J.A.B. Bulao & Associates

CASE 2012-0006: ANITA L. MIRANDA VS. THE PEOPLE OF THE PHILIPPINES (G.R. No. 176298, 25 JANUARY 2012, VILLARAMA, JR., J.) SUBJECT/S: ACCOUNTANT DEPOSITED CHECKS TO ACCOUNT OF VIVA AND WITHDREW PROCEEDS, LIABLE FOR QUALIFIED THEFT, NOT ESTAFA; COMPUTATION OF PENALTY FOR QUALIFIED THEFT; PENALTY INCREASED TO RECLUSION PERPETUA FOR STOLEN AMOUNT OF P797,187.85. (BRIEF TITLE: MIRANDA VS. PEOPLE).

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DISPOSITIVE:

WHEREFORE, the January 11, 2007 Decision of the Court of Appeals in CA-G.R. CR No. 29858 affirming the conviction of petitioner Anita L. Miranda for the crime of qualified theft is AFFIRMED with the MODIFICATION that the penalty is increased to reclusion perpetua.

With costs against the petitioner.

SO ORDERED.

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FIRST DIVISION

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DECISION

VILLARAMA, JR., J.:

Petitioner Anita L. Miranda appeals the January 11, 2007 Decision¹ of the Court of Appeals (CA) affirming the judgment² of the Regional Trial Court (RTC) of Manila, Branch 20, convicting her of qualified theft.

Petitioner was charged with qualified theft in an Information dated November 28, 2002. The Information reads:

That in or about and during the period comprised between April 28, 1998 and May 2, 2002, inclusive, in the City of Manila, Philippines, the said accused, did then and there wilfully, unlawfully and feloniously, with intent of gain and without the knowledge and consent of the owner thereof, take, steal and carry away the total amount of P797,187.85 belonging to VIDEO CITY COMMERCIAL, INC. and VIVA VIDEOCITY, INC. represented by MIGUEL Q. SAMILLANO, in the following manner, to wit: by making herself the payee in forty-two pre-signed BPI Family Bank checks in the account of Video City Commercial and Jefferson Tan (the latter as franchise[e]) and encashing said checks in the total amount of P797,187.85, for her personal benefit, to the damage and prejudice of said owner in the aforesaid amount of P797,187.85, Philippine Currency.

That the said accused acted with grave abuse of confidence, she being then employed as bookkeeper in the aforesaid firm and as such was privy to the financial records and checks belonging to complainant and was actually entrusted with the said financial records, documents and checks and their transactions thereof in behalf of complainant.³

Upon arraignment, petitioner pleaded not guilty. Trial thereafter ensued.

Summarily, the prosecution proved the following facts: Video City Commercial, Inc. (VCCI) and Viva Video City, Inc. (Viva) were sister companies which managed a chain of stores known as VideoCity. These stores, some company-owned while others were operated in joint ventures with franchisees, were engaged in the sale and rental of video-related merchandises. During the period of April 28, 1998 to May 2, 2002, petitioner was the accounting clerk and bookkeeper of VCCI and Viva. One of her duties was to disburse checks for the accounts she handled. She was assigned to handle twelve (12) VideoCitystore franchise accounts, including those of Tommy Uy, Wilma Cheng, Jefferson Tan and Sharon Cuneta. As regards the franchisee Jefferson Tan, who was out of the country most of the time, Tan pre-signed checks to cover the store’s disbursements and entrusted them to petitioner. The pre-signed checks by Jefferson Tan were from a current account maintained jointly by VCCI and Jefferson Tan at BPI Family Bank, Sta. Mesa. There was also an existing agreement with the bank that any disbursement not exceeding P20,000.00 would require only Tan’s signature.⁴

Taking advantage of Tan’s constant absence from the country, petitioner was able to use Tan’s joint-venture bank account with VCCI as a clearing house for her unauthorized transfer of funds. Petitioner deposited VCCI checks coming from other franchisees’ accounts into the said bank account, and withdrew the funds by writing checks to her name using the checks pre-signed by Tan. It was only after petitioner went on maternity leave and her subsequent resignation from the company in May 2002 that an audit was conducted since she refused to turn over all the financial records in her possession. The audit was made on all the accounts handled by petitioner and it was discovered that she made unauthorized withdrawals and fund transfers amounting to P4,877,759.60.⁵

The prosecution, in proving that petitioner had unlawfully withdrawn P797,187.85 for her own benefit, presented as its witness Jose Laureola, the assistant manager/acting cashier of BPI Family Bank, Sta. Mesa Branch. Laureola presented a microfilm of the checks, the encashed checks and deposit slips. He also presented the bank statement of VCCI which showed the encashment of forty-two (42) checks from the account of VCCI and Jefferson Tan amounting to P797,187.85.⁶

In the face of the prosecution’s evidence, petitioner chose not to present any evidence during trial.

