Standard Oil Company of New York vs.

Manuel Lopez Castelo

47 Phil. 256

FACTS:
Castelo, owner of a small interisland steamer, the Batangueo, let to Chumbuque, by contract of charter,
for use in conveying of cargo between certain ports of the Philippine Islands.

The contract has stipulated that the officers and crew of the Batangueo should be supplied by the
owner, and that the charterer should have no other control over the captain, pilot, and engineers than to
specify the voyages that they should make and to require the owner to discipline or relieve them as soon
as possible in case they should fail to perform the duties respectively assigned to them.

While the boat was being thus used by the charterer in the interisland trade, the Standard Oil Company
delivered to the agent of the boat in Manila a quantity of petroleum to be conveyed to the port of
Casiguran, in the Province of Sorsogon.

For this consignment a bill of lading of the usual form was delivered, with the stipulation that freight
should be paid at the destination. Said bill of lading contained no provision with respect to the storage of
the petroleum, but it was in fact placed upon the deck of the ship and not in the hold.

While the boat was on her way to the port mentioned, and off the western coast of Sorsogon, a violent
typhoon passed over that region, and while the storm was at its height the captain was compelled for the
safety of all to jettison the entire consignment of petroleum consisting of 200 cases.

When the storm abated the ship made port, and 13 cases of the petroleum were recovered, but the
remainder was wholly lost.

ISSUES:
WON the loss of this petroleum was a general average loss or a particular loss to be borne solely
by the owner of the cargo
WON the charterer may be held liable of the loss of the goods

HELD:
1st Issue
The loss was a General Average Loss. It is a general rule (xxx) that ordinarily the loss of cargo carried
on deck shall not be considered a general average loss. The reason for this rule is found in the fact that
deck cargo is in an extra-hazardous position and, if on a sailing vessel, its presence is likely to obstruct
the free action of the crew in managing the ship. Moreover, especially in the case of small vessels, it
renders the boat top-heavy and thus may have to be cast overboard sooner than would be necessary if it
were in the hold; and naturally it is always the first cargo to go over in case of emergency. Indeed, in Art
815 of Code of Commerce, it is expressly declared that deck cargo shall be cast overboard before cargo
stowed in the hold.

However, with the advent of the steamship as the principal conveyer of cargo by sea, it has been felt that
the reason for the rule has become less weighty, especially with reference to coastwise trade; and it is
now generally held that jettisoned goods carried on deck, according to the custom of trade, by steam
vessels navigating coastwise and inland waters, are entitled to contribution as a general average loss.

2nd Issue
Yes. It is the courts opinion, that the shipper will go after the owner of the ship and the agent. The
shipper may also have his recourse against the captain.

Primary liability is placed upon the person who has actual control over the conduct of the voyage and who
has most capital embarked in the venture, namely, the owner of the ship, leaving him to obtain recourse,
as it is very easy to do, from other individuals who have been drawn into the venture as shippers

The captain, by article 852 of the Code of Commerce, is required to initiate the proceedings for the
adjustment, liquidation, and distribution of any gross average to which the circumstances of the voyage
may have given origin; and it is therefore his duty to take the proper steps to protect any shipper whose
goods may have been jettisoned for the general safety

In the case before us the captain of the vessel did not take those steps; and the court is of the opinion
that the failure of the captain to take those steps gave rise to a liability for which the owner of the ship
must answer.
Yu Con vs. Ipil, et. al.
41 Phil 770

FACTS:
Yu Con is a merchant engaged in the sale of cloth and domestic articles. He has engaged for several
times a charter for a banca, the Maria, owned by Narciso Lauron, which was mastered by Glicerio Ipil and
Justo Salomo. On one transaction, Plaintiff had delivered a trunk of goods and money. However, such
cargo and money has disappeared while the ship was still on dock awaiting departure.

ISSUE:
WON the three defendants may be held liable.

HELD:
In order that a thing may be transported, it must be delivered to the carrier. From the time it is delivered to
the carrier or shipper until it is received by the consignee, the carrier has it in his possession, as a
necessary condition for its transportation, he is obliged to preserve and guard it.

Having failed to exercise for its safe-keeping the diligence required by the nature of the obligation
assumed by them and by the circumstances of the time and the place, it is evident that, in pursuance of
the provisions of articles 1601 and 1602, in their relation to articles 1783 and 1784, and as prescribed in
articles 1770, of the Civil Code, they are liable for its loss or misplacement and must restore it to the
plaintiff, together with the corresponding interest thereon as an indemnity for the losses and damages
caused him through the loss of the said sum.

