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FIRST DIVISION

MARINO B. DAANG, G.R. No. 191902

Petitioner,

Present:

-versus- BERSAMIN, CJ., Chairperson,

JARDELEZA, *
Acting Working Chairperson,
GESMUNDO, and
SKIPPERS UNITED PACIFIC, CARANDANG, JJ.
INC. and COMMERCIAL S.A.,
Respondents. Promulgated:

"JUL 3 0 2019
X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DECISION

JARDELEZA, J.:

This is a petition for review on certiorari 1 assailing the October 15,

2009 Decision2 and March 30, 2010 Resolution3 of the Court of Appeals (CA)
in CA-G.R. SP No. 107561. The CA reversed and set aside the Decision of
the National Labor Relations Commission (NLRC) in NLRC LAC No. 08-
000643-08. In this case, We restate the rule that a conditional settlement of a
judgment award which is highly prejudicial to the employee will be treated as
a voluntary settlement of his/her claim that operates as a final satisfaction in
his/her favor, rendering a case questioning the award moot and academic. 4

On October 15, 2005, Skippers United Pacific, Inc., for and on behalf
of its foreign principal Commercial S.A. (collectively, respondents), hired
petitioner Marino 5 B. Daang (Daang) as chief cook on board MV Merry
Fisher. Daang boarded the vessel on October 17, 2005. Although his contract
was originally for a period of nine months, it was extended upon mutual

• Designated as Acting Working Chairperson of the First Division per Special Order No. 2680 dated July
12, 2019.
1
Rollo, pp. 9-44.
2 Id. at 272-288. Penned by Associate Justice Rebecca De Guia-Salvador with Associate Justices
Apolinario D. Bruselas, Jr., and Mario V. Lopez, concurring.
3 Id. at 304-305.
4 MST Marine Services (Philippines). Inc. v. Asuncion, G.R. No. 211335, March 27, 2017, 821 SCRA 535,
546.
5 Also referred to as "Mariano" in some parts of the rol/o.

I
 Decision 2 G.R. No. 191902

agreement of the parties. 6 On May 15, 2007, Daang strained his back while
· lifting a 50-kilo bag of flour. Owing to the increasing severity of his back pain,
he was sent to a clinic in Santiago, Cuba where he was diagnosed with acute
lumbago and given medication. 7 Daang was further examined in the ports of
Havana and Garcia, Cuba. He was eventually repatriated to the Philippines on
May 28, 2007. Upon arrival, Daang was referred to the St. Christopher Clinic
where respondents' company-designated physician, Dr. Leynard Rubi co (Dr.
Rubi co), recommended the conduct of a Magnetic Resonance Imaging (MRI)
procedure. 8

Based on the results of the MRI procedure, Daang was found to be

suffering from "degenerative changes of the lumbar spine with right
paracentral and neural foraminal disc protrusion [at] L4-L5." 9 Although
advised to undergo surgery, he opted for physiotherapy instead. 10 On July 2,
2007, Dr. Rubi co declared Daang fit to work, with the advice to "refrain from
lifting heavy weights/objects and to maintain proper posture as necessary." 11
Respondents thereafter paid Daang sickness benefits in the amount of
US$1,194.88 as evidenced by the notarized Receipt and Release dated July
14, 2007. 12

Meanwhile, Daang sought re-employment with respondents. In its

course, he executed an Affidavit/Undertaking 13 and a handwritten
declaration 14 freeing respondents from any liability in case he incurs another
disease in relation to his back injury. 15

While undergoing the requisite pre-employment medical examination

(PEME), Daang discovered that he had gallbladder polyps and eventually
decided to forego re-employment. He consulted Dr. Manuel Fidel M. Magtira
(Dr. Magtira), an orthopedic surgeon at Casa Medica, Inc. in SM Southmall,
Las Pifias, who issued a Medical Report 16 dated September 29, 2007, finding
him "partially and permanently disabled with Grade 6 (50%) [i]mpediment
based on the Philippine Overseas Employment Administration (POEA)
Standard Employment Contract." 17 Daang thereafter demanded payment of
disability benefits from respondents. When his demands went unheeded, he
filed a complaint for total and permanent disability benefits and damages

