Title

Interorient Maritime Enterprises, Inc. vs. Remo

Case Decision Date

G.R. No. 181112 Jun 29, 2010

Seafarer's death from work-related illness deemed compensable despite contract expiration;
employer's failure to provide post-employment medical exam invalidated waiver.

636 Phil. 240

SECOND DIVISION

[ G.R. No. 181112, June 29, 2010 ]

INTERORIENT MARITIME ENTERPRISES, INC., INTERORIENT ENTERPRISES, INC., AND

LIBERIA AND DOROTHEA SHIPPING CO., LTD., PETITIONERS, VS. LEONORA S. REMO,
RESPONDENT.

DECISION

NACHURA, J.:

Before this Court is Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil
Procedure, seeking the reversal of the Court of Appeals (CA) Decision2 dated September 26,
2007, which reversed and set aside the resolution3 of the National Labor Relations
Commission (NLRC) dated June 23, 2006.

This case stems from the claim for death benefits filed by respondent Leonora S. Remo
(respondent), surviving spouse of Lutero Remo (Lutero), against petitioners Interorient
Maritime Enterprises, Inc. (Interorient), Interorient Enterprises, Inc., and Liberia and
Dorothea Shipping Co., Ltd. (petitioners).

Culled from the records, the facts are as follows:

Lutero was deployed by Interorient on November 10, 1998 to serve as Cook-Steward on board
the foreign principal's vessel, "M/T Captain Mitsos L" (the vessel), under a Philippine
Overseas Employment Administration (POEA) Standard Employment Contract (SEC) with a
duration of 12 months and a monthly salary of US$400.00.4
Respondent alleged that Lutero was repeatedly contracted and deployed by Interorient for
employment on board various vessels of its principals from September 1994 to April 1999;5
that prior to his last employment contract on October 29, 1998, he underwent a pre-
employment medical examination (PEME) and was declared fit to work; that on his fifth
month of employment, while on board the vessel, Lutero experienced severe abdominal and
chest pains, fainting spells and difficulty in breathing; that he was brought to a hospital in
Dubai where he was confined for one (1) week until his repatriation on April 19, 1999; that he
was diagnosed with atrial fibrillation and congestive heart failure; that within 2-3 days from
arrival, Lutero reported to Interorient and requested that he be given a post-employment
medical examination and assistance; that Interorient assured Lutero that he would be given a
medical examination and assistance which did not, however, materialize; that Lutero, after
waiting for about two weeks for the examination, went home to his province but, two weeks
thereafter, he was again confined in a hospital after experiencing another episode of
difficulty in breathing, abdominal and chest pains, dyspnea, and irregular cardiac breathing;
that for the period of May 3 to December 9, 1999, he underwent treatment for the ailment he
contracted during his overseas employment; that Lutero was diagnosed with Chronic Atrial
Fibrillation, Cardiomegaly, Essential Hypertension, and Schistosomiasis;6 that sometime
thereafter, he received notice from Interorient, requiring him to report as there was
supposedly a vessel available for him to join; that he tried to persuade his attending doctor,
Dr. Efren Ozaraga (Dr. Ozaraga), to declare him fit to work because he wanted to resume his
work, but the doctor refused; that Lutero reported to Interorient, but failed in his PEME; that
on August 28, 2000, he died at the age of 47 of hypertensive cardio-vascular disease,7 leaving
behind respondent and their three (3) children;8 that from the time of his discharge from the
vessel, Lutero did not receive any sickness benefit or medical assistance from petitioners;
and that respondent is entitled to death compensation as the death of her husband was due
to an illness contracted during the latter's employment, as well as sickness benefit, moral
and exemplary damages, and attorney's fees.

Petitioners denied liability and averred that, at the time of his application, Lutero expressly
declared in his application form that he did not, in the past and at that time, have any illness;
that during his PEME, he answered "no" to the listed medical conditions and to the question
if he was taking any medication;9 that on the basis of his representation, he was declared fit
to work and subsequently commenced employment; that after his repatriation, Lutero
reported to Interorient's office on April 20, 1999, and when asked about the circumstances of
his illness, he admitted that he had a preexisting ailment at the time of his application and
deployment, and discharged petitioners from liabilities arising from said preexisting illness
by virtue of his Acknowledgment10 and Undertaking;11 that thereafter, nothing was heard
from Lutero until February 2000, when he submitted to Interorient a medical certificate12 of
fitness to work issued by his private doctor, Dr. Ozaraga; that respondent was not entitled to
her claims because Lutero died after the expiration of the term of the contract; that Lutero
failed to disclose his preexisting illness at the time of his engagement; and that, following his
repatriation, he acknowledged his preexisting illness.

