G.R. No. 150429 , August 29, 2006
Roberto G. Famanila, Petitioner, vs. The Court of Appeals and Barbership Management Limited and NFD International Manning Agents, Inc., Respondents.

FACTS

Petitioner Roberto G. Famanila was employed as a messman by respondent NFD International Manning Agents, Inc. for its principal, Barbership Management Limited. On June 21, 1990, while the vessel was docked in the USA, Famanila suffered a cerebral hemorrhage, underwent two brain operations, and was subsequently repatriated. On August 21, 1990, a physician declared him permanently and totally disabled. On February 28, 1991, Famanila signed a Receipt and Release, accepting US$13,200 in full settlement of his claims, with his wife and a relative as witnesses.
On June 11, 1997, Famanila filed a complaint with the NLRC for disability and other benefits. The Labor Arbiter dismissed the complaint on the ground of prescription. The NLRC affirmed the dismissal, a decision subsequently upheld by the Court of Appeals. Famanila then filed this petition, arguing his consent to the settlement was vitiated by his disability and financial constraints, rendering it void, and that the applicable prescriptive period is ten years under the Civil Code, not three years under the Labor Code.

ISSUE

The issues are: (1) whether the Receipt and Release is void due to vitiated consent; and (2) whether the prescriptive period for filing the money claim is three years under the Labor Code or ten years under the Civil Code.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. On the first issue, the Court held that a vitiated consent does not render a contract void but merely voidable. The vices of consent under the Civil Code are mistake, violence, intimidation, undue influence, or fraud. Disability is not among these vices. The Court found no substantial evidence to support Famanila’s claim that his consent was vitiated. The document was witnessed by his wife and a relative, and its consideration was not shown to be unconscionable. While quitclaims are generally frowned upon, they are binding if executed voluntarily, fairly, and with reasonable consideration, which was the case here.
On the second issue, the Court ruled that Article 291 of the Labor Code, which prescribes a three-year period for filing money claims arising from employer-employee relations, is the applicable law. Famanila’s cause of action accrued on August 21, 1990, when he was declared permanently disabled. He filed his complaint only on June 11, 1997, well beyond the three-year prescriptive period, thus barring his claim. The Civil Code’s ten-year period for personal actions does not apply, as the Labor Code provides a specific statute of limitations for money claims in labor cases.