Presidential AD Hoc Fact-Finding Commitee on Behest Loans, et al. vs. Desierto et al.; G.R. No. 135715

Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 135715               April 13, 2011

PRESIDENTIAL AD HOC FACT- FINDING COMMITTEE ON BEHEST LOANS, represented by MAGDANGAL B. ELMA, PCGG CHAIRMAN AND ORLANDO C. SALVADOR AS CONSULTANT OF THE TECHNICAL WORKING GROUP OF THE AD-HOC COMMITTEE, Petitioners,
vs.
HONORABLE ANIANO A. DESIERTO AS OMBUDSMAN, PANFILO O. DOMINGO, CONRADO S. REYES, ENRIQUE M. HERBOZA, MOHAMMAD ALI DIMAPORO, ABDULLAH DIMAPORO AND AMER DIANALAN,Respondents.

D E C I S I O N

PEREZ, J.:

This petition for review on certiorari¹ is one among the 17 cases filed before us by the Presidential Ad Hoc Fact-Finding Committee on Behest Loans, charging public respondent Ombudsman Aniano A. Desierto (Ombudsman) for grave abuse of discretion, when, on the ground of prescription and insufficiency of evidence, he dismissed all of these cases then pending before him, including this case in OMB-0-97-1718.

The Facts

Respondents Mohammad Ali Dimaporo, Abdullah Dimaporo, and Amer Dianalan, were stockholders and officers of the Mindanao Coconut Oil Mills (MINCOCO), a domestic corporation established in 1974,² while respondents Panfilo O. Domingo, Conrado S. Reyes, Enrique M. Herboza, and Ricardo Sunga, were then officers of the National Investment and Development Corporation (NIDC).

On 10 May 1976, MINCOCO applied for a Guarantee Loan Accommodation with the NIDC for the amount of approximately P30,400,000.00, which the NIDC’s Board of Directors approved on 23 June 1976.

The guarantee loan was, however, both undercapitalized and under-collateralized because MINCOCO’s paid capital then was only P7,000,000.00 and its assets worth is P7,000,000.00.

This notwithstanding, MINCOCO further obtained additional Guarantee Loan Accommodations from NIDC in the amount of P13,647,600.00 and P7,000,000.00,³ respectively.

When MINCOCO’s mortgage liens were about to be foreclosed by the government banks due its outstanding obligations, Eduardo Cojuangco issued a memorandum dated 18 July 1983, bearing the late President Ferdinand E. Marcos’ (President Marcos) marginal note, disallowing the foreclosure of MINCOCO’s properties.⁴ The government banks were not able to recover any amount from MINCOCO and President Marcos’ marginal note was construed by the NIDC to have effectively released MINCOCO, including its owners, from all of its financial liabilities.⁵

The above mentioned transactions, were, however, discovered only in 1992 after then President Fidel V. Ramos (President Ramos), in an effort to recover the ill-gotten wealth of the late President Marcos, his family, and cronies, issued Administrative Order No. 13⁶ creating the Presidential Ad Hoc Fact-Finding Committee on Behest Loans (the Committee), with the Chairman of the Philippine Commission on Good Government (PCGG) as the Committee’s head. The Committee was directed, inter alia, to inventory all behest loans, and identify the lenders and borrowers, including the principal officers and stockholders of the borrowing firms, as well as the persons responsible for the granting of loans or who influenced the grant thereof.⁷ Subsequently, then President Ramos issued Memorandum Order No. 61⁸ outlining the criteria which may be utilized as a frame of reference in determining a behest loan, viz:

a. It is under-collateralized;

b. The borrower corporation is undercapitalized;

c. Direct or indirect endorsement by high government officials like presence of marginal note;

d. Stockholders, officers or agents of the borrower corporation are identified as cronies;

e. Deviation of use of loan proceeds from the purpose intended;

f. Use of corporate layering;

g. Non-feasibility of the project for which financing is being sought;

h. Extraordinary speed in which the loan release was made.

The Committee found that twenty-one (21) corporations, including MINCOCO, obtained behest loans. It claimed that the fact that MINCOCO was under-collateralized and undercapitalized; that its officers were identified as cronies; that the late President Marcos had marginal note, effectively waiving the government’s right to foreclose MINCOCO’s mortgage liens; and, that the Guarantee Loan Accommodation were approved in an extraordinary speed of one month, bore badges of behest loans.

Subsequently, the Committee filed with the Ombudsman a sworn complaint against MINCOCO’s Officers and NIDC’s Board of Directors for violation of Section 3(e) and (g) of Republic Act No. 3019,⁹ as amended.

By Resolution dated 9 July 1998, the Ombudsman motu prorio dismissed the complaint on the grounds that, first, there was insufficient evidence to warrant the indictment of the persons charged; and, second, the alleged offenses had prescribed.¹⁰ The Ombudsman explained:

Being undercapitalized, standing alone is meaningless. The approval of the loans/guarantees was still based on sound lending practice, otherwise, MINCOCO would have been disqualified from obtaining the same. If MINCOCO’s equity was more than the amount of the loans, there was no need for it to obtain the latter.

Anent the claim that Mohammad Ali Dimaporo was a crony of the late President Marcos, no evidence was adduced to prove the same, hence, remains a bare allegation. x x x.

On the issue that the notation by President Marcos in the Memorandum of July 18, 1983 is a behest order, suffice it to state that these marginal notes, if they meant endorsement as defined under Memorandum Order No. 61, endorsed the recommendation regarding the mortgage liens of the government banks of the Mothballed Coconut Oil Mills and not the approval/grant of the loans/guarantees in 1976. It is in effect approved the release of the liabilities of the former owners of coconut oil mills, one of which was MINCOCO, but not the acquisition of the said loans/guarantees.

The take over of MINCOCO by UNICOM without the consent of NIDC is not a characteristic of a behest loan. It is a mere violation of procedures that does not warrant a criminal action.

x x x x

For the perpetration of the acts being complained of, the respondents are charged of violations of Sections 3(e) and (g) of Republic Act No. 3019. The instant case however will no longer prosper for the offenses have already prescribed.

Be it remembered that MINCOCO applied for and was granted loans/guarantees way back in 1976. Thus, these acts are governed by the law in force at the time of their commission, which is the old R.A. No. 3019 before its amendment by Batas Pambansa Blg. 195 in March 1982. Offenses perpetrated prior to the enactment of this latter law prescribed ten (10) years later. And since the case was filed against the herein respondents only in September 1997, the offenses have long prescribed in 1986.

