Westminster Seafarer Management Philippines v. Raz
REITERATIONFacts
The Antecedents: Arnulfo C. Raz, a seafarer employed as a Fitter, sustained a shoulder injury while lifting a heavy cylinder head on May 15, 2015. He was repatriated due to unfitness for work and subsequently diagnosed with a superior labral tear and other shoulder conditions. After surgery and physical therapy, the company-designated physician assessed him with a Grade 9 disability, indicating ankylosis of one shoulder. However, a second opinion from another physician declared him permanently unfit for sea duties. This divergence in medical opinions led to a dispute over disability benefits. Procedural History: Raz filed a complaint against Westminster Seafarer Management Philippines, Inc. (Westminster) for total permanent disability benefits, medical reimbursement, damages, and attorney's fees. The National Conciliation and Mediation Board (NCMB) ruled in favor of Raz, ordering Westminster to pay US$129,212.00 in total and permanent disability benefits, US$10,000.00 in moral damages, and attorney's fees. Westminster's motion for reconsideration was denied. On appeal, the Court of Appeals (CA) modified the NCMB's decision, reducing the disability benefit to US$25,313.00 (Grade 9 disability) and awarding attorney's fees equivalent to 10% of the award, plus legal interest. Both parties' motions for reconsideration were denied by the CA. The Petition: Westminster filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to modify the CA's decision by deleting the award of 6% legal interest and attorney's fees. Westminster argued that it had already satisfied the judgment award, rendering the imposition of legal interest moot, and that attorney's fees were unwarranted as there was no bad faith on its part. Raz, in his comment, maintained his entitlement to total and permanent disability benefits and argued for the validity of the attorney's fees and damages due to Westminster's alleged bad faith.
Issue(s)
Whether the Court of Appeals erred in imposing 6% legal interest on the award of partial disability benefits to respondent. Whether the Court of Appeals erred in awarding attorney's fees in favor of respondent.
Ruling
The petition is DENIED. The Decision dated May 6, 2019 and the Resolution dated September 12, 2019 of the Court of Appeals in CA-G.R. SP No. 152165 are AFFIRMED.
Ratio Decidendi
On Issue 1: The Court applied the rule in Nacar v. Gallery Frames that "when the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest shall be 6% per annum from such finality until its satisfaction, this interim period being deemed equivalent to a forbearance of credit." The Supreme Court found that petitioner alleged satisfaction of the NCMB judgment but failed to attach documentary proof of payment as required under Section 4, Rule 45, Rules of Court. The Court emphasized that the petition must be accompanied by the material portions of the record and that noncompliance with Rule 45's documentary requirements is sufficient ground for dismissal or denial of relief concerning factual claims dependent on those documents. Because petitioner presented only bare allegations of payment without supporting documents, the Court declined to modify the CA's imposition of legal interest. The Court therefore affirmed the CA's application of the 6% legal interest rule, concluding that there was no competent basis on record to extinguish the interest or to alter the CA's dispositive award. The ruling reinforces that claims concerning execution and payments must be proven by competent documentary evidence in Rule 45 petitions, and absent such proof the Court will not speculate in favor of the petitioner. On Issue 2: The Court held that respondent was entitled to attorney's fees under Article 2208(8) of the Civil Code because he was forced to litigate to protect his rights and interests. The NCMB and the CA had previously determined that attorney's fees equivalent to 10% of the monetary award were appropriate, and the Supreme Court agreed with that assessment. The Court found no factual or legal basis to disturb the award of attorney's fees, noting petitioner's failure to show bad faith was not determinative where the employee had to pursue remedies to obtain the benefits due under the Collective Bargaining Agreement and administrative decision. The Court thus affirmed the award of reasonable attorney's fees in favor of respondent and upheld the 10% quantum as consistent with the findings below. By doing so, the Court applied settled principles on attorney's fees under the Civil Code and deferred to the proportional award fashioned by the NCMB and the CA in light of the circumstances presented.
Main Doctrine
When a judgment awarding a sum of money becomes final and executory, legal interest runs at 6% per annum from such finality until satisfaction; attorney's fees may be awarded pursuant to Article 2208(8) of the Civil Code where a party is forced to litigate to protect rights, and failure to attach material documents required by Rule 45 may lead to denial of relief predicated on such undocumented factual claims.