Transportation Law - 8th Set
G.R. No. 154305 December 9, 2004
MACONDRAY & CO., INC., petitioner,
vs.
PROVIDENT INSURANCE CORPORATION, respondent.
DECISION
PANGANIBAN, J.:
Hornbook is the doctrine that the negligence of counsel binds
the client. Also settled is the rule that clients should take the
initiative of periodically checking the progress of their cases,
so that they could take timely steps to protect their interest.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules
of Court, seeking to set aside the February 28, 2002 Decision2
and the July 12, 2002 Resolution3 of the Court of Appeals (CA)
in CA-GR CV No. 57077. The dispositive portion of the
Decision reads as follows:
"WHEREFORE, premises considered, the assailed Decision
dated September 17, 1996 is hereby REVERSED and SET
ASIDE. Accordingly, [Petitioner] Macondray & Co., Inc., is
hereby ORDERED to pay the [respondent] the amount of
P1,657,700.95."
The assailed Resolution denied petitioner's Motion for
Reconsideration.
The Facts
The CA adopted the factual antecedents narrated by the trial
court, as follows:
"x x x. On February 16, 1991, at Vancouver, B.C. Canada,
CANPOTEX SHIPPING SERVICES LIMITED INC., of Saskatoon,
Saskatchewan, (hereinafter the SHIPPER), shipped and loaded
on board the vessel M/V 'Trade Carrier', 5000 metric tons of
Standard Grade Muriate of Potash in bulk for transportation
to and delivery at the port of Sangi, Toledo City, Cebu, in
favor of ATLAS FERTILIZER CORPORATION, (hereinafter
CONSIGNEE) covered by B/L Nos. VAN-SAN-1 for the 815.96
metric tons and VAN-SAN-2 for the 4,184.04 metric tons.
Subject shipments were insured with [respondent] against all
risks under and by virtue of an Open Marine Policy No.
MOP-00143 and Certificate of Marine Insurance No.
CMI-823-91.
1
"When the shipment arrived, CONSIGNEE discovered that the
shipment sustained losses/shortage of 476.140 metric tons
valued at One Million Six Hundred Fifty Seven Thousand
Seven Hundred Pesos and Ninety Five Centavos
(P1,657,700.95), Philippine Currency. Provident paid losses.
Formal claims was then filed with Trade & Transport and
Macondray but the same refused and failed to settle the
same. Hence, this complaint.
"As per Officer's Return dated 4 June 1992, summons was
UNSERVED to defendant TRADE AND TRANSPORT at the given
address for reason that TRADE AND TRANSPORT is no longer
connected with Macondray & Co. Inc., and is not holding
office at said address as alleged by Ms. Guadalupe Tan. For
failure to effect service of summons the case against TRADE
& TRANSPORT was considered dismissed without prejudice.
"Defendant MACONDRAY filed ANSWER, denying liability
over the losses, having NO absolute relation with defendant
TRADE AND TRANSPORT, the alleged operator of the vessel
who transported the subject shipment; that accordingly,
MACONDRAY is the local representative of the SHIPPER; the
charterer of M/V TRADE CARRIER and not party to this case;
that it has no control over the acts of the captain and crew of
the Carrier and cannot be held responsible for any damage
arising from the fault or negligence of said captain and crew;
that upon arrival at the port of Sangi, Toledo City, Cebu, the
M/V Trade Carrier discharged the full amount of shipment, as
shown by the draft survey with a total quantity of 5,033.59
metric tons discharged from the vessel and delivered to the
CONSIGNEE.
"ISSUES: Whether or not Macondray and Co. Inc., as an agent
is responsible for any loss sustained by any party from the
vessel owned by defendant Trade and Transport. "Whether
or not Macondray is liable for loss which was allegedly
sustained by the plaintiff in this case.
"EVIDENCE FOR THE PLAINTIFF
"Plaintiff presented the testimonies of Marina Celerina P.
Aguas and depositions of Alberto Milan and Alfonso Picson
submitted as additional witnesses for PROVIDENT to prove
the material facts of the complaint are deemed admitted by
defendant MACONDRAY, on their defense that it is not an
agent of TRADE AND TRANSPORT.
"EVIDENCE FOR THE DEFENDANT MACONDRAY:
"Witness Ricardo de la Cruz testified as Supercargo of
MACONDRAY, that MACONDRAY was not an agent of
defendant TRADE AND TRANSPORT; that his functions as
Supercargo was to prepare a notice of readiness, statement
of facts, sailing notice and custom's clearance in order to
attend to the formalities and the need of the vessel; that
MACONDRAY is performing functions in behalf of CANPOTEX
and was appointed as local agent of the vessel, which duty
includes arrangement of the entrance and clearance of the
vessel."
Transportation Law - 8th Set
The trial court, in the decision dated September 17, 1996
earlier adverted to, ruled in favor of the [petitioner] x x x, the
dispositive portion of which reads:
"WHEREFORE, PREMISES CONSIDERED, the case as against
[petitioner] MACONDRAY is hereby DISMISSED.
"No pronouncement as to costs."4
Ruling of the Court of Appeals
The CA affirmed the trial court's finding that petitioner was
not the agent of Trade and Transport. The appellate court
ruled, however, that petitioner could still be held liable for
the shortages of the shipment, because the latter was the
ship agent of Canpotex Shipping Services Ltd. -- the shipper
and charterer of the vessel M/V Trade Carrier.
All told, the CA held petitioner "liable for the losses incurred
in the shipment of the subject cargoes to the [respondent],
who, being the insurer of the risk, was subrogated to the
rights and causes of action which the consignee, Atlas
Fertilizer Corporation, had against the [petitioner]."5
Hence, this Petition.6
The Issues
Petitioner raises the following issues for our consideration:
"Whether or not liability attached to petitioner despite the
unequivocal factual findings, that it was not a ship agent.
"Whether or not the 28 February 2002 Decision of the Court
of Appeals has attained finality.
"Whether or not by filing the instant Petition for Review on
Certiorari, petitioner is guilty of forum-shopping."7
The Court's Ruling
The Petition has no merit.
First Issue:
Petitioner's Liability
As a rule, factual findings of the Court of Appeals -- when not
in conflict with those of the trial court -- are not disturbed by
this Court,8 to which only questions of law may be raised in
an appeal by certiorari.9
2
In the present case, we find no compelling reason to overturn
the Court of Appeals in its categorical finding that petitioner
was the ship agent. Such factual finding was not in conflict
with the trial court's ruling, which had merely stated that
petitioner was not the agent of Trade and Transport. Indeed,
although it is not an agent of Trade and Transport, petitioner
can still be the ship agent of the vessel M/V Trade Carrier.
Article 586 of the Code of Commerce states that a ship agent
is "the person entrusted with provisioning or representing
the vessel in the port in which it may be found."
Hence, whether acting as agent of the owner10 of the vessel
or as agent of the charterer,11 petitioner will be considered
as the ship agent12 and may be held liable as such, as long as
the latter is the one that provisions or represents the vessel.
The trial court found that petitioner "was appointed as local
agent of the vessel, which duty includes arrangement for the
entrance and clearance of the vessel."13 Further, the CA
found and the evidence shows that petitioner represented
the vessel. The latter prepared the Notice of Readiness, the
Statement of Facts, the Completion Notice, the Sailing Notice
and Custom's Clearance.14 Petitioner's employees were
present at Sangi, Toledo City, one day before the arrival of
the vessel, where they stayed until it departed. They were
also present during the actual discharging of the cargo.15
Moreover, Mr. de la Cruz, the representative of petitioner,
also prepared for the needs of the vessel, like money,
provision, water and fuel.16
These acts all point to the conclusion that it was the entity
that represented the vessel in the Port of Manila and was the
ship agent17 within the meaning and context of Article 586 of
the Code of Commerce.
As ship agent, it may be held civilly liable in certain instances.
The Code of Commerce provides:
"Article 586. The shipowner and the ship agent shall be civilly
liable for the acts of the captain and for the obligations
contracted by the latter to repair, equip, and provision the
vessel, provided the creditor proves that the amount claimed
was invested for the benefit of the same."
"Article 587. The ship agent shall also be civilly liable for the
indemnities in favor 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 her equipments and the
freight it may have earned during the voyage."
Petitioner does not dispute the liabilities of the ship agent for
the loss/shortage of 476.140 metric tons of standard-grade
Muriate of Potash valued at P1,657,700.95. Hence, we find
no reason to delve further into the matter or to disturb the
finding of the CA holding petitioner, as ship agent, liable to
respondent for the losses sustained by the subject shipment.
Transportation Law - 8th Set
Second Issue:
Finality of the CA Decision
Petitioner claims that it picked up the February 28, 2002
Decision of the CA on May 14, 2002, after receiving the postal
notice the day before. It further attributes gross negligence
to its previous counsel for not informing the CA of his change
of address. It thus contends that notice of the assailed
Decision given to the previous counsel cannot be considered
as notice to petitioner.
We are not persuaded. "It is well-settled that when a party is
represented by counsel, notice should be made upon the
counsel of record at his given address to which notices of all
kinds emanating from the court should be sent in the
absence of a proper and adequate notice to the court of a
change of address."18
In the present case, service of the assailed Decision was made
on petitioner's counsels of record, Attys. Moldez and Galoz,
on March 6, 2002. That copy of the Decision was, however,
returned to the sender for the reason that the addressee had
"move[d] out." If counsel moves to another address without
informing the court of that change, such omission or neglect
is inexcusable and will not stay the finality of the decision.19
"The court cannot be expected to take judicial notice of the
new address of a lawyer who has moved or to ascertain on its
own whether or not the counsel of record has been changed
and who the new counsel could possibly be or where he
probably resides or holds office."20
It is unfortunate that the lawyer of petitioner neglected his
duties to the latter. Be that as it may, the negligence of
counsel binds the client.21 Service made upon the present
counsel of record at his given address is service to petitioner.
Hence, the assailed Decision has already become final and
unappealable.
In the present case, there is no compelling reason to overturn
well-settled jurisprudence or to interpret the rules liberally in
favor of petitioner, who is not entirely blameless. It should
have taken the initiative of periodically keeping in touch with
its counsel, checking with the court, and inquiring about the
status of its case.22 In so doing, it could have taken timely
steps to neutralize the negligence of its chosen counsel and
to protect its interests. "Litigants represented by counsel
should not expect that all they need to do is sit back, relax
and await the outcome of their case."23
In view of the foregoing, there is no necessity of passing upon
the third issue raised by petitioner.
