JOSEFINA M. PRINCIPE, PETITIONER, VS. PHILIPPINE-SINGAPORE TRANSPORT SERVICES, INC. AND CHUAN HUP AGENCIES, PTE. LTD., NATIONAL LABOR RELATIONS COMMISSION AND PHILIPPINE OVERSEA…

Once again this Tribunal is faced with the issue of the validity
of the quitclaim executed by the employee’s heir in favor of the employer.

Petitioner is the
widow of the late Abelardo Principe who was then the
Chief Engineer of M/V OSAM Falcon, a commercial vessel of Singaporean registry
owned by Chuan Hup Agencies, Pte.
Ltd. (Chuan Hup for brevity), one
of the private respondents herein, who is the principal of Philippine-Singapore Transport Services, Inc.
(PSTSI), also a private respondent herein.  The contract of employment of
the deceased with private respondent Chuan Hup
provides, among others, that Principe
would receive Singapore $2,800.00 a month to commence on September
7, 1982, medical
benefits and insurance coverage through group hospitalization and surgical
insurance and group and personal accident insurance for a capital sum of US$75,000.00. 
It also provides that the laws of Singapore shall apply in cases of
disputes arising out of the said appointment and that said disputes are to be resolved by the courts of the Republic of Singapore.^[1]

On September 15, 1982,
while Principe was on duty in Malintoc
Field, Palawan, Philippines,
he suddenly contracted a serious illness which eventually resulted to his death.^[2]

On July 5, 1983,
petitioner filed a complaint^[3]
against PSTSI with the Worker’s Assistance and Adjudication Office of the
Philippine Overseas Employment Administration (POEA), seeking the payment of
death compensation benefits and other benefits accruing to her deceased
husband.  While the aforesaid case was
pending, the parties entered into a compromise agreement.  On December
22, 1983, petitioner executed
a release and quitclaim in favor of PSTSI in consideration of the sum of Seven
Thousand Pesos (P7,000.00) together with hospital,
burial and other incidental expenses previously disbursed by PSTSI in
favor of petitioner’s deceased husband.^[4]
Consequently, Atty. Wellington Lachica, counsel for
petitioner, with the latter’s conformity, filed a motion to dismiss the case
with prejudice against PSTSI and without prejudice as against Chuan Hup.^[5]

On the basis of the compromise agreement and the motion to
dismiss dated November 23, 1983, the POEA issued
an order dated December 27, 1983,
dismissing petitioner’s complaint with prejudice against PSTSI.

On April 21, 1986,
petitioner filed with the POEA another claim for death benefits against PSTSI,
this time including Chuan Hup.  The new case was docketed as POEA Case No.
(L) 86-04-328.  In the decision dated January 27, 1987, the POEA dismissed
the complaint on the ground that there exist identity of parties, subject
matter and cause of action between the previous case,
POEA Case No. L-635-83 and the new case, and that the present
case is barred by prior judgment based on a compromise agreement in the
previous case.^[6]

Petitioner appealed to the National Labor Relations Commission
(NLRC).  In a resolution dated September 25, 1987, the NLRC
dismissed the appeal for lack of merit.^[7]

Hence, the present petition.

It is the position of the petitioner that the release and
quitclaim that she signed in favor of private respondent PSTSI is null and void
on the ground that the consideration given
in exchange thereof in the amount of P7,000.00 is extremely low and unconscionable.  Petitioner added that she was merely misled
to sign the quitclaim due to the
assurance given by PSTSI that it will help her recover the death compensation
and insurance proceeds due her deceased husband.  She argued that even on the assumption that
the quitclaim is valid, the release should benefit
PSTSI alone and should not include Chuan Hup as the
quitclaim was executed only in favor of PSTSI. 
Further she contended that notwithstanding the quitclaim executed in
favor of PSTSI, the latter may still be held liable since it is an agent of
Chuan Hup here in the Philippines.^[8]

The Solicitor General supports petitioner’s view stating that the
principle of res judicata
is inapplicable to the case at bar since petitioner and PSTSI agreed that the
dismissal of the suit against the latter is without prejudice insofar as the
principal Chuan Hup is concerned; that the quitclaim
is null and void as the consideration given is unconscionably low as it is not
even equal to one percent (1%) of petitioner’s claim; and that the quitclaim is
inequitable and incongrous to the declared policy of
the State to afford protection to labor, citing Section 3, Article XIII of the
1987 Constitution.^[9]

We rule for the petitioner.

