4/9/2020
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On 10 March 1995, respondents filed a Complaint for breach of contract and damages
against C.F. Sharp and its surety, Pioneer Insurance and Surety Corporation (Pioneer
Insurance), before the Regional Trial Court (RTC) of Pasay City. 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. Respondents also prayed for damages. Pioneer Insurance filed a
cross claim against C.F. Sharp and John J. Rocha, the executive vice-president of C.F.
Sharp, based on an Indemnity Agreement which substantially provides that the duo
shall jointly and severally indemnify Pioneer Insurance for damages, losses, and costs
which the latter may incur as surety. The RTC rendered judgment on 27 June 1996
favoring respondents, to wit:
WHEREFORE, plaintiffs’ causes of action having been proved with a
preponderance of evidence, judgment is hereby ordered as follows:
a. Declaring the non-deployment of plaintiffs and the refusal to release
documents as breach of contract;
b. By way of compensatory damages, awarding $450 per month and
$439 overtime per month, which should have been received by
plaintiffs from other employers, making a joint and solidary obligation
on the part of the two defendants – C.F. Sharp and Pioneer for the
period covered by the employment contracts;
c. Ordering each defendant to pay each plaintiff P50,000.00 as moral
damages and another P50,000.00 each as exemplary damages;
d. Ordering defendants to share in the payment to plaintiffs of
P50,000.00 attorney’s fees;
e. Defendants to pay litigation expenses and costs of suit.[2]
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. The trial court likewise upheld the cause of action of respondents against
Pioneer Insurance, the former being the actual beneficiaries of the surety bond.
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 Court of Appeals upheld the jurisdiction of the trial court by ruling that petitioners
are now estopped from raising such question because they have actively participated in
the proceedings before the trial court. The Court of Appeals further held that since
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