On October 7, 2005, the RTC found petitioner guilty beyond reasonable doubt of qualified theft. The RTC sentenced her to suffer the indeterminate penalty of eight (8) years and one (1) day of prision mayor, as minimum, to eighteen (18) years, two (2) months and twenty-one (21) days of reclusion temporal, as maximum, and to pay VCCI P797,187.85 plus costs.⁷

The RTC found that the prosecution was able to establish that the checks deposited to the joint account of VCCI and Jefferson Tan at BPI Family Bank were unlawfully withdrawn by the petitioner without VCCI’s consent. Petitioner took advantage of her position with VCCI and her access to the checks and its bank accounts.

On appeal, the CA affirmed the decision of the RTC. The CA held that contrary to petitioner’s claim that the prosecution failed to show who was the absolute owner of the thing stolen, there was no doubt that the personal property taken by petitioner does not belong to her but to Jefferson Tan and his joint venture partner VCCI. Thus, petitioner was able to gain from taking other people’s property without their consent. More, she was able to perpetrate the crime due to her position in VCCI which gave her access to the joint venture account of VCCI and Jefferson Tan, both of whom reposed trust and confidence in her. She exploited said trust and confidence to their damage in the amount of P797,187.85.

Undaunted, petitioner filed the instant petition for review on certiorari before this Court, raising the following issues:

1. WHETHER OR NOT THE ACCUSED IS GUILTY BEYOND REASONABLE DOUBT OF THE CRIME OF QUALIFIED THEFT.

1-a. WHETHER THE PHRASE “X X X SHALL TAKE THE PERSONAL PROPERTY OF ANOTHER WITHOUT THE LATTER’S CONSENT X X X” IN ARTICLE 308 OF THE REVISED PENAL CODE IN RELATION TO ARTICLE 310 OF THE SAME CODE WOULD REQUIRE AS AN ELEMENT OF “QUALIFIED THEFT” AN ESTABLISHED PROOF OF “OWNERSHIP” OF THE PROPERTY ALLEGEDLY STOLEN?

1-b. WHETHER IT IS IMPERATIVE THAT THE DUE EXECUTION AND AUTHENTICITY OF THE ALLEGED SIGNATURES OF THE ACCUSED IN THE CHECKS BE FULLY ESTABLISHED AND IDENTIFIED AND IF NOT SO ESTABLISHED AND IDENTIFIED, THE SAME WOULD BE A FATAL FLAW IN THE EVIDENCE OF THE PROSECUTION WHICH INEVITABLY WOULD LEAD TO ACCUSED’S ACQUITTAL?

1-c. WHETHER THE FAILURE TO ESTABLISH AND AUTHENTICATE OR IDENTIFY THE SIGNATURES OF THE ACCUSED ANNIE MIRANDA AND JEFFERSON TAN CONSTITUTED A FATAL FLAW IN PROVING THAT THE ACCUSED AND JEFFERSON TAN WERE THE AUTHORS OF SAID SIGNATURES?

1-d. [WHETHER THE] CONCLUSION OF FACTS BY THE REGIONAL TRIAL COURT AND COURT OF APPEALS ARE NOT SUPPORTED BY EVIDENCE.

1-e. WHETHER THE CHECKS AND VOUCHERS PRESENTED AS EVIDENCE NOT IN THEIR ORIGINALS SHOULD HAVE BEEN DENIED ADMISSION BY THE COURT A QUO, THERE BEING NO SUFFICIENT FACTS ADDUCED TO JUSTIFY THE PRESENTATION OF XEROX COPIES OR SECONDARY EVIDENCE.⁸

Essentially, the issue for our resolution is whether the CA correctly affirmed petitioner’s conviction for qualified theft.

Petitioner insists that she should not have been convicted of qualified theft as the prosecution failed to prove the private complainant’s absolute ownership of the thing stolen. Further, she maintains that Jefferson Tan’s signatures on the checks were not identified by any witness who is familiar with his signature. She likewise stresses that the checks and vouchers presented by the prosecution were not original copies and that no secondary evidence was presented in lieu of the former.

The appeal lacks merit.

A careful review of the records of this case and the parties’ submissions leads the Court to conclude that there exists no cogent reason to disturb the decision of the CA. We note that the arguments raised by petitioner in her petition are a mere rehash of her arguments raised before, and correctly resolved by, the CA.

The elements of the crime of theft as provided for in Article 308⁹ of the Revised Penal Code are as follows: (1) that there be taking of personal property; (2) that said property belongs to another; (3) that the taking be done with intent to gain; (4) that the taking be done without the consent of the owner; and (5) that the taking be accomplished without the use of violence against or intimidation of persons or force upon things.¹⁰ Theft becomes qualified when any of the following circumstances under Article 310¹¹ is present: (1) the theft is committed by a domestic servant; (2) the theft is committed with grave abuse of confidence; (3) the property stolen is either a motor vehicle, mail matter or large cattle; (4) the property stolen consists of coconuts taken from the premises of a plantation; (5) the property stolen is fish taken from a fishpond or fishery; and (6) the property was taken on the occasion of fire, earthquake, typhoon, volcanic eruption, or any other calamity, vehicular accident or civil disturbance.¹²

Here, the prosecution was able to prove beyond reasonable doubt that the amount of P797,187.85 taken does not belong to petitioner but to VCCI and that petitioner took it without VCCI’s consent and with grave abuse of confidence by taking advantage of her position as accountant and bookkeeper. The prosecution’s evidence proved that petitioner was entrusted with checks payable to VCCI or Viva by virtue of her position as accountant and bookkeeper. She deposited the said checks to the joint account maintained by VCCI and Jefferson Tan, then withdrew a total of P797,187.85 from said joint account using the pre-signed checks, with her as the payee. In other words, the bank account was merely the instrument through which petitioner stole from her employer VCCI.

