Malversation of public funds - G.R. Nos. 186659-710

G.R. Nos. 186659-710

"x xx .

Our Ruling

The petition has no merit.

Article 217 of the Revised Penal Code, as amended, provides:

Art. 217. Malversation of public funds or property –Presumption of malversation. - Any public officer who, by reason of the duties of his office, is accountable for public funds or property, shall appropriate the same, or shall take or misappropriate or shall consent, or through abandonment or negligence, shall permit any other person to take such public funds or property, wholly or partially, or shall otherwise be guilty of the misappropriation or malversation of such funds or property, shall suffer:

1. The penalty of prision correccional in its medium and maximum periods, if the amount involved in the misappropriation or malversation does not exceed two hundred pesos.

2. The penalty of prision mayor in its minimum and medium periods, if the amount involved is more than two hundred pesos but does not exceed six thousand pesos.

3. The penalty of prision mayor in its maximum period toreclusion temporal in its minimum period, if the amount involved is more than six thousand pesos but is less than twelve thousand pesos.

4. The penalty of reclusion temporal in its medium and maximum periods, if the amount involved is more than twelve thousand pesos but is less than twenty-two thousand pesos. If the amount exceeds the latter, the penalty shall be reclusion temporal in its maximum period to reclusion perpetua.

In all cases, persons guilty of malversation shall also suffer the penalty of perpetual special disqualification and a fine equal to the amount of the funds malversed or equal to the total value of the property embezzled.

The failure of a public officer to have duly forthcoming any public fund or property with which he is chargeable, upon demandby any duly authorized officer, shall be prima facie evidence that he has put such missing funds or property to personal uses. (Emphasis supplied.)

The following elements are essential for conviction in malversation cases:

1. That the offender is a public officer;

2. That he had custody or control of funds or property by reason of the duties of his office;

3. That those funds or property were public funds or property for which he was accountable; and

4. That he appropriated, took, misappropriated or consented or, through abandonment or negligence, permitted another person to take them.[23]

All the foregoing elements were satisfactorily established by the prosecution in this case. Petitioners have not rebutted the legal presumption that with the Disbursing Officer’s (Haron) failure to account for the illegally withdrawn amounts covered by the subject checks when demanded by the COA, they misappropriated and used the said funds for their personal benefit.

Petitioners however assert that their convictions were based solely on the Sandiganbayan’s conclusion that the vouchers submitted by the defense were illegal or irregular, whereas the informations simply alleged their absence or non-existence. They contend that said court could not have validly assessed the disbursement vouchers as to their legality because that duty pertains to the COA which refused and failed to examine the same. Had the court allowed the COA to evaluate and make a ruling on the validity of the vouchers, the result would have been different and most probably they would have been acquitted of the crime charged.

We are not persuaded by petitioners’ asseveration.

The Sandiganbayan categorically ruled that the disbursement vouchers were inexistent at the time of the issuance of the subject checks and expanded special audit based on its findings that: (1) petitioner Haron could not produce the vouchers upon demand by the COA in August 1993; (2) Resident Auditor Gagwis certified at about the same time that to date she has not received the vouchers mentioned in the supposed transmittal letters of March 4 and March 30, 1993; (3) the entries in the duly certified Report of Checks Issued by Deputized Disbursing Officer (RCIDDO) of the late Pandical M. Santiago, Cashier of ORG-ARMM, showed that for the months of January, February and March 1993, there were indeed entries of checks issued with Haron as payee but no disbursement voucher numbers as these were either lacking, detached or missing, and which were verified by the audit team as corresponding to the subject 52 checks issued and signed by petitioners and encashed by petitioner Haron who received the money withdrawn from the government depositary accounts; (4) FBMS Chief Corpus testified that he discovered the supposed vouchers still there at his office filing cabinet in May 1993 when these supposedly have already been submitted to the COA Resident Auditor as reflected in the March 4 and March 30, 1993 transmittal letters; and (5) the supposed original disbursement vouchers belatedly submitted to the COA central office last week of October 1993, were undated and unnumbered with no supporting documents as required by COA Circular No. 78-79 (April 5, 1978).