The release and quitclaim in question reads as follows:

“JOSEFINA M. PRINCIPE, of legal age, widow, and resident at
1287-E, G. Tuazon St., Sampaloc, Manila

in  favor
of

PHILIPPINE-SINGAPORE TRANSPORT SERVICES, INC., a domestic
corporation domiciled and having its principal place of business at 205 Martinez Bldg., Dasmariñas, Manila

WITNESSETH, that:

WHEREAS, on July 5, 1983,
Josefina M. Principe filed a complaint for death benefits against
Philippine-Singapore Transport Services, Inc.
as a shipping agency of Chuan Hup
Agencies Pte. Ltd. of the Republic
of Singapore for the death of her
husband, Engr. Abelardo D.
Principe, on September 15, 1982
in Matinloc Field, Offshore Palawan,
Philippines while in the course of his employment as Chief Engineer of ‘Osam Falcon’ in
POEA Case No. (L) 635-83 of the
Philippine Overseas Employment Administration, entitled ‘Josefina M. Principe
vs. Philippine-Singapore Transport Services, Inc.;’

WHEREAS, the parties have agreed to settle the above-entitled case amicably.

NOW, THEREFORE, for and in consideration of the sum of SEVEN THOUSAND
PESOS (P7,000.00), Philippine currency and of the hospital, burial and other
incidental expenses previously disbursed by Philippine-Singapore Transport
Services, Inc., receipt of which in full is hereby acknowledged to her full and
complete satisfaction, JOSEFINA M.
PRINCIPE have (sic) released and discharged, as she hereby releases and
discharges, Philippine-Singapore Transport Services, Inc., its directors, officers, employees, principals and agents from any and
all claims, actions, obligations and liabilities which she have or might have
against Philippine-Singapore Transport Services, Inc. in connection with the
death of her husband Abelardo D. Principe on
September 15, 1982 in Matinloc Field, Offshore Palawan under the circumstances  narrated in the aforementioned case.

That she hereby represents and warrants to Philippine-Singapore Transport Services, Inc. that she is the
surviving spouse legally entitled to claim for damages/support which may arise
from the death of said Abelardo D. Principe, and further, that she hereby manifests that any and all rights or claims which she, as a surviving forced heir of the late Abelardo
D. Principe might have against Philippine-Singapore Transport Services, Inc.,
its directors, employees, principals and agents arising out of or by reason of
the death of said Abelardo D. Principe are hereby
deemed waived and discharged and she have (sic) Philippine-Singapore Transport
Services, Inc., its directors, officers, employees, principals and agents and
whoever may be held liable, completely free and harmless from any claim and/or
liabilities that may arise from the death of said Abelardo
D. Principe (sic).

That in the event that any other person/persons, as surviving
spouse of the deceased Abelardo D. Principe should claim against
Philippine-Singapore Transport Services, Inc. for such damages/support arising from the death of Abelardo
D. Principe, and the claim is held valid, then Josefina M. Principe hereby
undertakes and agrees to reimburse to Philippine-Singapore Transport Services,
Inc. the amounts hereunder received, plus legal interest therein.

