucena City, as stipulated on the
face ofPolicy No. 37201, and considering that payment of the
aforementioned sum of money has been
unreasonably denied, pursuant to Sec. 244 of the Insurance Code,
defendant is further ordered to pay the plaintiff attorney's fees in the amount of P35,000.00.

All sums of money to be paid by virtue hereof shall bear interest at 12% per
annum (pursuant to Sec. 244 of the Insurance Code) from February 5, 1982, (91st day from
1st week of November 1983 when insured filed formal claim for full indemnity according to
adjuster Vetremar Dela Merced) until they are fully paid. 4

As aforestated, respondent Court of Appeals reversed said judgment of the trial court, hence this petition the
cruxwherein is whether or not Conditions Nos. 3 and 27 of
the insurance contracts were violated by petitioners thereby resulting in
their forfeiture of all the benefits thereunder.

Condition No. 3 of said insurance policies, otherwise known as


the "Other Insurance Clause," is uniformly contained in all the aforestated
insurance contracts of herein petitioners, as follows:

3. The insured shall give notice to the Company of any insurance or insurances already
effected, orwhich may subsequently be effected, covering any of the property or properties
consisting of stocks intrade, goods in process
and/or inventories only hereby insured, and unless
such notice be given andthe particulars of such insurance or insurances be stated therein or
endorsed on this policy pursuant to Section 50 of the Insurance
Code, by or on behalf of the Company before the occurrence of any loss ordamage, all
benefits under this policy shall be deemed forfeited, provided however, that this condition
shall not apply when the total insurance or insurances in force at
the time of loss or damage not morethan P200,000.00. 5

Petitioners admit that the respective insurance policies issued by private respondents did not state or endorse
thereon the other insurance coverage obtained or subsequently effected on the same stocks in trade for the
loss of which compensation is claimed by petitioners. 6 The policy
issued by respondent Western Guaranty Corporation(Western) did not
declare respondent Reliance Surety and Insurance Co., Inc. (Reliance) and respondent Equitable Insurance
Corporation (Equitable) as co-insurers on the same stocks,
while Reliance's Policies covering the samestocks did not likewise declare Western and Equitable as such co-
insurers. It is further admitted by petitioners thatEquitable's policy stated "nil" in the space thereon requiring
indication of any co-insurance although there were three (3) policies subsisting on the same stocks in trade
at the time of the loss, namely, that of Western in the amount ofP350,000.00 and two (2) policies of Reliance
in the total amount of P1,000,000.00. 7

43
In other words, the coverage by other insurance or co-insurance effected
or subsequently arranged by petitioners were neither stated nor endorsed in the policies of the three (3)
private respondents, warranting forfeiture of all benefits thereunder if we are to follow the express stipulation
in the aforequoted Policy Condition No. 3.

Petitioners contend that they are not to be blamed for the omissions,
alleging that insurance agent Leon Alvarez (for Western) and Yap Kam Chuan (for Reliance and Equitable)
knew about the existence of the additional insurancecoverage and that they were not
informed about the requirement that such other or additional insurance should bestated in the
policy, as they have not even read policies.8 These contentions cannot pass judicial muster.

The terms of the contract are clear and unambiguous. The insured is specifically required to disclose to the
insurer any other insurance and its particulars which he may have effected on the
same subject matter. The knowledge of such insurance by the insurer's agents, even assuming the acquisition
thereof by the former, is not the "notice" that would estop the insurers from denying the claim. Besides, the
so-called theory of imputed knowledge, that is, knowledge of the agent is
knowledge of the principal, aside from being of dubious applicability here has likewisebeen roundly
refuted by respondent court whose factual findings we find acceptable.

Thus, it points out that while petitioner Julian Sy claimed that he had informed insurance agent Alvarez
regarding the co-insurance on the property, he contradicted
himself by inexplicably claiming that he had not read the terms of the policies; that
Yap Dam Chuan could not likewise have obtained such knowledge for the same reason, aside from the fact
that the insurance with Western was obtained before those of
Reliance and Equitable; and that theconclusion of the trial court that Reliance and Equitable are "sister
companies" is an unfounded conjecture drawnfrom the mere fact that Yap Kam Chuan was
an agent for both companies which also had the same insuranceclaims adjuster. Availment of the
services of the same agents and adjusters by different companies is a
commonpractice in the insurance business and such facts do not warrant the speculative conclusion of the
trial court.

Furthermore, when the words and language of documents are clear and plain or readily understandable by an
ordinary reader thereof, there is absolutely no room for interpretation or construction
anymore.9 Courts are not allowed to make contracts for the parties; rather, they will intervene
only when the terms of the policy areambiguous, equivocal, or uncertain. 10 The parties must abide by the
terms of the contract because such termsconstitute the
measure of the insurer's liability and compliance therewith is a
condition precedent to the insured'sright of recovery from the insurer. 11

While it is a cardinal principle of insurance law that a policy or contract


of insurance is to be construed liberally infavor of the insured and strictly against the insurer
company, yet contracts of insurance, like other contracts, are to be construed according to
the sense and meaning of the terms which the parties themselves have used. If suchterms are clear and
unambiguous, they must be taken and understood in their plain, ordinary and popular sense. 12Moreover,
obligations arising from contracts have the force of law between
the contracting parties and should becomplied with in good faith. 13

44
Petitioners should be aware of the fact that a party is not relieved of the duty to exercise the ordinary care
and prudence that would be exacted in relation to other contracts. The conformity of the insured to the terms
of the policy is implied from his failure to express any disagreement with
what is provided for.14 It may be true that themajority rule, as cited by petitioners, is that injured
persons may accept policies without reading them, and that this is not negligence per se. 15 But, this is not
without any exception. It is and was incumbent upon petitioner Sy to read the insurance contracts, and this
can be reasonably expected of him considering that he has been a businessman since 196516 and the contract
concerns indemnity in case of loss in his money-making trade of which important
consideration he could not have been unaware as it was pre-in case of loss in his money-making trade of
which important consideration he could not have been unaware as it was precisely the reason for his
procuring the same.

We reiterate our pronouncement in Pioneer Insurance and Surety Corporation vs. Yap: 17

...
And considering the terms of the policy which required the insured to declare other insurance
s, thestatement in question must be deemed to be a statement (warranty) binding on
both insurer and insured, that there were no other insurance on the property. . . .

The annotation then, must be deemed to be a warranty that the property was not insured
by any other policy. Violation thereof entitled the insurer to rescind (Sec. 69, Insurance
Act). Such misrepresentation is fatal in the light of our views in Santa Ana vs. Commercial
Union Assurance Company, Ltd., 55 Phil. 329. The materiality of non-disclosure of other
insurance policies is not open to doubt.

xxx xxx xxx

The obvious purpose of the aforesaid requirement in the policy is to prevent over-insurance
and thus avert the perpetration of fraud. The public, as well as the insurer, is interested in
preventing the situation in which a fire would be profitable to the insured. According to
Justice Story: "The insured has no right to complain, for he assents to comply
with all the stipulations on his side, in order to entitlehimself to the
benefit of the contract, which, upon reason or principle, he has no right to ask the court to
dispense with the performance of his own part of the agreement, and yet to
bind the other party to obligations, which, but for those stipulations, would not have been
entered into."

Subsequently, in the case of Pacific Banking Corporation vs. Court of Appeals, et al., 18 we held:

It is not disputed that the insured failed to reveal before the loss three other insurances. As
found by the Court of Appeals, by reason of said unrevealed insurances, the insured had been
guilty of a falsedeclaration; a clear misrepresentation and a vital one because where
the insured had been asked to reveal but did not, that was deception. Otherwise stated, had
the insurer known that there were many co-insurances, it could have hesitated or plainly
desisted from entering into such contract. Hence, theinsured was guilty of clear fraud (Rollo,
p. 25).

45
Petitioner's contention that the allegation of fraud is but
a mere inference or suspicion is untenable. In fact, concrete evidence of fraud or false
declaration by the insured was furnished by the petitioner itself when the facts alleged in the
policy under clauses "Co-Insurances Declared" and
"Other InsuranceClause" are materially different from the actual number of co-
insurances taken over the subjectproperty. Consequently, "the whole foundation of the
contract fails, the risk does not attach and thepolicy never becomes a contract between the
parties." Representations of facts are the foundation ofthe contract and if the foundation does
not exist, the superstructure does not arise. Falsehood in suchrepresentations is not shown to
vary or add to the contract, or to terminate a contract which has oncebeen made, but to
show that no contract has ever existed (Tolentino, Commercial Laws of thePhilippines, p.
991, Vol. II, 8th Ed.,) A void or inexistent contract is one which has no force and effectfrom
the very beginning, as if it had never been entered into, and which cannot be
validated either bytime or by ratification (Tongoy vs. C.A., 123 SCRA 99 (1983); Avila v.
C.A., 145 SCRA, 1986).

As the insurance policy against fire expressly required that notice should be given by
the insured ofother insurance upon the same property, the total absence of such
notice nullifies the policy.