WHEREFORE, the Petition is DENIED and the assailed Decision
AFFIRMED. Costs against petitioner.
SO ORDERED.
G.R. No. 114167 July 12, 1995
3
COASTWISE LIGHTERAGE CORPORATION, petitioner,
vs.
COURT OF APPEALS and the PHILIPPINE GENERAL INSURANCE
COMPANY, respondents.
RESOLUTION
FRANCISCO, R., J.:
This is a petition for review of a Decision rendered by the
Court of Appeals, dated December 17, 1993, affirming Branch
35 of the Regional Trial Court, Manila in holding that herein
petitioner is liable to pay herein private respondent the
amount of P700,000.00, plus legal interest thereon, another
sum of P100,000.00 as attorney's fees and the cost of the
suit.
The factual background of this case is as follows:
Pag-asa Sales, Inc. entered into a contract to transport
molasses from the province of Negros to Manila with
Coastwise Lighterage Corporation (Coastwise for brevity),
using the latter's dumb barges. The barges were towed in
tandem by the tugboat MT Marica, which is likewise owned
by Coastwise.
Upon reaching Manila Bay, while approaching Pier 18, one of
the barges, "Coastwise 9", struck an unknown sunken object.
The forward buoyancy compartment was damaged, and
water gushed in through a hole "two inches wide and
twenty-two inches long"1 As a consequence, the molasses at
the cargo tanks were contaminated and rendered unfit for
the use it was intended. This prompted the consignee,
Pag-asa Sales, Inc. to reject the shipment of molasses as a
total loss. Thereafter, Pag-asa Sales, Inc. filed a formal claim
with the insurer of its lost cargo, herein private respondent,
Philippine General Insurance Company (PhilGen, for short)
and against the carrier, herein petitioner, Coastwise
Lighterage. Coastwise Lighterage denied the claim and it was
PhilGen which paid the consignee, Pag-asa Sales, Inc., the
amount of P700,000.00, representing the value of the
damaged cargo of molasses.
In turn, PhilGen then filed an action against Coastwise
Lighterage before the Regional Trial Court of Manila, seeking
to recover the amount of P700,000.00 which it paid to
Pag-asa Sales, Inc. for the latter's lost cargo. PhilGen now
claims to be subrogated to all the contractual rights and
claims which the consignee may have against the carrier,
which is presumed to have violated the contract of carriage.
The RTC awarded the amount prayed for by PhilGen. On
Coastwise Lighterage's appeal to the Court of Appeals, the
award was affirmed.
Hence, this petition.
Transportation Law - 8th Set
There are two main issues to be resolved herein. First,
whether or not petitioner Coastwise Lighterage was
transformed into a private carrier, by virtue of the contract of
affreightment which it entered into with the consignee,
Pag-asa Sales, Inc. Corollarily, if it were in fact transformed
into a private carrier, did it exercise the ordinary diligence to
which a private carrier is in turn bound? Second, whether or
not the insurer was subrogated into the rights of the
consignee against the carrier, upon payment by the insurer of
the value of the consignee's goods lost while on board one of
the carrier's vessels.
On the first issue, petitioner contends that the RTC and the
Court of Appeals erred in finding that it was a common
carrier. It stresses the fact that it contracted with Pag-asa
Sales, Inc. to transport the shipment of molasses from Negros
Oriental to Manila and refers to this contract as a "charter
agreement". It then proceeds to cite the case of Home
Insurance Company vs. American Steamship Agencies, Inc.2
wherein this Court held: ". . . a common carrier undertaking
to carry a special cargo or chartered to a special person only
becomes a private carrier."
Petitioner's reliance on the aforementioned case is misplaced.
In its entirety, the conclusions of the court are as follows:
Accordingly, the charter party contract is one of
affreightment over the whole vessel, rather than a demise. As
such, the liability of the shipowner for acts or negligence of
its captain and crew, would remain in the absence of
stipulation.3
The distinction between the two kinds of charter parties (i.e.
bareboat or demise and contract of affreightment) is more
clearly set out in the case of Puromines, Inc. vs. Court of
Appeals,4 wherein we ruled:
Under the demise or bareboat charter of the vessel, the
charterer will generally be regarded as the owner for the
voyage or service stipulated. The charterer mans the vessel
with his own people and becomes the owner pro hac vice,
subject to liability to others for damages caused by
negligence. To create a demise, the owner of a vessel must
completely and exclusively relinquish possession, command
and navigation thereof to the charterer, anything short of
such a complete transfer is a contract of affreightment (time
or voyage charter party) or not a charter party at all.
On the other hand a contract of affreightment is one in which
the owner of the vessel leases part or all of its space to haul
goods for others. It is a contract for special service to be
rendered by the owner of the vessel and under such contract
the general owner retains the possession, command and
navigation of the ship, the charterer or freighter merely
having use of the space in the vessel in return for his payment
of the charter hire. . . . .
. . . . An owner who retains possession of the ship though the
hold is the property of the charterer, remains liable as carrier
and must answer for any breach of duty as to the care,
loading and unloading of the cargo. . . .
4
Although a charter party may transform a common carrier
into a private one, the same however is not true in a contract
of affreightment on account of the aforementioned
distinctions between the two.
Petitioner admits that the contract it entered into with the
consignee was one of affreightment.5 We agree. Pag-asa
Sales, Inc. only leased three of petitioner's vessels, in order to
carry cargo from one point to another, but the possession,
command and navigation of the vessels remained with
petitioner Coastwise Lighterage.
Pursuant therefore to the ruling in the aforecited Puromines
case, Coastwise Lighterage, by the contract of affreightment,
was not converted into a private carrier, but remained a
common carrier and was still liable as such.
The law and jurisprudence on common carriers both hold
that the mere proof of delivery of goods in good order to a
carrier and the subsequent arrival of the same goods at the
place of destination in bad order makes for a prima facie case
against the carrier.
It follows then that the presumption of negligence that
attaches to common carriers, once the goods it transports are
lost, destroyed or deteriorated, applies to the petitioner. This
presumption, which is overcome only by proof of the exercise
of extraordinary diligence, remained unrebutted in this case.
The records show that the damage to the barge which carried
the cargo of molasses was caused by its hitting an unknown
sunken object as it was heading for Pier 18. The object turned
out to be a submerged derelict vessel. Petitioner contends
that this navigational hazard was the efficient cause of the
accident. Further it asserts that the fact that the Philippine
Coastguard "has not exerted any effort to prepare a chart to
indicate the location of sunken derelicts within Manila North
Harbor to avoid navigational accidents"6 effectively
contributed to the happening of this mishap. Thus, being
unaware of the hidden danger that lies in its path, it became
impossible for the petitioner to avoid the same. Nothing
could have prevented the event, making it beyond the pale of
even the exercise of extraordinary diligence.
However, petitioner's assertion is belied by the evidence on
record where it appeared that far from having rendered
service with the greatest skill and utmost foresight, and being
free from fault, the carrier was culpably remiss in the
observance of its duties.
Jesus R. Constantino, the patron of the vessel "Coastwise 9"
admitted that he was not licensed. The Code of Commerce,
which subsidiarily governs common carriers (which are
primarily governed by the provisions of the Civil Code)
provides:
Art. 609. Captains, masters, or patrons of vessels must be
Filipinos, have legal capacity to contract in accordance with
this code, and prove the skill capacity and qualifications
necessary to command and direct the vessel, as established
by marine and navigation laws, ordinances or regulations,
Transportation Law - 8th Set
and must not be disqualified according to the same for the
discharge of the duties of the position. . . .
Clearly, petitioner Coastwise Lighterage's embarking on a
voyage with an unlicensed patron violates this rule. It cannot
safely claim to have exercised extraordinary diligence, by
placing a person whose navigational skills are questionable,
at the helm of the vessel which eventually met the fateful
accident. It may also logically, follow that a person without
license to navigate, lacks not just the skill to do so, but also
the utmost familiarity with the usual and safe routes taken by
seasoned and legally authorized ones. Had the patron been
licensed, he could be presumed to have both the skill and the
knowledge that would have prevented the vessel's hitting the
sunken derelict ship that lay on their way to Pier 18.
As a common carrier, petitioner is liable for breach of the
contract of carriage, having failed to overcome the
presumption of negligence with the loss and destruction of
goods it transported, by proof of its exercise of extraordinary
diligence.
On the issue of subrogation, which petitioner contends as
inapplicable in this case, we once more rule against the
petitioner. We have already found petitioner liable for breach
of the contract of carriage it entered into with Pag-asa Sales,
Inc. However, for the damage sustained by the loss of the
cargo which petitioner-carrier was transporting, it was not
the carrier which paid the value thereof to Pag-asa Sales, Inc.
but the latter's insurer, herein private respondent PhilGen.
Article 2207 of the Civil Code is explicit on this point:
Art. 2207. If the plaintiffs property has been insured, and he
has received indemnity from the insurance company for the
injury or loss arising out of the wrong or breach of contract
complained of, the insurance company shall be subrogated to
the rights of the insured against the wrongdoer or the person
who violated the contract. . . .
This legal provision containing the equitable principle of
subrogation has been applied in a long line of cases including
Compania Maritima v. Insurance Company of North
America;7 Fireman's Fund Insurance Company v. Jamilla &
Company, Inc.,8 and Pan Malayan Insurance Corporation v.
Court of Appeals,9 wherein this Court explained:
Article 2207 of the Civil Code is founded on the well-settled
principle of subrogation. If the insured property is destroyed
or damaged through the fault or negligence of a party other
than the assured, then the insurer, upon payment to the
assured will be subrogated to the rights of the assured to
recover from the wrongdoer to the extent that the insurer
has been obligated to pay. Payment by the insurer to the
assured operated as an equitable assignment to the former
of all remedies which the latter may have against the third
party whose negligence or wrongful act caused the loss. The
right of subrogation is not dependent upon, nor does it grow
out of, any privity of contract or upon written assignment of
claim. It accrues simply upon payment of the insurance claim
by the insurer.
