CASE DIGEST: C.F. Sharp v. Pioneer Insurance & Surety

 

C.F. SHARP & CO. INC. and JOHN J. ROCHA, petitioners, vs. PIONEER INSURANCE & SURETY CORPORATION, WILFREDO C. AGUSTIN and HERNANDO G. MINIMO, respondents
G.R. No. 179469                |              February 15, 2012

FACTS:

Respondents Wilfredo C. Agustin and Hernando G. Minimo applied with C.F. Sharp sometime in August 1990 as sandblasters and painters in Libya. After passing the interview and submission of the requirements, a Contract of Employment was executed between respondents and C.F. Sharp. They were then advised to prepare for immediate deployment and to report to C.F. Sharp to ascertain the schedule of their deployment.

However, after a month respondents have not yet been deployed prompting them to request for the release of the documents they had submitted to C.F. Sharp. C.F. Sharp allegedly refused to surrender the documents which led to the filing of a complaint by respondents before the POEA.

The POEA found C.F. Sharp guilty of violation of Art. 34(k) of the Labpr Code. Consequently, C.F. Sharp’s license was suspended until the return of the disputed documents to respondents.

On March 10, 1995, respondents filed a Complaint for breach of contract and damages against C.F. Sharp and its surety, Pioneer Insurance and Surety Corporation. Respondents claimed that C.F. Sharp falsely assured them of deployment and that its refusal to release the disputed documents on the ground that they were already bound by reason of the Contract of Employment, denied respondents of employment opportunities abroad and a guaranteed income.

The trial court ruled that there was a violation of the contract when C.F. Sharp failed to deploy and release the papers and documents of respondents, hence, they are entitled to damages.

On appeal, C.F. Sharp and Rocha raise a jurisdictional issue—that the RTC has no jurisdiction over the instant case pursuant to Section 4(a) of Executive Order No. 797 which vests upon the POEA the jurisdiction over all cases, including money claims, arising out of or by virtue of any contract involving workers for overseas employment. C.F. Sharp and Rocha refuted the findings of the trial court and maintained that the perfection and effectivity of the Contract of Employment depend upon the actual deployment of respondents.

The CA held that since there is no perfected employment contract between the parties, it is the RTC and not the POEA, whose jurisdiction pertains only to claims arising from contracts involving Filipino seamen, which has jurisdiction over the instant case. Despite the finding that no contract was perfected between the parties, the Court of Appeals adjudged C.F. Sharp and Rocha liable for Damages.

ISSUE:

Whether or not there is already a perfected employment contract

RULING:

Under Article 1315 of the Civil Code, a contract is perfected by mere consent and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law.

An employment contract, like any other contract, is perfected at the moment (1) the parties come to agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties, (b) object certain which is the subject matter of the contract and (c) cause of the obligation.

The commencement of an employer-employee relationship must be treated separately from the perfection of an employment contract.

Despite the fact that the employer-employee relationship has not commenced due to the failure to deploy respondents in this case, respondents are entitled to rights arising from the perfected Contract of Employment, such as the right to demand performance by C.F. Sharp of its obligation under the contract.


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