Pandiman v Marine Manning G.R. No. 143313. June 21, 2005

J. Garcia

Facts:

Respondent Rosita Singhid’s deceased husband Benito Benito was hired by Fullwin, through its local agent, respondent Marine Manning, as chief cook on board the vessel MV Sun Richie Five for a term of twelve (12) months.

The vessel and its crew were insured with Ocean Marine. Ocean Marine  transacted business in the Philippines through its local correspondent, petitioner Pandiman Philippines, Inc.

While the vessel was on its way to Shanghai from Ho Chih Minh City, Vietnam Benito suffered a heart attack.  His remains were flown back to the Philippines.

Rosita filed a claim for death benefits with Marine Manning, which, however, referred her to petitioner Pandiman.  Petitioner approved the claim and recommended payment in the amount of US$79,000.00.  But Rosita’s death claims remained unpaid.

Hence, Rosita filed with the Labor Arbiter a complaint against Pandiman, Marine Manning, and Ocean Marine for recovery of death benefits, moral and exemplary damages and attorney’s fees. The NLRC ruled in her favor but dismissed the claim against Pandiman.

On Marine Manning’s appeal to the NLRC, the latter set aside that of the Labor Arbiter, absolved the petitioner from any liability and instead held Pandiman and Ocean Marine liable for Rosita’s claim.

Pandiman went to the Court of Appeals on a petition. It dismissed the petition and affirmed the NLRC ruling.

Issue:

1. Whether or not petitioner Pandiman may be held liable for Rosita’s claim for death benefits as Benito’s widow

2. Whether or not respondent MMMC and its foreign principal Fullwin with whom unquestionably the late Benito had an employment contract, should be absolved from death claim liabilities in this case.

Held: No. Yes. Petition granted.

Ratio:

The shipowners provided insurance for the ships and crew through an association. In this protection and indemnity agreement, which is actually an insurance contract, the provisions of the Insurance Code is the governing law.  In the subject insurance contract, Ocean Marine is the insurer, the shipowner (Sun Richie Five Bulkers S.A.) is the insured, and Rosita Singhid as widow and heir of a crew on board the insured vessel like Benito, is a beneficiary.

The Court of Appeals held Panidman liable for Rosita’s death claims under the contract of insurance, on the postulate that petitioner is an insurance agent under Section 300 of the Code.

Petitioner PPI, however, claims that it is not an insurance agent but a mere local correspondent of the P&I Club.  Thus, petitioner maintains that even if OMMIAL (the P&I Club), as insurer of Sun Richie Five, is held principally liable to Rosita for her husband’s death benefits, petitioner cannot be held solidarily liable together with said insurer.

There is nothing therein to show that an insurance contract in this case was in fact negotiated between the insured Sun Richie Five and the insurer Ocean Marine, through petitioner as insurance agent which will make petitioner an insurance agent under Section 300 of the Insurance Code. 

The NLRC, in its decision, merely relied on petitioner’s reference to Ocean Marine as its “principal” instead of its “client”.  Such “reference”, however, will not and cannot vary the definition of what an insurance agent actually is under the law, nor can it automatically turn petitioner into one.

Payment for claims arising from the peril is definitely not one of the liabilities of an insurance agent. Thus, there is no legal basis whatsoever for holding Pandiman solidarily liable with insurer Ocean Marine for Rosita’s claim for death benefits.

The insurance contract between the insurer and the insured, under Article 1311 of the Civil Code, is binding only upon the parties who execute the same. Petitioner PPI is not a party to the insurance contract in question.

2. Anent the second issue, the Court agrees with petitioner’s contention that the appellate court erred in affirming the NLRC’s decision which absolved Fullwin and its manning agent, respondent MMMC, of their joint and solidary liability arising from Benito’s employment contract with Fullwin.

It is undisputed that Benito was employed by Fullwin through its manning agency, Marine Manning. Fullwin, Benito’s principal employer is, therefore, liable under the same employment contract.  For its part, MMMC is bound by its undertaking pursuant to the Rules and Regulations Governing Overseas Employment (1991) that the manning applicants:

(3)     Shall assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the contract, including but not limited to payment of wages, health and disability compensation and repatriation;

By reason of the foregoing undertaking, respondent MMMC is jointly and solidarily liable with its foreign principal Fullwin, for whatever death benefits Benito’s widow is entitled to under Benito’s employment contract.