On January 13, 2004, the Labor Arbiter (LA) denied respondent's claims, holding that she was
not entitled thereto because Lutero's death did not occur during the term of the contract; that
Lutero failed to disclose his medical condition prior to his deployment; and that he
acknowledged his preexisting illness following his repatriation. Aggrieved, respondent
appealed to the NLRC which, however, affirmed the LA's ruling.

Undaunted, respondent went to the CA on certiorari,13 alleging grave abuse of discretion on

the part of the NLRC in not ruling that Lutero's death was due to an illness contracted during
his employment, or that said employment contributed to the development of his illness.

On September 26, 2007, the CA decided in favor of respondent, finding that the nature of
Lutero's employment contributed to the aggravation of his illness. Invoking our rulings in
Seagull Shipmanagement and Transport, Inc. v. NLRC14 and Wallem Maritime Services, Inc.
v. NLRC,15 the CA disposed of the case in this wise:

WHEREFORE, the petition is GRANTED. The assailed Resolutions of the National Labor
Relations Commission are REVERSED and SET ASIDE. Private respondents are ordered to
pay, jointly and severally, the following amounts to petitioner for herself and in her capacity
as guardian of her minor children: US$50,000.00 as death benefit; US$7,000.00 to each child
under the age of twenty-one (21), as allowances; and US$1,000.00 as burial expenses. Costs
against the private respondents.

SO ORDERED.16

On October 15, 2007, petitioners filed their Motion for Reconsideration,17 which was,
however, denied by the CA in its Resolution18 dated December 20, 2007.

Hence, this Petition based on the following grounds:

1) THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT RESPONDENT IS NOT
ENTITLED TO DEATH BENEFITS UNDER THE POEA STANDARD EMPLOYMENT CONTRACT FOR
THE DEATH OF HER HUSBAND OCCUR[R]ING ONE YEAR AFTER THE TERM OF HIS CONTRACT;

2) THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT RESPONDENT IS NOT
ENTITLED TO DEATH BENEFITS UNDER THE POEA STANDARD EMPLOYMENT CONTRACT FOR
THE DEATH OF HER HUSBAND AS THE LATTER'S DEATH WAS DUE TO [A] PRE-EXISTING
ILLNESS[; and]

3) THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE RESPONDENT IS
NOT ENTITLED TO DEATH BENEFITS UNDER THE POEA STANDARD EMPLOYMENT CONTRACT
FOR THE DEATH OF HER HUSBAND AS THE LATTER ADMITTED CONCEALING HIS TRUE
MEDICAL CONDITION AT THE TIME OF HIS PRE- EMPLOYMENT MEDICAL EXAMINATION.19

Petitioners rely on the findings of both the LA and the NLRC that the death of Lutero is not
compensable because it happened outside the term of his contract. Petitioners claim that the
medical certificate issued by Dr. Ozaraga, certifying that Lutero was already fit to resume
work, belies respondent's assertion that Lutero continued to be ill after his repatriation until
his death. Petitioners also rely on the undertaking executed by Lutero, stating that, before he
joined the vessel, he already had hypertension, and that he took medication prior to his
medical examination. Thus, petitioners submit that Lutero committed material
misrepresentation, disqualifying him from claiming the benefits provided for under the
POEA-SEC.20

On the other hand, respondent argues that petitioners failed to attach the pertinent
documents and pleadings to the Petition, and that the petition raises factual issues in
violation of Rule 45 of the Rules of Civil Procedure. Respondent asseverates that petitioners'
stance that the employer is liable only if the death of the seafarer occurs exactly during the
term of the contract violates the nature of the POEA-SEC and is contrary to the avowed policy
of the State to accord utmost protection and justice to labor. Invoking our ruling in Wallem,21
respondent maintains that "it is enough that the employment had contributed, even in a
small degree, to the development of the disease and in bringing about (the seafarer's) death."
Respondent stresses that this Court allowed the award of death benefits in Wallem even if the
seafarer therein died after the contract term. In the instant case, Lutero suffered a heart
ailment while on board the vessel - the illness manifested itself during the term of the
contract - and was the very reason of his repatriation. Respondent submits that Lutero died
of a heart ailment which he incurred during the term of the contract, thus, making his death
compensable. Respondent also denies that the heart ailment of Lutero was a preexisting
illness because, while it is true that the PEME is not exploratory, the ailment would have
been easily detected because Lutero had been continuously under petitioners' employ for
almost four years. Lastly, respondent highlights her claim that Lutero, after his repatriation,
immediately reported to Interorient and asked for post-medical examination and assistance,
but none was given to him. She bewails the fact that, instead of the conduct of said
examination, petitioners induced Lutero to execute the Acknowledgment and Undertaking,
releasing petitioners from any liability.22

The ultimate issue in this case is whether the CA committed a reversible error in rendering
the assailed Decision.