That she further states that the foregoing consideration is
voluntarily accepted by her as a full and final compromise, adjustment and
settlement of any and all claims that she may have against Philippine-Singapore
Transport Services, Inc., its directors, officers, employees, principals and
agents; and she hereby irrevocably affirm (sic)
that Philippine-Singapore Transport Services, Inc. has made this settlement
solely to buy peace, avoid litigation and on human consideration, and she
acknowledges that the payment of said consideration is not and shall never be
construed as an admission of liability or obligation by Philippine-Singapore
Transport Services, Inc., its officers, directors, employees, principals and
agents.”^[10]

It is true that a compromise agreement once approved by the court
has the effect of res judicata between the parties and should not be
disturbed except for vices of consent and forgery.  However, settled is the rule that the NLRC
may disregard technical rules of procedure in order to give life to the
constitutional mandate affording protection to labor and to conform to the need
of protecting the working class whose inferiority against the employer has
always been earmarked by disadvantage.^[11]

The Court finds that the compromise agreement entered into by the
petitioner in favor of PSTSI was not intended to totally foreclose her right
over the death benefits of her husband.  First,
the motion to dismiss, filed by petitioner through Atty. Lachica
before the POEA, which cited the compromise agreement entered into by the
parties, clearly and unequivocally reflects the undertaking that the release is
without prejudice as regards private respondent Chuan Hup.  This fact was acknowledged in the decision of
POEA Administrator Tomas D. Achacoso in POEA Case No.
(L) 86-04-328.  It is surprising why both
the POEA and the NLRC failed to consider this aspect in the resolution of the
second complaint filed by the petitioner against PSTSI and Chuan Hup.

 The second complaint was
filed by petitioner to enforce the joint and several liability of PSTSI and
Chuan Hup per joint affidavit of responsibility
executed by said parties in entering into a principal-agent relationship after
PSTSI failed to live up to its commitment to assist petitioner in the recovery
of death compensation.^[12]
This observation is supported by the provisions of the release signed by the
petitioner wherein the parties referred to therein were only the petitioner and
PSTSI.  The release is from any claim
against PSTSI.  Chuan Hup is not a party thereto. 
He cannot be considered covered by the release.

Moreover, the Court sees no reason why petitioner, with the
assistance of a counsel would ever agree to foreclose her right against Chuan Hup over the death benefits of her husband in exchange for
a very measly sum of Seven Thousand Pesos (P7,000.00).  They must have been aware that should she
pursue her case, she was assured of getting at least One Hundred Thousand Eight
Hundred Singapore dollars (S$100,800.00). 
This Court has laid down the rule in similar cases that applying the
Singapore Maritime Laws in case of a seaman’s death, the heirs of the seaman
should receive the equivalent of 36 months wages of the deceased seaman.^[13]

The fact that petitioner received the sum of P7,000.00
only should not be taken to mean as a waiver of her right.  The circumstances she was confronted with
during that time left her with no other alternative but to accept the same as she was in
dire need of money due to the sudden death of her husband.  PSTSI contends that it was precisely
because of her need for cash that petitioner thereby totally waived her right
over the death benefits of her husband.  We do not think so.  What is plausible is
the protestation of petitioner
that PSTSI took advantage of her financial distress and led her to signing the
release and quitclaim without
explaining the consequences to her. 
While it may be true that her counsel assisted her in the process, said
counsel must have been persuaded by the assurance of PSTSI that it shall help
obtain for her the corresponding benefits from Chuan Hup.

Even assuming for the sake of argument that the quitclaim had
foreclosed petitioner’s right over the death benefits of her husband, the fact
that the consideration given in exchange thereof was very much less than the
amount petitioner is claiming renders the quitclaim null and void for being
contrary to public policy.^[14]
The State must be firm in affording protection to labor.  The quitclaim wherein the consideration is
scandalously low and inequitable cannot be an obstacle to petitioner’s pursuing
her legitimate claim.^[15]
Equity dictates that the compromise agreement should be voided in this instance.

Lastly, it must be noted that the first complaint of petitioner
was merely an action against PSTSI whereas in the second complaint Chuan Hup was already included. 
The POEA ruled that the second complaint was merely an afterthought, and
that it was a product of a pre-conceived mind considering the interval of time
from the issuance of the order of dismissal in the previous case and the
institution of the second complaint.  We
do not think so.  On the contrary, the
Court holds that the delay was due to PSTSI’s failure
to make good its promise to assist the petitioner in recovering the death
benefits of her husband.  We see no other
reason thereby.  Hence, even if the
second action was filed beyond the three (3) year reglementary
period as provided by law for such claims. 
We cannot buy PSTSI’s argument that the claim
is already barred.  The blame for the
delay, if any, can only be attributed to PSTSI.

