Bright Maritime Corporation (BMC)/Desiree P. Tenorio vs. Ricardo B. Fantonial

A perfected employment contract between a manning agency and a seafarer gives rise to rights and obligations, the breach of which may give rise to a cause of action even before the employment relationship commences. The manning agency's unjustified prevention of a seafarer's deployment, despite a medical certificate declaring him fit to work, constitutes breach of contract for which the agency is liable for actual, moral, and exemplary damages and attorney's fees.

Petitioner Bright Maritime Corporation (BMC) is a manning agent that recruits and deploys Filipino seafarers for its foreign principal, Ranger Marine S.A. Respondent Ricardo B. Fantonial was a seafarer who applied for deployment as boatswain. The employment of Filipino seafarers on board ocean-going vessels is governed by the Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels (POEA Memorandum Circular No. 055-96), which provides that the employment contract commences upon actual departure of the seafarer from the airport or seaport in the point of hire.

On January 15, 2000, petitioner Bright Maritime Corporation (BMC), a manning agent, and its president, petitioner Desiree P. Tenorio, acting for and in behalf of their principal, Ranger Marine S.A., executed a Contract of Employment with respondent Ricardo B. Fantonial. The contract, verified and approved by the Philippine Overseas Employment Administration (POEA) on January 17, 2000, provided that respondent would be employed as boatswain of the foreign vessel M/V AUK for one year, with a basic monthly salary of US$450, plus an allowance of US$220, 90 hours per month of overtime with pay, and vacation leave with pay of US$45 per month.

Respondent underwent a medical examination at the Christian Medical Clinic, petitioner's accredited medical clinic. He was issued a Medical Certificate dated January 17, 2000, which had the phrase "FIT TO WORK" stamped on its lower and upper portion. At about 3:30 p.m. of January 17, 2000, respondent, after undergoing the pre-departure orientation seminar and being equipped with the necessary requirements and documents for travel, went to the Ninoy Aquino International Airport upon petitioners' instruction. Petitioners told respondent he would be departing that day and that a liaison officer would deliver his plane ticket. At about 4:00 p.m., petitioners' liaison officer met respondent at the airport and told him he could not leave on that day due to some defects in his medical certificate, instructing him to return to the Christian Medical Clinic.

Respondent went back to the Christian Medical Clinic the next day, and the examining physician, Dr. Lyn dela Cruz-De Leon, told him there was nothing wrong or irregular with his medical certificate. Respondent then went to petitioners' office for an explanation but was merely told to wait for their call, as he was being lined up for a flight to the ship's next port of call. Respondent never received a call from petitioners.

In their Position Paper, petitioners stated that respondent was referred to their accredited medical clinic for pre-employment medical examination on January 17, 2000, the same day he was supposed to fly to Germany to join the vessel, but he was not declared fit to work due to some medical problems. Petitioners submitted the Affidavit of Dr. Lyn dela Cruz-De Leon stating that she examined respondent on January 17, 2000; that physical and laboratory results were all within normal limits except for the finding, after chest x-ray, of Borderline Heart Size, and that respondent was positive to Hepatitis B on screening; that respondent underwent ECG which showed left axis deviation; that she requested a Hepatitis profile, done on January 18, 2000; and that on January 20, 2000, the result showed non-infectious Hepatitis B. Dr. De Leon stated that respondent was declared fit to work only on January 21, 2000; however, the date of the Medical Certificate was January 17, 2000, which was the date when she started to examine the patient per standard operating procedure.

Petitioners argued that since respondent was declared fit to work only on January 21, 2000, he could not join the vessel anymore as it had left the port in Germany. Respondent was advised to wait for the next vacancy for boatswain, but he failed to report to petitioners' office and gave them an incorrect telephone number. During the mandatory conference/conciliation stage, petitioners offered respondent to join one of their vessels, but he refused. Petitioners further argued that they cannot be held liable for illegal dismissal as the contract of employment had not yet commenced based on Section 2 of the Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels (POEA Memorandum Circular No. 055-96), which states that the employment contract shall commence upon actual departure of the seafarer from the airport or seaport in the point of hire.