6
Rollo, pp. 45, 273. The CA Decision states that the parties executed the Contract of Employment on
October 17, 2005, and Daang joined his vessel on the same date (id. at 273). It appears, however, that the
parties signed the Contract of Employment on October 15, 2005 (id. at 45).
7
Id at 273.
8
Id. at 274.
9 Id
IO Id.
11
Rollo, p. 307.
12
Id. at 308-309.
13
Id at 310-311.
14
Id. at 312.
15
Id. at 275.
16

17
Id. at 49-51(
Id. at 275.
 Decision 3 G.R. No. 191902

before the NLRC, docketed as NLRC-NCR Case No. OFW (M) 10-12095-
07.is

Relying on Dr. Magtira's Medical Report, the Labor Arbiter (LA), in

his Decision 19 dated June 27, 2008, ruled in Daang's favor and ordered
respondents to pay total and permanent disability benefits in the amount of
US$60,000.00 plus 10% attorney's fees.

On appeal, the NLRC, in its Resolution 20 dated October 20, 2008,

affirmed the ruling of the LA. It held that there is no dispute that Daang
sustained his injury while performing his duties on board the vessel during the
term of his employment. While Dr. Rubi co did declare Daang fit to work, he
also advised the latter to refrain from lifting heavy objects. To the NLRC, this
was proof that Daang can no longer perform his customary job. Further, the
NLRC found that, from his repatriation on May 29, 2007 until the filing of his
complaint on October 31, 2007, more than 120 days had elapsed and Daang
has not yet boarded another vessel to work as a seafarer. Thus, he is considered
permanently and totally disabled. 21 The NLRC also rejected respondents'
argument that Daang waived his right to file a complaint when he signed the
Receipt and Release dated July 14, 2007. According to the NLRC, the law
does not consider as valid any agreement to receive less compensation than
what a worker is entitled to. 22

Respondents thus elevated the NLRC' s ruling to the CA via a special

civil action for certiorari. In a Decision23 dated October 15, 2009, the CA
reversed the NLRC. It gave greater weight to Dr. Rubico's finding that Daang
was fit to work over Dr. Magtira's contrary pronouncement considering that
the former had given Daang more extensive medical attention compared to
the latter who did not appear to have conducted any independent
examination. 24 The CA also upheld the Release and Receipt executed by
Daang for lack of proof that it was entered into involuntarily. 25

Daang sought reconsideration but this was denied by the CA. Hence,
this petition.

On September 6, 2011, and pending resolution of his action before this

Court, Daang filed an urgent manifestation with motion to dismiss, alleging
that on March 10, 2009, the parties jointly executed and filed with the NLRC
a "conditional satisfaction of judgment with urgent motion to cancel appeal
bond all without prejudice to the pending petition for certiorari in the Court

1s Id. at 52-53, 275.

19 Id. at 122-128.
20
Id.atl68-175.
21 Id. at 172-173.
22
Id. at 174.
23
24
Supra noter.
Rollo, p. 2
.
25 Id. at 285.
 Decision 4 G.R. No. 191902

of Appeals" (hereinafter, Conditional Satisfaction of Judgment). 26 Daang

claims that he received from respondents the amount of P2,985,129.00 as
"conditional payment of the judgment award of the [LA] xx x only to prevent
imminent execution" 27 of the NLRC ruling. Under this Conditional
Satisfaction of Judgment, both parties prayed that the same be made of record
and that respondents' appeal bond be cancelled. It also appears that Daang
submitted a notarized affidavit (Affidavit), 28 approved by LA Arthur A.
Amansec, where the former committed, among others, not to file "any
complaint or prosecute any suit or action x xx against [respondents] x x x
after receiving the payment" 29 which he will return in case of reversal of the
NLRC Decision in his favor. 30

Respondents filed a counter-manifestation, claiming that the

Conditional Satisfaction of Judgment should not be taken against them
because it was the only protection available to them to prevent the execution
proceedings before the NLRC. 31

We grant petitioner's motion and consider the case before the CA moot
and academic.