Prescription commenced to run in 1976 when the assailed transaction happened. x x x.¹¹

Hence, this petition for review on certiorari under Rule 45 of the Rules of Court.¹²

The petitioner argued that the right of the State to recover behest loans as ill-gotten wealth is imprescriptible under Section 15, Article XI of the 1987 Constitution;¹³ and, assuming that the period to file criminal charges herefore is subject to prescription, the prescriptive period should be counted from the time of discovery of behest loans or sometime in 1992 when the Committee was constituted.¹⁴

The Ombudsman, in his Comment, countered that his office has the discretionary power during preliminary investigation to determine the sufficiency of evidence for indictment;¹⁵ that it is beyond the ambit of the Court to review this exercise of discretion;¹⁶ that Section 15, Article XI of the 1987 Constitution applies only to civil suits and not to criminal proceedings;¹⁷ and, that the crime under which the respondents herein were charged had already prescribed.¹⁸

Private respondents Panfilo O. Domingo and Enrique M. Herboza, filed their respective Comments mainly reiterating the Ombudsman’s contentions. The other respondents did not file their Comments, and, thus, considered to have waived their chance thereto.

The Court’s Ruling

The remedy from an adverse resolution of the Ombudsman is a petition for certiorari under Rule 65 of the Rules of Court; what was filed with the Court, however, was a petition for review on certiorari under Rule 45. Nevertheless, the Court will treat this petition as one filed under Rule 65 since a reading of its contents shows that the Committee imputes grave abuse of discretion to the Ombudsman for dismissing the complaint.¹⁹ This was how we also treated the previous cases marred by the same procedural lapse, the latest of which is the 2009 Presidential Ad-Hoc Fact Finding Committee on Behest Loans v. Desierto (G.R. No. 135703).²⁰

At the core of the controversy is the Ombudsman’s Resolution holding that prescription had already set-in effectively barring the institution of charges against the private respondents. The Ombudsman claimed that the alleged behest loans, transpired in 1976,²¹ and, thus, the complaint filed after more than two decades from the commission thereof or on 8 October 1997, was well beyond the 10-year prescriptive period provided for under the old Republic Act No. 3019.²²

In resolving the issue of prescription, the following shall be considered: (1) the period of prescription for the offense charged; (2) the time the period of prescription started to run; and (3) the time the prescriptive period was interrupted.²³

At the outset, the provision found in Section 15, Article XI of the 1987 Constitution that "the right of the State to recover properties unlawfully acquired by public officials or employees, from them or from their nominees or transferees, shall not be barred by prescription, laches or estoppels," has already been settled in Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto (G.R. No. 130140),²⁴ where the Court held that the above cited constitutional provision "applies only to civil actions for recovery of ill-gotten wealth, and not to criminal cases."²⁵

The period of prescription for the crime charged in this petition, committed in 1976 and prior to the amendment of Republic Act No. 3019, is ten (10) years.

Section 11²⁶ of Republic Act No. 3019 as amended by Batas Pambansa Blg. 195, provides that the offenses committed under Republic Act No. 3019 shall prescribe in fifteen (15) years; prior to this amendment, however, under the old Republic Act No. 3019, this prescriptive period was only ten (10) years. In People v. Pacificador,²⁷the Court held that the longer prescriptive period of 15-years does not apply in crimes committed prior to the effectivity of Batas Pambansa Blg. 195, which was approved on 16 March 1982, because, not being favorable to the accused, it cannot be given retroactive effect. Considering that the alleged crime was committed in 1976, and in line with the Court’s ruling in Pacificador, the prescription period should be ten (10) years.

Prescription of crime shall begin to run from the day of its commission, and if the same be not known at the time, from the discovery thereof and the institution of judicial proceedings for its investigation and punishment.

While we sustain the Ombudsman’s contention that the prescriptive period for the crime charged herein is 10 years and not 15 years, we are not persuaded that in this specific case, the prescriptive period began to run in 1976, when the loans were transacted.

The time as to when the prescriptive period starts to run for crimes committed under Republic Act No. 3019, a special law, is covered by Act No. 3326,²⁸ Section 2 of which provides that:

Section 2. Prescription shall begin to run from the day of the commission of the violation of the law, and if the same be not known at the time, from the discovery thereof and the institution of judicial proceedings for its investigation and punishment.

The prescription shall be interrupted when proceedings are instituted against the guilty person, and shall begin to run again if the proceedings are dismissed for reasons not constituting double jeopardy.

Generally, the prescriptive period shall commence to run on the day the crime is committed. That an aggrieved person "entitled to an action has no knowledge of his right to sue or of the facts out of which his right arises," does not prevent the running of the prescriptive period.²⁹ An exception to this rule is the "blameless ignorance" doctrine, incorporated in Section 2 of Act No. 3326. Under this doctrine, "the statute of limitations runs only upon discovery of the fact of the invasion of a right which will support a cause of action. In other words, the courts would decline to apply the statute of limitations where the plaintiff does not know or has no reasonable means of knowing the existence of a cause of action."³⁰ It was in this accord that the Court confronted the question on the running of the prescriptive period in People v. Duque³¹ which became the cornerstone of our 1999 Decision in Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto (G.R. No. 130149),³² and the subsequent cases³³which Ombudsman Desierto dismissed, emphatically, on the ground of prescription too. Thus, we held in a catena of cases,³⁴ that if the violation of the special law was not known at the time of its commission, the prescription begins to run only from the discovery thereof, i.e., discovery of the unlawful nature of the constitutive act or acts.

Corollary, it is safe to conclude that the prescriptive period for the crime which is the subject herein, commenced from the date of its discovery in 1992 after the Committee made an exhaustive investigation.³⁵ When the complaint was filed in 1997, only five years have elapsed, and, hence, prescription has not yet set in. The rationale for this was succinctly discussed in the 1999 Presidential Ad Hoc Fact-Finding Committee on Behest Loans,³⁶ that "it was well-high impossible for the State, the aggrieved party, to have known these crimes committed prior to the 1986 EDSA Revolution, because of the alleged connivance and conspiracy among involved public officials and the beneficiaries of the loans."³⁷ In yet another pronouncement, in the 2001 Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto (G.R. No. 130817),³⁸ the Court held that during the Marcos regime, no person would have dared to question the legality of these transactions.

While the Ombudsman has the full discretion to determine whether a criminal case is to be filed, the Court is not precluded from reviewing the Ombudsman’s action when there is a grave abuse of discretion.

True, the Ombudsman is a constitutionally created body with constitutionally mandated independence. Despite this, however, the Ombudsman comes within the purview of the Court’s power of judicial review³⁹ – a peculiar concept of Philippine Ombudsman, embodied in Article VIII, Section 1 of the 1987 Constitution⁴⁰ – which serves as a safety net against its capricious and arbitrary acts.⁴¹ Thus, in Garcia-Rueda v. Pascasio,⁴² the Court held that "while the Ombudsman has the full discretion to determine whether or not a criminal case is to be filed, the Court is not precluded from reviewing the Ombudsman’s action when there is grave abuse of discretion."⁴³ This is because, "while the Ombudsman enjoys, as it must, complete independence, it cannot and must not lose track of the law, which it is bound to uphold and obey."⁴⁴

After reviewing the case’s records, the Court finds that the present petition calls for the exercise of its power of judicial review.

Private respondents are charged with violation of Section 3(e) and (g) of Republic Act No. 3019 which states:

Section 3. Corrupt practices of public officers. - In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:

x x x x

(e) Causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of offices or government corporations charged with the grant of licenses or permits or other concessions.

x x x x

(g) Entering, on behalf of the Government, into any contract or transaction manifestly and grossly disadvantageous to the same, whether or not the public officer profited or will profit thereby.

