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Republic of the Philippines


G.R. No. 102358 November 19, 1992

HON. NIEVES ROLDAN-CONFESOR, in her capacity as Undersecretary of Labor and Employment,

The Court views with grave concern the alarming incidents of illegal recruitment which demonstrate all too
clearly that overseas employment has fast developed into a major source not only of much-needed foreign
exchanged but also, for the cunning and the crafty, of easy money.
In response to a newspaper advertisement looking for a couple to work as driver and tutor cum baby sitter,
petitioners Vicente and Gloria Manalo went to Career Planners Specialists International, Inc. (CPSI), a
licensed service contracting firm owned by private respondents, the spouses Victor and Elnora Fernandez.
After the requisite interview and testing, they were hired to work for a family in Saudi Arabia for a monthly
salary of US$350.00 each. According to petitioners, a placement fee of P40,000.00 was imposed as a
precondition for the processing of their papers. They paid only P30,000.00 in cash and executed a
promissory note for the balance. Then they were allowed by respondent Elnora Fernandez to sign their
contract papers but did not issue a receipt for the placement fee despite demand.
Shortly before boarding their flight to Saudi Arabia, petitioners were handed their contracts. According to
Gloria, she was surprised to discover that her position had been changed to that of domestic help. However,
a CPSI employee assured her that the change was only for the purpose of facilitating her departure and did
not in any way alter her employment as tutor. Incidentally, CPSI provided petitioners with the Travel Exit
Pass (TEP) of Filipino Manpower Services, Inc. (FILMAN), a duly licensed recruitment agency.
Contrary to the representation of her recruiter, Gloria was actually hired as a domestic help and not as a
tutor, so that after working for only twenty-five (25) days in Jeddah, she returned to Manila. Soon after,
Vicente also resigned from his work and followed her home. He could not stand the unbearable working
conditions of his employment. However, before leaving, he had to execute a promissory note to cover his
plane fare which respondent Victor Fernandez advanced. Vicente also had to sign a quitclaim in favor of
CPSI and his employer.
On 29 February 1988, petitioners sued private respondents before the Philippines Overseas Employment
Administration (POEA) charging them with illegal exaction, 1 false adverstisement, 2 and violation of other
pertinents laws, rules and regulations. They demanded the refund of the amount exacted from them, plus
payment of moral damages and the imposition of administrative sanctions. 3

Private respondents countered: (1) that Gloria applied as domestic help fully aware that she could not be a
tutor since she did not speak Arabic; (2) that the promissory note for P10,000.00 was required of petitioners
because they were hired without paying placement fees; (3) that it was unlikely for petitioners, who were
mature, educated and experienced in overseas work, to part with P30,000.00 without securing a receipt; (4)
that Vicente executed a quitclaim in favor of CPSI duly authenticated by embassy officials in Saudi Arabia;
(5) that there was no impropriety in having the employment papers of petitioners processed by FILMAN
because it was a sister company of CPSI, and private respondents Victor and Elnora were officers in both
Private respondents prayed for the disqualification of petitioners from overseas employment, and sought to
recover from them the SR 1,150 plane fare advanced by Victor for Vicente, P10,000.00 as placement fee
evidenced by a promissory note, and attorney's fees.
Mainly, on the basis of the transcripts of petitioners' testimonies in the clarificatory questioning before the
Rizal Provincial Prosecutor in a related criminal case, 4 the POEA issued its Order of 7 May 1990 giving more
weight and credence to petitioners' version thus
After a careful evaluation of the facts and the evidence presented, we are more inclined to
give weight to complainants' posture. Complainants' version of the case spontaneously
presented in their pleadings is, to our mind, more convincing than respondent's stand.
Moreover, the manner by which complainants narrated the whole incident inspired belief in
the allegation that respondent Career is indeed guilty of illegal exaction. Thus, the actual
expenses incurred by herein complainants computed hereinbelow less the allowable fees of
P3,000.00 (P1,500.00 per worker, respondent being a service contractor) should be returned
to them.
Actual Expenses
P30,000.00 placement fees
14.00 application form
300.00 psychological test
1,400.00 medical exam
P31,000.00 total
less 3,000.00 processing fees at
P1,500.00 per applicant
P28,714.00 amount to be refunded
It appearing, however, that only respondent Career Planners Specialist(s) Int'l. Inc., took part
in the collection of the aforesaid amount, the same should be solely held liable.
We cannot likewise give credence to the Final Quitclaim signed by complainant Vicente
Manalo before he left for the Philippines and presented by respondent as defense. While its
genuineness may not be in question, we believe that it has no bearing on the issue at bar.
The aforesaid Quitclaim deals more with matters concerning complainants' employment
abroad. However, the subject of the instant claim is the refund of complainants'
expenses prior to their deployment to Saudi Arabia.
On the other hand, we hold FILMAN liable for allowing its document such as the TEP to be
used by other agency. Respondent's defense that there is nothing wrong in this because
FILMAN is a sister company of CAREER does not merit consideration because such practice