The facts and circumstances of the case before Us appear to be on all

fours with those in Hernandez v. Crossworld Marine Services, Inc. 32 To
prevent the imminent execution of the NLRC's ruling awarding seafarer Juan
B. Hernandez (Hernandez) total and permanent disability benefits pending
resolution of the case it filed before the CA, the parties executed a Conditional
Satisfaction of Judgment stating that: ( 1) the payment was made only for the
purpose of avoiding the execution proceeding; (2) it is without prejudice to
the employer's petition for certiorari before the CA; and (3) in case of
reversal, Hernandez shall return the amount he received. Hernandez also
executed an Affidavit and Receipt of Payment wherein he committed not to
file any complaint or prosecute any action in the Philippines or in any country
against the employer. 33 When the CA reversed the NLRC ruling, Hernandez
appealed before Us, praying that the case before the CA be declared moot and
academic on account of the parties' agreement. Upon examination, We found
that the terms of the Conditional Satisfaction of Judgment, the Affidavit, and
the Receipt of Payment contained provisos depriving Hernandez of all his
rights to claim indemnity from the employer under all possible causes of
actions and in all available fora. Under the parties' agreement, in the event of

26
Id. at 362-364.
27
Id at 362-363. Emphasis omitted.
28
Id. at 365-367.
29
Id. at 366.
30
Id. at 365.
31
Id. at 382.
32
G.R. No. 209098, November 14, 2016, 808 SCRA 575.
33
6. That I have no further claims whatsoever in any theory of law against the Owners of MV
"NIKOMARIN" because of the payment made to me. That I certify and warrant that I will not file any
complaint or prosecute any suit or action in the Philippines, Panama, Japan or any other country against the
shipowners and/or the released parties herein after receiving the payment >° /6,000.00 or its peso
oq"ivalont xx x. xx x (/d. at 583-584, 589. Emphasis and citation omitted./
1
 Decision 5 G.R. No. 191902

a reversal of the NLRC ruling, Hernandez not only committed to return what
he received, he also waived his right to judicial recourse, thereby leaving him
with the proverbial empty bag. Thus, We ruled in Hernandez that this kind of
agreement is unfair and against public policy. 34 Accordingly, We held that
such conditional payment of the seafarer's claim should be treated as a
"voluntary settlement" in full satisfaction of the NLRC's judgment-which
consequently rendered the employer's petition before the CA moot and
academic. 35

Here, We find that the terms of the parties' Conditional Satisfaction of

Judgment and the Affidavit executed by petitioner are worded similarly with
the Conditional Satisfaction of Judgment and the Affidavit in Hernandez:

CONDITIONAL SATISFACTION OF JUDGMENT Xx X

1. That complainant MARINO B. DAANG received the

sum of TWO MILLION NINE HUNDRED EIGHTY-
FIVE THOUSAND ONE HUNDRED TWENTY-NINE
PESOS (PHP2,985,129.00), as conditional payment of the
judgment award of the Labor Arbiter in its Decision dated
27 June 2008 which was affirmed by the Honorable
Commission (Sixth Division) in its Resolutions dated 20
October 2008 and 28 November 2008 of the National Labor
Relations Commission. That payment is hereby made to
complainant only to prevent imminent execution that the
NLRC and the complainant are undertaking.
xxxx
5. That this Conditional Satisfaction of Judgment is
without prejudice to herein respondents' Petition for
Certiorari pending with the Court of Appeals docketed as
CA GR SP No. 107561 entitled "Skippers United Pacific
Inc. and Commercial S.A. vs. National Labor Relations
Commission {Third Division) and Marino B. Daang" and
this Conditional Satisfaction of Judgment is being made only
to prevent imminent execution being undertaken by the
NLRC and the complainant. 36 (Emphasis in the original.)

