1

1. FIRST DIVISION

[G.R. No. 123146. June 17, 2003.]

PEOPLE OF THE PHILIPPINES, Appellee, v. ALONA BULI-E and JOSEFINA (JOSIE)

ALOLINO, Appellants.

DECISION

AZCUNA, J.:

Appellants Alona Buli-e and Josefina Alolino assail the decision of the Regional Trial Court of Baguio City, Branch 15,
finding them guilty beyond reasonable doubt of illegal recruitment committed in large scale and eight counts of
estafa.chanrob1es virtua1 1aw 1ibrary

On March 16, 1993, the following information was filed against Jose Alolino and appellants, Alona Buli-e and Josefina
Alolino:chanrob1es virtual 1aw library

The undersigned accuses ALONA BULI-E, JOSEFINA (JOSIE) ALOLINO and JOSE ALOLINO for VIOLATION OF
ARTICLE 38 (b), PRESIDENTIAL DECREE NO. 442, AS AMENDED BY P.D. 1920 FURTHER AMENDED BY P.D.
2018, committed in large scale, which is an act of economic sabotage, and by a syndicate, committed as
follows:chanrob1es virtual 1aw library

That during the period from March 1991 to July 1992, in the City of Baguio, Philippines, and within the jurisdiction of
this Honorable Court, the above-named accused representing themselves to have the capacity to contract, enlist and hire
and transport Filipino workers for employment abroad did then and there willfully and unlawfully, for a fee, recruit and
promise employment/job placement to the following persons:chanrob1es virtual 1aw library

1. Constancio Macli-ing 5. Nieva Lampoyas

2. Jessica Estay 6. Sabado Agapito

3. Sidolia Fias-eo 7. Joseph Oratil and

4. John Mangili 8. Joel Oratil

in Taiwan without first obtaining or securing license or authority from the proper government agency

CONTRARY TO LAW. 1 

On the same day, eight separate informations for estafa were also filed against Jose Alolino and appellants Alona Buli-e
(Buli-e for brevity) and Josefina Alolino (Josefina, for brevity). Except as to the dates, amounts involved 2 and the names
of complainants, the following information in Criminal Case No. 11123-R typified the seven other informations for the
crime of estafa:chanrob1es virtual 1aw library

That on or about the 12th day of July, 1992, in the City of Baguio, Philippines, and within the jurisdiction of this
Honorable court, the above-named accused, conspiring, confederating and mutually aiding one another, did then and there
willfully, unlawfully and feloniously defraud one Constancio Macli-ing by way of false pretenses, which are executed
prior to or simultaneously with the commission of the fraud, as follows, to wit: the accused knowing fully well that they
are not authorized job recruiters for persons intending to secure work abroad convinced said Constancio Macli-ing and
pretended that they could secure a job for him/her abroad, for and in consideration of the sum of P15,000.00 when in truth
and in fact they could not; the said Constancio Macli-ing, deceived and convinced by the false pretenses employed by the
accused, parted away the total sum of P15,000.00 in favor of the accused, to the damage and prejudice of the said
Constancio Macli-ing in the aforementioned amount of FIFTEEN THOUSAND PESOS (P15,000.00), Philippine
Currency. 3 

Jose Alolino was never apprehended and remains at large. Upon arraignment, appellants pleaded not guilty to each of the
nine informations filed against them. A joint trial ensued since the cases involved the same factual milieu.

Evidence for the prosecution showed that on various dates from June 1990 to July 1992, complainants went to the house
of appellant Buli-e at No. 63 Sanitary Camp, Baguio City upon learning that she was recruiting workers for overseas
employment. A cousin of complainant Lampoyas, whom Buli-e helped deploy abroad, introduced Lampoyas to Buli-e in
1990. 4 The brothers Oratil went to see Buli-e about possible overseas employment in April 1992. 5 Mangili inquired
 2

from Buli-e if she was recruiting workers for overseas employment also in April 1992. 6 Sabado and Macli-ing
approached Buli-e for possible overseas work in May 1992, 7 while Estay, accompanied by her sister, went to see Buli-e
on June 17, 1992. 8 Fias-eo approached Buli-e on July 13, 1992, accompanied by Lampoyas. 9 

Buli-e confirmed to complainants that she was, in fact, recruiting contract workers for Taiwan and that, although she did
not have a license of her own to recruit, her boss in Manila who was a licensed recruiter, was in the process of getting her
one which would soon be issued. 10 Buli-e identified her superiors in Manila to be the spouses Jose 11 and Josefina
Alolino. Josefina was connected with Rodolfo S. Ibuna Employment Agency (RSI for brevity), a private employment
agency licensed to recruit overseas contract workers. Buli-e informed complainants that requirements for application of
overseas work included submission of bio-data, passport, NBI clearance, and medical examination clearance to show that
the applicant is physically and mentally fit. There was also a placement fee of P40,000 of which P15,000 must be paid in
advance. Buli-e told complainants that if they were interested in applying, they may submit to her said requirements
which she, in turn, will submit to her boss who was in charge of processing the necessary documents.

In the case of complainant Lampoyas who originally applied with Buli-e for employment in Kuwait, she was informed by
Buli-e that the latter was working for a certain Jessie Agtarep. 12 Lampoyas gave Buli-e P4,000 on March 14, 1991 as
downpayment for the placement fee and P5,000 on August 24, 1991. Lampoyas’ application papers were processed by
Jamal Enterprises in Makati, Metro Manila but in 1992, Buli-e transferred Lampoyas’ application to appellant Josefina,
whom Buli-e referred to as her new boss. 13 Lampoyas was enticed to work in Taiwan instead of Kuwait and was assured
that her deployment papers would be processed more quickly. 14 

From March to August 1992, Buli-e accompanied complainants, on separate occasions, to Manila where they had their
medical check-up at Saints Peter and Paul Medical Clinic in Ermita. Lampoyas had her medical check-up in March 1992
15 while Mangili and Joseph Oratil had their medical check-up in May 1992. 16 On June 20, 1992, Estay had her medical
check-up, 17 while Agapito and Macli-ing had their medical examination on July 5, 1992. 18 Fias-eo had her medical
examination on July 20, 1992 while Joel Oratil had his medical examination in August 1992. Complainants paid for the
medical examination, the results of which were given to Buli-e.chanrob1es virtua1 1aw 1ibrary

Immediately after complainants had undergone medical examination, Buli-e brought them to No. 11 Concorde Street,
Airman’s Village, Las Piñas, Metro Manila purportedly to introduce them to her boss, the spouses Alolino. Complainants,
except for Macli-ing and Agapito, were able to meet only Jose Alolino on the same day that they had undergone medical
examination. Jose Alolino allegedly told complainants that his wife, Josefina, was in Taiwan following up applications but
he assured them that they too would be deployed abroad in a matter of months. 19 Mangili, Estay, and the brothers Oratil
were able to meet Josefina personally when they returned to the residence of the Alolinos in Manila to follow up their
applications. 20 Fias-eo and Lampoyas, on the other hand, never met Josefina personally although they were able to talk
to her over the telephone several times when they were following up the status of their applications. 21 It was during these
telephone conversations that Josefina instructed Fias-eo and Lampoyas to have their medical examinations and secure
their NBI clearance in Manila accompanied by Buli-e whom she identified as her agent. 22 

Complainants were assured by one or both of the spouses that they were licensed to recruit overseas contract workers and
that they can deploy workers within two to three months. 23 Complainants were informed by Buli-e and Josefina that
deployment for Taiwan is on a first-come, first-served basis and that those who can comply with the requirements,
particularly the advance payment of P15,000, shall be deployed first. 24 

On different dates from May 1992 to July 1992, complainants handed to Buli-e at Sanitary Camp, Baguio City their
advance payments of P15,000 for which they were issued receipts. 25 Mangili paid P11,000 on May 22, 1992 and P4,000
on June 18, 1992. 26 The Oratil brothers paid P15,000 each in installments from May 1992 to July 15, 1992. 27 Macli-ing
paid P15,000 on July 12, 1992. 28 Fias-eo gave Buli-e P15,000 on July 13, 1992. 29 In addition to her previous payments
amounting to P9,000, Lampoyas paid Buli-e P5,000 also on July 13, 1992. 30 Estay gave P15,000 on July 21, 1992 31
while Agapito paid Buli-e P15,000 on July 22, 1992. 32 Buli-e assured complainants that she delivered the payments to
Josefina. Aside from giving the downpayment of the placement fee, complainants complied with the rest of the
requirements which included submission of pictures, bio-data, passports, NBI clearances and medical examination reports.

After months of waiting and despite compliance with all the requirements, complainants were not deployed abroad as
promised by appellants. From August 1992 to February 1993, complainants trooped to Buli-e’s house but Buli-e merely
kept on telling them to wait. When complainants called up Josefina by long distance telephone, they were also told just to
wait.

Weary of the interminable waiting, complainants went to the POEA office in Baguio City on February 2, 1993, to check
whether appellants were indeed licensed to recruit overseas contract workers. They were dismayed to find out that
appellants had no license to recruit in Baguio City or any part of the Cordillera Administrative Region (CAR). On the
same day, complainants filed their complaints with the POEA-CAR and the Prosecutor’s Office of Baguio City.

After appellants were apprehended and during their detention at the Baguio City Jail, Josefina, through counsel, refunded
complainant Fias-eo P15,000 for his downpayment on the placement fee. 33 Complainant Mangili also demanded a
refund and he was paid by Josefina, again through her counsel, the sum of P25,000 for his advance payment of P15,000
and as reimbursement of the actual expenses he incurred for his application. 34 
 3

During trial, Buli-e testified that she worked for RSI and had been referring applicants to the agency before 1991. She met
Josefina a year after she resigned from RSI. 35 In 1990, Buli-e had an applicant for Singapore, a certain Prescilla Laoayan
from Baguio City. Buli-e referred Prescilla to RSI which, through Mrs. Fe Go, handled the processing of her application.
As part of the requirements of the agency, Prescilla had to undergo training at the house of Josefina, who was then the
Marketing Director of RSI. In 1991, Josefina sent Buli-e a note, through Prescilla, telling her to go to the house of
Josefina at No. 11 Concorde Street, Airman’s Village, Las Piñas, Metro Manila to discuss matters about recruitment of
workers. Buli-e went to the house of Josefina as requested and it was then that she was appointed as an agent of Josefina.
36 Buli-e was tasked to find job applicants for Taiwan, Korea or Singapore whom she can refer to RSI through Josefina.
Buli-e would then be paid for each referral. When Buli-e asked Josefina if the latter was authorized or had any license to
recruit for overseas placement, Josefina answered in the affirmative. 37 

Thereafter, Buli-e started recruiting job applicants for Taiwan, Singapore and Korea at her house in No. 63 Sanitary
Camp, Baguio City. Complainants sought her of their own accord and Buli-e informed them of the requirements for job
application which consisted of submission of bio-data, passport, NBI clearance and placement fee of P40,000 of which
P15,000 must be paid in advance upon instructions of Josefina. Josefina allegedly instructed Buli-e to accompany
complainants to Sts. Peter and Paul Medical Clinic in Ermita, Manila for medical check-up. 38 Buli-e was likewise
instructed by Josefina to accompany some of the complainants in securing their NBI clearance and to receive whatever
documents complainants will be submitting including the P15,000 advance payment, all of which should be submitted to
Josefina. Buli-e said that she submitted the documents and the payments either to Jose Alolino or to Josefina. 39 She
clarified that she did not have a hand in securing the passports of complainants 40 and received instructions from Josefina
only when she communicated with Josefina through the telephone or went to Manila. She averred that she and several
members of her family also tried to apply for overseas work with Josefina and paid the latter P100,000. 41 

Buli-e presented Mrs. Nonette Legaspi-Villanueva, Unit Coordinator of POEA-CAR, to testify that RSI was a licensed
employment agency and that Josefina was a licensed recruiter at the time that Buli-e had dealings with her co-appellant.
Mrs. Villanueva testified that she has been with the POEA since 1985. Part of her functions included administrative and
technical supervision of the staff regarding employment, facilitation, licensing, investigation and monitoring of the
provincial recruitment authority as well as issuance of authorization to personnel to conduct inspection of licensed
agencies in the City of Baguio. 42 Mrs. Villanueva said that, as per the certification of the Chief of the Licensing Branch
of the POEA, RSI was a private employment agency with a license which expired on July 14, 1992. Josefina Alolino was
included in the list of the personnel submitted by the agency in July 1990 as Marketing Consultant. 43 Mrs. Villanueva,
however, clarified that licenses or permits to recruit workers are territorial in nature so that an agency licensed in Manila
can only engage in recruitment activities within the place specified in the license although the applicants may be non-
residents of Metro Manila. She further testified that she cannot remember if Buli-e was given any authority to recruit in
Baguio City. 44 

Josefina, on the other hand, testified that on September 16, 1987, she was appointed as one of the four Marketing
Directors of RSI which was located in 408 Jovan Condominium, Shaw Boulevard, Mandaluyong, Metro Manila. RSI,
represented by Rodolfo S. Ibuna as proprietor, was a private employment agency with a license which expired on July 14,
1992. As Overseas Marketing Director of RSI, Josefina was tasked to represent the agency in negotiating with employers
in Taiwan, Malaysia, United States and Singapore 45 for said employers to avail of the services of RSI in recruiting,
hiring, processing and deploying Filipino contract workers. She was also authorized to solicit applicants for overseas
placement through advertisements, referrals, walk-ins, etc., and to undertake screening, evaluation and final selection of
applicants. As per agreement with RSI, Josefina was entitled to a certain share for each successful negotiation with a
foreign employer. 46 

Josefina denied that Buli-e was her agent and insisted that she never gave Buli-e authority to recruit for RSI. On the
contrary, Buli-e allegedly informed Josefina that she was an agent of Mrs. Fe Go, another marketing Director of RSI.
Sometime in 1991, Mrs. Go referred to Josefina a certain Prescilla Laoayan, who wanted to apply as a domestic helper in
Taiwan. Upon being told that she could not be deployed unless she would give a downpayment of P15,000 for the
placement fee, Prescilla informed Josefina that she already gave P15,000 to an agent whom she identified to be Buli-e.
Josefina then wrote a note for Buli-e informing her that there was a problem regarding the processing of Prescilla’s
application. Prescilla delivered the note to Buli-e who in turn went to see Josefina at her house in No. 11 Concorde Street,
Airman’s Village, Las Piñas, Metro Manila. Josefina said that she and Buli-e merely talked about Prescilla’s application
and that was the first time that Josefina met and talked with Buli-e although she had already seen her before in the office
of Mrs. Fe Go. 47 

Josefina testified that herein complainants were originally referred by Buli-e to Mrs. Fe Go who, in turn, referred them to
her. Josefina said that she accepted referrals from Buli-e even though the latter was not her agent nor connected with RSI
because their agency accepts referrals from everyone. In 1992, Buli-e, claiming that complainants authorized and
designated her to act as their spokesperson, went to the house of Josefina several times to follow up the progress of their
applications. 48 

Josefina denied having given Buli-e instructions to accompany complainants to Saints Peter and Paul Medical Clinic in
Ermita, Manila. She also denied having an understanding with Buli-e to receive payments from each of complainants and
to bring them to her house in Las Piñas, Metro Manila. 49 Josefina explained that the deployment of complainants was
delayed because the Taiwanese government changed its previous policy of allowing foreign employment agencies like
RSI to negotiate directly with prospective employers in Taiwan. Foreign employment agencies were instead allowed to
 4

negotiate only with local employment agencies in Taiwan, which, in turn, were responsible for negotiating with the
Taiwanese employers. The change in the policy caused delay in the deployment of complainants since the local
employment agencies in Taiwan demanded additional requirements such as additional fees. Josefina said she informed
complainants of the delay and the reason for it but complainants could not wait to be deployed and, instead, demanded the
refund of their payments. 50 

On March 2, 1993, Josefina allegedly gave Buli-e P75,000 with the instruction that she was to give complainant
Lampoyas P5,000 as refund, and P10,000 each to complainants Macli-ing, Estay, Fias-eo, Mangili, Agapito, and the
Oratil brothers. Upon having been approached by complainants for the refund of their money, Josefina informed them that
she already gave their refunds through Buli-e. Complainants, however, claimed that they did not receive their refunds
from Buli-e. When complainants could not wait for the refund of their payments and failed to see Josefina who was
always out of the country due to her work, they filed the present cases. 51 

Emelita Racelis testified that she was an employee of RSI from 1989 to 1992 and was one of the two persons assigned to
Josefina. 52 Ms. Racelis said that Buli-e frequently went to the RSI, bringing applicants with her three times a month.
Among the applicants whom Buli-e referred to RSI through one of the marketing directors, Mrs. Fe Go, was a certain
Prescilla Laoayan. Racelis said that Laoayan was endorsed by Mrs. Go to Josefina because it is the practice that when the
applicant of one of the marketing directors cannot be deployed, the applicant will be endorsed to another marketing
director with a job opening. Josefina, however, had trouble deploying Ms. Laoayan whose placement fee had not been
forwarded by Buli-e to RSI. 53 

On July 4, 1995, the trial court rendered a decision, the dispositive portion of which reads, as follows:chanrob1es virtual
1aw library

WHEREFORE, judgment is rendered as follows:chanrob1es virtual 1aw library

1. In Criminal Case No. 11122-R, the Court finds the accused Alona Buli-e and Josefina (Josie) Alolino guilty beyond
reasonable doubt, by direct participation and in conspiracy with each other, of the crime of illegal recruitment in a large
scale as defined and penalized under Article 38(b) in relation to Article 39 of PD 442 as amended by PD 2018 and
sentences each of them to life imprisonment and to pay a fine of P100,000.00 each, and to pay the costs.

2. In Criminal case No. 11123-R to 11130-R (8 counts), the court finds the accused Alona Buli-e and Josefina (Josie)
Alolino guilty beyond reasonable doubt by direct participation and in conspiracy with each other of the crime of Estafa as
charged in the Informations in the aforesaid 8 cases as defined and penalized under Article 315 first paragraph in relation
to No. 2 (a) of the same article and sentences each of them, applying the indeterminate sentence law, to an imprisonment
ranging from six (6) months and one (1) day of prision correccional as minimum to six (6) years, eight (8) months and
twenty (20) days of prision mayor as maximum in each of the aforesaid 8 cases; to indemnify jointly and severally the
offended parties Constancio Macli-ing, Jessica Estay, Sidolia Fias-eo, John Mangili, Sabado Agapito, Joseph Oratil and
Joel Oratil the sum of P15,000.00 each and Nieva Lampoyas the sum of P14,000.00 as actual damages without subsidiary
imprisonment in case of insolvency and to pay the costs.

The accused Alona Buli-e and Josefina (Josie) Alolino being detention prisoners are entitled to be credited 4/5 of their
preventive imprisonment in the service of their sentence in accordance with Article 29 of the Revised Penal Code.

SO ORDERED. 54 

In rendering the decision, the trial court ruled that by their acts, Buli-e and Josefina, conspired and confederated with one
another in the illegal recruitment of complainants for overseas employment. Buli-e performed the recruitment activities in
Baguio and Josefina, in Manila. The trial court specifically noted Buli-e’s acts of accompanying the complainants to
Manila for their medical examinations, securing complainants’ NBI clearances and passports as well as receiving
complainants’ downpayments for the purported placement fee as an indication that she directly participated in the
recruitment of all complainants. The trial court observed that Buli-e practically confessed her acts of recruitment in open
court and justified the same by claiming that she was just acting as an agent of Josefina or was authorized to act in behalf
of the latter.chanrob1es virtua1 1aw 1ibrary

As regards Josefina, the trial court held that she directly participated in the recruitment of complainants even if she did not
personally go to Baguio City since she received the applications and other requirements such as NBI clearances,
passports, bio-data as well as the advanced payments of complainants from Buli-e. Either she or her husband Jose, or both
of them, entertained complainants who were brought by Buli-e to their home at No. 11 Concorde Street, Airman’s
Village, Las Piñas, Metro Manila. The spouses repeatedly promised to work or make arrangements for complainants’
deployment abroad.

The trial court ruled that the authority given to Josefina as Overseas Marketing Director of RSI, a duly licensed
employment agency, was confined to negotiating with foreign employers in Taiwan and she was not supposed to recruit
overseas Filipino workers. The court stressed that assuming Josefina was authorized to recruit in Manila, she had no
authority to do so in Baguio City. Citing Article 29 of the Labor Code which states that no license or authority shall be
used directly or indirectly by any person other than the one in whose favor it was issued or at any place other than that
stated in the license or authority, nor may such license or authority be transferred or conveyed to any other person or
 5

entity, the trial court ruled that appellants could not use the RSI license in Manila to recruit overseas contract workers in
Baguio City.

The trial court further noted that the license of RSI employment office was already suspended on June 8, 1992 and expired
on July 14, 1992. Consequently, the authority given by RSI to Josefina was likewise suspended on June 8, 1992 and
expired on July 14, 1992.

Finally, the trial court said that Josefina’s act of returning the advanced payments of some of complainants would not
exculpate her and only proved that she had in fact received money from complainants who were made to believe that they
would be deployed abroad at the soonest possible time.

With regard to the eight charges of estafa filed against appellants, the trial court convicted them on the ground that all the
elements of estafa were present under each of the eight charges filed. The trial court held that appellants through false
pretenses and fraudulent acts represented to complainants that they had the power, authority and capacity to deploy
workers abroad for a fee of P40,000, of which P15,000 should be paid as advance payment. The false pretenses and
fraudulent acts were executed prior to or simultaneous with appellants’ taking the sum of P15,000 as advance payment
from each of private complainants 55 which were received by Buli-e in Baguio City and turned over by her to Josefina in
Manila. Complainants relied on the pretenses and misrepresentations of appellants and parted with substantial sums of
money as advance payments of their placement fees. As a result of the false pretenses and misrepresentations,
complainants were damaged and prejudiced to the extent of the sums they had given as downpayment since appellants
failed to send them abroad as promised.

In her appeal before us, appellant Buli-e contends that the trial court erred:chanrob1es virtual 1aw library

I. IN FAILING TO APPRECIATE THE DEFENSE OF THE CO-ACCUSED ALONA BULI-E THAT SHE MERELY
REFERRED THE PRIVATE OFFENDED PARTIES TO CO-ACCUSED SPOUSES JOSE AND JOSEFINA ALOLINO,
WHOM SHE HONESTLY BELIEVED TO BE BONA FIDE OVERSEAS JOB RECRUITERS;

II. IN HOLDING THAT THERE WAS CONSPIRACY BETWEEN HEREIN APPELLANT BULI-E AND SPOUSES
ALOLINO IN THE COMMISSION OF THE CRIMES OF LARGE SCALE ILLEGAL RECRUITMENT AND
ESTAFA; AND

III. HOLDING CO-ACCUSED ALONA BULI-E LIABLE FOR ESTAFA WHEN THERE WAS NO SHOWING THAT
SAID ACCUSED BENEFITED FROM THE ALLEGED MISREPRESENTATION.

Appellant Josefina, on the other hand, presents the following assignments of error:chanrob1es virtual 1aw library

I. THE COURT A QUO ERRED IN FINDING JOSEFINA ALOLINO GUILTY BEYOND REASONABLE DOUBT
BY DIRECT PARTICIPATION AND IN CONSPIRACY WITH CO-ACCUSED ALONA BULI-E OF THE CRIME OF
ILLEGAL RECRUITMENT IN LARGE SCALE AS DEFINED AND PENALIZED UNDER ARTICLE 38[b] IN
RELATION TO ARTICLE 39 OF P.D. 442 AS AMENDED BY P.D. 2018 AND IN SENTENCING EACH OF THEM
TO LIFE IMPRISONMENT AND TO PAY A FINE OF P100,000.

II. THE COURT A QUO ERRED IN FINDING THE ACCUSED JOSEFINA ALOLINO GUILTY BEYOND
REASONABLE DOUBT BY DIRECT PARTICIPATION AND IN CONSPIRACY WITH CO-ACCUSED ALONA
BULI-E OF THE CRIME OF ESTAFA AS CHARGED IN THE INFORMATION IN THE AFORESAID 8 CASES AS
DEFINED AND PENALIZED UNDER ARTICLE 315 FIRST PARAGRAPH IN RELATION TO NO. 2[A] OF THE
SAME ARTICLE.

We shall discuss the interrelated issues together.

Under Article 13(b) of the Labor Code, recruitment and placement refer to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and include 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 or placement.

The essential elements of the crime of illegal recruitment in large scale are (1) the accused engages in acts of recruitment
and placement of workers defined under Article 13(b) or in any prohibited activities under Article 34 of the Labor Code;
(2) 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) the
accused commits the unlawful acts against three or more persons, individually or as a group. 56 When illegal recruitment
is committed in large scale or when it 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, it is considered as an offense involving economic
sabotage.chanrob1es virtua1 1aw 1ibrary

The factual backdrop shows that appellants engaged in recruitment activities involving eight persons. The recruitment
activities were made by appellants without having the license or authority to do so as evidenced by the certification issued
by Legal Officer of the POEA Regional Extension Unit, Cordillera Administrative Region, which stated that Alona Buli-
 6

e, Hilario Antonio, 57 Josie Alolino and Jose Alolino were not licensed nor authorized to recruit workers for overseas
employment in the City of Baguio or in any part of the region. 58 

Appellant Buli-e herself does not deny that she had no license or authority to recruit workers for overseas employment.
She, however, insists that she had never directly participated in recruiting complainants since it was in fact complainants
who sought her help in applying for overseas employment. Buli-e explained that she merely "referred" complainants to the
spouses Alolino whom she honestly believed to be bona fide overseas job recruiters and, since she, herself, had intentions
of applying for overseas work, she tagged along with complainants to Manila to see the spouses Alolino. Inasmuch as she
and complainants were all from Baguio City, complainants allegedly designated her to conduct all negotiations and follow
up of their applications with the spouses.

Buli-e’s claim deserves scant consideration. It is true that Buli-e did not actively seek complainants to recruit them for
overseas employment. It was complainants who sought her out. Nevertheless, when complainants approached her, Buli-e
gave complainants the impression that she had the ability to send workers abroad by saying that although she did not have
a license of her own to recruit, her boss, who was a licensed recruiter, was already in the process of securing her a license.
59 She not only informed complainants of the requirements in applying for overseas employment and even accompanied
them to Manila to procure the necessary documents such as passport, medical and NBI clearances. 60 It was she who
brought them to the house of the spouses Alolino and it was also she who received from complainants advanced payments
for placement fee which she handed over to the spouses. Her claim that she and her relatives were also victims of illegal
recruitment by the spouses Alolino is not substantiated.

We also find no reason to disturb the findings of the trial court that Josefina Alolino conspired and confederated with
Buli-e in recruiting applicants for overseas employment from Baguio City although neither she nor Buli-e had license or
authority to do so. Her claim that she did not have a direct participation in the recruitment in Baguio City and that she
merely assisted the complainants by referring them to RSI to facilitate their papers does not merit credence. There is no
showing that complainants ever set foot in the RSI office. They were always brought by Buli-e to the house of the spouses
Alolino in Las Piñas after their medical check up. Complainants, who were with other applicants, were entertained and
generously fed breakfast or dinner by one or both of the spouses who assured them that they would be able to fly to
Taiwan in just a matter of months. 61 Although Josefina alleged that the documents and payments were handed by Buli-e
to the RSI office, Josefina could show no proof to substantiate her claim. It is significant to note that after the informations
for illegal recruitment and eight counts of estafa were already filed in court, some of the complainants were given a refund
of their advances for the placement fees by Josefina herself, through counsel, and not by RSI.

Josefina’s acts clearly show that she and Buli-e acted in concert towards the accomplishment of a common felonious
purpose which was to recruit workers for overseas employment even though they had no license to do so. Settled is the
rule that if it is proved that two or more persons, aimed, by their acts, at the accomplishment of the same unlawful object,
each doing a part so that their acts, although apparently independent, were in fact connected and cooperative, indicating a
closeness of personal association and a concurrence of sentiment, a conspiracy may be inferred even though no actual
meeting between or among them to coordinate ways and means is proved. 62 

Josefina, however, maintains that as Overseas Marketing Director for RSI, she was authorized to solicit applicants for
overseas placement through advertisements, referrals, walk-ins, etc. and to undertake screening, evaluation and final
selection of applicants.

Apart from her bare testimony, there is nothing on record to corroborate Josefina’s claim that as Marketing Director she
was authorized to solicit applicants for overseas placement through advertisements, referrals, walk-ins, etc. Josefina did
not bother to formally offer as evidence the document allegedly supporting her claim that part of her duties as Marketing
Director included recruitment of overseas contract workers. The document not having been formally offered in court
cannot be considered, pursuant to Section 34, Rule 132 of the Rules of Court.

Moreover, the Licensing Branch of the POEA confirmed that the license of RSI had already been suspended on June 8,
1992 and expired on July 14, 1992. 63 Consequently, even if Josefina was licensed to recruit workers for overseas
employment, her authority to do so ceased when the license of her agency, RSI, was suspended and when it eventually
expired. Josefina, however, despite the suspension and expiration of the RSI license, continued to engage in recruitment
activities for overseas employment. Except for Lampoyas who met Jose Alolino at the latter’s house in March 1992, and
Mangili and Joseph Oratil who met Jose Alolino in May 1992, complainants were entertained at the house of the Alolinos
after the license of RSI had already been suspended. Lampoyas, Macli-ing and Mangili completed the P15,000
downpayment of the placement fee after the license of RSI had already been suspended. The rest of complainants gave
payments for the placement fee after the license of RSI had already expired.

Furthermore, Josefina’s alleged authority to recruit applicants for overseas employment as Marketing Director of RSI was
only confined to Metro Manila. Article 29 of the Labor Code provides:chanrob1es virtual 1aw library

Art. 29. Non-transferability of license or authority — No license or authority shall be used directly or indirectly by any
person other than the one in whose favor it was issued or at any place other than that stated in the license or authority, nor
may such license or authority be transferred, conveyed or assigned to any other person or entity. Any transfer of business
address, appointment or designation of any agent or representative including the establishment of additional offices
anywhere shall be subject to the prior approval of the Secretary of Labor.
 7

We are not persuaded by Josefina’s claim that no recruitment activity was being done outside of the territorial permit of
RSI and it was only incidental that complainants who were referred to her by Buli-e were residents of Baguio City. As
earlier discussed, there is no indication that complainants ever set foot in the RSI office. They were always brought by
Buli-e to Las Piñas, Metro Manila where they were entertained by one or both of the spouses Alolino who repeatedly
assured them that they would be able to fly to Taiwan in a matter of months. Josefina, who claims to have authority to
recruit applicants for overseas employment in behalf of RSI, should have known that licensed agencies are prohibited
from conducting any provincial recruitment, job fairs or recruitment activities of any form outside of the address stated in
the license, acknowledged branch or extension office, without securing prior authority from the POEA. 64 Pursuant to the
POEA rules and regulations, Josefina could recruit applicants for overseas employment and process their applications
only at the RSI office in Mandaluyong, Metro Manila since there was no showing that RSI had an acknowledged branch
or extension office in Baguio City or that the prior approval of the POEA for provincial recruitment or recruitment
activities outside the RSI office was obtained.

Finally, the trial court did not err in finding appellants guilty of eight (8) counts of estafa. It is settled that a person
convicted of illegal recruitment under the Labor Code can also be convicted of violation of the Revised Penal Code
provisions on estafa provided that the elements of the crime are present. 65 The elements for estafa are: (a) that the
accused defrauded another by abuse of confidence or by means of deceit, and (b) that damage or prejudice capable of
pecuniary estimation is caused to the offended party or third person. 66 

Appellants deceived complainants into believing that they had the authority and capability to send them to Taiwan for
employment. By reason or on the strength of such assurance, complainants parted with their money in payment of the
placement fees. Since the representations of appellants proved to be false, paragraph 2(a), Article 315 of the Revised
Penal Code is applicable. Buli-e’s claim that she did not benefit from the money collected from complainants since she
gave the payments to Josefina is of no moment. It was clearly established that she acted in connivance with Josefina in
defrauding complainants. As regards Josefina, the fact that she returned the payment of some of the complainants will not
exculpate her from criminal liability. Criminal liability for estafa is not affected by compromise or novation, for it is a
public offense which must be prosecuted and punished by the government on its own motion even though complete
reparation has been made of the damage suffered by the offended party. 67 

The actual damages in the sum of P15,000 awarded to each of complainants Fias-eo and Mangili, however, should be
deleted inasmuch as said amounts have already been reimbursed by Josefina during her detention.

WHEREFORE, the decision of the Regional Trial Court of Baguio City, Branch 15, is AFFIRMED with the
MODIFICATION that the actual damages awarded to Fias-eo and Mangili in Criminal Cases Nos. 11125-R and 11126-R
are deleted. Costs de oficio.chanrob1es virtua1 1aw 1ibrary

SO ORDERED.

Davide, Jr., C.J., Vitug, Ynares-Santiago and Carpio, JJ., concur.

 8

2. G.R. Nos. L-58674-77 July 11, 1990

PEOPLE OF THE PHILIPPINES, petitioner, 

vs.
HON. DOMINGO PANIS, Presiding Judge of the Court of First Instance of Zambales & Olongapo City, Branch
III and SERAPIO ABUG, respondents.

CRUZ, J:

The basic issue in this case is the correct interpretation of Article 13(b) of P.D. 442, otherwise known as the Labor Code,
reading as follows:

(b) Recruitment and placement' refers to any act of canvassing, enlisting, contracting, transporting, 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.

Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales and Olongapo City alleging
that Serapio Abug, private respondent herein, "without first securing a license from the Ministry of Labor as a holder of
authority to operate a fee-charging employment agency, did then and there wilfully, unlawfully and criminally operate a
private fee charging employment agency by charging fees and expenses (from) and promising employment in Saudi
Arabia" to four separate individuals named therein, in violation of Article 16 in relation to Article 39 of the Labor Code. 1

Abug filed a motion to quash on the ground that the informations did not charge an offense because he was accused of
illegally recruiting only one person in each of the four informations. Under the proviso in Article 13(b), he claimed, there
would be illegal recruitment only "whenever two or more persons are in any manner promised or offered any employment
for a fee. " 2

Denied at first, the motion was reconsidered and finally granted in the Orders of the trial court dated June 24 and
September 17, 1981. The prosecution is now before us on certiorari. 3

The posture of the petitioner is that the private respondent is being prosecuted under Article 39 in relation to Article 16 of
the Labor Code; hence, Article 13(b) is not applicable. However, as the first two cited articles penalize acts of recruitment
and placement without proper authority, which is the charge embodied in the informations, application of the definition of
recruitment and placement in Article 13(b) is unavoidable.