In maritime commerce, the shippers and passengers in making contracts with the captain do so through
the confidence they have in the shipowner who appointed him; they presume that the owner made a most
careful investigation before appointing him, and, above all, they themselves are unable to make such an
investigation, and even though they should do so, they could not obtain complete security, inasmuch as
the shipowner can, whenever he sees fir, appoint another captain instead.

The shipowner is in the same case with respect to the members of the crew, for, though he does not
appoint directly, yet, expressly or tacitly, he contributes to their appointment. On the other hand, if the
shipowner derives profits from the results of the choice of the captain and the crew, when the choice turns
out successful, it is also just that he should suffer the consequences of an unsuccessful appointment, by
application of the rule of natural law contained in the Partidas, viz., that he who enjoys the benefits
derived from a thing must likewise suffer the losses that ensue therefrom.

For legal purposes, that is, for the determination of the nature and effect of the relations created between
the plaintiff, as owner of the merchandise laden on said craft and of the money that was delivered to the
master, Ipil, and the defendant Lauron, as owner of the craft, the latter was a vessel, according to the
meaning and construction given to the word vessel in the Mercantile Code, in treating of maritime
commerce, under Title 1, Book 3.

The word vessel serves to designate every kind of craft by whatever particular or technical name it may
now be known or which nautical advancements may give it in the future. According to the foregoing
definitions, then, we should hold that the banca called Maria, chartered by the plaintiff Yu Con from the
defendant Narciso Lauron, was a "vessel", pursuant to the meaning this word has in mercantile law, that
is, in accordance with the provisions of the Code of Commerce in force.

The name of captain or master is given, according to the kind of vessel, to the person in charge of it.
Captain is applied to those who govern vessels that navigate the high seas or ships of large dimensions
and importance, although they be engaged in the coastwise trade. Masters are those who command
smaller ships engaged exclusively in the coastwise trade.

For the purposes of maritime commerce, the words "captain" and "master" have the same meaning; both
being the chiefs or commanders of ships.
Yangco vs. Laserna
73 Phil 330

FACTS:
Teodoro Yangco owns S.S. Negros which has left the port of Romblon to return to Manila. A typhoon has
occurred which the captain was duly advised and his attention thereto called by the passengers
themselves before the vessel set sail. The boat was overloaded as indicated by the loadline which was 6
to 7 inches below the surface of the water. The passengers, numbering about 180, were overcrowded,
the vessel's capacity being limited to only 123 passengers. After two hours of sailing, the boat
encountered strong winds and rough seas between the islands of Banton and Simara. As the sea
became increasingly violent, the captain ordered the vessel to turn left, evidently to return to port, but in
the maneuver, the vessel was caught sidewise by a big wave which caused it to capsize and sink. Many
of the passengers died in the mishap.

ISSUE:
WON the shipowner or agent, notwithstanding the total loss of the vessel as a result of the negligence of
its captain, be properly held liable in damages for the consequent death of its passengers

HELD:
No. It is held that this question is controlled by the provision of article 587 of the Code of Commerce
which provides, "The agent shall also be civilly liable for the indemnities in favor of third persons which
arise from the conduct of the captain in the care of the goods which the vessel carried; but he may
exempt himself therefrom by abandoning the vessel with all her equipments and the freight he may have
earned during the voyage."

The provision accords a shipowner or agent the right of abandonment; and by necessary implication, his
liability is confined to that which he is entitled as of right to abandon - "the vessel with all her equipments
and the freight it may have earned during the voyage." If the shipowner or agent may in any way be held
civilly liable at all for injury to or death of passengers arising from the negligence of the captain in cases of
collisions or shipwrecks, his liability is merely co-extensive with his interest in the vessel such that a total
loss thereof results in its extinction. In arriving at this conclusion, the fact is not ignored that the ill-fated S.
S. Negros, as a vessel engaged in interisland trade, is a common carrier, and that the relationship
between the petitioner and the passengers who died in the mishap rests on a contract of carriage. But
assuming that petitioner is liable for a breach of contract of carriage, the exclusively "real and
hypothecary nature" of maritime law operates to limit such liability to the value of the vessel, or to the
insurance thereon, if any. In the instant case it does not appear that the vessel was insured.
Chua Yek Hong vs. Intermediate Appellate Court
166 SCRA 183

FACTS:
Respondent is owner of M/V Luzviminda, a common carrier engaged in coastwise trade from the different
ports of Oriental Mindoro to the Port of Manila. In October 1977, petitioner loaded 1,000 sacks of copra,
valued at P101,227.40 on board M/V Luzviminda for shipment to Manila. Said cargo, however, did not
reach Manila because the vessel capsized and sank with all its cargo.