AFFIDAVIT

xxxx
5. That I understand that in case of reversal and/or
modification of the Decision dated 27 June 2008 of the
Labor Arbiter and the Resolutions dated 20 October
2008 and 28 November 2008 of the NLRC (Third
Division), by the Court of Appeals and/or the Supreme
Court, I shall return whatever is due and owing to
shipowners/manning agents without need of further
demand;
6. That I understand that the payment of the judgment
award of US$63,000.00 or its peso equivalent of

34
35
36
Id. at 589.
Id. at 593. l
Rollo, pp. 362-363.

/
 Decision 6 G.R. No. 191902

PHP2,985,129.00 includes all my past, present and future

expenses and claims, and all kinds of benefits due to me
under the POEA employment contract and all collective
bargaining agreements and all labor laws and regulations,
civil law, or any other law whatsoever and all damages,
pains, and sufferings in connection with my claim;
7. That I have no further claims whatsoever in any theory
of law against the Owners of "MERRY FISHER" because
of the payment made to me. That I certify and warrant that I
will not file any complaint or prosecute any suit or action in
the Philippines, Panama, Japan or any other country against
the shipowners and/or the released parties herein after
receiving the payment of US$63,000.00 or its peso
equivalent of PHP2,985,129.00[.]3 7 (Emphasis in the
original.)

In a nutshell, the documents above enabled respondents to prevent the

execution of the NLRC Decision, maintain their petition before the CA, and,
in the event of an unfavorable outcome, seek an appeal before Us. Daang, on
the other hand, would not only be obliged to return all settlement money he
received in the event that the CA reverses the NLRC, by his waiver of his
claims and right to prosecute any further action, he also gave up any legal
recourse which would otherwise have been available to him. Clearly, Daang
is on the losing end. The terms of the Conditional Satisfaction of Judgment
and the Affidavit, not unlike those considered by this Court in Hernandez, are
highly unfair and prejudicial against him.

Applying Hernandez, We find respondents to be in bad faith and should

therefore bear the consequence of their actions-the conditional payment of
the judgment award to Daang will be treated as a voluntary settlement in full
satisfaction of the NLRC's judgment. With the judgment award satisfied as of
March I 0, 2009-when the parties signed and filed the Conditional
Satisfaction of Judgment with the NLRC, respondents' petition before the CA
became moot and academic.

We reject respondents' contention that the Conditional Satisfaction of

Judgment is their only protection against the execution proceedings before the
NLRC. Respondents are not compelled to immediately pay the judgment
award. In fact, they had already filed with the NLRC an appeal bond intended
as an assurance to Daang that he would receive the money judgment upon
dismissal of respondents' appeal. 38

With this, We see no further need to resolve the other issues raised in
the petition.

WHEREFORE, premises considered, petitioner Marino B. Daang's

urgent manifestation and motion to dismiss is GRANTED. The October 15,
37
Id at 365-366.

C
'" See Camr P ~ , Sh;p Management, Inc. v. Madju.,, G.R. No. 186158, Novembec 22, 2010, 635
SCRA 619,627
Decision 7 G.R. No. 191902

2009 Decision and March 30,2010 Resolution of the Court of Appeals in CA-
G.R. SP No. 107561 are hereby REVERSED and SET ASIDE. The special
civil action filed by respondents before the Court of Appeals has been
rendered MOOT and ACADEMIC as a consequence of the complete
satisfaction of Marino B. Daang's claims.

SO ORDERED.

FRAN~EZA
Associate Justice
Acting Working Chairperson

WE CONCUR:

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby

certified 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.