Magsaysay Maritime Corporation vs. De Jesus

A conditional settlement of a judgment award may be treated as a compromise agreement and a judgment on the merits of the case if it turns out to be highly prejudicial to one of the parties, as where it prohibits that party from pursuing any further claims while the other party retains all available remedies, thereby rendering the pending petition moot and academic.

Magsaysay Maritime Corporation was the local manning agent of Princess Cruise Lines, Limited, which hired Bernardine De Jesus as an Accommodation Supervisor aboard the cruise ship Regal Princess under a contract of employment governed by the POEA Standard Employment Contract. After Bernardine died from cardio-vascular disease approximately two months following his repatriation upon completion of his contract, his widow Cynthia De Jesus sought death benefits, medical expenses, sickness allowance, damages, and attorney's fees from Magsaysay.

On February 28, 2006, Magsaysay Maritime Corporation, the local manning agent of Princess Cruise Lines, Limited, hired Bernardine De Jesus as an Accommodation Supervisor for the cruise ship Regal Princess under a contract of employment providing for a basic monthly wage of US$388.00 for a period of 10 months. Bernardine boarded the vessel on March 9, 2006 and disembarked on January 16, 2007 upon completion of his contract.

According to Cynthia De Jesus, Bernardine's widow, her husband suffered chest pains while still aboard the Regal Princess and reported his condition but was not provided medical attention. Upon his repatriation, he again requested a medical check-up, but his request was denied; he was told to rest and would be re-deployed. Petitioners, for their part, maintained that Bernardine was not repatriated due to illness but due to completion of his contract, and that he did not complain of any illness during the de-briefing session conducted before his repatriation. They also asserted that Bernardine failed to submit himself to a post-employment medical examination within three days from repatriation as required by the POEA-SEC.

On March 15, 2007, Bernardine was diagnosed with Aortic Aneurysm and underwent a coronary angiography. On March 21, 2007, he had a Left Axillofemoral Bypass. He died on March 26, 2007, approximately two months after his repatriation. On September 24, 2008, Cynthia filed a complaint against Magsaysay for payment of death benefits, medical expenses, sickness allowance, damages, and attorney's fees. The Labor Arbiter granted the complaint on June 30, 2009, finding it highly improbable that Bernardine developed a cardio-vascular disease causing his death merely two months after repatriation, and crediting Cynthia's evidence that Bernardine suffered chest pains while onboard and was denied medical attention both aboard the vessel and upon repatriation. The NLRC affirmed the Labor Arbiter's decision in toto on November 24, 2010, holding that Bernardine's cardio-vascular disease was work-related and that failure to undergo post-employment medical examination within three days from repatriation results in forfeiture of medical benefits and sickness allowance, not death benefits.

Magsaysay filed a Petition for Certiorari before the Court of Appeals on May 13, 2011. On June 30, 2011, Magsaysay paid Cynthia P3,370,514.40 as conditional satisfaction of the judgment award, without prejudice to the pending petition. The parties executed a Conditional Satisfaction of Judgment Award providing that the payment was without prejudice to the certiorari proceedings and that respondent would return the payment if the judgment award were reversed, while petitioners would pay the balance if the award were affirmed. Respondent also signed a Receipt of Payment and an Affidavit of Heirship, the latter containing a prohibition against her seeking further redress against petitioners in any country. The Court of Appeals dismissed the petition as moot and academic on August 17, 2012, and denied reconsideration on October 19, 2012.