From the 1999 landmark case of Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto (G.R. No. 130140),⁴⁵ to the 2008 Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Tabasondra (G.R. No. 133756),⁴⁶ and to the 2009 Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto (G.R. No. 135703),⁴⁷ the same issues confronted the Court as the one presented in the present petition, in that the Ombudsman similarly dismissed these cases not only on the ground of prescription but also for insufficiency of evidence.⁴⁸

Interestingly, the facts in Tabasondra⁴⁹ are squarely on all fours as the present case. Tabasondra,⁵⁰ involved Coco-Complex Philippines, Inc., (CCPI), a domestic corporation primarily incorporated for the manufacture of coconut oil.⁵¹ CCPI applied for Guarantee Loan Accommodation thru the National Investment Development Corporation amounting to P9,277,080.00, allegedly for the purchase of an oil mill to be supplied by Krupp Germany. The NIDC Board approved the loan in 1969,⁵² notwithstanding the fact that CCPI was undercapitalized with only P2,111,000.00 paid-up capital,⁵³ and under-collateralized with only P495,300.00 assets.⁵⁴ Thus, with the NIDC’s Guarantee Loan Accommodation, the Philippine National Bank (PNB) granted the loan. Still, with NIDC’s guarantee, CCPI obtained additional loans from PNB in 1972, which, as of 1992, ballooned to P205,889,545.76.

When the Committee filed criminal complaints against the CCPI’s Officers and PNB’s Board of Directors for violation of Section 3(e) and (g) of Republic Act No. 3019, the Ombudsman dismissed the complaint on the ground of prescription. For this, the Committee charged the Ombudsman for grave abuse of discretion, but pending its resolution before us, the Ombudsman, taking cue from the Court’s 1999 ruling in G.R. No. 130140,⁵⁵ motu proprio reinvestigated the complaint it earlier dismissed (and was still pending before us), only to dismiss it anew, in a Resolution dated 16 October 2000, opining that NIDC’s Board of Directors, who approved the loans in favor of CCPI, should have been the ones indicted.⁵⁶ Subsequently, the Court dismissed Tabasondra for being moot and academic.

Similarly, in the present petition, MINCOCO was also granted by NIDC a Guarantee Loan Accommodation amounting initially to P30.4 million pesos, despite its being undercapitalized and under-collateralized.⁵⁷

As the Ombudsman admitted, when MINCOCO’s mortgage liens were about to be foreclosed by the government banks, the late President Marcos intervened and through a marginal note, in connivance with the NIDC’s officers, waived the liabilities of its owners to the detriment of the government.⁵⁸ It behooves the Court that while the Ombudsman admitted this fact, it saw nothing wrong in President Marcos’ intervention, and the involvement therein of the NIDC’s officers. This intervention alone, by no less than the highest official of the land, waiving a multi-million peso liability of a private corporation, should have alarmed the Ombudsman.

It surprises us that while the Ombudsman dismissed Tabasondra for not impleading therein the NIDC’s Board of Directors, now that they (NIDC’s Board of Directors) have been impleaded, the Ombudsman still dismissed the complaint, allegedly for insufficiency of evidence.⁵⁹

Applying mutatis mutandis G.R. No. 133756⁶⁰ in this petition, it is apparent that there can be liability for violation of Section 3(e) and (g) of Republic Act No. 3019.

Violation of Section 3(e)⁶¹ of Republic Act No. 3019 requires that there be injury caused by giving unwarranted benefits, advantages or preferences to private parties who conspire with public officers. In contrast, Section 3(g)⁶²does not require the giving of unwarranted benefits, advantages or preferences to private parties, its core element being the engagement in a transaction or contract that is grossly and manifestly disadvantageous to the government.

The waiver of MINCOCO’s multi-peso loan should have been enough basis in finding that probably Section 3(e) of Republic Act No. 3019 was violated and the fact that NIDC extended a loan guarantee to MINCOCO, despite its being undercapitalized and under-collateralized, should have also been enough ground in finding probable cause for violation of Section 3(g) of the above-cited law.

More importantly, the finding of the Committee that MINCOCO obtained behest loans because of the following circumstances: MINCOCO was under-collateralized and undercapitalized; its officers were identified as cronies; President Marcos had marginal note, effectively waiving the government’s right to foreclose MINCOCO’s mortgage liens; and, NIDC approved MINCOCO’s Guarantee Loan Accommodation in an extraordinary speed of one month, should have been accorded a proper modicum of respect by the Ombudsman.

Considering the membership of the Committee – representatives from the Department of Finance, The Philippine National Bank, the Asset Privatization Trust, the Philippine Export and Foreign Loan Guarantee Corporation and even the Development Bank of the Philippines – its recommendation should be given great weight. No doubt, the members of the Committee are experts in the field of banking. On account of their special knowledge and expertise, they are in a better position to determine whether standard banking practices are followed in the approval of the loan/guarantee or what would generally constitute as adequate security for a given loan.⁶³1avvphi1

The duty of the Ombudsman in the conduct of a preliminary investigation is to establish whether there exists probable cause to file information in court against the accused.⁶⁴ A finding of probable cause needs only to rest on evidence showing that more likely than not, the accused committed the crime.⁶⁵ Considering the quantum of evidence needed to support a finding of probable cause, the Court holds that the Ombudsman gravely abused its discretion when it dismissed the complaint against herein respondents.

Preliminary investigation is not the occasion for the full and exhaustive display of the parties’ evidence.⁶⁶ It is for the presentation of such evidence only as may engender a well founded belief that an offense has been committed and that the accused is probably guilty thereof.⁶⁷ The validity and merits of a party’s accusation or defense, as well as admissibility of testimonies and evidence, are better ventilated during the trial proper.⁶⁸

In conclusion, the offenses ascribed to respondents "involve behest loans which bled white the economy of the country, one of the excesses of the authoritarian regime that led to the EDSA revolution, a serious evil that the 1987 Constitution aimed to extirpate."⁶⁹ It involves nothing less than the interest of the people whose transgressed rights are supposed to be vindicated by their protector – the Ombudsman.⁷⁰ As protector of the people, the Ombudsman should be pro-active in making use of its vast arsenal of powers to "bring the lamp of scrutiny to otherwise dark places even over the resistance of those who would draw the blinds."⁷¹

The criminal liability of Conrado S. Reyes is hereby extinguished in accordance with Article 89(1)⁷² of the Revised Penal Code as confirmed by his death certificate.⁷³ With respect to respondents Panfilo O. Domingo and Mohammad Ali Dimaporo, the facts of their deaths have to be confirmed to determine the application to them of the same provision.