Contrary to petitioners’ claim, the special audit team could not have examined the vouchers presented by the defense (Exhibits “1” to “1-A-43”) because the only indication of its actual receipt by the COA as admitted by the prosecution, was on October 23, 1993 long after the expanded audit was completed and beyond the 72-hour deadline specified in the September 10, 1993 demand letter addressed to Haron for the restitution of the total amount of illegal withdrawals. In addition, such disbursement vouchers have no supporting documents as required by COA Circular No. 92-389 dated November 3, 1992. On the other hand, the Certification dated August 18, 1998 issued by ARMM Chief Accountant Fontanilla stating that the vouchers were regular because these were properly recorded in the JAO, was not given credence by the Sandiganbayan. Upon scrutiny of the JAO covering the period January to March 1993, said court found that it failed to indicate the particular disbursement voucher that corresponds to each of the 52 checks, aside from the fact that it was prepared by the ARMM Chief Accountant who is under the control and supervision of the ORG. Notably, the JAO is used to summarize obligations incurred and to monitor the balance of unobligated allotments, which is prepared by function, and project for each fund and allotment class.[24] The JAO is thus separate and distinct from the Report of Checks Issued (RCI) which is prepared by the Disbursing Officer to report checks issued for payment of expenditures and/or prior accounts payable. What is clear is that the disbursement of funds covered by the 52 checks issued by the petitioners are subject to the rule that disbursement voucher “shall be used by all government entities for all money claims” and that the “voucher number shall be indicated on the voucher and on every supporting document.”[25] Inasmuch as the JAO for the months of January, February and March 1993 do not at all reflect or indicate the number of each of the disbursement vouchers supposedly attached to the 52 checks, it cannot serve as evidence of the recording of the original vouchers, much less the existence of those disbursement vouchers at the time of the issuance of the 52 checks and the conduct of the expanded audit.

Petitioners further raise issue on the regularity, completeness and objectivity of the expanded audit conducted by the COA. However, records showed that the ORG-ARMM were duly notified of the expanded audit at its commencement and was even requested thru the COA Resident Auditor to submit the needed disbursement vouchers. It must be noted that at an earlier date, a main audit had already been conducted for the financial transactions of ORG-ARMM during which State Auditor Mendoza experienced threats against her own security that she had to be immediately recalled from her assignment. Thus, by the time the expanded audit was conducted in August 1993 upon the directive of the COA Chairman, petitioners, especially Haron, should have seen to it that the records of disbursements and financial transactions including the period January to March 1993, were in order and available for further audit examination. In any case, even if there was no so-called entry conference held, there is absolutely no showing that petitioners were denied due process in the conduct of the expanded audit as they simply refused or failed to heed COA’s request for the production of disbursement vouchers and likewise ignored the formal demand made by COA Chairman Banaria for the restitution of the illegally withdrawn public funds, submitting their compliance only after the special audit team had submitted their report.

In fine, the Sandiganbayan committed no reversible error in holding that the testimonial and documentary evidence presented by the petitioners failed to overcome the prima facie evidence of misappropriation arising from Haron’s failure to give a satisfactory explanation for the illegal withdrawals from the ARMM funds under his custody and control. Petitioners likewise did not accomplish the proper liquidation of the entire amount withdrawn, during the expanded audit or any time thereafter. There is therefore no merit in petitioners’ argument that the Sandiganbayan erred in not applying the equipoise rule.

Under the equipoise rule, where the evidence on an issue of fact is inequipoise or there is doubt on which side the evidence preponderates, the party having the burden of proof loses. The equipoise rule finds application if the inculpatory facts and circumstances are capable of two or more explanations, one of which is consistent with the innocence of the accused and the other consistent with his guilt, for then the evidence does not fulfill the test of moral certainty, and does not suffice to produce a conviction.[26] Such is not the situation in this case because the prosecution was able to prove by adequate evidence that Disbursing Officer Haron failed to account for funds under his custody and control upon demand, specifically for theP21,045,570.64 illegally withdrawn from the said funds. In the crime of malversation, all that is necessary for conviction is sufficient proof that the accountable officer had received public funds, that he did not have them in his possession when demand therefor was made, and that he could not satisfactorily explain his failure to do so. Direct evidence of personal misappropriation by the accused is hardly necessary in malversation cases.[27]

As to the liability of petitioners Zacaria A. Candao and Abas A. Candao, the Sandiganbayan correctly ruled that they acted in conspiracy with petitioner Haron to effect the illegal withdrawals and misappropriation of ORG-ARMM funds.

Conspiracy exists when two or more persons come to an agreement concerning the commission of a felony and decide to commit it. Conspiracy need not be proved by direct evidence and may be inferred from the conduct of the accused before, during and after the commission of the crime, which are indicative of a joint purpose, concerted action and concurrence of sentiments. In conspiracy, the act of one is the act of all. Conspiracy is present when one concurs with the criminal design of another, indicated by the performance of an overt act leading to the crime committed. It may be deduced from the mode and manner in which the offense was perpetrated.[28]

In this case, petitioners Zacaria A. Candao and Abas A. Candao were co-signatories in the subject checks issued without the required disbursement vouchers. Their signatures in the checks, as authorized officials for the purpose, made possible the illegal withdrawals and embezzlement of public funds in the staggering aggregate amount of P21,045,570.64.

