514 SUPREME COURT REPORTS ANNOTATED

Principe vs. Philippine-Singapore Transport Service, Inc.

*
G.R. No. 80918. August 16, 1989.

JOSEFINA M. PRINCIPE, petitioner, vs. PHILIPPINE-

SINGAPORE TRANSPORT SERVICES, INC. and CHUAN
HUP AGENCIES, PTE. LTD., NATIONAL LABOR
RELATIONS COMMISSION AND PHILIPPINE
OVERSEAS EMPLOYMENT ADMINISTRATION,
respondents.

Labor Law; Evidence; Rule is settled that the NLRC may

disregard technical rules of procedure in order to give life to the
constitutional mandate affording protection to labor.—It is true
that a compromise agreement once approved by the court has the
effect of res judicata between the parties and should not be
disturbed except for vices of consent and forgery. However, settled
is the rule that the NLRC may disregard technical rules of
procedure in order to give life to the constitutional mandate
affording protection to labor and to conform to the need of
protecting the working class whose inferiority against the
employer has always been earmarked by disadvantage.
Same; Same; Quitclaim; Fact that the consideration given in
exchange of the quitclaim was very much less than the amount
petitioner is claiming renders the quitclaim null and void for being
contrary to public policy.—Even assuming for the sake of
argument that the quitclaim had foreclosed petitioner’s right over
the death benefits of her husband, the fact that the consideration
given in exchange thereof was very much less than the amount
petitioner is claiming renders the quitclaim null and void for
being contrary to public policy. The State must be firm in
affording protection to labor. The quitclaim wherein the
consideration is scandalously low and inequitable cannot be an
obstacle to petitioner’s pursuing her legitimate claim. Equity
dictates that the compromise agreement should be voided in this
instance.
Courts; Jurisdiction; It is well-settled that an agreement to
deprive a court of jurisdiction conferred on it by law is void and of
no legal effect; In this jurisdiction, labor cases are within the
competence of the National Labor Relations Commission.—Anent
the argument that the Philippine courts are without jurisdiction
over the subject matter as jurisdiction was, by agreement of the
parties, vested in the courts of

_______________

* FIRST DIVISION.

515

VOL. 176, AUGUST 16, 1989 515

Principe vs. Philippine-Singapore Transport Service, Inc.

the Republic of Singapore, it is well-settled that an agreement to

deprive a court of jurisdiction conferred on it by law is void and of
no legal effect. In this jurisdiction labor cases, are within the
competence of the National Labor Relations Commission.

PETITION to review the resolution of the National Labor

Relations Commission.

The facts are stated in the opinion of the Court.

     R.C. Carrera Law Firm for petitioner.
     Eladio B. Samson for private respondent.

GANCAYCO, J.:

Once again this Tribunal is faced with the issue of the

validity of the quitclaim executed by the employee’s heir in
favor of the employer.
Petitioner is the widow of the late Abelardo Principe
who was then the Chief Engineer of M/V OSAM Falcon, a
commercial vessel of Singaporean registry owned by Chuan
Hup Agencies, Pte. Ltd. (Chuan Hup for brevity), one of the
private respondents herein, who is the principal of
Philippine-Singapore Transport Services, Inc. (PSTSI), also
a private respondent herein. The contract of employment of
the deceased with private respondent Chua Hup provides,
among others, that Principe would receive Singapore
$2,800.00 a month to commence on September 7, 1982,
medical benefits and insurance coverage through group
hospitalization and surgical insurance and group and
personal accident insurance for a capital sum of
US$75,000.00. It also provides that the laws of Singapore
shall apply in cases of disputes arising out of the said
appointment and that said disputes are 1
to be resolved by
the courts of the Republic of Singapore.
On September 15, 1982, while Principe was on duty in
Malintoc Field, Palawan, Philippines, he suddenly
contracted
2
a serious illness which eventually resulted to his
death.

