Daang v. Skippers United Pacific, Inc.
REITERATIONFacts
The Antecedents: Petitioner Marino B. Daang was hired as chief cook on board MV Merry Fisher. While lifting a 50-kilo bag of flour, he strained his back and was diagnosed with acute lumbago. He was repatriated to the Philippines and examined by the company-designated physician, Dr. Leynard Rubico, who recommended an MRI. The MRI revealed degenerative changes of the lumbar spine with disc protrusion at L4-L5. Although advised to undergo surgery, Daang opted for physiotherapy. Dr. Rubico declared Daang fit to work with advice to refrain from lifting heavy weights. Respondents paid Daang sickness benefits and he executed a Receipt and Release. Daang later sought re-employment but discovered gallbladder polyps. He consulted Dr. Manuel Fidel M. Magtira, who found him partially and permanently disabled with a Grade 6 impediment. Daang demanded disability benefits, which were unheeded, prompting him to file a complaint for total and permanent disability benefits and damages. Procedural History: The Labor Arbiter (LA) ruled in favor of Daang, ordering payment of total and permanent disability benefits and attorney's fees. The National Labor Relations Commission (NLRC) affirmed the LA's ruling, holding that Daang could no longer perform his customary job and that more than 120 days had elapsed without him boarding another vessel. The NLRC also rejected the respondents' argument that Daang waived his right to file a complaint via the Receipt and Release. The Court of Appeals (CA) reversed the NLRC, giving greater weight to Dr. Rubico's fitness-to-work declaration over Dr. Magtira's pronouncement and upholding the Release and Receipt for lack of proof of involuntariness. Daang's motion for reconsideration was denied. The Petition: Pending resolution of the petition for review on certiorari before the Supreme Court, Daang filed an urgent manifestation and motion to dismiss, alleging that the parties jointly executed a "conditional satisfaction of judgment" on March 10, 2009. Under this agreement, Daang received ₱2,985,129.00 as "conditional payment of the judgment award" to prevent imminent execution. The agreement stipulated that the payment was without prejudice to the pending petition for certiorari before the CA, and that Daang would return the amount in case of reversal of the NLRC Decision. Daang also executed an affidavit committing not to file any complaint or prosecute any suit against respondents after receiving the payment.
Issue(s)
Whether the parties' "conditional satisfaction of judgment" and the accompanying affidavit rendered the petition before the Court of Appeals moot and academic. Whether the terms of the "conditional satisfaction of judgment" and the affidavit executed by the petitioner are fair and not prejudicial to the employee.
Ruling
The Supreme Court granted petitioner's motion and considered the case before the CA moot and academic. The Court reversed and set aside the CA's Decision and Resolution, declaring the special civil action filed by respondents before the CA as moot and academic due to the complete satisfaction of Marino B. Daang's claims.
Ratio Decidendi
On the issue of mootness due to conditional satisfaction of judgment: The Court found the facts and circumstances of the case to be on all fours with Hernandez v. Crossworld Marine Services, Inc. In Hernandez, a similar "conditional satisfaction of judgment" and affidavit were executed to prevent imminent execution of the NLRC's ruling. The terms stipulated that the payment was only to avoid execution proceedings, was without prejudice to the employer's appeal, and that the seafarer would return the amount if the ruling was reversed. The seafarer also waived his right to judicial recourse. The Supreme Court in Hernandez ruled that such agreements are unfair and against public policy, treating the conditional payment as a voluntary settlement in full satisfaction of the judgment, thereby rendering the employer's petition before the CA moot and academic. The Court applied this ruling to the present case, finding the terms of the parties' Conditional Satisfaction of Judgment and Affidavit similarly worded and highly unfair and prejudicial against Daang. The documents allowed respondents to prevent execution, maintain their appeal, and seek further recourse, while Daang would be obliged to return the settlement money and would have waived any legal recourse in case of reversal. On the fairness and prejudicial nature of the agreement: The Court reiterated that the terms of the Conditional Satisfaction of Judgment and the Affidavit executed by petitioner were worded similarly to those in Hernandez, which were found to be highly unfair and prejudicial. Specifically, the agreement enabled respondents to prevent the execution of the NLRC Decision, maintain their petition before the CA, and seek further appeal, while Daang would not only be obliged to return all settlement money in case of reversal but also waived his right to judicial recourse. This left Daang on the losing end, deprived of his rights to claim indemnity. The Court concluded that the conditional payment of the judgment award to Daang should be treated as a voluntary settlement in full satisfaction of the NLRC's judgment, rendering respondents' petition before the CA moot and academic as of March 10, 2009, when the Conditional Satisfaction of Judgment was filed. The Court rejected respondents' contention that the agreement was their only protection against execution, noting they had already filed an appeal bond.
Main Doctrine
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.