WHEREFORE, the petition is GRANTED. The Ombudsman is hereby ORDERED to:

1. DISMISS the complaint against deceased respondent Conrado S. Reyes;

2. REQUIRE the counsels of respondents Panfilo O. Domingo and Mohammad Ali Dimaporo to submit proof of their deaths; and

3. FILE with the Sandiganbayan the necessary Information against respondents Abdullah Dimaporo, Amer Dianalan, Enrique M. Herboza, and Ricardo Sunga.

SO ORDERED.

JOSE PORTUGAL PEREZ
Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice
Chairperson

TERESITA J. LEONARDO-DE CASTRO Associate Justice

DIOSDADO M. PERALTA* Associate Justice

MARIANO C. DEL CASTILLO
Associate Justice

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.

RENATO C. CORONA
Chief Justice

Footnotes

¹ Per Raffle dated 12 April 2011, Associate Justice Diosdado M. Peralta is designated as additional member in lieu of Associate Justice Presbitero J. Velasco, Jr. inhibition.

Filed under Rule 45 of the Rules of Court, but treated by the Court as a Petition for Certiorari under Rule 65.

² Registered with the Philippine Securities and Exchange Commission on 30 July 1974. Rollo, p. 29.

³ Petition for Review on Certiorari (hereafter, petition). Id. at 13.

⁴ In 1983, MINCOCO sold all its shares to the United Coconut Mills (UNICOM), which retained control over the mothballed oil mills. Petition, id. at 14.

⁵ Ombudsman Resolution. Id. at 31.

⁶ Issued on 8 October 1992.

⁷ Administrative Order No.13.

⁸ Issued on 9 November 1992.

⁹ Section 3. Corrupt practices of public officers. - In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:

x x x x

(e) Causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of offices or government corporations charged with the grant of licenses or permits or other concessions.

x x x x

(g) Entering, on behalf of the Government, into any contract or transaction manifestly and grossly disadvantageous to the same, whether or not the public officer profited or will profit thereby.

¹⁰ Ombudsman Resolution. Rollo, pp. 28-34.

¹¹ Id. at 31-32.

¹² Per Order dated 13 August 1998, the Ombudsman Denied the Motion for Reconsideration filed by the petitioner. Id. at 35-38.

¹³ Petition. Id. at 17-18.

¹⁴ Id. at 21-23.

¹⁵ Ombudsman’s Comment. Id. at 342.

¹⁶ Id.

¹⁷ Id.

¹⁸ Id.

¹⁹ Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, G.R. No.135703, 15 April 2009, 585 SCRA 18, 28.

²⁰ Id.

²¹ Petition. Rollo, p 13.

²² The Anti Graft and Corrupt Practices Act.

²³ Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, G.R. No. 130817, 22 August 2001, 363 SCRA 489, 493.

²⁴ Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, G.R. No. 130140, 25 October 1999, 317 SCRA 272.

²⁵ Id. at 289.

²⁶ Section 11. Prescription of Offenses. – All offenses punishable under this Act shall prescribe in fifteen years.

²⁷ G.R. No. 139405, 13 March 2001, 354 SCRA 310, 318.

²⁸ An Act to Establish Periods of Prescription for Violations Penalized by Special Act and Municipal Ordinances and to Provide When Prescription shall Begin to Run.

²⁹ Then Associate Justice Reynato S. Puno (Ret.) Concurring and Dissenting Opinion in Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, supra note 24 at 319.

³⁰ Id. at 318-319 citing 21 AM JUR 2d, pp. 715-716.

³¹ G.R. No. 100285, 13 August 1992, 212 SCRA 607.

³² Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, supra note 24.

³³ Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, G.R. 130817, supra note 23; Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, G.R. No. 135119, 21 October 2004, 441 SCRA 106; Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Ombudsman, G.R. No. 135350, 3 March 2006, 484 SCRA 16; Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Tabasondra, G.R. No. 133756, 4 July 2008, 557 SCRA 31.

³⁴ People v. Duque, supra note 31; Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, supra note 24; Presidential Commission on Good Government v. Desierto, G.R. No. 140358, 8 December 2000, 347 SCRA 561.

³⁵ 415 Phil. 723 (2001).

³⁶ Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, supra note 19.

³⁷ Id. at 28.

³⁸ Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, supra note 23.

³⁹ M. Maulion, Power and Paradox: Deconstructing Ombudsman Independence Amidst the Thicket of the Constitution, Law and Jurisprudence, LI U.S.T. L. Rev. 140-141.

⁴⁰ Id.

⁴¹ Id.

⁴² G.R. No. 118141, 5 September 1997, 278 SCRA 769 at 776 cited in M. Maulion, Power and Paradox: Deconstructing Ombudsman Independence Amidst the Thicket of the Constitution, Law and Jurisprudence, supra note 39.

⁴³ Id. at 141.

⁴⁴ Id.

⁴⁵ Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, supra note 24.

⁴⁶ Supra note 33.

⁴⁷ Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, supra note 19.

⁴⁸ Id.

⁴⁹ Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Tabasondra, supra note 33.

⁵⁰ Id.

⁵¹ Id. at 35.

⁵² Id.

⁵³ As of 31 December 1969, id. at 36.

⁵⁴ Id.

⁵⁵ Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, supra note 24.

⁵⁶ The Committee questioned the Ombudsman’s dismissal thereof before the Court which is now pending for resolution. Supra note 33 at 40.

⁵⁷ Ombudsman’s Resolution. Rollo, p. 29.

⁵⁸ Id. at 31.

⁵⁹ Id. at 33.

⁶⁰ Presidential As Hoc Fact-Finding Committee on Behest Loans v. Tabasondra, supra note 33.

⁶¹ The elements of the offense in Section 3(e) are: (1) that the accused are public officers or private persons charged in conspiracy with them; (2) that said public officers commit the prohibited acts during the performance of their official duties or in relation to their public positions; (3) that they cause undue injury to any party, whether the government or any party; (4) that such injury is caused by giving unwarranted benefits, advantage or preference to such parties; and (5) that the public officers have acted with manifest partiality, evident bad faith or gross inexcusable negligence.

⁶² On the other hand, the elements of the offense in Section 3(g) are: (1) that the accused is a public officer; (2) that he entered into a contract or transaction on behalf of the government; and (3) that such contract or transaction is grossly and manifestly disadvantageous to the government.

⁶³ Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, supra note 19 at 34.

⁶⁴ Id. at 33.

⁶⁵ Id.

⁶⁶ Id.

⁶⁷ Id.

⁶⁸ Id.

⁶⁹ Then Associate Justice Reynato S. Puno (Ret.) Concurring and Dissenting Opinion in Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, supra note 29 at 323.

⁷⁰ Id.

⁷¹ Commenting on the role of Ombudsman, which was challenged in 1970 in Alberta, Canada, Chief Justice Milvain said "x x x [h]e can bring the lamp of scrutiny to otherwise dark places even over the resistance of those who would draw the blinds. x x x." M. Maulion, Power and Paradox: Deconstructing Ombudsman Independence Amidst the Thicket of the Constitution, Law and Jurisprudence, supra note 39 at 110 citing Wafaqi Mohtasib Annual Report [http://www/policy.hu/bokhari/OmbuIntro.htm].

