THIRD DIVISION Ltd. (TMCL), as foreign principal, hired Edwin C.

WHEREFORE, premises considered, CAPT.

Gudelosao, Virgilio A. Tancontian, and six other OSCAR ORBETA, [TEMMPC], [TMCL], and PHIL-
July 13, 2016 crewmembers. They were hired through the local NIPPON KYOEI CORPORATION are hereby
manning agency of TMCL, Top Ever Marine directed to pay solidarily the complainants as
G.R. No. 181375 Management Philippine Corporation (TEMMPC). follows:
TEMMPC, through their president and general
manager, Capt. Oscar Orbeta (Capt. Orbeta), and
PHIL-NIPPON KYOEI, CORP., Petitioner, Burial 10%
the eight crewmembers signed separate contracts Death
vs. Expens atty's
of employment. Petitioner secured a Marine Benefits
ROSALIA T. GUDELOSAO, on her behalf and in es [fees]
Insurance Policy (Maritime Policy No. 00001)
behalf of minor children CHRISTY MAE T. from SSSICI over the vessel for P10,800,000.00 1. ROSALIA
GUDELOSAO and ROSE ELDEN T. GUDELOSAO, against loss, damage, and third party liability or T. US$50,0 US$1,0 US$5,1
CARMEN TANCONTIAN, on her behalf and in expense, arising from the occurrence of the perils GUDELOSA 00 00 00
behalf of the children CAMELA B. of the sea for the voyage of the vessel from O:
TANCONTIAN, BEVERLY B. TANCONTIAN, and Onomichi, Japan to Batangas, Philippines. This
ACE B. TANCONTIAN, Respondents. 2. CARMEN
Marine Insurance Policy included Personal
Accident Policies for the eight crewmembers for B. US$50,0 US$1,0 US$5,1
DECISION P3,240,000.00 each in case of accidental death or TANCONTI 00 00 00
injury.7 AN:
JARDELEZA, J.:
3.
On February 24, 2003, while still within Japanese CARMELA
This is a petition for review on certiorari1under waters, the vessel sank due to extreme bad US$7,00
B. US$700
Rule 45 of the Revised Rules of Court filed by Phil- weather condition. Only Chief Engineer 0
TANCONTI
Nippon Kyoei, Corp. (Petitioner) from the NiloMacasling survived the incident while the rest AN:
Decision2 of the Court of Appeals (CA) dated of the crewmembers, including Gudelosao and
October 4, 2007 (CA Decision) and its Tancontian, perished.8 4. BEVERLY
Resolution3 dated January 11, 2008 in CA-G.R. SP B. US$7,00
US$700
No. 95456. The CA reinstated the Labor Arbiter's Respondents, as heirs and beneficiaries of TANCONTI 0
Decision4 dated August 5, 2004 (LA Decision) with Gudelosao and Tancontian, filed separate AN:
the modification, among others, that petitioner is complaints for death benefits and other damages 5. ACE B.
liable to respondents under the insurance cover it against petitioner, TEMMPC, Capt. Orbeta, TMCL, US$7,00
TANCONTI US$700
procured from South Sea Surety & Insurance Co., and SSSICI, with the Arbitration Branch of the 0
AN:
Inc. (SSSICI). The CA ruled that petitioner's National Labor Relations Commission (NLRC).9
liability would be extinguished only upon
payment by SSSICI of the insurance proceeds to Further, respondent SOUTH SEA SURETY &
On August 5, 2004, Labor Arbiter (LA) Pablo S.
respondents.5 INSURANCE CO., INC. is hereby directed to pay
Magat rendered a Decision10 finding solidary
liability among petitioner, TEMMPC, TMCL and as beneficiaries complainants ROSALIA T.
