Case Digest: Panganiban v. Tara Trading & Shineline

G.R. No. 187116: October 18, 2010




In November 2005, petitioner was hired by respondent Tara Trading Shipmanagement, Inc.(Tara),in behalf of its foreign principal, respondent Shinline SDN BHD(Shinline)to work as an Oiler on board MV Thailine 5 with a monthly salary of US$409.00.

Sometime in April 2006, petitioner began exhibiting signs of mental instability. He was repatriated onMay 24, 2006for further medical evaluation and management.

Petitioner was referred by respondents to the Metropolitan Medical Centerwhere he was diagnosed to be suffering from brief psychotic disorder.

Despite his supposed total and permanent disability and despite repeated demands for payment of disability compensation, respondents allegedly failed and refused to comply with their contractual obligations.

Hence, petitioner filed a Complaint against respondents praying for the payment of US$60,000.00 as total and permanent disability benefits, reimbursement of medical and hospital expenses, moral and exemplary damages, and attorneys fees equivalent to 10% of total claims.

Respondents, on the other hand, maintained that petitioner requested for an early repatriation and arrived at the point of hire on May 24, 2006; that while on board the vessel, he confided to a co-worker, Henry Santos, that his eating and sleeping disorders were due to some family problems; that Capt. Zhao, the master of the vessel, even asked him if he wanted to see a doctor; that he initially declined; that on May 22, 2006, petitioner approached Capt. Zhao and requested for a vacation and early repatriation; that the said request was granted; that upon arrival, petitioner was subjected to a thorough psychiatric evaluation; and that after a series of check-ups, it was concluded that his illness did not appear to be work-related.Respondents argued that petitioner was not entitled to full and permanent disability benefits under the Philippine Overseas Employment Administration Standard Employment Contract(POEA SEC)because there was no declaration from the company-designated physician that he was permanently and totally disabled and that the claim for damages was without basis as no bad faith can be attributed to them.

On September 17, 2007, the LA ruled in favor of the petitioner.

Respondents appealed to the NLRC. OnMarch 25, 2008, theNLRC affirmedthe decision of the LA. The appeal of respondents was dismissed for lack of merit. Respondents filed a motion for reconsideration but it was denied in a resolution datedApril 30, 2008.

Aggrieved, respondents filed a Petition for Certiorari with prayer for the issuance of a writ of preliminary injunction and/or temporary restraining orderwith the CA.

OnOctober 29, 2008, theCAreversedthe decision of the NLRC. Petitioners Motion for Reconsideration was denied by the CA in its Resolution dated March 4, 2009. Hence, this petition.
Whether or not the CA is correct in denying petitioners entitlement to full and total disability benefits amounting to US$60,000.00 and attorneys fees in the amount of US$6,000.00.


It need not be overemphasized that in the absence of substantial evidence, working conditions cannot be accepted to have caused or at least increased the risk of contracting the disease, in this case, brief psychotic disorder. Substantial evidence is more than a mere scintilla. The evidence must be real and substantial, and not merely apparent; for the duty to prove work-causation or work-aggravation imposed by law is real and not merely apparent.

Even in case of death of a seafarer, the grant of benefits in favor of the heirs of the deceased isnotautomatic. As in the case ofRiverav.Wallem Maritime Services, Inc., without a post-medical examination or its equivalent to show that the disease for which the seaman died was contracted during his employment or that his working conditions increased the risk of contracting the ailment, the employer/s cannot be made liable for death compensation.

In fact, inMabuhay Shipping Services, Inc. v. NLRC,the Court held that the death of a seaman even during the term of employment does not automatically give rise to compensation. Several factors must be taken into account such as the circumstances which led to the

death, the provisions of the contract, and the right and obligation of the employer and the seaman with due regard to the provisions of the Constitution on the due process and equal protection clauses.

Petitioner points out that his illness is work-related simply because had it been a land-based employment, petitioner would have easily gone home and attended to the needs of his family.

The Court cannot submit to this argument. This is not the work-related instance contemplated by the provisions of the employment contract in order to be entitled to the benefits. Otherwise, every seaman would automatically be entitled to compensation because the nature of his work is not land-based and the submission of the seaman to the company-designated physician as to the nature of the illness suffered by him would just be an exercise of futility.