⁷² Article 89. How criminal liability is totally extinguished. – Criminal liability is totally extinguished:

1. By the death of the convict, as to the personal penalties; and as to pecuniary penalties, liability therefor is extinguished only when the death of the offender occurs before judgment.

⁷³ Death Certificate. Rollo, p. 249.

Antiquina vs. Magsaysay Maritime Corporation et al.; G.R. No. 168922

Republic of the Philippines
SUPREME COURT
Baguio City

FIRST DIVISION

G.R. No. 168922               April 13, 2011

WILFREDO Y. ANTIQUINA, Petitioner,
vs.
MAGSAYSAY MARITIME CORPORATION and/or MASTERBULK, PTE., LTD., Respondents.

D E C I S I O N

LEONARDO-DE CASTRO, J.:

Before the Court is a Petition for Review on Certiorari, assailing the Court of Appeals’ Decision¹ dated May 31, 2005 and Resolution² dated July 14, 2005 in CA-G.R. SP No. 82638. In the Decision dated May 31, 2005, the Court of Appeals modified the September 27, 2002³ Decision of the Labor Arbiter in OFW Case No. 01-06-1216-00 awarding sickness allowance, permanent medical unfitness benefits and attorney’s fees in favor of petitioner. The Court of Appeals denied petitioner’s motion for reconsideration of the May 31, 2005 Decision in the assailed Resolution.

The material facts of the case, as culled from the records, follow:

Sometime in February 2000, petitioner Wilfredo Y. Antiquina was hired, through respondent manning agency Magsaysay Maritime Corporation (MMC), to serve as Third Engineer on the vessel, M/T Star Langanger, which was owned and operated by respondent Masterbulk Pte., Ltd. (Masterbulk). According to petitioner’s contract of employment,⁴ his engagement on the vessel was for a period of nine (9) months at a salary of US$936.00 per month. It is undisputed that petitioner’s contract conformed to the standard Philippine Overseas Employment Agency (POEA) contract of employment.

Petitioner commenced his employment on the M/T Star Langanger on March 1, 2000. Almost seven months later, or on September 22, 2000, during a routine maintenance of the vessel’s H.F.O Purifier #1, petitioner suffered a fracture on his lower left arm after a part fell down on him. After first aid treatment was given to petitioner, he was brought to a hospital in Constanza, Romania where the vessel happened to be at the time of the accident. At the Romanian hospital, petitioner was diagnosed with "fractura 1/3 proximala cubitus stg." as shown by the medical certificate⁵ issued by the attending physician and his arm was put in a cast.

On October 1, 2000, petitioner was signed off the vessel at Port Said, Egypt and was repatriated to the Philippines, where he arrived on October 3, 2000. He immediately reported to the office of MMC on October 4, 2000 and was referred to Dr. Robert Lim of the Metropolitan Hospital. On October 5, 2000, petitioner was examined at the Metropolitan Hospital and Dr. Lim subsequently issued a medical report confirming that petitioner has an undisplaced fracture of the left ulna. Petitioner was given medication and advised to return after two weeks for repeat x-ray and re-evaluation.⁶

After one month, petitioner’s cast was removed and he was advised to undergo physical therapy sessions. Despite several months of physical therapy, petitioner noticed that his arm still had not healed and he had difficulty straightening his arm. Another company designated doctor, Dr. Tiong Sam Lim, evaluated petitioner’s condition and advised that petitioner undergo a bone grafting procedure whereby a piece of metal would be attached to the fractured bone. Upon learning from Dr. Tiong Sam Lim that the metal piece will only be removed from his arm after one and a half years, petitioner allegedly reacted with fear and decided not to have the operation.⁷

After formally informing respondents of his decision to forego the medical procedure recommended by the company physician, petitioner filed a complaint for permanent disability benefits, sickness allowance, damages and attorney’s fees against herein respondents.

In his position paper⁸ filed with the Labor Arbiter, petitioner asserted that he is entitled to sickness allowance equivalent to his basic wage for 120 days as stipulated under Section 20 of the POEA Standard Employment Contract. With respect to his claim for permanent disability benefits, he relied on the medical opinion of two doctors; namely, Dr. Rimando Saguin and Dr. Antonio A. Pobre who both issued medical certificates,⁹ finding to the effect that petitioner was no longer fit for sea service and recommending a partial permanent disability grade of 11 under the POEA Schedule of Disability Grading. However, petitioner claimed that, notwithstanding his own medical evidence regarding his disability grade, he was entitled to the purportedly superior benefits provided for under Section 20.1.5 of respondents’ collective bargaining agreement (CBA) with the Associated Marine Officers’ and Seamen’s Union of the Philippines (AMOSUP).¹⁰ Section 20.1.5 allegedly provides:

Permanent Medical Unfitness – A seafarer whose disability is assessed at 50% or more under the POEA Employment Contract shall, for the purpose of this paragraph, be regarded as permanently unfit for further sea service in any capacity and entitled to 100% compensation, i.e. US$80,000.00 for officers and US$60,000.00 for ratings, AB and below. Furthermore, any seafarer assessed at less than 50% di[s]ability under the Contract but certified as permanently unfit for further sea service in any capacity by the company doctor, shall also be entitled to 100% compensation.¹¹

Anent his prayer for damages and attorney’s fees, petitioner asserted that respondents should be made liable in view of their negligence and delay in the payment of his allegedly valid claims and the latter’s contravention of the terms and conditions of the contract of employment.¹²

In their defense, respondents contended that petitioner’s monetary claims were premature by reason of the latter’s refusal to undergo the operation recommended by the company designated physician. Respondents presented Dr. Tiong Sam Lim’s typewritten opinion¹³ dated June 4, 2001, stating that:

IF BONE GRAFTING WAS DONE AND THE BONE HEALED, THEN HE WILL BE ABLE TO GO BACK TO SEA DUTIES. IF THE LEFT FOREARM IS LEFT AS IS, THEN, THERE WILL BE PAIN AND INABILITY TO TURN THE FOREARM CAUSING DISABILITY. THE DISABILITY THEN WILL BE GRADE 10.

Further citing Section 20(B)(2) of the POEA Standard Employment Contract, respondents claimed that, although it was their obligation to repatriate an injured or sick seaman and pay for his treatment and sick leave benefits until he is declared fit to work or his degree of disability has been clearly established by the company designated physician, it was allegedly petitioner’s correlative obligation to submit himself for medical examination and treatment to determine if he is still fit to work or to establish the degree of his disability.¹⁴ Respondents made known their willingness to shoulder the cost of the operation or procedure needed but it was allegedly petitioner who refused to undergo the operation in bad faith and in contravention of the terms of the employment contract.¹⁵Further, respondents argued that they were not liable for damages and attorney’s fees for there was no bad faith or ill motive on their part.¹⁶

In a Decision dated September 27, 2002, the Labor Arbiter ruled in favor of petitioner and awarded him the amount of US$3,614.00 as sickness allowance; US$80,000.00 "representing [his] permanent medical unfitness benefits under the pertinent provisions of the Collective Bargaining Agreement";¹⁷ and attorney’s fees.