The view of the private respondents is that to constitute recruitment and placement, all the acts mentioned in this article
should involve dealings with two or mre persons as an indispensable requirement. On the other hand, the petitioner
argues that the requirement of two or more persons is imposed only where the recruitment and placement consists of an
offer or promise of employment to such persons and always in consideration of a fee. The other acts mentioned in the
body of the article may involve even only one person and are not necessarily for profit.

Neither interpretation is acceptable. We fail to see why the proviso should speak only of an offer or promise of
employment if the purpose was to apply the requirement of two or more persons to all the acts mentioned in the basic rule.
For its part, the petitioner does not explain why dealings with two or more persons are needed where the recruitment and
placement consists of an offer or promise of employment but not when it is done through "canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring (of) workers.

As we see it, the proviso was intended neither to impose a condition on the basic rule nor to provide an exception thereto
but merely to create a presumption. The presumption is that the individual or entity is engaged in recruitment and
placement whenever he or it is dealing with two or more persons to whom, in consideration of a fee, an offer or promise
of employment is made in the course of the "canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring
(of) workers. "

The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. Any of
the acts mentioned in the basic rule in Article 13(b) win constitute recruitment and placement even if only one prospective
worker is involved. The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a
promise or offer of employment to two or more prospective workers, the individual or entity dealing with them shall be
deemed to be engaged in the act of recruitment and placement. The words "shall be deemed" create that presumption.

This is not unlike the presumption in article 217 of the Revised Penal Code, for example, regarding the failure of a public
officer to produce upon lawful demand funds or property entrusted to his custody. Such failure shall be prima
facie evidence that he has put them to personal use; in other words, he shall be deemed to have malversed such funds or
property. In the instant case, the word "shall be deemed" should by the same token be given the force of a disputable
presumption or of prima facie evidence of engaging in recruitment and placement. (Klepp vs. Odin Tp., McHenry County
40 ND N.W. 313, 314.)

It is unfortunate that we can only speculate on the meaning of the questioned provision for lack of records of debates and
deliberations that would otherwise have been available if the Labor Code had been enacted as a statute rather than a
 9

presidential decree. The trouble with presidential decrees is that they could be, and sometimes were, issued without
previous public discussion or consultation, the promulgator heeding only his own counsel or those of his close advisers in
their lofty pinnacle of power. The not infrequent results are rejection, intentional or not, of the interest of the greater
number and, as in the instant case, certain esoteric provisions that one cannot read against the background facts usually
reported in the legislative journals.

At any rate, the interpretation here adopted should give more force to the campaign against illegal recruitment and
placement, which has victimized many Filipino workers seeking a better life in a foreign land, and investing hard- earned
savings or even borrowed funds in pursuit of their dream, only to be awakened to the reality of a cynical deception at the
hands of theirown countrymen.

WHEREFORE, the Orders of June 24, 1981, and September 17, 1981, are set aside and the four informations against the
private respondent reinstated. No costs.

SO ORDERED.

Teehankee, CJ, Abad Santos, Feria, Yap, Fernan, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr. and Paras, JJ.,
concur.
 10

3. G.R. No. 146964 August 10, 2006

ROSA C. RODOLFO, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

CARPIO MORALES, J.:

Petitioner was charged before the Regional Trial Court (RTC) of Makati for illegal recruitment alleged to have been
committed as follows:

That in or about and during the period from August to September 1984, in Makati, Metro Manila, Philippines, and within
the jurisdiction of this Honorable Court, the said accused representing herself 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 VILLAMOR ALCANTARA, NARCISO CORPUZ, 1NECITAS R.
FERRE, GERARDO H. TAPAWAN and JOVITO L. CAMA, without first securing the required license or authority from
the Ministry of Labor and Employment. 2

After trial on the merits, Branch 61 of the Makati RTC rendered its Judgment on the case, 3 the decretal portion of which
reads:

WHEREFORE, PREMISES ABOVE CONSIDERED, the Court finds the accused ROSA C. RODOLFO as GUILTY of
the offense of ILLEGAL RECRUITMENT and hereby sentences her [to] a penalty of imprisonment of EIGHT
YEARS and to pay the costs. 4 (Underscoring supplied)

In so imposing the penalty, the trial court took note of the fact that while the information reflected the commission of
illegal recruitment in large scale, only the complaint of the two of the five complainants was proven.

On appeal, the Court of Appeals correctly synthesized the evidence presented by the parties as follows:

[The evidence for the prosecution] shows that sometime in August and September 1984, accused-appellant approached
private complainants Necitas Ferre and Narciso Corpus individually and invited them to apply for overseas
employment in Dubai. The accused-appellant being their neighbor, private complainants agreed and went to the former’s
office. This office which bore the business name "Bayside Manpower Export Specialist" was in a building situated at
Bautista St. Buendia, Makati, Metro Manila. In that office, private complainants gave certain amounts to appellant for
processing and other fees. Ferre gave P1,000.00 as processing fee (Exhibit A) and another P4,000.00 (Exhibit B).
Likewise, Corpus gave appellant P7,000.00 (Exhibit D). Appellant then told private complainants that they were
scheduled to leave for Dubai on September 8, 1984. However, private complainants and all the other applicants were not
able to depart on the said date as their employer allegedly did not arrive. Thus, their departure was rescheduled to
September 23, but the result was the same. Suspecting that they were being hoodwinked, private complainants demanded
of appellant to return their money. Except for the refund of P1,000.00 to Ferre, appellant was not able to return private
complainants’ money. Tired of excuses, private complainants filed the present case for illegal recruitment against the
accused-appellant.

To prove that accused-appellant had no authority to recruit workers for overseas employment, the prosecution presented
Jose Valeriano, a Senior Overseas Employment Officer of the Philippine Overseas Employment Agency (POEA), who
testified that accused-appellant was neither licensed nor authorized by the then Ministry of Labor and Employment to
recruit workers for overseas employment.

For her defense, appellant denied ever approaching private complainants to recruit them for employment in Dubai. On the
contrary, it was the private complainants who asked her help in securing jobs abroad. As a good neighbor and friend, she
brought the private complainants to the Bayside Manpower Export Specialist agency because she knew Florante
Hinahon, 5 the owner of the said agency. While accused-appellant admitted that she received money from the private
complainants, she was quick to point out that she received the same only in trust for delivery to the agency. She denied
being part of the agency either as an owner or employee thereof. To corroborate appellant’s testimony, Milagros Cuadra,
who was also an applicant and a companion of private complainants, testified that appellant did not recruit them. On the
contrary, they were the ones who asked help from appellant. To further bolster the defense, Eriberto C. Tabing, the
accountant and cashier of the agency, testified that appellant is not connected with the agency and that he saw appellant
received money from the applicants but she turned them over to the agency through either Florantino Hinahon or
Luzviminda Marcos. 6 (Emphasis and underscoring supplied)

In light thereof, the appellate court affirmed the judgment of the trial court but modified the penalty imposed due to the
trial court’s failure to apply the Indeterminate Sentence Law.

The appellate court thus disposed:

WHEREFORE, finding no merit in the appeal, this Court DISMISSES it and AFFIRMS the appealed Decision EXCEPT
the penalty x x x which is hereby changed to five (5) years as minimum to seven (7) years as maximum with perpetual
disqualification from engaging in the business of recruitment and placement of workers. 7(Underscoring supplied)
 11

Petitioner’s Motion for Reconsideration having been denied, 8 the present petition was filed, faulting the appellate court

x x x IN GIVING CREDENCE TO THE TESTIMONIES OF THE COMPLAINING WITNESSES, [AND]

II

x x x IN FINDING THE PETITIONER-ACCUSED GUILTY WHEN THE PROSECUTION FAILED TO PROVE HER
GUILT BEYOND REASONABLE DOUBT. 9 (Underscoring supplied)

Petitioner bewails the failure of the trial court and the Court of Appeals to credit the testimonies of her witnesses, her
companion Milagros Cuadra, and Eriberto C. Tabing who is an accountant-cashier of the agency.

Further, petitioner assails the trial court’s and the appellate court’s failure to consider that the provisional receipts she
issued indicated that the amounts she collected from the private complainants were turned over to the agency through
Minda Marcos and Florante Hinahon. At any rate, she draws attention to People v. Señoron 10 wherein this Court held that
the issuance or signing of receipts for placement fees does not make a case for illegal recruitment. 11

The petition fails.

Articles 38 and 39 of the Labor Code, the legal provisions applicable when the offense charged was
committed, 12provided:

ART. 38. Illegal Recruitment. – (a) Any recruitment activities, including the prohibited practices enumerated under
Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority shall be deemed illegal and
punishable under Article 39 of this Code. x x x

Article 39. Penalties. – x x x x

(c) Any person who is neither a licensee nor a holder of authority under this Title found violating any provision thereof or
its implementing rules and regulations shall, upon conviction thereof, suffer the penalty of imprisonment of not less than
four years nor more than eight years or a fine of not less than  P20,000 nor more than P100,000 or both such imprisonment
and fine, at the discretion of the court;

x x x x (Underscoring supplied)

The elements of the offense of illegal recruitment, which must concur, are: (1) that the offender has no valid license or
authority required by law to lawfully engage in recruitment and placement of workers; and (2) that the offender
undertakes any activity within the meaning of recruitment and placement under Article 13(b), or any prohibited practices
enumerated under Article 34 of the Labor Code. 13 If another element is present  that the accused commits the act against
three or more persons, individually or as a group, it becomes an illegal recruitment in a large scale. 14

Article 13 (b) of the Labor Code defines "recruitment and placement" as "[a]ny 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." (Underscoring supplied)

That the first element is present in the case at bar, there is no doubt. Jose Valeriano, Senior Overseas Employment Officer
of the Philippine Overseas Employment Administration, testified that the records of the POEA do not show that petitioner
is authorized to recruit workers for overseas employment. 15 A Certification to that effect was in fact issued by
Hermogenes C. Mateo, Chief of the Licensing Division of POEA. 16

Petitioner’s disclaimer of having engaged in recruitment activities from the very start does not persuade in light of the
evidence for the prosecution. In People v. Alvarez, this Court held:

Appellant denies that she engaged in acts of recruitment and placement without first complying with the guidelines issued
by the Department of Labor and Employment. She contends that she did not possess any license for recruitment,
because she never engaged in such activity.

We are not persuaded. In weighing contradictory declarations and statements, greater weight must be given to the positive
testimonies of the prosecution witnesses than to the denial of the defendant. Article 38 (a) clearly shows that illegal
recruitment is an offense that is essentially committed by a non-licensee or non-holder of authority. A non-licensee means
any person, corporation or entity to which the labor secretary has not issued a valid license or authority to engage in
recruitment and placement; or whose license or authority has been suspended, revoked or cancelled by the POEA or the
labor secretary. A license authorizes a person or an entity to operate a private employment agency, while authority is
given to those engaged in recruitment and placement activities.

xxxx

That appellant in this case had been neither licensed nor authorized to recruit workers for overseas employment was
certified by Veneranda C. Guerrero, officer-in-charge of the Licensing and Regulation Office; and Ma. Salome S.
 12

Mendoza, manager of the Licensing Branch – both of the Philippine Overseas Employment Administration. Yet, as
complainants convincingly proved, she recruited them for jobs in Taiwan. 17 (Italics in the original; underscoring supplied)

The second element is doubtless also present. The act of referral, which is included in recruitment, 18 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." 19 Petitioner’s admission that she brought private complainants to the
agency whose owner she knows and her acceptance of fees including those for processing betrays her guilt.

That petitioner issued provisional receipts indicating that the amounts she received from the private complainants were
turned over to Luzviminda Marcos and Florante Hinahon does not free her from liability. For 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. 20 As the appellate court stated:

x x x Sec. 13(b) of P.D. 442 [The Labor Code] does not require that the recruiter receives and keeps the placement money
for himself or herself. For as long as a person who has no license to engage in recruitment of workers for overseas
employment offers for a fee an employment to two or more persons, then he or she is guilty of illegal recruitment. 21

Parenthetically, why petitioner accepted the payment of fees from the private complainants when, in light of her claim that
she merely brought them to the agency, she could have advised them to directly pay the same to the agency, she proferred
no explanation.

On petitioner’s reliance on Señoron, 22 true, this Court held that issuance of receipts for placement fees does not make a
case for illegal recruitment. But it went on to state that it is "rather the undertaking of recruitment activities without the
necessary license or authority" that makes a case for illegal recruitment. 23

A word on the penalty. Indeed, the trial court failed to apply the Indeterminate Sentence Law which also applies to
offenses punished by special laws.

Thus, Section 1 of Act No. 4103 (An Act to Provide for an Indeterminate Sentence and Parole for All Persons Convicted
of Certain Crimes by the Courts of the Philippine Islands; To Create A Board of Indeterminate Sentence and to Provide
Funds Therefor; and for Other Purposes) provides:

SECTION 1. Hereafter, in imposing a prison sentence for an offense punished by the Revised Penal Code, or its
amendments, the court shall sentence the accused to an indeterminate sentence the maximum term of which shall be that
which, in view of the attending circumstances, could be properly imposed under the rules of the said Code, and the
minimum which shall be within the range of the penalty next lower to that prescribed by the Code for the offense; and if
the offense is punished by any other law, the court shall sentence the accused to an indeterminate sentence, the maximum
term of which shall not exceed the maximum fixed by said law and the minimum shall not be less than the minimum term
prescribed by the same. (As amended by Act No. 4225) (Underscoring supplied)

While the penalty of imprisonment imposed by the appellate court is within the prescribed penalty for the offense, its
addition of "perpetual disqualification from engaging in the business of recruitment and placement of workers" is not part
thereof. Such additional penalty must thus be stricken off.

WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals
are AFFIRMED with MODIFICATION in that the accessory penalty imposed by it consisting of "perpetual
disqualification from engaging in the business of recruitment and placement of workers" is DELETED.

Costs against petitioner.

4. G.R. No. 155903             September 14, 2007

 13

C.F. SHARP CREW MANAGEMENT, INC., petitioner, 

vs.
HON. UNDERSECRETARY JOSE M. ESPANOL, JR., HON. SECRETARY LEONARDO A. QUISUMBING
and RIZAL INTERNATIONAL SHIPPING SERVICES, respondents.

DECISION

NACHURA, J.:

The petitioner C.F. Sharp Crew Management, Inc. (C.F. Sharp) appeals by certiorari the April 30, 2002 Decision 1 of the
Court of Appeals (CA) in CA-G.R. SP No. 53747 and the November 5, 2002 Resolution 2 denying its reconsideration.

In 1991, Louis Cruise Lines (LCL), a foreign corporation duly organized and existing under the laws of Cyprus, entered
into a Crewing Agreement3 with Papadopolous Shipping, Ltd. (PAPASHIP). PAPASHIP in turn appointed private
respondent Rizal International Shipping Services (Rizal) as manning agency in the Philippines, recruiting Filipino seamen
for LCL’s vessel.

On October 3, 1996, LCL terminated the Crewing Agreement with PAPASHIP to take effect on December 31, 1996. It
then appointed C.F. Sharp as crewing agent in the Philippines. C.F. Sharp requested for accreditation as the new manning
agency of LCL with the Philippine Overseas Employment Administration (POEA), but Rizal objected on the ground that
its accreditation still existed and would only expire on December 31, 1996.

Pending approval of the accreditation, Theodoros Savva and Adrias Tjiakouris of LCL arrived in the Philippines and
conducted a series of interviews for seafarers at C.F. Sharp’s office. Rizal reported LCL’s recruitment activities to the
POEA on December 9, 1996, and requested an ocular inspection of C.F. Sharp’s premises.

On December 17, 1996, POEA representatives conducted an inspection and found Savva and Tjiakouris at C.F. Sharp
interviewing and recruiting hotel staffs, cooks, and chefs for M/V Cyprus, with scheduled deployment in January
1997.4 The Inspection Report5 signed by Corazon Aquino of the POEA and countersigned by Mr. Reynaldo Banawis of
C.F. Sharp was thereafter submitted to the POEA.

On January 2, 1997, Rizal filed a complaint6 for illegal recruitment, cancellation or revocation of license, and blacklisting
against LCL and C.F. Sharp with the POEA, docketed as POEA Case No. RV-97-01-004. Then, on January 31, 1997,
Rizal filed a Supplemental Complaint7 adding violation of Section 29 of the Labor Code of the Philippines, for
designating and/or appointing agents, representatives and employees, without prior approval from the POEA.

For its part, C.F. Sharp admitted that Savva and Tjiakouris conducted interviews at C.F. Sharp’s office, but denied that
they were for recruitment and selection purposes. According to C.F. Sharp, the interviews were held for LCL’s ex-crew
members who had various complaints against Rizal. It belittled the inspection report of the POEA inspection team
claiming that it simply stated that interviews and recruitment were undertaken, without reference to who were conducting
the interview and for what vessels.8 C.F. Sharp also averred that Rizal was guilty of forum shopping, and prayed for the
dismissal of the complaint on this ground and for its lack of merit. 9

The POEA Administrator was not persuaded and found C.F. Sharp liable for illegal recruitment. According to the
Administrator, the inspection report of Ms. Aquino established that Savva and Tjiakouris had conducted, and, at the time
of the inspection, had been conducting interviews, selection and hiring for LCL, without any authority from the POEA.
The Administrator also held that C.F. Sharp violated Section 29 of the Labor Code when it designated officers and agents
without prior approval of the POEA. 10

Thus, the Administrator disposed:

WHEREFORE, premises considered, the respondent CF Sharp Agency is as it is hereby ordered suspended for a period of
six (6) months or in lieu thereof, it is ordered to pay a fine of P50,000.00 for violation of Art. 29 of the Labor Code, as
amended in relation to Sec. 6(b), Rule II, Book II of the Rules and Regulations Governing Overseas Employment in
accordance with the schedule of penalties.

Further, the respondent CF Sharp is as it is hereby ordered suspended for another period of [eighteen] (18) months or to
pay the fine of P180,000.00 for committing 9 counts of violation of Article 29 of the Labor Code as amended in relation
to Sec. 2(k), Rule I, Book VI of the Rules and Regulations governing Overseas Employment.

The period of suspension shall be served cummulatively (sic).

The charges of violation of Sec. 6(b) of RA 8042 are hereby referred to the Anti-Illegal Recruitment Branch for
appropriate action.

SO ORDERED.11

C.F. Sharp elevated the Administrator’s ruling to the Department of Labor and Employment (DOLE). On December 19,
1997, the then Secretary of Labor, Leonardo A. Quisumbing, 12 issued an Order,13 ruling that:

WHEREFORE, except as above MODIFIED, the Order dated March 13, 1997 of the POEA Administrator is
AFFIRMED.
 14

Accordingly, the C.F. Sharp Crew Management, Inc. is hereby found guilty of having violated Sec. 6, R.A. 8042 in
relation to Article 13 (b) and (f), and Article 16 of the Labor Code as amended; Rule II (jj), Book I and Sec 1 and 6, Rule
I, Book II, POEA Rules and Regulations Governing Overseas Employment, for having conspired and confederated with
the [Louis] Cruise Lines, Theodorus Savva and Andrias (sic) Tjiakouris in the recruitment of seafarers for LCL’s ships,
before it was duly accredited by POEA as the manning agency of LCL, thus a non-holder of authority at the time. The
penalty imposed against it of suspension of its license for six (6) months or in lieu thereof, to pay a fine of Fifty Thousand
Pesos (P50,000.00), is AFFIRMED.

Further, C.F. Sharp Crew Management, Inc. is hereby found guilty of one (1) count of violation of Art. 29 of the Labor
Code in relation to Sec. 2 (k), Rule I, Book VI of the Rules and Regulations Governing Overseas Employment, and is
imposed the penalty of two (2) months suspension of its license or in lieu thereof, to pay a fine of P20,000.00.

The penalties of suspension for both violations shall be served cumulatively.

Out of the P230,000.00 cash supersedeas bond posted by the petitioner-appellant, let the amount of P160,000.00 be
released and refunded to it, retaining P70,000.00 to be applied to the payment of the fines as imposed above, should the
petitioner opt to pay the fine instead of undergoing suspension of its license. However, the suspension shall remain in
force until such fine is paid, or in the event that the petitioner-appellant further appeals this Order.

The charge and finding of violation of Sec. 6 (b) of R.A. 8042 are hereby referred to the Anti-Illegal Recruitment Branch
for appropriate action.

SO ORDERED.14

C.F. Sharp’s motion for reconsideration having been denied on February 5, 1999 by the then Undersecretary, Jose M.
Espanol, Jr.,15 it elevated the case to this Court on petition for certiorari, with the case docketed as G.R. No. 137573. But,
in the June 16, 1999 Resolution, this Court referred the petition to the CA.

In the meantime, on April 15, 1999, C.F. Sharp requested the lifting of the suspension decreed by the Secretary of Labor
in his December 19, 1997 Order,16 which was granted by Deputy Administrator for Licensing and Adjudication Valentin
C. Guanio. C.F. Sharp was allowed to deploy seafarers for its principals.

Consequently, on April 30, 2002, the CA denied C.F. Sharp’s petition for certiorari,17 holding that C.F. Sharp was already
estopped from assailing the Secretary of Labor’s ruling because it had manifested its option to have the cash bond posted
answer for the alternative fines imposed upon it. By paying the adjudged fines, C.F. Sharp effectively executed the
judgment, having acquiesced to, and ratified the execution of the assailed Orders of the Secretary of Labor. The CA also
agreed with the POEA Administrator and the Secretary of Labor that Savva and Tjiakouris of LCL, along with C.F. Sharp,
undertook recruitment activities on December 7, 9 to 12, 1996, sans any authority. Finally, it affirmed both labor officials’
finding that C.F. Sharp violated Article 29 of the Labor Code and Section 2(k), Rule I, Book VI of the POEA Rules when
it appointed Henry Desiderio as agent, without prior approval from the POEA. Thus, the appellate court declared that the
Secretary of Labor acted well within his discretion in holding C.F. Sharp liable for illegal recruitment.

C.F. Sharp filed a motion for reconsideration,18 but the CA denied it on November 25, 2002.19

Hence, this appeal, positing these issues:

A. WHETHER OR NOT THE COURT OF APPEALS PATENTLY ERRED IN RULING THAT PETITIONER IS IN
ESTOPPEL IN QUESTIONING THE ORDER DATED DECEMBER 19, 1997 AND THE RESOLUTION DATED
FEBRUARY 5, 1999.

B. WHETHER OR NOT THE COURT OF APPEALS PATENTLY ERRED WHEN IT RULED THAT PETITIONER IS
LIABLE FOR VIOLATION OF SECTION 6[,] R.A. NO. 8042 IN RELATION TO ARTICLE 13 (b) and (f) AND
ARTICLE 66 (sic) OF THE LABOR CODE AS AMENDED; RULE II (jj) BOOK I; AND SECTIONS 1 AND 6, RULE
I, BOOK III POEA RULES AND REGULATIONS GOVERNING OVERSEAS EMPLOYMENT.

WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT PETITIONER IS
LIABLE FOR VIOLATION OF ARTICLE 29 OF THE LABOR CODE, AS AMENDED, IN RELATION TO SECTION
II (k)[,] RULE I, BOOK VI OF THE RULES AND REGULATIONS GOVERNING OVERSEAS EMPLOYMENT. 20

C.F. Sharp faults the CA for ruling that petitioner is estopped from questioning the resolutions of the Secretary of Labor.
It denied that it voluntarily executed, or acquiesced to, the assailed resolutions of the Secretary.

The general rule is that when a judgment has been satisfied, it passes beyond review, satisfaction being the last act and the
end of the proceedings, and payment or satisfaction of the obligation thereby established produces permanent and
irrevocable discharge; hence, a judgment debtor who acquiesces to and voluntarily complies with the judgment is
estopped from taking an appeal therefrom.21

In holding C.F. Sharp in estoppel, the CA apparently relied on the April 15, 1999 Order of the POEA, and, thus, declared:

[P]etitioner C.F. Sharp had already manifested its option to have the cash bond posted as an answer for the alternative
fines imposed in the Orders dated December 19, 1997 as stated in the Order dated April 15, 1999 of the POEA,
 15

Adjudication Office x x x. Thus, for voluntary execution of the Order of the Secretary of DOLE dated December 19, 1997
by paying the adjudged fines, the petitioner was then estopped from assailing such Order before Us by way of petition for
certiorari. Where a party voluntarily executes, partially or totally a judgment or acquiesces or ratifies the execution of the
same, he is estopped from appealing therefrom. x x x. 22

The April 15, 1999 Order of Deputy Commissioner Valentin C. Guanio reads:

Respondent C.F. Sharp Crew Management, Inc., thru counsel having manifested its option to have the cash bond posted
answer for the alternative fines imposed in the above-entitled case; the alternative suspension imposed in the Order of the
Secretary dated December 19, 1997 is hereby Lifted.

SO ORDERED.23

This Order was issued in response to C.F. Sharp’s request to lift the suspension decree of the Secretary of Labor. The
request stated, viz.:

[W]e write in behalf of our client, C.F. Sharp Crew Management Inc., regarding the Advice To Operating Units dated
April 15, 1999, which arose from the Decision of the Office of the Secretary of Labor in the case entitled C.F. Sharp Crew
Management, Inc. versus Rizal Shipping and docketed as RV 97-01-004.

In this connection, we would like to express our option to have the cash bond posted by us in the case entitled C.F. Sharp
Crew Management, Inc. versus Rizal Shipping and docketed as RV 97-01-044 to answer for any fine that the Supreme
Court may finally decide that our client should pay in the Case entitled, C.F. Sharp Crew Management, Inc. vs. Secretary
Leonardo Quisumbing and Rizal International Shipping Services and docketed as G.R. No. 137573.

Under the circumstances, it is most respectfully requested that the aforesaid advice be RECALLED and that a clearance
be issued in favor of our client, C.F. Sharp Crew Management, Inc.

Hoping for your immediate and favorable action on the matter. 24 (Emphasis supplied)

C.F. Sharp’s letter was explicit that the cash bond posted would be answerable for any fine that it may ultimately be held
liable to pay by virtue of a final decision. In fact, on March 25, 1999, prior to the filing of the above-quoted letter-request,
C.F. Sharp had already filed a petition for certiorari assailing the Orders of the Secretary of Labor. Furthermore, there is
no showing that the assailed Order of then Secretary Quisumbing was indeed executed to warrant the appellate court’s
conclusion that C.F. Sharp was estopped from assailing the said Order. Clearly, there is no basis for the CA to rule that
C.F. Sharp voluntarily executed, or acquiesced to, the execution of the unfavorable ruling of the Secretary of Labor.

The first issue having been settled, we now resolve whether C.F. Sharp is liable for illegal recruitment.

C.F. Sharp denies committing illegal recruitment activities in December 1996. It posits that the interviews undertaken by
Savva and Tjiakouris do not amount to illegal recruitment under Section 6 of Republic Act No. 8042 or the Migrants
Workers Act. Further, it contends that the interviews conducted were not for selection and recruitment purposes, but were
in connection with the seamen’s past employment with Rizal, specifically, their complaints for non-remittance of SSS
premiums, withholding of wages, illegal exactions from medical examinations and delayed allotments. It claims that it
was only upon approval of its application for accreditation that the employment contracts were entered into and actual
deployment of the seamen was made. C.F. Sharp, thus, concludes that it cannot be held liable for illegal recruitment.

The reasoning is specious.

Undoubtedly, in December 1996, LCL had no approved POEA license to recruit. C.F. Sharp’s accreditation as LCL’s new
manning agency was still pending approval at that time. Yet Savva and Tjiakouris, along with C.F. Sharp, entertained
applicants for LCL’s vessels, and conducted preparatory interviews.

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

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 basis of this definition – and contrary to what C.F. Sharp wants to portray - the conduct of preparatory interviews
is a recruitment activity.

The fact that C.F. Sharp did not receive any payment during the interviews is of no moment. From the language of Article
13(b), the act of recruitment may be "for profit or not." Notably, it is the lack of the necessary license or authority, not the
fact of payment, that renders the recruitment activity of LCL unlawful.

C.F. Sharp’s claim that the interviews were not for selection and recruitment purposes does not impress. As the Secretary
of Labor aptly said:

This Office cannot conceive of a good reason why LCL/Savva/Tjiakouris should be interested at the time in unearthing
alleged violations committed by Rizal Shipping whose representative status as manning agency was to be terminated in
 16

just a few weeks thereafter, spending valuable time and money in the process. They stood to gain nothing from such
taxing exercise involving several hundreds of ex-crew members, which could be handled by government agencies like the
POEA, NLRC, SSS. The observation of the POEA Administrator that the complaints of the crewmen were filed only after
Rizal Shipping filed its complaints with the POEA merely to bolster the defense of CF Sharp/LCL/Savva and Tjiakouris,
is telling.

Upon the other hand, it was more to LCL’S gain to interview, select and recruit the disembarking crewmen previously
recruited by Rizal Shipping, using CF Sharp’s facilities, as this would result in less recruitment time and cost.

Finally, the claim of Savva and Tjiakouris that Savva "talked to the POEA representative during their visit" about these
interviews and the violations which were confirmed, is just an afterthought to support their defense; there is no entry in
the Inspection Report confirming such claim. If such claim were true, then the "able officer" of CF Sharp (LCL’s
Attorney-in fact) who signed his conformity on the 4th page of the report, and put his initial on the last page of the report
containing the handwritten findings of the inspectors on the selection and recruitment activities of Savva and Tjiakouris,
would have insisted that an entry be made thereon about what Savva told the inspectors, or he could simply himself have
written thereon that the two LCL officials merely conducted interviews on the violations committed by Rizal Shipping.
However, the report is bereft of anything to that effect. More significant is the fact that the inspectors, in their
Memorandum dated December 11, 1996 (the very same day they conducted the inspection), stated that they "approached
said persons" (referring to Banawis, Savva and Tjiakouris) "and told us that they were doing interview to select
applicants… to complement the crew of a passenger ship for [LOUIS] CRUISE LINES." 25

Indeed, it was Savva and Tjiakouris that conducted the interviews, and undertook selection and hiring. However, C.F.
Sharp cannot steer clear of liability for it conspired with LCL in committing illegal recruitment activities. As the Secretary
of Labor had taken pains to demonstrate:

x x x [T]here is substantial evidence on record that as alleged by Rizal Shipping, CF Sharp conspired with LCL and its
officers Savva and Tjiakouris to conduct recruitment activities in its offices, at a time when LCL was not yet its POEA-
accredited principal, in violation of Sec. 6, R.A. 8042 in relation to Article 13(b) and (f) and Article 16 of the Labor Code
as amended; Rule II(jj) Book I, and Sec. 1 and 6, Rule I, Book III, all of the POEA Rules and Regulations Governing
Overseas Employment.

Indeed, C.F. Sharp was aware of these violations when it alleged in its Petition for Review that:

"…in any and all events, the findings relied upon by the Public Respondent show, at best, that the parties responsible for
the alleged acts of illegal recruitment are LCL and its officers alone, or at worst, LCL and its officers, in conspiracy with
petitioner. Yet, it is petitioner alone, who is severely punished and penalized." (underscoring supplied)

xxxx

The intention, agreement and both common design of both LCL and CF Sharp to engage in recruitment of crewmen for
LCL’s ships had already been made manifest when LCL through Savva had instructed, in the October 14, 1996 letter to
disembarking crewmembers, for the latter to report to CF Sharp for processing of their papers. This was followed by the
execution by LCL on October 17, 1996 of a Special Power of Attorney in favor of CF Sharp as new manning agent and
attorney-in-fact of LCL, with authority, among others, "to sign, authenticate and deliver all documents necessary to
complete any transaction related to the recruitment and hiring of Filipino seamen including the necessary steps to facilitate
the departure of recruited seamen"; "to assume, on our behalf and for our account, any liability that may arise in
connection with the recruitment of seamen and/or implementation of the employment contract of said seamen." And on
November 8, 1996, CF Sharp applied for accreditation as manning agent of LCL for the latter’s five named vessels. The
discovery by the POEA inspectors of the selection and recruitment activities undertaken by Savva and Tjiakouris at CF
Sharp’s offices on December 11, 1996, followed. The interviews by Savva and Tjiakouris at CF Sharp’s offices on
December 7, 1996 with around 300 crewmen, as sworn to by 98 crewmen (their affidavits were submitted in evidence by
CF Sharp); the interviews for selection and recruitment from December 9 to 12, 1996 as found by the POEA inspectors;
and the immediate deployment of 154 crewmen for LCL right after [the] POEA approval of accreditation of LCL as
principal of CF Sharp, could not have been undertaken without the assistance and cooperation of CF Sharp, even before
such transfer of accreditation was granted by POEA.

The petitioner-appellant must be reminded that prior to approval of the transfer of accreditation, no recruitment or
deployment may be made by the principal by itself or through the would-be transferee manning agency, or by the latter, as
this would constitute illegal recruitment by a non-holder of authority under Sec. 6, R.A. 8042 in relation to Article 13(b)
and (f) and Article 16 of the Labor Code as amended; Rule II(jj), Book I, and Sec. 1 and 6, Rule 1, Book III, POEA Rules
and Regulations Governing Overseas Employment.

The petitioner-appellant alleges that "there is no need for a license to enable LCL’s officers to conduct their alleged
activities of interviewing, selecting and hiring crewmen. Indeed, LCL’s officers could have conducted these activities
without a license."

Such claim is without legal basis, as direct hiring by employers of Filipino workers for overseas employment is banned;
they can only do so through, among others, licensed private recruitment and shipping/mining agencies (Art. 18, Labor
Code as amended; Sec. 1, Rule 1, Book II, POEA Rules and Regulations Governing Overseas Employment). 26
 17

We need not say more.

C.F. Sharp also denies violating Article 29 of the Labor Code. It insists that Henry Desiderio was neither an employee nor
an agent of C.F. Sharp. Yet, except for its barefaced denial, no proof was adduced to substantiate it.