Facts Capt. Orbeta. The LA also found SSSICI liable to the GUDELOSAO and CARMEN B.
respondents for the proceeds of the Personal TANCONTIAN [P]3,240,000.00 each for the
Petitioner, a domestic shipping corporation, Accident Policies and attorney's fees. The LA, proceeds of the Personal Accident Policy Cover it
purchased a "Ro-Ro" passenger/cargo vessel "MV however, ruled that the liability of petitioner shall issued for each of the deceased seafarers EDWIN
Mahlia" in Japan in February 2003. 6 For the be deemed extinguished only upon SSSICI's C. GUDELOSAO and VIRGILIO A. T ANCONTIAN
vessel's one month conduction voyage from Japan payment of the insurance proceeds. The plus 10% attorney's fees thereof at [P]324,000.00
to the Philippines, petitioner, as local principal, dispositive portion of the LA Decision reads: each thereof or a total of [P]648,000.00.
and Top Ever Marine Management Maritime Co.,

Page 1 of 8
Nevertheless, upon payment of said proceeds to Respondents filed a petition for certiorari17before ACE B.
said widows by respondent SOUTH SEA SURETY the CA where they argued that the NLRC gravely US$7,00
TANCONTI US$700
& INSURANCE CO., INC., respondent PHIL- abused its discretion in ruling that TEMMPC, 0
AN:
NIPPON CORPORATION's liability to all the TMCL, and Capt. Orbeta are absolved from the
complainants is deemed extinguished. terms and conditions of the POEA-SEC by virtue of
the limited liability rule. Respondents also argued Further, [respondents] CAPT. OSCAR ORBETA,
Any other claim is hereby dismissed for lack of that the NLRC gravely abused its discretion in [TEMMPC] and [TMCL] (the manning agency) are
merit. ruling that the obligation to pay the surviving hereby directed to pay solidarily the complainants
heirs rests solely on SSSICI. The CA granted the in addition to their awarded claims, additional
petition, the dispositive portion thereof reads: death benefits of US$7,000 each to the minor
SO ORDERED.11
children of petitioner Rosalia T. Gudelosao,
WHEREFORE for being impressed with merit the namely, Christy Mae T. Gudelosao and Rose Elden
On appeal, the NLRC modified the LA Decision in a T. Gudelosao.
Resolution12 dated February 28, 2006, the petition is hereby GRANTED. Accordingly, the
dispositive portion of which reads: Resolution dated February 28, 2006, and
Resolution, dated May 5, 2006, of the public Respondent SOUTH SEA SURETY & INSURANCE
respondent NLRC are hereby SET ASIDE. The CO., INC. is hereby directed to pay as beneficiaries
WHEREFORE, premises considered, the Appeals of complainants ROSALIA T. GUDELOSAO and
Decision of the Labor Arbiter dated [August 5,
Complainants and PNKC are GRANTED but only CARMEN B. TANCONTIAN [P]3,240,000.00 each
2004] is REINSTATED, subject to the following
partially in the case of Complainants' Appeal, and for the proceeds of the Personal Accident Policy
modifications:
the Appeal of [SSSICI] is DISMISSED for lack of Cover it issued for each of the deceased seafarers
merit. Accordingly, the Decision is SUSTAINED EDWIN C. GUDELOSAO and VIRGILIO A.
subject to the modification that [SSSICI] is (1) [R]espondents CAPT. OSCAR ORBETA,
[TEMMPC] and [TMCL] (the manning agency), are TANCONTIAN plus 10% attorney's fees thereof at
DIRECTED to pay Complainants in addition to [P]324,000.00 each thereof or a total of
their awarded claims, in the appealed decision, hereby directed to pay solidarily the complainants
as follows: [P]648,000.00.
additional death benefits of US$7,000 each to the
minor children of Complainant Gudelosao, namely,
Nevertheless, upon payment of said proceeds to
Christy Mae T. Gudelosao and Rose Elden T. Burial 10%
Death said widows by respondent SOUTH SEA SURETY &
Gudelosao. Expens atty's
Benefits INSURANCE CO., INC., respondent PHIL-NIPPON
es fees CORPORATION's liability to all the complainants is
As regards the other issues, the appealed Decision deemed extinguished.
ROSALIA T.
is SUSTAINED. US$50,0 US$1,0 US$5,1O
GUDELOSA
00 00 O SO ORDERED.18
O:
SO ORDERED.13
CARMEN B.