• Mootness of Petition: Petitioners argued, citing Leonis Navigation vs. Villamater, that their voluntary payment of the judgment award did not render the petition before the Court of Appeals moot and academic because the payment was made without prejudice to the pending certiorari proceedings, and respondent was estopped from claiming the controversy had ended.
• Non-Compensability of Death: Petitioners maintained that Bernardine's death was not compensable under the POEA-SEC because he died after his contract of employment was terminated, and their responsibilities and obligations to the deceased seafarer had ceased. They emphasized that Bernardine was not repatriated due to illness but because of the completion of his contract.
• Failure to Undergo Post-Employment Medical Examination: Petitioners contended that Bernardine failed to submit himself to a post-employment medical examination within three days from repatriation as required by the POEA-SEC, and that he did not complain of any illness during the de-briefing session conducted before his repatriation.
• Aortic Aneurysm Not Compensable: Petitioners argued that Aortic Aneurysm, which caused Bernardine's death, was not a compensable occupational disease under the POEA-SEC, that it could not be presumed the cause of death was work-related, and that respondent utterly failed to substantiate her claim that her husband's death was work-related.
• Forced Payment: Petitioners claimed they did not voluntarily offer to pay the full judgment award but were forced to pay because their petition before the Court of Appeals did not stay the judgment award, and they had opposed respondent's Motion for the Issuance of a Writ of Execution.

• Mootness of Petition: Respondent argued, citing Career Philippines Ship Management Inc. vs. Madjus, that the Conditional Satisfaction of Judgment was akin to an amicable settlement rendering the petition moot and academic, since by accepting the monetary award she would no longer have any available remedy against petitioners while petitioners remained free to pursue their remedies.
• Findings of Labor Tribunals: Respondent contended that the issues raised before the Supreme Court were the same factual issues already threshed out before the Court of Appeals and the NLRC, and that the findings of the administrative tribunals were supported by substantial evidence and should be accorded great weight and respect.
• Compliance with Reporting Requirement: Respondent denied that her husband failed to comply with the three-day reporting requirement, claiming he even asked to be provided with medical attention upon his repatriation but his request was denied. She asserted that he could not have immediately filed a disability claim because he was not yet examined by a doctor due to petitioners' refusal to provide post-employment medical attention, and that he was hoping his condition would improve after taking rest as suggested by petitioners.

• Mootness: Whether the payment of the judgment award rendered the Petition for Certiorari before the Court of Appeals moot and academic.
• Grave Abuse of Discretion: Whether the award of death benefits was issued with grave abuse of discretion.

• Mootness: Yes. The Conditional Satisfaction of Judgment Award constituted a compromise agreement that was highly prejudicial to respondent because it prohibited her from pursuing further claims in any country while petitioners retained all available remedies, rendering the pending certiorari petition moot and academic under the doctrine in Career Philippines Ship Management Inc. vs. Madjus.
• Grave Abuse of Discretion: No. The labor tribunals' findings that Bernardine's cardio-vascular disease was contracted during the term of his employment and caused his death after repatriation were supported by substantial evidence and were binding on the Court, absent grave abuse of discretion.

• Mootness: The Court distinguished Leonis Navigation vs. Villamater from Career Philippines Ship Management Inc. vs. Madjus. In Leonis, the conditional settlement was fair because both parties retained remedies—the employer could pursue certiorari while the widow was estopped from claiming the controversy had ended, but the payment was without prejudice to the outcome. In Career Philippines, the conditional satisfaction was highly prejudicial to the employee because it prohibited the employee from pursuing any further claims while the employer retained all remedies. Philippine Transmarine Carriers, Inc. vs. Legaspi clarified that the ruling in Career Philippines was based on equitable considerations—the conditional settlement was highly prejudicial to the employee. Philippine Transmarine Carriers, Inc. vs. Pelagio further summarized that where the agreement is fair to both parties, providing available remedies to both, the certiorari petition is not rendered moot. In the present case, the Conditional Satisfaction of Judgment Award and the Affidavit of Heirship contained a prohibition on respondent from seeking further redress against petitioners in the Philippines, the United States, Liberia, Kuwait, Panama, the United Kingdom, or any other country, while petitioners retained their certiorari petition and potential appeal. This placed the seafarer's beneficiaries at a grave disadvantage. Accordingly, Career Philippines was applicable and the Court of Appeals did not err in treating the conditional settlement as an amicable settlement rendering the petition moot. The Court noted that while a valid compromise agreement generally renders a pending case moot, being a contract the parties may modify its legal effects to prevent mootness; however, where the agreement is highly prejudicial to one party, it operates as a final satisfaction rendering the case moot.

