CASE DIGEST: Philippine Hammonia Ship Agency v. Dumadag

G.R. No. 194362 :June 26, 2013




On February 12, 2007, the Philippine Hammonia Ship Agency, Inc. (now known as BSM Crew Service Centre Philippines, Inc.), in behalf of its principal, Dorchester Marine Ltd. (petitioners), hired respondent Eulogio V. Dumadag for four months as Able Bodied Seaman for the vesselAl Hamra, pursuant to the Philippine Overseas Employment Administration Standard Employment Contract (POEA-SEC). Dumadag was to receive a monthly salary of US$558.00, plus other benefits. Before he boarded the vesselAl Hamra, Dumadag underwent a pre-employment medical examination and was declared fit to work.

Sometime in May 2007, while on board the vessel, Dumadag complained of difficulty in sleeping and changes in his body temperature. On May 18, 2007, a physician at the Honmoku Hospital in Yokohama, Japan examined him. He also underwent ultra-sonographic, blood and ECG examinations and was found to be normal and "fit for duty," but was advised to have bed rest for two to three days. Thereafter, Dumadag complained of muscle stiffness in his entire body. On June 20, 2007, he was again subjected to blood tests, urinalysis and uric laboratory procedures in Japan. He was found "fit for light duty for 5-7 days."

On July 19, 2007, his contract completed, Dumadag returned to the Philippines. Allegedly, upon his request, the agency referred him to the company-designated physician, Dr. Wilanie Romero-Dacanay of the Metropolitan Medical Center(MMC), for medical examination. At the MMC, Dumadag underwent baseline laboratory tests revealing "normal complete blood count, creatinine, sodium, potassium, calcium and elevated creatinine kinase." He was also subjected to thyroid function tests that likewise showed normal results. Further, he underwent psychological tests and treatment. He was assessed on August 6, 2007 to have "Adjustment Disorder with Mixed Anxiety and Depressed Mood," "Hypercreatinine Phospokinase," and "right Carpal Tunnel Syndrome."He was subsequently declared "fit to resume sea duties as of November 6, 2007" by the company-designated specialist. The petitioners shouldered Dumadags medical expenses, professional fees and physical therapy sessions with the company-designated physician.

Dumadag was not rehired by the petitioners. He claimed that he applied for employment with other manning agencies, but was unsuccessful.

On December 5, 2007, Dumadag consulted Dr. Frederic F. Diyco, an orthopedic surgeon at the Philippine Orthopedic Center, who certified that he was suffering from Carpal Tunnel Syndrome of the right wrist. Dr. Diyco gave him a temporary partial disability assessment.On January 8, 2008, Dumadag saw Dr. Ma. Ciedelle M.N. Paez-Rogacion, specializing in family medicine and psychiatry. Dr. Rogacion evaluated him to be suffering from minor depression.

On March 8, 2008, Dumadag again sought medical advice from Dr. Ariel C. Domingo, a family health and acupuncture physician. Dr. Domingo found him to be still suffering from adjustment disorder, with mixed anxiety and in a depressed mood, hypercreatinine phospokinase and carpal tunnel syndrome. He assessed Dumadag to be "unfit to work."Further, or on April 13, 2008, Dumadag consulted Dr. Nicanor F. Escutin, an orthopedic surgeon, who certified that he had generalized muscular weakness and that "he cannot perform nor function fully all his previous activities."Dr. Escutin declared Dumadag unfit for sea duty in whatever capacity and gave him a permanent total disability assessment.

After his consultations with the four physicians, Dumadag filed a claim for permanent total disability benefits, reimbursement of medical expenses, sickness allowance and attorneys fees against the petitioners.

In a decision dated February 27, 2009,Labor Arbiter (LA) Eduardo J. Carpio found merit in the complaint and ordered the petitioners, jointly and severally, to pay Dumadag US$82,500.00 in permanent total disability benefits, plus 10% attorneys fees. LA Carpio declared:

The assessment of the company physician is highly doubtful in the face of the continuing inability of complainant to work for more than a year already, coupled with the fact that his own designated physicians have found that complainant was far from being "fit" to return to his work as Able-bodied seaman. Despite the company doctors claim, complainant was found by his physicians to be still suffering from depression and had muscle damage on his upper and lower extremities, resulting in pain in his right hand and generalized muscle weakness, for which reason he was declared unfit for sea duty. In contrast to the said findings, the company doctor failed to substantiate her conclusion that complainant is "fit to work."