We find no cogent reason to disturb the above findings of the trial court which were affirmed by the CA and fully supported by the evidence on record. Time and again, the Court has held that the facts found by the trial court, as affirmed in toto by the CA, are as a general rule, conclusive upon this Court¹³ in the absence of any showing of grave abuse of discretion. In this case, none of the exceptions to the general rule on conclusiveness of said findings of facts are applicable.¹⁴ The Court gives weight and respect to the trial court’s findings in criminal prosecution because the latter is in a better position to decide the question, having heard the witnesses in person and observed their deportment and manner of testifying during the trial.¹⁵ Absent any showing that the lower courts overlooked substantial facts and circumstances, which if considered, would change the result of the case, this Court gives deference to the trial court’s appreciation of the facts and of the credibility of witnesses.

Moreover, we agree with the CA when it gave short shrift to petitioner’s argument that full ownership of the thing stolen needed to be established first before she could be convicted of qualified theft. As correctly held by the CA, the subject of the crime of theft is any personal property belonging to another. Hence, as long as the property taken does not belong to the accused who has a valid claim thereover, it is immaterial whether said offender stole it from the owner, a mere possessor, or even a thief of the property.¹⁶ In any event, as stated above, the factual findings of the courts a quo as to the ownership of the amount petitioner stole is conclusive upon this Court, the finding being adequately supported by the evidence on record.

However, notwithstanding the correctness of the finding of petitioner’s guilt, a modification is called for as regards the imposable penalty. On the imposition of the correct penalty, People v. Mercado¹⁷ is instructive. Pursuant to said case, in the determination of the penalty for qualified theft, note is taken of the value of the property stolen, which is P797,187.85 in this case. Since the value exceeds P22,000.00, the basic penalty is prision mayor in its minimum and medium periods to be imposed in the maximum period, that is, eight (8) years, eight (8) months and one (1) day to ten (10) years of prision mayor.

To determine the additional years of imprisonment to be added to the basic penalty, the amount of P22,000.00 is deducted from P797,187.85, which yields a remainder of P775,187.85. This amount is then divided by P10,000.00, disregarding any amount less than P10,000.00. The end result is that 77 years should be added to the basic penalty. However, the total imposable penalty for simple theft should not exceed 20 years. Thus, had petitioner committed simple theft, the penalty would be 20 years of reclusion temporal. As the penalty for qualified theft is two degrees higher, the trial court, as well as the appellate court, should have imposed the penalty of reclusion perpetua.

WHEREFORE, the January 11, 2007 Decision of the Court of Appeals in CA-G.R. CR No. 29858 affirming the conviction of petitioner Anita L. Miranda for the crime of qualified theft is AFFIRMED with the MODIFICATION that the penalty is increased to reclusion perpetua.

With costs against the petitioner.

SO ORDERED.

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

Pursuant to Section 13, Article VIII of the 1987 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.

1Rollo, pp. 24-35. Penned by Associate Justice Amelita G. Tolentino with Associate Justices Conrado M. Vasquez, Jr. and Lucenito N. Tagle concurring. The assailed decision was rendered in CA-G.R. CR No. 29858.

2CA rollo, pp. 33-42. The decision of the RTC was penned by Judge Marivic T. Balisi-Umali.

3Records, p. 1.

4CA rollo, pp. 34-39; rollo, pp. 26-27.

5Id.

6Id. at 38.

7Id. at 39-41.

8Rollo, pp. 12-14.

9Art. 308. Who are liable for theft. – Theft is committed by any person who, with intent to gain but without violence against, or intimidation of persons nor force upon things, shall take personal property of another without the latter’s consent.

x x x x

10People v. Sison, G.R. No. 123183, January 19, 2000, 322 SCRA 345, 363-364.

11Art. 310. Qualified theft. – The crime of theft shall be punished by the penalties next higher by two degrees than those respectively specified in the next preceding article, if committed by a domestic servant, or with grave abuse of confidence, or if the property stolen is motor vehicle, mail matter or large cattle or consists of coconuts taken from the premises of a plantation, fish taken from a fishpond or fishery or if property is taken on the occasion of fire, earthquake, typhoon, volcanic eruption, or any other calamity, vehicular accident or civil disturbance.

12People v. Sison, supra note 10 at 364.

13See Cosmos Bottling Corporation v. Nagrama, Jr., G.R. No. 164403, March 4, 2008, 547 SCRA 571, 584, citing The Philippine American Life and General Insurance Co. v. Gramaje, G.R. No. 156963, November 11, 2004, 442 SCRA 274, 283.