To further warrant and justify the forfeiture of the benefits under the insurance contracts involved, we need
merely toturn to Policy Condition No. 15 thereof, which reads in part:

15. . . . if any false declaration be made or used in support thereof, . . . all benefits under this
Policy shall be forfeited . . . . 19

Additionally, insofar as the liability of respondent Reliance is concerned, it is not denied that the complaint
for recovery was filed in court by petitioners only on January 31, 1984, or after more than one (1) year had
elapsedfrom petitioners' receipt of the insurers' letter of
denial on November 29, 1982. Policy Condition No. 27 of their insurance contract with Reliance provides:

27. Action or suit clause. —


If a claim be made and rejected and an action or suit be not commenced
either in the Insurance Commission or any court of competent jurisdiction of notice of such
rejection, orin case of arbitration taking place
as provided herein, within twelve (12) months after due
notice of theaward made by the arbitrator or arbitrators or umpire, then the claim shall for all
purposes be deemedto have been abandoned and shall not thereafter be recoverable
hereunder. 20

On this point, the trial court ruled:

. . . However, because of the peculiar circumstances of this case, we hesitate


in concluding thatplaintiff's right to ventilate his claim in court has been barred by reason of t
he time constraint provided in the insurance contract. It is
evident that after the plaintiff had received
the letter of denial, he stillfound it necessary to be informed of the specific causes or reasons
for the denial of his claim, reasonfor which his lawyer, Atty. Dator deemed it wise to send a

46
letter of inquiry to the defendant which wasanswered by defendant's Executive Vice-
President in a letter dated March 30, 1983, . . .
. Assuming,gratuitously, that the letter of Executive Vice-President Mary Dee Co dated
March 30, 1983, was received by plaintiff on the same date, the period of limitation should
start to run only from said date in the spirit of fair play and equity. . . . 21

We have perforce to reject this theory of the court below for being contrary to what we have heretofore
declared:

It is important to note the principle laid down by this Court in the case of Ang vs. Fulton Fire
Insurance Co. (2 SCRA 945 [1961]) to wit:

The condition contained in an insurance policy that claims must be presented


within one year
after rejection is not merely a procedural requirement but an important matter
essential to a prompt settlement of claims against insurance companies as it
demandsthat insurance suits be brought by
the insured while the evidence as to the
origin andcause of destruction have not yet disappeared.

In enunciating the above-cited principle, this Court had definitely settled the rationale for the
necessityof bringing suits against the Insurer within one year from the rejection of the claim.
The contention ofthe respondents that the one-year prescriptive period does
not start to run until the petition forreconsideration had been resolved by the insurer, runs cou
nter to the declared purpose for requiringthat an action or suit be filed in the Insurance
Commission or in a court of competent jurisdiction fromthe denial of the claim. To uphold
respondents' contention would contradict and defeat the very principle which this Court had
laid down. Moreover, it can easily be used by insured persons as a scheme or device to waste
time until any evidence which may be considered against them is destroyed.

xxx xxx xxx

While in the Eagle Star case (96 Phil. 701), this Court uses the phrase "final rejection", the
samecannot be taken to mean the rejection of a petition for reconsideration as insisted by
respondents.
Suchwas clearly not the meaning contemplated by this Court. The insurance policy in said
case providesthat the insured should file his claim first, with the carrier and then with the
insurer. The "final rejection"being referred to in said case is the rejection by the
insurance company. 22

Furthermore, assuming arguendo that petitioners felt the


legitimate need to be clarified as to the policy condition violated, there was a considerable lapse of time from
their receipt of the insurer's clarificatory letter dated March 30, 1983, up to the time the complaint was
filed in court on January 31, 1984. The one-year prescriptive period was yet
to expire on November 29, 1983, or about eight (8) months from the
receipt of the clarificatory letter, but petitioners let the period lapse without bringing their action in court.
We accordingly find no "peculiar circumstances" sufficient to relax the enforcement of the one-
year prescriptive period and we, therefore, hold that petitioners' claim was definitely filed out of time.

47
WHEREFORE, finding no cogent reason to disturb the judgment
of respondent Court of Appeals, the same ishereby AFFIRMED.

SO ORDERED.

THIRD DIVISION

SUNACE INTERNATIONAL G.R. No. 161757


MANAGEMENT SERVICES, INC.
Petitioner, Present:

QUISUMBING, J., Chairperson,


- versus - CARPIO,
CARPIO MORALES, and
TINGA, JJ.
NATIONAL LABOR RELATIONS
COMMISSION, Second Division; HON.
ERNESTO S. DINOPOL, in his capacity as
Labor Arbiter, NLRC; NCR, Arbitration

48
Branch, Quezon City and DIVINA A.
MONTEHERMOZO,
Respondents. Promulgated:

January 25, 2006

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

DECISION

CARPIO MORALES, J.:

Petitioner, Sunace International Management Services (Sunace), a corporation duly organized and
existing under the laws of the Philippines, deployed to Taiwan Divina A. Montehermozo (Divina) as a
domestic helper under a 12-month contract effective February 1, 1997.[1] The deployment was with the
assistance of a Taiwanese broker, Edmund Wang, President of Jet Crown International Co., Ltd.

After her 12-month contract expired on February 1, 1998, Divina continued working for her
Taiwanese employer, Hang Rui Xiong, for two more years, after which she returned to the Philippines on
February 4, 2000.

Shortly after her return or on February 14, 2000, Divina filed a complaint[2] before the National
Labor Relations Commission (NLRC) against Sunace, one Adelaide Perez, the Taiwanese broker, and the
employer-foreign principal alleging that she was jailed for three months and that she was underpaid.

The following day or on February 15, 2000, Labor Arbitration Associate Regina T. Gavin issued
Summons[3] to the Manager of Sunace, furnishing it with a copy of Divinas complaint and directing it to
appear for mandatory conference on February 28, 2000.

The scheduled mandatory conference was reset. It appears to have been concluded, however.

On April 6, 2000, Divina filed her Position Paper[4] claiming that under her original one-year contract
and the 2-year extended contract which was with the knowledge and consent of Sunace, the following
amounts representing income tax and savings were deducted:

Year Deduction for Deduction for Savings


Income Tax

1997 NT10,450.00 NT23,100.00


1998 NT9,500.00 NT36,000.00
1999 NT13,300.00 NT36,000.00;[5]

49
and while the amounts deducted in 1997 were refunded to her, those deducted in 1998 and 1999 were not.
On even date, Sunace, by its Proprietor/General Manager Maria Luisa Olarte, filed its Verified Answer and
Position Paper,[6] claiming as follows, quoted verbatim:

COMPLAINANT IS NOT ENTITLED


FOR THE REFUND OF HER 24 MONTHS
SAVINGS

3. Complainant could not anymore claim nor entitled for the refund of her 24 months savings as she
already took back her saving already last year and the employer did not deduct any money
from her salary, in accordance with a Fascimile Message from the respondent SUNACEs
employer, Jet Crown International Co. Ltd., a xerographic copy of which is herewith attached
as ANNEX 2 hereof;

COMPLAINANT IS NOT ENTITLED


TO REFUND OF HER 14 MONTHS TAX
AND PAYMENT OF ATTORNEYS FEES

4. There is no basis for the grant of tax refund to the complainant as the she finished her one year
contract and hence, was not illegally dismissed by her employer. She could only lay claim
over the tax refund or much more be awarded of damages such as attorneys fees as said
reliefs are available only when the dismissal of a migrant worker is without just valid or
lawful cause as defined by law or contract.

The rationales behind the award of tax refund and payment of attorneys fees is not to enrich the
complainant but to compensate him for actual injury suffered. Complainant did not suffer
injury, hence, does not deserve to be compensated for whatever kind of damages.

Hence, the complainant has NO cause of action against respondent SUNACE for monetary claims,
considering that she has been totally paid of all the monetary benefits due her under her
Employment Contract to her full satisfaction.

6. Furthermore, the tax deducted from her salary is in compliance with the
Taiwanese law, which respondent SUNACE has no control and complainant has to obey and
this Honorable Office has no authority/jurisdiction to intervene because the power to tax is a
sovereign power which the Taiwanese Government is supreme in its own territory. The
sovereign power of taxation of a state is recognized under international law and among
sovereign states.

7. That respondent SUNACE respectfully reserves the right to file supplemental Verified Answer
and/or Position Paper to substantiate its prayer for the dismissal of the above case against the
herein respondent. AND BY WAY OF -

x x x x (Emphasis and underscoring supplied)

50
Reacting to Divinas Position Paper, Sunace filed on April 25, 2000 an . . . ANSWER TO COMPLAINANTS
[7]
POSITION PAPER alleging that Divinas 2-year extension of her contract was without its knowledge and
consent, hence, it had no liability attaching to any claim arising therefrom, and Divina in fact executed a
Waiver/Quitclaim and Release of Responsibility and an Affidavit of Desistance, copy of each document was
annexed to said . . . ANSWER TO COMPLAINANTS POSITION PAPER.

To Sunaces . . . ANSWER TO COMPLAINANTS POSITION PAPER, Divina filed a 2-page reply,[8] without, however,
refuting Sunaces disclaimer of knowledge of the extension of her contract and without saying anything about
the Release, Waiver and Quitclaim and Affidavit of Desistance.

The Labor Arbiter, rejected Sunaces claim that the extension of Divinas contract for two more years was
without its knowledge and consent in this wise:

We reject Sunaces submission that it should not be held responsible for the
amount withheld because her contract was extended for 2 more years without its
knowledge and consent because as Annex B[9] shows, Sunace and Edmund Wang
have not stopped communicating with each other and yet the matter of the contracts
extension and Sunaces alleged non-consent thereto has not been categorically
established.

What Sunace should have done was to write to POEA about the extension
and its objection thereto, copy furnished the complainant herself, her foreign
employer, Hang Rui Xiong and the Taiwanese broker, Edmund Wang.

And because it did not, it is presumed to have consented to the extension and
should be liable for anything that resulted thereform (sic).[10] (Underscoring supplied)

The Labor Arbiter rejected too Sunaces argument that it is not liable on account of Divinas execution of a
Waiver and Quitclaim and an Affidavit of Desistance. Observed the Labor Arbiter:

Should the parties arrive at any agreement as to the whole or any part of the dispute,
the same shall be reduced to writing and signed by the parties and their respective counsel
(sic), if any, before the Labor Arbiter.

The settlement shall be approved by the Labor Arbiter after being satisfied that it was
voluntarily entered into by the parties and after having explained to them the terms and
consequences thereof.