Desiderio’s name does not appear in the list of employees and officials submitted by C.F. Sharp to the POEA. However,
his name appeared as the contact person of the applicants for the position of 2 nd and 3rd assistant engineers and
machinist/fitter in C.F Sharp’s advertisement in the February 2, 1997 issue of The Bulletin Today.27

Article 29 of the Labor Code is explicit, viz.:

Art. 29. NON-TRANSFERABILITY OF LICENSE OR AUTHORITY

No license or authority shall be used directly or indirectly by any person other than the one in whose favor it was issued or
at any place other than that stated in the license or authority, nor may such license or authority be transferred, conveyed or
assigned to any other person or entity. Any transfer of business address, appointment or designation of any agent or
representative including the establishment of additional offices anywhere shall be subject to the prior approval of the
Department of Labor. (Emphasis ours)

Thus, Section 2(k), Rule 1, Book VI of the POEA Rules Governing Overseas Employment provides:

Section 2. Grounds for Suspension/Cancellation of License.

xxxx

k. Appointing or designating agents, representatives or employees without prior approval from the Administration.

The appointment or designation of Desiderio as an employee or agent of C.F. Sharp, without prior approval from the
POEA, warrants administrative sanction. The CA, therefore, correctly rejected C.F. Sharp’s posture.

Apparently, realizing the folly of its defenses, C.F. Sharp assails the admissibility of the Memorandum and Inspection
Report of the POEA. It contends that these are patently inadmissible against C.F. Sharp for it was not given an
opportunity to cross–examine the POEA inspectors regarding the report.

The argument does not deserve even a short shrift. First, C.F. Sharp did not raise it before the POEA and Secretary of
Labor. The issue was raised for the first time in its petition for certiorari with the CA, where the jurisdiction of the
appellate court is limited to issues of jurisdiction and grave abuse of discretion. On numerous occasions, we have made it
clear that to allow fresh issues at this stage of the proceedings is violative of fair play, justice and due process. 28

Second, jurisprudence is replete with rulings that administrative bodies are not bound by the technical niceties of law and
procedure and the rules obtaining in the courts of law. 29 Hence, whatever merit C.F. Sharp’s argument might have in the
context of ordinary civil actions, where the rules of evidence apply with greater rigidity, disappears when adduced in
connection with labor cases.

The claim of denial of due process on the part of C.F. Sharp must also be rejected. The essence of due process lies in the
reasonable opportunity afforded a party to be heard and to submit any evidence in support of its defense. What is vital is
not the opportunity to cross-examine an adverse witness, but an opportunity to be heard. 30

In this case, C.F. Sharp was given ample opportunity to be heard, to adduce evidence in support of its version of the
material occurrences, and to controvert Rizal’s allegation and the Inspection Report. It submitted its position paper with
supporting affidavits and documents, and additionally pleaded its causes on appeal before the Secretary of Labor. Under
the circumstances, a claim of denial of due process on C.F. Sharp’s part is completely unavailing.

C.F. Sharp next impugns the probative value given by the Administrator and the Secretary of Labor to the Inspection
Report. It alleges that the POEA Administrator, the Labor Secretary and the CA relied only on the Inspection Report and
gave very little or no probative value to the affidavits that it submitted in support of its claim.

C.F. Sharp would have us re-evaluate the factual veracity and probative value of the evidence submitted in the
proceedings a quo. C.F. Sharp may well be reminded that it is not our function to review, examine, and evaluate or weigh
the evidence adduced by the parties. Elementary is the principle that this Court is not a trier of facts. Judicial review of
labor cases does not go beyond the evaluation of the sufficiency of the evidence upon which the labor officials' findings
rest. Hence, where the factual findings of the labor tribunals or agencies conform to, and are affirmed by, the CA, the
same are accorded respect and finality, and are binding upon this Court. It is only when the findings of the labor agencies
and the appellate court are in conflict that this Court will review the records to determine which findings should be upheld
as being more in conformity with the evidentiary facts. Where the CA affirms the labor agencies on review and there is no
showing whatsoever that said findings are patently erroneous, this Court is bound by the said findings. 31

Although the rule admits of several exceptions, none of them are in point in this case. In any event, we have carefully
examined the factual findings of the CA and found the same to be borne out of the record and sufficiently anchored on the
evidence presented.
 18

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. SP. No.
53747 are AFFIRMED.

SO ORDERED.
 19

5. G.R. No. 173792               August 31, 2011

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, 

vs.
ROSARIO "ROSE" OCHOA, Accused-Appellant.

DECISION

LEONARDO-DE CASTRO, J.:

For Our consideration is an appeal from the Decision 1 dated March 2, 2006 of the Court of Appeals in CA-G.R. CR.-H.C.
No. 00888, which affirmed with modification the Decision2 dated April 17, 2000 of the Regional Trial Court (RTC),
Quezon City, Branch 104, in Criminal Case Nos. 98-77300 to 98-77303. The RTC found accused-appellant Rosario
"Rose" Ochoa (Ochoa) guilty of illegal recruitment in large scale, as defined and penalized under Article II, Section 6 in
relation to Section 7(b) of Republic Act No. 8042, otherwise known as the "Migrant Workers and Overseas Filipinos Act
of 1995," in Criminal Case No. 98-77300; and of the crime of estafa, as defined and penalized in Article 315, paragraph
2(a) of the Revised Penal Code, in Criminal Case Nos. 98-77301, 98-77302, and 98-77303.

The Information filed before the RTC and docketed as Criminal Case No. 98-77300, charged Ochoa with illegal
recruitment in large scale, allegedly committed as follows:

That on or about the period covering the months of February 1997 up to April 1998 or immediately before or subsequent
thereto in Quezon City, Philippines and within the jurisdiction of this Honorable Court, the above name accused, did then
and there willfully, unlawfully and feloniously recruit Robert Gubat, Junior Agustin, Cesar Aquino, Richard Luciano,
Fernando Rivera, Mariano R. Mislang, Helen B. Palogo, Joebert Decolongon, Corazon S. Austria, Cristopher A. Bermejo,
Letecia D. Londonio, Alma Borromeo, Francisco Pascual, Raymundo A. Bermejo and Rosemarie A. Bermejo for a
consideration ranging from ₱2,000.00 to ₱32,000.00 or a total amount of ₱124,000.00 as placement fee which the
complainants paid to herein accused without the accused having secured the necessary license from the Department of
Labor and Employment.3 (Emphases supplied.)

Three other Informations were filed before the RTC and docketed as Criminal Case Nos. 98-77301, 98-77302, and 98-
77303, this time charging Ochoa with three counts of estafa, committed separately upon three private complainants Robert
Gubat (Gubat), Cesar Aquino (Cesar), and Junior Agustin (Agustin), respectively. The Information in Criminal Case No.
98-77301 accuses Ochoa of the following acts constituting estafa:

That on or about March 3, 1998 in Quezon City, Philippines and within the jurisdiction of this Honorable Court, the above
name accused did then and there willfully, unlawfully and feloniously recruit and promise employment in Taiwan to one
ROBERT GUBAT for a consideration of ₱18,800.00 as placement fee, knowing that she has no power, capacity or lawful
authority whatsoever and with no intention to fulfill her said promise, but merely as pretext, scheme or excuse to get and
exact money from said complainant, as she did in fact collect and received the amount of ₱18,800.00 from said Robert
Gubat, to his damage and prejudice.4 (Emphases supplied.)

The two other Informations for estafa were similarly worded as the aforequoted Information, except as to the name of the
private complainants and the amount purportedly collected by Ochoa from them, particularly:

Docket No. Private Complainant Amount Collected

Criminal Case No. 98-773025 Cesar Aquino ₱19.000.00

Criminal Case No. 98-773036 Junior Agustin ₱32,000.00

As prayed for by the State Prosecutor, all four criminal cases against Ochoa before the RTC were consolidated. When
arraigned, Ochoa pleaded not guilty. Thereafter, joint trial of the four criminal cases ensued.

The prosecution presented as witnesses Cory Aquino (Cory) of the Philippine Overseas Employment Agency (POEA) and
private complainants Gubat, Agustin, Francisco Pascual (Pascual), Rosemarie Bermejo (Rosemarie), Cesar, Christopher
Bermejo (Christopher), Joebert Decolongon (Decolongon), and Fernando Rivera (Rivera).

According to private complainants, they were recruited by Ochoa from January to March 1998 for various jobs in either
Taiwan or Saudi Arabia, under the following circumstances:

1. In the second week of February 1998, Ochoa was introduced to Robert Gubat, a licensed electrical engineer and a
resident of Pulang Lupa, Las Piñas, through a certain Nila, Gubat’s neighbor, who had a pending application for work
abroad with Ochoa. Ochoa talked to Gubat on the telephone, and during their conversation, Ochoa told Gubat that one of
her applicants was already leaving for Taiwan. Per Ochoa’s instruction, Gubat met with Francisco Pascual, who
accompanied him to Ochoa’s house in San Bartolome, Novaliches, Quezon City, and personally introduced Gubat to
Ochoa. Gubat submitted his résumé to Ochoa, which Ochoa would bring to Axil International Agency where Ochoa was
working as a recruiter. Right after browsing through Gubat’s résumé, Ochoa informed Gubat that as an engineer, Gubat
was qualified to work as a factory supervisor and could leave for Taiwan in two weeks or in March 1998. Ochoa also told
 20

Gubat that the total application expenses would amount to ₱100,000.00, and the downpayment was ₱50,000.00. Gubat
was able to actually pay Ochoa ₱18,800.00 as reservation fee at the agency; processing fee for Gubat’s papers at the
Department of Foreign Affairs (DFA), Malacañang, and Embassy of Taiwan; and medical examination fee. Ochoa,
however, only issued to Gubat three receipts, dated March 3, March 31, and April 6, all in the year 1998, in the amount of
₱5,000.00 each or a total of ₱15,000.00. Gubat started to worry when he was not able to leave for abroad as Ochoa
promised and when she failed to show up at their arranged meetings. When Gubat was finally able to talk to Ochoa,
Ochoa again promised him that he would be leaving for abroad soon. Despite Ochoa’s renewed promise, Gubat was still
not able to leave the country. Gubat then demanded that Ochoa return his documents and money. When Ochoa failed to
comply with his demand, Gubat filed a report against Ochoa at Barangay (Brgy.) San Bartolome, Novaliches, Quezon
City. On May 21, 1998, he met the other private complainants 7 who had similar complaints against Ochoa. When nothing
came out of the confrontation with Ochoa at Brgy. San Bartolome, Gubat and the other private complainants filed a joint
complaint against Ochoa before the National Bureau of Investigation (NBI). 8

2. The paths of Junior Agustin and Ochoa crossed on February 2, 1998. Agustin, a farmer, was staying at the home of
Pascual, his cousin, at No. 4 Gulod, Novaliches, Quezon City. When Ochoa arrived at Pascual’s home, Pascual introduced
Ochoa to Agustin as a recruiter for overseas workers in Taiwan. Interested in working abroad, Agustin submitted his bio-
data to Ochoa at the latter’s residence at Phase 1, Lot 3, San Bartolome, Novaliches, Quezon City. Ochoa promised
Agustin that he would be fielded as a factory worker in Taiwan for three years, earning a monthly salary of ₱18,000.00.
Ochoa then informed Agustin that the total placement fee for Taiwan is ₱80,000.00. Agustin initially paid Ochoa the sum
of ₱28,000.00 as processing fee. Ochoa then promised that Agustin could leave for Taiwan in two months. However, the
two months passed, but there was still no overseas employment for Agustin. Agustin was compelled to file a complaint
against Ochoa at Brgy. San Bartolome, Novaliches, Quezon City. Agustin met the other private complainants during the
barangay hearing on May 21, 1998. Ochoa was also present at said hearing. Given the unsuccessful barangay hearing,
Agustin and the other private complainants lodged a complaint against Ochoa before the NBI. 9

3. Francisco Pascual, presently jobless and a resident of Gulod, Novaliches, Quezon City, learned from a neighbor of one
Mrs. Bermejo that her son was being helped by Ochoa, a recruiter, to find a job abroad. Pascual went to Mrs. Bermejo’s
house in January 1998, and met Ochoa for the first time. Ochoa invited Pascual to apply for a job abroad, saying that the
latter could leave within two weeks. During Pascual’s visit at Ochoa’s house at Blk. 1, Lot 1, San Bartolome, Novaliches,
Quezon City, Ochoa promised Pascual employment as a driver salesman in Saudi Arabia, with a monthly salary of
₱18,000.00. Ochoa told Pascual that the placement fee would be ₱7,000.00 and that Pascual should already have his
medical examination so that the position in Saudi Arabia could be reserved for him. Since his visa had not yet arrived,
Pascual did not pay any placement fee to Ochoa. Pascual did undergo medical examination at St. Peter Medical Clinic in
Ermita, Manila, for which he paid ₱2,600.00 to Ochoa. Pascual though did not receive the results of his medical
examination because according to Ochoa, the same was withheld by the clinic. Despite Ochoa’s promises, Pascual was
not able to leave for Saudi Arabia. At that time, Pascual was still employed as a Field Coordinator with Selecta, but
because of his frequent absences, spent following-up on his application for work abroad, he was fired. Pascual filed a
complaint against Ochoa at Brgy. San Bartolome, Novaliches, Quezon City. As nothing happened during the
confrontation with Ochoa at the barangay hearing on May 21, 1998, Pascual and the other private complainants filed a
complaint before the NBI.10

4. Rosemarie Bermejo came to know of Ochoa through Rivera, a friend of Rosemarie’s mother. Rosemarie first met
Ochoa at the latter’s home in Quezon City sometime in January 1998. Rosemarie was promised by Ochoa employment for
three years in Saudi Arabia as clerk/typist, earning US$400.00. Rosemarie was also instructed by Ochoa to have a medical
examination and secure a passport and NBI clearance. Rosemarie and her brothers, who also applied for jobs abroad, were
accompanied by Ochoa to the St. Peter Medical Clinic in Malate, Manila for their medical examination on February 27,
1998. Rosemarie and her brother each handed over to Ochoa ₱2,600.00 for their medical examinations, and it was Ochoa
who gave the payment to the clinic. Rosemarie and her brothers then spent ₱55.00 each to secure NBI clearances for
travel abroad. In addition, Rosemarie gave Ochoa ₱5,500.00 on April 17, 1998; and although not secured by a receipt,
said payment was witnessed by Rosemarie’s mother and Imelda Panuga, the landlord of Rosemarie’s mother, who lent
Rosemarie the ₱5,500.00. During their initial meeting in January 1998, Ochoa said that Rosemarie could already leave for
abroad in two weeks. Since Rosemarie was not able to complete the requirements, her departure for Saudi Arabia was
moved to April 19, 1998. On April 19, 1998, Ochoa requested Rosemarie to go to the office of Al Arab Agency located at
Jalandoni Building, Ermita, Manila, to which Ochoa was purportedly connected. Rosemarie waited at the Al Arab Agency
until noon, but no one came to pick her up. Later, at the same day, Ochoa invited Rosemarie to her house for the birthday
celebration of her father. There, Ochoa explained that Rosemarie was unable to leave for Saudi Arabia because the Al
Arab Agency has yet to secure Rosemarie’s Overseas Employment Certificate (OEC). Ochoa advised Rosemarie to stay at
the rented apartment of Rosemarie’s mother because it was close to Ochoa’s house and would be more convenient as
Rosemarie could leave for abroad any day soon. When none of Ochoa’s promises came to fruition, Rosemarie, together
with the other private complainants, first sought redress from Brgy. San Bartolome, Novaliches, Quezon City, and then
from the NBI.11

5. It was Pascual who introduced Cesar Aquino, a resident of Cubao, to Ochoa at the latter’s residence in San Bartolome,
Novaliches, Quezon City, sometime in February 1998. When Cesar directly asked Ochoa if she was a recruiter, the latter
answered in the affirmative. Cesar applied to work as a factory worker in Taiwan. Ochoa told Cesar that as a factory
worker, he could earn at least ₱15,000.00 a month. On March 13, 1998, Cesar handed over ₱17,000.00 to Ochoa to cover
his processing fee and medical examination. On the same day, Cesar had his medical examination at St. Peter Medical
Clinic. Ochoa then promised that Cesar could leave two weeks thereafter. When two weeks had passed and he was not
able to leave for Taiwan, Cesar demanded that Ochoa return his money. Ochoa failed to comply with Cesar’s demand, and
 21

Cesar instituted a complaint against Ochoa at Brgy. San Bartolome, Novaliches, Quezon City. At the hearing attended by
Ochoa, Cesar, and the other private complainants before the Barangay Lupon, Ochoa signed a Kasunduan, agreeing to
return the money to private complainants. Again, Ochoa failed to fulfill her promise to return the money paid by Cesar,
thus, the latter, together with the other complainants, filed a complaint with the NBI. 12

6. Christopher Bermejo met Ochoa at the house of his mother in Novaliches, Quezon City in January 1998. Also present
at the house were Fernando Bermejo, Christopher’s brother, and Richard Luciano. Ochoa promised that after a week,
Christopher would already be deployed to Saudi Arabia as an accountant, earning 250-350 Saudi Riyals. As a result,
Christopher immediately resigned from his job at the Development Bank of the Philippines (DBP). Christopher’s mother
paid Ochoa ₱5,000.00 as processing fee for Christopher’s application. A week passed and Ochoa failed to send
Christopher to Saudi Arabia for work. When Rosemarie and Raymundo Bermejo (Raymundo), Christopher’s sister and
brother, respectively, also failed to leave for work abroad as promised by Ochoa, Christopher, Rosemarie, and their
mother went to see Ochoa at an office at the Jalandoni Building, Ermita, Manila. Ochoa explained that Christopher and
his siblings could not leave yet because there are other documents that still need to be accomplished. Ochoa said that she
would just notify Christopher and his siblings of their scheduled departure. When they still did not receive any notification
from Ochoa, Rosemarie, Raymundo, and their mother returned to the office at the Jalandoni Building and found out that
their placement fees were not given to said office. Christopher joined the other private complainants in filing a complaint
against Ochoa before the NBI.13

7. Joebert Decolongon is a resident of Sta. Maxima, Gulod, Novaliches, Quezon City, and works as a bus
conductor.lawphi1 Decolongon was introduced to Ochoa by Rivera, Decolongon’s friend, at Rivera’s house on Villareal
Street, Gulod, Novaliches. Ochoa informed Decolongon that there was a vacancy for the position of janitor in Saudi
Arabia, with a monthly salary of 800 Saudi Riyals. Decolongon submitted his application, birth certificate, and passport to
Ochoa. Ochoa also went to Decolongon’s house and collected from Decolongon’s wife the initial amount of ₱2,000.00 as
placement fee. The rest of Decolongon’s placement fees would be paid by one-month salary deduction. Trusting Ochoa,
neither Decolongon nor his wife demanded a receipt. When Ochoa failed to deploy Decolongon for employment abroad,
Decolongon too filed a complaint against Ochoa before Brgy. San Bartolome, Novaliches, Quezon City. Without a
successful resolution at the barangay level, Decolongon joined the private complainants in filing a complaint against
Ochoa before the NBI.14

8. Sometime in January 1998, Ochoa was accompanied by a certain Amy to Fernando Rivera’s residence at 27 Villareal
Street, Novaliches, Quezon City. Ochoa first talked to Rivera’s mother who had previously worked abroad. Ochoa then
also offered work to Rivera, either as tea boy or janitor in the army in Riyadh, Saudi Arabia. Rivera chose to work as a tea
boy, with a salary of 800 to 1,000 Saudi Riyals. Ochoa said that Rivera would be deployed in the first week of February
1998. Ochoa required Rivera to submit NBI clearance, passport, and pictures, but Rivera submitted only his NBI
clearance. In January 1998, Rivera paid Ochoa ₱2,000.00 as she would be the one to secure Rivera’s passport. In March
1998, Rivera handed over his ring and necklace, worth of ₱10,000.00, to Ochoa to cover his processing and medical
examination fees. Rivera did not require a receipt from Ochoa because he trusted Ochoa, who was his mother’s friend.
When Rivera failed to leave in February 1998, Ochoa explained that Rivera’s departure was postponed until March 1998
due to Ramadan. After the period of Ramadan, Rivera was still not able to leave for Saudi Arabia. Rivera then filed a
complaint against Ochoa before Brgy. San Bartolome, Novaliches, Quezon City. Ochoa promised to return to Rivera his
jewelries and ₱2,000.00, but Ochoa did not appear at the barangay hearing set on April 30, 1998. Thus, Rivera and the
other private complainants proceeded to file a complaint against Ochoa before the NBI. 15

Cory C. Aquino of the POEA authenticated the Certification dated June 3, 1998, issued by Hermogenes C. Mateo
(Mateo), Director, Licensing Branch of the POEA, that Ochoa, in her personal capacity, is neither licensed nor authorized
by the POEA to recruit workers for overseas employment. Cory identified Director Mateo’s signature on the Certification,
being familiar with the same. The Certification was issued after a check of the POEA records pursuant to a request for
certification from the NBI. Cory, however, admitted that she did not participate in the preparation of the Certification, as
the NBI’s request for certification was through a counter transaction, and another person was in charge of verification of
counter transactions.16

Ochoa testified on her own behalf.

Ochoa stated under oath that she was employed by AXIL International Services and Consultant (AXIL) as recruiter on
December 20, 1997. AXIL had a temporary license to recruit Filipino workers for overseas employment. Ochoa worked at
AXIL from 8:00 a.m. to 5:00 p.m. and was paid on a commission basis. She admitted recruiting private complainants and
receiving from them the following amounts as placement and medical fees:

Private Complainant Amounts Collected

Robert Gubat ₱18,000.00 for placement and medical fees17

Junior Agustin ₱22,000.00 for placement and medical fees18

Francisco Pascual ₱ 2,000.00 for medical fee19

 22

Rosemarie Bermejo ₱ 2,600.00 for medical fee20

Cesar Aquino ₱ 19,000.00 for placement and medical fees21

Christopher Bermejo ₱ 2,600.00 for medical fee22

Joebert Decolongon ₱ 6,000.00 for medical fee23

Fernando Rivera ₱ 2,000.00 for medical fee24

Ochoa claimed though that she remitted private complainants’ money to a person named Mercy, the manager of AXIL,
but AXIL failed to issue receipts because the private complainants did not pay in full. 25

On April 17, 2000, the RTC rendered a Decision finding Ochoa guilty beyond reasonable doubt of the crimes of illegal
recruitment in large scale (Criminal Case No. 98-77300) and three counts of estafa (Criminal Case Nos. 98-77301, 98-
77302, 98-77303). The dispositive portion of said Decision reads:

WHEREFORE, judgment is hereby rendered as follows:

1. In Criminal Case No. 98-77300, the Court finds the accused, ROSARIO "ROSE" OCHOA, guilty beyond reasonable
doubt as principal of ILLEGAL RECRUITMENT IN LARGE SCALE, defined and penalized in Section 6 in relation to
Section 7 (b) of Republic Act No. 8042, and sentences her to life imprisonment and a fine of One Million Pesos.

2. In Criminal Case No. 98-77301, the Court finds the accused, ROSARIO "ROSE" OCHOA, guilty beyond reasonable
doubt as principal of the crime of ESTAFA, defined and penalized in Article 315, paragraph 2 (a) of the Revised Penal
Code, and sentences her to an indeterminate penalty of two (2) years, eleven (11) months and eleven (11) days of prision
correccional as minimum to six (6) years, eight (8) months and twenty (20) days of prision mayor, as maximum, and to
indemnify complainant Robert Gubat in the amount of Eighteen Thousand Eight Hundred (₱18,800.00) Pesos.

3. In Criminal Case No. 98-77302, the Court finds the accused, ROSARIO "ROSE" OCHOA, guilty beyond reasonable
doubt as principal of the crime of ESTAFA, defined and penalized in Article 315, paragraph 2 (a) of the Revised Penal
Code, and sentences her to an indeterminate penalty of two (2) years, eleven (11) months and eleven (11) days of prision
correccional as minimum to six (6) years, eight (8) months and twenty (20) days of prision mayor as maximum, and to
indemnify the complainant Cesar Aquino in the amount of Seventeen Thousand (₱17,000.00) Pesos.

4. In Criminal Case No. 98-77303, the Court finds the accused, ROSARIO "ROSE" OCHOA, guilty beyond reasonable
doubt as principal of the crime of ESTAFA, defined and penalized in Article 315, paragraph 2 (a) of the Revised Penal
Code, and sentences her to an indeterminate penalty of two (2) years, eleven (11) months and eleven (11) days of prision
correccional as minimum to six (6) years, eight (8) months and twenty-one (21) days of prision mayor as maximum, and
to indemnify complainant Junior Agustin in the amount of Twenty-Eight Thousand (₱28,000.00) Pesos. 26

Ochoa filed a Notice of Appeal27 in which she stated her intention to appeal the RTC judgment of conviction and prayed
that the records of her case be forwarded to the Court of Appeals. Ochoa’s appeal was docketed as CA-G.R. CR. No.
24147 before the Court of Appeals.

In a Resolution28 dated August 8, 2000, the Court of Appeals granted Ochoa’s First Motion for Extension of Time to file
her brief.

Ochoa filed her Appellant’s Brief on September 4, 200029 while the People, through the Office of the Solicitor General
(OSG), filed its Appellee’s Brief on March 1, 2001. 30

The Special Fourteenth Division of the Court of Appeals promulgated its Decision 31 dated June 17, 2002 affirming the
appealed RTC decision dated April 17, 2000. Ochoa filed a Motion for Reconsideration, 32 which the People opposed for
being bereft of merit.33

In its Resolution34 dated August 6, 2003, the Court of Appeals declared that it had no jurisdiction over Ochoa’s appeal,
ratiocinating thus:

We affirmed this judgment on 17 June 2002. While neither the accused-appellant nor the Office of the Solicitor General
representing the people ever raised the issue of jurisdiction, our second look at the suit proved worthwhile because we
came to realize that we mistakenly assumed jurisdiction over this case where it does not obtain.

It was error to consider accused-appellant’s appeal from a trial court judgment imposing life imprisonment in Criminal
Case No. Q-98-77300 for illegal recruitment in a large scale. Consequently, the judgment we rendered dated 17 June 2002
is null and void. No less than Article VIII, §5(2)(d) of the Constitution proscribes us from taking jurisdiction—

SECTION 5. The Supreme Court shall have the following powers:

xxxx
 23

(2) Review, revise, reverse, modify or affirm on appeal or certiorari as the law or Rules of Court may provide, final
judgments and orders of the lower court in:

xxxx

(d) All criminal cases in which the penalty imposed is reclusion perpetua or higher…

§17(1) of the Judiciary Act of 1948 reiterates –

SECTION 17. Jurisdiction of the Supreme Court.

The Supreme Court shall have exclusive jurisdiction to review, revise, reverse, modify or affirm on appeal, as the law or
rules of court may provide, final judgments and decrees of inferior courts as herein provided, in—

(1) All criminal cases involving offenses for which the penalty imposed is life imprisonment; and those involving offenses
which, although not so punished, arose out of the same occurrences or which may have been committed by the accused on
the same occasion as that giving rise to the more serious offense, regardless of whether the accused are charged as
principals, accomplices, or accessories, or whether they have been tried jointly or separately; x x x.

§3 of Rule 122 of the Revised Rules of Criminal Procedure likewise declares –

SEC. 3. How appeal taken. –

(c) The appeal to the Supreme Court in cases where the penalty imposed by the Regional Trial Court is reclusion perpetua
or life imprisonment, or where a lesser penalty is imposed but for offenses committed on the same occasion or which
arose out of the same occurrence that gave rise to the more serious offense for which the penalty of death, reclusion
perpetua, or life imprisonment is impose[d], shall be by filing a notice of appeal in accordance with paragraph (a) of this
section.

Even if only in Criminal Case No. Q-98-77300 was the penalty of life imprisonment meted out, we still cannot consider
the appeal of the verdict in Criminal Case Nos. 98-77301 to 98-77303 for as the Supreme Court clearly clarified—

An appeal of a single decision cannot be split between two courts. The splitting of appeals is not conclusive to the orderly
administration of justice and invites possible conflict of dispositions between the reviewing courts. Specifically, the Court
of Appeals has no jurisdiction to review an appeal of a judgment imposing an indeterminate sentence, if the same ruling
also imposes reclusion perpetua, life imprisonment and death for crimes arising out of the same facts. In other words, the
Supreme Court has exclusive jurisdiction over appeals of criminal cases in which the penalty imposed below is reclusion
perpetua, life imprisonment or death, even if the same decision orders, in addition, a lesser penalty or penalties for crimes
arising out of the same occurrence or facts.

It will be seen that Robert Gubat, private complainant in Criminal Case No. Q-98-77301, Cesar Aquino, private
complainant in Criminal Case No. Q-98-77302 and Junior Agustin, private complainant in Criminal Case No. Q-98-77303
were also the private complainant in the illegal recruitment in a large scale suit, docketed as Criminal Case No. Q-98-
77300. As gleaned from the charges, the estafa cases were intimately related to or arose from the facts and occurrences of
the alleged illegal recruitment. Clearly, we have no recourse but to refuse cognizance over the estafa cases as well. 35

Despite its lack of jurisdiction over Ochoa’s appeal, the Court of Appeals did not dismiss the same and merely ordered its
transfer to us:

While the Supreme Court Circular No. 2-90 directs the dismissal of appeals filed before the wrong court, the Supreme
Court has in practice allowed the transfer of records from this Court to the highest court. In which case, we shall subscribe
to this practice in the interest of substantial justice.

WHEREFORE, premises considered, our decision is declared NULL and VOID. We order the TRANSFER of the records
of Criminal Cases Nos. 98-77300 to 98-77303 to the Supreme Court for proper action. 36

In the Resolution37 dated September 17, 2003, we accepted Ochoa’s appeal and informed both Ochoa and the OSG to file
their respective additional briefs. Ochoa’s appeal was then docketed as G.R. No. 159252.

On August 17, 2004, Ochoa’s counsel filed an explanation stating that he had nothing more to add since he had already
written and filed all necessary pleadings, complete with all the necessary research and arguments. 38

In the meantime, People v. Mateo39 was promulgated on July 7, 2004, where we held that an appeal from the decisions of
the RTC, sentencing the accused to life imprisonment or reclusion perpetua, should be made to the Court of Appeals.
Thus, in our Resolution40 dated March 11, 2005, the Court ordered the transfer of the records of G.R. No. 159252 to the
Court of Appeals for a decision on the merit. We likewise directed the Court of Appeals to raffle the said case to any of its
regular divisions.

When Ochoa’s appeal was before the Court of Appeals a second time, it was docketed as CA-G.R. CR.-H.C. No. 00888.
The Court of Appeals, in a Decision dated March 2, 2006, affirmed with modification the RTC Decision dated April 17,
2000. The appellate court essentially affirmed the findings of fact and law of the RTC, but reduced the award of damages
 24

in Criminal Case No. 98-77301 and increased the prison sentence in Criminal Case No. 98-77303. The decretal portion of
said Decision reads:

WHEREFORE, judgment is hereby rendered as follows:

I. The judgment of the trial court in Criminal Case No. 98-77300 finding appellant Rosario Ochoa guilty beyond
reasonable doubt of Illegal Recruitment in Large Scale constituting economic sabotage under Sec. 6 (l) and (m) in relation
to Sec. 7(b) of R.A. No. 8042 and sentencing her to life imprisonment and a fine of One Million Pesos (P1,000,000.00) is
AFFIRMED.

II. The judgment in Criminal Case No. 98-77301, finding appellant guilty beyond reasonable doubt of estafa is
MODIFIED. Appellant is, hereby, ordered to indemnify Robert Gubat in the amount of P15,000.00 only as and by way of
actual damages.

III. The judgment in Criminal Case No. 98-77302, finding appellant guilty beyond reasonable doubt of estafa is
AFFIRMED.

IV. The judgment in Criminal Case No. 98-77303, finding appellant guilty beyond reasonable doubt of estafa is
MODIFIED. Appellant is, hereby, sentenced to an indeterminate penalty of FOUR (4) YEARS and TWO (2) MONTHS
of prision correccional as minimum, to EIGHT (8) YEARS OF prision mayor as maximum. 41

Ochoa’s appeal is anchored on the following assignment of errors:

The lower court erred:

a. In admitting Exhibit "A" – the POEA Certification – when it was already excluded during the bail hearing

b. In shifting the burden of the accused to prove that there was no illegal recruitment

c. In finding that there was estafa

d. By not limiting liability of the accused to civil liability only42

We find no reversible error in the assailed Court of Appeals decision.

Illegal recruitment in large scale

Ochoa was charged with violation of Section 6 of Republic Act No. 8042. Said provision broadens the concept of illegal
recruitment under the Labor Code43 and provides stiffer penalties, especially for those that constitute economic sabotage,
i.e., illegal recruitment in large scale and illegal recruitment committed by a syndicate.

Section 6 of Republic Act No. 8042 defines illegal recruitment as follows:

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. It shall likewise include the following acts,
whether committed by any person, whether a non-licensee, non-holder, licensee or holder of authority:

xxxx

(m) Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for
purposes of deployment, in cases where the deployment does not actually take place without the worker's fault. Illegal
recruitment when committed by a syndicate or in large scale shall be 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
or confederating with one another. It is deemed committed in large scale if committed against three (3) or more persons
individually or as a group.

It is well-settled that to prove illegal recruitment, it must be shown that appellant gave complainants the distinct
impression that she had the power or ability to send complainants abroad for work such that the latter were convinced to
part with their money in order to be employed.44 All eight private complainants herein consistently declared that Ochoa
offered and promised them employment overseas. Ochoa required private complainants to submit their bio-data, birth
certificates, and passports, which private complainants did. Private complainants also gave various amounts to Ochoa as
payment for placement and medical fees as evidenced by the receipts Ochoa issued to Gubat, 45 Cesar,46 and
Agustin.47 Despite private complainants’ compliance with all the requirements Ochoa specified, they were not able to
leave for work abroad. Private complainants pleaded that Ochoa return their hard-earned money, but Ochoa failed to do
so.
 25

Ochoa contends that Exhibit "A," the POEA certification – which states that Ochoa, in her personal capacity, is neither
licensed nor authorized to recruit workers for overseas employment – was already rejected by the RTC during the
hearings on bail for being hearsay, and should not have been admitted by the RTC after the trial on the merits of the
criminal cases. Inadmissible evidence during bail hearings do not become admissible evidence after formal offer. Without
the POEA certification, the prosecution had no proof that Ochoa is unlicensed to recruit and, thus, she should be acquitted.

Ochoa’s contention is without merit.