5
Undoubtedly, upon payment by respondent insurer PhilGen
of the amount of P700,000.00 to Pag-asa Sales, Inc., the
consignee of the cargo of molasses totally damaged while
being transported by petitioner Coastwise Lighterage, the
former was subrogated into all the rights which Pag-asa Sales,
Inc. may have had against the carrier, herein petitioner
Coastwise Lighterage.
WHEREFORE, premises considered, this petition is DENIED
and the appealed decision affirming the order of Branch 35 of
the Regional Trial Court of Manila for petitioner Coastwise
Lighterage to pay respondent Philippine General Insurance
Company the "principal amount of P700,000.00 plus interest
thereon at the legal rate computed from March 29, 1989, the
date the complaint was filed until fully paid and another sum
of P100,000.00 as attorney's fees and costs"10 is likewise
hereby AFFIRMED
SO ORDERED.
G.R. No. 115286 August 11, 1994
INTER-ORIENT MARITIME ENTERPRISES, INC., SEA HORSE
SHIP, INC. and TRENDA WORLD SHIPPING (MANILA), INC.,
petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and RIZALINO D.
TAYONG, respondents.
Marilyn Cacho-Naoe for petitioners.
Wilfred L. Pascasio for private respondent.
FELICIANO, J.:
Private respondent Captain Rizalino Tayong, a licensed
Master Mariner with experience in commanding ocean-going
vessels, was employed on 6 July 1989 by petitioners Trenda
World Shipping (Manila), Inc. and Sea Horse Ship
Management, Inc. through petitioner Inter-Orient Maritime
Enterprises, Inc. as Master of the vessel M/V Oceanic
Mindoro, for a period of one (1) year, as evidenced by an
employment contract. On 15 July 1989, Captain Tayong
assumed command of petitioners' vessel at the port of
Hongkong. His instructions were to replenish bunker and
diesel fuel, to sail forthwith to Richard Bay, South Africa, and
there to load 120,000 metric tons of coal.
On 16 July 1989, while at the Port of Hongkong and in the
process of unloading cargo, Captain Tayong received a
weather report that a storm code-named "Gordon" would
shortly hit Hongkong. Precautionary measures were taken to
secure the safety of the vessel, as well as its crew,
considering that the vessel's turbo-charger was leaking and
the vessel was fourteen (14) years old.
On 21 July 1989, Captain Tayong followed-up the requisition
by the former captain of the Oceanic Mindoro for supplies of
Transportation Law - 8th Set
oxygen and acetylene, necessary for the welding-repair of the
turbo-charger and the economizer.1 This requisition had
been made upon request of the Chief Engineer of the vessel
and had been approved by the shipowner.2
On 25 July 1989, the vessel sailed from Hong Kong for
Singapore. In the Master's sailing message, Captain Tayong
reported a water leak from M.E. Turbo Charger No. 2 Exhaust
gas casing. He was subsequently instructed to blank off the
cooling water and maintain reduced RPM unless authorized
by the owners.3
On 29 July 1989, while the vessel was en route to Singapore,
Captain Tayong reported that the vessel had stopped in
mid-ocean for six (6) hours and forty-five (45) minutes due to
a leaking economizer. He was instructed to shut down the
economizer and use the auxiliary boiler instead.4
On 31 July 1989 at 0607 hrs., the vessel arrived at the port of
Singapore.5 The Chief Engineer reminded Captain Tayong
that the oxygen and acetylene supplies had not been
delivered.6 Captain Tayong inquired from the ship's agent in
Singapore about the supplies. The ship agent stated that
these could only be delivered at 0800 hours on August 1,
1989 as the stores had closed.7
Captain Tayong called the shipowner, Sea Horse Ship
Management, Ltd., in London and informed them that the
departure of the vessel for South Africa may be affected
because of the delay in the delivery of the supplies.8
Sea Horse advised Captain Tayong to contact its Technical
Director, Mr. Clark, who was in Tokyo and who could provide
a solution for the supply of said oxygen and acetylene.9
On the night of 31 July 1989, Mr. Clark received a call from
Captain Tayong informing him that the vessel cannot sail
without the oxygen and acetylene for safety reasons due to
the problems with the turbo charger and economizer. Mr.
Clark responded that by shutting off the water to the turbo
chargers and using the auxiliary boiler, there should be no
further problems. According to Mr. Clark, Captain Tayong
agreed with him that the vessel could sail as scheduled on
0100 hours on 1 August 1989 for South Africa.10
According to Captain Tayong, however, he communicated to
Sea Horse his reservations regarding proceeding to South
Africa without the requested supplies,11 and was advised by
Sea Horse to wait for the supplies at 0800 hrs. of 1 August
1989, which Sea Horse had arranged to be delivered on board
the Oceanic Mindoro.12 At 0800 hours on 1 August 1989, the
requisitioned supplies were delivered and Captain Tayong
immediately sailed for Richard Bay.
When the vessel arrived at the port of Richard Bay, South
Africa on 16 August 1989, Captain Tayong was instructed to
turn-over his post to the new captain. He was thereafter
repatriated to the Philippines, after serving petitioners for a
little more than two weeks.13 He was not informed of the
charges against him.14
6
On 5 October 1989, Captain Tayong instituted a complaint for
illegal dismissal before the Philippine Overseas Employment
Administration ("POEA"), claiming his unpaid salary for the
unexpired portion of the written employment contract, plus
attorney's fees.
Petitioners, in their answer to the complaint, denied that
they had illegally dismissed Captain Tayong. Petitioners
alleged that he had refused to sail immediately to South
Africa to the prejudice and damage of petitioners. According
to petitioners, as a direct result of Captain Tayong's delay,
petitioners' vessel was placed "off-hire" by the charterers for
twelve (12) hours. This meant that the charterers refused to
pay the charter hire or compensation corresponding to
twelve (12) hours, amounting to US$15,500.00, due to time
lost in the voyage. They stated that they had dismissed
private respondent for loss of trust and confidence.
The POEA dismissed Captain Tayong's complaint and held
that there was valid cause for his untimely repatriation. The
decision of the POEA placed considerable weight on
petitioners' assertion that all the time lost as a result of the
delay was caused by Captain Tayong and that his concern for
the oxygen and acetylene was not legitimate as these
supplies were not necessary or indispensable for running the
vessel. The POEA believed that the Captain had unreasonably
refused to follow the instructions of petitioners and their
representative, despite petitioners' firm assurances that the
vessel was seaworthy for the voyage to South Africa.
On appeal, the National Labor Relations Commission ("NLRC")
reversed and set aside the decision of the POEA. The NLRC
found that Captain Tayong had not been afforded an
opportunity to be heard and that no substantial evidence was
adduced to establish the basis for petitioners' loss of trust or
confidence in the Captain. The NLRC declared that he had
only acted in accordance with his duties to maintain the
seaworthiness of the vessel and to insure the safety of the
ship and the crew. The NLRC directed petitioners to pay the
Captain (a) his salary for the unexpired portion of the
contract at US$1,900.00 a month, plus one (1) month leave
benefit; and (b) attorney's fees equivalent to ten percent
(10%) of the total award due.
Petitioners, before this Court, claim that the NLRC had acted
with grave abuse of discretion. Petitioners allege that they
had adduced sufficient evidence to establish the basis for
private respondent's discharge, contrary to the conclusion
reached by the NLRC. Petitioners insist that Captain Tayong,
who must protect the interest of petitioners, had caused
them unnecessary damage, and that they, as owners of the
vessel, cannot be compelled to keep in their employ a captain
of a vessel in whom they have lost their trust and confidence.
Petitioners finally contend that the award to the Captain of
his salary corresponding to the unexpired portion of the
contract and one (1) month leave pay, including attorney's
fees, also constituted grave abuse of discretion.
The petition must fail.
We note preliminarily that petitioners failed to attach a
clearly legible, properly certified, true copy of the decision of
the NLRC dated 23 April 1994, in violation of requirement no.
3 of Revised Circular No. 1-88. On this ground alone, the
petition could have been dismissed. But the Court chose not
Transportation Law - 8th Set
to do so, in view of the nature of question here raised and
instead required private respondent to file a comment on the
petition. Captain Tayong submitted his comment. The Office
of the Solicitor General asked for an extension of thirty (30)
days to file its comment on behalf of the NLRC. We consider
that the Solicitor General's comment may be dispensed with
in this case.
It is well settled in this jurisdiction that confidential and
managerial employees cannot be arbitrarily dismissed at any
time, and without cause as reasonably established in an
appropriate investigation.15 Such employees, too, are
entitled to security of tenure, fair standards of employment
and the protection of labor laws.
The captain of a vessel is a confidential and managerial
employee within the meaning of the above doctrine. A
master or captain, for purposes of maritime commerce, is
one who has command of a vessel. A captain commonly
performs three (3) distinct roles: (1) he is a general agent of
the shipowner; (2) he is also commander and technical
director of the vessel; and (3) he is a representative of the
country under whose flag he navigates.16 Of these roles, by
far the most important is the role performed by the captain
as commander of the vessel; for such role (which, to our mind,
is analogous to that of "Chief Executive Officer" [CEO] of a
present-day corporate enterprise) has to do with the
operation and preservation of the vessel during its voyage
and the protection of the passengers (if any) and crew and
cargo. In his role as general agent of the shipowner, the
captain has authority to sign bills of lading, carry goods
aboard and deal with the freight earned, agree upon rates
and decide whether to take cargo. The ship captain, as agent
of the shipowner, has legal authority to enter into contracts
with respect to the vessel and the trading of the vessel,
subject to applicable limitations established by statute,
contract or instructions and regulations of the shipowner.17
To the captain is committed the governance, care and
management of the vessel.18 Clearly, the captain is vested
with both management and fiduciary functions.
It is plain from the records of the present petition that
Captain Tayong was denied any opportunity to defend
himself. Petitioners curtly dismissed him from his command
and summarily ordered his repatriation to the Philippines
without informing him of the charge or charges levelled
against him, and much less giving him a chance to refute any
such charge. In fact, it was only on 26 October 1989 that
Captain Tayong received a telegram dated 24 October 1989
from Inter-Orient requiring him to explain why he delayed
sailing to South Africa.
We also find that the principal contention of petitioners
against the decision of the NLRC pertains to facts, that is,
whether or not there was actual and sufficient basis for the
alleged loss of trust or confidence. We have consistently held
that a question of "fact" is, as a general rule, the concern
solely of an administrative body, so long as there is
substantial evidence of record to sustain its action.