A compromise agreement entered into by the parties not in the presence of the Labor
Arbiter before whom the case is pending shall be approved by him, if after confronting the
parties, particularly the complainants, he is satisfied that they understand the terms and
conditions of the settlement and that it was entered into freely voluntarily (sic) by them and
the agreement is not contrary to law, morals, and public policy.

And because no consideration is indicated in the documents, we strike them down as


contrary to law, morals, and public policy.[11]

51
He accordingly decided in favor of Divina, by decision of October 9, 2000,[12] the dispositive portion of
which reads:

Wherefore, judgment is hereby rendered ordering respondents SUNACE


INTERNATIONAL SERVICES and its owner ADELAIDA PERGE, both in their personal
capacities and as agent of Hang Rui Xiong/Edmund Wang to jointly and severally pay
complainant DIVINA A. MONTEHERMOZO the sum of NT91,950.00 in its peso equivalent
at the date of payment, as refund for the amounts which she is hereby adjudged entitled to as
earlier discussed plus 10% thereof as attorneys fees since compelled to litigate, complainant
had to engage the services of counsel.

SO ORDERED.[13] (Underescoring supplied)

On appeal of Sunace, the NLRC, by Resolution of April 30, 2002,[14] affirmed the Labor Arbiters
decision.

Via petition for certiorari,[15] Sunace elevated the case to the Court of Appeals which dismissed it
outright by Resolution of November 12, 2002,[16] the full text of which reads:

The petition for certiorari faces outright dismissal.


The petition failed to allege facts constitutive of grave abuse of discretion on the part
of the public respondent amounting to lack of jurisdiction when the NLRC affirmed the
Labor Arbiters finding that petitioner Sunace International Management Services impliedly
consented to the extension of the contract of private respondent Divina A. Montehermozo. It
is undisputed that petitioner was continually communicating with private respondents foreign
employer (sic). As agent of the foreign principal, petitioner cannot profess ignorance of such
extension as obviously, the act of the principal extending complainant (sic) employment
contract necessarily bound it. Grave abuse of discretion is not present in the case at bar.

ACCORDINGLY, the petition is hereby DENIED DUE


COURSE and DISMISSED.[17]

SO ORDERED.

(Emphasis on words in capital letters in the original; emphasis on words in small


letters and underscoring supplied)

Its Motion for Reconsideration having been denied by the appellate court by Resolution of January 14,
2004,[18] Sunace filed the present petition for review on certiorari.

The Court of Appeals affirmed the Labor Arbiter and NLRCs finding that Sunace knew of and
impliedly consented to the extension of Divinas 2-year contract. It went on to state that It is undisputed that
[Sunace] was continually communicating with [Divinas] foreign employer. It thus concluded that [a]s agent
of the foreign principal, petitioner cannot profess ignorance of such extension as obviously, the act of the
principal extending complainant (sic) employment contract necessarily bound it.

52
Contrary to the Court of Appeals finding, the alleged continuous communication was with the
Taiwanese broker Wang, not with the foreign employer Xiong.

The February 21, 2000 telefax message from the Taiwanese broker to Sunace, the only basis of a
finding of continuous communication, reads verbatim:

xxxx

Regarding to Divina, she did not say anything about her saving in
police station. As we contact with her employer, she took back her saving
already last years. And they did not deduct any money from her salary. Or she
will call back her employer to check it again. If her employer said yes! we
will get it back for her.

Thank you and best regards.


(sgd.)
Edmund Wang
President[19]

The finding of the Court of Appeals solely on the basis of the above-quoted telefax message, that
Sunace continually communicated with the foreign principal (sic) and therefore was aware of and had
consented to the execution of the extension of the contract is misplaced. The message does not provide
evidence that Sunace was privy to the new contract executed after the expiration on February 1, 1998 of the
original contract. That Sunace and the Taiwanese broker communicated regarding Divinas allegedly
withheld savings does not necessarily mean that Sunace ratified the extension of the contract. As Sunace
points out in its Reply[20] filed before the Court of Appeals,

As can be seen from that letter communication, it was just an information


given to the petitioner that the private respondent had t[aken] already her savings
from her foreign employer and that no deduction was made on her salary. It contains
nothing about the extension or the petitioners consent thereto.[21]

Parenthetically, since the telefax message is dated February 21, 2000, it is safe to assume that it was
sent to enlighten Sunace who had been directed, by Summons issued on February 15, 2000, to appear on
February 28, 2000 for a mandatory conference following Divinas filing of the complaint on February 14,
2000.

Respecting the Court of Appeals following dictum:


As agent of its foreign principal, [Sunace] cannot profess ignorance of such an
extension as obviously, the act of its principal extending [Divinas] employment contract
necessarily bound it,[22]

it too is a misapplication, a misapplication of the theory of imputed knowledge.

53
The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal, employer
Xiong, not the other way around.[23] The knowledge of the principal-foreign employer cannot, therefore, be
imputed to its agent Sunace.

There being no substantial proof that Sunace knew of and consented to be bound under the 2-year
employment contract extension, it cannot be said to be privy thereto. As such, it and its owner cannot be held
solidarily liable for any of Divinas claims arising from the 2-year employment extension. As the New Civil
Code provides,

Contracts take effect only between the parties, their assigns, and heirs, except
in case where the rights and obligations arising from the contract are not transmissible
by their nature, or by stipulation or by provision of law.[24]

Furthermore, as Sunace correctly points out, there was an implied revocation of its agency
relationship with its foreign principal when, after the termination of the original employment contract, the
foreign principal directly negotiated with Divina and entered into a new and separate employment contract in
Taiwan. Article 1924 of the New Civil Code reading

The agency is revoked if the principal directly manages the business entrusted to the
agent, dealing directly with third persons.

thus applies. In light of the foregoing discussions, consideration of the validity of the Waiver
and Affidavit of Desistance which Divina executed in favor of Sunace is rendered
unnecessary. WHEREFORE, the petition is GRANTED. The challenged resolutions of the
Court of Appeals are hereby REVERSED and SET ASIDE. The complaint of respondent
Divina A. Montehermozo against petitioner is DISMISSED. SO ORDERED.
EN BANC

G.R. No. 167614 March 24, 2009

ANTONIO M. SERRANO, Petitioner,


vs.
Gallant MARITIME SERVICES, INC. and MARLOW NAVIGATION CO., INC., Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

For decades, the toil of solitary migrants has helped lift entire families and communities out of poverty. Their
earnings have built houses, provided health care, equipped schools and planted the seeds of businesses. They
have woven together the world by transmitting ideas and knowledge from country to country. They have
provided the dynamic human link between cultures, societies and economies. Yet, only recently have we
begun to understand not only how much international migration impacts development, but how smart public
policies can magnify this effect.

54
United Nations Secretary-General Ban Ki-Moon
Global Forum on Migration and Development
Brussels, July 10, 20071

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

Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just, valid or
authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his
placement fee with interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of
his employment contract or for three (3) months for every year of the unexpired term, whichever is less.

x x x x (Emphasis and underscoring supplied)

does not magnify the contributions of overseas Filipino workers (OFWs) to national development, but
exacerbates the hardships borne by them by unduly limiting their entitlement in case of illegal dismissal to
their lump-sum salary either for the unexpired portion of their employment contract "or for three months for
every year of the unexpired term, whichever is less" (subject clause). Petitioner claims that the last clause
violates the OFWs' constitutional rights in that it impairs the terms of their contract, deprives them of equal
protection and denies them due process.

By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails the December 8, 2004
Decision3 and April 1, 2005 Resolution4 of the Court of Appeals (CA), which applied the subject clause,
entreating this Court to declare the subject clause unconstitutional.

Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd. (respondents)
under a Philippine Overseas Employment Administration (POEA)-approved Contract of Employment with
the following terms and conditions:

Duration of contract 12 months

Position Chief Officer

Basic monthly salary US$1,400.00

Hours of work 48.0 hours per week

Overtime US$700.00 per month

Vacation leave with pay 7.00 days per month5

On March 19, 1998, the date of his departure, petitioner was constrained to accept a downgraded
employment contract for the position of Second Officer with a monthly salary of US$1,000.00, upon the
assurance and representation of respondents that he would be made Chief Officer by the end of April 1998. 6

Respondents did not deliver on their promise to make petitioner Chief Officer.7 Hence, petitioner refused to
stay on as Second Officer and was repatriated to the Philippines on May 26, 1998.8

55
Petitioner's employment contract was for a period of 12 months or from March 19, 1998 up to March 19,
1999, but at the time of his repatriation on May 26, 1998, he had served only two (2) months and seven (7)
days of his contract, leaving an unexpired portion of nine (9) months and twenty-three (23) days.

Petitioner filed with the Labor Arbiter (LA) a Complaint9 against respondents for constructive dismissal and
for payment of his money claims in the total amount of US$26,442.73, broken down as follows:

May 27/31, US$ 413.90


1998 (5 days)
incl. Leave
pay

June 01/30, 2,590.00


1998

July 01/31, 2,590.00


1998

August 01/31, 2,590.00


1998

Sept. 01/30, 2,590.00


1998

Oct. 01/31, 2,590.00


1998

Nov. 01/30, 2,590.00


1998

Dec. 01/31, 2,590.00


1998

Jan. 01/31, 2,590.00


1999

Feb. 01/28, 2,590.00


1999

Mar. 1/19, 1,640.00


1999 (19 days)
incl. leave pay

--------------------------------------------------------------------------------

25,382.23

Amount
adjusted to
chief mate's
salary

56
(March 19/31, 1,060.5010
1998 to April
1/30, 1998) +

----------------------------------------------------------------------------------------------

TOTAL US$ 26,442.7311


CLAIM

as well as moral and exemplary damages and attorney's fees.