• Grave Abuse of Discretion: The Court limited itself to questions of law in a Rule 45 petition and did not re-examine factual findings of the NLRC when confirmed by the Court of Appeals, as those findings are conclusive and binding absent grave abuse of discretion. Section 20(A) of the POEA-SEC requires that for a seafarer to be entitled to death benefits, he must have suffered a work-related death during the term of his contract. However, Section 32-A acknowledges compensation for death occurring after the employment contract on account of a work-related illness, provided: (1) the seafarer's work involved the described risks; (2) the disease was contracted as a result of exposure to those risks; (3) the disease was contracted within the period of exposure and under such other factors necessary to contract it; and (4) there was no notorious negligence on the part of the seafarer. Section 32-A(11) further provides that cardio-vascular diseases may be considered occupational when any of the established conditions are met. Both labor tribunals found that Bernardine first experienced chest pains while onboard during the term of his employment and that his requests for medical attention were repeatedly ignored. The Labor Arbiter found it improbable for Bernardine to have developed and died from cardio-vascular disease within two months after repatriation, concluding that the illness occurred during the term of employment though it may not have fully manifested at once. The NLRC found sufficient evidence of the causal relationship between the disease and maritime employment. These factual findings, supported by substantial evidence—defined as such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion—were binding on the Court.

• Compromise Agreement as Judgment on the Merits — A compromise agreement, defined under Article 2028 of the Civil Code as a contract whereby parties make reciprocal concessions to avoid or end litigation, has the effect of res judicata upon the parties. While a valid compromise agreement generally renders a pending case moot and academic, being a contract, the parties may modify its legal effects to prevent the pending case from becoming moot. However, where the compromise is highly prejudicial to one party—such as where it prohibits that party from pursuing any further claims while the other retains all available remedies—it operates as a final satisfaction of judgment, rendering the case moot and academic.

• Conditional Satisfaction of Judgment in Labor Cases — A conditional satisfaction of a judgment award may be treated as a compromise agreement. When it is fair to both parties—providing available remedies to both, with the employee obliged to return payment if the petition is granted—the certiorari petition is not rendered moot. When it is highly prejudicial to the employee—prohibiting the employee from pursuing any further claims while the employer retains all remedies—it renders the case moot and academic. The distinction turns on equitable considerations, as clarified in Philippine Transmarine Carriers, Inc. vs. Legaspi and Philippine Transmarine Carriers, Inc. vs. Pelagio.

• Factual Findings of Labor Tribunals — The factual findings of the NLRC, when confirmed by the Court of Appeals, are conclusive and binding on the Supreme Court in a Rule 45 petition, absent grave abuse of discretion. The Court does not re-examine conflicting evidence, re-evaluate witness credibility, or substitute its judgment for that of the administrative body, which has acquired expertise in its specialized field.

• Compensability of Seafarer's Death After Contract Term — While the general rule under Section 20(A) of the POEA-SEC is that a seafarer's death must be work-related and occur during the term of employment, an exception exists under Section 32-A for death occurring after the contract on account of a work-related illness contracted during the term, provided: (1) the seafarer's work involved the described risks; (2) the disease was contracted as a result of exposure to those risks; (3) the disease was contracted within the period of exposure and under such other factors necessary to contract it; and (4) there was no notorious negligence on the part of the seafarer. Cardio-vascular diseases are listed as occupational under Section 32-A(11) when any of the established conditions are met.

• "A conditional settlement of a judgment award may be treated as a compromise agreement and a judgment on the merits of the case if it turns out to be highly prejudicial to one of the parties." — This is the opening statement of the decision, articulating the core doctrine that governs the resolution of the mootness issue.