The record requires us to reject petitioners' claim that the
NLRC's conclusions of fact were not supported by substantial
evidence. Petitioners rely on self-serving affidavits of their
own officers and employees predictably tending to support
petitioners' allegation that Captain Tayong had performed
acts inimical to petitioners' interests for which, supposedly,
7
he was discharged. The official report of Mr. Clark,
petitioners' representative, in fact supports the NLRC's
conclusion that private respondent Captain did not arbitrarily
and maliciously delay the voyage to South Africa. There had
been, Mr. Clark stated, a disruption in the normal functioning
of the vessel's turbo-charger19 and economizer and that had
prevented the full or regular operation of the vessel. Thus,
Mr. Clark relayed to Captain Tayong instructions to "maintain
reduced RPM" during the voyage to South Africa, instead of
waiting in Singapore for the supplies that would permit
shipboard repair of the malfunctioning machinery and
equipment.
More importantly, a ship's captain must be accorded a
reasonable measure of discretionary authority to decide what
the safety of the ship and of its crew and cargo specifically
requires on a stipulated ocean voyage. The captain is held
responsible, and properly so, for such safety. He is right there
on the vessel, in command of it and (it must be presumed)
knowledgeable as to the specific requirements of
seaworthiness and the particular risks and perils of the
voyage he is to embark upon. The applicable principle is that
the captain has control of all departments of service in the
vessel, and reasonable discretion as to its navigation.20 It is
the right and duty of the captain, in the exercise of sound
discretion and in good faith, to do all things with respect to
the vessel and its equipment and conduct of the voyage
which are reasonably necessary for the protection and
preservation of the interests under his charge, whether those
be of the shipowners, charterers, cargo owners or of
underwriters.21 It is a basic principle of admiralty law that in
navigating a merchantman, the master must be left free to
exercise his own best judgment. The requirements of safe
navigation compel us to reject any suggestion that the
judgment and discretion of the captain of a vessel may be
confined within a straitjacket, even in this age of electronic
communications.22 Indeed, if the ship captain is convinced,
as a reasonably prudent and competent mariner acting in
good faith that the shipowner's or ship agent's instructions
(insisted upon by radio or telefax from their offices thousands
of miles away) will result, in the very specific circumstances
facing him, in imposing unacceptable risks of loss or serious
danger to ship or crew, he cannot casually seek absolution
from his responsibility, if a marine casualty occurs, in such
instructions.23
Compagnie de Commerce v. Hamburg24 is instructive in this
connection. There, this Court recognized the discretionary
authority of the master of a vessel and his right to exercise
his best judgment, with respect to navigating the vessel he
commands. In Compagnie de Commerce, a charter party was
executed between Compagnie de Commerce and the owners
of the vessel Sambia, under which the former as charterer
loaded on board the Sambia, at the port of Saigon, certain
cargo destined for the Ports of Dunkirk and Hamburg in
Europe. The Sambia, flying the German flag, could not, in the
judgment of its master, reach its ports of destination because
war (World War I) had been declared between Germany and
France. The master of the Sambia decided to deviate from
the stipulated voyage and sailed instead for the Port of
Manila. Compagnie de Commerce sued in the Philippines for
damages arising from breach of the charter party and
unauthorized sale of the cargo. In affirming the decision of
the trial court dismissing the complaint, our Supreme Court
held that the master of the Sambia had reasonable grounds
to apprehend that the vessel was in danger of seizure or
capture by the French authorities in Saigon and was justified
by necessity to elect the course which he took i.e., to flee
Saigon for the Port of Manila with the result that the
shipowner was relieved from liability for the deviation from
Transportation Law - 8th Set
the stipulated route and from liability for damage to the
cargo. The Court said:
The danger from which the master of the Sambia fled was a
real and not merely an imaginary one as counsel for shipper
contends. Seizure at the hands of an "enemy of the King"
though not inevitable, was a possible outcome of a failure to
leave the port of Saigon; and we cannot say that under the
conditions existing at the time when the master elected to
flee from that port, there were no grounds for a "reasonable
apprehension of danger" from seizure by the French
authorities, and therefore no necessity for flight.
The word "necessity" when applied to mercantile affairs,
where the judgment must in the nature of things be
exercised, cannot, of course, mean an irresistible compelling
power. What is meant by it in such cases is the force of
circumstances which determine the course a man ought to
take. Thus, where by the force of circumstances, a man has
the duty cast upon him of taking some action for another,
and under that obligation adopts a course which, to the
judgment of a wise and prudent man, is apparently the best
for the interest of the persons for whom he acts in a given
emergency, it may properly be said of the course so taken
that it was in a mercantile sense necessary to take it.25
(Emphasis supplied)
Compagnie de Commerce contended that the shipowner
should, at all events, be held responsible for the deterioration
in the value of the cargo incident to its long stay on board the
vessel from the date of its arrival in Manila until the cargo
was sold. The Supreme Court, in rejecting this contention also,
declared that:
But it is clear that the master could not be required to act on
the very day of his arrival; or before he had a reasonable
opportunity to ascertain whether he could hope to carry out
his contract and earn his freight; and that he should not be
held responsible for a reasonable delay incident to an effort
to ascertain the wishes of the freighter, and upon failure to
secure prompt advice, to decide for himself as to the course
which he should adopt to secure the interests of the absent
owner of the property aboard the vessel.
The master is entitled to delay for such a period as may be
reasonable under the circumstances, before deciding on the
course he will adopt. He may claim a fair opportunity of
carrying out a contract, and earning the freight, whether by
repairing or transhipping. Should the repair of the ship be
undertaken, it must be proceeded with diligently; and if so
done, the freighter will have no ground of complaint,
although the consequent delay be a long one, unless, indeed,
the cargo is perishable, and likely to be injured by the delay.
Where that is the case, it ought to be forwarded, or sold, or
given up, as the case may be, without waiting for repairs.
A shipowner or shipmaster (if communication with the
shipowner is impossible), will be allowed a reasonable time in
which to decide what course he will adopt in such cases as
those under discussion; time must be allowed to him to
ascertain the facts, and to balance the conflicting interests
involved, of shipowner, cargo owner, underwriter on ship and
freight. But once the time has elapsed, he is bound to act
promptly according as he has elected either to repair, or
abandon the voyage, or tranship. If he delays, and owing to
8
that delay a perishable cargo suffers damage, the shipowner
will be liable for that damage; he cannot escape that
obligation by pleading the absence of definite instructions
from the owners of the cargo or their underwriters, since he
has control of the cargo and is entitled to elect.26 (Emphasis
supplied)
The critical question, therefore, is whether or not Captain
Tayong had reasonable grounds to believe that the safety of
the vessel and the crew under his command or the possibility
of substantial delay at sea required him to wait for the
delivery of the supplies needed for the repair of the
turbo-charger and the economizer before embarking on the
long voyage from Singapore to South Africa.
In this connection, it is specially relevant to recall that,
according to the report of Mr. Robert Clark, Technical
Director of petitioner Sea Horse Ship Management, Inc., the
Oceanic Mindoro had stopped in mid-ocean for six (6) hours
and forty-five (45) minutes on its way to Singapore because
of its leaking economizer.27 Equally relevant is the telex
dated 2 August 1989 sent by Captain Tayong to Sea Horse
after Oceanic Mindoro had left Singapore and was en route
to South Africa. In this telex, Captain Tayong explained his
decision to Sea Horse in the following terms:
I CAPT. R.D. TAYONG RE: UR PROBLEM IN SPORE (SINGAPORE)
I EXPLAIN AGN TO YOU THAT WE ARE INSECURITY/DANGER
TO SAIL IN SPORE W/OUT HAVING SUPPLY OF OXY/ACET. PLS
UNDERSTAND HV PLENTY TO BE DONE REPAIR FM MAIN
ENGINE LIKE TURBO CHARGER PIPELINE, ECONOMIZER
LEAKAGE N ETC WE COULD NOT FIX IT W/OUT OXY/ACET
ONBOARD. I AND MR. CLARK WE CONTACTED EACH OTHER
BY PHONE IN PAPAN N HE ADVSED US TO SAIL TO RBAY N
WILL SUPPLY OXY/ACET UPON ARRIVAL RBAY HE ALSO
EXPLAINED TO MY C/E HOW TO FIND THE REMEDY W/OUT
OXY/ACET BUT C/E HE DISAGREED MR. CLARK IDEA, THAT IS
WHY WE URG REQUEST[ED] YR KIND OFFICE TO ARRANGE
SUPPLY OXY/ACET BEFORE SAILING TO AVOID RISK/DANGER
OR DELAY AT SEA N WE TOOK PRECAUTION UR TRIP FOR 16
DAYS FM SPORE TO RBAY. PLS. UNDERSTAND UR
SITUATION.28 (Emphasis partly in source and partly supplied)
Under all the circumstances of this case, we, along with the
NLRC, are unable to hold that Captain Tayong's decision
(arrived at after consultation with the vessel's Chief Engineer)
to wait seven (7) hours in Singapore for the delivery on board
the Oceanic Mindoro of the requisitioned supplies needed for
the welding-repair, on board the ship, of the turbo-charger
and the economizer equipment of the vessel, constituted
merely arbitrary, capricious or grossly insubordinate behavior
on his part. In the view of the NLRC, that decision of Captain
Tayong did not constitute a legal basis for the summary
dismissal of Captain Tayong and for termination of his
contract with petitioners prior to the expiration of the term
thereof. We cannot hold this conclusion of the NLRC to be a
grave abuse of discretion amounting to an excess or loss of
jurisdiction; indeed, we share that conclusion and make it our
own.
Clearly, petitioners were angered at Captain Tayong's
decision to wait for delivery of the needed supplies before
sailing from Singapore, and may have changed their estimate
of their ability to work with him and of his capabilities as a
ship captain. Assuming that to be petitioners' management
prerogative, that prerogative is nevertheless not to be
Transportation Law - 8th Set
exercised, in the case at bar, at the cost of loss of Captain
Tayong's rights under his contract with petitioners and under
Philippine law.
ACCORDINGLY, petitioners having failed to show grave abuse
of discretion amounting to loss or excess of jurisdiction on
the part of the NLRC in rendering its assailed decision, the
Petition for Certiorari is hereby DISMISSED, for lack of merit.