Petitioner then instituted a complaint for damages on breach of contract of carriage against private
respondent. The trial court rendered a decision in favour of the petitioners. On appeal, the appellate
court ruled in favour of the respondents applying article 587 of the Code of Commerce.

ISSUE:
WON the respondent court erred in applying the doctrine of limited liability under Article 587 of the Code
of Commerce

HELD:
Article 587 of the Code of Commerce provides: The ship agents shall be civilly liable for the indemnities in
favour of third persons which may arise from the conduct of the captain in the care of the goods which he
loaded on the vessel; but he may exempt himself therefrom by abandoning the vessel with all the
equipment and the freight it may have earned during the voyage.

Said article is the source of the doctrine of limited liability, which gives the ship agents or owners right of
abandonment of the vessel and earned freight and such abandonment provides the cessation of the
responsibility of the ship agent/owner. In other words, the ship agent/owners liability is merely co-
extensive with his interest in the vessel that a total loss thereof results in its extinction, no vessel, no
liability.

The limited liability rule, however provides for exceptions: (1) where the injury or death to a passenger is
due either to the fault of the ship owner, or to the concurring negligence of the ship owner and the captain
(2) where the vessel is insured; and (3) in workmen's compensation claims. In this case, there is nothing
in the records to show that the loss of the cargo was due to the fault of the private respondent as ship
owners, or to their concurrent negligence with the captain of the vessel and there was no showing that the
vessel was insured.

Also, the provisions of the Civil Code on common carriers do not apply in this case since the
circumstances of the case are not within those that can be regulated by such provisions so the Code of
Commerce and other special laws shall apply.
In sum, it is held that the respondents are freed from their liabilities applying the limited liability rule for
having totally lost the vessel and none of the exceptions apply to them, the liability for the loss of the
cargo of the copra must be deemed extinguished
Chua Yek Hong vs. Intermediate Appellate Court
G.R. No. 74811, December 14, 1988

FACTS:
A decision dated 30 September 1988 was rendered by the Supreme Court affirms the decision of the
Court of Appeals dismissing the complaint against private respondents herein and absolving them from
any and all liability from the loss of 1,000 sacks of copra shipped by petitioner aboard a provide
repondents vessel. A Motion for Reconsideration of such decision was filed as an opposition thereto.

ISSUE:
WON the Court failed to consider the Trial Court's finding that the loss of the vessel with its cargo was
due to the fault of the shipowner or to the concurring negligence of the shipowner and the captain.

HELD:
The Appellate Court Decision, however, mentions only the ship captain as having been negligent in the
performance of his duties (p. 3, Court of Appeals Decision, p. 15, Rollo). This is a factual finding binding
on this Court. For the exception to the limited liability rule (Article 587, Code of Commerce) to apply, the
loss must be due to the fault of the shipowner, or to the concurring negligence of the shipowner and the
captain. As we held, there is nothing in the records showing such negligence (p. 6, Decision.).

The invocation by petitioners of Articles 1733 and 1735 of the Civil Code is misplaced. As was stated in
the Decision sought to be reconsidered, while the primary law governing the instant case is the Civil
Code, in all matters not regulated by said Code, the Code of Commerce and other special laws shall
govern. Since the Civil Code contains no provisions regulating liability of shipowners or agents in the
event of total loss or destruction of the vessel, it is the provisions of the Code of Commerce, particularly
Article 587, that governs.

Petitioner further contends that the ruling laid down in Eastern Shipping Lines vs. IAC, et al. (150 SCRA
464 [1987]) should be made to apply in the instant case. That case, however, involved foreign maritime
trade while the present case involves local inter-island shipping. The environmental set-up in the two
cases, therefore, is not on all fours.