The LA rendered a Decision dated July 15, 1999, declaring the dismissal of petitioner illegal and
awarding him monetary benefits, to wit:

WHEREFORE, premises considered, judgment is hereby rendered declaring that the dismissal of the
complainant (petitioner) by the respondents in the above-entitled case was illegal and the respondents
are hereby ordered to pay the complainant [petitioner], jointly and severally, in Philippine Currency,
based on the rate of exchange prevailing at the time of payment, the amount of EIGHT THOUSAND
SEVEN HUNDRED SEVENTY U.S. DOLLARS (US $8,770.00), representing the complainant’s
salary for three (3) months of the unexpired portion of the aforesaid contract of
employment.1avvphi1

The respondents are likewise ordered to pay the complainant [petitioner], jointly and severally, in
Philippine Currency, based on the rate of exchange prevailing at the time of payment, the amount of
FORTY FIVE U.S. DOLLARS (US$ 45.00),12 representing the complainant’s claim for a salary
differential. In addition, the respondents are hereby ordered to pay the complainant, jointly and
severally, in Philippine Currency, at the exchange rate prevailing at the time of payment, the
complainant’s (petitioner's) claim for attorney’s fees equivalent to ten percent (10%) of the total
amount awarded to the aforesaid employee under this Decision.

The claims of the complainant for moral and exemplary damages are hereby DISMISSED for lack of
merit.

All other claims are hereby DISMISSED.

SO ORDERED.13 (Emphasis supplied)

In awarding petitioner a lump-sum salary of US$8,770.00, the LA based his computation on the
salary period of three months only -- rather than the entire unexpired portion of nine months and 23
days of petitioner's employment contract - applying the subject clause. However, the LA applied the
salary rate of US$2,590.00, consisting of petitioner's "[b]asic salary, US$1,400.00/month +
US$700.00/month, fixed overtime pay, + US$490.00/month, vacation leave pay =
US$2,590.00/compensation per month."14

Respondents appealed15 to the National Labor Relations Commission (NLRC) to question the finding
of the LA that petitioner was illegally dismissed.

57
Petitioner also appealed16 to the NLRC on the sole issue that the LA erred in not applying the ruling
of the Court in Triple Integrated Services, Inc. v. National Labor Relations Commission 17 that in case
of illegal dismissal, OFWs are entitled to their salaries for the unexpired portion of their contracts. 18

In a Decision dated June 15, 2000, the NLRC modified the LA Decision, to wit:

WHEREFORE, the Decision dated 15 July 1999 is MODIFIED. Respondents are hereby ordered to
pay complainant, jointly and severally, in Philippine currency, at the prevailing rate of exchange at
the time of payment the following:

1. Three (3) months salary

$1,400 x 3 US$4,200.00

2. Salary differential 45.00

US$4,245.00

3. 10% Attorney’s fees 424.50

TOTAL US$4,669.50

The other findings are affirmed.

SO ORDERED.19

The NLRC corrected the LA's computation of the lump-sum salary awarded to petitioner by reducing the
applicable salary rate from US$2,590.00 to US$1,400.00 because R.A. No. 8042 "does not provide for the
award of overtime pay, which should be proven to have been actually performed, and for vacation leave
pay."20

Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality of the
subject clause.21 The NLRC denied the motion.22

Petitioner filed a Petition for Certiorari23 with the CA, reiterating the constitutional challenge against the
subject clause.24 After initially dismissing the petition on a technicality, the CA eventually gave due course
to it, as directed by this Court in its Resolution dated August 7, 2003 which granted the petition
for certiorari, docketed as G.R. No. 151833, filed by petitioner.

In a Decision dated December 8, 2004, the CA affirmed the NLRC ruling on the reduction of the applicable
salary rate; however, the CA skirted the constitutional issue raised by petitioner. 25

His Motion for Reconsideration26 having been denied by the CA,27 petitioner brings his cause to this Court
on the following grounds:

58
The Court of Appeals and the labor tribunals have decided the case in a way not in accord with applicable
decision of the Supreme Court involving similar issue of granting unto the migrant worker back wages equal
to the unexpired portion of his contract of employment instead of limiting it to three (3) months

II

In the alternative that the Court of Appeals and the Labor Tribunals were merely applying their interpretation
of Section 10 of Republic Act No. 8042, it is submitted that the Court of Appeals gravely erred in law when
it failed to discharge its judicial duty to decide questions of substance not theretofore determined by the
Honorable Supreme Court, particularly, the constitutional issues raised by the petitioner on the
constitutionality of said law, which unreasonably, unfairly and arbitrarily limits payment of the award for
back wages of overseas workers to three (3) months.

III

Even without considering the constitutional limitations [of] Sec. 10 of Republic Act No. 8042, the Court of
Appeals gravely erred in law in excluding from petitioner’s award the overtime pay and vacation pay
provided in his contract since under the contract they form part of his salary. 28

On February 26, 2008, petitioner wrote the Court to withdraw his petition as he is already old and sickly, and
he intends to make use of the monetary award for his medical treatment and medication.29 Required to
comment, counsel for petitioner filed a motion, urging the court to allow partial execution of the undisputed
monetary award and, at the same time, praying that the constitutional question be resolved.30

Considering that the parties have filed their respective memoranda, the Court now takes up the full merit of
the petition mindful of the extreme importance of the constitutional question raised therein.

On the first and second issues

The unanimous finding of the LA, NLRC and CA that the dismissal of petitioner was illegal is not disputed.
Likewise not disputed is the salary differential of US$45.00 awarded to petitioner in all three fora. What
remains disputed is only the computation of the lump-sum salary to be awarded to petitioner by reason of his
illegal dismissal.

Applying the subject clause, the NLRC and the CA computed the lump-sum salary of petitioner at the
monthly rate of US$1,400.00 covering the period of three months out of the unexpired portion of nine
months and 23 days of his employment contract or a total of US$4,200.00.

Impugning the constitutionality of the subject clause, petitioner contends that, in addition to the US$4,200.00
awarded by the NLRC and the CA, he is entitled to US$21,182.23 more or a total of US$25,382.23,
equivalent to his salaries for the entire nine months and 23 days left of his employment contract, computed at
the monthly rate of US$2,590.00.31

The Arguments of Petitioner

Petitioner contends that the subject clause is unconstitutional because it unduly impairs the freedom of
OFWs to negotiate for and stipulate in their overseas employment contracts a determinate employment
period and a fixed salary package.32 It also impinges on the equal protection clause, for it treats OFWs

59
differently from local Filipino workers (local workers) by putting a cap on the amount of lump-sum salary to
which OFWs are entitled in case of illegal dismissal, while setting no limit to the same monetary award for
local workers when their dismissal is declared illegal; that the disparate treatment is not reasonable as there is
no substantial distinction between the two groups;33and that it defeats Section 18,34 Article II of the
Constitution which guarantees the protection of the rights and welfare of all Filipino workers, whether
deployed locally or overseas.35

Moreover, petitioner argues that the decisions of the CA and the labor tribunals are not in line with existing
jurisprudence on the issue of money claims of illegally dismissed OFWs. Though there are conflicting
rulings on this, petitioner urges the Court to sort them out for the guidance of affected OFWs. 36

Petitioner further underscores that the insertion of the subject clause into R.A. No. 8042 serves no other
purpose but to benefit local placement agencies. He marks the statement made by the Solicitor General in his
Memorandum, viz.:

Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the event
that jurisdiction over the foreign employer is not acquired by the court or if the foreign employer reneges on
its obligation. Hence, placement agencies that are in good faith and which fulfill their obligations are
unnecessarily penalized for the acts of the foreign employer. To protect them and to promote their continued
helpful contribution in deploying Filipino migrant workers, liability for money claims was reduced under
Section 10 of R.A. No. 8042. 37 (Emphasis supplied)

Petitioner argues that in mitigating the solidary liability of placement agencies, the subject clause sacrifices
the well-being of OFWs. Not only that, the provision makes foreign employers better off than local
employers because in cases involving the illegal dismissal of employees, foreign employers are liable for
salaries covering a maximum of only three months of the unexpired employment contract while local
employers are liable for the full lump-sum salaries of their employees. As petitioner puts it:

In terms of practical application, the local employers are not limited to the amount of backwages they have to
give their employees they have illegally dismissed, following well-entrenched and unequivocal jurisprudence
on the matter. On the other hand, foreign employers will only be limited to giving the illegally dismissed
migrant workers the maximum of three (3) months unpaid salaries notwithstanding the unexpired term of the
contract that can be more than three (3) months.38

Lastly, petitioner claims that the subject clause violates the due process clause, for it deprives him of the
salaries and other emoluments he is entitled to under his fixed-period employment contract.39

The Arguments of Respondents

In their Comment and Memorandum, respondents contend that the constitutional issue should not be
entertained, for this was belatedly interposed by petitioner in his appeal before the CA, and not at the earliest
opportunity, which was when he filed an appeal before the NLRC.40

The Arguments of the Solicitor General

The Solicitor General (OSG)41 points out that as R.A. No. 8042 took effect on July 15, 1995, its provisions
could not have impaired petitioner's 1998 employment contract. Rather, R.A. No. 8042 having preceded

60
petitioner's contract, the provisions thereof are deemed part of the minimum terms of petitioner's
employment, especially on the matter of money claims, as this was not stipulated upon by the parties.42

Moreover, the OSG emphasizes that OFWs and local workers differ in terms of the nature of their
employment, such that their rights to monetary benefits must necessarily be treated differently. The OSG
enumerates the essential elements that distinguish OFWs from local workers: first, while local workers
perform their jobs within Philippine territory, OFWs perform their jobs for foreign employers, over whom it
is difficult for our courts to acquire jurisdiction, or against whom it is almost impossible to enforce judgment;
and second, as held in Coyoca v. National Labor Relations Commission43 and Millares v. National Labor
Relations Commission,44 OFWs are contractual employees who can never acquire regular employment
status, unlike local workers who are or can become regular employees. Hence, the OSG posits that there are
rights and privileges exclusive to local workers, but not available to OFWs; that these peculiarities make for
a reasonable and valid basis for the differentiated treatment under the subject clause of the money claims of
OFWs who are illegally dismissed. Thus, the provision does not violate the equal protection clause nor
Section 18, Article II of the Constitution.45

Lastly, the OSG defends the rationale behind the subject clause as a police power measure adopted to
mitigate the solidary liability of placement agencies for this "redounds to the benefit of the migrant workers
whose welfare the government seeks to promote. The survival of legitimate placement agencies helps
[assure] the government that migrant workers are properly deployed and are employed under decent and
humane conditions."46

The Court's Ruling

The Court sustains petitioner on the first and second issues.