Petitioners Zacaria A. Candao and Abas A. Candao assail their conviction as co-conspirators in the crime of malversation contending that their only participation was in the ministerial act of signing the checks. The checks having passed through processing by finance and accounting personnel of ORG-ARMM, petitioners said they had to rely on the presumption of regularity in the performance of their subordinates’ acts. Furthermore, they assert that since conspiracy requires knowledge of the purpose for which the crime was committed, they could not have been conspirators in the design to defraud the government.

We disagree with such postulation.

As the Regional Governor of ARMM, petitioner Zacaria A. Candao cannot exonerate himself from liability for the illegally withdrawn funds of ORG-ARMM. Under Section 102 (1) of the Government Auditing Code of the Philippines, he is responsible for all government funds pertaining to the agency he heads:

Section 102. Primary and secondary responsibility. – (1) The head of any agency of the government is immediately and primarily responsible for all government funds and property pertaining to his agency.

x x x x (Emphasis supplied.)

Petitioners Zacaria A. Candao and his Executive Secretary Abas A. Candao are both accountable public officers within the meaning of Article 217 of the Revised Penal Code, as amended. No checks can be prepared and no payment can be effected without their signatures on a disbursement voucher and the corresponding check. In other words, any disbursement and release of public funds require their approval,[29] as in fact checks issued and signed by petitioner Haron had to be countersigned by them. Their indispensable participation in the issuance of the subject checks to effect illegal withdrawals of ARMM funds was therefore duly established by the prosecution and the Sandiganbayan did not err in ruling that they acted in conspiracy with petitioner Haron in embezzling and misappropriating such funds.

Moreover, as such accountable officers, petitioners Zacaria A. Candao and Abas A. Candao were charged with the duty of diligently supervising their subordinates to prevent loss of government funds or property, and are thus liable for any unlawful application of government funds resulting from negligence, as provided in Sections 104 and 105 of the Government Auditing Code of the Philippines, which read:

Sec. 104. Records and reports required by primarily responsible officers. – The head of any agency or instrumentality of the national government or any government-owned or controlled corporation and any other self-governing board or commission of the government shall exercise the diligence of a good father of a family in supervising accountable officers under his control to prevent the incurrence of loss of government funds or property, otherwise he shall be jointly and solidarily liable with the person primarily accountable therefor. x x x x

Sec. 105. Measure of liability of accountable officers. x x x

(2) Every officer accountable for government funds shall be liable for all losses resulting from the unlawful deposit, use, or application thereof and for all losses attributable to negligence in the keeping of the funds.

The fact that ARMM was still a recently established autonomous government unit at the time does not mitigate or exempt petitioners from criminal liability for any misuse or embezzlement of public funds allocated for their operations and projects. The Organic Act for ARMM (R.A. No. 6734) mandates that the financial accounts of the expenditures and revenues of the ARMM are subject to audit by the COA.[30] Presently, under the Amended Organic Act (R.A. No. 9054), the ARMM remained subject to national laws and policies relating to, among others, fiscal matters and general auditing.[31] Here, the prosecution successfully demonstrated that the illegal withdrawals were deliberately effected through the issuance of checks without the required disbursement vouchers and supporting documents. And even if petitioners Zacaria A. Candao and Abas A. Candao invoke lack of knowledge in the criminal design of their subordinate, Disbursing Officer Haron, they are still liable as co-principals in the crime of malversation assuming such misappropriation of public funds was not intentional, as alleged in the informations, but due to their negligence in the performance of their duties. As this Court ratiocinated in Cabello v. Sandiganbayan[32]:

Besides, even on the putative assumption that the evidence against petitioner yielded a case of malversation by negligence but the information was for intentional malversation, under the circumstances of this case his conviction under the first mode of misappropriation would still be in order. Malversation is committed either intentionally or by negligence. The dolo or the culpa present in the offense is only a modality in the perpetration of the felony. Even if the mode charged differs from the mode proved, the same offense of malversation is involved and conviction thereof is proper. A possible exception would be when the mode of commission alleged in the particulars of the indictment is so far removed from the ultimate categorization of the crime that it may be said due process was denied by deluding the accused into an erroneous comprehension of the charge against him. That no such prejudice was occasioned on petitioner nor was he beleaguered in his defense is apparent from the records of this case.[33] (Emphasis supplied.)