The Labor Arbiter found in favor of respondent, ruling that the contract of employment was already executed and approved by the POEA, and that the commencement of employment is not one of the requirements to make the contract consummated and enforceable but only a gauge for the payment of salary. The Labor Arbiter held that petitioners' unilateral revocation of the contract amounted to pre-termination without just or authorized cause, constituting illegal dismissal, and ordered petitioner BMC to pay respondent the peso equivalent of US$2,680.00. The NLRC reversed, holding that respondent's failure to depart was due to his health, and that the Labor Arbiter's award of placement fee had no basis in law. The Court of Appeals reversed the NLRC, reinstating the Labor Arbiter's Decision with modification, finding that the medical certificate proved respondent was fit to work on January 17, 2000, and that petitioners' act of preventing respondent from leaving was tainted with bad faith.

• Medical Certificate Date: Petitioners contended that the Court of Appeals erred in doubting the Affidavit of Dr. Lyn dela Cruz-De Leon, which stated that respondent's Hepatitis profile was done only on January 18, 2000 and concluded on January 20, 2000; the date "January 17, 2000" was written on the medical certificate because it was the day respondent was referred and initially examined, in accordance with generally accepted medical practice.
• Non-Commencement of Contract: Petitioners asserted that respondent's failure to join the vessel on January 17, 2000 should not be attributed to them, as it was a direct consequence of the delay in the release of the medical report; respondent's fitness to work is a condition sine qua non for deploying an overseas contract worker, and without a clean bill of health, the contract of employment cannot be considered perfected.
• No Illegal Dismissal: Petitioners argued that pursuant to Section 2 of the POEA Standard Employment Contract, since respondent did not actually depart from the airport, no employer-employee relationship existed, hence there was no illegal dismissal and the award of damages must be set aside.
• Good Faith: Petitioners asserted that they did not conceal any information from respondent and even tried to communicate with him for another shipboard assignment after his failed deployment, which ruled out bad faith.

The decision does not separately recount respondent's arguments before the Supreme Court beyond the procedural posture that respondent filed a petition for certiorari before the Court of Appeals alleging that the NLRC committed grave abuse of discretion in rendering its Decision and Resolution. The Court of Appeals' findings, which respondent sought to sustain, were that the contract of employment had already been perfected and approved by the POEA, that there was no valid and justifiable reason for petitioners to withhold respondent's departure, and that petitioners' act was tainted with bad faith.

• Validity of Ground for Preventing Departure: Whether petitioners' reason for preventing respondent from leaving Manila and joining the vessel M/V AUK in Germany on January 17, 2000 was valid.
• Perfection of Employment Contract: Whether respondent's employment contract was not perfected pursuant to the POEA Standard Employment Contract, such that no employer-employee relationship existed and no illegal dismissal could be found.
• Award of Monetary Benefits: Whether the Court of Appeals erred in awarding monetary benefits to respondent despite the provision of the POEA Standard Employment Contract to the contrary.
• Findings of Fact: Whether the Court of Appeals committed serious error with regard to its findings of facts, which, if not corrected, would cause grave or irreparable damage or injury to petitioners.

• Validity of Ground for Preventing Departure: No. The Medical Certificate dated January 17, 2000, stamped with the words "FIT TO WORK," proved that respondent was medically fit to leave Manila on that date to join the vessel M/V AUK in Germany, and the Affidavit of Dr. Lyn dela Cruz-De Leon could not overcome this documentary evidence.
• Perfection of Employment Contract: Partly meritorious. The employment contract was perfected on January 15, 2000 when the parties signed it and it was approved by the POEA on January 17, 2000, but the contract did not commence since petitioners did not allow respondent to leave; nevertheless, the breach of rights and obligations born contemporaneously with the perfection of the contract gave rise to a cause of action.
• Award of Monetary Benefits: Yes, with modification. Petitioner BMC is liable for actual damages representing one year's salary under the contract, moral damages of ₱30,000.00, exemplary damages increased to ₱50,000.00, and attorney's fees equivalent to ten percent of the recoverable amount.
• Findings of Fact: No. The Court reviewed the factual findings because the issue was shrouded by a conflict of factual perceptions between the lower court and the NLRC, and agreed with the Court of Appeals' findings.