When the Court is called upon to exercise its power of judicial review of the acts of its co-equals, such as the
Congress, it does so only when these conditions obtain: (1) that there is an actual case or controversy
involving a conflict of rights susceptible of judicial determination;47 (2) that the constitutional question is
raised by a proper party48 and at the earliest opportunity;49 and (3) that the constitutional question is the very
lis mota of the case,50otherwise the Court will dismiss the case or decide the same on some other ground.51

Without a doubt, there exists in this case an actual controversy directly involving petitioner who is personally
aggrieved that the labor tribunals and the CA computed his monetary award based on the salary period of
three months only as provided under the subject clause.

The constitutional challenge is also timely. It should be borne in mind that the requirement that a
constitutional issue be raised at the earliest opportunity entails the interposition of the issue in the pleadings
before a competent court, such that, if the issue is not raised in the pleadings before that competent court, it
cannot be considered at the trial and, if not considered in the trial, it cannot be considered on
appeal.52 Records disclose that the issue on the constitutionality of the subject clause was first raised, not in
petitioner's appeal with the NLRC, but in his Motion for Partial Reconsideration with said labor
tribunal,53 and reiterated in his Petition for Certiorari before the CA.54Nonetheless, the issue is deemed
seasonably raised because it is not the NLRC but the CA which has the competence to resolve the
constitutional issue. The NLRC is a labor tribunal that merely performs a quasi-judicial function – its
function in the present case is limited to determining questions of fact to which the legislative policy of R.A.
No. 8042 is to be applied and to resolving such questions in accordance with the standards laid down by the
law itself;55 thus, its foremost function is to administer and enforce R.A. No. 8042, and not to inquire into the

61
validity of its provisions. The CA, on the other hand, is vested with the power of judicial review or the power
to declare unconstitutional a law or a provision thereof, such as the subject clause.56 Petitioner's interposition
of the constitutional issue before the CA was undoubtedly seasonable. The CA was therefore remiss in
failing to take up the issue in its decision.

The third condition that the constitutional issue be critical to the resolution of the case likewise obtains
because the monetary claim of petitioner to his lump-sum salary for the entire unexpired portion of his 12-
month employment contract, and not just for a period of three months, strikes at the very core of the subject
clause.

Thus, the stage is all set for the determination of the constitutionality of the subject clause.

Does the subject clause violate Section 10,


Article III of the Constitution on non-impairment
of contracts?

The answer is in the negative.

Petitioner's claim that the subject clause unduly interferes with the stipulations in his contract on the term of
his employment and the fixed salary package he will receive57 is not tenable.

Section 10, Article III of the Constitution provides:

No law impairing the obligation of contracts shall be passed.

The prohibition is aligned with the general principle that laws newly enacted have only a prospective
operation,58and cannot affect acts or contracts already perfected;59 however, as to laws already in existence,
their provisions are read into contracts and deemed a part thereof.60 Thus, the non-impairment clause under
Section 10, Article II is limited in application to laws about to be enacted that would in any way derogate
from existing acts or contracts by enlarging, abridging or in any manner changing the intention of the parties
thereto.

As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of the
employment contract between petitioner and respondents in 1998. Hence, it cannot be argued that R.A. No.
8042, particularly the subject clause, impaired the employment contract of the parties. Rather, when the
parties executed their 1998 employment contract, they were deemed to have incorporated into it all the
provisions of R.A. No. 8042.

But even if the Court were to disregard the timeline, the subject clause may not be declared unconstitutional
on the ground that it impinges on the impairment clause, for the law was enacted in the exercise of the police
power of the State to regulate a business, profession or calling, particularly the recruitment and deployment
of OFWs, with the noble end in view of ensuring respect for the dignity and well-being of OFWs wherever
they may be employed.61Police power legislations adopted by the State to promote the health, morals, peace,
education, good order, safety, and general welfare of the people are generally applicable not only to future
contracts but even to those already in existence, for all private contracts must yield to the superior and
legitimate measures taken by the State to promote public welfare.62

62
Does the subject clause violate Section 1,
Article III of the Constitution, and Section 18,
Article II and Section 3, Article XIII on labor
as a protected sector?

The answer is in the affirmative.

Section 1, Article III of the Constitution guarantees:

No person shall be deprived of life, liberty, or property without due process of law nor shall any person be
denied the equal protection of the law.

Section 18,63 Article II and Section 3,64 Article XIII accord all members of the labor sector, without
distinction as to place of deployment, full protection of their rights and welfare.

To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to
economic security and parity: all monetary benefits should be equally enjoyed by workers of similar
category, while all monetary obligations should be borne by them in equal degree; none should be denied the
protection of the laws which is enjoyed by, or spared the burden imposed on, others in like circumstances. 65

Such rights are not absolute but subject to the inherent power of Congress to incorporate, when it sees fit, a
system of classification into its legislation; however, to be valid, the classification must comply with these
requirements: 1) it is based on substantial distinctions; 2) it is germane to the purposes of the law; 3) it is not
limited to existing conditions only; and 4) it applies equally to all members of the class. 66

There are three levels of scrutiny at which the Court reviews the constitutionality of a classification
embodied in a law: a) the deferential or rational basis scrutiny in which the challenged classification needs
only be shown to be rationally related to serving a legitimate state interest;67 b) the middle-tier or
intermediate scrutiny in which the government must show that the challenged classification serves an
important state interest and that the classification is at least substantially related to serving that interest; 68 and
c) strict judicial scrutiny69 in which a legislative classification which impermissibly interferes with the
exercise of a fundamental right70 or operates to the peculiar disadvantage of a suspect class71 is presumed
unconstitutional, and the burden is upon the government to prove that the classification is necessary to
achieve a compelling state interest and that it is the least restrictive means to protect such interest.72

Under American jurisprudence, strict judicial scrutiny is triggered by suspect classifications 73 based on
race74 or gender75 but not when the classification is drawn along income categories.76

It is different in the Philippine setting. In Central Bank (now Bangko Sentral ng Pilipinas) Employee
Association, Inc. v. Bangko Sentral ng Pilipinas,77 the constitutionality of a provision in the charter of
the Bangko Sentral ng Pilipinas(BSP), a government financial institution (GFI), was challenged for
maintaining its rank-and-file employees under the Salary Standardization Law (SSL), even when the rank-
and-file employees of other GFIs had been exempted from the SSL by their respective charters. Finding that
the disputed provision contained a suspect classification based on salary grade, the Court deliberately
employed the standard of strict judicial scrutiny in its review of the constitutionality of said provision. More
significantly, it was in this case that the Court revealed the broad outlines of its judicial philosophy, to wit:

63
Congress retains its wide discretion in providing for a valid classification, and its policies should be accorded
recognition and respect by the courts of justice except when they run afoul of the Constitution. The deference
stops where the classification violates a fundamental right, or prejudices persons accorded special
protection by the Constitution. When these violations arise, this Court must discharge its primary role as
the vanguard of constitutional guaranties, and require a stricter and more exacting adherence to constitutional
limitations. Rational basis should not suffice.

Admittedly, the view that prejudice to persons accorded special protection by the Constitution requires a
stricter judicial scrutiny finds no support in American or English jurisprudence. Nevertheless, these foreign
decisions and authorities are not per se controlling in this jurisdiction. At best, they are persuasive and have
been used to support many of our decisions. We should not place undue and fawning reliance upon them and
regard them as indispensable mental crutches without which we cannot come to our own decisions through
the employment of our own endowments. We live in a different ambience and must decide our own problems
in the light of our own interests and needs, and of our qualities and even idiosyncrasies as a people, and
always with our own concept of law and justice. Our laws must be construed in accordance with the intention
of our own lawmakers and such intent may be deduced from the language of each law and the context of
other local legislation related thereto. More importantly, they must be construed to serve our own public
interest which is the be-all and the end-all of all our laws. And it need not be stressed that our public interest
is distinct and different from others.

xxxx

Further, the quest for a better and more "equal" world calls for the use of equal protection as a tool of
effective judicial intervention.

Equality is one ideal which cries out for bold attention and action in the Constitution. The Preamble
proclaims "equality" as an ideal precisely in protest against crushing inequities in Philippine society. The
command to promote social justice in Article II, Section 10, in "all phases of national development," further
explicitated in Article XIII, are clear commands to the State to take affirmative action in the direction of
greater equality. x x x [T]here is thus in the Philippine Constitution no lack of doctrinal support for a more
vigorous state effort towards achieving a reasonable measure of equality.

Our present Constitution has gone further in guaranteeing vital social and economic rights to marginalized
groups of society, including labor. Under the policy of social justice, the law bends over backward to
accommodate the interests of the working class on the humane justification that those with less privilege in
life should have more in law. And the obligation to afford protection to labor is incumbent not only on the
legislative and executive branches but also on the judiciary to translate this pledge into a living reality. Social
justice calls for the humanization of laws and the equalization of social and economic forces by the State so
that justice in its rational and objectively secular conception may at least be approximated.

xxxx

Under most circumstances, the Court will exercise judicial restraint in deciding questions of constitutionality,
recognizing the broad discretion given to Congress in exercising its legislative power. Judicial scrutiny
would be based on the "rational basis" test, and the legislative discretion would be given deferential
treatment.