Respondents appealed the Labor Arbiter’s decision to the National Labor Relations Commission (NLRC), contending, in addition to their previously proffered arguments, that they have already paid petitioner’s sickness allowance¹⁸ and that the Labor Arbiter had no basis to award disability compensation for failure of petitioner to present the CBA and proof of membership to AMOSUP.

The NLRC dismissed respondents’ appeal in a Decision¹⁹ dated August 20, 2003 and subsequently denied their motion for reconsideration.²⁰

Undeterred, respondents filed a petition for certiorari²¹ with the Court of Appeals. In a Decision dated May 31, 2005, the Court of Appeals noted that the NLRC appeared to have followed the rule that the conclusions of the Labor Arbiter when sufficiently corroborated by the evidence on record must be accorded respect by the appellate tribunals and thus, the NLRC no longer examined the evidence submitted by respondents to prove payment of petitioner’s sickness allowance.²² However, relying on our decision in Philippine Telegraph and Telephone Corporation v. National Labor Relations Commission,²³ the Court of Appeals held that:

Although said evidence were filed for the first time on appeal, it would have been prudent upon the NLRC to look into them since it was not bound by the rules of evidence prevailing in courts of law or equity. In fact, labor officials are mandated by Article 221 of the Labor Code to use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process. x x x.²⁴ (Emphasis supplied.)

As for the probative value of the receipts submitted by respondents as annexes to the memorandum of appeal, the Court of Appeals found that:

As clearly shown by said annexes, [respondents] had already paid [petitioner] his sickness allowance. In fact, he received a PCIB Check, dated November 28, 2000, in the amount of P41,467.98 on December 1, 2000; another PCIB Check, dated December 14, 2000, in the amount of P45,255.60 on January 10, 2001; an FEBTC check, dated January 25, 2001, in the amount of P48,053.68 on January 31, 2001; and lastly an RCBC check, dated February 14, 2001, in the amount of P43,691.06 on February 28, 2001. All of these documents bear [petitioner’s] signature. Thus, he cannot deny that he received said sickness allowance in the total amount of P178,468.32.²⁵(Emphasis supplied.)

With respect to respondents’ claim that the Labor Arbiter’s award of US$80,000 in medical unfitness benefits had no basis, the Court of Appeals held that:

A careful perusal of the records shows that [petitioner’s] claim that he was a member of AMOSUP and, therefore, Article 20.1.5 of the CBA providing for an US$80,000.00 permanent medical unfitness benefits applies in this case, is not supported by the evidence. For one, the said CBA does not form part of the evidence presented by [petitioner] in this case. Instead, what he submitted as an attachment to his Memorandum of Authorities before this Court is a copy of a document entitled "Addendum to Memorandum of Agreement by and between Masterbulk PTE Ltd., Associated Marine Officers & Seamen’s Union of the Phils. (AMOSUP), and Magsaysay Maritime Corporation." Said Addendum merely provides:

"1. That the Agreement shall be renewed/extended for another one (1) year effective January 1, 2000.

2. All other terms and conditions of the Agreement not in anyway inconsistent with the foregoing shall remain unaltered and in full force and effect."

Moreover, he did not even present any identification card that would show that he was really a member of the said labor organization. Neither did he present any document that would show that seafarers like him who ply the overseas route were compulsory or automatic members of said labor organization. Since [petitioner] claims such membership, it was incumbent upon him to prove it.

We, thus, hold that the NLRC committed a grave abuse of discretion when it affirmed the Labor Arbiter’s decision awarding [petitioner] US$80,000.00 as medical unfitness benefit, despite the fact that such claim was unsubstantiated by any documentary evidence.²⁶ (Emphases supplied.)

However, as it was undisputed that petitioner suffered a work-related injury, the Court of Appeals still saw fit to award medical unfitness benefits, based on the POEA Standard Contract of Employment and the finding of petitioner’s own physician that the proper disability grade for petitioner’s injury was Grade 11 or 14.93%. Thus, the Court of Appeals computed petitioner’s medical unfitness benefits, as follows:

While it is true that [petitioner’s] claim for disability is premature, the fact remains that there is still a work-connected injury and the attendant loss or impairment of his earning capacity that need to be compensated. On this score, Sec. 30-A of POEA Standard Contract of Employment is applicable. The same provides for a schedule of disability allowances and per said schedule, an impediment of Grade 11 is equivalent to the maximum rate of US$50,000.00. Multiply this amount by the degree of impediment, which is 14.93%, the [petitioner] is entitled to US$7,465.00, to be paid in Philippine Currency equivalent to the exchange rate prevailing during the time of payment.²⁷

After finding that this case did not fall under the exceptional circumstances provided by law for an award of attorney’s fees, the Court of Appeals ruled that the award of 10% attorney’s fees in favor of petitioner was improper. Thus, the dispositive portion of the Court of Appeals’ May 31, 2005 Decision read:

WHEREFORE, the September 27, 2002 Decision of the Labor Arbiter is hereby modified to read as follows:

"WHEREFORE, judgment is hereby rendered

1] ordering the respondents to pay the complainant the amount of US$7,480.00 or its equivalent amount in Philippine Currency at the prevailing exchange rate at the time of payment, representing permanent medical unfitness benefits, plus legal interest reckoned from the time it was due;

2] denying the claim for sickness allowance, the same having been paid;

3] denying the claim for attorney’s fees; and

4] denying the other claims of the complainant."²⁸

In his motion for reconsideration of the above Decision of the Court of Appeals, petitioner claimed that it was only by inadvertence that he previously failed to attach a copy of the CBA. Attached as annexes to his motion were: (a) a purported copy of the CBA (Masterbulk Vessels Maritime Officers Agreement 1999) which allegedly entitled him to US$110,000.00 in disability benefits (an amount even higher than the Labor Arbiter’s award of US$80,000.00); and (b) a copy of his monthly contributions as union member during the period that he was employed by respondents. Thus, he prayed that the Court of Appeals reconsider its May 31, 2005 Decision and award him the higher amount of US$110,000.00 in disability benefits in accordance with the Masterbulk Vessels Maritime Officers Agreement 1999.

In their Comment, respondents objected to the annexes of petitioner’s motion for reconsideration on the grounds that his belated filing violated their right to due process and that the list of monthly contributions he presented did not prove he was a member of AMOSUP since the said list did not contain any validation/signature of an AMOSUP officer.

In his Reply, petitioner attached as additional evidence copies of: (a) his identification card as AMOSUP member; (b) his identification card as member of the Singapore Maritime Officers’ Union; and (c) a certification dated July 13, 2005 issued by the Legal Department of AMOSUP that petitioner was a member of said union at the time of employment with the M/T Star Langager from March 2 to October 1, 2000.²⁹

In a Resolution dated July 14, 2005, the Court of Appeals denied petitioner’s motion for reconsideration, ruling that:

As to the Masterbulk Vessels Maritime Agreement, it is too late in the day to consider it as it was just submitted with the Motion for Reconsideration. Liberality to get to the truth is most ideal but there is a point or stage of the process that it should no longer be allowed. To do so at this stage would be unfair to the other party.³⁰

Hence, petitioner now comes to this Court, raising the following issues:

I.