US$50,0 US$1,0 US$5,1O The CA found that the NLRC erred when it ruled
The NLRC absolved petitioner, TEMMPC and TANCONTI
00 00 O that the obligation of petitioner, TEMMPC and
TMCL and Capt. Orbeta from any liability based on AN: TMCL for the payment of death benefits under the
the limited liability rule. 14 It, however, affirmed POEA-SEC was ipso facto transferred to SSSICI
CARMELA
SSSICI's liability after finding that the Personal upon the death of the seafarers. TEMMPC and
B. US$7,00
Accident Policies answer for the death benefit US$700 TMCL cannot raise the defense of the total loss of
TANCONTI 0
claims under the Philippine Overseas Employment the ship because its liability under POEA-SEC is
AN:
Administration Standard Employment Contract separate and distinct from the liability of the
(POEASEC).15 Respondents filed a Partial Motion BEVERLY B. shipowner.19 To disregard the contract, which has
for Reconsideration which the NLRC denied in a US$7,00
TANCONTI US$700 the force of law between the parties, would defeat
Resolution dated May 5, 2006.16 0
AN: the purpose of the Labor Code and the rules and
regulations issued by the Department of Labor

Page 2 of 8
and Employment (DOLE) in setting the minimum SSSICI. Thus, there is no reason in making Discussion
terms and conditions of employment for the petitioner's exoneration from liability conditional
protection of Filipino seamen.20 The CA noted that on SSSICI's payment of the insurance proceeds. I. Liability under the POEA
the benefits being claimed are not dependent Standard Employment Contract.
upon whether there is total loss of the vessel, On December 8, 2008, TEMMPC filed its
because the liability attaches even if the vessel did Manifestation28 informing us of TEMMPC and At the outset, the CA erred in absolving petitioner
not sink.21 Thus, it was error for the NLRC to TMCL's Joint Motion to Dismiss the Petition and from the liabilities under the POEA-SEC. Petitioner
absolve TEMMPC and TMCL on the basis of the the CA's Resolution29 dated January 11, 2008 was the local principal of the deceased seafarers
limited liability rule. granting it. The dismissal is based on the for the conduction trip of MV Mahlia. Petitioner
execution of the Release of All Rights and Full hired them through TMCL, which also acted
Significantly though, the CA ruled that petitioner is Satisfaction Claim30 (Release and Quitclaim) on through its agent, TEMMPC. Petitioner admitted
not liable under the POEA-SEC, but by virtue of its December 14, 2007 between respondents and its role as a principal of its agents TMCL, TEMMPC
being a shipowner.22 Thus, petitioner is liable for TEMMPC, TMCL, and Capt. Orbeta. In a and Capt. Orbeta in their Joint Partial
the injuries to passengers even without a Resolution31 dated January 28, 2009, we noted Appeal36 before the NLRC.37 As such, it is solidarily
determination of its fault or negligence.1âwphi1 It that TEMMPC, TMCL, and Capt. Orbeta will no liable with TEMMPC and TMCL for the benefits
is for this reason that petitioner obtained longer comment on the Petition. under the POEA-SEC.
insurance from SSSICI - to protect itself against
the consequences of a total loss of the vessel On the other hand, SSSICI filed its Comment 32 to Doctrine of limited liability is not
caused by the perils of the sea. Consequently, the petition dated September 3, 2010. It alleged applicable to claims under POEA-SEC.
SSSICI's liability as petitioner's insurer directly that the NLRC has no jurisdiction over the
arose from the contract of insurance against insurance claim because claims on the Personal In this jurisdiction, the limited liability rule is
liability (i.e., Personal Accident Policy).23 The CA Accident Policies did not arise from employer- embodied in Articles 587, 590 and 837 under
then ordered that petitioner's liability will only be employee relations. It also alleged that petitioner Book III of the Code of Commerce, viz:
extinguished upon payment by SSSICI of the filed a complaint for sum of money33 in the
insurance proceeds.24 Regional Trial Court (RTC) of Manila, Branch 46,
Art. 587. The ship agent shall also be civilly liable
where it prays for the payment of the insurance
for the indemnities in favor of third persons which
Petitioner filed a Motion for proceeds on the individual Marine Insurance
arise from the conduct of the captain in the care of
Reconsideration25 dated November 5, 2007 but Policy with a Personal Accident Policy covering
the goods which the vessel carried; but he may
this was denied by the CA in its Resolution 26 dated the crewmembers of MV Mahlia. This case was
exempt himself therefrom by abandoning the
January 11, 2008. On the other hand, since SSSICI eventually dismissed and is now subject of an
vessel with all her equipment and the freightage
did not file a motion for reconsideration of the CA appeal34 before the CA. SSSICI prays that this
he may have earned during the voyage.