Under Article 217, paragraph 4 of the Revised Penal Code, as amended, the penalty of reclusion temporal in its maximum period toreclusion perpetua shall be imposed if the amount involved exceedsP22,000.00, in addition to fine equal to the funds malversed. Considering that neither aggravating nor mitigating circumstance attended the crime charged, the maximum imposable penalty shall be within the range of the medium period of reclusion temporal maximum to reclusion perpetua, or eighteen (18) years, eight (8) months and one (1) day to twenty (20) years. Applying the Indeterminate Sentence Law, the minimum penalty, which is one degree lower from the maximum imposable penalty, shall be within the range of prision mayor maximum to reclusion temporal medium, or ten (10) years and one (1) day to seventeen (17) years and four (4) months.[34] The penalty imposed by the Sandiganbayan on petitioners needs therefore to be modified insofar as the maximum penalty is concerned and is hereby reduced to seventeen (17) years and four (4) months of reclusion temporal medium, for each count.

WHEREFORE, the petition for review on certiorari is DENIED for lack of merit. The Decision dated October 29, 2008 in Criminal Case Nos. 24569 to 24574, 24575, 24576 to 24584, 24585 to 24592, 24593, 24594, 24595 to 24620 finding petitioners guilty beyond reasonable doubt of the crime of Malversation of Public Funds under Article 217, paragraph 4 of theRevised Penal Code, as amended, and the Resolution dated February 20, 2009 of the Sandiganbayan (First Division), denying petitioners’ motion for reconsideration are AFFIRMED with MODIFICATIONS in that petitioners are instead accordingly sentenced to suffer an indeterminate prison term of ten (10) years and one (1) day of prision mayor maximum, as minimum, to seventeen (17) years and four (4) months of reclusion temporalmedium, as maximum, in each of the above-numbered criminal cases.

In addition to the payment of the fine ordered by the Sandiganbayan, and by way of restitution, the petitioners are likewise ordered to pay, jointly and severally, the Republic of the Philippines through the ARMM-Regional Treasurer, the total amount of P21,045,570.64 malversed funds as finally determined by the COA.

In the service of their respective sentences, the petitioners shall be entitled to the benefit of the three-fold rule as provided in Article 70 of theRevised Penal Code, as amended.

With costs against the petitioners.

SO ORDERED.

x x x."

Identity of the accused not established; acquitted G.R. No. 183830

G.R. No. 183830

"x x x.

Issue

The primordial issue is whether Amegable’s identification of Caliso as the man who killed AAA at noon of July 5, 1997 was positive and reliable.

Ruling

The appeal is meritorious.

In every criminal prosecution, the identity of the offender, like the crime itself, must be established by proof beyond reasonable doubt. Indeed, the first duty of the Prosecution is not to prove the crime but to prove the identity of the criminal, for even if the commission of the crime can be established, there can be no conviction without proof of identity of the criminal beyond reasonable doubt.[19]

The CA rejected the challenge Caliso mounted against the reliability of his identification as the culprit by Amegable in the following manner:[20]

As to the first two errors raised, appellant contends that the testimony of Soledad Amegable was replete with discrepancies. Appellant avers, for instance, that Soledad failed to see the assailant’s face. Moreover, considering the distance between where Soledad was supposedly hiding and where the incident transpired, appellant states that it was inconceivable for her to have heard and seen the incident. According to appellant, witness Soledad could not even remember if at that time, she hid behind a banana plant, or a coconut tree.

At bench, the incident happened at noon, when the sun was at its brightest. Soledad could very well recognize appellant. Furthermore, notwithstanding the fact that it was his back that was facing her, she asserted being familiar with the physical features of appellant, considering that he frequented their barangay. Even during her cross-examination by the defense counsel, Soledad remained steadfast in categorically stating that she recognized appellant:

Q: Mrs. Amegable, you said during your direct examination that you saw Delfin Caliso, the accused in this case, several times passed by your barangay, am I correct?

A: Several times.

Q: By any chance prior to the incident, did you talk to him?

A: No, sir.

Q: Are you acquainted with him?

A: Yes, sir.

Q: Even if he is in his back position?

A: Yes, sir. (Emphasis Supplied)

Given the circumstances as stated above, it was even probable that Soledad caught glimpses of the profile of the appellant at the time of the incident. She related, in addition, that when the victim was being submerged in the water, there was no object obstructing her view.