Costs against petitioners.
SO ORDERED.
G.R. No. 130068 October 1, 1998
FAR EASTERN SHIPPING COMPANY, petitioner,
vs.
COURT OF APPEALS and PHILIPPINE PORTS
AUTHORITY, respondents.
G.R. No. 130150 October, 1998
MANILA PILOTS ASSOCIATION, petitioner,
vs.
PHILIPPINE PORTS AUTHORITY and FAR EASTERN
SHIPPING COMPANY, respondents.
REGALADO, J.:
These consolidated petitions for review on certiorari seek
in unison to annul and set aside the decision of 1
respondent Court of Appeals of November 15, 1996 and its
resolution dated July 31, 1997 in CA-G.R. CV No. 24072,
2
entitled "Philippine Ports Authority, Plaintiff-Appellee vs.
Far Eastern Shipping Company, Senen C. Gavino and
Manila Pilots' Association, Defendants-Appellants," which
affirmed with modification the judgment of the trial court
holding the defendants-appellants therein solidarily liable
for damages in favor of herein private respondent.
There is no dispute about the facts as found by the
appellate court,
thus
. . . On June 20, 1980, the M/V PAVLODAR, flying under the
flagship of the USSR, owned and operated by the Far
Eastern Shipping Company (FESC for brevity's sake),
arrived at the Port of Manila from Vancouver, British
Columbia at about 7:00 o'clock in the morning. The vessel
was assigned Berth 4 of the Manila International Port, as
its berthing space. Captain Roberto Abellana was tasked
by the Philippine Port Authority to supervise the berthing
of the vessel. Appellant Senen Gavino was assigned by the
Appellant Manila Pilots' Association (MPA for brevity's
sake) to conduct docking maneuvers for the safe berthing
of the vessel to Berth No. 4.
Gavino boarded the vessel at the quarantine anchorage
and stationed himself in the bridge, with the master of the
vessel, Victor Kavankov, beside him. After a briefing of
Gavino by Kavankov of the particulars of the vessel and its
cargo, the vessel lifted anchor from the quarantine
anchorage and proceeded to the Manila International Port.
The sea was calm and the wind was ideal for docking
maneuvers.
When the vessel reached the landmark (the big church by
the Tondo North Harbor) one-half mile from the pier,
Gavino ordered the engine stopped. When the vessel was
already about 2,000 feet from the pier, Gavino ordered
the anchor dropped. Kavankov relayed the orders to the
crew of the vessel on the bow. The left anchor, with two (2)
shackles, were dropped. However, the anchor did not take
hold as expected. The speed of the vessel did not slacken.
A commotion ensued between the crew members. A brief
conference ensued between Kavankov and the crew
members. When Gavino inquired what was all the
9
commotion about, Kavankov assured Gavino that there
was nothing to it.
After Gavino noticed that the anchor did not take hold, he
ordered the engines half-astern. Abellana, who was then
on the pier apron, noticed that the vessel was approaching
the pier fast. Kavankov likewise noticed that the anchor
did not take hold. Gavino thereafter gave the "full-astern"
code. Before the right anchor and additional shackles
could be dropped, the bow of the vessel rammed into the
apron of the pier causing considerable damage to the pier.
The vessel sustained damage too, (Exhibit "7-Far Eastern
Shipping). Kavankov filed his sea protest (Exhibit
"1-Vessel"). Gavino submitted his report to the Chief Pilot
(Exhibit "1-Pilot") who referred the report to the Philippine
Ports Authority (Exhibit 2-Pilot"). Abellana likewise
submitted his report of the incident (Exhibit "B").
Per contract and supplemental contract of the Philippine
Ports Authority and the contractor for the rehabilitation of
the damaged pier, the same cost the Philippine Ports
Authority the amount of P1,126,132.25 (Exhibits "D" and
"E").
3
On January 10, 1983, the Philippine Ports Authority (PPA,
for brevity), through the Solicitor General, filed before the
Regional Trial Court of Manila, Branch 39, a complaint for
a sum of money against Far Eastern Shipping Co., Capt.
Senen C. Gavino and the Manila Pilots' Association,
docketed as Civil Case No. 83-14958, praying that the
4
defendants therein be held jointly and severally liable to
pay the plaintiff actual and exemplary damages plus costs
of suit. In a decision dated August 1, 1985, the trial court
ordered the defendants therein jointly and severally to
pay the PPA the amount of P1,053,300.00 representing
actual damages and the costs of suit. 5
The defendants appealed to the Court of Appeals and
raised the following issues: (1) Is the pilot of a commercial
vessel, under compulsory pilotage, solely liable for the
damage caused by the vessel to the pier, at the port of
destination, for his negligence? and (2) Would the owner
of the vessel be liable likewise if the damage is caused by
the concurrent negligence of the master of the vessel and
the pilot under a compulsory pilotage?
As stated at the outset, respondent appellate court
affirmed the findings of the court a quo except that if
found no employer-employee relationship existing
between herein private respondents Manila Pilots'
Association (MPA, for short) and Capt. Gavino. This being
6
so, it ruled instead that the liability of MPA is anchored,
not on Article 2180 of the Civil Code, but on the provisions
of Customs Administrative Order No. 15-65, and 7
accordingly modified said decision of the trial court by
holding MPA, along with its co-defendants therein, still
solidarily liable to PPA but entitled MPA to reimbursement
from Capt. Gavino for such amount of the adjudged
pecuniary liability in excess of the amount equivalent to
seventy-five percent (75%) of its prescribed reserve
fund. 8
Neither Far Eastern Shipping Co. (briefly, FESC) nor MPA
was happy with the decision of the Court of Appeals and
both of them elevated their respective plaints to us via
separate petitions for review oncertiorari.
In G. R. No. 130068, which was assigned to the Second
Division of this Court, FESC imputed that the Court of
Appeals seriously erred:
1. in not holding Senen C. Gavino and the Manila Pilots'
Association as the parties solely responsible for the
resulting damages sustained by the pier deliberately
ignoring the established jurisprudence on the matter;
Transportation Law - 8th Set
2. in holding that the master had not exercised the
required diligence demanded from him by the
circumstances at the time the incident happened;
3. in affirming the amount of damages sustained by the
respondent Philippine Ports Authority despite a strong and
convincing evidence that the amount is clearly exorbitant
and unreasonable;
4. in not awarding any amount of counterclaim prayed for
by the petitioner in its answer; and
5. in not granting herein petitioner's claim against pilot
Senen C. Gavino and Manila Pilots' Association in the
event that it be held
liable.9
Petitioner asserts that since the MV PAVLODAR was under
compulsory pilotage at the time of the incident, it was the
compulsory pilot, Capt. Gavino, who was in command and
had complete control in the navigation and docking of the
vessel. It is the pilot who supersedes the master for the
time being in the command and navigation of a ship and
his orders must be obeyed in all respects connected with
her navigation. Consequently, he was solely responsible
for the damage caused upon the pier apron, and not the
owners of the vessel. It claims that the master of the boat
did not commit any act of negligence when he failed to
countermand or overrule the orders of the pilot because
he did not see any justifiable reason to do so. In other
words, the master cannot be faulted for relying absolutely
on the competence of the compulsory pilot. If the master
does not observe that a compulsory pilot is incompetent
or physically incapacitated, the master is justified in
relying on the pilot. 10
Respondent PPA, in its comment, predictably in full
agreement with the ruling of respondent court on the
solidary liability of FESC, MPA and Capt. Gavino, stresses
the concurrent negligence of Capt. Gavino, the harbor
pilot, and Capt. Viktor Kabankov, * shipmaster of MV
Pavlodar, as the basis of their solidary liability for damages
sustained by PPA. It posits that the vessel was being
piloted by Capt. Gavino with Capt. Kabankov beside him all
the while on the bridge of the vessel, as the former took
over the helm of MV Pavlodar when it rammed and
damaged the apron of the pier of Berth No. 4 of the
Manila International Port. Their concurrent negligence was
the immediate and proximate cause of the collision
between the vessel and the pier Capt. Gavino, for his
negligence in the conduct of docking maneuvers for the
safe berthing of the vessel; and Capt. Kabankov, for failing
to countermand the orders of the harbor pilot and to take
over and steer the vessel himself in the face of imminent
danger, as well as for merely relying on Capt. Gavino
during the berthing procedure. 11
On the other hand, in G.R. No. 130150, originally assigned
to the Court's First Division and later transferred to the
Third Division. MPA, now as petitioner in this case, avers
that respondent court's errors consisted in disregarding
and misinterpreting Customs Administrative Order No.
15-65 which limits the liability of MPA. Said pilots'
association asseverates that it should not be held solidarily
liable with Capt. Gavino who, as held by respondent court
is only a member, not an employee, thereof. There being
no employer-employee relationship, neither can MPA be
held liable for any vicarious liability for the respective
exercise of profession by its members nor be considered a
joint tortfeasor as to be held jointly and severally
liable. It further argues that there was erroneous reliance
12
on Customs Administrative Order No. 15-65 and the
constitution and by-laws of MPA, instead of the provisions
of the Civil Code on damages which, being a substantive
law, is higher in category than the aforesaid constitution
10
and by-laws of a professional organization or an
administrative order which bears no provision classifying
the nature of the liability of MPA for the negligence its
member pilots. 13
As for Capt. Gavino, counsel for MPA states that the
former had retired from active pilotage services since July
28, 1994 and has ceased to be a member of petitioner
pilots' association. He is not joined as a petitioner in this
case since his whereabouts are unknown. 14
FESC's comment thereto relied on the competence of the
Court of Appeals in construing provisions of law or
administrative orders as bases for ascertaining the liability
of MPA, and expressed full accord with the appellate
court's holding of solidary liability among itself, MPA and
Capt. Gavino. It further avers that the disputed provisions
of Customs Administrative Order No. 15-65 clearly
established MPA's solidary liability.