LA Carpio noted that the petitioners suddenly stopped rehiring Dumadag despite the fact that they had continuously employed him for at least fifteen (15) times for the last 15 years. He viewed this as the most convincing proof that Dumadags inability to work was due to the illness he contracted in the course of his last employment.

On appeal by the petitioners, the National Labor Relations Commission (NLRC), in a resolution dated July 30, 2009, affirmed LA Carpios decision.On September 28, 2009, it denied the petitioners motion for reconsideration.The petitioners then elevated the case to the CA through a petition forcertiorariunder Rule 65 of the Rules of Court, contending that the NLRC gravely abused its discretion in disregarding the "fit-to-work" assessment of the company-designated physician.

The CA denied the petition in its decision of August 31, 2010.It upheld the NLRC rulingsin toto. Itfound no grave abuse of discretionon the part of the NLRC when it sustained LA Carpios award of permanent total disability benefits to Dumadag on the basis of the findings of the physicians of his choice. Also, as LA Carpio and the NLRC did, it noted that Dumadag was not rehired by the petitioners after he was declared fit to work by the company-designated physician and neither was he able to secure employment through other manning agencies.

The petitioners moved for reconsideration, but the CA denied the motion in its resolution of November 2, 2010. Hence, the petition.

ISSUE: Whether or not Dumadag is entitled to permanent total disability benefits based solely on the findings of his personal physicians?

HELD: Court of Appeals decision set aside.


Dumadag asks that the petition be dismissed outright for raising only questions of fact and not of law, in violation of the rules.

We findDumadags position untenable. For a question to be one of law, it must not involve an examination of the probative value of the evidence presented by the parties or any of them. Otherwise stated, there is a question of law when the issue arises as to what the law is on a certain state of facts; there is a question of fact when the issue involves the truth or falsehood of alleged facts.In the present case, the controversy arises not from the findings made by Dumadags physicians which contradict the fit-to-work certification of the company-designated physician; it arises from the application of the law and jurisprudence on the conflicting assessments of the two sets of physicians. We thus find no procedural obstacle in our review of the case.


We are confronted, once again, with the question of whose disability assessment should prevail in a maritime disability claim the fit-to-work assessment of the company-designated physician or the contrary opinion of the seafarers chosen physicians that he is no longer fit to work. A related question immediately follows how are the conflicting assessments to be resolved?

InVergara v. Hammonia Maritime Services, Inc.,the Court said: "the Department of Labor and Employment (DOLE), through the POEA, has simplified the determination of liability for work-related death, illness or injury in the case of Filipino seamen working on foreign ocean-going vessels. Every seaman and the vessel owner (directly or represented by a local manning agency) are required to execute the POEA Standard Employment Contract as a conditionsine qua nonprior to the deployment for overseas work. The POEA Standard Employment Contract is supplemented by the CBA between the owner of the vessel and the covered seaman."

In this case, Dumadag and the petitioners entered into a contract in accordance with the POEA-SEC. They also had a CBA. Dumadags claim for disability compensation could have been resolved bilaterally had the parties observed the procedure laid down in the POEA-SEC and in their CBA.

Section 20(B)(3) of the POEA-SEC provides:

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.

If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the Employer and the seafarer. The third doctors decision shall be final and binding on both parties.

On the other hand, the CBA between the Associated Marine Officers and Seamens Union of the Philippines and Dumadags employer, the Dorchester Marine Ltd.,states:

The degree of disability which the employer, subject to this Agreement, is liable to pay shall be determined by a doctor appointed by the Employer.If a doctor appointed by the seafarer and his Union disagrees with the assessment, a third doctor may be agreed jointly between the Employer and the Seafarer and his Union, and the third doctors decision shall be final and binding on both parties.


The POEA-SEC and the CBA govern the employment relationship between Dumadag and the petitioners. The two instruments are the law between them. They are bound by their terms and conditions, particularly in relation to this case, the mechanism prescribed to determine liability for a disability benefits claim. InMagsaysay Maritime Corp. v. Velasquez,the Court said: "The POEA Contract, of which the parties are both signatories,is the law between them and as such, its provisions bind both of them." Dumadag, however, pursued his claim without observing the laid-out procedure. He consulted physicians of his choice regarding his disability after Dr. Dacanay, the company-designated physician, issued her fit-to-work certification for him. There is nothing inherently wrong with the consultations as the POEA-SEC and the CBA allow him to seek a second opinion. The problem only arose when he pre-empted the mandated procedure by filing a complaint for permanent disability compensation on the strength of his chosen physicians opinions, without referring the conflicting opinions to a third doctor for final determination.