14See Reyes v. CA, 328 Phil. 171, 179-180 (1996) citing Floro v. Llenado, 314 Phil. 715, 727-728 (1995). The Court, however, may determine the factual milieu of cases or controversies under specific circumstances, such as:

(1) when the inference made is manifestly mistaken, absurd or impossible;

(2) when there is a grave abuse of discretion;

(3) when the finding is grounded entirely on speculations, surmises or conjectures;

(4) when the judgment of the Court of Appeals is based on misapprehension of facts;

(5) when the findings of fact are conflicting;

(6) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee;

(7) when the findings of the Court of Appeals are contrary to those of the trial court;

(8) when the findings of fact are conclusions without citation of specific evidence on which they are based;

(9) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion;

(10) when the findings of fact of the Court of Appeals are premised on the absence of evidence and are contradicted by the evidence on record.

15People v. Martinada, G.R. Nos. 66401-03, February 13, 1991, 194 SCRA 36, 41.

16Florenz D. Regalado, Criminal Law Conspectus, First edition, p. 522.

17G.R. No. 143676, February 19, 2003, 397 SCRA 746, 758.

CASE 2012-0005: MAGSAYSAY MARITIME CORPORATION AND/OR WASTFEL-LARSEN MANAGEMENT A/S VS. OBERTO S. LOBUSTA (G.R. NO. 177578, 25 JANUARY 2012, VILLARAMA, JR., J.) SUBJECT/S: LABOR CODE APPLIES TO CLAIMS UNDER POEA-APPROVED CONTRACTS; CONCEPT OF PERMANENT TOTAL DISABILITY; ORDERS OF COURT TO FILE PLEADINGS ARE NOT MERE REQUESTS, DISOBEDIENCE CONSTITUTES CONTEMPT. (BRIEF TITLE: MAGSAYSAY MARITIME VS. LOBUSTA)

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DISPOSITIVE:

WHEREFORE, we DENY the present petition for review on certiorari and AFFIRM the Decision dated August 18, 2006 of the Court of Appeals and its Resolution dated April 19, 2007 in CA-G.R. SP No. 74035. We ORDER petitioners Magsaysay Maritime Corporation and/or Wastfel-Larsen Management A/S to pay respondent Oberto S. Lobusta US$65,163 as total award, to be paid in Philippine pesos at the exchange rate prevailing during the time of payment.

With costs against the petitioners.

SO ORDERED.

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FIRST DIVISION

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DECISION

VILLARAMA, JR., J.:

Petitioners appeal the Decision¹ dated August 18, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 74035 and its Resolution² dated April 19, 2007, denying the motion for reconsideration thereof. The CA declared that respondent is suffering from permanent total disability and ordered petitioners to pay him US$2,060 as medical allowance, US$60,000 as disability benefits and 5% of the total monetary award as attorney’s fees.

The facts follow:

Petitioner Magsaysay Maritime Corporation is a domestic corporation and the local manning agent of the vessel MV “Fossanger” and of petitioner Wastfel-Larsen Management A/S.³

Respondent Oberto S. Lobusta is a seaman who has worked for Magsaysay Maritime Corporation since 1994.⁴ In March 1998, he was hired again as Able Seaman by Magsaysay Maritime Corporation in behalf of its principal Wastfel-Larsen Management A/S. The employment contract⁵ provides for Lobusta’s basic salary of US$515 and overtime pay of US$206 per month. It also provides that the standard terms and conditions governing the employment of Filipino seafarers on board ocean-going vessels, approved per Department Order No. 33 of the Department of Labor and Employment and Memorandum Circular No. 55 of the Philippine Overseas Employment Administration (POEA Standard Employment Contract), both series of 1996, shall be strictly and faithfully observed.

Lobusta boarded MV “Fossanger” on March 16, 1998.⁶ After two months, he complained of breathing difficulty and back pain. On May 12, 1998, while the vessel was in Singapore, Lobusta was admitted at Gleneagles Maritime Medical Center and was diagnosed to be suffering from severe acute bronchial asthma with secondary infection and lumbosacral muscle strain. Dr. C K Lee certified that Lobusta was fit for discharge on May 21, 1998, for repatriation for further treatment.⁷

Upon repatriation, Lobusta was referred to MetropolitanHospital. The medical coordinator, Dr. Robert Lim, issued numerous medical reports regarding Lobusta’s condition. Lobusta was first seen by a Pulmonologist and an Orthopedic Surgeon on May 22, 1998.⁸ Upon reexamination by the Orthopedic Surgeon on August 11, 1998, he opined that Lobusta needs surgery, called decompression laminectomy,⁹ which was done on August 30, 1998.¹⁰ On October 12, 1998, Dr. Lim issued another medical report stating the opinion of the Orthopedic Surgeon that the prognosis for Lobusta’s recovery after the spine surgery is good. However, the Pulmonologist opined that Lobusta’s obstructive airway disease needs to be monitored regularly and that Lobusta needs to be on bronchodilator indefinitely. Hence, Lobusta should be declared disabled with a suggested disability grading of 10-20%.¹¹ The suggestion was not heeded and Lobusta’s treatment continued.