The inconsistencies as alleged by appellant, between Soledad Amegable’s declaration in court and her affidavit, such as the tree or plant from where she was hiding behind at the time of the incident, are insignificant and cannot negate appellant’s criminal liability. Her whole attention was riveted to the incident that was unfolding before her. Besides, any such inconsistencies are minor. Slight contradictions are indicative of an unrehearsed testimony and could even serve to strengthen the witness’ credibility. A witness who is telling the truth is not always expected to give a perfectly concise testimony, considering the lapse of time and the treachery of human memory.

In fact, the testimony of a single eye-witness is sufficient to support a conviction, so long as such testimony is found to be clear and straightforward and worthy of credence by the trial court. Furthermore, over here, witness Soledad had no reason to testify falsely against appellant.

Besides, the credibility of witnesses and their testimonies is a matter best undertaken by the trial court, because of its unique opportunity to observe the witnesses firsthand and to note their demeanor, conduct and attitude. Findings of the trial court on such matters are binding and conclusive on the appellate court.

Contrary to the CA’s holding that the identification of Caliso based on Amegable’s recognition of him was reliable, the Court considers the identification not reliable and beyond doubt as to meet the requirement of moral certainty.

When is identification of the perpetrator of a crime positive and reliable enough for establishing his guilt beyond reasonable doubt?

The identification of a malefactor, to be positive and sufficient for conviction, does not always require direct evidence from an eyewitness; otherwise, no conviction will be possible in crimes where there are no eyewitnesses. Indeed, trustworthy circumstantial evidence can equally confirm the identification and overcome the constitutionally presumed innocence of the accused. Thus, the Court has distinguished two types of positive identification in People v. Gallarde,[21] to wit: (a) that by direct evidence, through an eyewitness to the very commission of the act; and (b) that by circumstantial evidence, such as where the accused is last seen with the victim immediately before or after the crime. The Court said:

xxx Positive identification pertains essentially to proof of identity and not per se to that of being an eyewitness to the very act of commission of the crime. There are two types of positive identification. A witness may identify a suspect or accused in a criminal case as the perpetrator of the crime as an eyewitness to the very act of the commission of the crime. This constitutes direct evidence. There may, however, be instances where, although a witness may not have actually seen the very act of commission of a crime, he may still be able to positively identify a suspect or accused as the perpetrator of a crime as for instance when the latter is the person or one of the persons last seen with the victim immediately before and right after the commission of the crime. This is the second type of positive identification, which forms part of circumstantial evidence, which, when taken together with other pieces of evidence constituting an unbroken chain, leads to only fair and reasonable conclusion, which is that the accused is the author of the crime to the exclusion of all others. If the actual eyewitnesses are the only ones allowed to possibly positively identify a suspect or accused to the exclusion of others, then nobody can ever be convicted unless there is an eyewitness, because it is basic and elementary that there can be no conviction until and unless an accused is positively identified. Such a proposition is absolutely absurd, because it is settled that direct evidence of the commission of a crime is not the only matrix wherefrom a trial court may draw its conclusion and finding of guilt. If resort to circumstantial evidence would not be allowed to prove identity of the accused on the absence of direct evidence, then felons would go free and the community would be denied proper protection.[22]

Amegable asserted that she was familiar with Caliso because she had seen him pass by in her barangay several times prior to the killing. Such assertion indicates that she was obviously assuming that the killer was no other than Caliso. As matters stand, therefore, Caliso’s conviction hangs by a single thread of evidence, the direct evidence of Amegable’s identification of him as the perpetrator of the killing. But that single thread was thin, and cannot stand sincere scrutiny. In every criminal prosecution, no less than moral certainty is required in establishing the identity of the accused as the perpetrator of the crime. Her identification of Caliso as the perpetrator did not have unassailable reliability, the only means by which it might be said to be positive and sufficient. The test to determine the moral certainty of an identification is its imperviousness to skepticism on account of its distinctiveness. To achieve such distinctiveness, the identification evidence should encompass unique physical features or characteristics, like the face, the voice, the dentures, the distinguishing marks or tattoos on the body, fingerprints, DNA, or any other physical facts that set the individual apart from the rest of humanity.

A witness’ familiarity with the accused, although accepted as basis for a positive identification, does not always pass the test of moral certainty due to the possibility of mistake.