We refer to the following ruling in Fullero v. People, 48 wherein we rejected a similar argument raised by petitioner therein
against a certification issued by an officer of the Professional Regulation Commission:

Regarding the third issue, petitioner contended that the prosecution's documentary evidence, consisting of Exhibits "A,"
"C," "F," "G," "H," "I," "J," "K," "L," "M," "N," "O," "P," "Q" and "R" and their sub-markings, are inadmissible in
evidence based on the following reasons:

(1) Exhibit "A," which is the Certification of the PRC dated 17 January 1998, confirming that petitioner's name does not
appear in the registry books of licensed civil engineers, was not properly identified during the trial. The proper person to
identify the certification should have been the signatory therein which was PRC Director II Jose A. Arriola, or in his
absence, a person who actually witnessed the execution of the certification. Prosecution witness Atayza, who was not
present when the certification was executed, had identified the certification during the trial. Thus, the contents of the
certification are mere hearsay; x x x.

xxxx

Section 36, Rule 130 of the Revised Rules on Evidence, states that a witness can testify only to those facts which he
knows of or comes from his personal knowledge, that is, which are derived from his perception. A witness, therefore, may
not testify as to what he merely learned from others either because he was told, or he read or heard the same. Such
testimony is considered hearsay and may not be received as proof of the truth of what he has learned. This is known as the
hearsay rule.

The law, however, provides for specific exceptions to the hearsay rule. One of the exceptions is the entries in official
records made in the performance of duty by a public officer. In other words, official entries are admissible in evidence
regardless of whether the officer or person who made them was presented and testified in court, since these entries are
considered prima facie evidence of the facts stated therein. Other recognized reasons for this exception are necessity and
trustworthiness. The necessity consists in the inconvenience and difficulty of requiring the official's attendance as a
witness to testify to innumerable transactions in the course of his duty. This will also unduly hamper public business. The
trustworthiness consists in the presumption of regularity of performance of official duty by a public officer.

Exhibit "A," or the Certification of the PRC dated 17 January 1998, was signed by Arriola, Director II of the PRC,
Manila. Although Arriola was not presented in court or did not testify during the trial to verify the said certification, such
certification is considered as prima facie evidence of the facts stated therein and is therefore presumed to be truthful,
because petitioner did not present any plausible proof to rebut its truthfulness. Exhibit A is therefore admissible in
evidence.49

In the case at bar, the POEA certification was signed by Dir. Mateo of the POEA Licensing Branch. Although Dir. Mateo
himself did not testify before the RTC, the prosecution still presented Cory, Dir. Mateo’s subordinate at the POEA
Licensing Branch, to verify Dir. Mateo’s signature.

Also worth re-stating is the justification provided by the Court of Appeals for the admissibility of the POEA certification,
viz:

The certificate is admissible. It is true that the trial court, during the bail hearings, rejected the certification for being
hearsay because at that stage of the proceedings, nobody testified yet on the document. However, as the trial progressed,
an officer of the POEA, specifically in its licensing branch, had testified on the document. It does not follow, then, as
appellant would want this court to assume, that evidence rejected during bail hearings could not be admissible during the
formal offer of evidence.

This court admits that Ms. Cory Aquino was not the signatory of the document. Nevertheless, she could testify on the
veracity of the document because she is one of the officers of the licensing branch of the POEA. Being so, she could
testify whether a certain person holds a license or not. It bears stressing that Ms. Aquino is familiar with the signature of
Mr. Mateo because the latter is her superior. Moreover, as testified to by Ms. Aquino, that as a policy in her office, before
a certification is made, the office checks first whether the name of the person requested to be verified is a reported
personnel of any licensed agency by checking their index and computer files.

As found in the office’s records, appellant, in her personal capacity, is neither licensed nor authorized to recruit workers
for overseas employment. It bears stressing, too, that this is not a case where a certification is rendered inadmissible
because the one who prepared it was not presented during the trial. To reiterate, an officer of the licensing branch of the
POEA, in the person of Ms. Aquino, testified on the document. Hence, its execution could be properly determined and the
veracity of the statements stated therein could be ascertained. 50
 26

More importantly, Ochoa could still be convicted of illegal recruitment even if we disregard the POEA certification, for
regardless of whether or not Ochoa was a licensee or holder of authority, she could still have committed illegal
recruitment. Section 6 of Republic Act No. 8042 clearly provides that any person, whether a non-licensee, non-holder,
licensee or holder of authority may be held liable for illegal recruitment for certain acts as enumerated in paragraphs (a) to
(m) thereof. Among such acts, under Section 6(m) of Republic Act No. 8042, is the "[f]ailure to reimburse expenses
incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where
the deployment does not actually take place without the worker’s fault." Ochoa committed illegal recruitment as described
in the said provision by receiving placement and medical fees from private complainants, evidenced by the receipts issued
by her, and failing to reimburse the private complainants the amounts they had paid when they were not able to leave for
Taiwan and Saudi Arabia, through no fault of their own.

Ochoa further argues in her defense that she should not be found personally and criminally liable for illegal recruitment
because she was a mere employee of AXIL and that she had turned over the money she received from private
complainants to AXIL.

We are not convinced. Ochoa’s claim was not supported by any corroborating evidence. The POEA verification dated
September 23, 1998, also signed by Dir. Mateo, and presented by Ochoa during trial, pertains only to the status of AXIL
as a placement agency with a "limited temporary authority" which had already expired. Said verification did not show
whether or not Ochoa was employed by AXIL. Strangely, for an alleged employee of AXIL, Ochoa was not able to
present the most basic evidence of employment, such as appointment papers, identification card (ID), and/or payslips. The
receipts presented by some of the private complainants were issued and signed by Ochoa herself, and did not contain any
indication that Ochoa issued and signed the same on behalf of AXIL. Also, Ochoa was not able to present any proof that
private complainants’ money were actually turned over to or received by AXIL.

There is no reason for us to disturb the weight and credence accorded by the RTC to the evidence of the prosecution, over
that of the defense. As is well-settled in this jurisdiction, greater weight is given to the positive identification of the
accused by the prosecution witnesses than the accused’s denial and explanation concerning the commission of the
crime.51 Likewise, factual findings of the trial courts, including their assessment of the witnesses’ credibility, are entitled
to great weight and respect by the Supreme Court, particularly when the Court of Appeals affirmed such findings. After
all, the trial court is in the best position to determine the value and weight of the testimonies of witnesses. The absence of
any showing that the trial court plainly overlooked certain facts of substance and value that, if considered, might affect the
result of the case, or that its assessment was arbitrary, impels the Court to defer to the trial court’s determination
according credibility to the prosecution evidence. 52Moreover, in the absence of any evidence that the prosecution
witnesses were motivated by improper motives, the trial court’s assessment of the credibility of the witnesses shall not be
interfered with by this Court.53

Under the last paragraph of Section 6 of Republic Act No. 8042, illegal recruitment shall be considered an offense
involving economic sabotage if committed in a large scale, that is, committed against three or more persons individually
or as a group. Here, there are eight private complainants who convincingly testified on Ochoa’s acts of illegal recruitment.

In view of the overwhelming evidence presented by the prosecution, we uphold the verdict of the RTC, as affirmed by the
Court of Appeals, that Ochoa is guilty of illegal recruitment constituting economic sabotage.

Section 7(b) of Republic Act No. 8042 provides that the penalty of life imprisonment and a fine of not less than
₱500,000.00 nor more than ₱1,000.000.00 shall be imposed when the illegal recruitment constitutes economic sabotage.
Thus:

Sec. 7. Penalties. –

(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than six (6) years
and one (1) day but not more than twelve (12) years and a fine of not less than Two hundred thousand pesos
(₱200,000.00) nor more than Five hundred thousand pesos (₱500,000.00).

(b) The penalty of life imprisonment and a fine of not less than Five hundred thousand pesos (₱500,000.00) nor more than
One million pesos (₱1,000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage as defined
herein.

Since the penalty of life imprisonment and a fine of ₱1,000,000.00 imposed on Ochoa by the RTC, and affirmed by the
Court of Appeals, are in accord with the law, we similarly sustain the same.

Estafa

We affirm as well the conviction of Ochoa for estafa committed against three private complainants in Criminal Case Nos.
98-77301, 98-77302, and 98-77303. The very same evidence proving Ochoa’s criminal liability for illegal recruitment
also established her criminal liability for estafa.

It is settled that a person may be charged and convicted separately of illegal recruitment under Republic Act No. 8042, in
relation to the Labor Code, and estafa under Article 315, paragraph 2(a) of the Revised Penal Code. We explicated in
People v. Cortez and Yabut54 that:
 27

In this jurisdiction, it is settled that a person who commits illegal recruitment may be charged and convicted separately of
illegal recruitment under the Labor Code and estafa under par. 2(a) of Art. 315 of the Revised Penal Code. The offense of
illegal recruitment is malum prohibitum where the criminal intent of the accused is not necessary for conviction, while
estafa is malum in se where the criminal intent of the accused is crucial for conviction. Conviction for offenses under the
Labor Code does not bar conviction for offenses punishable by other laws. Conversely, conviction for estafa under par.
2(a) of Art. 315 of the Revised Penal Code does not bar a conviction for illegal recruitment under the Labor Code. It
follows that one’s acquittal of the crime of estafa will not necessarily result in his acquittal of the crime of illegal
recruitment in large scale, and vice versa. 55

Article 315, paragraph 2(a) of the Revised Penal Code defines estafa as:

Art. 315. Swindling (estafa). - Any person who shall defraud another by any of the means mentioned hereinbelow x x x:

xxxx

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

(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.

The elements of estafa are: (a) that the accused defrauded another by abuse of confidence or by means of deceit, and (b)
that damage or prejudice capable of pecuniary estimation is caused to the offended party or third person. 56Both elements
are present in Criminal Case Nos. 98-77301, 98-77302, and 98-77303. Ochoa’s deceit was evident in her false
representation to private complainants Gubat, Cesar, and Agustin that she possessed the authority and capability to send
said private complainants to Taiwan/Saudi Arabia for employment as early as one to two weeks from completion of the
requirements, among which were the payment of placement fees and submission of a medical examination report. Ochoa
promised that there were already existing job vacancies overseas for private complainants, even quoting the corresponding
salaries. Ochoa carried on the deceit by receiving application documents from the private complainants, accompanying
them to the clinic for medical examination, and/or making them go to the offices of certain recruitment/placement
agencies to which Ochoa had actually no connection at all. Clearly deceived by Ochoa’s words and actions, private
complainants Gubat, Cesar, and Aquino were persuaded to hand over their money to Ochoa to pay for their placement and
medical fees. Sadly, private complainants Gubat, Cesar, and Aquino were never able to leave for work abroad, nor recover
their money.

The penalty for estafa depends on the amount of defraudation. According to Article 315 of the Revised Penal Code:

Art. 315. Swindling (estafa). – Any person who shall defraud another by any of the means mentioned hereinbelow shall be
punished by:

1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum period, if the amount of
the fraud is over 12,000 pesos but does not exceed 22,000 pesos, and if such amount exceeds the latter sum, the penalty
provided in this paragraph shall be imposed in its maximum period, adding one year for each additional 10,000 pesos; but
the total penalty which may be imposed shall not exceed twenty years. In such cases, and in connection with the accessory
penalties which may be imposed under the provisions of this Code, the penalty shall be termed prision mayor or reclusion
temporal, as the case may be.

It was established by evidence that in Criminal Case No. 98-77301, Gubat was defrauded by Ochoa in the amount of
₱15,000.00; in Criminal Case No. 77-98302, Cesar paid Ochoa the sum of ₱17,000.00; and in Criminal Case No. 77-
98303, Agustin handed over to Ochoa a total of ₱28,000.00.

The prescribed penalty for estafa under Article 315 of the Revised Penal Code, when the amount of the fraud is over
₱12,000.00 but not exceeding ₱22,000.00, is prision correccional maximum to prision mayor minimum (i.e., from 4 years,
2 months and 1 day to 8 years). If the amount of fraud exceeds ₱22,000.00, the aforementioned penalty shall be imposed
in its maximum period, adding one year for each additional ₱10,000.00, provided that the total penalty shall not exceed 20
years.1avvphi1

Under the Indeterminate Sentence Law, the minimum term shall be within the range of the penalty next lower to that
prescribed by the Revised Penal Code, or anywhere within prision correccional minimum and medium (i.e., from 6
months and 1 day to 4 years and 2 months).57 Consequently, the minimum terms in Criminal Case Nos. 98-77301 and 98-
77302 were correctly fixed by the RTC and affirmed by the Court of Appeals at 2 years, 11 months, and 11 days of
prision correccional. While the minimum term in Criminal Case No. 98-77303 was increased by the Court of Appeals to 4
years and 2 months of prision correccional, it is still within the range of the penalty next lower to that prescribed by
Section 315 of the Revised Penal Code.

The maximum term under the Indeterminate Sentence Law shall be that which, in view of attending circumstances, could
be properly imposed under the rules of the Revised Penal Code. To compute the minimum, medium, and maximum
periods of the prescribed penalty for estafa when the amount of fraud exceeds ₱12,000.00, the time included in prision
correccional maximum to prision mayor minimum shall be divided into three equal portions, with each portion forming a
period. Following this computation, the minimum period for prision correccional maximum to prision mayor minimum is
from 4 years, 2 months, and 1 day to 5 years, 5 months, and 10 days; the medium period is from 5 years, 5 months, and 11
 28

days to 6 years, 8 months, and 20 days; and the maximum period is from 6 years, 8 months, and 21 days to 8 years. Any
incremental penalty (i.e., 1 year for every ₱10,000.00 in excess of ₱22,000.) shall thus be added to anywhere from 6
years, 8 months, and 21 days to 8 years, at the discretion of the court, provided that the total penalty does not exceed 20
years.58

In Criminal Case Nos. 98-77301 and 98-77302, the amounts of fraud were more than ₱12,00.00 but not exceeding
₱22,000.00, and in the absence of any mitigating or aggravating circumstance, the maximum term shall be taken from the
medium period of the penalty prescribed (i.e., 5 years, 5 months, and 11 days to 6 years, 8 months, and 20 days). Thus, the
maximum terms of 6 years, 8 months, and 20 days actually imposed by the RTC and affirmed by the Court of Appeals in
Criminal Case Nos. 98-77301 and 98-77302 are proper.

As for determining the maximum term in Criminal Case No. 98-77303, we take into consideration that the amount of
fraud was ₱28,000.00. Since the amount of fraud exceeded ₱22,000.00, the maximum term shall be taken from the
maximum period of the prescribed penalty, which is 6 years, 8 months, and 21 days to 8 years; but since the amount of
fraud exceeded ₱22,000.00 by only ₱6,000.00 (less than ₱10,000.00), no incremental penalty shall be imposed.
Considering that the maximum term of 8 years fixed by the Court of Appeals in Criminal Case No. 98-77303 is within the
maximum period of the proscribed penalty, we see no reason for disturbing the same.

WHEREFORE, we DENY the present appeal for lack of merit and AFFIRM the Decision dated March 2, 2006 of the
Court of Appeals in CA-G.R. CR.-H.C. No. 00888, affirming with modification the Decision dated April 17, 2000 of the
Regional Trial Court, Quezon City, Branch 104, in Criminal Case Nos. 98-77300 to 98-77303, to read as follows:

1. In Criminal Case No. 98-77300, accused-appellant Rosario "Rose" Ochoa is found guilty beyond reasonable doubt of
illegal recruitment in large scale, constituting economic sabotage, as defined and penalized in Section 6(l) and (m), in
relation to Section 7(b), of Republic Act No. 8042, and is sentenced to life imprisonment and a fine of One Million Pesos
(₱1,000.000.00);

2. In Criminal Case No. 98-77301, accused-appellant Rosario "Rose" Ochoa is found guilty beyond reasonable doubt of
the crime of estafa, as defined and penalized in Article 315, paragraph 2(a) of the Revised Penal Code, and is sentenced to
an indeterminate penalty of two (2) years, eleven (11) months, and eleven (11) days of prision correccional, as minimum,
to six (6) years, eight (8) months, and twenty (20) days of prision mayor, as maximum, and to indemnify private
complainant Robert Gubat in the amount of Fifteen Thousand Pesos (₱15,000.00) as actual damages;

3. In Criminal Case No. 98-77302, accused-appellant Rosario "Rose" Ochoa is found guilty beyond reasonable doubt of
the crime of estafa, as defined and penalized in Article 315, paragraph 2(a) of the Revised Penal Code, and is sentenced to
an indeterminate penalty of two (2) years, eleven (11) months, and eleven (11) days of prision correccional, as minimum,
to six (6) years, eight (8) months, and twenty (20) days of prision mayor, as maximum, and to indemnify private
complainant Cesar Aquino in the amount of Seventeen Thousand Pesos (₱17,000.00); and

4. In Criminal Case No. 98-77303, accused-appellant Rosario "Rose" Ochoa is found guilty beyond reasonable doubt of
the crime of estafa, as defined and penalized in Article 315, paragraph 2(a) of the Revised Penal Code, and is sentenced to
an indeterminate penalty of four (4) years and two (2) months of prision correccional, as minimum, to eight (8) years of
prision mayor, as maximum, and to indemnify private complainant Junior Agustin in the amount of Twenty-Eight
Thousand Pesos (₱28,000.00).

SO ORDERED.
 29

6. G.R. No. 187730               June 29, 2010

PEOPLE OF THE PHILIPPINES, Petitioner, 

vs.
RODOLFO GALLO y GADOT, Accused-Appellant,
FIDES PACARDO y JUNGCO and PILAR MANTA y DUNGO, Accused.

DECISION

VELASCO, JR., J.:

The Case

This is an appeal from the Decision1 dated December 24, 2008 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No.
02764 entitled People of the Philippines v. Rodolfo Gallo y Gadot (accused-appellant), Fides Pacardo y Jungco and Pilar
Manta y Dungo (accused), which affirmed the Decision 2 dated March 15, 2007 of the Regional Trial Court (RTC), Branch
30 in Manila which convicted the accused-appellant Rodolfo Gallo y Gadot ("accused-appellant") of syndicated illegal
recruitment in Criminal Case No. 02-206293 and estafa in Criminal Case No. 02-206297.

The Facts

Originally, accused-appellant Gallo and accused Fides Pacardo ("Pacardo") and Pilar Manta ("Manta"), together with
Mardeolyn Martir ("Mardeolyn") and nine (9) others, were charged with syndicated illegal recruitment and eighteen (18)
counts of estafa committed against eighteen complainants, including Edgardo V. Dela Caza ("Dela Caza"), Sandy
Guantero ("Guantero") and Danilo Sare ("Sare"). The cases were respectively docketed as Criminal Case Nos. 02-
2062936 to 02-206311. However, records reveal that only Criminal Case No. 02-206293, which was filed against
accused-appellant Gallo, Pacardo and Manta for syndicated illegal recruitment, and Criminal Case Nos. 02-206297, 02-
206300 and 02-206308, which were filed against accused-appellant Gallo, Pacardo and Manta for estafa, proceeded to
trial due to the fact that the rest of the accused remained at large. Further, the other cases, Criminal Case Nos. 02-206294
to 02-206296, 02-206298 to 02-206299, 02-206301 to 02-206307 and 02-206309 to 02-206311 were likewise
provisionally dismissed upon motion of Pacardo, Manta and accused-appellant for failure of the respective complainants
in said cases to appear and testify during trial.

It should also be noted that after trial, Pacardo and Manta were acquitted in Criminal Case Nos. 02-206293, 02-206297,
02-206300 and 02-206308 for insufficiency of evidence. Likewise, accused-appellant Gallo was similarly acquitted in
Criminal Case Nos. 02-206300, the case filed by Guantero, and 02-206308, the case filed by Sare. However, accused-
appellant was found guilty beyond reasonable doubt in Criminal Case Nos. 02-206293 and 02-206297, both filed by Dela
Caza, for syndicated illegal recruitment and estafa, respectively.

Thus, the present appeal concerns solely accused-appellant’s conviction for syndicated illegal recruitment in Criminal
Case No. 02-206293 and for estafa in Criminal Case No. 02-206297.

In Criminal Case No. 02-206293, the information charges the accused-appellant, together with the others, as follows:

The undersigned accuses MARDEOLYN MARTIR, ISMAEL GALANZA, NELMAR MARTIR, MARCELINO
MARTIR, NORMAN MARTIR, NELSON MARTIR, MA. CECILIA M. RAMOS, LULU MENDANES, FIDES
PACARDO y JUNGCO, RODOLFO GALLO y GADOT, PILAR MANTA y DUNGO, ELEONOR PANUNCIO and
YEO SIN UNG of a violation of Section 6(a), (l) and (m) of Republic Act 8042, otherwise known as the Migrant Workers
and Overseas Filipino Workers Act of 1995, committed by a syndicate and in large scale, as follows:

That in or about and during the period comprised between November 2000 and December, 2001, inclusive, in the City of
Manila, Philippines, the said accused conspiring and confederating together and helping with 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 FERDINAND
ASISTIN, ENTICE BRENDO, REYMOND G. CENA, EDGARDO V. DELA CAZA, RAYMUND EDAYA, SANDY O.
GUANTENO, RENATO V. HUFALAR, ELENA JUBICO, LUPO A. MANALO, ALMA V. MENOR, ROGELIO S.
MORON, FEDILA G. NAIPA, OSCAR RAMIREZ, MARISOL L. SABALDAN, DANILO SARE, MARY BETH
SARDON, JOHNNY SOLATORIO and JOEL TINIO in Korea as factory workers and charge or accept directly or
indirectly from said FERDINAND ASISTIN the amount of P45,000.00; ENTICE BRENDO – P35,000.00; REYMOND
G. CENA – P30,000.00; EDGARDO V. DELA CAZA – P45,000.00; RAYMUND EDAYA – P100,000.00; SANDY O.
GUANTENO – P35,000.00; RENATO V. HUFALAR – P70,000.00; ELENA JUBICO – P30,000.00; LUPO A.
MANALO – P75,000.00; ALMA V. MENOR – P45,000.00; ROGELIO S. MORON – P70,000.00; FEDILA G. NAIPA –
P45,000.00; OSCAR RAMIREZ – P45,000.00; MARISOL L. SABALDAN – P75,000.00; DANILO SARE –
P100,000.00; MARY BETH SARDON – P25,000.00; JOHNNY SOLATORIO – P35,000.00; and JOEL TINIO –
P120,000.00 as placement fees in connection with their overseas employment, which amounts are in excess of or greater
than those specified in the schedule of allowable fees prescribed by the POEA Board Resolution No. 02, Series 1998, and
without valid reasons and without the fault of the said complainants failed to actually deploy them and failed to reimburse
the expenses incurred by the said complainants in connection with their documentation and processing for purposes of
their deployment.3 (Emphasis supplied)

In Criminal Case No. 02-206297, the information reads:

 30

That on or about May 28, 2001, in the City of Manila, Philippines, the said accused conspiring and confederating together
and helping with [sic] one another, did then and there willfully, unlawfully and feloniously defraud EDGARDO V. DELA
CAZA, in the following manner, to wit: the said accused by means of false manifestations and fraudulent representations
which they made to the latter, prior to and even simultaneous with the commission of the fraud, to the effect that they had
the power and capacity to recruit and employ said EDGARDO V. DELA CAZA in Korea as factory worker and could
facilitate the processing of the pertinent papers if given the necessary amount to meet the requirements thereof; induced
and succeeded in inducing said EDGARDO V. DELA CAZA 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 untrue and were made [solely] for the purpose of obtaining, as in fact they did obtain the said
amount of P45,000.00 which amount once in their possession, with intent to defraud said [EDGARDO] V. DELA CAZA,
they willfully, unlawfully and feloniously misappropriated, misapplied and converted the said amount of P45,000.00 to
their own personal use and benefit, to the damage and prejudice of the said EDGARDO V. DELA CAZA in the aforesaid
amount of P45,000.00, Philippine currency.

CONTRARY TO LAW.4

When arraigned on January 19, 2004, accused-appellant Gallo entered a plea of not guilty to all charges.

On March 3, 2004, the pre-trial was terminated and trial ensued, thereafter.

During the trial, the prosecution presented as their witnesses, Armando Albines Roa, the Philippine Overseas Employment
Administration (POEA) representative and private complainants Dela Caza, Guanteno and Sare. On the other hand, the
defense presented as its witnesses, accused-appellant Gallo, Pacardo and Manta.

Version of the Prosecution

On May 22, 2001, Dela Caza was introduced by Eleanor Panuncio to accused-appellant Gallo, Pacardo, Manta,
Mardeolyn, Lulu Mendanes, Yeo Sin Ung and another Korean national at the office of MPM International Recruitment
and Promotion Agency ("MPM Agency") located in Malate, Manila.

Dela Caza was told that Mardeolyn was the President of MPM Agency, while Nelmar Martir was one of the incorporators.
Also, that Marcelino Martir, Norman Martir, Nelson Martir and Ma. Cecilia Ramos were its board members. Lulu
Mendanes acted as the cashier and accountant, while Pacardo acted as the agency’s employee who was in charge of the
records of the applicants. Manta, on the other hand, was also an employee who was tasked to deliver documents to the
Korean embassy.

Accused-appellant Gallo then introduced himself as a relative of Mardeolyn and informed Dela Caza that the agency was
able to send many workers abroad. Together with Pacardo and Manta, he also told Dela Caza about the placement fee of
One Hundred Fifty Thousand Pesos (PhP 150,000) with a down payment of Forty-Five Thousand Pesos (PhP 45,000) and
the balance to be paid through salary deduction.

Dela Caza, together with the other applicants, were briefed by Mardeolyn about the processing of their application papers
for job placement in Korea as a factory worker and their possible salary. Accused Yeo Sin Ung also gave a briefing about
the business and what to expect from the company and the salary.

With accused-appellant’s assurance that many workers have been sent abroad, as well as the presence of the two (2)
Korean nationals and upon being shown the visas procured for the deployed workers, Dela Caza was convinced to part
with his money. Thus, on May 29, 2001, he paid Forty-Five Thousand Pesos (PhP 45,000) to MPM Agency through
accused-appellant Gallo who, while in the presence of Pacardo, Manta and Mardeolyn, issued and signed Official Receipt
No. 401.

Two (2) weeks after paying MPM Agency, Dela Caza went back to the agency’s office in Malate, Manila only to discover
that the office had moved to a new location at Batangas Street, Brgy. San Isidro, Makati. He proceeded to the new address
and found out that the agency was renamed to New Filipino Manpower Development & Services, Inc. ("New Filipino").
At the new office, he talked to Pacardo, Manta, Mardeolyn, Lulu Mendanes and accused-appellant Gallo. He was
informed that the transfer was done for easy accessibility to clients and for the purpose of changing the name of the
agency.

Dela Caza decided to withdraw his application and recover the amount he paid but Mardeolyn, Pacardo, Manta and Lulu
Mendanes talked him out from pursuing his decision. On the other hand, accused-appellant Gallo even denied any
knowledge about the money.

After two (2) more months of waiting in vain to be deployed, Dela Caza and the other applicants decided to take action.
The first attempt was unsuccessful because the agency again moved to another place. However, with the help of the Office
of Ambassador Señeres and the Western Police District, they were able to locate the new address at 500 Prudential
Building, Carriedo, Manila. The agency explained that it had to move in order to separate those who are applying as
entertainers from those applying as factory workers. Accused-appellant Gallo, together with Pacardo and Manta, were
then arrested.

The testimony of prosecution witness Armando Albines Roa, a POEA employee, was dispensed with after the prosecution
and defense stipulated and admitted to the existence of the following documents:
 31

1. Certification issued by Felicitas Q. Bay, Director II, Licensing Branch of the POEA to the effect that "New Filipino
Manpower Development & Services, Inc., with office address at 1256 Batangas St., Brgy. San Isidro, Makati City, was a
licensed landbased agency whose license expired on December 10, 2001 and was delisted from the roster of licensed
agencies on December 14, 2001." It further certified that "Fides J. Pacardo was the agency’s Recruitment Officer";

2. Certification issued by Felicitas Q. Bay of the POEA to the effect that MPM International Recruitment and Promotion
is not licensed by the POEA to recruit workers for overseas employment;

3. Certified copy of POEA Memorandum Circular No. 14, Series of 1999 regarding placement fee ceiling for landbased
workers.

4. Certified copy of POEA Memorandum Circular No. 09, Series of 1998 on the placement fee ceiling for Taiwan and
Korean markets, and

5. Certified copy of POEA Governing Board Resolution No. 02, series of 1998.

Version of the Defense

For his defense, accused-appellant denied having any part in the recruitment of Dela Caza. In fact, he testified that he also
applied with MPM Agency for deployment to Korea as a factory worker. According to him, he gave his application
directly with Mardeolyn because she was his town mate and he was allowed to pay only Ten Thousand Pesos (PhP
10,000) as processing fee. Further, in order to facilitate the processing of his papers, he agreed to perform some tasks for
the agency, such as taking photographs of the visa and passport of applicants, running errands and performing such other
tasks assigned to him, without salary except for some allowance. He said that he only saw Dela Caza one or twice at the
agency’s office when he applied for work abroad. Lastly, that he was also promised deployment abroad but it never
materialized.

Ruling of the Trial Court

On March 15, 2007, the RTC rendered its Decision convicting the accused of syndicated illegal recruitment and estafa.
The dispositive portion reads:

WHEREFORE, judgment is hereby rendered as follows:

I. Accused FIDES PACARDO y JUNGO and PILAR MANTA y DUNGO are hereby ACQUITTED of the crimes
charged in Criminal Cases Nos. 02-206293, 02-206297, 02-206300 and 02-206308;

II. Accused RODOLFO GALLO y GADOT is found guilty beyond reasonable doubt in Criminal Case No. 02-206293 of
the crime of Illegal Recruitment committed by a syndicate and is hereby sentenced to suffer the penalty of life
imprisonment and to pay a fine of ONE MILLION (Php1,000,000.00) PESOS. He is also ordered to indemnify
EDGARDO DELA CAZA of the sum of FORTY-FIVE THOUSAND (Php45,000.00) PESOS with legal interest from the
filing of the information on September 18, 2002 until fully paid.

III. Accused RODOLFO GALLO y GADOT in Criminal Case No. 02-206297 is likewise found guilty and is hereby
sentenced to suffer the indeterminate penalty of FOUR (4) years of prision correccional as minimum to NINE (9) years of
prision mayor as maximum.

IV. Accused RODOLFO GALLO y GADOT is hereby ACQUITTED of the crime charged in Criminal Cases Nos. 02-
206300 and 02-206308.

Let alias warrants for the arrest of the other accused be issued anew in all the criminal cases. Pending their arrest, the
cases are sent to the archives.

The immediate release of accused Fides Pacardo and Pilar Manta is hereby ordered unless detained for other lawful cause
or charge.

SO ORDERED.5

Ruling of the Appellate Court

On appeal, the CA, in its Decision dated December 24, 2008, disposed of the case as follows:

WHEREFORE, the appealed Decision of the Regional Trial Court of Manila, Branch 30, in Criminal Cases Nos. 02-
206293 and 02-206297, dated March 15, 2007, is AFFIRMED with the MODIFICATION that in Criminal Case No. 02-
206297, for estafa, appellant is sentenced to four (4) years of prision correccional to ten (10) years of prision mayor.

SO ORDERED.6

The CA held the totality of the prosecution’s evidence showed that the accused-appellant, together with others, engaged in
the recruitment of Dela Caza. His actions and representations to Dela Caza can hardly be construed as the actions of a
mere errand boy.
 32

As determined by the appellate court, the offense is considered economic sabotage having been committed by more than
three (3) persons, namely, accused-appellant Gallo, Mardeolyn, Eleonor Panuncio and Yeo Sin Ung. More importantly, a
personal found guilty of illegal recruitment may also be convicted of estafa. 7 The same evidence proving accused-
appellant’s commission of the crime of illegal recruitment in large scale also establishes his liability for estafa under
paragragh 2(a) of Article 315 of the Revised Penal Code (RPC).

On January 15, 2009, the accused-appellant filed a timely appeal before this Court.

The Issues

Accused-appellant interposes in the present appeal the following assignment of errors:

The court a quo gravely erred in finding the accused-appellant guilty of illegal recruitment committed by a syndicate
despite the failure of the prosecution to prove the same beyond reasonable doubt.

II

The court a quo gravely erred in finding the accused-appellant guilty of estafa despite the failure of the prosecution to
prove the same beyond reasonable doubt.

Our Ruling

The appeal has no merit.

Evidence supports conviction of the crime of Syndicated Illegal Recruitment

Accused-appellant avers that he cannot be held criminally liable for illegal recruitment because he was neither an officer
nor an employee of the recruitment agency. He alleges that the trial court erred in adopting the asseveration of the private
complainant that he was indeed an employee because such was not duly supported by competent evidence. According to
him, even assuming that he was an employee, such cannot warrant his outright conviction sans evidence that he acted in
conspiracy with the officers of the agency.

We disagree.

To commit syndicated illegal recruitment, three elements must be established: (1) the offender undertakes either any
activity within the meaning of "recruitment and placement" defined under Article 13(b), or any of the prohibited practices
enumerated under Art. 34 of the Labor Code; (2) he has no valid license or authority required by law to enable one to
lawfully engage in recruitment and placement of workers; 8 and (3) the illegal recruitment is committed by a group of three
(3) or more persons conspiring or confederating with one another. 9 When illegal recruitment is committed by a syndicate
or in large scale, i.e., if it is committed against three (3) or more persons individually or as a group, it is considered an
offense involving economic sabotage.10

Under Art. 13(b) of the Labor 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".

After a thorough review of the records, we believe that the prosecution was able to establish the elements of the offense
sufficiently. The evidence readily reveals that MPM Agency was never licensed by the POEA to recruit workers for
overseas employment.

Even with a license, however, illegal recruitment could still be committed under Section 6 of Republic Act No. 8042
("R.A. 8042"), otherwise known as the Migrants and Overseas Filipinos Act of 1995, viz:

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. It shall, likewise, include the following act,
whether committed by any person, whether a non-licensee, non-holder, licensee or holder of authority:

(a) To charge or accept directly or indirectly any amount greater than that specified in the schedule of allowable fees
prescribed by the Secretary of Labor and Employment, or to make a worker pay any amount greater than that actually
received by him as a loan or advance;

xxxx

(l) Failure to actually deploy without valid reason as determined by the Department of Labor and Employment; and
 33

(m) Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for
purposes of deployment and processing for purposes of deployment, in cases where the deployment does not actually take
place without the worker’s fault. Illegal recruitment when committed by a syndicate or in large scale shall be 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
or confederating with one another. It is deemed committed in large scale if committed against three (3) or more persons
individually or as a group.