On February 16, 1999, Lobusta was reexamined. Dr. Lim reported that Lobusta still complains of pain at the lumbosacral area although the EMG/NCV¹² test revealed normal findings. Lobusta was prescribed medications and was advised to return on March 16, 1999 for re-evaluation.¹³

On February 19, 1999, Dr. Lim reported that Lobusta has been diagnosed to have a moderate obstructive pulmonary disease which tends to be a chronic problem, such that Lobusta needs to be on medications indefinitely. Dr. Lim also stated that Lobusta has probably reached his maximum medical care.¹⁴

Petitioners “then faced the need for confirmation and grading by a second opinion” and “it took the parties time to agree on a common doctor, until they agreed on Dr. Camilo Roa.”¹⁵ Dr. Roa’s clinical summary states that Lobusta’s latest follow-up check-up was on December 16, 1999; that Lobusta is not physically fit to resume his normal work as a seaman due to the persistence of his symptoms; that his asthma will remain chronically active and will be marked by intermittent exacerbations; and that he needs multiple controller medications for his asthma.¹⁶

As the parties failed to reach a settlement as to the amount to which Lobusta is entitled, Lobusta filed on October 2, 2000, a complaint¹⁷ for disability/medical benefits against petitioners before the National Labor Relations Commission (NLRC).

Sometime in October 2000, Magsaysay Maritime Corporation suggested that Lobusta be examined by another company-designated doctor for an independent medical examination. The parties agreed on an independent medical examination by Dr. Annette M. David, whose findings it was agreed upon, would be considered final.

On November 17, 2000, Dr. David interviewed and examined Lobusta.¹⁸ Pertinent portions of Dr. David’s report read:

xxx Based on the Classes of Respiratory Impairment as described in the American Medical Association’s Guidelines for the Evaluation of Permanent Impairment, this is equivalent to Class 2 or Mild Impairment of the Whole Person (level of impairment: 10-25% of the whole person). Given the persistence of the symptoms despite an adequate medical regimen, the impairment may be considered permanent.

The determination of disability and fitness for duty/return-to-work is more complex. During asymptomatic periods, Mr. Lobusta could conceivably be capable of performing the duties and responsibilities of an Able Seaman as listed in the memos provided by Pandiman (Duties of an Able Seaman on board an average vessel, January 26, 2000; and Deck Crew general Responsibilities, 95.11.01). However, consideration needs to be given to the following:

• During the personal interview, Mr. Lobusta reported the need to use a self-contained breathing apparatus (SCBA) for “double bottom” work. While the use of these devices may not appreciably increase the work of breathing, an individual who develops an acute asthmatic attack under conditions requiring the use of an SCBA (oxygen-poor atmospheres) may be at increased risk for a poor outcome.
• When out at sea, the medical facilities on board an average vessel may not be adequate to provide appropriate care for an acute asthmatic exacerbation. Severe asthmatic attacks require life-sustaining procedures such as endotracheal intubation and on occasion, mechanical ventilation. Asthma can be fatal if not treated immediately. The distance from and the time required to transport an individual having an acute asthmatic attack on a vessel at sea to the appropriate medical facilities on land are important factors in the decision regarding fitness for duty.
• Several of the duties listed for an Able Seaman require the use of a variety of chemical substances (e.g. grease, solvents, cleaning agents, de-greasers, paint, etc.), many of which are known or suspected asthma triggers in sensitized individuals. The potential for an Able Seaman’s exposure to these asthma triggers is considerable.

Taken altogether, it is my opinion that Mr. Lobusta ought not to be considered fit to return to work as an Able Seaman. While the degree of impairment is mild, for the reasons stated above, it would be in the interest of all parties involved if he were to no longer be considered as capable of gainful employment as a seafarer. It is possible that he may perform adequately in another capacity, given a land-based assignment.¹⁹ (Stress in the original by Dr. David.)

As no settlement was reached despite the above findings, the Labor Arbiter ordered the parties to file their respective position papers.

On April 20, 2001, the Labor Arbiter rendered a decision²⁰ ordering petitioners to pay Lobusta (a) US$2,060 as medical allowance, (b) US$20,154 as disability benefits, and (c) 5% of the awards as attorney’s fees.

The Labor Arbiter ruled that Lobusta suffered illness during the term of his contract. Hence, petitioners are liable to pay Lobusta his medical allowance for 120 days or a total of US$2,060. The Labor Arbiter held that provisions of the Labor Code, as amended, on permanent total disability do not apply to overseas seafarers. Hence, he awarded Lobusta US$20,154 instead of US$60,000, the maximum rate for permanent and total disability under Section 30 and 30-A of the 1996 POEA Standard Employment Contract. The Labor Arbiter also awarded attorney’s fees equivalent to 5% of the total award since Lobusta was assisted by counsel.²¹

Lobusta appealed. The NLRC dismissed his appeal and affirmed the Labor Arbiter’s decision. The NLRC ruled that Lobusta’s condition may only be considered permanent partial disability. While Dr. David suggested that Lobusta’s prospects as seafarer may have been restricted by his bronchial asthma, Dr. David also stated that the degree of impairment is mild. Said qualification puts Lobusta’s medical condition outside the definition of total permanent disability, said the NLRC.²² Later, the NLRC also denied Lobusta’s motion for reconsideration.