No matter how honest Amegable’s testimony might have been, her identification of Caliso by a sheer look at his back for a few minutes could not be regarded as positive enough to generate that moral certainty about Caliso being the perpetrator of the killing, absent other reliable circumstances showing him to be AAA’s killer. Her identification of him in that manner lacked the qualities of exclusivity and uniqueness, even as it did not rule out her being mistaken. Indeed, there could be so many other individuals in the community where the crime was committed whose backs might have looked like Caliso’s back. Moreover, many factors could have influenced her perception, including her lack of keenness of observation, her emotional stress of the moment, her proneness to suggestion from others, her excitement, and her tendency to assume. The extent of such factors are not part of the records; hence, the trial court and the CA could not have taken them into consideration. But the influence of such varied factors could not simply be ignored or taken for granted, for it is even a well-known phenomenon that the members of the same family, whose familiarity with one another could be easily granted, often inaccurately identify one another through a sheer view of another’s back. Certainly, an identification that does not preclude a reasonable possibility of mistake cannot be accorded any evidentiary force.[23]

Amegable’s recollection of the perpetrator wearing short pants bearing the number “11” did not enhance the reliability of her identification of Caliso. For one, such pants were not one-of-a-kind apparel, but generic. Also, they were not offered in evidence. Yet, even if they had been admitted in evidence, it remained doubtful that they could have been linked to Caliso without proof of his ownership or possession of them in the moments before the crime was perpetrated.

Nor did the lack of bad faith or ill motive on the part of Amegable to impute the killing to Caliso guarantee the reliability and accuracy of her identification of him. The dearth of competent additional evidence that eliminated the possibility of any human error in Amegable’s identification of Caliso rendered her lack of bad faith or ill motive irrelevant and immaterial, for even the most sincere person could easily be mistaken about her impressions of persons involved in startling occurrences such as the crime committed against AAA. It is neither fair nor judicious, therefore, to have the lack of bad faith or ill motive on the part of Amegable raise her identification to the level of moral certainty.

The injuries found on the person of Caliso by Dr. Fuentecilla, as borne out by the medical certificate dated June 9, 1997,[24] did not support the culpability of Caliso. The injuries, which were mostly mere scratch marks,[25]were not even linked by the examining physician to the crime charged. Inasmuch as the injuries of Caliso might also have been due to other causes, including one related to his doing menial labor most of the time, their significance as evidence of guilt is nil.

In the absence of proof beyond reasonable doubt as to the identity of the culprit, the accused’s constitutional right to be presumed innocent until the contrary is proved is not overcome, and he is entitled to an acquittal,[26]though his innocence may be doubted.[27] The constitutional presumption of innocence guaranteed to every individual is of primary importance, and the conviction of the accused must rest not on the weakness of the defense he put up but on the strength of the evidence for the Prosecution.[28]

WHEREFORE, the decision promulgated on October 26, 2007 isREVERSED and SET ASIDE for insufficiency of evidence, and accused-appellant Delfin Caliso is ACQUITTED of the crime of murder.

The Director of the Bureau of Corrections in Muntinlupa City is directed to forthwith release Delfin Caliso from confinement, unless there is another lawful cause warranting his further detention.

No pronouncement on costs of suit.

SO ORDERED.

x x x."

Labor Law; permanent disability vs. permanent total disability. - G.R. No. 176884

G.R. No. 176884

"x x x.

“Permanent disability refers to the inability of a worker to perform his job for more than 120 days, regardless of whether he loses the use of any part of his body. What determines petitioner’s entitlement to permanent disability benefits is his inability to work for more than 120 days.”[1] On the other hand, “[p]ermanent total disability means disablement of an employee to earn wages in the same kind of work, or work of similar nature that he was trained for or accustomed to perform, or any kind of work which a person of his mentality and attainment could do. It does not mean absolute helplessness.”[2]

x x x.

Our Ruling

The petition is meritorious.

Petitioner is entitled to permanent disability benefits.

a) The certification by the company-designated physician that petitioner is fit to work was issued after 199 days or more than 120 days from the time he was medically repatriated to the Philippines.

Petitioner’s Employment Contract[54] specifically provides that the same shall be deemed an “integral part of the Standard Terms and Conditions Governing the Employment of Filipino Seafarers On Board Ocean-Going Vessels” otherwise known as the POEA Standard Employment Contract. Section 20(B) of the POEA Standard Employment Contract provides:

B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS

x x x x

3. 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.

x x x x

The Labor Code's provision on permanent total disability applies with equal force to seafarers.[55] Article 192 (c) (1) of the Labor Code provides,viz;

Art. 192. Permanent total disability. - x x x

x x x x

(c) The following disabilities shall be deemed total and permanent:

(1) Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided for in the Rules;

x x x x[56]

Thus, in Quitoriano v. Jebsens Maritime, Inc.,[57] we held that:

Thus, Court has applied the Labor Code concept of permanent total disability to the case of seafarers. x x x

x x x x

There are three kinds of disability benefits under the Labor Code, as amended by P.D. No. 626: (1) temporary total disability, (2) permanent total disability, and (3) permanent partial disability. Section 2, Rule VII of the Implementing Rules of Book V of the Labor Code differentiates the disabilities as follows:

Sec. 2. Disability. - (a) A total disability is temporary if as a result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous period not exceeding 120 days, except as otherwise provided for in Rule X of these Rules.