Thus, the Motion for Reconsideration is rendered denied and such denial is final
Heirs of Amparo de los Santos vs. Court of Appeals
186 SCRA 649

FACTS:
Compania Maritina owns a vessel, M/V Mindoro, which has sailed from Manila to New Washington, Aklan
with many passengers aboard. During its voyage, the vessel had met a typhoon, typhoon Welming, and
was sunk by such occurrence. Many of its passengers died. One of them was Amparo delos Santos. In a
decision by the Board of Marine Inquiry, it was found that the captain and some officers of the crew were
negligent in operating the vessel. The Heirs of Amparo contends that there was negligence on the part of
the vessel. On the other hand, Compania Maritima contends that no negligence was ever established and
that the drowning of the passengers was due to force majeure.

ISSUE:
WON Compania Maritima was negligent
WON Article 587 of the Code of Commerce may be appreciated in this case

HELD:
1st Issue
Yes, Compania Maritima was negligent. Modern technology belies the claim of Compania Maritima that it
did not have any information about typhoon Welming until after the boat was already at sea. The Weather
Bureau had already informed that a typhoon was coming as it had already forecasted that an incoming
storm. Moreover, the Weather Bureau is equipped with modern apparatus which enables it to detect any
incoming atmospheric disturbances. It is highly improbable due to the late departure of the ship that the
Weather Bureau had not yet issued any typhoon bulletin at any time during the day to the shipping
companies.

It is well noted also that Maritima displayed lack of foresight and minimum concern for the safety of its
passengers. The ship was delayed for 4 hours and it did not check from the captain the reasons behind
the delay nor send its representative to inquire into the cause of the delay. A closer supervision could
have prevented the overloading of the vessel. Maritima also did not install a radar which could have
allowed the ship to navigate safely for shelter during the storm. The vessel was left at the mercy of
Welming.

2nd Issue
Art. 587 is inapplicable because the shipowner was also negligent. Under Art. 587 of the Code of
Commerce, a shipowner or agent has the right of abandonment; and by necessary implication, his liability
is confined to that which he is entitled of right to abandon the vessel with all her equipments and the
freight it may have earned during the voyage. This rule is necessary to offset against the innumerable
hazards and perils of sea voyage and to encourage shipbuilding and maritime commerce.

The limited liability doctrine applies not only to goods but also in all cases like death or injury to
passengers wherein the shipowner or agent may properly be held liable for the negligent or illicit acts of
the captain.Art. 587 speaks only of situations where the fault or negligence is committed solely by the
captain. In cases where the shipowner is likewise to be blamed, Art. 587 does not apply.
Such a situation will be covered by the New Civil Code provisions on common carriers.
Aboitiz Shipping Corporation vs. General Accident Fire and Life Assurance Corporation, Ltd.
217 SCRA 359

FACTS:
Aboitiz Corporation operated M/V P. Aboitiz, a common carrier which sank on a voyage from Hong Kong
to the Philippines on 31 October 1980. General Accident Fire and Life Assurance Corporation, Ltd. Is a
foreign insurance company pursuing its remedies as subrogee of several cargo consignees whose cargo
sank with the said vessel. The sinking gave rise to several suits against Aboitiz. The sinking was initially
investigated by the Board of Marine Inquiry which found that the sinking was due to force majeure and
that the vessel was sea worthy. Notwithstanding such finding, the trial court found against the carrier on
the basis that the loss was not due to force majeure. The attempted execution of the judgment award in
said case gave rise to this case. Aboitiz contends that the Limited Liability Rule warrants immediate stay
of execution of judgment to prevent impairment of other creditors shares.

ISSUE:
WON the Limited Liability Rule arising out of the real and hypothecary nature of maritime law should
apply.

HELD:
The real and hypothecary nature of maritime law simply means that the liability of the carrier in
connection with losses related to maritime contracts is confined to the vessel, which is hypothecated for
such obligations or which stands as guaranty for their settlement. The liability of the vessel owner and
agent arising from the operation of such vessel were confined to the vessel itself, its equipment, freight,
and insurance, if any.

The Limited Liability Rule in the Philippines cover only liability for injuries to third parties, acts of the
captain and collisions. The only time the Limited Liability Rule does not apply is when there is an actual
finding of negligence on the part of the vessel owner or agent. In this case, there has been no actual
finding of negligence on the part of Aboitiz.