Unsatisfied, Lobusta brought the case to the CA under Rule 65 of the 1997 Rules of Civil Procedure, as amended. As aforesaid, the CA declared that Lobusta is suffering from permanent total disability and increased the award of disability benefits in his favor to US$60,000, to wit:

WHEREFORE, the petition for certiorari is hereby GRANTED. The challenged resolution of the NLRC dated 20 June 2002 is MODIFIED, declaring [Lobusta] to be suffering from permanent total disability.

[Petitioners] are ORDERED to pay [Lobusta] the following:

a) US$2,060.00 as medical allowance,

b) US$60,000.00 as disability benefits, and

c) 5% of the total monetary award as attorney’s fees

x x x x²³

The CA faulted the NLRC for “plucking only particular phrases” from Dr. David’s report and said that the NLRC cannot wantonly disregard the full import of said report. The CA ruled that Lobusta’s disability brought about by his bronchial asthma is permanent and total as he had been unable to work since May 14, 1998 up to the present or for more than 120 days, and because Dr. David found him not fit to return to work as an able seaman.

Hence, this petition which raises two legal issues:

WHETHER OR NOT THE POEA CONTRACT CONSIDERS THE MERE LAPSE OF MORE THAN ONE HUNDRED TWENTY (120) DAYS AS TOTAL AND PERMANENT DISABILITY.

WHETHER OR NOT THERE IS LEGAL BASIS TO AWARD RESPONDENT LOBUSTA ATTORNEY’S FEES.²⁴

Petitioners argue that the CA erred in applying the provisions of the Labor Code instead of the provisions of the POEA contract in determining Lobusta’s disability, and in ruling that the mere lapse of 120 days entitles Lobusta to total and permanent disability benefits. The CA allegedly erred also in holding them liable for attorney’s fees, despite the absence of legal and factual bases.

The petition lacks merit.

Petitioners are mistaken that it is only the POEA Standard Employment Contract that must be considered in determining Lobusta’s disability. In Palisoc v. Easways Marine, Inc.,²⁵ we said that whether the Labor Code’s provision on permanent total disability applies to seafarers is already a settled matter. In Palisoc, we cited the earlier case of Remigio v. National Labor Relations Commission²⁶ where we said (1) that the standard employment contract for seafarers was formulated by the POEA pursuant to its mandate under Executive Order No. 247²⁷ “to secure the best terms and conditions of employment of Filipino contract workers and ensure compliance therewith,” and “to promote and protect the well-being of Filipino workers overseas”; (2) that Section 29 of the 1996 POEA Standard Employment Contract itself provides that all rights and obligations of the parties to the contract, including the annexes thereof, shall be governed by the laws of the Republic of the Philippines, international conventions, treaties and covenants where the Philippines is a signatory; and (3) that even without this provision, a contract of labor is so impressed with public interest that the Civil Code expressly subjects it to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.²⁸

In affirming the Labor Code concept of permanent total disability, Remigio further stated:

Thus, the Court has applied the Labor Code concept of permanent total disability to the case of seafarers. In Philippine Transmarine Carriers v. NLRC, seaman Carlos Nietes was found to be suffering from congestive heart failure and cardiomyopathy and was declared as unfit to work by the company-accredited physician. The Court affirmed the award of disability benefits to the seaman, citing ECC v. Sanico, GSIS v. CA, and Bejerano v. ECC that “disability should not be understood more on its medical significance but on the loss of earning capacity. Permanent total disability means disablement of an employee to earn wages in the same kind of work, or work of similar nature that [he] was trained for or accustomed to perform, or any kind of work which a person of [his] mentality and attainment could do. It does not mean absolute helplessness.” It likewise cited Bejerano v. ECC, that in a disability compensation, it is not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of one’s earning capacity.

The same principles were cited in the more recent case of Crystal Shipping, Inc. v. Natividad. In addition, the Court cited GSIS v. Cadiz and Ijares v. CA that “permanent disability is the inability of a worker to perform his job for more than 120 days, regardless of whether or not he loses the use of any part of his body.”

x x x x

These facts clearly prove that petitioner was unfit to work as drummer for at least 11-13 months – from the onset of his ailment on March 16, 1998 to 8-10 months after June 25, 1998. This, by itself, already constitutes permanent total disability. x x x²⁹

In Vergara v. Hammonia Maritime Services, Inc.,³⁰ we also said that the standard terms of the POEA Standard Employment Contract agreed upon are intended to be read and understood in accordance with Philippine laws, particularly, Articles 191 to 193 of the Labor Code, as amended, and the applicable implementing rules and regulations in case of any dispute, claim or grievance.