The Petition is bereft of merit.

As a rule, only questions of law may be raised in and resolved by this Court on petitions
brought under Rule 45 of the Rules of Civil Procedure, because the Court, not being a trier of
facts, is not duty-bound to reexamine and calibrate the evidence on record. In exceptional
cases, however, we may delve into and resolve factual issues when there is insufficient or
insubstantial evidence to support the findings of the tribunal or court below, or when too
much is concluded, inferred or deduced from the bare or incomplete facts submitted by the
parties, or when the lower courts come up with conflicting positions.23 This case constitutes
an exception inasmuch as the CA's findings contradict those of the LA and the NLRC.

Section 20(B)1 of the Standard Terms and Conditions Governing the Employment of Filipino
Seafarers On-Board Ocean-Going Vessels made pursuant to POEA Memorandum Circular No.
055-96 and Department Order No. 33, Series of 1996, clearly provides:

The liabilities of the employer when the seafarer suffers injury or illness during the term of
his contract are as follows:

...

2. If the injury or illness requires medical and/or dental treatment in a foreign port, the
employer shall be liable for the full cost of such medical, serious dental, surgical and hospital
treatment as well as board and lodging until the seafarer is declared fit to work or to be
repatriated.

However, if after repatriation, the seafarer still requires medical attention arising from said
injury or illness, he shall be so provided at cost to the employer until such time he is declared
fit or the degree of his disability has been established by the company-designated
physician.24
For disability claims, the post-employment medical examination is meant to verify the
medical condition of the seafarer when he signs off from the vessel.25 On the other hand, in
the cases involving death compensation, our rulings in Gau Sheng Phils., Inc. v. Joaquin26
and Rivera v. Wallem Maritime Services, Inc.27 stressed the importance of a post-
employment medical examination or its equivalent, i.e., it is a basis for the award of death
compensation. In these cited cases, however, death benefits were not awarded because the
seafarers and/or their representatives failed to abide by the POEA-SEC wherein it was stated
that the seafarer must report to his employer for a post-employment medical examination
within three working days from the date of arrival, otherwise, benefits under the POEA-SEC
would be nullified.28

In light of this ruling, the following questions may be asked: What if the seafarer reported to
his employer but despite his request for a post-employment medical examination, the
employer, who is mandated to provide this service under POEA Memorandum Circular No.
055-96, did not do so? Would the absence of a post-employment medical examination be
taken against the seafarer?

Both parties in this case admitted that Lutero was confined in a hospital in Dubai for almost
one week due to atrial fibrillation and congestive heart failure. Undeniably, Lutero suffered a
heart ailment while under the employ of petitioners. This fact is duly established.
Respondent has also consistently asserted that 2-3 days immediately after his repatriation on
April 19, 1999, Lutero reported to the office of Interorient, requesting the required post-
employment medical examination. However, it appears that, instead of heeding Lutero's
request, Interorient conveniently prioritized the execution of the Acknowledgment and
Undertaking which were purportedly notarized on April 20, 1999, thus leaving Lutero in the
cold. In their pleadings, petitioners never traversed this assertion and did not meet this issue
head-on. This self-serving act of petitioners should not be condoned at the expense of our
seafarers. Therefore, the absence of a post-employment medical examination cannot be used
to defeat respondent's claim since the failure to subject the seafarer to this requirement was
not due to the seafarer's fault but to the inadvertence or deliberate refusal of petitioners.

Moreover, we attach little evidentiary value to the Acknowledgment and Undertaking

purportedly executed by Lutero, which is in the nature of a waiver and/or quitclaim. As a rule,
quitclaims, waivers, or releases are looked upon with disfavor and are largely ineffective to
bar claims for the measure of a worker's legal rights.29
To be valid, a Deed of Release, Waiver and/or Quitclaim must meet the following
requirements: (1) that there was no fraud or deceit on the part of any of the parties; (2) that
the consideration for the quitclaim is credible and reasonable; and (3) that the contract is not
contrary to law, public order, public policy, morals or good customs, or prejudicial to a third
person with a right recognized by law.30 Courts have stepped in to annul questionable
transactions, especially where there is clear proof that a waiver, for instance, was obtained
from an unsuspecting or a gullible person; or where the agreement or settlement was
unconscionable on its face. A quitclaim is ineffective in barring recovery of the full measure
of a worker's rights, and the acceptance of benefits therefrom does not amount to estoppel.
Moreover, a quitclaim in which the consideration is scandalously low and inequitable cannot
be an obstacle to the pursuit of a worker's legitimate claim.31

Based on the foregoing disquisition, we find the Acknowledgment and Undertaking to be

void, as contrary to public policy. Other than the fact that the Acknowledgment and
Undertaking did not provide for any consideration given in favor of Lutero, it is likewise
evident that the terms thereof are unconscionable and that petitioners merely wangled them
from the unsuspecting Lutero who, at that time, just arrived in the country after having been
confined in a hospital in Dubai for a heart ailment.