THE COURT OF APPEALS COMMITTED GRAVE ERROR IN NOT ADMITTING AND CONSIDERING THE EVIDENCE SUBMITTED BY PETITIONER SHOWING THAT HE IS A MEMBER OF THE AMOSUP AND THE SINGAPORE MARITIME OFFICERS UNION.

II.

THE COURT OF APPEALS WAS CLEARLY BIASED IN FAVOR OF THE RESPONDENTS SUCH THAT IT SHOWED LIBERALITY TO THE LATTER BUT STRICTLY APPLIED THE RULES AGAINST PETITIONER.

At the outset, it should be noted that the resolution of the foregoing issues entails a review of the facts of the case which ordinarily would not be allowed in a petition for review on certiorari under Rule 45 of the Rules of Court. As a rule, only questions of law, not questions of fact, may be raised in a petition for review on certiorari under Rule 45.

However, this principle is subject to recognized exceptions. In the labor law setting, the Court will delve into factual issues when conflict of factual findings exists among the labor arbiter, the NLRC, and the Court of Appeals.³¹Considering that in the present case there were differing factual findings on the part of the Court of Appeals, on one hand, and the Labor Arbiter and the NLRC, on the other, there is a need to make our own assiduous evaluation of the evidence on record.

As the two issues raised by petitioner are intrinsically related, they will be discussed together.

The Court finds merit in petitioner’s contention that it would be more in keeping with the interest of fairness and substantial justice for the Court of Appeals to likewise admit and review petitioner’s evidence despite being submitted only on appeal. There appears to be no justification for relaxing the rules of procedure in favor of the employer and not taking the same action in the case of the employee, particularly in light of the principle that technical rules of procedure shall be liberally construed in favor of the working class in accordance with the demands of substantial justice.³² We have also previously held that "[r]ules of procedure and evidence should not be applied in a very rigid and technical sense in labor cases in order that technicalities would not stand in the way of equitably and completely resolving the rights and obligations of the parties."³³

In line with the objective of dispensing substantial justice, this Court has examined the evidence belatedly submitted by petitioner to the Court of Appeals. Unfortunately, even with this procedural concession in favor of petitioner, we do not find any sufficient basis to overturn the Court of Appeals’ May 31, 2005 Decision on the merits.

To recall, it was petitioner’s assertion in his Position Paper that he is entitled to US$80,000.00 as medical unfitness benefits under Article 20.1.5 of the CBA with AMOSUP, which provision he merely quoted in his pleading.³⁴ The Labor Arbiter awarded the amount of US$80,000.00 as permanent medical unfitness benefits, citing the said AMOSUP CBA as his basis for the award.³⁵ The Court of Appeals found that such award was not supported by any evidence, in view of petitioner’s failure to present a copy of the AMOSUP CBA and proof of his membership in said union.

Although petitioner was able to submit to the Court of Appeals copies of his identification card as an AMOSUP member and a certification from AMOSUP’s Legal Department that he was a member of said union during the period of his employment on the M/T Star Langanger,³⁶ he still failed to present any copy of respondents’ supposed CBA with AMOSUP.

What petitioner belatedly presented on appeal appears to be a CBA between respondent Masterbulk and the Singapore Maritime Officers’ Union, not AMOSUP. Article 20.1.5, or the stipulation regarding permanent medical fitness benefits quoted in petitioner’s Position Paper and relied upon by the Labor Arbiter in his decision, cannot be found in this CBA. Instead, Clause 24 of the Masterbulk Vessels Maritime Officers’ Agreement 1999 provides in part:

24. COMPENSATION FOR INJURY OR DEATH

(1) The Company shall pay compensation to an officer for any injury or death arising from an accident while in the employment of the Company, and for this purpose shall effect a 24-hour insurance coverage in accordance with Appendix IV to this Agreement.

(2) Compensation shall be paid as stipulated in sub-clause (1) of this clause for all injuries howsoever caused, regardless of whether or not an officer comes within the scope of the Workmen’s Compensation Act and includes accidents arising or not arising out of the course of his employment and accidents arising outside the working hours of the injured or dead officer.

(3) An officer who is outside the scope of the Workmen’s Compensation Act shall be entitled to claim for compensation equivalent to that payable under the Workmen’s Compensation Act as if he is covered by the scope under the Workmen’s Compensation Act.

(4) An officer who receives compensation under the Workmen’s Compensation Act shall be entitled to receive only the difference between the amount paid to him under the Workmen’s Compensation Act and the amount payable under Appendix IV, if the latter amount is higher than the compensation assessed by the Workmen’s Compensation Department.

(5) An officer who suffers temporary incapacity shall be entitled to medical benefits including paid sick leave as stipulated in clause 23 of this Agreement.³⁷

The higher amount of benefits (US$110,000.00) being claimed by petitioner does not appear in clause 24 but in Appendix IV referred therein, to wit:

APPENDIX IV
(Clauses 19 & 24)

COMPENSATION FOR INJURY OR DEATH
Maximum Compensation Payable:

WORLD-WIDE WAR RISK IN
EXCEPT WAR ZONE OR
WAR ZONE AREA WARLIKE AREA

1.1 Master, Chief Engineer and All ranks US$110,000 US$220,000

Compensation shall be paid to an officer who sustains injuries through an accident as follows:

PERCENTAGE OF
CAPITAL SUM PAYABLE

x x x x

2.2. PERMANENT DISABLEMENT resulting in:

x x x x

2.2.8 Any other injury causing permanent disablement ……………….100%

x x x x

2.3 Permanent total loss of use of member shall be treated as loss of member.

2.4 Where the injury is not specified the Company shall adopt a percentage of disablement, which in its opinion is not inconsistent with the scales shown in sub-paragraph 2.2.

2.5 The aggregate of all percentages payable in respect of any one accident shall not exceed 100%.

x x x x

4. Injuries which are covered under the 1st and 2nd Schedule to the Singapore Workmen’s Compensation Act (SWCA), but are not covered under this group personal accident policy (GPA) policy, shall be similarly covered by this GPA policy to the extent that computation of the percentage of compensation entailed in the SWCA shall be based on the maximum amount of compensation entailed in paragraph 1 of this Appendix. In the event of similar injury being entailed in the SWCA and this GPA policy, the more favourable compensation shall prevail.

5. The Company shall effect a 24-hour insurance to cover officers in its employment for any injury or death arising from an accident or war risk as shown in this Appendix.

6. The geographical limits of the insurance cover shall be worldwide.³⁸ (Emphasis supplied.)

From the foregoing, respondent Masterbulk ostensibly committed in this CBA with a foreign union, Singapore Maritime Officers’ Union, that it shall pay compensation for injuries of employee-union members through the latter’s coverage in a group personal accident insurance policy under terms set out in Appendix IV of the CBA. This contractual obligation is completely different from the cause of action set out in petitioner’s Position Paper or the relief granted by the Labor Arbiter – which was the purported obligation of respondents under an alleged CBA with a local union to pay a specific amount of permanent medical unfitness benefits.