The persons criminally liable for the above offenses are the principals, accomplices and accessories. In case of juridical
persons, the officers having control, management or direction of their business shall be liable.

In the instant case, accused-appellant committed the acts enumerated in Sec. 6 of R.A. 8042. Testimonial evidence
presented by the prosecution clearly shows that, in consideration of a promise of foreign employment, accused-appellant
received the amount of Php 45,000.00 from Dela Caza. When accused-appellant made misrepresentations concerning the
agency’s purported power and authority to recruit for overseas employment, and in the process, collected money in the
guise of placement fees, the former clearly committed acts constitutive of illegal recruitment. 11 Such acts were accurately
described in the testimony of prosecution witness, Dela Caza, to wit:

PROS. MAGABLIN

Q: How about this Rodolfo Gallo?

A: He was the one who received my money.

Q: Aside from receiving your money, was there any other representations or acts made by Rodolfo Gallo?

A: He introduced himself to me as relative of Mardeolyn Martir and he even intimated to me that their agency has sent so
many workers abroad.

xxxx

PROS. MAGABLIN

Q: Mr. Witness, as you claimed you tried to withdraw your application at the agency. Was there any instance that you
were able to talk to Fides Pacardo, Rodolfo Gallo and Pilar Manta?

A: Yes, ma’am.

Q: What was the conversation that transpired among you before you demanded the return of your money and documents?

A: When I tried to withdraw my application as well as my money, Mr. Gallo told me "I know nothing about your money"
while Pilar Manta and Fides Pacardo told me, why should I withdraw my application and my money when I was about to
be [deployed] or I was about to leave.

xxxx

Q: And what transpired at that office after this Panuncio introduced you to those persons whom you just mentioned?

A: The three of them including Rodolfo Gallo told me that the placement fee in that agency is Php 150,000.00 and then I
should deposit the amount of Php 45,000.00. After I have deposited said amount, I would just wait for few days…

xxxx

Q: They were the one (sic) who told you that you have to pay Php 45,000.00 for deposit only?

A: Yes, ma’am, I was told by them to deposit Php 45,000.00 and then I would pay the remaining balance of
Php105,000.00, payment of it would be through salary deduction.

Q: That is for what Mr. Witness again?

A: For placement fee.

Q: Now did you believe to (sic) them?

A: Yes, ma’am.

Q: Why, why did you believe?

A: Because of the presence of the two Korean nationals and they keep on telling me that they have sent abroad several
workers and they even showed visas of the records that they have already deployed abroad.
 34

Q: Aside from that, was there any other representations which have been made upon you or make you believe that they
can deploy you?

A: At first I was adamant but they told me "If you do not want to believe us, then we could do nothing." But once they
showed me the [visas] of the people whom they have deployed abroad, that was the time I believe them.

Q: So after believing on the representations, what did you do next Mr. Witness?

A: That was the time that I decided to give the money.

xxxx

PROS. MAGABLIN

Q: Do you have proof that you gave the money?

A: Yes, ma’am.

Q: Where is your proof that you gave the money?

A: I have it here.

PROS. MAGABLIN:

Witness is producing to this court a Receipt dated May 28, 2001 in the amount of Php45,000.00 which for purposes of
record Your Honor, may I request that the same be marked in the evidence as our Exhibit "F".

xxxx

PROS. MAGABLIN

Q: There appears a signature appearing at the left bottom portion of this receipt. Do you know whose signature is this?

A: Yes, ma’am, signature of Rodolfo Gallo.

PROS. MAGABLIN

Q: Why do you say that that is his signature?

A: Rodolfo Gallo’s signature Your Honor because he was the one who received the money and he was the one who filled
up this O.R. and while he was doing it, he was flanked by Fides Pacardo, Pilar Manta and Mardeolyn Martir.

xxxx

Q: So it was Gallo who received your money?

A: Yes, ma’am.

PROS. MAGABLIN

Q: And after that, what did this Gallo do after he received your money?

A: They told me ma’am just to call up and make a follow up with our agency.

xxxx

Q: Now Mr. Witness, after you gave your money to the accused, what happened with the application, with the promise of
employment that he promised?

A: Two (2) weeks after giving them the money, they moved to a new office in Makati, Brgy. San Isidro.

xxxx

Q: And were they able to deploy you as promised by them?

A: No, ma’am, they were not able to send us abroad. 12

Essentially, Dela Caza appeared very firm and consistent in positively identifying accused-appellant as one of those who
induced him and the other applicants to part with their money. His testimony showed that accused-appellant made false
misrepresentations and promises in assuring them that after they paid the placement fee, jobs in Korea as factory workers
were waiting for them and that they would be deployed soon. In fact, Dela Caza personally talked to accused-appellant
and gave him the money and saw him sign and issue an official receipt as proof of his payment. Without a doubt, accused-
appellants’ actions constituted illegal recruitment.
 35

Additionally, accused-appellant cannot argue that the trial court erred in finding that he was indeed an employee of the
recruitment agency. On the contrary, his active participation in the illegal recruitment is unmistakable. The fact that he
was the one who issued and signed the official receipt belies his profession of innocence.

This Court likewise finds the existence of a conspiracy between the accused-appellant and the other persons in the agency
who are currently at large, resulting in the commission of the crime of syndicated illegal recruitment.

In this case, it cannot be denied that the accused-appellent together with Mardeolyn and the rest of the officers and
employees of MPM Agency participated in a network of deception. Verily, the active involvement of each in the
recruitment scam was directed at one single purpose – to divest complainants with their money on the pretext of
guaranteed employment abroad. The prosecution evidence shows that complainants were briefed by Mardeolyn about the
processing of their papers for a possible job opportunity in Korea, as well as their possible salary. Likewise, Yeo Sin Ung,
a Korean national, gave a briefing about the business and what to expect from the company. Then, here comes accused-
appellant who introduced himself as Mardeolyn’s relative and specifically told Dela Caza of the fact that the agency was
able to send many workers abroad. Dela Caza was even showed several workers visas who were already allegedly
deployed abroad. Later on, accused-appellant signed and issued an official receipt acknowledging the down payment of
Dela Caza. Without a doubt, the nature and extent of the actions of accused-appellant, as well as with the other persons in
MPM Agency clearly show unity of action towards a common undertaking. Hence, conspiracy is evidently present.

In People v. Gamboa,13 this Court discussed the nature of conspiracy in the context of illegal recruitment, viz:

Conspiracy to defraud aspiring overseas contract workers was evident from the acts of the malefactors whose conduct
before, during and after the commission of the crime clearly indicated that they were one in purpose and united in its
execution. Direct proof of previous agreement to commit a crime is not necessary as it may be deduced from the mode
and manner in which the offense was perpetrated or inferred from the acts of the accused pointing to a joint purpose and
design, concerted action and community of interest. As such, all the accused, including accused-appellant, are equally
guilty of the crime of illegal recruitment since in a conspiracy the act of one is the act of all.

To reiterate, in establishing conspiracy, it is not essential that there be actual proof that all the conspirators took a direct
part in every act. It is sufficient that they acted in concert pursuant to the same objective. 14

Estafa

The prosecution likewise established that accused-appellant is guilty of the crime of estafa as defined under Article 315
paragraph 2(a) of the Revised Penal Code, viz:

Art. 315. Swindling (estafa). – Any person who shall defraud another by any means mentioned hereinbelow…

xxxx

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

(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.

The elements of estafa in general are: (1) that the accused defrauded another (a) by abuse of confidence, or (b) by means
of deceit; and (2) that damage or prejudice capable of pecuniary estimation is caused to the offended party or third
person.15 Deceit is the false representation of a matter of fact, whether by words or conduct, by false or misleading
allegations, or by concealment of that which should have been disclosed; and which deceives or is intended to deceive
another so that he shall act upon it, to his legal injury.

All these elements are present in the instant case: the accused-appellant, together with the other accused at large, deceived
the complainants into believing that the agency had the power and capability to send them abroad for employment; that
there were available jobs for them in Korea as factory workers; that by reason or on the strength of such assurance, the
complainants parted with their money in payment of the placement fees; that after receiving the money, accused-appellant
and his co-accused went into hiding by changing their office locations without informing complainants; and that
complainants were never deployed abroad. As all these representations of the accused-appellant proved false, paragraph
2(a), Article 315 of the Revised Penal Code is thus applicable.1avvphi1

Defense of Denial Cannot Prevail over Positive Identification

Indubitably, accused-appellant’s denial of the crimes charged crumbles in the face of the positive identification made by
Dela Caza and his co-complainants as one of the perpetrators of the crimes charged. As enunciated by this Court in People
v. Abolidor,16 "[p]ositive identification where categorical and consistent and not attended by any showing of ill motive on
the part of the eyewitnesses on the matter prevails over alibi and denial."

The defense has miserably failed to show any evidence of ill motive on the part of the prosecution witnesses as to falsely
testify against him.
 36

Therefore, between the categorical statements of the prosecution witnesses, on the one hand, and bare denials of the
accused, on the other hand, the former must prevail. 17

Moreover, this Court accords the trial court’s findings with the probative weight it deserves in the absence of any
compelling reason to discredit the same. It is a fundamental judicial dictum that the findings of fact of the trial court are
not disturbed on appeal except when it overlooked, misunderstood or misapplied some facts or circumstances of weight
and substance that would have materially affected the outcome of the case. We find that the trial court did not err in
convicting the accused-appellant.

WHEREFORE, the appeal is DENIED for failure to sufficiently show reversible error in the assailed decision. The
Decision dated December 24, 2008 of the CA in CA-G.R. CR-H.C. No. 02764 is AFFIRMED.

No costs.

SO ORDERED.
 37

7. G.R. No. 105204 March 9, 1995

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, 

vs.
THELMA REYES and NICK REYES, accused, THELMA REYES accused-appellant.

MENDOZA, J.:

This is an appeal from the decision of the Regional Trial Court of Laguna, Branch 35, the dispositive portion of which
reads as follows:

WHEREFORE, the prosecution having established the guilt of the accused Thelma Reyes beyond reasonable doubt of
Illegal Recruitment defined and penalized under Article 38, P.D. No. 442 as amended, the Court hereby sentences said
accused to suffer a penalty of Reclusion Perpetua and to pay a fine in the amount of P100,000.00 and to indemnify
Rosalino Bitang and Fabian Baradas, Mr. de Castro, Lorenzo Blanza and Ramon Mendoza the sum of P45,000.00 and to
pay the costs.

Appellant Thelma Reyes was charged together with her husband Nick Reyes, but the latter was at large and so has
remained up to now. Consequently, the trial proceeded only with respect to Thelma Reyes in view of her plea of not
guilty.

The prosecution's first witness, Rosalino Bitang, testified that sometime in 1985, he and five others (Lorenzo Blanza,
Fabian Baradas, Edgardo Garcia, Ramon Mendoza and Dionisio de Castro) went to the house of the appellant in Los
Baños, Laguna, to apply for employment abroad; that he gave P5,000 to Nick Reyes as downpayment for the recruitment
fees; that Nick Reyes handed the money to his wife Thelma Reyes, and afterward issued a receipt (Exh. A), which reads:

RECEIPT

RECEIVED from MR. RIZALINO BITANG the amount of FIVE THOUSAND (P5,000.00) PESOS, Philippine
Currency.

Manila, September 19, 1985.

(SGD.) NICK N. REYES, SR.

Bitang testified that on January 14, 1986, he and his companions paid P34,000.00 more to the spouses through Dionisio de
Castro. Of this amount, P8,500.00 was for his (witness Bitang's) placement fee, while the balance was for payment of his
companions' fees. As before Nick Reyes received the amount and gave it to his wife, Thelma Reyes, after which he issued
a receipt (Exh. B) which reads:

RECEIPT

RECEIVED from MR. DIONISIO DE CASTRO the amount of THIRTY FOUR THOUSAND (P34,000.00) Pesos,
Philippine Currency for the following: Edgardo Garcia Ramon Mendoza Lorenzo Blanza, Fabian Barradas, and Rosalino
Bitang.

Manila, January 14, 1986.

(SGD) NICHOL REYES SR.

According to complainant, Nick Reyes promised to notify them as soon as they were accepted for employment so that
they could leave for abroad, but this promise was not fulfilled. He said that he checked with the Philippine Overseas
Employment Administration (POEA) and found out that the spouses were not licensed recruiters. A certification to this
effect was issued to him by the POEA. (Exh. C)

The other complainant Fabian Baradas also testified. He stated that he was introduced to Thelma Reyes sometime in
September, 1985 at Lemery, Batangas, while the latter was recruiting workers for deployment in Saudi Arabia.

On several occasions between September and December, 1985, he and several others went to appellant's house at
Junction, Los Baños Laguna for overseas employment and were required to submit travel documents, such as passports,
birth certificates and NBI clearances and to pay various amounts of money.

On January 9, 1986, he gave P6,000.00 to Nick and Thelma Reyes, through his godfather Dionisio de Castro, for which
Nick Reyes issued to him a receipt (Exh. E), reading:

RECEIPT

Received from Mr. Dionisio de Castro the amount of Six Thousand (P6,000.00) Pesos, Philippine Currency.

Manila, January 9, 1986.

 38

(SGD.) NICK N. REYES

On January 14, 1986, he paid the additional amount of P12,000.00 to Reyes through Dionisio de Castro as evidenced by
Exh. B. The money was supposed to cover the cost of the processing papers. However, as no job was forthcoming, he
went to the POEA to inquire, and, like Rosalino Bitang, he learned that the spouses were not licensed recruiters.

The complainants both testified that as soon as they obtained the POEA certification that appellant and her husband were
not licensed to recruit, they demanded from the spouses the return of their money and when the latter did not give back
their money, they filed the complaint in this case.

Only the appellant Thelma Reyes testified in her behalf. She claimed that she met the witnesses Bitang and Baradas only
when they were looking for her husband at their house in Los Baños, Laguna, between March and May of 1986. She
denied having met them before.

She admitted that the receipts (Exhs. A, B and E) were all written and signed by her husband, but she denied she had
anything to do with her husband's activities. She said they had been estranged since March 1986 precisely because she did
not approve of her husband's illegal activities. She claimed that she had told her husband that, even though they were
poor, they could live on their earning and the monthly support of P10,000.00 which they were receiving from her mother-
in-law who lived in the United States.

According to appellant, she and her husband saw each other only occasionally, whenever they visited their children in Los
Baños where they were studying because she lived in Singalong, Manila. She presumed that her husband had told
complainants to go to the house in Los Baños which they were merely renting for their children and that she was included
in the complaint only because her husband could not be located.

On cross-examination she admitted that there were fourteen (14) other cases of Illegal Recruitment filed and/or pending
against her and her husband in different courts of Manila and claimed that some of the cases had been dismissed or settled
after she had refunded the money of the complainants.

Testifying on rebuttal for the prosecution, Rosalino Bitang stated that it was Thelma Reyes herself who gave the job
applicants the address and sketch of their house in Los Baños, Laguna, and that she represented to him that she was
negotiating for job placements abroad. Bitang reiterated that money paid to Nick Reyes was given to Thelma Reyes who
counted it before Nick Reyes issued receipts.

On the basis of the parties' evidence, the trial court found Thelma Reyes guilty of illegal recruitment and sentenced her as
stated in the beginning. Hence this appeal.

Appellant claims that the trial court erred —

1. IN FINDING THAT THE PROSECUTION HAS MARSHALLED THE QUANTUM OF EVIDENCE SUFFICIENT
TO CONVICT THE ACCUSED OF THE CRIME OF ILLEGAL RECRUITMENT UNDER ARTICLE 38, P.D. NO.
442.

2. IN NOT CONSIDERING THE FACT THAT THERE ARE ONLY TWO COMPLAINANTS IN THE
INFORMATION FILED ON DECEMBER 11, 1986 AGAINST THE ACCUSED HENCE THEY CANNOT BE
PROSECUTED UNDER ARTICLE 38, P.D. NO. 442.

3. IN GIVING CREDENCE TO THE VERBAL TESTIMONIES OF PRIVATE COMPLAINANTS RATHER THAN

THE DOCUMENTARY EVIDENCE.

We shall now deal with these contentions of appellant.

First. Appellant contends that the testimonies of Bitang and Baradas are insufficient to sustain conviction. She contends
that Dionisio de Castro, who allegedly advanced P34,000.00 for the complainants and their companions, should have been
presented to corroborate the claim of the claimants.

The contention is without merit. To be sure, an accused can be convicted on the strength of the testimony of a single
witness, if such testimony is credible and positive and produces a conviction beyond reasonable doubt. 1 That the witness
is also the complainant in a case makes little difference as long as the court is convinced beyond doubt that the witness is
telling the truth. For instance, in Hernandez v. Court of Appeals2 this Court held:

Petitioner claims that the decision of the trial court is not supported by the evidence, which is contrary to the findings of
the Court of Appeals that said decision is "in accordance with law and the evidence" (Rollo,
p. 12). He points out that the appellate court should not have believed the trial court's conclusion that "the sole testimony
of the offended party would have sufficed to sustain her assertions" (Rollo, p. 47). He claims that self-serving declarations
of a party favorable to himself are not admissible and that none of the alleged witnesses to the transactions were
presented.

The common objection known as "self-serving" is not correct because almost all testimonies are self-serving. The proper
basis for objection is "hearsay" (Wenke, Making and Meeting Objections, 69).
 39

Petitioner fails to take into account the distinction between self-serving statements and testimonies made in court. Self-
serving statements are those made by a party out of court advocating his own interest; they do not include a party's
testimony as a witness in court (National Development Co. v. Workmen's Compensation Commission, 19 SCRA 861
[1967]).

Self-serving statements are inadmissible because the adverse party is not given the opportunity for cross-examination, and
their admission would encourage fabrication of testimony. This cannot be said of a party's testimony in court made under
oath, with full opportunity on the part of the opposing party for cross-examination.

It is not true that none of the alleged witnesses to the transactions was presented in court (Rollo, p. 13). Yolanda Dela
Rosa, an eye-witness to some of the transactions, testified for the prosecution. Assuming that Dela Rosa was not presented
as a witness, the testimony of de Leon sufficed to sustain the conviction of petitioner. The conviction of an accused may
be on the basis of the testimony of a single witness (People v. Rumeral, 200 SCRA 194 [1991]). In determining the value
and credibility of evidence, witnesses are to be weighed, not counted (People v. Villalobos, 209 SCRA 304 [1992]).

In the case at bar, the trial court gave weight to the testimonies of complainants because,

Except for the denial of accused Thelma Reyes that she has nothing to do with the recruitment of the complaining
witnesses as well as the collection of the amount from them, said accused failed to sufficiently overthrow the convincing
testimony of the complaining witnesses that accused Thelma Reyes was present and even counted the money evidenced
by Exhibit[s] "A" and "B" after her husband hands it to her and that her husband Nick Reyes who issued the receipts to
the complainants.

Moreover, when the issue is the credibility of witnesses, appellate courts will in general not disturb the findings of the trial
court unless certain facts or circumstances of weight have been overlooked, misunderstood or misapplied which, if
considered, might affect the result of the case. This is because the trial court heard the testimony of the witnesses and
observed their deportment and manner of testifying during the trial. 3

With respect to the fact that Dionisio de Castro was not presented to testify, it is sufficient to say that there was no
necessity for this because there is no question that the amount of P34,000.00 which he had advanced for the complainants
and others was received by Nick Reyes.

Second. Appellant contends that the receipts constitute the best evidence to show that only Nick Reyes received the
amounts stated therein because only his signature appears on the receipts. That the receipts were signed by Nick Reyes
alone only proves that it was to him that the amounts were paid. What, on the other hand, complainants are saying is that
appellant is guilty because she and her husband, conspiring together, acted and made them believe that they were licensed
recruiters. If so, the acts of the husband were likewise those of her. Indeed, the evidence shows that after receiving the
amounts from complainants, Nick Reyes handed the money paid to the appellant and that Nick Reyes issued the receipts
in question only after appellant Thelma Reyes had counted it.

Appellant claims that she and her husband separated in 1985 precisely because she did not want to be involved in his
illegal activities. This seems to be us to be a convenient way to dissociate herself, but her mere claim is not enough to
overcome the evidence of the prosecution. If there was anyone whose testimony needed corroboration it was appellant.

Taking another tack, appellant points out that complainants cannot explain why the purpose for which payment was made
is not stated in the receipts nor why the receipts purport to have been issued in "Manila" and not in Los Baños where they
said they had made all the payments. She argues that if the illegal recruitment was made in Manila, then the Regional
Trial Court of Laguna had no jurisdiction to try the case.

The circumstances pointed out by appellant only underscores the deviousness of appellant and her husband. Complainants
have an elementary education only. It is not for them — but for appellant and her husband — to explain these
circumstances because it was the latter who made-the receipts. It is not far fetched that they made the receipts this way
precisely to create doubt as to their real import. It is enough that complainants positively identified the appellant and her
husband as having illegally recruited them and collected money from them. Their testimonies have not been successfully
rebutted by the lame denial of appellant.

Third. Appellant contends that in any event the testimonies of the two complainants could not be the basis for a finding of
illegal recruitment on a large scale and for imposing the penalty of life imprisonment on her. The Labor Code prescribes
the penalty of life imprisonment for illegal recruitment when committed on a "large scale." Art. 38 (b) of the Code
provides:

(b) Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic
sabotage and shall be penalized in accordance with Article 39 hereof.

And Art. 39 (a) provides:

Art. 39. Penalties. — (a) The penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P100,000) shall be
imposed if illegal recruitment constitutes economic sabotage as defined herein.

We agree with this contention.

 40

In this case the information against appellant mentioned only the two complainants Fabian Baradas and Rosalino Bitang
as having been illegally recruited by appellant and her husband. The trial Court, however, held appellant guilty of illegal
recruitment on a large scale because aside from Baradas and Bitang, appellant and her husband allegedly recruited others,
namely, Lorenzo Blanza, Edgardo Garcia, Ramon Mendoza, and Dionisio de Castro.

This is error. To be sure, Blanza and Garcia, according to complainant Baradas were able to obtain overseas employment.
On the other hand, with respect to De Castro there is no evidence that he, too, had been illegally recruited by the spouses.
What appears in the record is that he advanced the amount of P34,000.00 in behalf of the complainants and the three
others. Only two, therefore, had been illegally recruited.

There are, it is said, 14 other cases filed pending in the courts against the accused for illegal recruitment. These cases
cannot be taken into account for the purpose of Art. 38(b). 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.

Moreover, even it Blanza and Garcia had been illegally recruited so as to make the number of persons illegally recruited
four and make the crime that of illegal recruitment on a large scale, since this was not alleged in the information and this
is the more serious offense which includes that which was charged, the appellant can only be found guilty of the less
serious offense charged, pursuant to Rule 120, §4.

Accordingly, appellant must be punished under Art. 39(c) of the Labor Code which provides:

(c) Any person who is neither a licensee nor a holder of authority under this Title found violating any provision thereof or
its implementing rules and regulations shall upon conviction thereof, suffer the penalty of imprisonment of not less than
four years nor more than eight years or a fine of not less than P20,000 nor more than P100,000 or both such imprisonment
and fine, at the discretion of the court.

WHEREFORE, the decision appealed from is SET ASIDE and another one is rendered, finding appellant Thelma Reyes
guilty of illegal recruitment on two (2) counts and is hereby sentenced for each crime to suffer imprisonment of 6 years
and 1 day to 8 years and pay a fine of P50,000.00; and ordered to indemnify Rosalino Bitang in the amount of P13,500.00
and Fabian Baradas in the amount of P18,000.00 and pay the costs.

SO ORDERED.
 41

8. G.R. Nos. 182978-79               April 7, 2009

BECMEN SERVICE EXPORTER AND PROMOTION, INC., Petitioner, 

vs.
SPOUSES SIMPLICIO and MILA CUARESMA (for and in behalf of their daughter, Jasmin G. Cuaresma),
WHITE FALCON SERVICES, INC. and JAIME ORTIZ (President,White Falcon Services, Inc.), Respondents.

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

G.R. Nos. 184298-99               April 7, 2009

SPOUSES SIMPLICIO and MILA CUARESMA (for and in behalf of their daughter, Jasmin G.
Cuaresma),Petitioners, 
vs.
WHITE FALCON SERVICES, INC. and BECMEN SERVICE EXPORTER AND PROMOTION,
INC., Respondents.

DECISION

YNARES-SANTIAGO, J.:

These consolidated petitions assail the Amended Decision 1 of the Court of Appeals dated May 14, 2008 in CA-G.R. SP
No. 80619 and CA-G.R. SP No. 81030 finding White Falcon Services, Inc. and Becmen Service Exporter and Promotion,
Inc. solidarily liable to indemnify spouses Simplicio and Mila Cuaresma the amount of US$4,686.73 in actual damages
with interest.

On January 6, 1997, Jasmin Cuaresma (Jasmin) was deployed by Becmen Service Exporter and Promotion, Inc. 2(Becmen)
to serve as assistant nurse in Al-Birk Hospital in the Kingdom of Saudi Arabia (KSA), for a contract duration of three
years, with a corresponding salary of US$247.00 per month.

Over a year later, she died allegedly of poisoning.

Jessie Fajardo, a co-worker of Jasmin, narrated that on June 21, 1998, Jasmin was found dead by a female cleaner lying on
the floor inside her dormitory room with her mouth foaming and smelling of poison. 3

Based on the police report and the medical report of the examining physician of the Al-Birk Hospital, who conducted an
autopsy of Jasmin’s body, the likely cause of her death was poisoning. Thus:

According to letter No. 199, dated 27.2.1419H, issued by Al-Birk Police Station, for examining the corpse of Jasmin
Cuaresma, 12.20 P.M. 27.2.1419H, Sunday, at Al-Birk Hospital.

1. The Police Report on the Death

2. The Medical Diagnosis

Sex: Female Age: 25 years Relg: Christian

The said person was brought to the Emergency Room of the hospital; time 12.20 P.M. and she was unconscious, blue, no
pulse, no respiration and the first aid esd undertaken but without success.

3. Diagnosis and Opinion: Halt in blood circulation respiratory system and brain damage due to an apparentpoisoning
which is under investigation.4

Name : Jasmin Cuaresma

Sex : Female

Marital Status : Single Nationality: Philipino (sic)

Religion : Christian

Profession : Nurse

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

On 27.2.1419H, Dr. Tariq Abdulminnem and Dr. Ashoki Komar, both have examined the dead body of Jasmin Cuaresma,
at 12.20 P.M., Sunday, 22.2.14189H, and the result was:

1. Report of the Police on the death

 42

2. Medical Examination: Blue skin and paleness on the Extrimes (sic), total halt to blood circulation and respiratory
system and brain damage. There were no external injuries. Likely poisoning by taking poisonous substance, yet not
determined. There was a bad smell in the mouth and unknown to us. 5 (Emphasis supplied)

Jasmin’s body was repatriated to Manila on September 3, 1998. The following day, the City Health Officer of Cabanatuan
City conducted an autopsy and the resulting medical report indicated that Jasmin died under violent circumstances, and
not poisoning as originally found by the KSA examining physician. The City Health Officer found that Jasmin had
abrasions at her inner lip and gums; lacerated wounds and abrasions on her left and right ears; lacerated wounds and
hematoma (contusions) on her elbows; abrasions and hematoma on her thigh and legs; intra-muscular hemorrhage at the
anterior chest; rib fracture; puncture wounds; and abrasions on the labia minora of the vaginal area. 6

On March 11, 1999, Jasmin’s remains were exhumed and examined by the National Bureau of Investigation (NBI). The
toxicology report of the NBI, however, tested negative for non-volatile, metallic poison and insecticides. 7

Simplicio and Mila Cuaresma (the Cuaresmas), Jasmin’s parents and her surviving heirs, received from the Overseas
Workers Welfare Administration (OWWA) the following amounts: P50,000.00 for death benefits; P50,000.00 for loss of
life; P20,000.00 for funeral expenses; and P10,000.00 for medical reimbursement.

On November 22, 1999, the Cuaresmas filed a complaint against Becmen and its principal in the KSA, Rajab & Silsilah
Company (Rajab), claiming death and insurance benefits, as well as moral and exemplary damages for Jasmin’s death. 8

In their complaint, the Cuaresmas claim that Jasmin’s death was work-related, having occurred at the employer’s
premises;9 that under Jasmin’s contract with Becmen, she is entitled to "iqama insurance" coverage; that Jasmin is entitled
to compensatory damages in the amount of US$103,740.00, which is the sum total of her monthly salary of US$247.00
per month under her employment contract, multiplied by 35 years (or the remaining years of her productive life had death
not supervened at age 25, assuming that she lived and would have retired at age 60).

The Cuaresmas assert that as a result of Jasmin’s death under mysterious circumstances, they suffered sleepless nights and
mental anguish. The situation, they claim, was aggravated by findings in the autopsy and exhumation reports which
evidently show that a grave injustice has been committed against them and their daughter, for which those responsible
should likewise be made to pay moral and exemplary damages and attorney’s fees.

In their position paper, Becmen and Rajab insist that Jasmin committed suicide, citing a prior unsuccessful suicide attempt
sometime in March or April 1998 and relying on the medical report of the examining physician of the Al-Birk Hospital.
They likewise deny liability because the Cuaresmas already recovered death and other benefits totaling P130,000.00 from
the OWWA. They insist that the Cuaresmas are not entitled to "iqama insurance" because this refers to the "issuance" –
not insurance – of iqama, or residency/work permit required in the KSA. On the issue of moral and exemplary damages,
they claim that the Cuaresmas are not entitled to the same because they have not acted with fraud, nor have they been in
bad faith in handling Jasmin’s case.

While the case was pending, Becmen filed a manifestation and motion for substitution alleging that Rajab terminated their
agency relationship and had appointed White Falcon Services, Inc. (White Falcon) as its new recruitment agent in the
Philippines. Thus, White Falcon was impleaded as respondent as well, and it adopted and reiterated Becmen’s arguments
in the position paper it subsequently filed.

On February 28, 2001, the Labor Arbiter rendered a Decision 10 dismissing the complaint for lack of merit. Giving weight
to the medical report of the Al-Birk Hospital finding that Jasmin died of poisoning, the Labor Arbiter concluded that
Jasmin committed suicide. In any case, Jasmin’s death was not service-connected, nor was it shown that it occurred while
she was on duty; besides, her parents have received all corresponding benefits they were entitled to under the law. In
regard to damages, the Labor Arbiter found no legal basis to warrant a grant thereof.

On appeal, the National Labor Relations Commission (Commission) reversed the decision of the Labor Arbiter. Relying
on the findings of the City Health Officer of Cabanatuan City and the NBI as contained in their autopsy and toxicology
report, respectively, the Commission, via its November 22, 2002 Resolution 11 declared that, based on substantial evidence
adduced, Jasmin was the victim of compensable work-connected criminal aggression. It disregarded the Al-Birk Hospital
attending physician’s report as well as the KSA police report, finding the same to be inconclusive. It declared that
Jasmin’s death was the result of an "accident" occurring within the employer’s premises that is attributable to her
employment, or to the conditions under which she lived, and thus arose out of and in the course of her employment as
nurse. Thus, the Cuaresmas are entitled to actual damages in the form of Jasmin’s lost earnings, including future earnings,
in the total amount of US$113,000.00. The Commission, however, dismissed all other claims in the complaint.

Becmen, Rajab and White Falcon moved for reconsideration, whereupon the Commission issued its October 9, 2003
Resolution12 reducing the award of US$113,000.00 as actual damages to US$80,000.00. 13 The NLRC likewise declared
Becmen and White Falcon as solidarily liable for payment of the award.

Becmen and White Falcon brought separate petitions for certiorari to the Court of Appeals. 14 On June 28, 2006, the
appellate court rendered its Decision,15 the dispositive portion of which reads, as follows:

WHEREFORE, the subject petitions are DENIED but in the execution of the decision, it should first be enforced against
White Falcon Services and then against Becmen Services when it is already impossible, impractical and futile to go
against it (White Falcon).
 43

SO ORDERED.16

The appellate court affirmed the NLRC’s findings that Jasmin’s death was compensable, the same having occurred at the
dormitory, which was contractually provided by the employer. Thus her death should be considered to have occurred
within the employer’s premises, arising out of and in the course of her employment.

Becmen and White Falcon moved for reconsideration. On May 14, 2008, the appellate court rendered the assailed
Amended Decision, the dispositive portion of which reads, as follows:

WHEREFORE, the motions for reconsideration are GRANTED. Accordingly, the award of US$80,000.00 in actual
damages is hereby reduced to US$4,686.73 plus interest at the legal rate computed from the time it became due until fully
paid. Petitioners are hereby adjudged jointly and solidarily liable with the employer for the monetary awards with Becmen
Service Exporter and Promotions, Inc. having a right of reimbursement from White Falcon Services, Inc.

SO ORDERED.17

In the Amended Decision, the Court of Appeals found that although Jasmin’s death was compensable, however, there is
no evidentiary basis to support an award of actual damages in the amount of US$80,000.00. Nor may lost earnings be
collected, because the same may be charged only against the perpetrator of the crime or quasi-delict. Instead, the appellate
court held that Jasmin’s beneficiaries should be entitled only to the sum equivalent of the remainder of her 36-month
employment contract, or her monthly salary of US$247.00 multiplied by nineteen (19) months, with legal interest.

Becmen filed the instant petition for review on certiorari (G.R. Nos. 182978-79). The Cuaresmas, on the other hand,
moved for a reconsideration of the amended decision, but it was denied. They are now before us via G.R. Nos. 184298-99.

On October 6, 2008, the Court resolved to consolidate G.R. Nos. 184298-99 with G.R. Nos. 182978-79.