It is a time-honored rule that in controversies between a laborer and his employer, doubts
reasonably arising from the evidence or from the interpretation of agreements and writings
should be resolved in the former's favor in consonance with the avowed policy of the State to
give maximum aid and protection to labor.32 This principle gives us even greater reason to
affirm the findings of the CA which aptly and judiciously held:

It was established on record that before the late Lutero Remo signed his last contract with
private respondents as Cook-Steward of the vessel "M/T Captain Mitsos L," he was required to
undergo a series of medical examinations. Yet, he was declared "fit to work" by private
respondents' company designated-physician. On April 19, 1999, Remo was discharged from
his vessel after he was hospitalized in Fujairah for atrial fibrillation and congestive heart
failure. His death on August 28, 2000, even if it occurred months after his repatriation, due to
hypertensive cardio-vascular disease, could clearly have been work related. Declared as "fit
to work" at the time of hiring, and hospitalized while on service on account of "atrial
fibrillation and congestive heart failure," his eventual death due to "hypertensive cardio-
vascular disease" could only be work related. The death due to "hypertensive cardio-vascular
disease" could in fact be traced to Lutero Remo's being the "Cook-Steward." As Cook-Steward
of an ocean going vessel, Remo had no choice but to prepare and eat hypertension inducing
food, a kind of food that eventually caused his "hypertensive cardio-vascular disease," a
disease which in turn admittedly caused his death.

Private respondents cannot deny liability for the subject death by claiming that the seafarer's
death occurred beyond the term of his employment and worsely, that there has been
misrepresentation on the part of the seafarer. For, as employer, the private respondents had
all the opportunity to pre-qualify, thoroughly screen and choose their applicants to
determine if they are medically, psychologically and mentally fit for employment. That the
seafarer here was subjected to the required pre-qualification standards before he was
admitted as Cook-Steward, it thus has to be safely presumed that the late Remo was in a good
state of health when he boarded the vessel.33
In sum, we find no reversible error on the part of the CA in rendering the assailed Decision
which would warrant the reversal and/or modification of the same.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No.
97336 dated September 26, 2007 is AFFIRMED. No costs.

SO ORDERED.

Carpio, (Chairperson), Peralta, Abad, and Mendoza, JJ., concur.

1 Rollo, pp. 3-30.

2 Docketed as CA-G.R. SP No. 97336, penned by Associate Justice Vicente S.E. Veloso, with
Associate Justices Juan Q. Enriquez, Jr. and Marlene Gonzales-Sison, concurring; id. at 33-
44.

3 Rollo, pp. 62-70.

4 CA rollo, p. 90.

5 Id. at 88-89.

6 Id. at 91-93.
7 Id. at 94.

8 Id. at 95-98.

9 Id. at 112-114.

10 Id. at 115.

11 Id. at 116.

12 Id. at 117.

13 Id. at 6-48.

14 G.R. No. 123619, June 8, 2000, 333 SCRA 236.

15 376 Phil. 738 (1999).

16 Supra note 2, at 43-44.

17 Rollo, pp. 75-82.

18 Id. at 46.

19 Supra note 1, at 10.

20 Id.

21 Supra note 15.

22 Comment; rollo, pp. 97-140.

23 Pascua v. NLRC, 351 Phil. 48, 61 (1998).

24 Emphasis supplied.

25 Nisda v. Sea Serve Maritime Agency, G.R. No. 179177, July 23, 2009, 593 SCRA 668.
26 G.R. No. 144665, September 8, 2004, 437 SCRA 608.

27 G.R. No. 160315, November 11, 2005, 474 SCRA 714.

28 Section 20(B) 3 of POEA Memorandum Circular No. 055-96.

29Phil. Employ Services and Resources, Inc. v. Paramio, G.R. No. 144786, April 15, 2004, 427
SCRA 732, 755.

30Danzas Intercontinental, Inc. v. Daguman, G.R. No. 154368, April 15, 2005, 456 SCRA 382,
397-398.

31 R & E Transport, Inc. v. Latag, G.R. No. 155214, February 13, 2004, 422 SCRA 698, 708.

32 Metropolitan Bank and Trust Company v. National Labor Relations Commission, G.R. No.
152928, June 18, 2009, 589 SCRA 376.

33 Supra note 2, at 41-43.