is not allowed under the POEA Rules and Regulations. A check with our records, however,
showed that respondent FILMAN had been put in the list of forever banned agencies
effective April 5, 1989.
Anent the claim for moral damages, this Office has no jurisdiction to entertain the same.
WHEREFORE, . . . the Authority of Career Planners Specialist(s) International is hereby
suspended for four (4) months or in lieu thereof, a fine of P40,000.00 is hereby imposed for
illegal exaction on two counts plus restitution of the amount of P28,714.00 to herein
complainants in both instances.
Filipino Manpower Services, Inc. is hereby meted a fine of P40,000.00 for two counts of
misrepresentation. Its perpetual disqualification from recruitment activities is hereby
The claim for moral damages is dismissed for lack of jurisdiction.
Respondent Career's counterclaim is likewise dismissed or lack of merit.

Private respondents filed a motion for reconsideration and on 4 February 1991, POEA issued a resolution
setting arise its earlier order stating that
It is worth mentioning at this point that our sole basis for holding respondent Career liable for
illegal exaction was the uncorroborated testimony of the complainants.
As we have consistently held, (the) charge of illegal exaction is a serious charge which may
cause the suspension or cancellation of the authority or license of the offending agency.
Hence, it should be proven and substantiated by a clear and convincing evidence. Mere
allegation of complainant that the agency charged more than the authorized fee will not
suffice to indict the agency for illegal exaction unless the allegation is supported by other
corroborative circumstantial evidence.
Thus, for lack of concrete evidence or proof to support our initial findings, we are inclined to
reconsider the penalty imposed upon respondent.
Foregoing premises, the penalty of suspension imposed upon respondent Career Planners
Specialist(s) International, Inc. pursuant to our Order dated May 7, 1990 is hereby LIFTED.
Accordingly, the alternative fine of P40,000.00 which was paid under protest by respondent
is hereby ordered refunded to them. 6
Petitioners appealed to the Secretary of Labor. On 5 July 1991, then Undersecretary of Labor Ma. Nieves
Roldan-Confesor (now Secretary of Labor) sustained the reconsideration of POEA. Her Order reads in part

We find . . . no cogent reason or sufficient justification to reverse or modify the assailed

Records reveal that the only basis for holding respondent Career Planners Specialist(s)
International, Inc., liable for illegal exaction, as held in the previous POEA Order dated May