64
But if the challenge to the statute is premised on the denial of a fundamental right, or the perpetuation of
prejudice against persons favored by the Constitution with special protection, judicial scrutiny ought
to be more strict. A weak and watered down view would call for the abdication of this Court’s solemn duty
to strike down any law repugnant to the Constitution and the rights it enshrines. This is true whether the actor
committing the unconstitutional act is a private person or the government itself or one of its instrumentalities.
Oppressive acts will be struck down regardless of the character or nature of the actor.

xxxx

In the case at bar, the challenged proviso operates on the basis of the salary grade or officer-employee status.
It is akin to a distinction based on economic class and status, with the higher grades as recipients of a benefit
specifically withheld from the lower grades. Officers of the BSP now receive higher compensation packages
that are competitive with the industry, while the poorer, low-salaried employees are limited to the rates
prescribed by the SSL. The implications are quite disturbing: BSP rank-and-file employees are paid the
strictly regimented rates of the SSL while employees higher in rank - possessing higher and better education
and opportunities for career advancement - are given higher compensation packages to entice them to stay.
Considering that majority, if not all, the rank-and-file employees consist of people whose status and rank in
life are less and limited, especially in terms of job marketability, it is they - and not the officers - who have
the real economic and financial need for the adjustment . This is in accord with the policy of the Constitution
"to free the people from poverty, provide adequate social services, extend to them a decent standard of
living, and improve the quality of life for all." Any act of Congress that runs counter to this constitutional
desideratum deserves strict scrutiny by this Court before it can pass muster. (Emphasis supplied)

Imbued with the same sense of "obligation to afford protection to labor," the Court in the present case also
employs the standard of strict judicial scrutiny, for it perceives in the subject clause a suspect classification
prejudicial to OFWs.

Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs. However, a
closer examination reveals that the subject clause has a discriminatory intent against, and an invidious impact
on, OFWs at two levels:

First, OFWs with employment contracts of less than one year vis-à-vis OFWs with employment
contracts of one year or more;

Second, among OFWs with employment contracts of more than one year; and

Third, OFWs vis-à-vis local workers with fixed-period employment;

OFWs with employment contracts of less than one year vis-à-vis OFWs with employment contracts of
one year or more

As pointed out by petitioner,78 it was in Marsaman Manning Agency, Inc. v. National Labor Relations
Commission79(Second Division, 1999) that the Court laid down the following rules on the application of the
periods prescribed under Section 10(5) of R.A. No. 804, to wit:

A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an illegally dismissed
overseas contract worker, i.e., whether his salaries for the unexpired portion of his employment contract
or three (3) months’ salary for every year of the unexpired term, whichever is less, comes into play only

65
when the employment contract concerned has a term of at least one (1) year or more. This is evident from
the words "for every year of the unexpired term" which follows the words "salaries x x x for three
months." To follow petitioners’ thinking that private respondent is entitled to three (3) months salary only
simply because it is the lesser amount is to completely disregard and overlook some words used in the statute
while giving effect to some. This is contrary to the well-established rule in legal hermeneutics that in
interpreting a statute, care should be taken that every part or word thereof be given effect since the law-
making body is presumed to know the meaning of the words employed in the statue and to have used them
advisedly. Ut res magis valeat quam pereat.80 (Emphasis supplied)

In Marsaman, the OFW involved was illegally dismissed two months into his 10-month contract, but was
awarded his salaries for the remaining 8 months and 6 days of his contract.

Prior to Marsaman, however, there were two cases in which the Court made conflicting rulings on Section
10(5). One was Asian Center for Career and Employment System and Services v. National Labor Relations
Commission (Second Division, October 1998),81 which involved an OFW who was awarded a two-year
employment contract, but was dismissed after working for one year and two months. The LA declared his
dismissal illegal and awarded him SR13,600.00 as lump-sum salary covering eight months, the unexpired
portion of his contract. On appeal, the Court reduced the award to SR3,600.00 equivalent to his three
months’ salary, this being the lesser value, to wit:

Under Section 10 of R.A. No. 8042, a worker dismissed from overseas employment without just, valid or
authorized cause is entitled to his salary for the unexpired portion of his employment contract or for three (3)
months for every year of the unexpired term, whichever is less.

In the case at bar, the unexpired portion of private respondent’s employment contract is eight (8) months.
Private respondent should therefore be paid his basic salary corresponding to three (3) months or a total of
SR3,600.82

Another was Triple-Eight Integrated Services, Inc. v. National Labor Relations Commission (Third Division,
December 1998),83 which involved an OFW (therein respondent Erlinda Osdana) who was originally granted
a 12-month contract, which was deemed renewed for another 12 months. After serving for one year and
seven-and-a-half months, respondent Osdana was illegally dismissed, and the Court awarded her salaries for
the entire unexpired portion of four and one-half months of her contract.

Case Title Contract Period of Service Unexpired Period Period Applied in the
Period Computation of the
Monetary Award

Skippers v. 6 months 2 months 4 months 4 months


Maguad84

Bahia Shipping v. 9 months 8 months 4 months 4 months


Reynaldo Chua 85

Centennial 9 months 4 months 5 months 5 months


Transmarine v. dela
Cruz l86

66
Talidano v. Falcon87 12 months 3 months 9 months 3 months

Univan v. CA 88 12 months 3 months 9 months 3 months

Oriental v. CA 89 12 months more than 2 10 months 3 months


months

PCL v. NLRC90 12 months more than 2 more or less 9 months 3 months


months

Olarte v. Nayona91 12 months 21 days 11 months and 9 days 3 months

JSS v.Ferrer92 12 months 16 days 11 months and 24 days 3 months

Pentagon v. 12 months 9 months and 7 2 months and 23 days 2 months and 23 days
Adelantar93 days

Phil. Employ v. 12 months 10 months 2 months Unexpired portion


Paramio, et al.94

Flourish Maritime v. 2 years 26 days 23 months and 4 days 6 months or 3 months for
Almanzor 95 each year of contract

Athenna Manpower 1 year, 10 1 month 1 year, 9 months and 6 months or 3 months for
v. Villanos 96 months and 28 28 days each year of contract
days
The Marsaman interpretation of Section 10(5) has since been adopted in the following cases:

As the foregoing matrix readily shows, the subject clause classifies OFWs into two categories. The first
category includes OFWs with fixed-period employment contracts of less than one year; in case of illegal
dismissal, they are entitled to their salaries for the entire unexpired portion of their contract. The second
category consists of OFWs with fixed-period employment contracts of one year or more; in case of illegal
dismissal, they are entitled to monetary award equivalent to only 3 months of the unexpired portion of their
contracts.

The disparity in the treatment of these two groups cannot be discounted. In Skippers, the respondent OFW
worked for only 2 months out of his 6-month contract, but was awarded his salaries for the remaining 4
months. In contrast, the respondent OFWs in Oriental and PCL who had also worked for about 2 months out
of their 12-month contracts were awarded their salaries for only 3 months of the unexpired portion of their
contracts. Even the OFWs involved in Talidano and Univan who had worked for a longer period of 3 months
out of their 12-month contracts before being illegally dismissed were awarded their salaries for only 3
months.

To illustrate the disparity even more vividly, the Court assumes a hypothetical OFW-A with an employment
contract of 10 months at a monthly salary rate of US$1,000.00 and a hypothetical OFW-B with an
employment contract of 15 months with the same monthly salary rate of US$1,000.00. Both commenced
work on the same day and under the same employer, and were illegally dismissed after one month of work.
Under the subject clause, OFW-A will be entitled to US$9,000.00, equivalent to his salaries for the
remaining 9 months of his contract, whereas OFW-B will be entitled to only US$3,000.00, equivalent to his

67
salaries for 3 months of the unexpired portion of his contract, instead of US$14,000.00 for the unexpired
portion of 14 months of his contract, as the US$3,000.00 is the lesser amount.

The disparity becomes more aggravating when the Court takes into account jurisprudence that, prior to the
effectivity of R.A. No. 8042 on July 14, 1995,97 illegally dismissed OFWs, no matter how long the period of
their employment contracts, were entitled to their salaries for the entire unexpired portions of their contracts.
The matrix below speaks for itself:

Case Title Contract Period Period of Unexpired Period Period Applied in the
Service Computation of the
Monetary Award

ATCI v. CA, et al.98 2 years 2 months 22 months 22 months

Phil. Integrated v. 2 years 7 days 23 months and 23 23 months and 23 days


NLRC99 days

JGB v. NLC100 2 years 9 months 15 months 15 months

Agoy v. NLRC101 2 years 2 months 22 months 22 months

EDI v. NLRC, et 2 years 5 months 19 months 19 months


al.102

Barros v. NLRC, et 12 months 4 months 8 months 8 months


al.103

Philippine 12 months 6 months and 22 5 months and 18 5 months and 18 days


Transmarine v. days days
Carilla104

It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the unexpired portions
thereof, were treated alike in terms of the computation of their monetary benefits in case of illegal dismissal.
Their claims were subjected to a uniform rule of computation: their basic salaries multiplied by the entire
unexpired portion of their employment contracts.

The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of computation of the
money claims of illegally dismissed OFWs based on their employment periods, in the process singling
out one category whose contracts have an unexpired portion of one year or more and subjecting them to the
peculiar disadvantage of having their monetary awards limited to their salaries for 3 months or for the
unexpired portion thereof, whichever is less, but all the while sparing the other category from such prejudice,
simply because the latter's unexpired contracts fall short of one year.

Among OFWs With Employment Contracts of More Than One Year

Upon closer examination of the terminology employed in the subject clause, the Court now has misgivings
on the accuracy of the Marsaman interpretation.