• Validity of Ground for Preventing Departure: The Court carefully reviewed the records and agreed with the Court of Appeals that respondent's Medical Certificate dated January 17, 2000, stamped with the words "FIT TO WORK," proved that respondent was medically fit to leave Manila on that date. The Affidavit of Dr. Lyn dela Cruz-De Leon that respondent was declared fit to work only on January 21, 2000 could not overcome the evidence in the Medical Certificate, which already stated that respondent had "Class-B Non-Infectious Hepatitis-B" and that he was fit to work. The doctor's explanation that the Medical Certificate was dated January 17, 2000 because it carried the date when they started to examine the patient per standard operating procedure did not persuade, as it went against logic and the chronological recording of medical procedures. Under Rule 130, Section 2 of the Rules of Court, the Medical Certificate submitted as documentary evidence is proof of its contents, including the date thereof which states that respondent was already declared fit to work on January 17, 2000, the date of his scheduled deployment.

• Perfection of Employment Contract: An employment contract, like any other contract, is perfected at the moment (1) the parties come to agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties, (b) object certain which is the subject matter of the contract, and (c) cause of the obligation. The object of the contract was the rendition of service by respondent on board the vessel for which service he would be paid the salary agreed upon. The employment contract was perfected on January 15, 2000 when it was signed by the parties, respondent and petitioners, who entered into the contract in behalf of their principal, Ranger Marine S.A., thereby signifying their consent to the terms and conditions of employment embodied in the contract, and the contract was approved by the POEA on January 17, 2000. However, the employment contract did not commence, since petitioners did not allow respondent to leave on January 17, 2000 to embark the vessel M/V AUK in Germany on the ground that he was not yet declared fit to work on the day of departure, although his Medical Certificate dated January 17, 2000 proved that respondent was fit to work. Citing Santiago vs. CF Sharp Crew Management, Inc. , the Court noted that the employment contract did not commence when the hired seaman was not able to depart from the airport or seaport in the point of hire; thus, no employer-employee relationship was created. Nevertheless, even before the start of any employer-employee relationship, contemporaneous with the perfection of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the erring party. If the reverse happened, that is, the seafarer failed or refused to be deployed as agreed upon, he would be liable for damages. While the POEA Standard Contract must be recognized and respected, neither the manning agent nor the employer can simply prevent a seafarer from being deployed without a valid reason. Petitioners' act of preventing respondent from leaving and complying with his contract of employment constitutes breach of contract for which petitioner BMC is liable for actual damages to respondent for the loss of one-year salary as provided in the contract, computed at US$670 per month, inclusive of allowance, totaling US$8,040.00.

• Award of Monetary Benefits: The Court upheld the award of moral damages in the amount of ₱30,000.00, as the Court of Appeals correctly found petitioners' act was tainted with bad faith, considering that respondent's Medical Certificate stated that he was fit to work on the day of his scheduled departure, yet he was not allowed to leave allegedly for medical reasons. The Court also agreed that petitioner BMC is liable for exemplary damages, which are imposed by way of example or correction for the public good in view of petitioner's act of preventing respondent from being deployed on the ground that he was not yet declared fit to work on the date of his departure, despite evidence to the contrary. Such act, if tolerated, would prejudice the employment opportunities of qualified seafarers who are prevented from deployment by a manning agency for unjustified reasons. Following Claudio S. Yap vs. Thenamaris Ship's Management, et al. , the Court increased exemplary damages from ₱10,000.00 to ₱50,000.00. The Court also held that respondent is entitled to attorney's fees in the concept of damages and expenses of litigation, as petitioners' failure to deploy respondent based on an unjustified ground forced respondent to file the case, warranting the award of attorney's fees equivalent to ten percent of the recoverable amount.

• Findings of Fact: The general rule that petitions for review only allow the review of errors of law is not ironclad. Where the issue is shrouded by a conflict of factual perceptions by the lower court or the lower administrative body, such as the NLRC in this case, the Court is constrained to review the factual findings of the Court of Appeals. The Court agreed with the Court of Appeals' factual findings.

• Perfection of Employment Contracts — An employment contract, like any other contract, is perfected at the moment (1) the parties come to agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties, (b) object certain which is the subject matter of the contract, and (c) cause of the obligation. In this case, the employment contract was perfected on January 15, 2000 when the parties signed it, signifying their consent, and approved by the POEA on January 17, 2000.

• Commencement vs. Perfection of Employment Contract — Under Section 2 of the POEA Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels (POEA Memorandum Circular No. 055-96), the employment contract between the employer and the seafarer shall commence upon actual departure of the seafarer from the airport or seaport in the point of hire and with a POEA approved contract. The contract may be perfected even before it commences; perfection and commencement are distinct concepts. In this case, the contract was perfected but did not commence because petitioners prevented respondent from departing.