7, 1990 was the uncorroborated testimony of the complainants. There was no concrete
evidence or proof to support the POEA Administrator's initial findings.
We take this opportunity to inform the complainants that the charge of illegal exaction is a
serious charge which may cause the suspension or cancellation of the authority or license of
a recruitment agency. Therefore, said charge must be proven and substantiated by clear and
convincing evidence. A mere allegation will not suffice to find an agency liable for illegal
exaction unless said allegation is supported by other corroborative circumstantial evidence.
In this connection, records show that complainants could not narrate the specific
circumstances surrounding their alleged payment of the amount of P30,000.00. They could
not even remember the specific date when said amount was paid to respondent agency. In
addition, when complainants were separately questioned as to how the money was kept
bundled together prior to being handed to respondent agency for payment, Gloria Manalo
said it was wrapped in a piece of paper while Vicente Manalo said it was placed inside an
envelope. 7
On the charge of petitioners that they were given jobs (driver/domestic help) different from those advertised
by private respondents, the Undersecretary ruled that there was no misrepresentation by way of false
advertisement because it was established that private respondents also caused to be printed in the same
newspaper page a second box looking for a couple driver/domestic help.
In her Order of 9 October 1991, then Undersecretary Ma. Nieves Roldan-Confesor denied petitioners'
motion for reconsideration. 8
In the present recourse, petitioners claim that public respondent POEA committed a fatal jurisdictional error
when it resolved private respondents' motion for reconsideration in violation of Rule V, Book VI of the 1985
POEA Rules and Regulations directing the transmittal of motions for reconsideration to the National Labor
Relations Commission (NLRC) for determination. Consequently, for want of legal competence to act on said
motion, the Order of 4 February 1991, as well as the subsequent orders of public respondent
Undersecretary of Labor dated 5 July 1991 and 9 October 1991, is null and void.
In Aguinaldo Industries Corporation v. Commissioner of Internal Revenue 9 We ruled
To allow a litigant to assume a different posture when he comes before the court and
challenge the position he had accepted at the administrative level, would be to sanction a
procedure whereby the court which is supposed to review administrative determinations
would not review, but determine and decide for the first time, a question not raised at the
administrative forum. This cannot be permitted, for the same reason that underlies the
requirement of prior exhaustion of administrative remedies to give administrative authorities
the prior opportunity to decide controversies within its competence, and in much the same
way that, on the judicial level, issues not raised in the lower court cannot be raised for the
first time on appeal.
The alleged procedural lapse by respondent POEA was raised by petitioners only before Us,
notwithstanding that such ground was already existing when they appealed to the Secretary of Labor.
Ironically, petitioners now question the jurisdiction of the Secretary of Labor over the appeal which they
themselves elevated to that office. When petitioners filed their motion for reconsideration with the
Undersecretary of Labor, this procedural issue was not even mentioned. Clearly, it would be the height of
unfairness and inequity if We now allow petitioners to backtrack after getting an unfavorable verdict from
public respondents whose authority they themselves involved. In Tijam v.Sibonghanoy 10 We said: ". . . we
frown upon the "undesirable practice" of a party submitting his case for decision and then accepting the judgment,
only if favorable, and attacking it for lack of jurisdiction, when adverse . . . ."

In this regard, however, We find no procedural infirmity constituting reversible error.

The 1985 POEA Rules and Regulations 11 is divided into eight (8) Books. Book VI, cited by petitioners, is entitled
"Adjudication Rules". The procedure outlined therein relates to the original and exclusive jurisdiction exercised by
POEA through its Adjudication Department "to hear and decide all cases involving employer-employee relations
arising out of or by virtue of a law or contact involving Filipino workers for overseas employment," involving
"[v]iolation of the terms and conditions of employment . . . . [d]isputes relating to the implementation and
interpretation of employment contracts . . . [m]oney claims of workers against their employers and/or their duly
authorized agents in the Philippines or vice versa . . . . [c]laims for death, disability and other benefits arising out
of employment . . . . and . . . . [v]iolations of our non-compliance with any compromise agreement entered into by
and between the parties in an overseas employment contract."
On the other hand, Book II entitled "Licensing and Regulations" of the 1985 POEA Rules and Regulations,
notably Rule VI cited by private respondents, refers particularly to the procedure for suspension, cancellation
and revocation of Authority or License 12 through the POEA Licensing and Regulation Office (LRO).
The controversy in the present case centers on the liability of private respondents for illegal exaction, false
advertisement and violation of pertinent laws and rules on recruitment of overseas workers and the resulting
imposition of penalty of suspension of the Authority of respondent CPSI. Quite plainly, We are not concerned
here with employer-employee relations, the procedure of which is outlined in Book VI; rather, with the
suspension or revocation of Authority embodied in Book II.
Evidently, no jurisdictional error was accordingly committed because in cases affecting suspension,
revocation or cancellation of Authority, the POEA has authority under Sec. 18, Rule VI, Book II, to resolve
motions for reconsideration which may thereafter be appealed to the Secretary of Labor. Section 18,
provides: "A motion for reconsideration of an order o suspension (issued by POEA) or an appeal to the
Minister (now Secretary of Labor) from an order cancelling a license or authority may be entertained only
when filed with the LRO within ten (10) working days from the service of the order or decision" (parenthesis
Petitioners also argue that public respondents gravely abused their discretion when they violated petitioners'
right to administrative due process by requiring clear and convincing evidence to establish the charge illegal
exaction. This point is well taken. There was grave abuse of discretion.
In the administrative proceedings for cancellation, revocation or suspension of Authority or License, no rule
requires that testimonies of complainants be corroborated by documentary evidence, if the charge of
unlawful exaction is substantially proven. All administrative determinations require only substantial proof and
not clear and convincing evidence as erroneously contended by pubic respondents.
Clear and convincing proof is ". . . more than mere preponderance, but not to extent of such certainty as is
required beyond reasonable doubt as in criminal cases . . ." 13 while substantial evidence ". . . consists of more
than a mere scintilla of evidence but may be somewhat less than a preponderance . . . ." 14 Consequently, in the
hierarchy of evidentiary values, We find proof beyond reasonable doubt at the highest level, followed by clear and
convincing evidence, preponderance of evidence, and substantial evidence, in that order.
That the administrative determination of facts may result in the suspension or revocation of the authority of
CPSI does not require a higher degree of proof. The proceedings are administrative, and the consequent
imposition of suspension/revocation of Authority/License does not make the proceedings criminal. Moreover,
the sanctions are administrative and, accordingly, their infliction does not give rise to double jeopardy when
a criminal action is instituted for the same act.
Thus We held in Atlas Consolidated Mining and Development Corporation v. Factoran, Jr. 15