Thus, the CA was correct in applying the Labor Code provisions in Lobusta’s claim for disability benefits. The Labor Arbiter erred in failing to apply them.

Article 192(c)(1) under Title II, Book IV of the Labor Code, as amended, reads:

ART. 192. Permanent total disability. – x x x

x x x x

(c) The following disabilities shall be deemed total and permanent:

(1) Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided in the Rules;

x x x x

Section 2(b), Rule VII of the Implementing Rules of Title II, Book IV of the Labor Code, as amended, or the Amended Rules on Employees’ Compensation Commission (ECC Rules), reads:

Sec. 2. Disability. – x x x

(b) A disability is total and permanent if as a result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise provided for in Rule X of these Rules.

x x x x

Section 2, Rule X of the ECC Rules reads:

SEC. 2. Period of entitlement.— (a) The income benefit shall be paid beginning on the first day of such disability. If caused by an injury or sickness it shall not be paid longer than 120 consecutive days except where such injury or sickness still requires medical attendance beyond 120 days but not to exceed 240 days from onset of disability in which case benefit for temporary total disability shall be paid. However, the System may declare the total and permanent status at any time after 120 days of continuous temporary total disability as may be warranted by the degree of actual loss or impairment of physical or mental functions as determined by the System.

x x x x

According to Vergara,³¹ these provisions of the Labor Code, as amended, and implementing rules are to be read hand in hand with the first paragraph of Section 20(B)(3) of the 2000 POEA Standard Employment Contract which reads:

Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician[,] but in no case shall this period exceed one hundred twenty (120) days.

Vergara continues:

As these provisions operate, the seafarer, upon sign-off from his vessel, must report to the company-designated physician within three (3) days from arrival for diagnosis and treatment. For the duration of the treatment but in no case to exceed 120 days, the seaman is on temporary total disability as he is totally unable to work. He receives his basic wage during this period until he is declared fit to work or his temporary disability is acknowledged by the company to be permanent, either partially or totally, as his condition is defined under the POEA Standard Employment Contract and by applicable Philippine laws. If the 120 days initial period is exceeded and no such declaration is made because the seafarer requires further medical attention, then the temporary total disability period may be extended up to a maximum of 240 days, subject to the right of the employer to declare within this period that a permanent partial or total disability already exists. The seaman may of course also be declared fit to work at any time such declaration is justified by his medical condition.

x x x x

As we outlined above, a temporary total disability only becomes permanent when so declared by the company physician within the periods he is allowed to do so, or upon the expiration of the maximum 240-day medical treatment period without a declaration of either fitness to work or the existence of a permanent disability.³²

To be sure, there is one Labor Code concept of permanent total disability, as stated in Article 192(c)(1) of the Labor Code, as amended, and the ECC Rules. We also note that the first paragraph of Section 20(B)(3) of the 2000 POEA Standard Employment Contract was lifted verbatim from the first paragraph of Section 20(B)(3) of the 1996 POEA Standard Employment Contract, to wit:

Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician, but in no case shall this period exceed one hundred twenty (120) days.

Applying the foregoing considerations, we agree with the CA that Lobusta suffered permanent total disability. On this point, the NLRC ruling was not in accord with law and jurisprudence.

Upon repatriation, Lobusta was first examined by the Pulmonologist and Orthopedic Surgeon on May 22, 1998. The maximum 240-day (8-month) medical-treatment period expired, but no declaration was made that Lobusta is fit to work. Nor was there a declaration of the existence of Lobusta’s permanent disability. On February 16, 1999, Lobusta was still prescribed medications for his lumbosacral pain and was advised to return for reevaluation. May 22, 1998 to February 16, 1999 is 264 days or 6 days short of 9 months.

On Lobusta’s other ailment, Dr. Roa’s clinical summary also shows that as of December 16, 1999, Lobusta was still unfit to resume his normal work as a seaman due to the persistence of his symptoms. But neither did Dr. Roa declare the existence of Lobusta’s permanent disability. Again, the maximum 240-day medical treatment period had already expired. May 22, 1998 to December 16, 1999 is 19 months or 570 days. In Remigio, unfitness to work for 11-13 months was considered permanent total disability. So it must be in this case. And Dr. David’s much later report that Lobusta “ought not to be considered fit to return to work as an Able Seaman” validates that his disability is permanent and total as provided under the POEA Standard Employment Contract and the Labor Code, as amended.

In fact, the CA has found that Lobusta was not able to work again as a seaman and that his disability is permanent “as he has been unable to work since 14 May 1998 to the present or for more than 120 days.” This period is more than eight years, counted until the CA decided the case in August 2006. On the CA ruling that Lobusta’s disability is permanent since he was unable to work “for more than 120 days,” we have clarified in Vergara that this “temporary total disability period may be extended up to a maximum of 240 days.”

Thus, we affirm the award to Lobusta of US$60,000 as permanent total disability benefits, the maximum award under Section 30 and 30-A of the 1996 POEA Standard Employment Contract. We also affirm the award of US$2,060 as sickness allowance which is not contested and appears to have been accepted by the parties.