15
On the other hand, public respondent PPA, likewise
through representations by the Solicitor General, assumes
the same supportive stance it took in G.R. No. 130068 in
declaring its total accord with the ruling of the Court of
Appeals that MPA is solidarily liable with Capt. Gavino and
FESC for damages, and in its application to the fullest
extent of the provisions of Customs Administrative Order
No. 15-65 in relation to MPA's constitution and by-laws
which spell out the conditions of and govern their
respective liabilities. These provisions are clear and
unambiguous as regards MPA's liability without need for
interpretation or construction. Although Customs
Administrative Order No. 15-65 is a mere regulation issued
by an administrative agency pursuant to delegated
legislative authority to fix details to implement the law, it
is legally binding and has the same statutory force as any
valid statute. 16
Upon motion by FESC dated April 24, 1998 in G.R. No.
17
130150, said case was consolidated with G.R. No.
130068. 18
Prefatorily, on matters of compliance with procedural
requirements, it must be mentioned that the conduct of
the respective counsel for FESC and PPA leaves much to be
desired, to the displeasure and disappointment of this
Court.
Sec. 2, Rule 42 of the 1997 Rules of Civil
Procedure incorporates the former Circular No. 28-91
19
which provided for what has come to be known as the
certification against forum shopping as an additional
requisite for petitions filed with the Supreme Court and
the Court of Appeals, aside from the other requirements
contained in pertinent provisions of the Rules of Court
therefor, with the end in view of preventing the filing of
multiple complaints involving the same issues in the
Supreme Court, Court of Appeals or different divisions
thereof or any other tribunal or agency.
More particularly, the second paragraph of Section 2, Rule
42 provides:
xxx xxx xxx
The petitioner shall also submit together with the petition
a certification under oath that he has not theretofore
commenced any other action involving the same issues in
the Supreme Court, the Court of Appeals or different
divisions thereof, or any other tribunal or agency; if there
is such other action or proceeding, he must state the status
of the same; and if he should thereafter learn that a similar
action or proceeding has been filed or is pending before
the Supreme Court, the Court of Appeals or different
divisions thereof, or any other tribunal or agency, he
undertakes to promptly inform the aforesaid courts and
other tribunal or agency thereof within five (5) days
therefrom. (Emphasis ours.)
Transportation Law - 8th Set
For petitions for review filed before the Supreme Court,
Section 4(e), Rule 45 specifically requires that such
petition shall contain a sworn certification against forum
shopping as provided in the last paragraph of Section 2,
Rule 42.
The records show that the law firm of Del Rosario and Del
Rosario through its associate, Atty. Herbert A. Tria, is the
counsel of record for FESC in both G.R. No. 130068 and
G.R. No. 130150.
G.R. No. 130068, which is assigned to the Court's Second
Division, commenced with the filing by FESC through
counsel on August 22, 1997 of a verified motion for
extension of time to file its petition for thirty (30) days
from August 28, 1997 or until September 27, 1997. Said20
motion contained the following certification against forum
shopping signed by Atty. Herbert A. Tria as affiant:
21
CERTIFICATION
AGAINST FORUM SHOPPING
I/we hereby certify that I/we have not commenced any
other action or proceeding involving the same issues in the
Supreme Court, the Court of Appeals, or any other tribunal
or agency; that to the best of my own knowledge, no such
action or proceeding is pending in the Supreme Court, the
Court of Appeals, or any other tribunal or agency; that if
I/we should thereafter learn that a similar action or
proceeding has been filed or is pending before the
Supreme Court, the Court of Appeals, or any other tribunal
or agency, I/we undertake to report that fact within five (5)
days therefrom to this Honorable Court.
This motion having been granted, FESC subsequently filed
its petition on September 26, 1997, this time bearing a
"verification and certification against forum-shopping"
executed by one Teodoro P. Lopez on September 24,
1997, to wit:
22
VERIFICATION AND CERTIFICATION
AGAINST FORUM SHOPPING
in compliance with Section 4(e), Rule 45 in relation
to Section 2, Rule 42 of the Revised Rules of Civil Procedure
I, Teodoro P. Lopez, of legal age, after being duly sworn,
depose and state:
1. That I am the Manager, Claims Department of Filsov
Shipping Company, the local agent of petitioner in this
case.
2. That I have caused the preparation of this Petition for
Review on Certiorari.
3. That I have read the same and the allegations therein
contained are true and correct based on the records of
this case.
4. That I certify that petitioner has not commenced any
other action or proceeding involving the same issues in the
Supreme Court or Court of Appeals, or any other tribunal
or agency, that to the best of my own knowledge, no such
action or proceeding is pending in the Supreme Court, the
Court of Appeals or any other tribunal or agency, that if I
should thereafter learn that a similar action or proceeding
has been filed or is pending before the Supreme Court, the
Court of Appeals, or any other tribunal or agency, I
undertake to report the fact within five (5) days therefrom
to this Honorable Court. (Italics supplied for emphasis.)
Reviewing the records, we find that the petition filed by
MPA in G.R. No. 130150 then pending with the Third
Division was duly filed on August 29, 1997 with a copy
thereof furnished on the same date by registered mail to
counsel for FESC. Counsel of record for MPA. Atty. Jesus
23
P. Amparo, in his verification accompanying said petition
dutifully revealed to the Court that
xxx xxx xxx
3. Petitioner has not commenced any other action or
proceeding involving the same issues in this Honorable
11
Court, the Court of Appeals or different Divisions thereof,
or any other tribunal or agency, but to the best of his
knowledge, there is an action or proceeding pending in this
Honorable Court, entitled Far Eastern Shipping Co.,
Petitioner, vs. Philippine Ports Authority and Court of
Appeals with a Motion for Extension of time to file Petition
For Review by Certiorari filed sometime on August 18,
1987. If undersigned counsel will come to know of any
other pending action or claim filed or pending he
undertakes to report such fact within five (5) days to this
Honorable Court. (Emphasis supplied.)
24
Inasmuch as MPA's petition in G.R. No. 130150 was posted
by registered mail on August 29, 1997 and taking judicial
notice of the average period of time it takes local mail to
reach its destination, by reasonable estimation it would be
fair to conclude that when FESC filed its petition in G.R. No.
130068 on September 26, 1997, it would already have
received a copy of the former and would then have
knowledge of the pendency of the other petition initially
filed with the First Division. It was therefore incumbent
upon FESC to inform the Court of that fact through its
certification against forum shopping. For failure to make
such disclosure, it would appear that the aforequoted
certification accompanying the petition in G.R. No. 130068
is defective and could have been a ground for dismissal
thereof.
Even assuming that FESC had not yet received its copy of
MPA's petition at the time it filed its own petition and
executed said certification, its signatory did state "that if I
should thereafter learn that a similar action or proceeding
has been filed or is pending before the Supreme Court, the
Court of Appeals or any other tribunal or agency, I
undertake to report the fact within five (5) days therefrom
to this Honorable Court." Scouring the records page by
25
page in this case, we find that no manifestation
concordant with such undertaking was then or at any
other time thereafter ever filed by FESC nor was there any
attempt to bring such matter to the attention of the Court.
Moreover, it cannot feign non-knowledge of the existence
of such other petition because FESC itself filed the motion
for consolidation in G.R. No. 130150 of these two cases on
April 24, 1998.
It is disturbing to note that counsel for FESC, the law firm
of Del Rosario and Del Rosario, displays an unprofessional
tendency of taking the Rules for granted, in this instance
exemplified by its pro forma compliance therewith but
apparently without full comprehension of and with less
than faithful commitment to its undertakings to this Court
in the interest of just, speedy and orderly administration
of court proceedings.
As between the lawyer and the courts, a lawyer owes
candor, fairness and good faith to the court. He is an26
officer of the court exercising a privilege which is
indispensable in the administration of justice. Candidness,
27
especially towards the courts, is essential for the
expeditious administration of justice. Courts are entitled
to expect only complete honesty from lawyers appearing
and pleading before them. Candor in all dealings is the
28
very essence of honorable membership in the legal
profession. More specifically, a lawyer is obliged to
29
observe the rules of procedure and not to misuse them to
defeat the ends of justice. It behooves a lawyer,
30
therefore, to exert every effort and consider it his duty to
assist in the speedy and efficient administration of
justice. Being an officer of the court, a lawyer has a
31
responsibility in the proper administration of justice. Like
the court itself, he is an instrument to advance its ends
the speedy, efficient, impartial, correct and inexpensive
adjudication of cases and the prompt satisfaction of final
Transportation Law - 8th Set
judgments. A lawyer should not only help attain these
objectives but should likewise avoid any unethical or
improper practices that impede, obstruct or prevent their
realization, charged as he is with the primary task of
assisting in the speedy and efficient administration of
justice.32
Sad to say, the members of said law firm sorely failed to
observe their duties as responsible members of the Bar.
Their actuations are indicative of their predisposition to
take lightly the avowed duties of officers of the Court to
promote respect for law and for legal processes. We 33
cannot allow this state of things to pass judicial muster.
In view of the fact that at around the time these petitions
were commenced, the 1997 Rules of Civil Procedure had
just taken effect, the Court treated infractions of the new
Rules then with relative liberality in evaluating full
compliance therewith. Nevertheless, it would do well to
remind all concerned that the penal provisions of Circular
No. 28-91 which remain operative provides, inter alia:
3. Penalties.
xxx xxx xxx
(c) The submission of a false certification under Par. 2 of
the Circular shall likewise constitute contempt of court,
without prejudice to the filing of criminal action against
the guilty party. The lawyer may also be subjected to
disciplinary proceedings.
It must be stressed that the certification against forum
shopping ordained under the Rules is to be executed by
the petitioner, and not by counsel. Obviously it is the
petitioner, and not always the counsel whose professional
services have been retained for a particular case, who is in
the best position to know whether he or it actually filed or
caused the filing of a petition in that case. Hence, a
certification against forum shopping by counsel is a
defective certification. It is clearly equivalent to
non-compliance with the requirement under Section 2,
Rule 42 in relation to Section 4, Rule 45, and constitutes a
valid cause for dismissal of the petition.
Hence, the initial certification appended to the motion for
extension of time to file petition in G.R. No. 130068
executed in behalf of FESC by Atty. Tria is procedurally
deficient. But considering that it was a superfluity at that
stage of the proceeding, it being unnecessary to file such a
certification with a mere motion for extension, we shall
disregard such error. Besides, the certification
subsequently executed by Teodoro P. Lopez in behalf of
FESC cures that defect to a certain extent, despite the
inaccuracies earlier pointed out. In the same vein, we shall
consider the verification signed in behalf of MPA by its
counsel, Atty. Amparo, in G.R. No. 130150 as substantial
compliance inasmuch as it served the purpose of the Rules
of informing the Court of the pendency of another action
or proceeding involving the same issues.