_______________

1 Pages 16-18, Rollo.

2 Pages 19-20, Rollo.

516

516 SUPREME COURT REPORTS ANNOTATED

Principe vs. Philippine-Singapore Transport Service, Inc.

3
On July 5, 1983, petitioner filed a complaint against
PSTSI with the Worker’s Assistance and Adjudication
Office of the Philippine Overseas Employment
Administration (POEA), seeking the payment of death
compensation benefits and other benefits accruing to her
deceased husband. While the aforesaid case was pending,
the parties entered into a compromise agreement. On
December 22, 1983, petitioner executed a release and
quitclaim in favor of PSTSI in consideration of the sum of
Seven Thousand Pesos (P7,000.00) together with hospital,
burial and other incidental expenses previously disbursed4
by PSTSI in favor of petitioner’s deceased husband.
Consequently, Atty. Wellington Lachica, counsel for
petitioner, with the latter’s conformity, filed a motion to
dismiss the case with prejudice against
5
PSTSI and without
prejudice as against Chuan Hup.
On the basis of the compromise agreement and the
motion to dismiss dated November 23, 1983, the POEA
issued an order dated December 27, 1983, dismissing
petitioner’s complaint with prejudice against PSTSI.
On April 21, 1986, petitioner filed with the POEA
another claim for death benefits against PSTSI, this time
including Chuan Hup. The new case was docketed as
POEA Case No. (L) 86-04-328. In the decision dated
January 27, 1987, the POEA dismissed the complaint on
the ground that there exist identity of parties, subject
matter and cause of action between the previous case,
POEA Case No. L-635-83 and the new case, and that the
present case is barred by prior judgment 6
based on a
compromise agreement in the previous case.
 Petitioner appealed to the National Labor Relations
Commission (NLRC). In a resolution dated September7 25,
1987, the NLRC dismissed the appeal for lack of merit.
Hence, the present petition.
It is the position of the petitioner that the release and
quitclaim that she signed in favor of private respondent
PSTSI is

_______________

3 POEA Case No. L-635-83.

4 Pages 21-22, Rollo.
5 Page 25, Rollo.
6 Pages 24-27, Rollo.
7 Pages 29-32, Rollo.

517

VOL. 176, AUGUST 16, 1989 517

Principe vs. Philippine-Singapore Transport Service, Inc.

null and void on the ground that the consideration given in

exchange thereof in the amount of P7,000.00 is extremely
low and unconscionable. Petitioner added that she was
merely misled to sign the quitclaim due to the assurance
given by PSTSI that it will help her recover the death
compensation and insurance proceeds due her deceased
husband. She argued that even on the assumption that the
quitclaim is valid, the release should benefit PSTSI alone
and should not include Chua Hup as the quitclaim was
executed only in favor of PSTSI. Further she contended
that notwithstanding the quitclaim executed in favor of
PSTSI, the latter may still be held liable8 since it is an
agent of Chuan Hup here in the Philippines.
The Solicitor General supports petitioner’s view stating
that the principle of res judicata is inapplicable to the case
at bar since petitioner and PSTSI agreed that the dismissal
of the suit against the latter is without prejudice insofar as
the principal Chuan Hup is concerned; that the quitclaim is
null and void as the consideration given is unconscionably
low as it is not even equal to one percent (1%) of
petitioner’s claim; and that the quitclaim is inequitable and
incongrous to the declared policy of the State to afford
protection to 9labor, citing Section 3, Article XIII of the 1987
Constitution.
We rule for the petitioner.
The release and quitclaim in question reads as follows:
 “JOSEFINA M. PRINCIPE, of legal age,
widow, and resident at 1287-E, G. Tuazon
St., Sampaloc, Manila      
in favor of     
PHILIPPINE-SINGAPORE TRANS
PORT SERVICES, INC., a domestic corpo     
ration domiciled and having its principal     
place of business at 205 Martinez Bldg.,     
Dasmariñas, Manila.     

