G.R. No. 155903 - C.F. SHARP CREW MANAGEMENT, INC. vs. ESPANOL, JR.

C.F. Sharp Crew Management, Inc. (petitioner) challenged administrative orders imposed on it regarding illegal recruitment.
The dispute originated when Louis Cruise Lines (LCL), a foreign corporation, terminated its previous crewing agreement with Papadopolous Shipping, Ltd. (PAPASHIP) and appointed C.F. Sharp as its new manning agent in the Philippines.
Prior to C.F. Sharp’s accreditation with the Philippine Overseas Employment Administration (POEA), a recruitment controversy arose involving Rizal International Shipping Services, the previously accredited manning agency.

In October 1996, LCL terminated its agreement with PAPASHIP and designated C.F. Sharp as its new agent.

C.F. Sharp then sought accreditation from the POEA for recruiting Filipino seamen on behalf of LCL.
Rizal objected to the change, arguing that its accreditation was still valid until December 31, 1996.

Recruitment interview activities were conducted by LCL officials, Theodoros Savva and Andrias Tjiakouris, at the C.F. Sharp office in mid-December 1996.

The activities included interviews with hotel staffs, cooks, chefs, and notably around 300 seamen, with evidence provided by affidavits and an Inspection Report.
POEA inspectors conducted an inspection on December 17, 1996, and observed the interview and selection process.

Rizal filed a complaint with the POEA on December 9, 1996, alleging illegal recruitment, noncompliance on matters of license and appointment, and violations under Section 29 of the Labor Code.

Illegal recruitment activities, including the unauthorized conduct of interviews and selection processes.
Violation of Section 29 of the Labor Code for designating officers, agents, or employees without prior POEA approval.

The Secretary of Labor, Leonardo A. Quisumbing, on December 19, 1997, affirmed the POEA Administrator’s sanctions, imposing monetary fines and periods of suspension on C.F. Sharp.
C.F. Sharp’s motion for reconsideration was denied by Undersecretary Jose M. Espanol, Jr. on February 5, 1999, and it later elevated the case to the Court of Appeals (CA) via petition for certiorari.

On April 15, 1999, C.F. Sharp requested and was granted the lifting of the suspension by the Deputy Administrator for Licensing and Adjudication, which allowed it to deploy seamen despite the pending accreditation.
The CA, on April 30, 2002, held that by opting to have its posted cash bond answer for the fines (and thereby effectively paying the fines), C.F. Sharp was estopped from questioning the administrative orders.
The CA’s findings included:

Confirmation that preparatory interviews, selection, and recruitment were indeed undertaken in violation of legal requirements.
Reliance on the Inspection Report and supporting affidavits of about 98 seamen, which established that the interview activities were meant for recruitment.

The interviews conducted were not recruitment activities but were related to processing complaints by ex-crew members against Rizal.
Its challenges to the administrative orders were improperly based on estoppel because it had not voluntarily executed or acquiesced to the unfavorable orders.

The petitioner further contested the admissibility and probative value of the POEA Inspection Report, claiming a denial of due process due to lack of cross-examination opportunities.
However, evidence such as the instructions from LCL to report to C.F. Sharp and the Special Power of Attorney executed by LCL were crucial in establishing a conspiracy between LCL and C.F. Sharp to engage in illegal recruitment.

Whether the CA erred in ruling that C.F. Sharp was estopped from assailing the December 19, 1997 administrative order and the February 5, 1999 resolution on the ground that it voluntarily executed its posted cash bond in lieu of incurring suspension or further fines.

Whether the CA wrongly held C.F. Sharp liable for illegal recruitment by undertaking recruitment activities prior to having obtained a valid POEA accreditation.
Whether the preparatory interviews and selection activities conducted at C.F. Sharp’s office qualify as “recruitment” under Section 6 of R.A. No. 8042 in relation to Article 13(b) and (f) and Article 16 of the Labor Code.

Whether C.F. Sharp’s appointment of an agent (Henry Desiderio) without prior POEA approval constituted a violation of Article 29 of the Labor Code and Section 2(k), Rule I, Book VI of the POEA Rules and Regulations.