(b) A disability is total and permanent if as a result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise provided for in Rule X of these Rules.

(c) A disability is partial and permanent if as a result of the injury or sickness the employee suffers a permanent partial loss of the use of any part of his body.

In Vicente v. ECC (G.R. No. 85024, January 23, 1991, 193 SCRA 190, 195):

x x x the test of whether or not an employee suffers from 'permanent total disability' is a showing of the capacity of the employee to continue performing his work notwithstanding the disability he incurred. Thus, if by reason of the injury or sickness he sustained, the employee is unable to perform his customary job for more than 120 days and he does not come within the coverage of Rule X of the Amended Rules on Employees Compensability (which, in more detailed manner, describes what constitutes temporary total disability), then the said employee undoubtedly suffers from 'permanent total disability' regardless of whether or not he loses the use of any part of his body.

A total disability does not require that the employee be absolutely disabled or totally paralyzed. What is necessary is that the injury must be such that the employee cannot pursue his usual work and earn therefrom (Austria v. Court of Appeals, G.R. No. 146636, Aug. 12, 2002, 387 SCRA 216, 221). On the other hand, a total disability is considered permanent if it lasts continuously for more than 120 days. Thus, in the very recent case of Crystal Shipping, Inc. v. Natividad (G.R. No. 134028, December 17, 1999, 321 SCRA 268, 270-271), we held:

Permanent disability is inability of a worker to perform his job for more than 120 days, regardless of whether or not he lose[s] the use of any part of his body. x x x

Total disability, on the other hand, means the disablement of an employee to earn wages in the same kind of work of similar nature that he was trained for, or accustomed to perform, or any kind of work which a person of his mentality and attainments could do. It does not mean absolute helplessness. In disability compensation, it is not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of one's earning capacity.[58]

In Quitoriano, the seafarer therein was medically repatriated to the Philippines on May 30, 2001[59] and upon arrival, he underwent several tests at the Medical Center Manila under the care of Dr. Cruz, the company-designated physician,[60] who incidentally is the same Dr. Cruz who treated petitioner in the instant case. After a lapse of 169 days from his repatriation, or on November 16, 2001, Dr. Cruz declared the seafarer therein fit to work.[61] Unconvinced, the seafarer consulted an independent internist-cardiologist who diagnosed him as suffering from “hypertension cardiovascular disease and hyperlipidemia”.[62] The seafarer thus demanded from the shipping company payment of his permanent disability benefits but he was rebuffed on the ground that he was declared fit to work by Dr. Cruz.[63] The seafarer thus filed a complaint to recover his permanent disability benefits and attorney's fees. The case eventually reached this Court raising the issue of whether the CA erred in not finding the disability of the seafarer as permanent and total and for not awarding him attorney's fees.[64] The Court ruled in favor of the seafarer holding that “the fact that it was only on November 16, 2001 that the 'fit to work' certification was issued by Dr. Cruz or more than five months from the time petitioner was medically repatriated on May 30, 2001, petitioner's disability is considered permanent and total.”[65]

The ruling in Quitoriano applies in the instant case. Similarly, petitioner herein was medically repatriated to the Philippines on October 8, 2001. However, it was only on April 25, 2002 or after a lapse of 199 days that Dr. Cruz issued a certification declaring him fit to work. Thus, we declare herein, just as we pronounced in Quitoriano, that petitioner’s disability is considered permanent and total because the “fit to work” certification was issued by Dr. Cruz only on April 25, 2002, or more than 120 days after he was medically repatriated on October 8, 2001.

b) The company-designated physician’s certification that petitioner is fit to work does not make him ineligible for permanent total disability benefits.

We find no merit in respondents' contention that the company-designated physician's assessment that petitioner is fit to work makes him ineligible to claim permanent disability benefits.[66] This issue has already been raised, and rebuffed, in United Philippine Lines, Inc. v. Beseril.[67] Petitioners therein argued that “the provisions on disability benefits operate only upon certification by the company-designated physician that the claiming seafarer is indeed disabled, hence, respondent is not eligible for an award of disability benefits as 'he was certified fit for sea duty after the conduct of the last medical examination'”.[68] However, this line of argument was resoundingly rebuffed by the Court, thus:

But even in the absence of an official finding by the company-designated physicians that respondent is unfit for sea duty, respondent is deemed to have suffered permanent disability. Permanent disability is the inability of a worker to perform his job for more than 120 days, regardless of whether he loses the use of any part of his body. It is undisputed that from the time respondent suffered a heart attack on December 5, 1997, he was unable to work for more than 120 days, his cardiac rehabilitation and physical therapy having ended only on May 28, 1998.