_______________

8 Pages 9-12, Rollo.

9 Pages 91-94-Rollo.

518

518 SUPREME COURT REPORTS ANNOTATED

Principe vs. Philippine-Singapore Transport Service, Inc.

WITNESSETH, that:
WHEREAS, on July 5, 1983, Josefina M. Principe filed a
complaint for death benefits against Philippine-Singapore
Transport Services, Inc. as a shipping agency of Chuan Hup
Agencies Pte. Ltd. of the Republic of Singapore for the death of
her husband, Engr. Abelardo D. Principe, on September 15, 1982
in Matinloc Field, Offshore Palawan, Philippines while in the
course of his employment as Chief Engineer of ‘Osam Falcon’ in
POEA Case No. (L) 635-83 of the Philippine Overseas
Employment Administration, entitled ‘Josefina M. Principe vs.
Philippine-Singapore Transport Services, Inc.;’
WHEREAS, the parties have agreed to settle the above-
entitled case amicably.
NOW, THEREFORE, for and in consideration of the sum of
SEVEN THOUSAND PESOS (P7,000.00), Philippine currency
and of the hospital, burial and other incidental expenses
previously disbursed by Philippine-Singapore Transport Services,
Inc., receipt of which in full is hereby acknowledged to her full
and complete satisfaction, JOSEFINA M. PRINCIPE have (sic)
released and discharged, as she hereby releases and discharges,
Philippine-Singapore Transport Services, Inc., its directors,
officers, employees, principals and agents from any and all claims,
actions, obligations and liabilities which she have or might have
against Philippine-Singapore Transport Services, Inc. in
connection with the death of her husband Abelardo D. Principe on
September 15, 1982 in Matinloc Field, Offshore Palawan under
the circumstances narrated in the aforementioned case.
 That she hereby represents and warrants to Philippine-
Singapore Transport Services, Inc. that she is the surviving
spouse legally entitled to claim for damages/support which may
arise from the death of said Abelardo D. Principe, and further,
that she hereby manifests that any and all rights or claims which
she, as a surviving forced heir of the late Abelardo D. Principe
might have against Philippine-Singapore Transport Services, Inc.,
its directors, employees, principals and agents arising out of or by
reason of the death of said Abelardo D. Principe are hereby
deemed waived and discharged and she have (sic) Philippine-
Singapore Transport Services, Inc., its directors, officers,
employees, principals and agents and whoever may be held liable,
completely free and harmless from any claim and/or liabilities
that may arise from the death of said Abelardo D. Principe (sic).
That in the event that any other person/persons, as surviving
spouse of the deceased Abelardo D. Principe should claim against
Philippine-Singapore Transport Services, Inc. for such
damages/support arising from the death of Abelardo D. Principe,
and the claim is held valid, then Josefina M. Principe hereby
undertakes and agrees to

519

VOL. 176, AUGUST 16, 1989 519

Principe vs. Philippine-Singapore Transport Service, Inc.

reimburse to Philippine-Singapore Transport Services, Inc. the

amounts hereunder received, plus legal interest therein.
That she further states that the foregoing consideration is
voluntarily accepted by her as a full and final compromise,
adjustment and settlement of any and all claims that she may
have against Philippine-Singapore Transport Services, Inc., its
directors, officers, employees, principals and agents; and she
hereby irrevocably affirm (sic) that Philippine-Singapore
Transport Services, Inc. has made this settlement solely to buy
peace, avoid litigation and on human consideration, and she
acknowledges that the payment of said consideration is not and
shall never be construed as an admission of liability or obligation
by Philippine-Singapore Transport Services, 10
Inc., its officers,
directors, employees, principals and agents.”