Decision, the CA issued a Partial Entry of matter be considered in resolving the present
Judgment27 stating that the decision became final case.35
and executory as to SSSICI on October 27, 2007. Art. 590. The co-owners of a vessel shall be civilly
liable, in the proportion of their contribution to
Issues
the common fund, for the results of the acts of the
Hence, this petition where petitioner claims that
captain, referred to in Art. 587.
the CA erred in ignoring the fundamental rule in I. Whether the doctrine of real and hypothecary
Maritime Law that the shipowner may exempt nature of maritime law (also known as the limited
itself from liability by abandoning the vessel and Each part-owner may exempt himself from this
liability rule) applies in favor of petitioner.
freight it may have earned during the voyage, and liability by the abandonment before a notary of
the proceeds of the insurance if any. Since the the part of the vessel belonging to him.
II. Whether the CA erred in ruling that the liability
liability of the shipowner is limited to the value of of petitioner is extinguished only upon SSSICI's
the vessel unless there is insurance, any claim Art. 837. The civil liability incurred by the
payment of insurance proceeds.
against petitioner is limited to the proceeds shipowners in the cases prescribed in this section,
arising from the insurance policies procured from shall be understood as limited to the value of the

Page 3 of 8
vessel with all its appurtenances and freightage insurance, if any, so that if the shipowner or agent granted under the POEA-SEC. 47 Specifically, its
earned during the voyage. abandoned the ship, equipment, and freight, his Section 20(A)(l) and (4)(c) provides that:
liability was extinguished.
Article 83 7 applies the limited liability rule in 1. In case of work-related death of the seafarer,
cases of collision. Meanwhile, Articles 587 and 590 But the provisions of the Code of Commerce during the term of his contract the employer shall
embody the universal principle of limited liability invoked by appellant have no room in the pay his beneficiaries the Philippine Currency
in all cases wherein the shipowner or agent may application of the Workmen's Compensation Act equivalent to the amount of Fifty Thousand US
be properly held liable for the negligent or illicit which seeks to improve, and aims at the dollars (US$50,000) and an additional amount of
acts of the captain.38 These articles precisely amelioration of, the condition of laborers and Seven Thousand US dollars (US$7,000) to each
intend to limit the liability of the shipowner or employees. It is not the liability for the damage or child under the age of twenty-one (21) but not
agent to the value of the vessel, its appurtenances loss of the cargo or injury to, or death of, a exceeding four (4) children, at the exchange rate
and freightage earned in the voyage, provided that passenger by or through the misconduct of the prevailing during the time of payment.
the owner or agent abandons the vessel. 39 When captain or master of the ship; nor the liability for
the vessel is totally lost, in which case the loss of the ship as a result of collision; nor the xxx
abandonment is not required because there is no responsibility for wages of the crew, but a liability
vessel to abandon, the liability of the shipowner or created by a statute to compensate employees and 4. The other liabilities of the employer when the
agent for damages is extinguished. 40 Nonetheless, laborers in cases of injury received by or inflicted seafarer dies as a result of work-related injury or
the limited liability rule is not absolute and is upon them, while engaged in the performance of illness during the term of employment are as
without exceptions. It does not apply in cases: (1) their work or employment, or the heirs and follows:
where the injury or death to a passenger is due dependents of such laborers and employees in the
either to the fault of the shipowner, or to the event of death caused by their employment. Such
xxx
concurring negligence of the shipowner and the compensation has nothing to do with the
captain; (2) where the vessel is insured; and (3) in provisions of the Code of Commerce regarding
workmen's compensation claims.41 maritime commerce. It is an item in the cost of c. The employer shall pay the beneficiaries of the
production which must be included in the budget seafarer the [Philippine] currency equivalent to
of any well-managed industry. 43 (Underscoring the amount of One Thousand US dollars
In Abueg v. San Diego,42 we ruled that the limited
supplied.) (US$1,000) for burial expenses at the exchange
liability rule found in the Code of Commerce is
rate prevailing during the time of payment.