It bears stressing that procedural rules are instruments in
the speedy and efficient administration of justice. They
should be used to achieve such end and not to derail it.
Counsel for PPA did not make matters any better. Despite
the fact that, save for the Solicitor General at the time, the
same legal team of the Office of the Solicitor General (OSG,
for short) composed of Assistant Solicitor General Roman
G. Del Rosario and Solicitor Luis F. Simon, with the
addition of Assistant Solicitor General Pio C. Guerrero very
much later in the proceedings, represented PPA
throughout the appellate proceedings in both G.R. No.
130068 and G.R. No. 130150 and was presumably fully
acquainted with the facts and issues of the case, it took
the OSG an inordinately and almost unreasonably long
period of time to file its comment, thus unduly delaying
the resolution of these cases. It took several changes of
12
leadership in the OSG from Silvestre H. Bello III to
Romeo C. dela Cruz and, finally, Ricardo P. Galvez
before the comment in behalf of PPA was finally filed.
In G.R. No. 130068, it took eight (8) motions for extension
of time totaling 210 days, a warning that no further
extensions shall be granted, and personal service on the
Solicitor General himself of the resolution requiring the
filing of such comment before the OSG indulged the Court
with the long required comment on July 10, 1998. This, 35
despite the fact that said office was required to file its
comment way back on November 12, 1997. A closer 36
scrutiny of the records likewise indicates that petitoner
FESC was not even furnished a copy of said comment as
required by Section 5, Rule 42. Instead, a copy thereof was
inadvertently furnished to MPA which, from the point of
view of G.R. No. 130068, was a non-party. The OSG fared
37
slightly better in G.R. No. 130150 in that it took only six (6)
extensions, or a total of 180 days, before the comment
was finally filed. And while it properly furnished
38
petitioner MPA with a copy of its comment, it would have
been more desirable and expedient in this case to have
furnished its therein co-respondent FESC with a copy
thereof, if only as a matter of professional courtesy. 39
This undeniably dilatory disinclination of the OSG to
seasonably file required pleadings constitutes deplorable
disservice to the tax-paying public and can only be
categorized as censurable inefficiency on the part of the
government law office. This is most certainly
professionally unbecoming of the OSG.
Another thing that baffles the Court is why the OSG did
not take the inititive of filing a motion for consolidation in
either G.R. No. 130068 or G.R. No. 130150, considering its
familiarity with the background of the case and if only to
make its job easier by having to prepare and file only one
comment. It could not have been unaware of the
pendency of one or the other petition because, being
counsel for respondent in both cases, petitioner is
required to furnish it with a copy of the petition under
pain of dismissal of the petition for failure otherwise. 40
Besides, in G.R. 130068, it prefaces its discussions thus
Incidentally, the Manila Pilots' Association (MPA), one of
the defendants-appellants in the case before the
respondent Court of Appeals, has taken a separate appeal
from the said decision to this Honorable Court, which was
docketed as G.R. No. 130150 and entitled "Manila Pilots'
Association, Petitioner, versus Philippine Ports Authority
and Far Eastern Shipping Co., Respondents." 41
Similarly, in G.R. No. 130150, it states
Incidentally, respondent Far Eastern Shipping Co. (FESC)
had also taken an appeal from the said decision to this
Honorable Court, docketed as G.R. No. 130068, entitled
"Far Eastern Shipping Co. vs. Court of Appeals and
Philippine Ports Authority." 42
We find here a lackadaisical attitude and complacency on
the part of the OSG in the handling of its cases and an
34
almost reflexive propensity to move for countless
extensions, as if to test the patience of the Court, before
favoring it with the timely submission of required
pleadings.
It must be emphasized that the Court can resolve cases
only as fast as the respective parties in a case file the
necessary pleadings. The OSG, by needlessly extending the
pendency of these cases through its numerous motions for
extension, came very close to exhausting this Court's
forbearance and has regrettably fallen short of its duties
as the People's Tribune.
The OSG is reminded that just like other members of the
Bar, the canons under the Code of Professional
Responsibility apply with equal force on lawyers in
Transportation Law - 8th Set
government service in the discharge of their official
tasks. These ethical duties are rendered even more
43
exacting as to them because, as government counsel, they
have the added duty to abide by the policy of the State to
promote a high standard of ethics in public
service. Furthermore, it is incumbent upon the OSG, as
44
part of the government bureaucracy, to perform and
discharge its duties with the highest degree of
professionalism, intelligence and skill and to extend
45
prompt, courteous and adequate service to the public. 46
Now, on the merits of the case. After a judicious
examination of the records of this case, the pleadings filed,
and the evidence presented by the parties in the two
petitions, we find no cogent reason to reverse and set
aside the questioned decision. While not entirely a case of
first impression, we shall discuss the issues seriatim and,
correlatively by way of a judicial once-over, inasmuch as
the matters raised in both petitions beg for validation and
updating of well-worn maritime jurisprudence. Thereby,
we shall write finis to the endless finger-pointing in this
shipping mishap which has been stretched beyond the
limits of judicial tolerance.
The Port of Manila is within the Manila Pilotage District
which is under compulsory pilotage pursuant to Section 8,
Article III of Philippine Ports Authority Administrative
Order No. 03-85, which provides that:
47
Sec. 8. Compulsor Pilotage Service. For entering a
harbor and anchoring thereat, or passing through rivers or
straits within a pilotage district, as well as docking and
undocking at any pier/wharf, or shifting from one berth or
another, every vessel engaged in coastwise and foreign
trade shall be under compulsory pilotage. . . .
In case of compulsory pilotage, the respective duties and
responsibilities of the compulsory pilot and the master
have been specified by the same regulation in this wise:
Sec. 11. Control of vessels and liability for damage. On
compulsory pilotage grounds, the Harbor Pilot providing
the service to a vessel shall be responsible for the damage
caused to a vessel or to life and property at ports due to
his negligence or fault. He can only be absolved from
liability if the accident is caused by force majeure or
natural calamities provided he has exercised prudence and
extra diligence to prevent or minimize damage.
The Master shall retain overall command of the vessel
even on pilotage grounds whereby he can countermand or
overrule the order or command of the Harbor Pilot on
beard. In such event, any damage caused to a vessel or to
life and property at ports by reason of the fault or
negligence of the Master shall be the responsibility and
liability of the registered owner of the vessel concerned
without prejudice to recourse against said Master.
Such liability of the owner or Master of the vessel or its
pilots shall be determined by competent authority in
appropriate proceedings in the light of the facts and
circumstances of each particular case.
Sec. 32. Duties and responsibilities of the Pilot or Pilots'
Association. The duties and responsibilities of the
Harbor Pilot shall be as follows:
xxx xxx xxx
f) a pilot shall be held responsible for the direction of a
vessel from the time he assumes his work as a pilot
thereof until he leaves it anchored or berthed
safely; Provided, however, that his responsibility shall
cease at the moment the Master neglects or refuses to
carry out hisorder.
Customs Administrative Order No. 15-65 issued twenty
years earlier likewise provided in Chapter I thereof for the
responsibilities of pilots:
13
Par. XXXIX. A Pilot shall be held responsible for the
direction of a vessel from the time he assumes control
thereof until he leaves it anchored free from
shoal: Provided, That his responsibility shall cease at the
moment the master neglects or refuses to carry out his
instructions.
xxx xxx xxx
Par. XLIV. Pilots shall properly and safely secure or
anchor vessels under their control when requested to do
so by the master of such vessels.
I. G.R. No. 130068
Petitioner FESC faults the respondent court with serious
error in not holding MPA and Capt. Gavino solely
responsible for the damages cause to the pier. It avers that
since the vessel was under compulsory pilotage at the
time with Capt. Gavino in command and having exclusive
control of the vessel during the docking maneuvers, then
the latter should be responsible for damages caused to the
pier. It likewise holds the appellate court in error for
48
holding that the master of the ship, Capt. Kabankov, did
not exercise the required diligence demanded by the
circumstances. 49
We start our discussion of the successive issues bearing in
mind the evidentiary rule in American jurisprudence that
there is a presumption of fault against a moving vessel
that strikes a stationary object such as a dock or
navigational aid. In admiralty, this presumption does more
than merely require the ship to go forward and produce
some evidence on the presumptive matter. The moving
vessel must show that it was without fault or that the
collision was occasioned by the fault of the stationary
object or was the result of inevitable accident. It has been
held that such vessel must exhaust every reasonable
possibility which the circumstances admit and show that in
each, they did all that reasonable care required. In the
50
absence of sufficient proof in rebuttal, the presumption of
fault attaches to a moving vessel which collides with a
fixed object and makes a prima facie case of fault against
the vessel. Logic and experience support this
51
presumption:
The common sense behind the rule makes the burden a
heavy one. Such accidents simply do not occur in the
ordinary course of things unless the vessel has been
mismanaged in some way. It is nor sufficient for the
respondent to produce witnesses who testify that as soon
as the danger became apparent everything possible was
done to avoid an accident. The question remains, How
then did the collision occur? The answer must be either
that, in spite of the testimony of the witnesses, what was
done was too little or too late or, if not, then the vessel
was at fault for being in a position in which an unavoidable
collision would occur. 52
The task, therefore, in these cases is to pinpoint who was
negligent the master of the ship, the harbor pilot or
both.
A pilot, in maritime law, is a person duly qualified, and
licensed, to conduct a vessel into or out of ports, or in
certain waters. In a broad sense, the term "pilot" includes
both (1) those whose duty it is to guide vessels into or out
of ports, or in particular waters and (2) those entrusted
with the navigation of vessels on the high seas. However,
53
the term "pilot" is more generally understood as a person
taken on board at a particular place for the purpose of
conducting a ship through a river, road or channel, or from
a port. 54
Under English and American authorities, generally
speaking, the pilot supersedes the master for the time
being in the command and navigation of the ship, and his
orders must be obeyed in all matters connected with her
Transportation Law - 8th Set
navigation. He becomes the master pro hac vice and
should give all directions as to speed, course, stopping and
reversing anchoring, towing and the like. And when a
licensed pilot is employed in a place where pilotage is
compulsory, it is his duty to insist on having effective
control of the vessel, or to decline to act as pilot. Under
certain systems of foreign law, the pilot does not take
entire charge of the vessel, but is deemed merely the
adviser of the master, who retains command and control
of the navigation even in localities where pilotage is
compulsory. 55
It is quite common for states and localities to provide for
compulsory pilotage, and safety laws have been enacted
requiring vessels approaching their ports, with certain
exceptions, to take on board pilots duly licensed under
local law. The purpose of these laws is to create a body of
seamen thoroughly acquainted with the harbor, to pilot
vessels seeking to enter or depart, and thus protect life
and property from the dangers of navigation. 56
In line with such established doctrines, Chapter II of
Customs Administrative Order No. 15-65 prescribes the
rules for compulsory pilotage in the covered pilotage
districts, among which is the Manila Pilotage District,
viz.