It is true that a compromise agreement once approved by

the court has the effect of res judicata between the parties
and should not be disturbed except for vices of consent and
forgery. However, settled is the rule that the NLRC may
disregard technical rules of procedure in order to give life
to the constitutional mandate affording protection to labor
and to conform to the need of protecting the working class
whose inferiority against the 11
employer has always been
earmarked by disadvantage.
The Court finds that the compromise agreement entered
into by the petitioner in favor of PSTSI was not intended to
totally foreclose her right over the death benefits of her
husband. First, the motion to dismiss, filed by petitioner
through Atty. Lachica before the POEA, which cited the
compromise agreement entered into by the parties, clearly
and unequivocally reflects the undertaking that the release
is without prejudice as regards private respondent Chuan
Hup. This fact was acknowledged in the decision of POEA
Administrator Tomas D. Achacoso in POEA Case No. (L)
86-04-328. It is surprising why both the POEA and the
NLRC failed to consider this aspect in the resolution of the
second complaint filed by the petitioner against

_______________

10 Pages 21-22, Rollo.

11 Cuales vs. National Labor Relations Commission, 121 SCRA 812
(1983); Araneta vs. Perez, 7 SCRA 923 (1963); Serrano vs. Miave, 13
SCRA 461 (1965); Vda. de Corpus vs. Phodaca-Ambrocia, 32 SCRA 279
(1970).

520

520 SUPREME COURT REPORTS ANNOTATED

Principe vs. Philippine-Singapore Transport Service, Inc.

PSTSI and Chuan Hup.

The second complaint was filed by petitioner to enforce
the joint and several liability of PSTSI and Chuan Hup per
joint affidavit of responsibility executed by said parties in
entering into a principal-agent relationship after PSTSI
failed to live up to its commitment to 12
assist petitioner in
the recovery of death compensation. This observation is
supported by the provisions of the release signed by the
petitioner wherein the parties referred to therein were only
the petitioner and PSTSI. The release is from any claim
against PSTSI. Chuan Hup is not a party thereto. He
cannot be considered covered by the release.
Moreover, the Court sees no reason why petitioner, with
the assistance of a counsel would ever agree to foreclose her
right against Chuan Hup over the death benefits of her
husband in exchange for a very measly sum of Seven
Thousand Pesos (P7,000.00). They must have been aware
that should she pursue her case, she was assured of getting
at least One Hundred Thousand Eight Hundred Singapore
dollars (S$100,800.00). This Court has laid down the rule
in similar cases that applying the Singapore Maritime
Laws in case of a seaman’s death, the heirs of the seaman
should receive the13
equivalent of 36 months wages of the
deceased seaman.
The fact that petitioner received the sum of P7,000.00
only should not be taken to mean as a waiver of her right.
The circumstances she was confronted with during that
time left her with no other alternative but to accept the
same as she was in dire need of money due to the sudden
death of her husband. PSTSI contends that it was precisely
because of her need for cash that petitioner thereby totally
waived her right over the death benefits of her husband.
We do not think so. What is plausible is the protestation of
petitioner that PSTSI took advantage of her financial
distress and led her to signing the release and quitclaim
without explaining the consequences to her. While it may
be true that her counsel assisted her in the

_______________

12 Pages 67-73, Rollo.

13 Norse Management Co. (Pte.) vs. National Seamen Board, 117 SCRA
486, 491 (1982), citing Vir-Jen Shipping and Marine Services, Inc. vs.
National Seamen Board, L-41297 (1975).

521

VOL. 176, AUGUST 16, 1989 521

Principe vs. Philippine-Singapore Transport Service, Inc.