inapplicable in a liability created by statute to
compensate employees and laborers, or the heirs We see no reason why the above doctrine should
and dependents, in cases of injury received by or not apply here. Akin to the death benefits under the Labor Code,
inflicted upon them while engaged in the these benefits under the POEA-SEC are given
performance of their work or employment, to wit: when the employee dies due to a work-related
Act No. 3428, otherwise known as The Workmen's
cause during the term of his contract.48 The
Compensation Act44 is the first law on workmen's
liability of the shipowner or agent under the
The real and hypothecary nature of the liability of compensation in the Philippines for work-related
POEA-SEC has likewise nothing to do with the
the shipowner or agent embodied in the injury, illness, or death. This was repealed on
provisions of the Code of Commerce regarding
provisions of the Maritime Law, Book III, Code of November 1, 1974 by the Labor Code, 45 and was
maritime commerce. The death benefits granted
Commerce, had its origin in the prevailing further amended on December 27, 1974 by
under the POEA-SEC is not due to the death of a
conditions of the maritime trade and sea voyages Presidential Decree No. 626. 46 The pertinent
passenger by or through the misconduct of the
during the medieval ages, attended by provisions are now found in Title II, Book IV of the
captain or master of the ship; nor is it the liability
innumerable hazards and perils. To offset against Labor Code on Employees Compensation and
for the loss of the ship as result of collision; nor
these adverse conditions and to encourage State Insurance Fund.
the liability for wages of the crew. It is a liability
shipbuilding and maritime commerce, it was
created by contract between the seafarers and
deemed necessary to confine the liability of the The death benefits granted under Title II, Book IV their employers, but secured through the State's
owner or agent arising from the operation of a of the Labor Code are similar to the death benefits intervention as a matter of constitutional and
ship to the vessel, equipment, and freight, or

Page 4 of 8
statutory duty to protect Filipino overseas All the same, the Release and Quitclaim executed which are derived from the nature of the
workers and to secure for them the best terms and between TEMMPC, TMCL and Capt. Oscar Orbeta, obligation and of those which are personal to
conditions possible, in order to compensate the and respondents redounded to the benefit of him, or pertaining to his share. He may also
seafarers' heirs and dependents in the event of petitioner as a solidary debtor. avail of those defenses personally belonging to his
death while engaged in the performance of their co-debtors, but only to the extent of their share in
work or employment. The POEA-SEC prescribes Petitioner is solidarily liable with TEMMPC and the debt. Thus, Varorient may set up all the
the set of standard provisions established and TMCL for the death benefits under the POEA-SEC. defenses pertaining to Colarina and Lagoa;
implemented by the POEA containing the The basis of the solidary liability of the principal whereas Colarina and Lagoa are liable only to the
minimum requirements prescribed by the with the local manning agent is found in the extent to which Varorient may be found liable by
government for the employment of Filipino second paragraph of Section 10 of the Migrant the court. The complaint against Varorient, Lagoa
seafarers. While it is contractual in nature, the Workers and Overseas Filipino Act of and Colarina is founded on a common cause of
POEA-SEC is designed primarily for the protection 1995,55 which, in part, provides: "[t]he liability of action; hence, the defense or the appeal by anyone
and benefit of Filipino seamen in the pursuit of the principal/employer and the of these solidary debtors would redound to the
their employment on board ocean-going recruitment/placement agency for any and all benefit of the others.