The rights of parties to claim against an agent or owner of a vessel may be compared to those of
creditors against an insolvent corporation whose assets are not enough to satisfy the totality of claims
against it. Each individual creditor may prove the actual amount of their respective claims but this does
not mean that they shall be allowed to recover fully. The claimants or creditors are limited in their recovery
to the remaining value of accessible assets. No claimant can be given precedence over the others by the
simple expedience of having filed or completed its action than the rest. Thus, execution of judgment must
be stayed pending completion of all cases occasioned by the subject sinking.
Aboitiz Shipping Corporation vs. New India Assurance Company, Ltd.
G.R. No. 156978, August 24, 2007

FACTS:
Societe Francaise Des Colloides loaded a cargo of textiles and chemicals from France on board a vessel
owned by Franco-Belgian Services, Inc. The cargo was consigned to General Textile, Inc. and insured by
respondent New India Assurance. While in HK, the cargo was transferred to M/V P. Aboitiz for
transhipment to Manila. Before departure, the Japanese Meteorological Center advised the vessel it was
safe to travel. But at sea, the vessel got a report of a typhoon moving within its path. It changed its course
to avoid the typhoon but still, its hull leaked and the vessel sank. The captain of M/V P. Aboitiz filed his
Marine Protest stating that the wind force was at 10-15 knots, and the weather described as moderate
breeze, small waves, becoming longer, fairly frequent white horses.

Respondent insurer paid General textile and was subrogated to its rights. Respondent New Indias
surveyor found that the cause was the flooding of the holds brought about by the vessels questionable
seaworthiness. Respondent New India filed a complaint for damages against petitioner Aboitiz alleging
that the proximate cause of the shipments loss was the fault/negligence of the master and crew of the
vessel, its unseaworthiness and defendants failure to exercise extraordinary diligence in the transport of
goods.

Petitioner Aboitiz alleged that in accordance with the real and hypothecary nature of maritime law, the
sinking of M/V P. Aboitiz extinguished its liability on the loss of the cargoes. The Board of Marine Inquiry
(BMI) exonerated the captain and crew of any administrative liability and declared the vessel seaworthy
and that the sinking was due to typhoon.

ISSUE:
WON the limited liability doctrine, which limits respondents award of damages to its pro rata share in the
insurance proceeds, may be appreciated

HELD:
No. It will not apply. The Supreme Court has once ruled, in the case of Monarch Insurance vs. Court of
Appeals, the sinking was not due to force majeure but to its unseaworthy condition. There, the petitioner
was concurrently liable with the captain and crew. The circumstances made the doctrine of limited liability
applicable. An exception to the limited liability doctrine is when the damage is due to the fault of the
shipowner or to the concurrent negligence of the shipowner and captain. In which case, the shipowner
shall be liable fully for damages. Where the vessel is found unseaworthy, the shipowner is presumed
negligent since its tasked with the maintenance of its vessel. Though this duty can be delegated, the
shipowner must still exercise close supervision over its men.

In the present case, petitioner Aboitiz has the burden of showing that it exercise extradordinacry diligence
in the transport of the goods it had on board in order to invoke the limited liability doctrine. To limit its
liability to the amount of the insurance proceeds, Aboitiz had to prove that the unseaworthiness of its
vessel was not due to its fault or negligence. Under the circumstances, Aboitiz failed to discharge this
burden. The TC and CA found that the sinking wasnt due to the typhoon but to the vessels
unseaworthiness. Evidence shows that the weather was moderate when it sank. Moreover, the findings of
BMI are not always binding on courts. The exoneration of the officers and crew only relate to their
administrative liabilities and doesnt serve to absolve the common carrier from its liabilities arising from its
failure to exercise extraordinary diligence. Where the shipowner fails to overcome the presumption of
negligence, the doctrine of limited liability cannot be applied.
Phil-Nippon Kyoei, Corporation vs. Rosalia T. Gudelosao
G.R. No. 156978, August 24, 2007

FACTS:
Petitioner, Phil-Nippon Kyoei, a domestic shipping corporation, purchased a Ro-Ro passenger/cargo
vessel, the MV Mahlia, in Japan. For the vessels one month conduction voyage from Japan to the
Philippines, petitioner, as local principal, and Top Ever Marine Management Maritime Co., Ltd. (TMCL),
as a foreign principal, hired Edwin Gudelosao, Virgilio Tancontian, and six other crewmembers.