On the other hand, PSTSI argues that it cannot be held
responsible on the ground that the aforesaid affidavit of undertaking with
Chuan Hup is applicable only to those members of the
crew recruited by PSTSI in the Philippines for and in behalf of its principal
Chuan Hup and that since Principe was directly hired
by Chuan Hup. 
PSTSI cannot be held responsible as it has no privity
of contract with those personnel recruited in Singapore.

The argument is untenable. 
This is the first time PSTSI raised this defense when it had all the
chance to do so below.  Moreover, if
PSTSI honestly believed it had no privity of contract
with Principe who was directly recruited by Chuan Hup,
then there is no reason why it entered into a compromise agreement with herein
petitioner.  From the very start, it
should have asked for the dismissal of the case against it on the ground of lack of cause of
action, but it did not do so.  What is
obvious is that Principe was actually recruited by PSTSI and that he signed the
employment contract with the
principal Chuan Hup. 
Thus, private respondents stand jointly and severally liable for the
claim of petitioner.

Anent the argument that the Philippine courts are without
jurisdiction over the subject matter as jurisdiction was, by agreement of the
parties, vested in the courts of the Republic of Singapore, it is well-settled
that an agreement to deprive a court of jurisdiction conferred on it by law is void and of no legal effect.^[16]
In this jurisdiction labor cases, are within the competence of the National
Labor Relations Commission.

With respect to petitioner’s monetary claim, since the parties
agreed that the laws of Singapore shall govern their relationship and that any
dispute arising from the contract shall be resolved by the law of that country,
then the petitioner is entitled to death benefits equivalent to 36 months
salary of her husband.^[17]
As the wage of deceased Abelardo Principe was
S$2,800.00 a month, then petitioner is entitled to a total of S$100,800.00.

WHEREFORE, premises
considered, the petition is granted.  The
resolution of the NLRC dated September 25, 1987 is hereby set aside and another
decision is hereby rendered ordering private respondents PSTSI and Chuan Hup Agencies, Pte. Ltd. to jointly and severally pay petitioner the sum of
S$100,800.00 in its equivalent in Philippine pesos.

This decision is immediately executory.

SO ORDERED.

Narvasa, Acting C.J., (Chairman),
Cruz, Griño-Aquino, and
Medialdea, JJ., concur.

^[1] Pages 16-18, Rollo.

^[2] Pages 19-20, Rollo.

^[3] POEA Case No. L-635-83.

^[4] Pages 21-22, Rollo.

^[5] Page 25, Rollo.

^[6] Pages 24-27, Rollo.

^[7] Pages 29-32, Rollo.

^[8] Pages 9-12, Rollo.

^[9] Pages 91-94, Rollo.

^[10] Pages 21-22, Rollo.

^[11] Cuales vs. National Labor
Relations Commission, 121 SCRA 812 (1983); Araneta
vs. Perez, 7 SCRA 923 (1963); Serrano vs. Miave, 13 SCRA 461 (1965); Vda.
de Corpus vs. Phodaca-Ambrocia,
32 SCRA 279 (1970).

^[12] Pages 67-73, Rollo.

^[13] Norse Management Co. (Pte.) vs.
National Seamen Board, 117 SCRA 486, 491 (1982), citing Vir-Jen
Shipping and Marine Services,
Inc. vs. National Seamen Board, L-41297 (1975).

^[14] Article 6, Civil Code.

^[15] Cuales vs. National Labor Relations
Commission, supra.

^[16] Molina vs. De la Riva, 6 Phil. 12 (1906).

^[17]
Norse Management Co. (Pte.) vs. National
Seamen Board, supra.