vessels.49 As such, it is deemed incorporated in claims under this section shall be joint and
every Filipino seafarers' contract of several." This provision, is in tum, implemented by xxx
employment.50 It is established pursuant to Section 1 (e)(8), Rule 2, Part II of the POEA Rules
POEA's power "to secure the best terms and and Regulations Governing the Recruitment and x xx If Varorient were to be found liable and made
conditions of employment of Filipino contract Employment of Seafarers, which requires the to pay pursuant thereto, the entire obligation
workers and ensure compliance therewith" and undertaking of the manning agency to "[a]ssume would already be extinguished even if no attempt
"to protect the well-being of Filipino workers joint and solidary liability with the employer for was made to enforce the judgment against
overseas"51 pursuant to Article 17 of the Labor all claims and liabilities which may arise in Colarina. Because there existed a common cause
Code as amended by Executive Order (EO) Nos. connection with the implementation of the of action against the three solidary obligors, as
79752 and 247.53 employment contract [and POEA-SEC]." the acts and omissions imputed against them
are one and the same, an ultimate finding that
But while the nature of death benefits under the We have consistently applied the Civil Code Varorient was not liable would, under these
Labor Code and the POEA-SEC are similar, the provisions on solidary obligations, specifically circumstances, logically imply a similar
death benefits under the POEA-SEC are intended Articles 121756 and 1222,57 to labor cases.58 We exoneration from liability for Colarina and
to be separate and distinct from, and in addition explained in Varorient Shipping Co., Lagoa, whether or not they interposed any
to, whatever benefits the seafarer is entitled to Inc. v. NLRC59the nature of the solidary liability in defense.60 (Emphasis supplied.)
under Philippine laws, including those benefits labor cases, to wit:
which may be claimed from the State Insurance Thus, the rule is that the release of one solidary
Fund.54 x xx The POEA Rules holds her, as a corporate debtor redounds to the benefit of the
officer, solidarily liable with the local licensed others.61 Considering that petitioner is solidarily
Thus, the claim for death benefits under the POEA- manning agency. Her liability is inseparable from liable with TEMMPC and TMCL, we hold that the
SEC is the same species as the workmen's those of Varorient and Lagoa. If anyone of them is Release and Quitclaim executed by respondents in
compensation claims under the Labor Code – both held liable then all of them would be liable for the favor of TEMMPC and TMCL redounded to
of which belong to a different realm from that of same obligation. Each of the solidary debtors, petitioner's benefit. Accordingly, the liabilities of
Maritime Law. Therefore, the limited liability rule insofar as the creditor/s is/are concerned, is petitioner under Section 20(A)(l) and (4)(c) of the
does not apply to petitioner's liability under the the debtor of the entire amount; it is only with POEA-SEC to respondents are now deemed
POEA-SEC. respect to his co-debtors that he/she is liable extinguished. We emphasize, however, that this
to the extent of his/her share in the obligation. pronouncement does not foreclose the right of
Nevertheless, the Release and Quitclaim benefit Such being the case, the Civil Code allows each reimbursement of the solidary debtors who
petitioner as a solidary debtor. solidary debtor, in actions filed by the paid (i.e., TEMMPC and TMCL) from petitioner as
creditor/s, to avail himself of all defenses their co-debtor.

Page 5 of 8
II. Liability under the Personal several. This provision shall be incorporated in before the Insurance Commission for mediation or
the contract for overseas employment and shall be adjudication. The amendment, however, took
Accident Policies. a condition precedent for its approval. The effect on May 8, 2010 long after the Personal
performance bond to be filed by the Accident Policies in this case were procured in
The NLRC has jurisdiction over the recruitment/placement agency, as provided by 2003. Accordingly, the NLRC has jurisdiction over
claim on the Personal Accident law, shall be answerable for all money claims or the claim for proceeds under the Personal
Policies. damages that may be awarded to the workers. If Accident Policies.
the recruitment/placement agency is a juridical
being, the corporate officers and directors and In any event, SSSICI can no longer assail its
We find that the CA correctly upheld the NLRC's partners as the case may be, shall themselves be liability under the Personal Accident Policies.