• Rights and Obligations Contemporaneous with Perfection — Even before the start of any employer-employee relationship, contemporaneous with the perfection of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the erring party. If the seafarer failed or refused to be deployed as agreed upon, he would be liable for damages; conversely, if the manning agency prevented deployment without valid reason, it is liable for breach of contract.

• Documentary Evidence as Proof of Contents — Under Rule 130, Section 2 of the Rules of Court, documents as evidence consist of writings or any material containing letters, words, numbers, figures, symbols or other modes of written expressions offered as proof of their contents. A medical certificate is proof of its contents, including the date thereof which states that the seafarer was already declared fit to work on the date of his scheduled deployment.

• "An employment contract, like any other contract, is perfected at the moment (1) the parties come to agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties, (b) object certain which is the subject matter of the contract, and (c) cause of the obligation." — This passage states the canonical formulation for the perfection of employment contracts, which the Court applied to find that the contract between petitioners and respondent was perfected on January 15, 2000.

• "Nevertheless, even before the start of any employer-employee relationship, contemporaneous with the perfection of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the erring party." — This is the ratio decidendi of the case, establishing that a cause of action for breach of contract may arise even before the employment relationship commences.

• "While the POEA Standard Contract must be recognized and respected, neither the manning agent nor the employer can simply prevent a seafarer from being deployed without a valid reason." — This passage articulates the limitation on the manning agency's discretion in deploying seafarers, which is central to the Court's finding of breach of contract.

• "The Medical Certificate submitted as documentary evidence is proof of its contents, including the date thereof which states that respondent was already declared fit to work on January 17, 2000, the date of his scheduled deployment." — This passage applies the rules on documentary evidence to establish that the medical certificate prevailed over the doctor's affidavit explanation.

• Santiago vs. CF Sharp Crew Management, Inc., G.R. No. 162419, July 10, 2007, 527 SCRA 165 — Followed. The Court cited this case for the propositions that the employment contract did not commence when the hired seaman was not able to depart from the airport or seaport in the point of hire, thus no employer-employee relationship was created; that contemporaneous with the perfection of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of action; and that attorney's fees are recoverable when the defendant's act or omission has compelled the plaintiff to incur expenses to protect his interest.

• Claudio S. Yap vs. Thenamaris Ship's Management, et al., G.R. No. 179532, May 30, 2011 — Followed. The Court relied on this recent case to increase the award of exemplary damages from ₱10,000.00 to ₱50,000.00 and to support the award of attorney's fees.

• OSM Shipping Philippines, Inc. vs. National Labor Relations Commission, G.R. No. 138193, March 5, 2003, 398 SCRA 606, 615 — Cited for the elements of a perfected contract.

• German Marine Agencies, Inc. vs. National Labor Relations Commission, G.R. No. 142049, January 30, 2001, 350 SCRA 629, 648 — Cited for the proposition that exemplary damages are imposed not to enrich one party or impoverish another, but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions.

• Alay sa Kapatid International Foundation, Inc. (AKAP) vs. Dominguez, G.R. No. 164198, June 15, 2007, 524 SCRA 719 — Cited for the exception to the general rule that petitions for review only allow the review of errors of law, permitting review of factual findings where the issue is shrouded by a conflict of factual perceptions.

• Section 2, POEA Memorandum Circular No. 055-96 (Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels) — Provides that the employment contract between the employer and the seafarer shall commence upon actual departure of the seafarer from the airport or seaport in the point of hire and with a POEA approved contract. The Court applied this provision to determine that the contract did not commence because respondent was not allowed to depart, but held that perfection and commencement are distinct.

• Article 2220, Civil Code — Provides that willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due, and the same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith. The Court applied this to uphold the award of moral damages.

• Article 2229, Civil Code — Provides that exemplary or corrective damages are imposed by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages. The Court applied this to uphold and increase the award of exemplary damages.

• Rule 130, Section 2, Rules of Court — Provides that documents as evidence consist of writings or any material containing letters, words, numbers, figures, symbols or other modes of written expressions offered as proof of their contents. The Court applied this to hold that the Medical Certificate is proof of its contents, including the date stating respondent was fit to work.

Presbitero J. Velasco, Jr. (Chairperson), Roberto A. Abad, Jose Catral Mendoza, and Estela M. Perlas-Bernabe concurred in the decision.