We now come to the question whether the Court may award medical unfitness benefits in accordance with the Masterbulk Vessels Maritime Officers Agreement 1999 as prayed for in the present petition. On this point, we rule that we cannot in view of the doubtful authenticity and enforceability of this CBA belatedly submitted by petitioner.

A perusal of the photocopies of the Masterbulk Vessels Maritime Officers Agreement 1999 submitted by petitioner to the Court and the Court of Appeals revealed that there were missing pages. The first page of the agreement began with a portion of clause 3. There was no signature page showing that the agreement was duly signed by the representatives of Masterbulk and the union. On some pages, there were page numbers and signatures/initials in the margins but on other pages there were no page numbers and signatures/initials. On the pages that did contain page numbers it was indicated that the document had 24 pages but the copies submitted by petitioner only had 17 pages.

Although petitioner was able to submit a photocopy of his identification card as a member of the Singapore Maritime Officers’ Union, it appeared on the face of said identification card that his membership expired in September 2000 and it was unclear from the incomplete copy of the Masterbulk Vessels Maritime Officers Agreement 1999 if petitioner is entitled to make a claim under the said agreement beyond the term of his membership in the foreign union.

Even more importantly, clause 7 of the Masterbulk Vessels Maritime Officers Agreement 1999 provided that:

7. REFEREE

In the event of a dispute arising out of the operation of this Agreement, the matter shall be referred by either party to the President of the Industrial Arbitration Court of Singapore who may select a referee appointed under section 43 of the Industrial Relations Act to hear and determine such dispute.³⁹(Emphases supplied.)

It likewise does not escape our notice that under the pertinent provisions of the above-mentioned agreement the computation and payment of compensation for injuries depend on the applicable provisions of the Singapore Workmen’s Compensation Act which petitioner did not prove in these proceedings. Verily, the application and enforcement of foreign law is beyond this Court’s authority, especially in the absence of proof of such foreign law. As we previously ruled in one case, "foreign laws do not prove themselves in our courts. Foreign laws are not a matter of judicial notice. Like any other fact, they must be alleged and proven. x x x."⁴⁰

In National Union of Workers in Hotels, Restaurants and Allied Industries-Manila Pavilion Hotel Chapter v. National Labor Relations Commission,⁴¹ we held that "[t]he burden of proof rests upon the party who asserts the affirmative of an issue. And in labor cases, the quantum of proof necessary is substantial evidence, or such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion."⁴²lawphi1

What is indubitable in this case is that petitioner alleged in his Position Paper that there was a CBA with AMOSUP (a local union of which he was purportedly a member) which entitled him to disability benefits in the amount of US$80,000.00. It is elementary that petitioner had the duty to prove by substantial evidence his own positive assertions. He did not discharge this burden of proof when he submitted photocopied portions of a different CBA with a different union.

In all, we find that the Court of Appeals committed no error in ruling that the Labor Arbiter’s award of US$80,000.00 in disability benefits was unsupported by the evidence on record, even if we take into consideration petitioner’s late documentary submissions. There is no cogent reason to disturb the appellate court’s finding that the only credible and competent bases for an award of disability benefits to petitioner are the POEA Standard Contract of Employment and petitioner’s own medical evidence that his disability grade is Grade 11 (14.93%). Thus, the Court of Appeals’ computation of petitioner’s permanent medical unfitness benefits in the amount of US$7,465.00⁴³ must stand.

WHEREFORE, the instant petition for review is DENIED. The Decision dated May 31, 2005 and the Resolution dated July 14, 2005 of the Court of Appeals in CA-G.R. SP No. 82638 are AFFIRMED.

No pronouncement as to costs.

SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO
Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice
Chairperson

PRESBITERO J. VELASCO, JR. Associate Justice

MARIANO C. DEL CASTILLO Associate Justice

JOSE PORTUGAL PEREZ
Associate Justice

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice

Footnotes

¹ Rollo, pp. 152-163; penned by then Court of Appeals Associate Justice Jose Catral Mendoza (now a member of this Court) with Presiding Justice Romeo A. Brawner and Associate Justice Edgardo P. Cruz, concurring.

² Id. at 187-188.

³ Id. at 87-96.

⁴ Id. at 29.

⁵ CA rollo, pp. 41-42.

⁶ Id. at 43.

⁷ Rollo, p. 13.

⁸ Id. at 52-61.

⁹ These were dated March 29, 2001 and September 20, 2001, respectively; rollo, pp. 49-51.

¹⁰ Rollo, p. 57.

¹¹ Id. at 114.

¹² Id. at 58-59.

¹³ CA rollo, p. 44.

¹⁴ Rollo, pp. 66-67.

¹⁵ Id.

¹⁶ Id at 68-69.

¹⁷ Id. at 95.

¹⁸ CA rollo, p. 106; attaching to the memorandum of appeal documents to purportedly prove payment (CArollo, pp. 116-127).

¹⁹ Rollo, pp. 111-117.

²⁰ Id. at 133-135.

²¹ Id. at 136-150.

²² Id. at 157.

²³ 262 Phil. 491 (1990).

²⁴ Rollo, p. 158.

²⁵ Id. at 158.

²⁶ Id. at 159-160.

²⁷ Id. at 161.

²⁸ Id. at 162.

²⁹ Id. at 183-185.

³⁰ Id. at 187.

³¹ Peñaflor v. Outdoor Clothing Manufacturing Corporation, G.R. No. 177114. January 21, 2010, 610 SCRA 497, 506.

³² Plantation Bay Resort and Spa v. Dubrico, G.R. No. 182216, December 4, 2009, 607 SCRA 726, 731-732; citing PNOC Dockyard & Engineering Corp. v. National Labor Relations Commission, 353 Phil. 431, 445 (1998).

³³ Sevillana v. I.T. (International) Corp./Samir Maddah & Travellers Insurance and Surety Corporation, 408 Phil. 570, 579 (2001).

³⁴ Rollo, pp. 57-58.

³⁵ Id. at 94-95.

³⁶ As discussed previously, these were attached to petitioner’s Reply filed with the Court of Appeals. (CA rollo, pp. 253 and 256.)

³⁷ Rollo, p. 36.

³⁸ Id. at 42-44.

³⁹ Id. at 33.

⁴⁰ Manufacturers Hanover Trust Co. and/or Chemical Bank v. Guerrero, 445 Phil. 770, 777 (2003).

⁴¹ G.R. No. 179402, September 30, 2008, 567 SCRA 291.

⁴² Id. at 305.

⁴³ In the body of the Court of Appeals’ Decision dated May 31, 2005, the amount of permanent medical unfitness benefits was correctly computed as US$50,000.00 x 14.93% = US$7,465.00. However, the dispositive portion of said Decision erroneously stated that the permanent medical unfitness benefits to be awarded was US$7,480.00.