jurisdiction to order SSSICI to pay respondents the jointly and solidarily liable with the corporation or SSSICI failed to file a motion for reconsideration
value of the proceeds of the Personal Accident partnership for the aforesaid claims and damages. on the CA Decision. In a Resolution dated April 24,
Policies. x xx (Emphasis supplied.) 2008, the CA certified in a Partial Entry of
Judgment that the CA Decision with respect to
The Migrant Workers and Overseas Filipinos Act In Finman General Assurance Corp. v. SSSICI has become final and executory and is
of 1995 gives the Labor Arbiters of the NLRC the Inocencio,62 we upheld the jurisdiction of the POEA recorded in the Book of Entries of Judgments. 65 A
original and exclusive jurisdiction over claims to determine a surety's liability under its bond. decision that has acquired finality becomes
arising out of an employer-employee relationship We ruled that the adjudicatory power to do so is immutable and unalterable. This quality of
or by virtue of any law or contract involving not vested with the Insurance Commission immutability precludes the modification of a final
Filipino workers for overseas deployment, exclusively. The POEA (now the NLRC) is vested judgment, even if the modification is meant to
including claims for actual, moral, exemplary and with quasi-judicial powers over all cases, correct erroneous conclusions of fact and law.
other forms of damage. It further creates a joint including money claims, involving employer- This holds true whether the modification is made
and several liability among the principal or employee relations arising out of or by virtue of by the court that rendered it or by the highest
employer, and the recruitment/placement agency, any law or contract involving Filipino workers for court in the land. Thus, SSSICI's liability on the
for any and all claims involving Filipino overseas employment.63 Here, the award of the Personal Accident Policies can no longer be
workers, viz: insurance proceeds arose out of the personal disturbed in this petition.
accident insurance procured by petitioner as the
SEC. 10. Money Claims. - Notwithstanding any local principal over the deceased seafarers who SSSICI 's liability as insurer under the
provision of law to the contrary, the Labor were Filipino overseas workers. The premiums Personal Accident Policies is direct.
Arbiters of the National Labor Relations paid by petitioner were, in actuality, part of the
Commission (NLRC) shall have the original and total compensation paid for the services of the
exclusive jurisdiction to hear and decide, We, however, find that the CA erred in ruling that
crewmembers.64 Put differently, the labor of the "upon payment of [the insurance] proceeds to said
within ninety (90) calendar days after the filing of employees is the true source of the benefits which
the complaint, the claims arising out of an widows by respondent SOUTH SEA SURETY &
are a form of additional compensation to them. INSURANCE CO., INC., respondent PHIL-NIPPON
employer-employee relationship or by virtue of Undeniably, such claim on the personal accident
any law or contract involving Filipino workers CORPORATION's liability to all the complainants is
cover is a claim under an insurance deemed extinguished."66
for overseas deployment including claims for contract involving Filipino workers for overseas
actual, moral, exemplary and other forms of deployment within the jurisdiction of the NLRC.
damages. Consistent with this mandate, the NLRC This ruling makes petitioner's liability conditional
shall endeavor to update and keep abreast with upon SSSICI's payment of the insurance proceeds.
It must also be noted that the amendment under In doing so, the CA determined that the Personal
the developments in the global services industry. Section 37-A of the Migrant Workers and Overseas Accident Policies are casualty insurance,
Filipinos Act of 1995 on Compulsory Insurance specifically one of liability insurance. The CA
The liability of the principal/employer and the Coverage does not apply.1âwphi1 The amendment
recruitment/placement agency for any and all determined that petitioner, as insured, procured
requires the claimant to bring any question or from SSSICI the Personal Accident Policies in
claims under this section shall be joint and dispute in the enforcement of any insurance policy order to protect itself from the consequences of

Page 6 of 8
the total loss of the vessel caused by the perils of Notably, the parties did not submit the Personal the insurance proceeds contemplated under the
the sea. The CA found that the liabilities insured Accident Policies with the NLRC or the CA. exception in the case of a lost vessel are the
against are all monetary claims, excluding the However, based on the pleadings submitted by the insurance over the vessel and pending freightage
benefits under the POEA-SEC, of respondents in parties, SSSICI admitted that the crewmembers of for the particular voyage.76 It is not the insurance
connection with the sinking of the vessel. MV Mahlia are insured for the amount of in favor of the seafarers, the proceeds of which are
P3,240,000.00, payable upon the accidental death intended for their beneficiaries. Thus, if ever
We rule that while the Personal Accident Policies of the crewmembers.71 It further admitted that the petitioner is liable for the value of the insurance
are casualty insurance, they do not answer for insured risk is the loss of life or bodily injury proceeds under tort or quasi-delict, it would be
petitioner's liabilities arising from the sinking of brought about by the violent external event or from the Marine Insurance Policy over the vessel
the vessel. It is an indemnity insurance procured accidental means.72 Based on the foregoing, the and not from the Personal Accident Policies over
by petitioner for the benefit of the seafarers. As a insurer itself admits that what is being insured the seafarers.