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

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT GAVE MORE CREDENCE AND WEIGHT TO THE
AUTOPSY REPORT CONDUCTED BY THE CABANATUAN CITY HEALTH OFFICE THAN THE MEDICAL
AND POLICE REPORTS ISSUED BY THE MINISTRY OF HEALTH OF KINGDOM OF SAUDI ARABIA AND AL-
BIRK HOSPITAL.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN ON THE BASIS OF THE POSITION PAPERS AND
ANNEXES THERETO INCLUDING THE AUTOPSY REPORT, IT CONCLUDED THAT THE DEATH OF JASMIN
CUARESMA WAS CAUSED BY CRIMINAL AGGRESSION.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD THAT THE DEATH OF JASMIN CUARESMA
WAS COMPENSABLE PURSUANT TO THE RULING OF THE SUPREME COURT IN TALLER VS. YNCHAUSTI,
G.R. NO. 35741, DECEMBER 20, 1932, WHICH IT FOUND TO BE STILL GOOD LAW.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD BECMEN LIABLE FOR THE DEATH OF
JASMIN CUARESMA NOTWITHSTANDING ITS ADMISSIONS THAT "IQAMA INSURANCE" WAS A
TYPOGRAPHICAL ERROR SINCE "IQAMA" IS NOT AN INSURANCE.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT CONCLUDED THAT THE DEATH OF JASMIN WAS
WORK RELATED.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD BECMEN LIABLE TO JASMIN’S
BENEFICIARIES FOR THE REMAINDER OF HER 36-MONTH CONTRACT COMPUTED IN THIS MANNER:
MONTHLY SALARY OF US$246.67 MULTIPLIED BY 19 MONTHS, THE REMAINDER OF THE TERM OF
JASMIN’S EMPLOYMENT CONTRACT, IS EQUAL TO US$4,686.73.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD BECMEN LIABLE TO PAY INTEREST AT THE
LEGAL RATE FROM THE TIME IT WAS DUE UNTIL FULLY PAID.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD BECMEN AND WHITE FALCON JOINTLY
AND SEVERALLY LIABLE WITH THE EMPLOYER NOTWITHSTANDING THE ASSUMPTION OF LIABILITY
EXECUTED BY WHITE FALCON IN FAVOR OF BECMEN.

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

(THE COURT OF APPEALS) GRAVELY ERRED IN APPLYING THE PROVISIONS OF THE CIVIL CODE
CONSIDERED GENERAL LAW DESPITE THE CASE BEING COVERED BY E.O. 247, R.A. 8042 AND LABOR
CODE CONSIDERED AS SPECIAL LAWS.

(THE COURT OF APPEALS) GRAVELY ERRED IN NOT APPLYING THE DECEASED’S FUTURE EARNINGS
WHICH IS (AN) INHERENT FACTOR IN THE COMPUTATION OF DEATH BENEFITS OF OVERSEAS FILIPINO
CONTRACT WORKERS.
 44

(THE COURT OF APPEALS) GRAVELY ERRED IN REDUCING THE DEATH BENEFITS AWARDED BY NLRC
CONSIDERED FINDINGS OF FACT THAT CANNOT BE DISTURBED THROUGH CERTIORARI UNDER RULE
65 OF THE RULES OF COURT.

The issue for resolution is whether the Cuaresmas are entitled to monetary claims, by way of benefits and damages, for
the death of their daughter Jasmin.

The terms and conditions of Jasmin’s 1996 Employment Agreement which she and her employer Rajab freely entered into
constitute the law between them. As a rule, stipulations in an employment contract not contrary to statutes, public policy,
public order or morals have the force of law between the contracting parties. 18 An examination of said employment
agreement shows that it provides for no other monetary or other benefits/privileges than the following:

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

2. Free air tickets to KSA at the start of her contract and to the Philippines at the end thereof, as well as for her vacation at
the end of each twenty four-month service;

3. Transportation to and from work;

4. Free living accommodations;

5. Free medical treatment, except for optical and dental operations, plastic surgery charges and lenses, and medical
treatment obtained outside of KSA;

6. Entry visa fees will be shared equally between her and her employer, but the exit/re-entry visa fees, fees for Iqama
issuance, renewal, replacement, passport renewal, sponsorship transfer and other liabilities shall be borne by her;

7. Thirty days paid vacation leave with round trip tickets to Manila after twenty four-months of continuous service;

8. Eight days public holidays per year;

9. The indemnity benefit due her at the end of her service will be calculated as per labor laws of KSA.

Thus, the agreement does not include provisions for insurance, or for accident, death or other benefits that the Cuaresmas
seek to recover, and which the labor tribunals and appellate court granted variably in the guise of compensatory damages.

However, the absence of provisions for social security and other benefits does not make Jasmin’s employment contract
infirm. Under KSA law, her foreign employer is not obliged to provide her these benefits; and neither is Jasmin entitled to
minimum wage – unless of course the KSA labor laws have been amended to the opposite effect, or that a bilateral wage
agreement has been entered into.

Our next inquiry is, should Jasmin’s death be considered as work-connected and thus compensable? The evidence
indicates that it is not. At the time of her death, she was not on duty, or else evidence to the contrary would have been
adduced. Neither was she within hospital premises at the time. Instead, she was at her dormitory room on personal time
when she died. Neither has it been shown, nor does the evidence suggest, that at the time she died, Jasmin was performing
an act reasonably necessary or incidental to her employment as nurse, because she was at her dormitory room. It is
reasonable to suppose that all her work is performed at the Al-birk Hospital, and not at her dormitory room.

We cannot expect that the foreign employer should ensure her safety even while she is not on duty. It is not fair to require
employers to answer even for their employees’ personal time away from work, which the latter are free to spend of their
own choosing. Whether they choose to spend their free time in the pursuit of safe or perilous undertakings, in the
company of friends or strangers, lovers or enemies, this is not one area which their employers should be made accountable
for. While we have emphasized the need to observe official work time strictly, 19 what an employee does on free time is
beyond the employer’s sphere of inquiry.

While the "employer’s premises" may be defined very broadly not only to include premises owned by it, but also premises
it leases, hires, supplies or uses,20 we are not prepared to rule that the dormitory wherein Jasmin stayed should constitute
employer’s premises as would allow a finding that death or injury therein is considered to have been incurred or sustained
in the course of or arose out of her employment. There are certainly exceptions, 21 but they do not appear to apply here.
Moreover, a complete determination would have to depend on the unique circumstances obtaining and the overall factual
environment of the case, which are here lacking.

But, did Jasmin commit suicide? Rajab, Becmen and White Falcon vehemently insist that she did; thus, her heirs may not
claim benefits or damages based on criminal aggression. On the other hand, the Cuaresmas do not believe so.

The Court cannot subscribe to the idea that Jasmin committed suicide while halfway into her employment contract. It is
beyond human comprehension that a 25-year old Filipina, in the prime of her life and working abroad with a chance at
making a decent living with a high-paying job which she could not find in her own country, would simply commit suicide
for no compelling reason.

The Saudi police and autopsy reports – which state that Jasmin is a likely/or apparent victim of poisoning – are patently
inconclusive. They are thus unreliable as evidence.
 45

On the contrary, the autopsy report of the Cabanatuan City Health Officer and the exhumation report of the NBI
categorically and unqualifiedly show that Jasmin sustained external and internal injuries, specifically abrasions at her
inner lip and gums; lacerated wounds and abrasions on her left and right ears; lacerated wounds and hematoma
(contusions) on her elbows; abrasions and hematoma on her thigh and legs; intra-muscular hemorrhage at the
anterior chest; a fractured rib; puncture wounds; and abrasions on the labia minora of the vaginal area. The NBI
toxicology report came up negative on the presence of poison.

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

Even if we were to agree with the Saudi police and autopsy reports that indicate Jasmin was poisoned to death, we do not
believe that it was self-induced. If ever Jasmin was poisoned, the assailants who beat her up – and possibly raped her – are
certainly responsible therefor.

We are not exactly ignorant of what goes on with our OFWs. Nor is the rest of the world blind to the realities of life being
suffered by migrant workers in the hands of some foreign employers. It is inconceivable that our Filipina women would
seek employment abroad and face uncertainty in a foreign land, only to commit suicide for unexplained reasons. Deciding
to leave their family, loved ones, and the comfort and safety of home, to work in a strange land requires unrivaled strength
and courage. Indeed, many of our women OFWs who are unfortunate to end up with undesirable employers have been
there more times than they care to, beaten up and broken in body – yet they have remained strong in mind, refusing to
give up the will to live. Raped, burned with cigarettes, kicked in the chest with sharp high-heeled shoes, starved for days
or even weeks, stabbed, slaved with incessant work, locked in their rooms, forced to serve their masters naked, grossly
debased, dehumanized and insulted, their spirits fought on and they lived for the day that they would once again be
reunited with their families and loved ones. Their bodies surrendered, but their will to survive remained strong.

It is surprising, therefore, that Rajab, Becmen and White Falcon should insist on suicide, without even lifting a finger to
help solve the mystery of Jasmin’s death. Being in the business of sending OFWs to work abroad, Becmen and White
Falcon should know what happens to some of our OFWs. It is impossible for them to be completely unaware that cruelties
and inhumanities are inflicted on OFWs who are unfortunate to be employed by vicious employers, or upon those who
work in communities or environments where they are liable to become victims of crime. By now they should know that
our women OFWs do not readily succumb to the temptation of killing themselves even when assaulted, abused, starved,
debased and, worst, raped.

Indeed, what we have seen is Rajab and Becmen’s revolting scheme of conveniently avoiding responsibility by clinging to
the absurd theory that Jasmin took her own life. Abandoning their legal, moral and social obligation (as employer and
recruiter) to assist Jasmin’s family in obtaining justice for her death, they immediately gave up on Jasmin’s case, which
has remained under investigation as the autopsy and police reports themselves indicate. Instead of taking the cudgels for
Jasmin, who had no relative or representative in the KSA who would naturally demand and seek an investigation of her
case, Rajab and Becmen chose to take the most convenient route to avoiding and denying liability, by casting Jasmin’s
fate to oblivion. It appears from the record that to this date, no follow up of Jasmin’s case was ever made at all by them,
and they seem to have expediently treated Jasmin’s death as a closed case. Despite being given the lead via the autopsy
and toxicology reports of the Philippine authorities, they failed and refused to act and pursue justice for Jasmin’s sake and
to restore honor to her name.

Indeed, their nonchalant and uncaring attitude may be seen from how Jasmin’s remains were repatriated. No official
representative from Rajab or Becmen was kind enough to make personal representations with Jasmin’s parents, if only to
extend their condolences or sympathies; instead, a mere colleague, nurse Jessie Fajardo, was designated to accompany
Jasmin’s body home.

Of all life’s tragedies, the death of one’s own child must be the most painful for a parent. Not knowing why or how
Jasmin’s life was snuffed out makes the pain doubly unbearable for Jasmin’s parents, and further aggravated by Rajab,
Becmen, and White Falcon’s baseless insistence and accusation that it was a self-inflicted death, a mortal sin by any
religious standard.

Thus we categorically hold, based on the evidence; the actual experiences of our OFWs; and the resilient and courageous
spirit of the Filipina that transcends the vilest desecration of her physical self, that Jasmin did not commit suicide but a
victim of murderous aggression.

Rajab, Becmen, and White Falcon’s indifference to Jasmin’s case has caused unfathomable pain and suffering upon her
parents. They have turned away from their moral obligation, as employer and recruiter and as entities laden with social
and civic obligations in society, to pursue justice for and in behalf of Jasmin, her parents and those she left behind.
Possessed with the resources to determine the truth and to pursue justice, they chose to stand idly for the sake of
convenience and in order that they may avoid pecuniary liability, turning a blind eye to the Philippine authorities’ autopsy
and toxicology reports instead of taking action upon them as leads in pursuing justice for Jasmin’s death. They have
placed their own financial and corporate interests above their moral and social obligations, and chose to secure and
insulate themselves from the perceived responsibility of having to answer for and indemnify Jasmin’s heirs for her death.

Under Republic Act No. 8042 (R.A. 8042), or the Migrant Workers and Overseas Filipinos Act of 1995, 22 the State shall,
at all times, uphold the dignity of its citizens whether in country or overseas, in general, and Filipino migrant workers, in
particular.23 The State shall provide adequate and timely social, economic and legal services to Filipino migrant
 46

workers.24 The rights and interest of distressed25 overseas Filipinos, in general, and Filipino migrant workers, in particular,
documented or undocumented, are adequately protected and safeguarded. 26

Becmen and White Falcon, as licensed local recruitment agencies, miserably failed to abide by the provisions of R.A.
8042. Recruitment agencies are expected to extend assistance to their deployed OFWs, especially those in distress.
Instead, they abandoned Jasmin’s case and allowed it to remain unsolved to further their interests and avoid anticipated
liability which parents or relatives of Jasmin would certainly exact from them. They willfully refused to protect and tend
to the welfare of the deceased Jasmin, treating her case as just one of those unsolved crimes that is not worth wasting their
time and resources on. The evidence does not even show that Becmen and Rajab lifted a finger to provide legal
representation and seek an investigation of Jasmin’s case. Worst of all, they unnecessarily trampled upon the person and
dignity of Jasmin by standing pat on the argument that Jasmin committed suicide, which is a grave accusation given its
un-Christian nature.

We cannot reasonably expect that Jasmin’s parents should be the ones to actively pursue a just resolution of her case in
the KSA, unless they are provided with the finances to undertake this herculean task. Sadly, Becmen and Rajab did not
lend any assistance at all in this respect. The most Jasmin’s parents can do is to coordinate with Philippine authorities as
mandated under R.A. 8042, obtain free legal assistance and secure the aid of the Department of Foreign Affairs, the
Department of Labor and Employment, the POEA and the OWWA in trying to solve the case or obtain relief, in
accordance with Section 2327 of R.A. 8042. To our mind, the Cuaresmas did all that was within their power, short of
actually flying to the KSA. Indeed, the Cuaresmas went even further. To the best of their abilities and capacities, they
ventured to investigate Jasmin’s case on their own: they caused another autopsy on Jasmin’s remains as soon as it arrived
to inquire into the true cause of her death. Beyond that, they subjected themselves to the painful and distressful experience
of exhuming Jasmin’s remains in order to obtain another autopsy for the sole purpose of determining whether or not their
daughter was poisoned. Their quest for the truth and justice is equally to be expected of all loving parents. All this time,
Rajab and Becmen – instead of extending their full cooperation to the Cuaresma family – merely sat on their laurels in
seeming unconcern.

In Interorient Maritime Enterprises, Inc. v. NLRC,28 a seaman who was being repatriated after his employment contract
expired, failed to make his Bangkok to Manila connecting flight as he began to wander the streets of Bangkok aimlessly.
He was shot to death by Thai police four days after, on account of running amuck with a knife in hand and threatening to
harm anybody within sight. The employer, sued for death and other benefits as well as damages, interposed as defense the
provision in the seafarer agreement which provides that "no compensation shall be payable in respect of any injury,
incapacity, disability or death resulting from a willful act on his own life by the seaman." The Court rejected the defense
on the view, among others, that the recruitment agency should have observed some precautionary measures and should
not have allowed the seaman, who was later on found to be mentally ill, to travel home alone, and its failure to do so
rendered it liable for the seaman’s death. We ruled therein that –

The foreign employer may not have been obligated by its contract to provide a companion for a returning employee, but it
cannot deny that it was expressly tasked by its agreement to assure the safe return of said worker. The uncaring attitude
displayed by petitioners who, knowing fully well that its employee had been suffering from some mental disorder,
nevertheless still allowed him to travel home alone, is appalling to say the least. Such attitude harks back to
another time when the landed gentry practically owned the serfs, and disposed of them when the latter had grown
old, sick or otherwise lost their usefulness.29 (Emphasis supplied)

Thus, more than just recruiting and deploying OFWs to their foreign principals, recruitment agencies have equally
significant responsibilities. In a foreign land where OFWs are likely to encounter uneven if not discriminatory treatment
from the foreign government, and certainly a delayed access to language interpretation, legal aid, and the Philippine
consulate, the recruitment agencies should be the first to come to the rescue of our distressed OFWs since they know the
employers and the addresses where they are deployed or stationed. Upon them lies the primary obligation to protect the
rights and ensure the welfare of our OFWs, whether distressed or not. Who else is in a better position, if not these
recruitment agencies, to render immediate aid to their deployed OFWs abroad?

Article 19 of the Civil Code provides that every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith. Article 21 of the Code states that any
person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy
shall compensate the latter for the damage. And, lastly, Article 24 requires that in all contractual, property or other
relations, when one of the parties is at a disadvantage on account of his moral dependence, ignorance, indigence, mental
weakness, tender age or other handicap, the courts must be vigilant for his protection.

Clearly, Rajab, Becmen and White Falcon’s acts and omissions are against public policy because they undermine and
subvert the interest and general welfare of our OFWs abroad, who are entitled to full protection under the law. They set an
awful example of how foreign employers and recruitment agencies should treat and act with respect to their distressed
employees and workers abroad. Their shabby and callous treatment of Jasmin’s case; their uncaring attitude; their
unjustified failure and refusal to assist in the determination of the true circumstances surrounding her mysterious death,
and instead finding satisfaction in the unreasonable insistence that she committed suicide just so they can conveniently
avoid pecuniary liability; placing their own corporate interests above of the welfare of their employee’s – all these are
contrary to morals, good customs and public policy, and constitute taking advantage of the poor employee and her
family’s ignorance, helplessness, indigence and lack of power and resources to seek the truth and obtain justice for the
death of a loved one.
 47

Giving in handily to the idea that Jasmin committed suicide, and adamantly insisting on it just to protect Rajab and
Becmen’s material interest – despite evidence to the contrary – is against the moral law and runs contrary to the good
custom of not denouncing one’s fellowmen for alleged grave wrongdoings that undermine their good name and honor. 30

Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social
legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with the basic public
policy of the State to afford protection to labor, promote full employment, ensure equal work opportunities regardless of
sex, race or creed, and regulate the relations between workers and employers. This ruling is likewise rendered imperative
by Article 17 of the Civil Code which states that laws which have for their object public order, public policy and good
customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed
upon in a foreign country.31

The relations between capital and labor are so impressed with public interest, 32 and neither shall act oppressively against
the other, or impair the interest or convenience of the public. 33 In case of doubt, all labor legislation and all labor contracts
shall be construed in favor of the safety and decent living for the laborer. 34

The grant of moral damages to the employee by reason of misconduct on the part of the employer is sanctioned by Article
2219 (10)35 of the Civil Code, which allows recovery of such damages in actions referred to in Article 21. 36

Thus, in view of the foregoing, the Court holds that the Cuaresmas are entitled to moral damages, which Becmen and
White Falcon are jointly and solidarily liable to pay, together with exemplary damages for wanton and oppressive
behavior, and by way of example for the public good.

Private employment agencies are held jointly and severally liable with the foreign-based employer for any violation of the
recruitment agreement or contract of employment. This joint and solidary liability imposed by law against recruitment
agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is
due him.37 If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the
case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims
and damages.38

White Falcon’s assumption of Becmen’s liability does not automatically result in Becmen’s freedom or release from
liability. This has been ruled in ABD Overseas Manpower Corporation v. NLRC.39 Instead, both Becmen and White
Falcon should be held liable solidarily, without prejudice to each having the right to be reimbursed under the provision of
the Civil Code that whoever pays for another may demand from the debtor what he has paid. 40

WHEREFORE, the Amended Decision of the Court of Appeals dated May 14, 2008 in CA-G.R. SP No. 80619 and CA-
G.R. SP No. 81030 is SET ASIDE. Rajab & Silsilah Company, White Falcon Services, Inc., Becmen Service
Exporter and Promotion, Inc., and their corporate directors and officers are found jointly and solidarily liable
and ORDERED to indemnify the heirs of Jasmin Cuaresma, spouses Simplicio and Mila Cuaresma, the following
amounts:

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

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

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

4) Costs of suit.

SO ORDERED.
 48

9. 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.

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 Decision 3 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

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 Complaint 9 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:
 49

May US$ 413.90

27/31,
1998
(5
days)
incl.
Leave
pay

June 2,590.00
01/30,
1998

July 2,590.00
01/31,
1998

Augus 2,590.00
t
01/31,
1998

Sept. 2,590.00
01/30,
1998

Oct. 2,590.00
01/31,
1998

Nov. 2,590.00
01/30,
1998

Dec. 2,590.00
01/31,
1998

Jan. 2,590.00
01/31,
1999

Feb. 2,590.00
01/28,
1999

Mar. 1,640.00
1/19,
1999
(19
days)
incl.
leave
pay

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

  25,382.23

Amou  
nt
 50

adjust
ed to
chief
mate's
salary

(Marc 1,060.5010
h
19/31,
1998
to
April
1/30,
1998)
+

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

TOTA US$ 26,442.7311

L
CLAI
M

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.

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

 51

$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:

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.
 52

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 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 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 Commission 43 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
 53

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 party 48 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 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 receive 57 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
 54

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 right 70 or operates to the peculiar disadvantage of a suspect class 71 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:

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
 55

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.

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 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)
 56

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.

The Marsaman interpretation of Section 10(5) has since been adopted in the following cases:

Case Title Contract Period of Unexpired Period Applied in

Period Service Period the Computation of
the Monetary
Award

Skippers v. 6 months 2 months 4 months 4 months

Maguad84

Bahia Shipping 9 months 8 months 4 months 4 months

v. Reynaldo
Chua 85

Centennial 9 months 4 months 5 months 5 months

Transmarine v.
dela Cruz l86

Talidano v. 12 months 3 months 9 months 3 months

Falcon87

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 3 months

months months

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

Nayona91 days

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

days

Pentagon v. 12 months 9 months and 2 months and 23 2 months and 23

Adelantar93 7 days days days
 57

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

Paramio, et al.94

Flourish 2 years 26 days 23 months and 4 6 months or 3

Maritime v. days months for each
Almanzor 95 year of contract

Athenna 1 year, 10 1 month 1 year, 9 months 6 months or 3

Manpower v. months and and 28 days months for each
Villanos 96 28 days year of contract

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 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 of Unexpired Period Applied in the

Period Service Period Computation of the
Monetary Award

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

al.98

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

v. NLRC99 23 days

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

Agoy v. 2 years 2 months 22 months 22 months

NLRC101

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

al.102

Barros v. 12 months 4 months 8 months 8 months

NLRC, et al.103

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

Transmarine v. 22 days 18 days
Carilla104
 58

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.

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.

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.
 59

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. Gay 114 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. 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 state 125 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
 60

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 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;

(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
 61

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

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 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
 62

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.

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.
 63

10. G.R. No. 112175 July 26, 1996

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, 

vs.
ENGINEER RODOLFO DIAZ, accused-appellant.

TORRES, JR., J.:p

Rodolfo 'Erwin' Diaz seeks the mandate of this Court to review the decision dated September 2, 1993, of the Regional
Trial Court, 11th Judicial Region, Branch 10, Davao City, 1 in Criminal Case No. 26, 993-92 convicting him of the crime
of Illegal Recruitment in Large Scale, and sentencing him to suffer life imprisonment and to pay a fine of P100,000.00
plus the costs.

In an Information dated August 15, 1992, Assistant City Prosecutor David W. Natividad of Davao City charged appellant
of violating Articles 38 (a) and 38 (b) in relation to Article 39 of the Labor Code, as amended, as follows:

That sometime in the month of July 1992, in the City of Davao, and within the jurisdiction of this Honorable Court, the
abovementioned accused, purporting himself to have the capacity to contract, enlist and transport Filipino workers for
employment abroad, particularly Brunei and Japan, did then and there, willfully, unlawfully recruit and promise
employment/job placement abroad to Mary Anne Navarro, Maria Theresa Fabricante and Maria Elena Ramirez, without
first securing the required license and/or authority from the Department of Labor and Employment.

CONTRARY TO LAW. 2

The antecedent facts found by the Court a quo reads:

Mary Anne Navarro was 22 years old, single and a student of the University of the Immaculate Concepcion in 1992,
taking up bachelor of science in music, Davao City.

Maria Theresa Fabricante was 23 years old, single and jobless in 1992. She is accordingly a commerce graduate of the
Notre Dame University in Cotabato City.

Maria Elena Ramirez was 27 years old, married and a businesswoman in 1992. She is accordingly a college graduate of
the University of Mindanao in Davao City where she finished the course of bachelor of science in commerce, major in
management.

From the combined testimonies of these three complainants, the Court has gathered that this is what happened, which
gave rise to this case:

In June 1992 they were all enrolled at the Henichi Techno Exchange Cultural Foundation in Davao City, studying
Niponggo. Their teacher was Mrs. Remedios Aplicador.

One day Mrs. Aplicador told them that if they wanted to go and work abroad, particularly Brunei where they could earn a
salary of "$700.00 for four hours daily work," she would refer them to Mr. Paulo Lim who knew one Engr. Erwin Diaz
who was recruiting applicants for Brunei (tsn 9-7-92 pp. 10-11 & tsn 9-8-92 p. 34).

Accompanied by Mrs. Aplicador, the three complainants went to Mr. Paulo Lim who explained to them that he was not
the one recruiting workers but Engr. Diaz (tsn 9-8-92 p. 34). Mr. Lim informed them that his children had already applied
with Engr. Diaz and that the requirements were bio-data, passport, medical checkup, I.D. and income tax return, and
P2,500.00 for processing of their papers (tsn 9-7-92 pp. 11 & 23-24 & 9-8-92 pp. 46 & 58). Telling them that he knew
"pretty well the recruiter" Engr. Diaz and that "We don't have to worry we can really go abroad and as a matter of fact he
said that his three children were applying (to go) to Brunei," he offered to accompany them to Engr. Erwin Diaz at the
office of the CIS (tsn 9-7-92 p.11). They asked Mr. Lim when he was available, and he said July 18 (1992), Saturday
morning (tsn 9-8-92 p. 34).

On July 18, Mr. Paulo Lim and Mrs. Remedios Aplicador accompanied the three complainants to Engr. Diaz who was
then being detained in the CIS Detention Center in Davao City and introduced them to him. The complainants asked Engr.
Diaz why he was "inside the cell." and he explained that four applicants had filed a case against him "because they could
not accept that they were sick of hepatitis and that the CIS elements are just making money out of it" (tsn 9-8-92 p. 35).
They asked him if he was "recruiting applicants for Brunei" and "he said yes"; they also inquired what were the
requirements, and he said four passport size pictures of each applicant, bio-data, income tax return, medical certificate,
NBI clearance, passport, P2,500.00 for processing of the papers of each applicant, and P65,000.00 as placement fee, but
only P20,000.00 for plane fare was to be paid by each applicant, the balance of P45,000.00 was to be paid by means of
salary deductions (tsn 9-7-92 p. 12; tsn 9-8-92 p. 35 & p. 59). The P2,500.00 for processing of their respective
 64

applications was to be paid at the house of Engr. Diaz at 14 Aries Street, GSIS Heights, Davao City, with telephone no. 8-
46-71 (tsn 9-7-92 p. 12).

Mary Anne Navarro paid P2,300.00 to Engr. Diaz at his residence on July 22, 1992 (Exh. "C"). There is no explanation by
her why she paid only P2,300.00 and not P2,500.00.

Maria Theresa Fabricante paid only P2,000.00 to Engr. Diaz also on July 22, 1992 (Exh. "E"). She paid only that amount
because, according to her testimony, she already had a passport and Engr. Diaz said she was required to pay only
P2,000.00 (tsn 9-8-92 p. 35).

Maria Elena Ramirez paid to Engr. Diaz P2,500.00 but she lost her receipt (tsn 9-8-92 p. 59). However, it was returned to
her by Engr. Diaz on August 17, 1992 (Exh. "G").

Exhibit "G" is a RECEIPT signed by the three complainants acknowledging the return to them respectively of the amounts
of P2,300.00, P2,000.00 and P2,500.00 by the accused and his wife who also signed it as witnesses (tsn 9-8-92 p. 43).

After submitting to the accused all the required papers and undergoing medical examination (before the return of said
amounts to the complainants), they asked him when they could leave. The accused told them to wait for three to four
weeks as his papers were still being processed by the CIS (tsn 9-7-92 p. 15). During this period when the accused had
already been released from detention (testimony of the accused, tsn 4-27-93 pp. 16-17), the complainants kept inquiring
from him when they would be leaving for Brunei, going to his house several times where they saw many other applicants
like them. But the accused just kept saying that his papers were still with the CIS (tsn 9-7-92 p. 15).

When he was still detained, he told the complainants that "the name of his agency is confidential but the owner thereof is
Erlinda Romualdez" who "used to be her (sic) mistress" assuring them that "we don't have to worry about it because he
said it is government project and then he said he will escort us to Philippine Plaza Hotel for briefing before leaving for
abroad and after the briefing at the Philippine Plaza Hotel we will proceed to POEA where we will sign a contract that is
the time we will give him the amount of P20,000.00 and then we will proceed to the residence of Erlinda Romualdez
where we will be staying for three days" (tsn 9-8-92 pp. 40-41).

Mary Anne Navarro asked her father for P20,000.00 for her plane fare, and so they mortgaged their piano for P30,000.00
to Serve Loan Mart as evidenced by a promissory note for P30,000.00 (Exh. "D" & tsn 9-7-92 p. 16).

From the borrowed P30,000.00, Mary Anne Navarro set aside P20,000.00 "for placement fee and the remaining
P10,000.00 I used in buying travelling bag, dresses, shoes and of course make up (sic) because we were told that we will
be working there as salesgirls. Then hairband, pair of earrings and ring" (tsn 9-7-92 pp. 16-17). It was the accused who
told them that they would be working in one of the department stores in Brunei and receiving a monthly pay of $700.00
for working only four hours a day (tsn 9-7-92 p. 17). Earlier, she said Engr. Diaz told her and her co-complainants herein
that the P20,000.00 was for plane fare (tsn 9-7-92 p. 12).

Maria theresa Fabricante went home to Cotabato to secure the required P20,000.00. Her father sold a horse for P5,000.00.
As for the balance of P15,000.00 "Our plan was to mortgage our five hectare land to a friend of my father."

Q Was the land actually mortgage?

A The money was ready for release.

Q Now, was the money release?

A No sir.

Q Why?

A The money was supposed to be released on August 6, but before that date August 3, I came back to Davao and went to
the office of POEA and verify whether Engr. Diaz was indeed a licensed recruiter.

Q What did you find out when you go there?

A He is not registered or in the list. His name does not appear on the list.

Q With whom did you talk to with the POEA?

A Atty. Evangelio.

Q Now, upon learning that Mr. Diaz is not included in the masters list, what did you do?

A After knowing that I went to my two companions Ma. Elena Ramirez and Mary Anne Navarro and informed them of
what I found out that the agency represented by Engr. Diaz was a fake agency and I advised them they too should follow
it up by themselves.

Q Now, of your own knowledge, did they do?

A Yes sir.
 65

Q What about you?

A Yes sir, we set a date to go to the POEA but before that we agreed that we will go and see Engr. Diaz to get back the
money that we paid as well as the papers.

Q Did you actually go to Engr. Diaz?

A Yes sir.

Q What happened?

A We went to see Eng. Diaz and when we met him, he greet us by saying: "If you are ready to leave?" But we told him
that we are not going to leave and we are withdrawing our applications because we found from the office of the POEA
that he is a fake recruiter and so he got angry and said that if our purpose in going there was to withdraw, he said we can
and we can get back our documents the next day but he said we will have to pay him charges. And we said, what for? He
said for labor because he already secured a plane ticket for us and when I asked where the plane tickets are? He said it is
in Cagayan (tsn 9-8-92 pp. 38-39)

At the POEA the three complainants learned that the "agency represented by Engr. Diaz was a fake agency" (tsn 9-8-92 p.
38). The Philippine Overseas Employment Administration issued a CERTIFICATION (Exh. "A") which reads:

This is to certify that Eng'r. Diaz a.k.a. Erwin, Rudy, Edwin, Rodolfo, Ariel Mateo of Aries St., GSIS Subd., Matina,
Davao City; Mr. Paulo Lim and Remedios Aplicador both of Sto. Rosario St., Buhangin, Davao City were never granted
an authority to conduct recruitment for overseas employment in Davao City or in any part of Region XI, and that the
agency of the former known as Phil Jap Constr'n and Tanaka and Diaz Asso. were never been a licensed agency for
overseas recruitment.

This certification is being issued upon the written request of Ma. Elena Ramirez, Mary Anne Navarro and Ma. Theresa
Fabricante for whatever legal purpose it may serve them best.

14 August 1992 Davao City, Philippines.

(Sgd) GAUDENCIO DELA PEÑA

Unit Coordinator

The three complainants withdrew their applications from Engr. Diaz without paying his charges. The mounts they paid for
processing fees were all returned to them by Engr. Diaz (Exh. "G"). 3

On September 2, 1993 the trial court rendered a decision finding the appellant guilty of the crime charged, the dispositive
portion of which states:

WHEREFORE, this Court finds the accused Rodolfo "Erwin" Diaz guilty beyond reasonable doubt of the offense of large
scale illegal recruitment and sentences him to suffer life imprisonment and to pay a fine of P100,000.00, plus the costs.

Accused appellant Diaz predicated the instant appeal on the following assignment of errors:

THE LOWER COURT ERRED IN FINDING THAT THE ACCUSED NOT ONLY CONFINED HIMSELF TO
FACILITATING THE PASSPORT AND MEDICAL EXAMINATION OF THE COMPLAINANTS BUT ALSO
PROMISED THEM EMPLOYMENT ABROAD.

II

THE LOWER COURT ERRED IN NOT FINDING THAT THE ACCUSED WAS MERELY A FACILITATOR OF
TRAVEL DOCUMENTS AND NOT AN ILLEGAL RECRUITER.

III

THE LOWER COURT ERRED IN CONVICTING THE ACCUSED OF THE CRIME CHARGED. 4

The foregoing assigned errors, being intertwined, shall be discussed together.

The crime of illegal recruitment, as defined under Articles 38 (a) in relation to Articles 13 (b) and 34 and penalized under
Article 39 of the Labor Code, as amended by Presidential Decree 1920 and Presidential Decree 2018, is any recruitment
activity, including the prohibited practices enumerated under Article 34, undertaken by a non-licensee or non-holder of
authority.

Thus, in People v. Cabacang 5 this Court ruled that the crime of illegal recruitment is committed when two elements
concur, namely:

1] That the offender has no valid license or authority required by law to enable one to lawfully engage in recruitment and
placement of workers; and,
 66

2] That the offender undertakes either any activity within the meaning of recruitment and placement defined under Article
13 (b), or any prohibited practices enumerated under Article 34.

Article 13 (b) of the Labor Code, provides for the statutory definition of "recruitment and placement", as follows:

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.

In People v. Panis, 6 we made the pronouncement that any of the acts mentioned in Article 13(b) will constitute
recruitment and placement even if only one prospective worker is involved. The number of persons dealt with is not an
essential ingredient of the act of recruitment and placement.

Article 38 (a) clearly shows that illegal recruitment is an offense which is essentially committed by a non-licensee or non-
holder of authority.