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The Court notes that the subject clause "or for three (3) months for every year of the unexpired
term, whichever is less" contains the qualifying phrases "every year" and "unexpired term." By its ordinary
meaning, the word "term" means a limited or definite extent of time.105 Corollarily, that "every year" is but
part of an "unexpired term" is significant in many ways: first, the unexpired term must be at least one
year, for if it were any shorter, there would be no occasion for such unexpired term to be measured by every
year; and second, the original term must be more than one year, for otherwise, whatever would be the
unexpired term thereof will not reach even a year. Consequently, the more decisive factor in the
determination of when the subject clause "for three (3) months for every year of the unexpired
term, whichever is less" shall apply is not the length of the original contract period as held
in Marsaman,106 but the length of the unexpired portion of the contract period -- the subject clause applies in
cases when the unexpired portion of the contract period is at least one year, which arithmetically requires that
the original contract period be more than one year.

Viewed in that light, the subject clause creates a sub-layer of discrimination among OFWs whose contract
periods are for more than one year: those who are illegally dismissed with less than one year left in their
contracts shall be entitled to their salaries for the entire unexpired portion thereof, while those who are
illegally dismissed with one year or more remaining in their contracts shall be covered by the subject clause,
and their monetary benefits limited to their salaries for three months only.

To concretely illustrate the application of the foregoing interpretation of the subject clause, the Court
assumes hypothetical OFW-C and OFW-D, who each have a 24-month contract at a salary rate of
US$1,000.00 per month. OFW-C is illegally dismissed on the 12th month, and OFW-D, on the 13th month.
Considering that there is at least 12 months remaining in the contract period of OFW-C, the subject clause
applies to the computation of the latter's monetary benefits. Thus, OFW-C will be entitled, not to
US$12,000,00 or the latter's total salaries for the 12 months unexpired portion of the contract, but to the
lesser amount of US$3,000.00 or the latter's salaries for 3 months out of the 12-month unexpired term of the
contract. On the other hand, OFW-D is spared from the effects of the subject clause, for there are only 11
months left in the latter's contract period. Thus, OFW-D will be entitled to US$11,000.00, which is
equivalent to his/her total salaries for the entire 11-month unexpired portion.

OFWs vis-à-vis Local Workers


With Fixed-Period Employment

As discussed earlier, prior to R.A. No. 8042, a uniform system of computation of the monetary awards of
illegally dismissed OFWs was in place. This uniform system was applicable even to local workers with
fixed-term employment.107

The earliest rule prescribing a uniform system of computation was actually Article 299 of the Code of
Commerce (1888),108 to wit:

Article 299. If the contracts between the merchants and their shop clerks and employees should have been
made of a fixed period, none of the contracting parties, without the consent of the other, may withdraw from
the fulfillment of said contract until the termination of the period agreed upon.

Persons violating this clause shall be subject to indemnify the loss and damage suffered, with the exception
of the provisions contained in the following articles.

69
In Reyes v. The Compañia Maritima,109 the Court applied the foregoing provision to determine the liability
of a shipping company for the illegal discharge of its managers prior to the expiration of their fixed-term
employment. The Court therein held the shipping company liable for the salaries of its managers for
the remainder of their fixed-term employment.

There is a more specific rule as far as seafarers are concerned: Article 605 of the Code of Commerce which
provides:

Article 605. If the contracts of the captain and members of the crew with the agent should be for a definite
period or voyage, they cannot be discharged until the fulfillment of their contracts, except for reasons of
insubordination in serious matters, robbery, theft, habitual drunkenness, and damage caused to the vessel or
to its cargo by malice or manifest or proven negligence.

Article 605 was applied to Madrigal Shipping Company, Inc. v. Ogilvie,110 in

which the Court held the shipping company liable for the salaries and subsistence allowance of its illegally
dismissed employees for the entire unexpired portion of their employment contracts.

While Article 605 has remained good law up to the present,111 Article 299 of the Code of Commerce was
replaced by Art. 1586 of the Civil Code of 1889, to wit:

Article 1586. Field hands, mechanics, artisans, and other laborers hired for a certain time and for a certain
work cannot leave or be dismissed without sufficient cause, before the fulfillment of the contract. (Emphasis
supplied.)

Citing Manresa, the Court in Lemoine v. Alkan112 read the disjunctive "or" in Article 1586 as a conjunctive
"and" so as to apply the provision to local workers who are employed for a time certain although for no
particular skill. This interpretation of Article 1586 was reiterated in Garcia Palomar v. Hotel de France
Company.113 And in both Lemoine and Palomar, the Court adopted the general principle that in actions for
wrongful discharge founded on Article 1586, local workers are entitled to recover damages to the extent of
the amount stipulated to be paid to them by the terms of their contract. On the computation of the amount of
such damages, the Court in Aldaz v. Gay114 held:

The doctrine is well-established in American jurisprudence, and nothing has been brought to our attention to
the contrary under Spanish jurisprudence, that when an employee is wrongfully discharged it is his duty to
seek other employment of the same kind in the same community, for the purpose of reducing the damages
resulting from such wrongful discharge. However, while this is the general rule, the burden of showing that
he failed to make an effort to secure other employment of a like nature, and that other employment of a like
nature was obtainable, is upon the defendant. When an employee is wrongfully discharged under a contract
of employment his prima facie damage is the amount which he would be entitled to had he continued in such
employment until the termination of the period. (Howard vs. Daly, 61 N. Y., 362; Allen vs. Whitlark, 99
Mich., 492; Farrell vs. School District No. 2, 98 Mich., 43.)115(Emphasis supplied)

On August 30, 1950, the New Civil Code took effect with new provisions on fixed-term employment:
Section 2 (Obligations with a Period), Chapter 3, Title I, and Sections 2 (Contract of Labor) and 3 (Contract
for a Piece of Work), Chapter 3, Title VIII, Book IV.116 Much like Article 1586 of the Civil Code of 1889,
the new provisions of the Civil Code do not expressly provide for the remedies available to a fixed-term
worker who is illegally discharged. However, it is noted that in Mackay Radio & Telegraph Co., Inc. v.

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Rich,117 the Court carried over the principles on the payment of damages underlying Article 1586 of the Civil
Code of 1889 and applied the same to a case involving the illegal discharge of a local worker whose fixed-
period employment contract was entered into in 1952, when the new Civil Code was already in effect. 118

More significantly, the same principles were applied to cases involving overseas Filipino workers whose
fixed-term employment contracts were illegally terminated, such as in First Asian Trans & Shipping Agency,
Inc. v. Ople,119involving seafarers who were illegally discharged. In Teknika Skills and Trade Services, Inc.
v. National Labor Relations Commission,120 an OFW who was illegally dismissed prior to the expiration of
her fixed-period employment contract as a baby sitter, was awarded salaries corresponding to the unexpired
portion of her contract. The Court arrived at the same ruling in Anderson v. National Labor Relations
Commission,121 which involved a foreman hired in 1988 in Saudi Arabia for a fixed term of two years, but
who was illegally dismissed after only nine months on the job -- the Court awarded him salaries
corresponding to 15 months, the unexpired portion of his contract. In Asia World Recruitment, Inc. v.
National Labor Relations Commission,122 a Filipino working as a security officer in 1989 in Angola was
awarded his salaries for the remaining period of his 12-month contract after he was wrongfully discharged.
Finally, in Vinta Maritime Co., Inc. v. National Labor Relations Commission,123 an OFW whose 12-month
contract was illegally cut short in the second month was declared entitled to his salaries for the remaining 10
months of his contract.

In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were illegally
discharged were treated alike in terms of the computation of their money claims: they were uniformly
entitled to their salaries for the entire unexpired portions of their contracts. But with the enactment of R.A.
No. 8042, specifically the adoption of the subject clause, illegally dismissed OFWs with an unexpired
portion of one year or more in their employment contract have since been differently treated in that their
money claims are subject to a 3-month cap, whereas no such limitation is imposed on local workers with
fixed-term employment.

The Court concludes that the subject clause contains a suspect classification in that, in the computation of
the monetary benefits of fixed-term employees who are illegally discharged, it imposes a 3-month cap on
the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on the
claims of other OFWs or local workers with fixed-term employment. The subject clause singles out one
classification of OFWs and burdens it with a peculiar disadvantage.

There being a suspect classification involving a vulnerable sector protected by the Constitution, the Court
now subjects the classification to a strict judicial scrutiny, and determines whether it serves a compelling
state interest through the least restrictive means.

What constitutes compelling state interest is measured by the scale of rights and powers arrayed in the
Constitution and calibrated by history.124 It is akin to the paramount interest of the state125 for which some
individual liberties must give way, such as the public interest in safeguarding health or maintaining medical
standards,126 or in maintaining access to information on matters of public concern.127

In the present case, the Court dug deep into the records but found no compelling state interest that the subject
clause may possibly serve.

The OSG defends the subject clause as a police power measure "designed to protect the employment of
Filipino seafarers overseas x x x. By limiting the liability to three months [sic], Filipino seafarers have better

71
chance of getting hired by foreign employers." The limitation also protects the interest of local placement
agencies, which otherwise may be made to shoulder millions of pesos in "termination pay." 128

The OSG explained further:

Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the event
that jurisdiction over the foreign employer is not acquired by the court or if the foreign employer reneges on
its obligation. Hence, placement agencies that are in good faith and which fulfill their obligations are
unnecessarily penalized for the acts of the foreign employer. To protect them and to promote their continued
helpful contribution in deploying Filipino migrant workers, liability for money are reduced under Section 10
of RA 8042.

This measure redounds to the benefit of the migrant workers whose welfare the government seeks to
promote. The survival of legitimate placement agencies helps [assure] the government that migrant workers
are properly deployed and are employed under decent and humane conditions.129 (Emphasis supplied)

However, nowhere in the Comment or Memorandum does the OSG cite the source of its perception of the
state interest sought to be served by the subject clause.