process, said counsel must have been persuaded by the

assurance of PSTSI that it shall help obtain for her the
corresponding benefits from Chuan Hup.
Even assuming for the sake of argument that the
quitclaim had foreclosed petitioner’s right over the death
benefits of her husband, the fact that the consideration
given in exchange thereof was very much less than the
amount petitioner is claiming renders the quitclaim
14
null
and void for being contrary to public policy. The State
must be firm in affording protection to labor. The quitclaim
wherein the consideration is scandalously low and
inequitable cannot be15
an obstacle to petitioner’s pursuing
her legitimate claim. Equity dictates that the compromise
agreement should be voided in this instance.
Lastly, it must be noted that the first complaint of
petitioner was merely an action against PSTSI whereas in
the second complaint Chuan Hup was already included.
The POEA ruled that the second complaint was merely an
afterthought, and that it was a product of a pre-conceived
mind considering the interval of time from the issuance of
the order of dismissal in the previous case and the
institution of the second complaint. We do not think so. On
the contrary, the Court holds that the delay was due to
PSTSI’s failure to make good its promise to assist the
petitioner in recovering the death benefits of her husband.
We see no other reason thereby. Hence, even if the second
action was filed beyond the three (3) year reglementary
period as provided by law for such claims, We cannot buy
PSTSI’s argument that the claim is already barred. The
blame for the delay, if any, can only be attributed to PSTSI.
On the other hand, PSTSI argues that it cannot be held
responsible on the ground that the aforesaid affidavit of
undertaking with Chua Hup is applicable only to those
members of the crew recruited by PSTSI in the Philippines
for and in behalf of its principal Chuan Hup and that since
Principe was directly hired by Chuan Hup, PSTSI cannot
be held responsible as it has no privity of contract with
those personnel recruited in Singapore.

_______________

14 Article 6, Civil Code.

15 Cuales vs. National Labor Relations Commission, supra.

522

522 SUPREME COURT REPORTS ANNOTATED

Principe vs. Philippine-Singapore Transport Service, Inc.

The argument is untenable. This is the first time PSTSI

raised this defense when it had all the chance to do so
below. Moreover, if PSTSI honestly believed it had no
privity of contract with Principe who was directly recruited
by Chuan Hup, then there is no reason why it entered into
a compromise agreement with herein petitioner. From the
very start, it should have asked for the dismissal of the
case against it on the ground of lack of cause of action, but
it did not do so. What is obvious is that Principe was
actually recruited by PSTSI and that he signed the
employment contract with the principal Chuan Hup. Thus,
private respondents stand jointly and severally liable for
the claim of petitioner.
Anent the argument that the Philippine courts are
without jurisdiction over the subject matter as jurisdiction
was, by agreement of the parties, vested in the courts of the
Republic of Singapore, it is well-settled that an agreement
to deprive a court of jurisdiction
16
conferred on it by law is
void and of no legal effect. In this jurisdiction labor cases,
are within the competence of the National Labor Relations
Commission. With respect to petitioner’s monetary claim,
since the parties agreed that the laws of Singapore shall
govern their relationship and that any dispute arising from
the contract shall be resolved by the law of that country,
then the petitioner is entitled to death benefits
17
equivalent
to 36 months salary of her husband. As the wage of
deceased Abelardo Principe was S$2,800.00 a month, then
petitioner is entitled to a total of S$100,800.00.
WHEREFORE, premises considered, the petition is
granted. The resolution of the NLRC dated September 25,
1987 is hereby set aside and another decision is hereby
rendered ordering private respondents PSTSI and Chuan
Hup Agencies, Pte. Ltd. to jointly and severally pay
petitioner the sum of S$100,800.00 in its equivalent in
Philippine pesos.
This decision is immediately executory.

_____________________

16 Molina vs. De la Riva, 6 Phil. 12 (1906).

17 Norse Management Co. (Pte.) vs. National Seamen Board, supra.

523

VOL. 176, AUGUST 16, 1989 523

Country Bankers Insurance Corp. vs. Travellers Insurance
and Surety Corporation

SO ORDERED.

          Narvasa, (Actg. C.J.), Cruz, Griño-Aquino and

Medialdea, JJ., concur.

Petition granted; resolution set aside.

Notes.—The National Labor Relations Commission, not

the regular courts, has jurisdiction over actions for recovery
of unpaid salaries, separation benefits and damages.
(Pepsi-Cola Bottling Company vs. Martinez, 112 SCRA
578.)
Findings of NLRC that release and quitclaim executed
by employee is binding, should be reversed for being
arbitrary and oppressive. (Cuales vs. NLRC, 121 SCRA
812.)
 ——o0o——

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