A non-licensee or non-holder of authority means any person, corporation or entity which has not been issued a valid
license or authority to engage in recruitment and placement by the Secretary of Labor, or whose license or authority has
been suspended, revoked or cancelled by the POEA or the Secretary. 7

Moreover, recruitment and placement activities of agents or representatives whose appointments by a license or holder of
authority were not previously authorized by the POEA shall likewise constitute illegal
recruitment. 8

We ruled in People vs. Goce, in this wise:

"Article 38 (b) 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 the qualifying circumstances exist,
namely,

a] when illegal recruitment is committed by a syndicate, that is, if carried out by a group of three or more persons
conspiring or confederating with one another; or,

b] when illegal recruitment is committed in large scale, that is, if committed against three or more persons individually or
as a group. 9

Considering the clear import of the foregoing doctrine which spells the unmistakable intent of the specific provision
applicable at bar, the instant case without doubt involves illegal recruitment in large scale.

The elements of the crime of illegal recruitment in large scale, which are undoubtedly present in this case are:

1] the offender is a non-licensee or non-holder of authority to engage in recruitment and placement activity,

2] the offender undertakes recruitment and placement activity defined under Article 13 (b), or any prohibited practices
enumerated under Article 34, and

3] illegal recruitment is committed against three or more persons individually or as a group. 10

As can be ascertained after a thorough reading of the records, appellant Diaz was neither a licensee nor a holder of
authority to qualify him to lawfully engage in recruitment and placement activity.

Pursuant to the Certification issued by the POEA dated 14th of August 1992, 11 duly signed by Gaudencio de la Pena, Unit
Coordinator, appellant was never granted an authority to conduct recruitment for overseas employment.

As to the third element of the crime, there were obviously three persons who were victims of the appellant's nefarious act
of large scale illegal recruitment.

Relative to the question of whether or not appellant Diaz was engaged in recruitment activity, it is clear from the
testimonies of the three complaints that appellant undertook to recruit them, thus:

Maria Elena Ramirez testified in the following tenor:

Q: When you went to see Mr. Diaz, what happened?

A: We were introduced by Mr. Lim to Diaz, and then we asked Diaz if it is true that he's recruiting applicants for abroad.
He said that he is recruiting applicants for Japan or Brunei and if we have P20,000 we can go to Brunei and we will be
given priority if we have the amount.

Q: What else did you ask Mr. Diaz?

 67

A: We asked him what were the requirements.

Q: And what did he answer?

A: Well, he told us that we are required to submit 8 copies of passport, ID photos, income tax return, passport, medical
certificate and the the amount of P2,500 and he further said that our placement fee will be P65,000 but all we have to pay
in advance is the amount of P20,000 and the remaining balance of P45,000 shall be given through salary deductions. 12

Maria Theresa Fabricante testified in the following manner:

She declared:

Q: What else did you ask Mr. Diaz?

A: We asked him if he is indeed recruiting applicants for Brunei. And he said, Yes. After that we asked him what are the
requirements and he told us that we need passport, four passport size ID pictures, income tax return and NBI clearance,
and if we have diplomas to attach with the other documents.

Q: What else did Mr. Diaz tell you to do?

A: He said that if we are interested, he will take care of the processing of the documents by giving him the amount of
P2,500, and that he explained that our placement fee will be in the sum of P65,000 and we will just have to raise P20,000
for the processing of our visa, plane tickets and POEA expenses. 13

She continued:

Q: What about your work in Brunei, what did you ask him?

A: I asked Engr. Diaz whether our work would be contract worker and he said yeas and we did not have to worry about it
because he said it was a government project and then he said he would escort us to Philippine Plaza Hotel for briefing
before leaving for abroad and after the briefing we will proceed to the POEA where we would sign our contract and after
signing that is the time we would give the amount of P20,000 and then we would proceed to the residence of Erlinda
Romualdez where we would be staying for three days. 14

The same thing was testified to by Mary Anne Navarro. Appellant told her that he was recruiting contract workers for
abroad, particularly Brunei, and promised her a job opportunity if she can produce various amounts of money for
expenses and processing of documents. 15

Testifying in his behalf, appellant denied these complainants' allegations. He asserted that he never made a promise in
favor of complainants for employment abroad but assisted them in the procurement of passports and medical certificates.

This Court is not, however, persuaded by appellant's bare denials.

Evidently, greater weight must generally be given to the positive testimonies of the prosecution witnesses than to the
denial of the defendant in weighing contradictory declarations and statements. 16 We stated this rule with curt emphasis in
Goce (supra) that —

The lame defense consisting of such bare denials by appellant cannot overcome the evidence presented by the prosecution
proving her guilt beyond reasonable doubt. 17

The acts of the appellant, which were clearly described in the lucid testimonies of the three victims, such as collecting
from each of the complainants payment for passport, medical tests, placement fee, plane tickets and other sundry
expenses, promising them employment abroad, contracting and advertising for employment, unquestionably constitute
acts of large scale illegal recruitment.

Appellant sought refuge in the testimonies of his three witnesses that would give credence to the claim that he was only a
facilitator of travel documents and not a recruiter.

The trial court did not give weight to appellant's allegations.

As observed by the trial court, the testimony of Edgar Macomao, is incredible which would raise serious doubts about his
motive as a witness. 18 It also describes the testimony of Paulo Lim as unclear and confusing. 19 Neither was the testimony
of Abednigo Neri given much credit by the trial court.

Admittedly, the findings of the trial court as to the credibility of witnesses are to be given great weight and a high degree
of respect by the Appellate Court.

In People vs. Reyes (242 SCRA 264), we enunciated the rule that —

When the issue is the credibility of witnesses, appellate courts will in general not disturb the findings of the trial court
unless certain facts or circumstances of weight have been overlooked, misunderstood or misapplied which, if considered,
might affect the result of the case. This is because the trial court heard the testimony of the witnesses and observed their
deportment and manner of testifying during trial. 20
 68

In the case at bar, we see no reason to disturb these observations of the trial court. A careful scrutiny of the records reveals
that no facts or circumstances had been overlooked or misapplied by the trial court which might affect the result of the
case when considered.

As aptly pointed out by the Solicitor General, to wit:

With the evidence on record, it is hard to believe that services promised by the appellant to the three complainants were to
consists only of his assistance in the procurement of passports and medical certificates for each of them for they
themselves could have easily secured these documents at a lesser cost. Moreover, the fact that the appellant still collected
P2,000 from Theresa Fabricante who already had a passport belies his claim that his services were limited only to
procuring a passport and medical certificate. 21

The accused's assertion that he only assisted in the processing of passport and medical certificate is nothing more than a
frivolous excuse to divert the truth.

Likewise, it is the settled rule that a person is guilty of illegal recruitment when he gives the impression that he has the
power to send workers abroad. 22 Appellant Diaz manifestly gave that impression to the three complainants that he had the
ability to send workers abroad. Misrepresenting himself as a recruiter of workers for Brunei, he promised them work for a
fee and convinced them to give their money for the purpose of getting an employment overseas.

The findings of the trial court, to which we agree, were arrived at with meticulous care, to wit:

There is no direct and express denial by Mr. Diaz of the following testimonies of the complainants:

1] That they had asked Mr. Diaz if he was "recruiting applicants for Brunei" and he said "Yes".

2] That when asked what his requirements were, he said four passport size pictures, bio-data, income tax returns, medical
certificates, NBI clearance, passport, P2,500 for processing fee, and P65,000 as placement fee, but only P20,000 for plane
fare was to be paid as the balance of P45,000 was payable by salary deductions.

3] That he was asked by the complainants as to what agency he would be referring them, he said "the name of the agency
is confidential but the owner thereof is one Erlinda Romualdez, who used to be his mistress"; that the complainants did
not have to worry because "it is a government project and then he said he'd escort us to the Philippine Plaza Hotel for
briefing before leaving for abroad and after the briefing we will proceed to POEA where we will sign our contract and
after the signing that is the time we will give the P20,000, and then we will proceed to the residence of Erlinda Romualdez
where we will be staying for three days."

4] That Mr. Diaz told me the complainants that they would be working "as salesgirls in one of the department stores in
Brunei, that they will be getting $700 a month and they will be only working four hours a day"

These are definitely prohibited practices or activities constituting large scale illegal recruitment according to the above
quoted provisions of the law. There is no denial of these by the accused. 23

This Court is aware of a new law, RA 8042, otherwise known as Migrant Workers for Overseas Employment, which was
approved on June 07, 1995. It is An Act to Institute the Policies of Overseas Employment and Establish a Higher Standard
of Protection and Promotion of the Welfare of Migrant Workers, their Families and Overseas Filipinos in Distress and for
Other Purposes. This new law, amends the pertinent provisions of the Labor Code of the Philippines and gives a new
definition of the crime of illegal recruitment and provides for its higher penalty.

We are not in anyway applying the otherwise restrictive provisions of this new law as it is not applicable in the case at
bar, considering the rule that crimes are punishable by the laws in force at the time of their commission.

In synthesis, considering the positive testimonies of the complainants against the negative bare denials of accused-
appellant, no other conclusion could be arrived at but to sustain the conviction of accused-appellant finding the latter
guilty of large scale illegal recruitment beyond reasonable doubt.

IN VIEW OF THE FOREGOING PREMISES, the Decision appealed from dated September 2, 1993 is hereby
AFFIRMED in all respects, with costs against accused-appellant Rodolfo Diaz.

SO ORDERED.
 69

632 Phil. 276

NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Decision [1] dated
July 22, 2008 of the Court of Appeals (CA) in CA-G.R. CR No. 30628.

Rosita Sy (Sy) was charged with one count of illegal recruitment in Criminal Case No. 02-0537 and one count of estafa in
Criminal Case No. 02-0536. In a joint decision of the Regional Trial Court (RTC), Sy was exonerated of the illegal
recruitment charge. However, she was convicted of the crime of estafa. Thus, the instant appeal involves only Criminal
Case No. 02-0536 for the crime of estafa.

The Information[2] for estafa reads:

That sometime in the month of March 1997, in the City of Las Piñas, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, did, then and there willfully, unlawfully and feloniously defraud Felicidad
Mendoza-Navarro y Landicho in the following manner, to wit: the said accused by means of false pretenses and
fraudulent representation which she made to the said complainant that she can deploy her for employment in Taiwan, and
complainant convinced by said representations, gave the amount of P120,000.00 to the said accused for processing of her
papers, the latter well knowing that all her representations and manifestations were false and were only made for the
purpose of obtaining the said amount, but once in her possession[,] she misappropriated, misapplied and converted the
same to her own personal use and benefit, to the damage and prejudice of Felicidad Mendoza-Navarro y Landicho in the
aforementioned amount of P120,000.00.

CONTRARY TO LAW.[3]

On May 27, 2007, Sy was arraigned and pleaded not guilty to the crimes charged. Joint trial ensued thereafter.

As summarized by the CA, the facts of the case are as follows:

Version of the Prosecution

Sometime in March 1997, appellant, accompanied by Corazon Miranda (or "Corazon"), went to the house of Corazon's
sister, Felicidad Navarro (or "Felicidad"), in Talisay, Batangas to convince her (Felicidad) to work abroad. Appellant
assured Felicidad of a good salary and entitlement to a yearly vacation if she decides to take a job in Taiwan. On top of
these perks, she shall receive compensation in the amount of Php120,000.00. Appellant promised Felicidad that she will
take care of the processing of the necessary documents, including her passport and visa. Felicidad told appellant that she
will think about the job offer.

Two days later, Felicidad succumbed to appellant's overseas job solicitation. With Corazon in tow, the sisters proceeded
to appellant's residence in Better Homes, Moonwalk, Las Piñas City. Thereat, Felicidad handed to appellant the amount of
Php60,000.00. In the third week of March 1997, Felicidad returned to appellant's abode and paid to the latter another
Php60,000.00. The latter told her to come back the following day. In both instances, no receipt was issued by appellant to
acknowledge receipt of the total amount of Php120,000.00 paid by Felicidad.

On Felicidad's third trip to appellant's house, the latter brought her to Uniwide in Sta. Cruz, Manila, where a male person
showed to them the birth certificate that Felicidad would use in applying for a Taiwanese passport. The birth certificate
was that of a certain Armida Lim, born to Margarita Galvez and Lim Leng on 02 June 1952. Felicidad was instructed on
how to write Armida Lim's Chinese name.

Subsequently, appellant contacted Felicidad and thereafter met her at the Bureau of Immigration office. Thereat,
Felicidad, posing and affixing her signature as Armida G. Lim, filled out the application forms for the issuance of Alien
Certificate of Registration (ACR) and Immigrant Certificate of Registration (ICR). She attached to the application forms
her own photo. Felicidad agreed to use the name of Armida Lim as her own because she already paid to appellant the
amount of Php120,000.00.

In December 1999, appellant sent to Felicidad the birth certificate of Armida Lim, the Marriage Contract of Armida Lim's
parents, ACR No. E128390, and ICR No. 317614. These documents were submitted to and eventually rejected by the
Taiwanese authorities, triggering the filing of illegal recruitment and estafa cases against appellant.

Version of the Defense

 70

Appellant denied offering a job to Felicidad or receiving any money from her. She asserted that when she first spoke to
Felicidad at the latter's house, she mentioned that her husband and children freely entered Taiwan because she was a
holder of a Chinese passport. Felicidad commented that many Filipino workers in Taiwan were holding Chinese
passports.

Three weeks later, Felicidad and Corazon came to her house in Las Piñas and asked her if she knew somebody who could
help Felicidad get a Chinese ACR and ICR for a fee.

Appellant introduced a certain Amelia Lim, who, in consideration of the amount of Php120,000.00, offered to Felicidad
the use of the name of her mentally deficient sister, Armida Lim. Felicidad agreed. On their second meeting at appellant's
house, Felicidad paid Php60,000.00 to Amelia Lim and they agreed to see each other at Uniwide the following day. That
was the last time appellant saw Felicidad and Amelia Lim. [4]

On January 8, 2007, the RTC rendered a decision,[5] the dispositive portion of which reads:

WHEREFORE, premises considered the court finds the accused Rosita Sy NOT GUILTY of the crime of Illegal
Recruitment and she is hereby ACQUITTED of the said offense. As regards the charge of Estafa, the court finds the
accused GUILTY thereof and hereby sentences her to an indeterminate penalty of four (4) years of prision correctional as
minimum to 11 years of prision mayor, as maximum. The accused is ordered to reimburse the amount of sixty-thousand
(Php60,000.00) to the private complainant.

SO ORDERED.[6]

Aggrieved, Sy filed an appeal for her conviction of estafa. On July 22, 2008, the CA rendered a Decision,[7] affirming with
modification the conviction of Sy, viz.:

WHEREFORE, with the MODIFICATION sentencing accused-appellant to suffer the indeterminate penalty of four (4)
years and two (2) months of prision correccional, as minimum, to seventeen (17) years of reclusion temporal, as
maximum, the appealed decision is AFFIRMED in all other respects.

SO ORDERED.[8]

Hence, this petition.

The sole issue for resolution is whether Sy should be held liable for estafa, penalized under Article 315, paragraph 2(a) of
the Revised Penal Code (RPC).[9]

Swindling or estafa is punishable under Article 315 of the RPC. There are three ways of committing estafa, viz.: (1) with
unfaithfulness or abuse of confidence; (2) by means of false pretenses or fraudulent acts; or (3) through fraudulent means.
The three ways of committing estafa may be reduced to two, i.e., (1) by means of abuse of confidence; or (2) by means of
deceit.

The elements of estafa in general are the following: (a) that an accused defrauded another by abuse of confidence, or by
means of deceit; and (b) that damage and prejudice capable of pecuniary estimation is caused the offended party or third
person.

The act complained of in the instant case is penalized under Article 315, paragraph 2(a) of the RPC, wherein estafa is
committed by any person who shall defraud another by false pretenses or fraudulent acts executed prior to or
simultaneously with the commission of the fraud. It is committed by using fictitious name, or by pretending to possess
power, influence, qualifications, property, credit, agency, business or imaginary transactions, or by means of other similar
deceits.

The elements of estafa by means of deceit are the following, viz.: (a) that there must be a false pretense or fraudulent
representation as to his power, influence, qualifications, property, credit, agency, business or imaginary transactions; (b)
that such false pretense or fraudulent representation was made or executed prior to or simultaneously with the commission
of the fraud; (c) that the offended party relied on the false pretense, fraudulent act, or fraudulent means and was induced to
part with his money or property; and (d) that, as a result thereof, the offended party suffered damage. [10]

In the instant case, all the foregoing elements are present. It was proven beyond reasonable doubt, as found by the RTC
and affirmed by the CA, that Sy misrepresented and falsely pretended that she had the capacity to deploy Felicidad
Navarro (Felicidad) for employment in Taiwan. The misrepresentation was made prior to Felicidad's payment to Sy of
One Hundred Twenty Thousand Pesos (P120,000.00). It was Sy's misrepresentation and false pretenses that induced
 71

Felicidad to part with her money. As a result of Sy's false pretenses and misrepresentations, Felicidad suffered damages as
the promised employment abroad never materialized and the money she paid was never recovered.

The fact that Felicidad actively participated in the processing of the illegal travel documents will not exculpate Sy from
liability. Felicidad was a hapless victim of circumstances and of fraud committed by Sy. She was forced to take part in the
processing of the falsified travel documents because she had already paid P120,000.00. Sy committed deceit by
representing that she could secure Felicidad with employment in Taiwan, the primary consideration that induced the latter
to part with her money. Felicidad was led to believe by Sy that she possessed the power and qualifications to provide
Felicidad with employment abroad, when, in fact, she was not licensed or authorized to do so. Deceived, Felicidad parted
with her money and delivered the same to petitioner. Plainly, Sy is guilty of estafa.

Illegal recruitment and estafa cases may be filed simultaneously or separately. The filing of charges for illegal recruitment
does not bar the filing of estafa, and vice versa. Sy's acquittal in the illegal recruitment case does not prove that she is not
guilty of estafa. Illegal recruitment and estafa are entirely different offenses and neither one necessarily includes or is
necessarily included in the other. A person who is convicted of illegal recruitment may, in addition, be convicted
of estafa under Article 315, paragraph 2(a) of the RPC.[11] In the same manner, a person acquitted of illegal recruitment
may be held liable for estafa. Double jeopardy will not set in because illegal recruitment is malum prohibitum, in which
there is no necessity to prove criminal intent, whereas estafa is malum in se, in the prosecution of which, proof of criminal
intent is necessary.[12]

The penalty prescribed for estafa under Article 315 of the RPC is prision correccional in its maximum period to prision
mayor in its minimum period, if the amount defrauded is over Twelve Thousand Pesos (P12,000.00) but does not exceed
Twenty-two Thousand Pesos (P22,000.00), and if such amount exceeds the latter sum, the penalty shall be imposed in its
maximum period, adding one year for each additional Ten Thousand Pesos (P10,000.00); but the total penalty that may be
imposed shall not exceed twenty years. In such cases, and in connection with the accessory penalties that may be imposed
under the provisions of this Code, the penalty shall be termed prision mayor or reclusion temporal, as the case may be.

The addition of one year imprisonment for each additional P10,000.00, in excess of P22,000.00, is the incremental
penalty. The incremental penalty rule is a mathematical formula for computing the penalty to be actually imposed using
the prescribed penalty as the starting point. This special rule is applicable in estafa and in theft.[13]

In estafa, the incremental penalty is added to the maximum period of the penalty prescribed, at the discretion of the court,
in order to arrive at the penalty to be actually imposed, which is the maximum term within the context of the
Indeterminate Sentence Law (ISL).[14]Under the ISL, attending circumstances in a case are applied in conjunction with
certain rules of the Code in order to determine the penalty to be actually imposed based on the penalty prescribed by the
Code for the offense. The circumstance is that the amount defrauded exceeds P22,000.00, and the incremental penalty rule
is utilized to fix the penalty actually imposed.[15]

To compute the incremental penalty, the amount defrauded shall be subtracted by P22,000.00, and the difference shall be
divided by P10,000.00, and any fraction of P10,000.00 shall be discarded. [16]

In the instant case, prision correccional in its maximum period to prision mayor in its minimum period is the imposable
penalty. The duration of prision correccional in its maximum period is from four (4) years, two (2) months and one (1)
day to six (6) years; while prision mayor in its minimum period is from six (6) years and one (1) day to eight (8) years.
The incremental penalty for the amount defrauded would be an additional nine years imprisonment, to be added to the
maximum imposable penalty of eight years. Thus, the CA committed no reversible error in sentencing Sy to an
indeterminate penalty of four (4) years and two (2) months of prision correccional,as minimum, to seventeen (17) years
of reclusion temporal, as maximum.

As to the amount that should be returned or restituted by Sy, the sum that Felicidad gave to Sy, i.e., P120,000.00, should
be returned in full. The fact that Felicidad was not able to produce receipts is not fatal to the case of the prosecution since
she was able to prove by her positive testimony that Sy was the one who received the money ostensibly in consideration
of an overseas employment in Taiwan.[17]

WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals dated July 22, 2008 in CA-G.R. CR No.
30628, sentencing petitioner Rosita Sy to an indeterminate penalty of four (4) years and two (2) months of prision
correccional, as minimum, to seventeen (17) years of reclusion temporal, as maximum, is hereby AFFIRMED. We,
however, MODIFY the CA Decision as to the amount of civil indemnity, in that Sy is ordered to reimburse the amount of
One Hundred Twenty Thousand Pesos (P120,000.00) to private complainant Felicidad Navarro.

SO ORDERED.
 72

G.R. Nos. 97320-27 July 30, 1993

VALLUM SECURITY SERVICES and BAGUIO LEISURE CORPORATION (HYATT TERRACES

BAGUIO), petitioners, 
vs.
THE NATIONAL LABOR RELATIONS COMMISSION, RUBEN ABELLERA, MANUEL GANANCIAL,
SAMSON ALEJERA, ROMEO BAUTISTA, CARLOS BANIAGO, GABRIEL CABASAL, ARTEMIO CARIÑO,
BENJAMIN LARON, SANTIAGO PACULAN, FRANCISCO OBEDOZA, CEFERINO GARCIA, ARNOLD
PAMINLAN, ROMAN PALIMA, JOSEFINO LOZANO, PEDRO DULAY, JR., CLAUDIO PANGANIBAN,
RONNIE BALDERAS, AVELINO PINTO, BEN ENRIQUE ESTOCAPIO, ESABELITO ANGARA, ROBERT
AGUIMBAG, WILSON ESTAVILLO, FELIXBERTO NARVASA, PABLITO ROSARIO, EDGAR PALISOC,
DONIE PERALTA, WILLY QUESADA, MARIO URBANO, EDWIN JACOB, JOSE VIRGILIO LUSTERIO,
MA. NESTOR LABADOR, ROMEO LOPEZ, MANOLO MAGAT, MARIANO MARCENA, WILSON MUNAR.
ROSEMARIE DUMLAO, FLORENTINO CASTAÑEDA, RUBEN PANTERIA, JOHNNY VILLANUEVA,
DELIA ROSARIO, GARY JAVATE, DEAN PASAMIC, VALERIE BRIONES, NEMENCIO CUTCHON,
PHILIP MORIS, VINCENT NOEL CABRERA and JAIME GIMENO, respondents.

Sanidad Law Offices for petitioners.

Cabato Law Office for respondents.

FELICIANO, J.:

On 1 September 1986, petitioner Baguio Leisure Corporation (Hyatt Terraces Baguio) ("Hyatt Baguio") and petitioner
Vallum Security Services ("Vallum") entered into a contract for security services under the terms of which Vallum agreed
to protect the properties and premises of Hyatt Baguio by providing fifty (50) security guards, on a 24-hour basis, a day.

On 1 June 1988, Heinrich L. Maulbecker, Hyatt Baguio's General Manager, wrote to Domingo A. Inocentes, President of
Vallum advising that effective 1 July 1988, the contract of security services would be terminated.

Vallum informed Mr. Maulbecker, on 22 June 1988, that it was agreeable to the termination of the contract.

On 30 June 1988, private respondents, who were security guards provided by Vallum to Hyatt Baguio, were informed by
Vallum's Personnel Officer that the contract between the two (2) had already expired. Private respondents were directed to
report to Vallum's head office at Sucat Road, in Muntinlupa, Metropolitan Manila, not later than 15 July 1988 for re-
assignment. They were also told that failure to report at Sucat would be taken to mean that they were no longer interested
in being re-assigned to some other client of Vallum.

None of the private respondents reported at Sucat for re-assignment. Instead, between July and September 1988, private
respondents filed several complaints against petitioners in the National Labor Relations Commission's Office ("NLRC")
in Baguio City for illegal dismissal and unfair labor practices; for violation of labor standards relating to underpayment of
wages, premium holiday and restday pay, uniform allowances and meal allowances. They prayed for reinstatement with
full backwages. The several cases were consolidated together.

On 19 May 1989, the Labor Arbiter rendered a decision dismissing the complaints. He found Vallum to be an independent
contractor and, consequently, declined to hold Hyatt Baguio liable for dismissal of private respondents. He also held that
the termination of services of private respondents by Vallum did not constitute an unfair labor practice, considering that
such termination had been brought about by lack of work. Furthermore, the Labor Arbiter held that private respondents
were not entitled to backwages or separation pay, in line with the "no work, no pay" principle. Lastly, he found no
violation of the labor standard provisions on payment of wages and other employee benefits. 1

Private respondents appealed the Labor Arbiter's decision to the NLRC. On 31 July 1990, the NLRC promulgated a
resolution reversing the Labor Arbiter's decision, the dispositive portion of which resolution reads as follows:

WHEREFORE, the decision appealed from is hereby REVERSED and set aside and a new one entered ordering the
respondent Hyatt Terraces Baguio to reinstate the complainants to their former positions with full backwages limited to
one (1) year. In view of supervening event which makes the reinstatement imposible, respondents Hyatt Terraces Baguio
and Vallum Security Services Corporation, are directed, jointly and severally to pay complainants, in lieu of
reinstatement, separation pay equal to one (1) month per year of service. Service of six month shall be considered a year
for the purpose of the same.2

Petitioners moved for reconsideration, without success.

Vallum and Hyatt Baguio are hence before this Court on certiorari seeking to: (a) reverse and annul the Resolutions of the
NLRC of 31 July 1990 and 31 January 1991; and (b) reinstate the decision of the Labor Arbiter dated 19 May 1989.
Petitioners assert that the NLRC's finding that an employer-employee relationship had existed between Hyatt Baguio and
private respondents, is tainted with arbitrariness.
 73

The main issue here presented and addressed below is whether or not private respondent security guards are indeed
employees of petitioner Hyatt Baguio.

In determining whether a given set of circumstances constitute or exhibit an employer-employee relationship, the accepted
rule is that the elements or circumstances relating to the following matters shall be examined and considered:

1. the selection and engagement of the employee;.

2. the payment of wages;
3. the power of dismissal; and
4. the power to control the employees' conduct.3

Of the above, control of the employees' conduct is commonly regarded as the most crucial and determinative indicator of
the presence or absence of an employer-employee relationship. 4 We examine below the circumstances of the relationship
between petitioners and private respondents under the above four (4) rubrics.

In respect of the selection and engagement of the employees, the records here show that private respondents filled up
Hyatt employment application forms and submitted the executed forms directly to the Security Department of Hyatt
Baguio.5 It appears that these executed application forms were returned to the respective applicants; 6nonetheless, however,
a few days after the applications to Hyatt Baguio were submitted, Vallum sent letters of acceptance to private respondents.
Petitioners do not deny that private respondent had applied for employment at Hyatt's Security Department and that
Security Department was used to process the applications. Petitioners argue that because the premises to be secured were
located in Baguio, Vallum found it more advantageous to recruit security guards from the Baguio area. It would have been
most inconvenient for applicants from the Baguio area to have gone all the way to Sucat in Makati to file and follow-up
their applications; accordingly, Vallum was provided with its own office at Hyatt Baguio and there the applications, with
the assistance of Hyatt Baguio's Security Department, were processed. 7 Petitioners' argument here, while understandable,
does not negate the fact that the process of selection and engagement of private respondents had been carried out in Hyatt
Baguio and subject to the scrutiny of officers and employees of Hyatt Baguio.

In respect of the mode or manner of payment of wages, private respondents submitted in evidence four hundred twenty-
three (423) pay slips (Exhibits "A" for complainants-private respondents), which bore Hyatt Baguio's logo. 8These pay
slips show that it was Hyatt Baguio which paid their wages directly and that Hyatt Baguio deducted therefrom the
necessary amounts for SSS premiums, internal revenue withholding taxes, and medicare contributions. The Labor Arbiter
had found that a separate payroll was maintained for Vallum by Hyatt Baguio; the NLRC, however, held that this finding
had no factual basis, and we are compelled to agree with this finding. It is true that a subsequent agreement (10 September
1986) between Vallum and Hyatt Baguio had provided:

1. That for the purposes of facilitating and prevention of delays in the distribution of payroll to all Security guards
assigned at the premises of the company and as embraced in the contract of Security services, the [vallum] shall herewith
authorize the [Hyatt Baguio] to undertake the distribution of the payroll directly to the guards as mentioned herein.
(Emphasis supplied)

2. That for purposes of the payroll distribution as stated above, the company shall devise ways to ensure the efficient and
prompt distribution to the guards of their respective salaries. 9 (Emphasis supplied)

The fact that this agreement had stipulated for direct payment by Hyatt Baguio of private respondents' wages did not, of
course, dissolve the relevance of such direct payment as an indicator of an employer-employee relationship between Hyatt
Baguio and private respondents. Vallum did not even provide Hyatt Baguio with Vallum's own pay slips or payroll
vouchers for such direct payments. What clearly emerges is that Hyatt Baguio discharged a function which was properly a
function of the employer.

Turning to the matter of location of the power of dismissal, we note that the contract provided that upon loss of
confidence on the part of Hyatt Baguio vis-a-vis any security guard furnished by Vallum, such security guard "may be
changed immediately upon the request to [Vallum] by [Hyatt Baguio]." Notwithstanding the terms of the formal contract
between petitioners, the NLRC found that, in operative fact, it was Hyatt Baguio's Chief Security Officer 
who exercised the power of enforcing disciplinary measures over the security guards. 10 In the matter of termination of
services of particular security guards, Hyatt Baguio had merely used Vallum as a channel to implement its decisions,
much as it had done in the process of selection and recruitment of the guards.

Coming then to the location of the power of control over the activities of the security guards, the following factors lead us
to the conclusion that power was effectively located in Hyatt Baguio rather than in Vallum:

(a) the assignments of particular security guards was subject to the approval of Hyatt Baguio's Chief Security Officer; 11

(b) promotions of the security guards from casual to regular employees were approved or ratified by the Chief Security
Officer of Hyatt Baguio; 12

(c) Hyatt Baguio's Chief Security Officer decided who among the various security guards should be an duty or on call, as
well as who, in cases of disciplinary matters, should be suspended or dismissed; 13

(d) the petitioners themselves admitted that Hyatt Baguio, through its Chief Security Officer, awarded citations to
individual security guards for meritorious services. 14
 74

Petitioners contend that what existed between Vallum and Hyatt Baguio was simply close coordination and dove-tailing
of operations, rather than control and supervision by one over the operations of the other, and that Hyatt Baguio's Chief
Security Officer had acted as the conduit between Hyatt Baguio and Vallum in respect of the implementation of the
contract of security services. That is not, however, the characterization given by the NLRC to the details of the factual
relationships between Hyatt Baguio (acting through its Chief Security Officer) and Vallum and private respondent
security guards and it is clear to the Court that the characterization reached by the NLRC is not without the support of
substantial evidence of record. We agree with the NLRC's characterization.

One final circumstance seems worthy of note: orders received by private respondent security guards were set forth on
paper bearing the letterheads of both Hyatt Baguio and Vallum. 15 It appears to us, therefore, that Hyatt Baguio explicitly
purported, at the very least, to share with Vallum the exercise of the power of control and supervision with Vallum over
the security guards, if indeed Vallum was not functioning merely as an alter ego of Hyatt Baguio in respect of the
operations of the security guards. In the ordinary course of business, security guard agencies are engaged because of their
specialized capabilities in the matter of physical security. It is a security agency's business to know the most efficacious
manner of protecting and securing a particular place at a particular time. In the case at bar, the functions performed by
Hyatt Baguio's Chief Security Officer were precisely the duties which the head or senior officer of a legitimate security
agency would be exercising over its own employees.

Finally, we note that the contract for security services between Vallum and Hyatt Baguio contained the following
provisions:

xxx xxx xxx

3. The AGENCY shall exercise discipline, supervision, control and administration over the security guard so assigned to
the premises of the COMPANY in accordance with the Rules and Regulations of the PCSUSIA, the Local Police
Departments, the AGENCY and the COMPANY.

4. The AGENCY shall provide at its own expense all necessary, proper and duly licensed firearms, ammunitions,
nightsticks, and other paraphernalia for security purposes, to the guards it assigns to the COMPANY and shall shoulder all
taxes and licenses relating to the Security Services referred to in this agreement.

5. It is expressly understood and mutually agreed by the parties hereto that the AGENCY shall be held solely liable for
any claim for security guards' wages and/or damages arising out of personal injury including death caused, either by the
AGENCY's guard upon a third party or by the AGENCY'S guard or third party upon a guard assigned by the AGENCY to
the COMPANY, and should the COMPANY be held liable therefore, the AGENCY shall reimburse the COMPANY for
any and all amounts that it may have been called upon to pay.

xxx xxx xxx

7. The AGENCY shall always detail within the hours the period provided for and in the paragraph 1 of this contract, an
authorized representative who shall handle for the AGENCY all matters regarding security and enforcement which the
COMPANY may wish to implement.

The thrust of the foregoing discussion, however, is that the relationship between Vallum and Hyatt Baguio as actually
conducted departed significantly from the formal written terms of their agreement. It is to us self-evident that the
characterization in law of such relationship cannot conclusively be made in terms alone of the written agreement — which
constitutes but one factor out of many that the Court must take into account — but must rest upon an examination of the
detailed facts of such relationship in the world of time and space.

