G.R. No. 51910 August 10, 1989
LITONJUA SHIPPING COMPANY INC., petitioner, vs. NATIONAL SEAMEN BOARD and GREGORIO P. CANDONGO, respondents.

FACTS

Petitioner Litonjua Shipping Company, Inc. was the appointed local crewing agent for Fairwind Shipping Corporation. In September 1976, while the vessel M/V Dufton Bay, owned by R.D. Mullion Ship Broking Agency Ltd. but under charter to Fairwind, was in Cebu, its master hired private respondent Gregorio Candongo as Third Engineer under a one-year contract approved by the NSB. Candongo was discharged in Malaysia on December 28, 1976, before his contract expired, for a reason stated only as “by owner’s arrange.” Upon returning to the Philippines, he filed a complaint for violation of contract against Mullion and Litonjua before the NSB.
During the NSB proceedings, the hearing officer declared Litonjua in default for failing to secure a postponement. Evidence presented showed that Litonjua’s supercargos, Edmond Cruz and Renato Litonjua, actively assisted in the recruitment process in Cebu by accompanying the vessel’s master to the NSB office, facilitating NISA clearances, and being present during crew interviews. The NSB hearing officer rendered a default judgment holding Mullion and Litonjua jointly and severally liable for Candongo’s unexpired wages and leave pay.

ISSUE

Whether petitioner Litonjua Shipping Company, Inc., as a local crewing agent, can be held jointly and severally liable with the foreign shipowner for the wrongful pre-termination of a seafarer’s employment contract.

RULING

Yes. The Supreme Court affirmed the NSB decision, holding Litonjua solidarily liable. The legal logic rests on the principle of agency and the statutory duty to ensure compliance with employment contracts under the Labor Code. The Court found that Litonjua was not merely a passive agent but actively participated in the recruitment and hiring of Candongo. Its supercargos facilitated the entire process, from securing necessary clearances to being present at the interview with the vessel’s master. This direct involvement made Litonjua a real party in interest in the employment contract.
Furthermore, the Court emphasized that the NSB, as the administrative body tasked with overseeing overseas employment, had the authority to hold the local agent jointly and severally liable with the foreign principal. This serves a vital public policy: to provide an accessible remedy for overseas workers against foreign entities that are often beyond the reach of Philippine courts. By imposing solidary liability on the local agent, the law ensures that seafarers can enforce their rights domestically. Litonjua’s argument that it was merely an agent and that liability should fall solely on the shipowner or charterer was rejected. Its active role in the recruitment and its contractual authority from Fairwind to “sue and be sued” established its liability as a co-employer for the purpose of enforcing the seafarer’s contract claims.