They were hired through the local minning agency of TMCL, Top Ever Marine Management Philippine
Corporation (TEMMPC). TEMMPC, through their president and general manager, Captain Oscar Orbeta,
and the eight crewmembers signed separate contracts of employment. Petitioner secured a Marine
Insurance Policy over the vessel against loss, damage, and third party liability or expense, arising from
the occurrence of the perils of the sea for the voyage of the vessel from Japan to Philippines. This Marine
Insurance Policy includes the Personal Accident Policies for the eight crewmembers in case of accidental
death or injury.

While still in Japanese waters, the vessel sank due to extreme bad weather condition. Only the Chief
Engineer survived the incident while the rest of the crewmembers perished. The heirs and beneficiaries
filed complaints for death benefits and other damages against TEMMPC, Captain Orbeta, TMCL, and the
Insurance Company.

ISSUE:
WON the doctrine of limited liability rule of maritime law applies in workmens compensation claims

HELD:
No, it is not applicaple. In this jurisdiction, the limited liability rule is embodied in Articles 587, 590 and 837
under Book III of the Code of Commerce, which provides:

Art. 587. The ship agent shall also be civilly liable for the indemnities in favor of third persons which arise
from the conduct of the captain in the care of the goods which the vessel carried; but he may exempt
himself therefrom by abandoning the vessel with all her equipment and the freightage he may have
earned during the voyage.

Art. 590. The co-owners of a vessel shall be civilly liable, in the proportion of their contribution to the
common fund, for the results of the acts of the captain, referred to in Art. 587.
Each part-owner may exempt himself from this liability by the abandonment before a notary of the part of
the vessel belonging to him.

Art. 837. The civil liability incurred by the shipowners in the cases prescribed in this section, shall be
understood as limited to the value of the vessel with all its appurtenances and freightage earned during
the voyage.

Article 837 applies the limited liability rule in cases of collision. Meanwhile, Articles 587 and 590 embody
the universal principle of limited liability in all cases wherein the shipowner or agent may be properly held
liable for the negligent or illicit acts of the captain. These articles precisely intend to limit the liability of the
shipowner or agent to the value of the vessel, its appurtenances and freightage earned in the voyage,
provided that the owner or agent abandons the vessel.

In Abueg v. San Diego, we ruled that the limited liability rule found in the Code of Commerce is
inapplicable in a liability created by statute to compensate employees and laborers, or the heirs and
dependents, in cases of injury received by or inflicted upon them while engaged in the performance of
their work or employment

Act No. 3428, otherwise known as The Workmen's Compensation Act is the first law on workmen's
compensation in the Philippines for work-related injury, illness, or death. This was repealed on November
1, 1974 by the Labor Code, and was further amended on December 27, 1974 by Presidential Decree No.
626. The pertinent provisions are now found in Title II, Book IV of the Labor Code on Employees
Compensation and State Insurance Fund. The death benefits granted under Title II, Book IV of the Labor
Code are similar to the death benefits granted under the POEA-SEC.

Akin to the death benefits under the Labor Code, these benefits under the POEA-SEC are given when the
employee dies due to a work-related cause during the term of his contract. The liability of the shipowner
or agent under the POEA-SEC has likewise nothing to do with the provisions of the Code of Commerce
regarding maritime commerce.
The death benefits granted under the POEA-SEC is not due to the death of a passenger by or through
the misconduct of the captain or master of the ship; nor is it the liability for the loss of the ship as result of
collision; nor the liability for wages of the crew. It is a liability created by contract between the seafarers
and their employers, but secured through the State's intervention as a matter of constitutional and
statutory duty to protect Filipino overseas workers and to secure for them the best terms and conditions
possible, in order to compensate the seafarers' heirs and dependents in the event of death while engaged
in the performance of their work or employment. The POEA-SEC prescribes the set of standard
provisions established and implemented by the POEA containing the minimum requirements prescribed
by the government for the employment of Filipino seafarers. While it is contractual in nature, the POEA-
SEC is designed primarily for the protection and benefit of Filipino seamen in the pursuit of their
employment on board ocean-going vessels. As such, it is deemed incorporated in every Filipino
seafarers' contract of employment. It is established pursuant to POEA's power "to secure the best terms
and conditions of employment of Filipino contract workers and ensure compliance therewith" and "to
protect the well-being of Filipino workers overseas" pursuant to Article 17 of the Labor Code as amended
by Executive Order (EO) Nos. 797 and 247.