result, petitioner is not directly liable to pay under against is not the liability of the shipowner for
the policies because it is merely the policyholder death or injuries to passengers but the death of WHEREFORE, the petition is PARTLY
of the Personal Accident Policies. the seafarers arising from accident. GRANTED. The CA Decision dated October 4,
2007 and the Resolution dated January 11, 2008
Section 176 (formerly Sec. 174) of The Insurance The liability of SSSICI to the beneficiaries is direct of the Court of Appeals are AFFIRMED WITH THE
Code67 defines casualty insurance as follows: under the insurance contract.73 Under the FOLLOWING MODIFICATIONS:
contract, petitioner is the policyholder, with
SEC. 174. Casualty insurance is insurance SSSICI as the insurer, the crewmembers as (1) The death benefits are limited to the amount
covering loss or liability arising from accident the cestui que vie or the person whose life is being granted under the Release of All Rights and Full
or mishap, excluding certain types of loss insured with another as beneficiary of the Satisfaction of Claim dated December 14, 2007
which by law or custom are considered as proceeds,74 and the latter's heirs as beneficiaries executed between respondents and Top Ever
falling exclusively within the scope of other of the policies. Upon petitioner's payment of the Marine Management Company Ltd., Top Ever
types of insurance such as fire or marine. It premiums intended as additional compensation to Marine Management Philippine Corporation, and
includes, but is not limited to, employer's liability the crewmembers, SSSICI as insurer undertook to Captain Oscar Or beta;
insurance, motor vehicle liability insurance, plate indemnify the crewmembers' beneficiaries from
glass insurance, burglary and theft an unknown or contingent event. 75 Thus, when the (2) As a solidary co-debtor, petitioner's liability to
insurance, personal accident and health CA conditioned the extinguishment of petitioner's respondents under the POEA-SEC is also
insurance as written by non-life insurance liability on SSSICI's payment of the Personal extinguished by virtue of the Release of All Rights
companies, and other substantially similar kinds Accident Policies' proceeds, it made a finding that and Full Satisfaction of Claim dated December 14,
of petitioner is subsidiarily liable for the face value of 2007; and
the policies. To reiterate, however, there is no
basis for such finding; there is no obligation on the
insurance. (Emphasis supplied.) (3) The last paragraph of the dispositive portion of
part of petitioner to pay the insurance proceeds
the CA Decision dated October 4, 2007 stating:
because petitioner is, in fact, the obligee or
Based on Section 176, casualty insurance may "Nevertheless, upon payment of said proceeds to
policyholder in the Personal Accident Policies.
cover liability or loss arising from accident or said widows by respondent SOUTH SEA SURETY &
Since petitioner is not the party liable for the value
mishap.1âwphi1 In a liability insurance, the INSURANCE CO., INC., respondent PHIL-NIPPON
of the insurance proceeds, it follows that the
insurer assumes the obligation to pay third party CORPORATION's liability to all the complainants is
limited liability rule does not apply as well.
in whose favor the liability of the insured deemed extinguished ... " is DELETED.
arises.68 On the other hand, personal accident One final note. Petitioner's claim that the limited
insurance refers to insurance against death or SO ORDERED.
liability rule and its corresponding
injury by accident or accidental means. 69 In an exception (i.e., where the vessel is insured) apply
accidental death policy, the accident causing the FRANCIS H. JARDELEZA
here is irrelevant because petitioner was not
death is the thing insured against.70 Associate Justice
found liable under tort or quasi-delict. Moreover,

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