. . . it is sufficient that administrative findings of fact are supported by evidence, or negatively

stated, it is sufficient that findings of fact are not shown to be unsupported by evidence.
Substantial evidence is all that is needed to support an administrative finding of fact, and
substantial evidence is such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion (Ang Tibay v. Court of Industrial Relations, 69 Phil. 635,
642; Police Commission v. Lood, 127 SCRA 762 [1984].
The POEA, after assessing the evidence of both parties, found that private respondents collected from
petitioners P30,000.00 as placement fees; consequently, it ruled that there was illegal exaction. Surprisingly,
without altering its findings of fact, POEA reconsidered its order. It held that uncorroborated testimonies were
not enough to conclude that illegal exaction was committed, particularly so that this might result in the
suspension or revocation of respondents' authority to engage in recruitment activities. The premise that
testimonies of petitioners should be supported by some other form of evidence is, to say the least, fallacious.
In Castillo v. Court of Appeals, 16 where the appellate court reversed the findings of fact of the trial court by
requiring a higher degree of proof, We held
. . . we find no strong and cogent reason which justifies the appellate court's deviation from
the findings and conclusions of the trial court. As pointed out in Hernandez v. Intermediate
Appellate Court (189 SCRA 758 [1990]), in agrarian cases, all that is required is mere
substantial evidence. Hence, the agrarian court's findings of fact which went beyond the
minimum evidentiary support demanded by law, that is, supported by substantial evidence,
are final and conclusive and cannot be reversed by the appellate tribunal.
The seeming discrepancy in the statements of the witnesses (one saying the money was wrapped in paper,
the other, that the money was in an envelope; neither testified on the specific date of the exaction), refers
only to minor details. Perhaps it would be different if the variance refers to essential points, e.g., whether the
amount of P30,000.00 was actually paid by petitioners to private respondents. Consequently, whether the
money was wrapped in paper, or placed in an envelope, or unwrapped or whether the parties could not
recall when there payment was effected is unimportant. After all, the money could have been wrapped in
paper and placed in the envelope, or placed in the envelope without being wrapped, or wrapped with use of
an unpasted envelope that appeared to be the envelope itself. In either case, petitioners, could have viewed
them differently; but the difference is ultimately inconsequential. The crucial point to consider is that the
petitioners categorically and unequivocally testified that respondents collected from them the amount of
P30,000.00 as their placement fees and that they paid the amount demanded. In this regard, it may be worth
to emphasize that only substantial evidence, not necessarily clear and convincing evidence, is required.
Moreover, when confronted with conflicting assertions, the rule that "as between a positive and categorical
testimony which has a ring of truth on one hand, and a bare denial on the other, the former is generally held
to prevail . . . ." 17 applies.
But even on the supposition that there was no payment of P30,000.00, it cannot be denied that private
respondents required petitioners to execute a promissory note for P10,000.00 purportedly because
petitioners were hired without paying placement fees. The mere charging of P10,000.00, standing alone, is
enough to hold private respondents answerable for illegal exaction because the allowable amount to be
collected per contract worker according to respondent POEA was only P1,500.00, or P3,000.00 for both
WHEREFORE, the petition is GRANTED. The challenged Orders of respondent Undersecretary of Labor
dated 5 July 1991 and 9 October 1991, as well as the Resolution of respondent POEA dated 4 February
1991, having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction are SET
ASIDE, and the original Order of respondent POEA dated 7 May 1990 is ordered REINSTATED and

Cruz, Padilla and Grio-Aquino, JJ., concur.