ALL OCEANS MARITIME AGENCY, INC., AND GOLDEN PEAK MARITIME AGENCY, LTD., PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, AND…

All Oceans Maritime Agency versus National Labor Relations Commission

The Case

This is a petition for certiorari brought by All Oceans Maritime Agency, Incorporated and Golden Peak Maritime Agency, Limited against the National Labor Relations Commission, the Philippine Overseas Employment Administration, and Regulo Bongoyan. The petitioners ask the Supreme Court to nullify the ruling of the National Labor Relations Commission, which had affirmed an award of unpaid salaries and benefits in favor of Bongoyan, the shipmaster they had engaged for their vessel. The case matters because it shows how the Court treats a shipmaster's handling of crew provision funds, and how it applies the rules on compensation, or set-off, to mutual money claims between an employer and a seafarer.

Procedural History

Bongoyan filed a complaint with the Philippine Overseas Employment Administration, seeking recovery of unpaid salaries, overtime pay, annual leave pay, and home leave pay. The Philippine Overseas Employment Administration ruled in his favor, declaring that although he had made unauthorized drawings, the agency was estopped from holding him liable because it had acquiesced in those drawings. All Oceans appealed to the National Labor Relations Commission. The Commission affirmed the award, but on a different ground: it declined to find estoppel, yet held that Bongoyan could not be made accountable because there was doubt as to his actual liability, and it refused to set off the conflicting claims, invoking Article 1279 of the Civil Code. All Oceans then came to the Supreme Court on a petition for certiorari, claiming grave abuse of discretion.

Facts

All Oceans engaged Regulo Bongoyan as master of the vessel Sarpindo Pribumi for twelve months at a monthly salary of 1,430 dollars. He took command on November 4, 1980, and disembarked on December 8, 1981, after serving out his term. As shipmaster, he provided the crew with monthly food provisions, drawing funds each month from the agency's accounts in various ports and submitting a monthly statement of account to the Manila office.

When Bongoyan took over, the provisions for November 1980 had already been consumed by the preceding master. To feed the crew that month, he applied the funds allotted for December, then drew against January to cover December, and so on. This advance-payment pattern continued until March 1981. In April 1981 he withdrew funds for May and June but made no provision payment for June. In July he mislabeled a payment as for August, then corrected it. At the end of his service, his report showed an advance payment for January 1982, with a note explaining the one-month shortage he had inherited.

All Oceans claimed misappropriation of 6,107.59 dollars, alleging a double payment for June 1981 and that Bongoyan collected the whole December 1981 allocation though he served only until December 8. Bongoyan did not deny the excess drawings for December. He had turned over provisions worth 523.86 dollars to his successor and made two payments to All Oceans totaling 2,264.70 dollars. Meanwhile, the finding was that All Oceans still owed him 3,749.65 dollars in unpaid overtime, annual leave pay, home leave pay, and net salary.

Issues

• Whether or not the National Labor Relations Commission gravely abused its discretion in refusing to set off Bongoyan's liability for excess drawings against the amounts due him from All Oceans.
• Whether or not Bongoyan may be held accountable for the alleged double payment of crew provisions for June 1981.
• Whether or not Bongoyan is liable to All Oceans for the excess drawings corresponding to December 9 to 31, 1981.

Applicable Provisions

Article 1279 of the Civil Code, which the Commission invoked in refusing the set-off, provides:

In order that compensation may be proper, it is necessary: (1) That each one of the obligors be bound principally, and that he be at the same time a principal creditor of the other; (2) That both debts consist in a sum of money, or if the things due are consumable, they be of the same kind, and also of the same quality if the latter has been agreed upon; (3) That the two debts be due; (4) That they be liquidated and demandable; (5) That over neither of them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor.

This provision governs whether the mutual claims of All Oceans and Bongoyan may be extinguished by compensation, which turns on whether the debts are due, liquidated, and demandable.

Ruling

The Court held that the Commission erred in refusing the set-off. The accountant's own analysis conceded that Bongoyan could be charged with only one month of overpaid provisions, and that analysis failed to account for the fact that no drawings were made for November 1980. Since it was indisputably All Oceans' responsibility to defray the cost of the November provisions, and it was never Bongoyan's obligation to shoulder that cost personally, he could not be made answerable for it. Bongoyan commanded the vessel for exactly fourteen months, and his monthly drawings corresponded exactly to fourteen.

On the December 1981 excess, the Court held Bongoyan liable. It was his duty to account for the funds for the entire month, including the excess corresponding to December 9 to 31, claimed at 2,506.31 dollars. From this the Court deducted the 2,264.70 dollars he had paid, leaving 241.61 dollars owing from Bongoyan to All Oceans.

Against the 3,749.65 dollars still due Bongoyan, the Court set off the 241.61 dollars, leaving 3,508.04 dollars payable to him as of March 2, 1982, when the amount became determinate upon his last payment. The Court thus treated the debts as liquidated and demandable, contrary to the Commission's premise.

Doctrine

A shipmaster is not personally liable for crew provision costs that were the employer's responsibility to defray, and he cannot be charged for a shortage he inherited when he assumed command. Where an employer and a seafarer hold mutual money claims that are due, liquidated, and demandable, compensation or set-off under Article 1279 of the Civil Code properly extinguishes them to the extent of the concurrent amount. The employer bears the burden of proving misappropriation with precision; an accounting that ignores an inherited shortage is insufficient.

Disposition

The Court affirmed the decision of the National Labor Relations Commission with modification, fixing the petitioners' liability to Bongoyan at the peso equivalent of 3,508.04 dollars at the time of payment, with legal interest from March 2, 1982, and costs against the petitioners.

Remember This

Memorize this line: mutual money claims that are due and liquidated are extinguished by compensation, so the employer's proven claim must be set off against the seafarer's award. Examiners use this case to test Article 1279 of the Civil Code on compensation and the shipmaster's accountability for crew provision funds.