That respondent was found to be 'fit to return to work' by Clinica Manila (where he underwent regular cardiac rehabilitation program and physical therapy from January 15 to May 28, 1998 under UPL's account) on September 22, 1998 or a few months after his rehabilitation does not matter. x x x[69]

Considering the circumstances prevailing in the instant case, we likewise rule that it does not matter that the company-designated physician assessed petitioner as fit to work. It is undisputed that from the time petitioner was repatriated on October 8, 2001, he was unable to work for more than 120 days as he was only certified fit to work on April 25, 2002. Consequently, petitioner's disability is considered permanent and total.[70] In fact, from his repatriation until the filing of his petition before this Court on March 21, 2007,[71] or for more than five years, petitioner claims that he was unable to resume his job as a seaman[72] which thus strongly indicates that his disability is permanent and total. Also, we note that the certification was issued only after petitioner consulted a private physician (Dr. Mapapala) and after he formally demanded from the respondents, through his lawyer, the payment of his sickness allowance, disability benefits and attorney's fees.

Consequently, we find it irrelevant to discuss at this juncture as to which prognosis, that of Dr. Cruz or petitioner's private physicians', is more accurate.

The case of Sarocam v. Interorient Maritime Ent. Inc. is not in point.

The CA[73] erroneously applied Sarocam v. Interorient Maritime Ent. Inc.[74] in ruling that petitioner is no longer entitled to claim disability benefits since he was declared fit to work by Dr. Cruz. The factual circumstances in Sarocam completely differ from the instant case. InSarocam, the seafarer therein was declared fit to work by the company-designated physician after a lapse of only 13 days from the date of his repatriation[75] hence way before the lapse of the 120-day mark. Moreover, the seafarer therein executed a release and quitclaim in favor of his employers acknowledging receipt of his sickness benefits wages and freeing his employers of any liability.[76]

The amount of permanent disability benefits.

In his Petition, petitioner claims for disability benefits in the amount of US$80,000.00 pursuant to the CBA.[77] In his Memorandum, however, he concedes that the CBA provision does not apply[78] and now claims for only US$60,000.00 as disability benefits pursuant to the POEA Standard Employment Contract.

Indeed, the CBA provision does not apply as the same refers to disability arising from accidents and not due to illness as in the case of petitioner. The pertinent CBA provision reads:

Sec. I: A seafarer who suffers permanent disability as a result of an accident, regardless of fault but excluding injuries caused by a seafarer's willful act, whilst in the employment of the Company including accidents occurring while travelling to or from the Ship, and whose ability to work is reduced as a result thereof, shall in addition to sick pay be entitled to compensation according to the provisions of this agreement. The copy/ies of the medical certificate and other relevant medical reports shall be made available by the Company to the seafarer.[79]

On the other hand, the POEA Standard Employment Contract particularly Section 20(B) (6) thereof provides, to wit:

6. In case of permanent total or partial disability of the seafarer caused by either injury or illness the seafarer shall be compensated in accordance with the schedule of benefits enumerated in Section 32 of this Contract. Computation of his benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time the illness or disease was contracted.

In turn, Section 32 provides that for an impediment considered as total and permanent, a disability allowance of US$60,000.00 (US$50,000.00 x 120%) is granted. Therefore, considering our earlier discussion finding petitioner’s disability as permanent and total, he is then entitled to receive disability benefits of US$60,000.00.

Petitioner is entitled to attorney’s fees.

Petitioner alleges that he is entitled to attorney’s fees pursuant to Article 2208 of the Civil Code because he was forced to litigate to recover his wages.[80] On the other hand, respondents argue that petitioner’s claim for attorney’s fees is without legal and factual basis.

We find for the petitioner. Circumstances show that he demanded from the respondents the payment of his disability benefits but the same went unheeded. Left with no other recourse, petitioner filed the instant case to recover what is rightfully his under the law. Plainly, he was “compelled to litigate due to respondent[s'] failure to satisfy his valid claim, [thus, he] is x x x entitled to attorney's fees of ten percent (10%) of the total award at its peso equivalent at the time of actual payment.”[81]

x x x."