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PENTAGON INTERNATIONAL SHIPPING SERVICES v. CA

FACTS:

The case involves a dispute between JDA Inter-Phil Maritime Services (JDA Inter-Phil) and Pentagon International Shipping Services, Inc. (Pentagon), both domestic corporations engaged in the recruitment of seafarers. Pentagon hired Filomeno V. Madrio and Luisito G. Rubiano as chief officer and second engineer, respectively, on behalf of their foreign principal, Baleen Marine Pte. Ltd. (Baleen Marine). After their contract expired, Madrio and Rubiano alleged non-payment and underpayment of wages and brought claims against Pentagon and Baleen Marine.

Pentagon denied liability, asserting that it had ceased to be the manning agency of Baleen Marine and that JDA Inter-Phil had been appointed as the new local agent. JDA Inter-Phil argued that it did not assume the responsibilities of Pentagon and that Pentagon remained jointly and severally liable with Baleen Marine. The Labor Arbiter ruled in favor of Pentagon, but the NLRC reversed the decision. The NLRC later reversed itself again and ruled in favor of Pentagon.

JDA Inter-Phil filed a petition for certiorari in the Court of Appeals (CA). The CA granted the temporary restraining order (TRO) and ultimately annulled and set aside the NLRC resolutions. Pentagon appealed the CA decision, arguing that JDA Inter-Phil should be held liable. On the other hand, JDA Inter-Phil claimed that it withdrew its application with the Philippine Overseas Employment Administration (POEA) and therefore should not be held liable.

The issue before the Court is whether there was a valid substitution of the manning agent from Pentagon to JDA Inter-Phil.

ISSUES:

  1. Whether the transfer of accreditation from Pentagon to JDA Inter-Phil is valid.

  2. Whether the minutes of the meeting can replace the requirement of an authenticated special power of attorney and manning agreement.

  3. Whether or not the agreement reached during the meeting for the transfer of accreditation between Pentagon and JDA Inter-Phil has legal effect.

  4. Whether or not Pentagon is exempt from its liabilities and responsibilities towards Madrio and Rubiano.

RULING:

  1. The transfer of accreditation from Pentagon to JDA Inter-Phil is not valid. JDA Inter-Phil did not submit the required authenticated special power of attorney and manning agreement, which is necessary for the validity of the transfer.

  2. The minutes of the meeting cannot replace the requirement of an authenticated special power of attorney and manning agreement. The minutes of a meeting are simply notes or records of what transpired during the meeting and do not contain the necessary elements of a special power of attorney and manning agreement. Furthermore, the minutes were not duly authenticated as required by the law.

  3. The agreement reached during the meeting for the transfer of accreditation between Pentagon and JDA Inter-Phil does not have legal effect. The agreement was only a preliminary step and did not come to fruition. Therefore, it cannot be submitted in compliance with the POEA's requirements for the transfer of accreditation.

  4. Pentagon is not exempt from its liabilities and responsibilities towards Madrio and Rubiano. The liabilities of Pentagon continue regardless of any substitution, amendment, or modification of the contract, as provided in the Migrant Workers' Act of 1995. The manning agreement between Pentagon and its principal also extends until the expiration of the employment contracts of the employees recruited and employed pursuant to the recruitment agreement. Joint and solidary liability is meant to assure aggrieved workers of immediate and sufficient payment.

PRINCIPLES:

  • The local manning agency seeking accreditation of its foreign principal must submit the required documents, including an authenticated special power of attorney and manning agreement. Failure to comply with this requirement renders the transfer of accreditation invalid.

  • The minutes of a meeting cannot replace the requirement of an authenticated special power of attorney and manning agreement. The minutes are mere records of the meeting and do not contain the necessary elements of the required documents.

  • Contracts that have for their object an act that would prejudice a third person must appear in a public document.

  • Signatures in the minutes of a meeting only confirm attendance and agreement to the contents of the minutes, but do not necessarily mean that it is the document embodying the intention or agreement.

  • Liabilities under a manning agreement do not end with the termination of the agreement; they extend until the expiration of the employment contracts.

  • Joint and solidary liability ensures the immediate and sufficient payment of what is due to aggrieved workers.