We find no basis for overturning the conclusions reached by the NLRC that Vallum, in the specific circumstances of this
case, was not an independent contractor but was, rather, a "labor-only" contracor. Section 9 of Rule VII of Book III
entitled "Conditions of Employment" of the Omnibus Rules Implementing the Labor Code provides as follows:

Sec. 9. Labor-only contracting. (a) Any person who undertakes to supply workers to an employer shall be deemed to be
engaged in labor-only contracting where such person:

(1) Does not have substantial capital or investment in the form of tools, equipment, machineries, work premises and other
materials; and

(2) The workers recruited and placed by such person are performing activities which are directly related to the principal
business or operations of the employer in which workers are habitually employed.

(b) Labor-only contracting as defined herein is hereby prohibited and the person acting as contractor shall be considered
merely as an agent or intermediary of the employer who shall be responsible to the workers in the same manner and extent
as if the latter were directly employed by him.

xxx xxx xxx

Sec. 8. Job contracting. — There is job contracting permissible under the Code if the following conditions are met:
 75

(1) The contractor carries on an independent business and undertakes the contract work on his own account under his own
responsibility according his own manner and method, free from the control and direction of his employer or principal in
all matters connected with the performance of the work except as to results thereof; and

(2) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and
other materials which are necessary in the conduct of his business.

In the case at bar, we noted that Vallum did not have a branch office in Baguio City and that Hyatt Baguio provided
Vallum with offices at Hyatt's own premises and allowed Vallum to use its Security Department in the processing of
applications. That was the reason too why Vallum had stipulated that Hyatt Baguio was to distribute the salaries of the
security guards directly to them and that Hyatt had used its own corporate forms and pay slips in doing so. The security
guards were clearly performing activities directly related to the business operations of Hyatt Baguio, since the undertaking
to safeguard the person and belongings of hotel guests is one of the obligations of a hotel vis-a-visits guests and the
general public.

Where labor-only contracting exists in a given case, the law itself implies or establishes an employer-employee
relationship between the employer (the owner of the project or establishment) (here, Hyatt Baguio) and the employees of
the labor-only contractor (here, Vallum) to prevent any violation or circumvention of provisions of the Labor Code. 16

The issue of illegal dismissal need not detain us for long. It has not been alleged by petitioners that a just or authorized
cause for terminating private respondents' services had existed. And even if such lawful cause existed, it is not alleged that
private respondents' rights to procedural due process in that connection had been appropriately observed.

We conclude that petitioners have not shown any grave abuse of discretion or any act without or any in excess of
jurisdiction on the part of the National Labor Relations Commission in rendering its Resolutions dated 31 July 1990 and
31 January 1991.

WHEREFORE, premises considered, the Petition for Certiorari is hereby DISMISSED for lack of merit. Costs against
petitioners.

Bidin, Romero, Melo and Vitug, JJ., concur.

 76

G.R. No. 129315               October 2, 2000

OSIAS I. CORPORAL, SR., PEDRO TOLENTINO, MANUEL CAPARAS, ELPIDIO LACAP, SIMPLICIO
PEDELOS, PATRICIA NAS, and TERESITA FLORES, petitioners, 
vs.
NATIONAL LABOR RELATIONS COMMISSION, LAO ENTENG COMPANY, INC. and/or TRINIDAD LAO
ONG, respondents.

DECISION

QUISUMBING, J.:

This special civil action for certiorari seeks the review of the Resolution dated October 17, 1996 of public respondent
National Labor Relations Commission (First Division), 1 in NLRC NCR Case No. 00-04-03163-95, and the Resolution
dated March 5, 1997 denying the motion for reconsideration. The aforecited October 17th Resolution affirmed the
Decision dated September 28, 1996 of Labor Arbiter Potenciano S. Cañizares dismissing the petitioners' complaint for
illegal dismissal and declaring that petitioners are not regular employees of private respondent Lao Enteng Company, Inc..

The records of the case show that the five male petitioners, namely, Osias I. Corporal, Sr., Pedro Tolentino, Manuel
Caparas, Elpidio Lacap, and Simplicio Pedelos worked as barbers, while the two female petitioners, Teresita Flores and
Patricia Nas worked as manicurists in New Look Barber Shop located at 651 P. Paterno Street, Quiapo, Manila owned by
private respondent Lao Enteng Co. Inc.. Petitioner Nas alleged that she also worked as watcher and marketer of private
respondent.

Petitioners claim that at the start of their employment with the New Look Barber Shop, it was a single proprietorship
owned and managed by Mr. Vicente Lao. In or about January 1982, the children of Vicente Lao organized a corporation
which was registered with the Securities and Exchange Commission as Lao Enteng Co. Inc. with Trinidad Ong as
President of the said corporation. Upon its incorporation, the respondent company took over the assets, equipment, and
properties of the New Look Barber Shop and continued the business. All the petitioners were allowed to continue working
with the new company until April 15, 1995 when respondent Trinidad Ong informed them that the building wherein the
New Look Barber Shop was located had been sold and that their services were no longer needed. 2

On April 28, 1995, petitioners filed with the Arbitration Branch of the NLRC, a complaint for illegal dismissal, illegal
deduction, separation pay, non-payment of 13th month pay, and salary differentials. Only petitioner Nas asked for
payment of salary differentials as she alleged that she was paid a daily wage of P25.00 throughout her period of
employment. The petitioners also sought the refund of the P1.00 that the respondent company collected from each of them
daily as salary of the sweeper of the barber shop.

Private respondent in its position paper averred that the petitioners were joint venture partners and were receiving fifty
percent commission of the amount charged to customers. Thus, there was no employer-employee relationship between
them and petitioners. And assuming arguendo, that there was an employer-employee relationship, still petitioners are not
entitled to separation pay because the cessation of operations of the barber shop was due to serious business losses.

Respondent Trinidad Lao Ong, President of respondent Lao Enteng Co. Inc., specifically stated in her affidavit dated
September 06, 1995 that Lao Enteng Company, Inc. did not take over the management of the New Look Barber Shop, that
after the death Lao Enteng petitioner were verbally informed time and again that the partnership may fold up anytime
because nobody in the family had the time to be at the barber shop to look after their interest; that New Look Barber Shop
had always been a joint venture partnership and the operation and management of the barber shop was left entirely to
petitioners; that her father's contribution to the joint venture included the place of business, payment for utilities including
electricity, water, etc. while petitioners as industrial partners, supplied the labor; and that the barber shop was allowed to
remain open up to April 1995 by the children because they wanted to give the partners a chance at making it work.
Eventually, they were forced to close the barber shop because they continued to lose money while petitioners earned from
it. Trinidad also added that private respondents had no control over petitioners who were free to come and go as they
wished. Admittedly too by petitioners they received fifty percent to sixty percent of the gross paid by customers. Trinidad
explained that some of the petitioners were allowed to register with the Social Security System as employees of Lao
Enteng Company, Inc. only as an act of accommodation. All the SSS contributions were made by petitioners. Moreover,
Osias Corporal, Elpidio Lacap and Teresita Flores were not among those registered with the Social Security System.
Lastly, Trinidad avers that without any employee-employer relationship petitioners claim for 13th month pay and
separation pay have no basis in fact and in law. 3

In a Decision dated September 28, 1995, Labor Arbiter Potenciano S. Cañizares, Jr. ordered the dismissal of the complaint
on the basis of his findings that the complainants and the respondents were engaged in a joint venture and that there
existed no employer-employee relation between them. The Labor Arbiter also found that the barber shop was closed due
to serious business losses or financial reverses and consequently declared that the law does not compel the establishment
to pay separation pay to whoever were its employees. 4

On appeal, NLRC affirmed the said findings of the Labor Arbiter and dismissed the complaint for want of merit,
ratiocinating thus:
 77

Indeed, complainants failed to show the existence of employer-employee relationship under the fourway test established
by the Supreme Court. It is a common practice in the Barber Shop industry that barbers supply their own scissors and
razors and they split their earnings with the owner of the barber shop. The only capital of the owner is the place of work
whereas the barbers provide the skill and expertise in servicing customers. The only control exercised by the owner of the
barber shop is to ascertain the number of customers serviced by the barber in order to determine the sharing of profits. The
barbers maybe characterized as independent contractors because they are under the control of the barber shop owner only
with respect to the result of the work, but not with respect to the details or manner of performance. The barbers are
engaged in an independent calling requiring special skills available to the public at large. 5

Its motion for reconsideration denied in the Resolution6 dated March 5, 1997, petitioners filed the instant petition
assigning that the NLRC committed grave abuse of discretion in:

I. ARBITRARILY DISREGARDING SUBSTANTIAL EVIDENCE PROVING THAT PETITIONERS WERE

EMPLOYEES OF RESPONDENT COMPANY IN RULING THAT PETITIONERS WERE INDEPENDENT
CONTRACTORS.

II. NOT HOLDING THAT PETITIONERS WERE ILLEGALLY DISMISSED AND IN NOT AWARDING THEIR
MONEY CLAIMS.7

Petitioners principally argue that public respondent NLRC gravely erred in declaring that the petitioners were independent
contractors. They contend that they were employees of the respondent company and cannot be considered as independent
contractors because they did not carry on an independent business. They did not cut hair, manicure, and do their work in
their own manner and method. They insist they were not free from the control and direction of private respondents in all
matters, and their services were engaged by the respondent company to attend to its customers in its barber shop.
Petitioners also stated that, individually or collectively, they do not have substantial capital nor investments in tools,
equipments, work premises and other materials necessary in the conduct of the barber shop. What the barbers owned were
merely combs, scissors, and razors, while the manicurists owned only nail cutters, nail polishes, nippers and cuticle
removers. By no standard can these be considered "substantial capital" necessary to operate a barbers shop.

Finally, petitioners fault the NLRC for arbitrarily disregarding substantial evidence on record showing that petitioners
Pedro Tolentino, Manuel Caparas, Simplicio Pedelos, and Patricia Nas were registered with the Social Security System as
regular employees of the respondent company. The SSS employment records in common show that the employer's ID No.
of Vicente Lao/Barber and Pawn Shop was 03-0606200-1 and that of the respondent company was 03-8740074-7. All the
foregoing entries in the SSS employment records were painstakingly detailed by the petitioners in their position paper and
in their memorandum appeal but were arbitrarily ignored first by the Labor Arbiter and then by the respondent NLRC
which did not even mention said employment records in its questioned decision.

We found petition is impressed with merit.

In our view, this case is an exception to the general rule that findings of facts of the NLRC are to be accorded respect and
finality on appeal. We have long settled that this Court will not uphold erroneous conclusions unsupported by substantial
evidence.8 We must also stress that where the findings of the NLRC contradict those of the labor arbiter, the Court, in the
exercise of its equity jurisdiction, may look into the records of the case and reexamine the questioned findings. 9

The issues raised by petitioners boil down to whether or not an employer-employee relationship existed between
petitioners and private respondent Lao Enteng Company, Inc. The Labor Arbiter has concluded that the petitioners and
respondent company were engaged in a joint venture. The NLRC concluded that the petitioners were independent
contractors.

The Labor Arbiter's findings that the parties were engaged in a joint venture is unsupported by any documentary evidence.
It should be noted that aside from the self-serving affidavit of Trinidad Lao Ong, there were no other evidentiary
documents, nor written partnership agreements presented. We have ruled that even the sharing of proceeds for every job
of petitioners in the barber shop does not mean they were not employees of the respondent company. 10

Petitioner aver that NLRC was wrong when it concluded that petitioners were independent contractors simply because
they supplied their own working implements, shared in the earnings of the barber shop with the owner and chose the
manner of performing their work. They stressed that as far as the result of their work was concerned the barber shop
owner controlled them.

An independent contractor is one who undertakes "job contracting", i.e., a person who (a) carries on an independent
business and undertakes the contract work on his own account under his own responsibility according to his own manner
and method, free from the control and direction of his employer or principal in all matters connected with the performance
of the work except as to the results thereof, and (b) has substantial capital or investment in the form of tools, equipment,
machineries, work premises, and other materials which are necessary in the conduct of the business. 11

Juxtaposing this provision vis-à-vis the facts of this case, we are convinced that petitioners are not "independent
contractors". They did not carry on an independent business. Neither did they undertake cutting hair and manicuring nails,
on their own as their responsibility, and in their own manner and method. The services of the petitioners were engaged by
the respondent company to attend to the needs of its customers in its barber shop. More importantly, the petitioners,
individually or collectively, did not have a substantial capital or investment in the form of tools, equipment, work
 78

premises and other materials which are necessary in the conduct of the business of the respondent company. What the
petitioners owned were only combs, scissors, razors, nail cutters, nail polishes, the nippers - nothing else. By no standard
can these be considered substantial capital necessary to operate a barber shop. From the records, it can be gleaned that
petitioners were not given work assignments in any place other than at the work premises of the New Look Barber Shop
owned by the respondent company. Also, petitioners were required to observe rules and regulations of the respondent
company pertaining, among other things, observance of daily attendance, job performance, and regularity of job output.
The nature of work performed by were clearly directly related to private respondent's business of operating barber shops.
Respondent company did not dispute that it owned and operated three (3) barber shops. Hence, petitioners were not
independent contractors.

Did an employee-employer relationship exist between petitioners and private respondent? The following elements must be
present for an employer-employee relationship to exist: (1) the selection and engagement of the workers; (2) power of
dismissal; (3) the payment of wages by whatever means; and (4) the power to control the worker's conduct, with the latter
assuming primacy in the overall consideration. Records of the case show that the late Vicente Lao engaged the services of
the petitioners to work as barbers and manicurists in the New Look Barber Shop, then a single proprietorship owned by
him; that in January 1982, his children organized a corporation which they registered with the Securities and Exchange
Commission as Lao Enteng Company, Inc.; that upon its incorporation, it took over the assets, equipment, and properties
of the New Look Barber Shop and continued the business; that the respondent company retained the services of all the
petitioners and continuously paid their wages. Clearly, all three elements exist in petitioners' and private respondent's
working arrangements.

Private respondent claims it had no control over petitioners.1âwphi1 The power to control refers to the existence of the
power and not necessarily to the actual exercise thereof, nor is it essential for the employer to actually supervise the
performance of duties of the employee. It is enough that the employer has the right to wield that power. 12 As to the
"control test", the following facts indubitably reveal that respondent company wielded control over the work performance
of petitioners, in that: (1) they worked in the barber shop owned and operated by the respondents; (2) they were required
to report daily and observe definite hours of work; (3) they were not free to accept other employment elsewhere but
devoted their full time working in the New Look Barber Shop for all the fifteen (15) years they have worked until April
15, 1995; (4) that some have worked with respondents as early as in the 1960's; (5) that petitioner Patricia Nas was
instructed by the respondents to watch the other six (6) petitioners in their daily task. Certainly, respondent company was
clothed with the power to dismiss any or all of them for just and valid cause. Petitioners were unarguably performing
work necessary and desirable in the business of the respondent company.

While it is no longer true that membership to SSS is predicated on the existence of an employee-employer relationship
since the policy is now to encourage even the self-employed dressmakers, manicurists and jeepney drivers to become SSS
members, we could not agree with private respondents that petitioners were registered with the Social Security System as
their employees only as an accommodation. As we have earlier mentioned private respondent showed no proof to their
claim that petitioners were the ones who solely paid all SSS contributions. It is unlikely that respondents would report
certain persons as their workers, pay their SSS premium as well as their wages if it were not true that they were indeed
their employees.13

Finally, we agree with the labor arbiter that there was sufficient evidence that the barber shop was closed due to serious
business losses and respondent company closed its barber shop because the building where the barber shop was located
was sold. An employer may adopt policies or changes or adjustments in its operations to insure profit to itself or protect
investment of its stockholders. In the exercise of such management prerogative, the employer may merge or consolidate
its business with another, or sell or dispose all or substantially all of its assets and properties which may bring about the
dismissal or termination of its employees in the process. 14

Prescinding from the above, we hold that the seven petitioners are employees of the private respondent company; as such,
they are to be accorded the benefits provided under the Labor Code, specifically Article 283 which mandates the grant of
separation pay in case of closure or cessation of employer's business which is equivalent to one (1) month pay for every
year of service.15 Likewise, they are entitled to the protection of minimum wage statutes. Hence, the separation pay due
them may be computed on the basis of the minimum wage prevailing at the time their services were terminated by the
respondent company. The same is true with respect to the 13th month pay. The Revised Guidelines on the Implementation
of the 13th Month Pay Law states that "all rank and file employees are now entitled to a 13th month pay regardless of the
amount of basic salary that they receive in a month. Such employees are entitled to the benefit regardless of their
designation or employment status, and irrespective of the method by which their wages are paid, provided that they have
worked for at least one (1) month during a calendar year" and so all the seven (7) petitioners who were not paid their 13th
month pay must be paid accordingly.16

Anent the other claims of the petitioners, such as the P10,000.00 as penalty for non-compliance with procedural process;
P10,000.00 as moral damages; refund of P1.00 per day paid to the sweeper; salary differentials for petitioner Nas;
attorney's fees), we find them without basis.

IN VIEW WHEREOF, the petition is GRANTED. The public respondent's Decision dated October 17, 1996 and
Resolution dated March 05, 1997 are SET ASIDE. Private respondents are hereby ordered to pay, severally and jointly,
the seven (7) petitioners their (1) 13th month pay and (2) separation pay equivalent to one month pay for every year of
service, to be computed at the then prevailing minimum wage at the time of their actual termination which was April 15,
1995.Costs against private respondents.SO ORDERED.
 79

G.R. No. 119268           February 23, 2000

ANGEL JARDIN, DEMETRIO CALAGOS, URBANO MARCOS, ROSENDO MARCOS, LUIS DE LOS
ANGELES, JOEL ORDENIZA and AMADO CENTENO, petitioners, 
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and GOODMAN TAXI (PHILJAMA
INTERNATIONAL, INC.) respondents.

QUISUMBING, J.:

This special civil action for certiorari seeks to annul the decision1 of public respondent promulgated on October 28, 1994,
in NLRC NCR CA No. 003883-92, and its resolution2 dated December 13, 1994 which denied petitioners motion for
reconsideration.

Petitioners were drivers of private respondent, Philjama International Inc., a domestic corporation engaged in the
operation of "Goodman Taxi." Petitioners used to drive private respondent's taxicabs every other day on a 24-hour work
schedule under the boundary system. Under this arrangement, the petitioners earned an average of P400.00 daily.
Nevertheless, private respondent admittedly regularly deducts from petitioners, daily earnings the amount of P30.00
supposedly for the washing of the taxi units. Believing that the deduction is illegal, petitioners decided to form a labor
union to protect their rights and interests.

Upon learning about the plan of petitioners, private respondent refused to let petitioners drive their taxicabs when they
reported for work on August 6, 1991, and on succeeding days. Petitioners suspected that they were singled out because
they were the leaders and active members of the proposed union. Aggrieved, petitioners filed with the labor arbiter a
complaint against private respondent for unfair labor practice, illegal dismissal and illegal deduction of washing fees. In a
decision3 dated August 31, 1992, the labor arbiter dismissed said complaint for lack of merit.

On appeal, the NLRC (public respondent herein), in a decision dated April 28, 1994, reversed and set aside the judgment
of the labor arbiter. The labor tribunal declared that petitioners are employees of private respondent, and, as such, their
dismissal must be for just cause and after due process. It disposed of the case as follows:

WHEREFORE, in view of all the foregoing considerations, the decision of the Labor Arbiter appealed from is hereby
SET ASIDE and another one entered:

1. Declaring the respondent company guilty of illegal dismissal and accordingly it is directed to reinstate the
complainants, namely, Alberto A. Gonzales, Joel T. Morato, Gavino Panahon, Demetrio L. Calagos, Sonny M. Lustado,
Romeo Q. Clariza, Luis de los Angeles, Amado Centino, Angel Jardin, Rosendo Marcos, Urbano Marcos, Jr., and Joel
Ordeniza, to their former positions without loss of seniority and other privileges appertaining thereto; to pay the
complainants full backwages and other benefits, less earnings elsewhere, and to reimburse the drivers the amount paid as
washing charges; and

2. Dismissing the charge of unfair [labor] practice for insufficiency of evidence.

SO ORDERED.4

Private respondent's first motion for reconsideration was denied. Remaining hopeful, private respondent filed another
motion for reconsideration. This time, public respondent, in its decision 5 dated October 28, 1994, granted aforesaid second
motion for reconsideration. It ruled that it lacks jurisdiction over the case as petitioners and private respondent have no
employer-employee relationship. It held that the relationship of the parties is leasehold which is covered by the Civil Code
rather than the Labor Code, and disposed of the case as follows:

VIEWED IN THE LIGHT OF ALL THE FOREGOING, the Motion under reconsideration is hereby given due course.

Accordingly, the Resolution of August 10, 1994, and the Decision of April 28, 1994 are hereby SET ASIDE. The
Decision of the Labor Arbiter subject of the appeal is likewise SET ASIDE and a NEW ONE ENTERED dismissing the
complaint for lack of jurisdiction.

No costs.

SO ORDERED.6

Expectedly, petitioners sought reconsideration of the labor tribunal's latest decision which was denied. Hence, the instant
petition.

In this recourse, petitioners allege that public respondent acted without or in excess of jurisdiction, or with grave abuse of
discretion in rendering the assailed decision, arguing that:

THE NLRC HAS NO JURISDICTION TO ENTERTAIN RESPONDENT'S SECOND MOTION FOR

RECONSIDERATION WHICH IS ADMITTEDLY A PLEADING PROHIBITED UNDER THE NLRC RULES, AND
TO GRANT THE SAME ON GROUNDS NOT EVEN INVOKED THEREIN.
 80

II

THE EXISTENCE OF AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE PARTIES IS ALREADY A

SETTLED ISSUE CONSTITUTING RES JUDICATA, WHICH THE NLRC HAS NO MORE JURISDICTION TO
REVERSE, ALTER OR MODIFY.

III

IN ANY CASE, EXISTING JURISPRUDENCE ON THE MATTER SUPPORTS THE VIEW THAT PETITIONERS-
TAXI DRIVERS ARE EMPLOYEES OF RESPONDENT TAXI COMPANY.7

The petition is impressed with merit.

The phrase "grave abuse of discretion amounting to lack or excess of jurisdiction" has settled meaning in the
jurisprudence of procedure. It means such capricious and whimsical exercise of judgment by the tribunal exercising
judicial or quasi-judicial power as to amount to lack of power. 8 In labor cases, this Court has declared in several instances
that disregarding rules it is bound to observe constitutes grave abuse of discretion on the part of labor tribunal.

In Garcia vs. NLRC,9 private respondent therein, after receiving a copy of the labor arbiter's decision, wrote the labor
arbiter who rendered the decision and expressed dismay over the judgment. Neither notice of appeal was filed nor cash or
surety bond was posted by private respondent. Nevertheless, the labor tribunal took cognizance of the letter from private
respondent and treated said letter as private respondent's appeal. In a certiorari action before this Court, we ruled that the
labor tribunal acted with grave abuse of discretion in treating a mere letter from private respondent as private respondent's
appeal in clear violation of the rules on appeal prescribed under Section 3(a), Rule VI of the New Rules of Procedure of
NLRC.

In Philippine Airlines Inc. vs. NLRC,10 we held that the labor arbiter committed grave abuse of discretion when he failed
to resolve immediately by written order a motion to dismiss on the ground of lack of jurisdiction and the supplemental
motion to dismiss as mandated by Section 15 of Rule V of the New Rules of Procedure of the NLRC.

In Unicane Workers Union-CLUP vs. NLRC,11 we held that the NLRC gravely abused its discretion by allowing and
deciding an appeal without an appeal bond having been filed as required under Article 223 of the Labor Code.

In Mañebo vs. NLRC,12 we declared that the labor arbiter gravely abused its discretion in disregarding the rule governing
position papers. In this case, the parties have already filed their position papers and even agreed to consider the case
submitted for decision, yet the labor arbiter still admitted a supplemental position paper and memorandum, and by taking
into consideration, as basis for his decision, the alleged facts adduced therein and the documents attached thereto.

In Gesulgon vs. NLRC,13 we held that public respondent gravely abused its discretion in treating the motion to set aside
judgment and writ of execution as a petition for relief of judgment. In doing so, public respondent had, without sufficient
basis, extended the reglementary period for filing petition for relief from judgment contrary to prevailing rule and case
law.

In this case before us, private respondent exhausted administrative remedy available to it by seeking reconsideration of
public respondent's decision dated April 28, 1994, which public respondent denied. With this motion for reconsideration,
the labor tribunal had ample opportunity to rectify errors or mistakes it may have committed before resort to courts of
justice can be had.14 Thus, when private respondent filed a second motion for reconsideration, public respondent should
have forthwith denied it in accordance with Rule 7, Section 14 of its New Rules of Procedure which allows only one
motion for reconsideration from the same party, thus:

Sec. 14. Motions for Reconsideration. — Motions for reconsideration of any order, resolution or decision of the
Commission shall not be entertained except when based on palpable or patent errors, provided that the motion is under
oath and filed within ten (10) calendar days from receipt of the order, resolution or decision with proof of service that a
copy of the same has been furnished within the reglementary period the adverse party and provided further, that only one
such motion from the same party shall be entertained. [Emphasis supplied]

The rationale for allowing only one motion for reconsideration from the same party is to assist the parties in obtaining an
expeditious and inexpensive settlement of labor cases. For obvious reasons, delays cannot be countenanced in the
resolution of labor disputes. The dispute may involve no less than the livelihood of an employee and that of his loved ones
who are dependent upon him for food, shelter, clothing, medicine, and education. It may as well involve the survival of a
business or an industry.15

As correctly pointed out by petitioner, the second motion for reconsideration filed by private respondent is indubitably a
prohibited pleading16 which should have not been entertained at all. Public respondent cannot just disregard its own rules
on the pretext of "satisfying the ends of justice", 17 especially when its disposition of a legal controversy ran afoul with a
clear and long standing jurisprudence in this jurisdiction as elucidated in the subsequent discussion. Clearly, disregarding
a settled legal doctrine enunciated by this Court is not a way of rectifying an error or mistake. In our view, public
respondent gravely abused its discretion in taking cognizance and granting private respondent's second motion for
reconsideration as it wrecks the orderly procedure in seeking reliefs in labor cases.
 81

But, there is another compelling reason why we cannot leave untouched the flip-flopping decisions of the public
respondent. As mentioned earlier, its October 28, 1994 judgment is not in accord with the applicable decisions of this
Court. The labor tribunal reasoned out as follows:

On the issue of whether or not employer-employee relationship exists, admitted is the fact that complainants are taxi
drivers purely on the "boundary system". Under this system the driver takes out his unit and pays the owner/operator a fee
commonly called "boundary" for the use of the unit. Now, in the determination the existence of employer-employee
relationship, the Supreme Court in the case of Sara, et al., vs. Agarrado, et al. (G.R. No. 73199, 26 October 1988) has
applied the following four-fold test: "(1) the selection and engagement of the employee; (2) the payment of wages; (3) the
power of dismissal; and (4) the power of control the employees conduct."

"Among the four (4) requisites", the Supreme Court stresses that "control is deemed the most important that the other
requisites may even be disregarded". Under the control test, an employer-employee relationship exists if the "employer"
has reserved the right to control the "employee" not only as to the result of the work done but also as to the means and
methods by which the same is to be accomplished. Otherwise, no such relationship exists. (Ibid.)

Applying the foregoing parameters to the case herein obtaining, it is clear that the respondent does not pay the drivers, the
complainants herein, their wages. Instead, the drivers pay a certain fee for the use of the vehicle. On the matter of control,
the drivers, once they are out plying their trade, are free to choose whatever manner they conduct their trade and are
beyond the physical control of the owner/operator; they themselves determine the amount of revenue they would want to
earn in a day's driving; and, more significantly aside from the fact that they pay for the gasoline they consume, they
likewise shoulder the cost of repairs on damages sustained by the vehicles they are driving.

Verily, all the foregoing attributes signify that the relationship of the parties is more of a leasehold or one that is covered
by a charter agreement under the Civil Code rather than the Labor Code. 18

The foregoing ratiocination goes against prevailing jurisprudence.

In a number of cases decided by this Court,19 we ruled that the relationship between jeepney owners/operators on one hand
and jeepney drivers on the other under the boundary system is that of employer-employee and not of lessor-lessee. We
explained that in the lease of chattels, the lessor loses complete control over the chattel leased although the lessee cannot
be reckless in the use thereof, otherwise he would be responsible for the damages to the lessor. In the case of jeepney
owners/operators and jeepney drivers, the former exercise supervision and control over the latter. The management of the
business is in the owner's hands. The owner as holder of the certificate of public convenience must see to it that the driver
follows the route prescribed by the franchising authority and the rules promulgated as regards its operation. Now, the fact
that the drivers do not receive fixed wages but get only that in excess of the so-called "boundary" they pay to the
owner/operator is not sufficient to withdraw the relationship between them from that of employer and employee. We have
applied by analogy the abovestated doctrine to the relationships between bus owner/operator and bus conductor, 20 auto-
calesa owner/operator and driver,21 and recently between taxi owners/operators and taxi drivers. 22 Hence, petitioners are
undoubtedly employees of private respondent because as taxi drivers they perform activities which are usually necessary
or desirable in the usual business or trade of their employer.

As consistently held by this Court, termination of employment must be effected in accordance with law. The just and
authorized causes for termination of employment are enumerated under Articles 282, 283 and 284 of the Labor Code. The
requirement of notice and hearing is set-out in Article 277 (b) of the said Code. Hence, petitioners, being employees of
private respondent, can be dismissed only for just and authorized cause, and after affording them notice and hearing prior
to termination. In the instant case, private respondent had no valid cause to terminate the employment of petitioners.
Neither were there two (2) written notices sent by private respondent informing each of the petitioners that they had been
dismissed from work. These lack of valid cause and failure on the part of private respondent to comply with the twin-
notice requirement underscored the illegality surrounding petitioners' dismissal.

Under the law, an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual
reinstatement.23 It must be emphasized, though, that recent judicial pronouncements 24 distinguish between employees
illegally dismissed prior to the effectivity of Republic Act No. 6715 on March 21, 1989, and those whose illegal
dismissals were effected after such date. Thus, employees illegally dismissed prior to March 21, 1989, are entitled to
backwages up to three (3) years without deduction or qualification, while those illegally dismissed after that date are
granted full backwages inclusive of allowances and other benefits or their monetary equivalent from the time their actual
compensation was withheld from them up to the time of their actual reinstatement. The legislative policy behind Republic
Act No. 6715 points to "full backwages" as meaning exactly that, i.e., without deducting from backwages the earnings
derived elsewhere by the concerned employee during the period of his illegal dismissal. Considering that petitioners were
terminated from work on August 1, 1991, they are entitled to full backwages on the basis of their last daily earnings.

With regard to the amount deducted daily by private respondent from petitioners for washing of the taxi units, we view the
same as not illegal in the context of the law. We note that after a tour of duty, it is incumbent upon the driver to restore the
unit he has driven to the same clean condition when he took it out. Car washing after a tour of duty is indeed a practice in
the taxi industry and is in fact dictated by fair play. 25 Hence, the drivers are not entitled to reimbursement of washing
charges.1âwphi1.nêt
 82

WHEREFORE, the instant petition is GRANTED. The assailed DECISION of public respondent dated October 28, 1994,
is hereby SET ASIDE. The DECISION of public respondent dated April 28, 1994, and its RESOLUTION dated
December 13, 1994, are hereby REINSTATED subject to MODIFICATION. Private respondent is directed to reinstate
petitioners to their positions held at the time of the complained dismissal. Private respondent is likewise ordered to pay
petitioners their full backwages, to be computed from the date of dismissal until their actual reinstatement. However, the
order of public respondent that petitioners be reimbursed the amount paid as washing charges is deleted. Costs against
private respondents.

SO ORDERED.
 83

II. ILLEGAL RECRUITMENT

Sec. 6. DEFINITIONS. - For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, procuring workers and includes referring, contact services, promising or
advertising for employment abroad, whether for profit or not, when undertaken by a non-license 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 such non-license 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. It shall likewise include the following acts,
whether committed by any persons, whether a non-licensee, non-holder, licensee or holder of authority.

(a) To charge or accept directly or indirectly any amount greater than the specified in the schedule of allowable fees
prescribed by the Secretary of Labor and Employment, or to make a worker pay any amount greater than that actually
received by him as a loan or advance;

(b) To furnish or publish any false notice or information or document in relation to recruitment or employment;

(c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose
of securing a license or authority under the Labor Code;

(d) To induce or attempt to induce a worker already employed to quit his employment in order to offer him another unless
the transfer is designed to liberate a worker from oppressive terms and conditions of employment;

(e) To influence or attempt to influence any persons or entity not to employ any worker who has not applied for
employment through his agency;

(f) To engage in the recruitment of placement of workers in jobs harmful to public health or morality or to dignity of the
Republic of the Philippines;

(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and Employment or by his duly authorized
representative;

(h) To fail to submit reports on the status of employment, placement vacancies, remittances of foreign exchange earnings,
separations from jobs, departures and such other matters or information as may be required by the Secretary of Labor and
Employment;

(i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of
Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the
expiration of the same without the approval of the Department of Labor and Employment;

(j) For an officer or agent of a recruitment or placement agency to become an officer or member of the Board of any
corporation engaged in travel agency or to be engaged directly on indirectly in the management of a travel agency;

(k) To withhold or deny travel documents from applicant workers before departure for monetary or financial
considerations other than those authorized under the Labor Code and its implementing rules and regulations;

(l) Failure to actually deploy without valid reasons as determined by the Department of Labor and Employment; and

(m) Failure to reimburse expenses incurred by the workers in connection with his documentation and processing for
purposes of deployment, in cases where the deployment does not actually take place without the worker's fault. Illegal
recruitment when committed by a syndicate or in large scale shall be considered as offense involving economic sabotage.

Illegal recruitment is deemed committed by a syndicate carried out by a group of three (3) or more persons conspiring or
confederating with one another. It is deemed committed in large scale if committed against three (3) or more persons
individually or as a group.

The persons criminally liable for the above offenses are the principals, accomplices and accessories. In case of juridical
persons, the officers having control, management or direction of their business shall be liable.

SEC. 7. PENALTIES -

(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than six (6) years
and one (1) day but not more than twelve (12) years and a fine not less than two hundred thousand pesos (P200,000.00)
nor more than five hundred thousand pesos (P500,000.00).

 (b) The penalty of life imprisonment and a fine of not less than five hundred thousand pesos (P500,000.00) nor more than
one million pesos (P1,000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage as defined herein.

 Provided, however, that the maximum penalty shall be imposed if the person illegally recruited is less than eighteen (18)
years of age or committed by a non-licensee or non-holder of authority.