• "This prohibition on the part of respondent to pursue any of the available legal remedies should the Court of Appeals or this Court reverse the judgment award of the labor tribunals or prosecute any other suit or action in another country puts the seafarer's beneficiaries at a grave disadvantage." — This passage explains why the conditional settlement was highly prejudicial to respondent, justifying the application of the Career Philippines doctrine and the dismissal of the petition as moot.

• "It is therefore evident that the illness which caused Seaman de Jesus' death occurred during the term of his employment contract, though it may not have fully manifested at once." — Quoted from the Labor Arbiter's decision, this finding supports the conclusion that the seafarer's cardio-vascular disease was work-related and contracted during employment, satisfying the exception under Section 32-A of the POEA-SEC.

• "Being factual in nature, this Court sees no reason to disturb the findings of the labor tribunals as it has usually given deference to the findings of fact of administrative agencies which have acquired expertise in their specific jurisdiction. Their factual findings are generally binding upon this Court, absent a showing a grave abuse of discretion." — This articulates the doctrine of deference to administrative agency factual findings that underpins the Court's refusal to re-examine the labor tribunals' determinations on compensability.

• Leonis Navigation vs. Villamater, 628 Phil. 81 (2010) — Cited by petitioners to argue that voluntary payment of the judgment award did not render the certiorari petition moot. Distinguished: in Leonis, the conditional settlement was fair because both parties retained remedies, unlike the present case where the settlement was highly prejudicial to respondent.
• Career Philippines Ship Management Inc. vs. Madjus, 650 Phil. 157 (2010) — Cited by respondent and applied by the Court. The conditional satisfaction was held highly prejudicial to the employee because it prohibited further claims while the employer retained all remedies, rendering the case moot and academic.
• Philippine Transmarine Carriers, Inc. vs. Legaspi, 710 Phil. 838 (2013) — Clarified that Career Philippines was decided based on the conditional settlement being highly prejudicial to the employee, grounded on equitable considerations.
• Philippine Transmarine Carriers, Inc. vs. Pelagio, 766 Phil. 504 (2015) — Summarized Legaspi, holding that where the agreement is fair to both parties—providing available remedies to both, with the employee obliged to return payment if the petition is granted—the certiorari petition is not rendered moot.
• Gadrinab vs. Salamanca, 736 Phil. 279 (2014) — Cited for the definition of a compromise agreement under Article 2028 of the Civil Code and its effect as res judicata upon the parties.
• Madridejos vs. NYK-Fil Ship Management, Inc., G.R. No. 204262, June 7, 2017 — Cited for the rule that the Court limits itself to questions of law in a Rule 45 petition and does not re-examine the factual findings of the NLRC.

• Article 2028, Civil Code — Defines a compromise agreement as a contract whereby parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced. Applied to characterize the Conditional Satisfaction of Judgment Award as a compromise agreement with the effect of res judicata.
• Section 20(A), POEA Standard Employment Contract — Requires that for a seafarer to be entitled to death benefits, the death must be work-related and occur during the term of the contract. Applied as the general rule on compensability of seafarers' deaths.
• Section 32-A, POEA Standard Employment Contract — Provides for compensation for death of a seafarer occurring after the employment contract on account of a work-related illness, subject to four conditions: (1) the seafarer's work involved the described risks; (2) the disease was contracted as a result of exposure; (3) the disease was contracted within the period of exposure; and (4) there was no notorious negligence. Applied as the exception allowing death benefits for Bernardine, who died after his contract term.
• Section 32-A(11), POEA Standard Employment Contract — Lists cardio-vascular diseases as occupational when contracted under working conditions involving the described risks, with specific conditions for compensability. Applied to Bernardine's cardio-vascular disease, which the labor tribunals found was contracted during the term of employment.

Velasco, Jr. (Chairperson), Bersamin, Martires, and Gesmundo, JJ., concurred.