On the matter of attorney’s fees, under Article 2208³³ of the Civil Code, attorney’s fees can be recovered in actions for recovery of wages of laborers and actions for indemnity under employer’s liability laws. Attorney’s fees are also recoverable when the defendant’s act or omission has compelled the plaintiff to incur expenses to protect his interest.³⁴ Such conditions being present here, we affirm the award of attorney’s fees, which we compute as US$3,103 or 5% of US$62,060.

Before we end, we note petitioners’ repeated failure to comply with our resolutions, as well as the orders issued by the tribunals below. We remind petitioners and their counsels that our resolutions requiring them to file pleadings are not to be construed as mere requests, nor should they be complied with partially, inadequately or selectively. Counsels are also reminded that lawyers are called upon to obey court orders and willful disregard thereof will subject the lawyer not only for contempt but to disciplinary sanctions as well.³⁵ We may also dismiss petitioners’ appeal for their failure to comply with any circular, directive or order of the Supreme Court without justifiable cause.³⁶ In fact, we actually denied the instant petition on July 9, 2008 since petitioners failed to file the required reply to the comment filed by Lobusta.³⁷ On reconsideration, however, we reinstated the petition.³⁸ But when we required the parties to submit memoranda, petitioners again did not comply.³⁹ As regards the proceedings below, they did not file their position paper on time, despite the extensions granted by the Labor Arbiter.⁴⁰ Nor did they file the comment and memorandum required by the CA.⁴¹

Finally, we note that the Labor Arbiter improperly included Miguel Magsaysay as respondent in his decision.⁴² It should be noted that Lobusta sued Magsaysay Maritime Corporation and/or Wastfel-Larsen Management A/S in his complaint.⁴³ He also named them as the respondents in his position paper.⁴⁴ Petitioners are the proper parties.

WHEREFORE, we DENY the present petition for review on certiorari and AFFIRM the Decision dated August 18, 2006 of the Court of Appeals and its Resolution dated April 19, 2007 in CA-G.R. SP No. 74035. We ORDER petitioners Magsaysay Maritime Corporation and/or Wastfel-Larsen Management A/S to pay respondent Oberto S. Lobusta US$65,163 as total award, to be paid in Philippine pesos at the exchange rate prevailing during the time of payment.

With costs against the petitioners.

SO ORDERED.

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

Pursuant to Section 13, Article VIII of the 1987 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.

• ·Also referred to as Westfal-Larsen Management A/S.

*Designated additional member per Raffle dated February 10, 2010 vice Associate Justice Lucas P. Bersamin who recused himself from the case due to prior action in the Court of Appeals.

1Rollo, pp. 34-44. Penned by Associate Justice Santiago Javier Ranada with the concurrence of Associate Justices Portia Aliño-Hormachuelos and Amelita G. Tolentino.

2Id. at 46-47. Penned by Associate Justice Portia Aliño-Hormachuelos with the concurrence of Associate Justices Lucas P. Bersamin (now a Member of this Court) and Amelita G. Tolentino.

3Id. at 11.

4Records, p. 50.

5Id. at 3.

6Rollo, p. 49.

7Id. at 34-35, 73.

8Id. at 74.

9Id. at 81.

10Id. at 83.

11Id. at 84-85.

12Electromyography/Nerve Conduction Velocity.

13Rollo, p. 91.

14Id. at 92.

15Id. at 53.

16Id. at 95.

17Records, p. 2.

18Rollo, pp. 101-103.

19Id. at 103.

20Id. at 43-57.

21Id. at 51-56.

22Id. at 334-336.

23Rollo, p. 43.

24Id. at 18.

25G.R. No. 152273, September 11, 2007, 532 SCRA 585, 592.

26G.R. No. 159887, April 12, 2006, 487 SCRA 190.

27Reorganizing the Philippine Overseas Employment Administration and for Other Purposes.

28Supra note 26 at 207.

29Id. at 207-208, 212.

30G.R. No. 172933, October 6, 2008, 567 SCRA 610, 626.

31Id. at 627.

32Id. at 628-629.

33ART. 2208. In the absence of stipulation, attorney’s fees and expenses of litigation, other than judicial costs, cannot be recovered except:

x x x x

(7) In actions for the recovery of wages of x x x laborers x x x;

(8) In actions for indemnity under workmen’s compensation and employer’s liability laws;

x x x x

34Remigio v. National Labor Relations Commission, supra note 26 at 215.

35Sebastian v. Bajar, A.C. No. 3731, September 7, 2007, 532 SCRA 435, 449.

36Rules of Court, Rule 56, Section 5. Grounds for dismissal of appeal. – x x x

x x x x

(e) Failure to comply with any circular, directive or order of the Supreme Court without justifiable cause.

x x x x

37Rollo, p. 300.

38Id. at 319.

39Id. at 337.

40Records, p. 48.

41CA rollo, pp. 182, 183-245.

42Records, p. 43.

43Id. at 2.

44Id. at 18.