The OSG locates the purpose of R.A. No. 8042 in the speech of Rep. Bonifacio Gallego in sponsorship of
House Bill No. 14314 (HB 14314), from which the law originated;130 but the speech makes no reference to
the underlying reason for the adoption of the subject clause. That is only natural for none of the 29 provisions
in HB 14314 resembles the subject clause.

On the other hand, Senate Bill No. 2077 (SB 2077) contains a provision on money claims, to wit:

Sec. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor Arbiters of the
National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and
decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of the complaint, the claim arising out of an employer-
employee relationship or by virtue of any law or contract involving Filipino workers for overseas
employment including claims for actual, moral, exemplary and other forms of damages.

The liability of the principal and the recruitment/placement agency or any and all claims under this Section
shall be joint and several.

Any compromise/amicable settlement or voluntary agreement on any money claims exclusive of damages
under this Section shall not be less than fifty percent (50%) of such money claims: Provided, That any
installment payments, if applicable, to satisfy any such compromise or voluntary settlement shall not be more
than two (2) months. Any compromise/voluntary agreement in violation of this paragraph shall be null and
void.

Non-compliance with the mandatory period for resolutions of cases provided under this Section shall subject
the responsible officials to any or all of the following penalties:

(1) The salary of any such official who fails to render his decision or resolution within the prescribed
period shall be, or caused to be, withheld until the said official complies therewith;

72
(2) Suspension for not more than ninety (90) days; or

(3) Dismissal from the service with disqualification to hold any appointive public office for five (5)
years.

Provided, however, That the penalties herein provided shall be without prejudice to any liability which any
such official may have incurred under other existing laws or rules and regulations as a consequence of
violating the provisions of this paragraph.

But significantly, Section 10 of SB 2077 does not provide for any rule on the computation of money claims.

A rule on the computation of money claims containing the subject clause was inserted and eventually
adopted as the 5th paragraph of Section 10 of R.A. No. 8042. The Court examined the rationale of the
subject clause in the transcripts of the "Bicameral Conference Committee (Conference Committee) Meetings
on the Magna Carta on OCWs (Disagreeing Provisions of Senate Bill No. 2077 and House Bill No. 14314)."
However, the Court finds no discernible state interest, let alone a compelling one, that is sought to be
protected or advanced by the adoption of the subject clause.

In fine, the Government has failed to discharge its burden of proving the existence of a compelling state
interest that would justify the perpetuation of the discrimination against OFWs under the subject clause.

Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the employment of
OFWs by mitigating the solidary liability of placement agencies, such callous and cavalier rationale will
have to be rejected. There can never be a justification for any form of government action that alleviates the
burden of one sector, but imposes the same burden on another sector, especially when the favored sector is
composed of private businesses such as placement agencies, while the disadvantaged sector is composed of
OFWs whose protection no less than the Constitution commands. The idea that private business interest can
be elevated to the level of a compelling state interest is odious.

Moreover, even if the purpose of the subject clause is to lessen the solidary liability of placement
agencies vis-a-vistheir foreign principals, there are mechanisms already in place that can be employed to
achieve that purpose without infringing on the constitutional rights of OFWs.

The POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas
Workers, dated February 4, 2002, imposes administrative disciplinary measures on erring foreign employers
who default on their contractual obligations to migrant workers and/or their Philippine agents. These
disciplinary measures range from temporary disqualification to preventive suspension. The POEA Rules and
Regulations Governing the Recruitment and Employment of Seafarers, dated May 23, 2003, contains similar
administrative disciplinary measures against erring foreign employers.

Resort to these administrative measures is undoubtedly the less restrictive means of aiding local placement
agencies in enforcing the solidary liability of their foreign principals.

Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right of
petitioner and other OFWs to equal protection.1avvphi1

73
Further, there would be certain misgivings if one is to approach the declaration of the unconstitutionality of
the subject clause from the lone perspective that the clause directly violates state policy on labor under
Section 3,131Article XIII of the Constitution.

While all the provisions of the 1987 Constitution are presumed self-executing,132 there are some which this
Court has declared not judicially enforceable, Article XIII being one,133 particularly Section 3 thereof, the
nature of which, this Court, in Agabon v. National Labor Relations Commission,134 has described to be not
self-actuating:

Thus, the constitutional mandates of protection to labor and security of tenure may be deemed as self-
executing in the sense that these are automatically acknowledged and observed without need for any
enabling legislation. However, to declare that the constitutional provisions are enough to guarantee the full
exercise of the rights embodied therein, and the realization of ideals therein expressed, would be impractical,
if not unrealistic. The espousal of such view presents the dangerous tendency of being overbroad and
exaggerated. The guarantees of "full protection to labor" and "security of tenure", when examined in
isolation, are facially unqualified, and the broadest interpretation possible suggests a blanket shield in favor
of labor against any form of removal regardless of circumstance. This interpretation implies an
unimpeachable right to continued employment-a utopian notion, doubtless-but still hardly within the
contemplation of the framers. Subsequent legislation is still needed to define the parameters of these
guaranteed rights to ensure the protection and promotion, not only the rights of the labor sector, but of the
employers' as well. Without specific and pertinent legislation, judicial bodies will be at a loss, formulating
their own conclusion to approximate at least the aims of the Constitution.

Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source of a positive enforceable
right to stave off the dismissal of an employee for just cause owing to the failure to serve proper notice or
hearing. As manifested by several framers of the 1987 Constitution, the provisions on social justice require
legislative enactments for their enforceability.135 (Emphasis added)

Thus, Section 3, Article XIII cannot be treated as a principal source of direct enforceable rights, for the
violation of which the questioned clause may be declared unconstitutional. It may unwittingly risk opening
the floodgates of litigation to every worker or union over every conceivable violation of so broad a concept
as social justice for labor.

It must be stressed that Section 3, Article XIII does not directly bestow on the working class any actual
enforceable right, but merely clothes it with the status of a sector for whom the Constitution urges protection
through executive or legislative action and judicial recognition. Its utility is best limited to being an impetus
not just for the executive and legislative departments, but for the judiciary as well, to protect the welfare of
the working class. And it was in fact consistent with that constitutional agenda that the Court in Central Bank
(now Bangko Sentral ng Pilipinas) Employee Association, Inc. v. Bangko Sentral ng Pilipinas, penned by
then Associate Justice now Chief Justice Reynato S. Puno, formulated the judicial precept that when the
challenge to a statute is premised on the perpetuation of prejudice against persons favored by the
Constitution with special protection -- such as the working class or a section thereof -- the Court may
recognize the existence of a suspect classification and subject the same to strict judicial scrutiny.

The view that the concepts of suspect classification and strict judicial scrutiny formulated in Central Bank
Employee Association exaggerate the significance of Section 3, Article XIII is a groundless
apprehension. Central Bank applied Article XIII in conjunction with the equal protection clause. Article

74
XIII, by itself, without the application of the equal protection clause, has no life or force of its own as
elucidated in Agabon.

Along the same line of reasoning, the Court further holds that the subject clause violates petitioner's right to
substantive due process, for it deprives him of property, consisting of monetary benefits, without any existing
valid governmental purpose.136

The argument of the Solicitor General, that the actual purpose of the subject clause of limiting the
entitlement of OFWs to their three-month salary in case of illegal dismissal, is to give them a better chance
of getting hired by foreign employers. This is plain speculation. As earlier discussed, there is nothing in the
text of the law or the records of the deliberations leading to its enactment or the pleadings of respondent that
would indicate that there is an existing governmental purpose for the subject clause, or even just a pretext of
one.

The subject clause does not state or imply any definitive governmental purpose; and it is for that precise
reason that the clause violates not just petitioner's right to equal protection, but also her right to substantive
due process under Section 1,137 Article III of the Constitution.

The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire unexpired period
of nine months and 23 days of his employment contract, pursuant to law and jurisprudence prior to the
enactment of R.A. No. 8042.

On the Third Issue

Petitioner contends that his overtime and leave pay should form part of the salary basis in the computation of
his monetary award, because these are fixed benefits that have been stipulated into his contract.

Petitioner is mistaken.

The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like petitioner,
DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract of Seafarers, in
which salary is understood as the basic wage, exclusive of overtime, leave pay and other bonuses; whereas
overtime pay is compensation for all work "performed" in excess of the regular eight hours, and holiday pay
is compensation for any work "performed" on designated rest days and holidays.

By the foregoing definition alone, there is no basis for the automatic inclusion of overtime and holiday pay in
the computation of petitioner's monetary award, unless there is evidence that he performed work during those
periods. As the Court held in Centennial Transmarine, Inc. v. Dela Cruz,138

However, the payment of overtime pay and leave pay should be disallowed in light of our ruling in
Cagampan v. National Labor Relations Commission, to wit:

The rendition of overtime work and the submission of sufficient proof that said was actually performed are
conditions to be satisfied before a seaman could be entitled to overtime pay which should be computed on
the basis of 30% of the basic monthly salary. In short, the contract provision guarantees the right to overtime
pay but the entitlement to such benefit must first be established.

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In the same vein, the claim for the day's leave pay for the unexpired portion of the contract is unwarranted
since the same is given during the actual service of the seamen.

WHEREFORE, the Court GRANTS the Petition. The subject clause "or for three months for every year of
the unexpired term, whichever is less" in the 5th paragraph of Section 10 of Republic Act No. 8042
is DECLAREDUNCONSTITUTIONAL; and the December 8, 2004 Decision and April 1, 2005
Resolution of the Court of Appeals are MODIFIED to the effect that petitioner is AWARDED his salaries
for the entire unexpired portion of his employment contract consisting of nine months and 23 days computed
at the rate of US$1,400.00 per month.

No costs.

SO ORDERED.

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