The filing of the complaint constituted a breach of Dumadags contractual obligation to have the conflicting assessments of his disability referred to a third doctor for a binding opinion. The petitioners could not have possibly caused the non-referral to a third doctor because they were not aware that Dumadag secured separate independent opinions regarding his disability. Thus, the complaint should have been dismissed, for without a binding third opinion, the fit-to-work certification of the company-designated physician stands, pursuant to the POEA-SEC and the CBA. As it turned out, however, the LA and the NLRC relied on the assessments of Dumadags physicians that he was unfit for sea duty, and awarded him permanent total disability benefits.

We find the rulings of the labor authorities seriously flawed as they were renderedin total disregard of the law between the parties the POEA-SEC and the CBA on the prescribed procedure for the determination of disability compensation claims, particularly with respect to the resolution of conflicting disability assessments of the company-designated physician and Dumadags physicians, without saying why it was disregarded or ignored; it was as if the POEA-SEC and the CBA did not exist.This is grave abuse of discretion, considering that, as labor dispute adjudicators, the LA and the NLRC are expected to uphold the law.For affirming the labor tribunals, the CA committed the same jurisdictional error.

As we earlier stressed, Dumadag failed to comply with the requirement under the POEA-SEC and the CBA to have the conflicting assessments of his disability determined by a third doctoras was his duty.He offered no reason that could have prevented him from following the procedure. Before he filed his complaint, or between July 19, 2007, when he came homeupon completion of his contract, and November 6, 2007, when Dr. Dacanay declared him fit to work, he had been under examination and treatment (with the necessary medical procedures) by the company specialists. All the while, the petitioners shouldered his medical expenses, professional fees and costs of his therapy sessions. In short, the petitioners attended to his health condition despite the expiration of his contract. We, therefore, find it puzzling why Dumadag did not bring to the petitioners attention the contrary opinions of his doctors and suggest that they seek a third opinion.

Whatever his reasons might have been, Dumadags disregard of the conflict-resolution procedure under the POEA-SEC and the CBA cannot and should not be tolerated and allowed to stand, lest it encourage a similar defiance. We stress in this respect that we have yet to come across a case where the parties referred conflicting assessments of a seafarers disability to a third doctor since the procedure was introduced by the POEA-SEC in 2000 whether the Courts ruling in a particular case upheld the assessment of the company-designated physician, as inMagsaysay Maritime Corporation v. National Labor Relations Commission (Second Division)and similar other cases, or sustained the opinion of the seafarers chosen physician as inHFS Philippines, Inc. v. Pilar,cited by the CA, and other cases similarly resolved. The third-doctor-referral provision of the POEA-SEC, it appears to us, has been honored more in the breach than in the compliance. This is unfortunate considering that the provision is intended to settle disability claims voluntarily at the parties level where the claims can be resolved more speedily than if they were brought to court.

Given the circumstances under which Dumadag pursued his claim, especially the fact that he caused the non-referral to a third doctor, Dr. Dacanays fit-to-work certification must be upheld. InSantiago v. Pacbasin Ship Management, Inc.,the Court declared: "[t]here was no agreement on a third doctor who shall examine him anew and whose finding shall be final and binding. This Court is left without choice but to uphold the certification made by Dr. Lim with respect to Santiagos disability."

On a different plane, Dumadag cannot insist that the "favorable" reports of his physicians be chosen over the certification of the company-designated physician, especially if we were to consider that the physicians he consulted examined him for only a day (or shorter) on four different dates between December 5, 2007 and April 13, 2008. Moreover, we point out that they merely relied on the same medical history, diagnoses and analyses provided by the company-designated specialists. Under the circumstances, we cannot simply say that their findings are more reliable than the conclusions of the company-designated physicians.

Finally, we find the pronouncement that Dumadags non-hiring by the petitioners as the most convincing proof of his illness or disability without basis. There is no evidence on record showing that he sought re-employment with the petitioners or that it was a matter of course for the petitioners to re-hire him after the expiration of his contract. Neither is there evidence on Dumadags claim that he applied with other manning agencies, but was turned down due to his illness.