The fact is that the petitioner failed to establish, by substantial evidence, that his brief psychotic disorder was caused by the nature of his work as oiler of the company-owned vessel. In fact, he failed to elaborate on the nature of his job or to specify his functions as oiler of respondent company. The Court, therefore, has difficulty in finding any link between his position as oiler and his illness.

The Court cannot give less importance either to the fact that petitioner was a seaman for 10 years serving 10 to 18-month contracts and never did he have any problems with his earlier contracts. The Court can only surmise that the brief psychotic disorder suffered by him was brought about by a family problem. His daughter was sick and, as a seafarer, he could not just decide to go home and be with his family. Even the psychiatric reportprepared by the evaluating private psychiatrist of petitioner shows that the hospitalization of petitioners youngest daughter caused him poor sleep and appetite. Later, he started hearing voices and developed fearfulness.


Although strict rules of evidence are not applicable in claims for compensation and disability benefits, the Court cannot just disregard the provisions of the POEA SEC. Significantly, a seaman is a contractual and not a regular employee. His employment is contractually fixed for a certain period of time. Petitioner and respondents entered into a contract of employment. It was approved by the POEA onOctober 25, 2005and, thus, served as the law between the parties. Undisputedly, Section 20-B of the POEA Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels (POEA-SEC) provides for compensation and benefits for injury or illness suffered by a seafarer. It says that, in order to claim disability benefits under the Standard Employment Contract, it is the company-designated physician who must proclaim that the seaman suffered a permanent disability, whether total or partial, due to either injury or illness, during the term of the latters employment.In German Marine Agencies, Inc. v. NLRC, the Courts discussion on the seafarers claim for disability benefits is enlightening. Thus:

In order to claim disability benefits under the Standard Employment Contract, it is the company-designated physician who must proclaim that the seaman suffered a permanent disability, whether total or partial, due to either injury or illness, during the term of the latters employment. There is no provision requiring accreditation by the POEA of such physician. In fact, aside from their own gratuitous allegations, petitioners are unable to cite a single provision in the said contract in support of their assertions or to offer any credible evidence to substantiate their claim. If accreditation of the company-designated physician was contemplated by the POEA, it would have expressly provided for such a qualification, by specifically using the term accreditation in the Standard Employment Contract, to denote its intention. For instance, under the Labor Code, it is expressly provided that physicians and hospitals providing medical care to an injured or sick employee covered by the Social Security System or the Government Service Insurance System must be accredited by the Employees Compensation Commission. It is a cardinal rule in the interpretation of contracts that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall control.There is no ambiguity in the wording of the Standard Employment Contract the only qualification prescribed for the physician entrusted with the task of assessing the seamans disability is that he be company-designated. When the language of the contract is explicit, as in the case at bar, leaving no doubt as to the intention of the drafters thereof, the courts may not read into it any other intention that would contradict its plain import.

In this case, the findings of respondents designated physician that petitioner has been suffering from brief psychotic disorder and that it is not work-related must be respected.

The Court commiserates with the petitioner, but absent substantial evidence from which reasonable basis for the grant of benefits prayed for can be drawn, the Court is left with no choice but to deny his petition, lest an injustice be caused to the employer. Otherwise stated, while it is true that labor contracts are impressed with public interest and the provisions of the POEA SEC must be construed logically and liberally in favor of Filipino seamen in the pursuit of their employment on board ocean-going vessels, still the rule is that justice is in every case for the deserving, to be dispensed with in the light of established facts, the applicable law, and existing jurisprudence.

Lastly, it appears premature at this time to consider petitioners disability as permanent and total because the severity of his ailment has not been established with finality to render him already incapable of performing the work of a seafarer. In fact, the medical expert termed his condition asbriefpsychotic disorder. The Court also takes note, as the CA correctly did, that petitioner did not finish his treatment with the company-designated physician, hence, there is no final evaluationyeton petitioner.

All told, no reversible error was committed by the CA in rendering the assailed Decision and issuing the questioned Resolution.


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