PARAGRAPH I. Pilotage for entering a harbor and
anchoring thereat, as well as docking and undocking in any
pier or shifting from one berth to another shall be
compulsory, except Government vessels and vessels of
foreign governments entitled to courtesy, and other
vessels engaged solely in river or harbor work, or in a daily
ferry service between ports which shall be exempt from
compulsory pilotage provisions of these
regulations: provided, however, that compulsory pilotage
shall not apply in pilotage districts whose optional pilotage
is allowed under these regulations.
Pursuant thereto, Capt. Gavino was assigned to pilot MV
Pavlodar into Berth 4 of the Manila International Port.
Upon assuming such office as compulsory pilot, Capt.
Gavino is held to the universally accepted high standards
of care and diligence required of a pilot, whereby he
assumes to have skill and knowledge in respect to
navigation in the particular waters over which his license
extends superior to and more to be trusted than that of
the master. A pilot 57 should have a thorough knowledge
57
of general and local regulations and physical conditions
affecting the vessel in his charge and the waters for which
he is licensed, such as a particular harbor or river.
He is not held to the highest possible degree of skill and
care, but must have and exercise the ordinary skill and
care demanded by the circumstances, and usually shown
by an expert in his profession. Under extraordinary
circumstancesm, a pilot must exercise extraordinary
care. 58
In Atlee vs. The Northwesrern Union Packet Company. Mr. 59
Justice Miller spelled out in great detail the duties of a
pilot:
. . . (T)he pilot of a river steamer, like the harbor pilot, is
selected for his personal knowledge of the topography
through which he steers his vessel. In the long course of a
thousand miles in one of these rivers, he must be familiar
with the appearance of the shore on each side of the river
as he goes along. Its banks, towns, its landings, its houses
and trees, are all landmarks by which he steers his vessel.
The compass is of little use to him. He must know where
the navigable channel is, in its relation to all these external
objects, especially in the night. He must also be familiar
with all dangers that are permanently located in the
course of the river, as sand-bars, snags, sunken rocks or
trees or abandoned vessels orbarges. All this he must
14
know and remember and avoid. To do this, he must be
constantly informed of the changes in the current of the
river, of the sand-bars newly made,of logs or snags, or
other objects newly presented, against which his vessel
might be injured.
xxx xxx xxx
It may be said that this is exacting a very high order of
ability in a pilot. But when we consider the value of the
lives and property committed to their control, for in this
they are absolute masters, the high compensation they
receive, the care which Congress has taken to secure by
rigid and frequent examinations and renewal of licenses,
this very class of skill, we do not think we fix the standard
too high.
Tested thereby, we affirm respondent court's finding that
Capt. Gavino failed to measure up to such strict standard
of care and diligence required of pilots in the performance
of their duties. Witness this testimony of Capt. Gavino:
Court: You have testified before that the reason why the
vessel bumped the pier was because the anchor was not
released immediately or as soon as you have given the
order. Do you remember having srated that?
A Yes, your Honor.
Q And you gave this order to the captain of the vessel?
A Yes, your Honor.
Q By that testimony, you are leading the Court to
understand that if that anchor was released immediately
at the time you gave the order, the incident would not
have happened. Is that correct?
A Yes, sir, but actually it was only a presumption on my
part because there was a commotion between the officers
who are in charge of the dropping of the anchor and the
captain. I could not understand their language, it was in
Russian, so I presumed the anchor was not dropped on
time.
Q So, you are not sure whether it was really dropped on
time or not?
A I am not sure, your Honor.
xxx xxx xxx
Q You are not even sure what could have caused the
incident. What factor could have caused the incident?
A Well, in this case now, because either the anchor was
not dropped on time or the anchor did not hold, that was
the cause of the incident, your Honor. 60
It is disconcertingly riddled with too much incertitude and
manifests a seeming indifference for the possibly injurious
consequences his commands as pilot may have. Prudence
required that he, as pilot, should have made sure that his
directions were promptly and strictly followed. As
correctly noted by the trial court
Moreover, assuming that he did indeed give the command
to drop the anchor on time, as pilot he should have seen
to it that the order was carried out, and he could have
done this in a number of ways, one of which was to
inspect the bow of the vessel where the anchor
mechanism was installed. Of course, Captain Gavino
makes reference to a commotion among the crew
members which supposedly caused the delay in the
execution of the command. This account was reflected in
the pilot's report prepared four hours later, but Capt.
Kavankov, while not admitting whether or not such a
commotion occurred, maintained that the command to
drop anchor was followed "immediately and precisely."
Hence, the Court cannot give much weight or
consideration to this portion of Gavino's testimony." 61
An act may be negligent if it is done without the
competence that a reasonable person in the position of
the actor would recognize as necessary to prevent it from
creating an unreasonable risk of harm to another. Those
62
Transportation Law - 8th Set
who undertake any work calling for special skills are
required not only to exercise reasonable care in what they
do but also possess a standard minimum of special
knowledge and ability. 63
Every man who offers his services to another, and is
employed, assumes to exercise in the employment such
skills he possesses, with a reasonable degree of diligence.
In all these employments where peculiar skill is requisite, if
one offers his services he is understood as holding himself
out to the public as possessing the degree of skill
commonly possessed by others in the same employment,
and if his pretensions are unfounded he commits a species
of fraud on every man who employs him in reliance on his
public profession. 64
Furthermore, there is an obligation on all persons to take
the care which, under ordinary circumstances of the case,
a reasonable and prudent man would take, and the
omission of that care constitutes negligence. Generally,
65
the degree of care required is graduated according to the
danger a person or property attendant upon the activity
which the actor pursues or the instrumentality which he
uses. The greater the danger the greater the degree of
care required. What is ordinary under extraordinary of
conditions is dictated by those conditions; extraordinary
risk demands extraordinary care. Similarly, the more
imminent the danger, the higher the degree of care. 66
We give our imprimatur to the bases for the conclusion of
the Court of Appeals that Capt. Gavino was indeed
negligent in the performance of his duties:
xxx xxx xxx
. . . As can be gleaned from the logbook, Gavino ordered
the left anchor and two (2) shackles dropped at 8:30
o'clock in the morning. He ordered the engines of the
vessel stopped at 8:31 o'clock. By then,Gavino must have
realized that the anchor did not hit a hard object and was
not clawed so as to reduce the momentum of the vessel.
In point of fact, the vessel continued travelling towards
the pier at the same speed. Gavino failed to react, At 8:32
o'clock, the two (2) tugboats began to push the stern part
of the vessel from the port side bur the momentum of the
vessel was not contained. Still, Gavino did not react. He
did not even order the other anchor and two (2) more
shackles dropped to arrest the momentum of the vessel.
Neither did he order full-astern. It was only at 8:34
o'clock, or four (4) minutes, after the anchor was dropped
that Gavino reacted. But his reaction was even (haphazard)
because instead of arresting fully the momentum of the
vessel with the help of the tugboats, Gavino ordered
merely "half-astern". It took Gavino another minute to
order a "full-astern". By then, it was too late. The vessel's
momentum could no longer be arrested and, barely a
minute thereafter, the bow of the vessel hit the apron of
the pier. Patently, Gavino miscalculated. He failed to react
and undertake adequate measures to arrest fully the
momentum of the vessel after the anchor failed to claw to
the seabed. When he reacted, the same was even
(haphazard). Gavino failed to reckon the bulk of the vessel,
its size and its cargo. He erroneously believed that only
one (1) anchor would suffice and even when the anchor
failed to claw into the seabed or against a hard object in
the seabed, Gavino failed to order the other anchor
dropped immediately. His claim that the anchor was
dropped when the vessel was only 1,000 feet from the
pier is but a belated attempt to extricate himself from the
quagmire of his own insouciance and negligence. In sum,
then, Appellants' claim that the incident was caused by
"force majeure" is barren of factual basis.
xxx xxx xxx
15
The harbor pilots are especially trained for this job. In the
Philippines, one may not be a harbor pilot unless he
passed the required examination and training conducted
then by the Bureau of Custom, under Customs
Administrative Order No. 15-65, now under the Philippine
Ports Authority under PPA Administrative Order 63-85,
Paragraph XXXIX of the Customs Administrative Order No.
15-65 provides that "the pilot shall be held responsible for
the direction of the vessel from the time he assumes
control thereof, until he leaves it anchored free from
shoal: Provided, that his responsibility shall cease at
the.moment the master neglects or refuse(s) to carry out
his instructions." The overall direction regarding the
procedure for docking and undocking the vessel emanates
from the harbor pilot. In the present recourse, Gavino
failed to live up to his responsibilities and exercise
reasonable care or that degree of care required by the
exigencies of the occasion. Failure on his part to exercise
the degree of care demanded by the circumstances is
negligence (Reese versus Philadelphia & RR Co. 239 US 363,
60 L ed. 384, 57 Am Jur, 2d page 418). 67
This affirms the findings of the trial court regarding Capt.
Gavino's negligence:
This discussion should not however, divert the court from
the fact that negligence in manuevering the vessel must
be attributed to Capt. Senen Gavino. He was an
experienced pilot and by this time should have long
familiarized himself with the depth of the port and the
distance he could keep between the vessel and port in
order to berth safely. 68
The negligence on the part of Capt. Gavino is evident; but
Capt. Kabancov is no less responsible for the allision. His
unconcerned lethargy as master of the ship in the face of
troublous exigence constitutes negligence.
While it is indubitable that in exercising his functions a
pilot is in sole command of the ship and supersedes the
69
master for the time being in the command and navigation
of a ship and that he becomes master pro hac vice of a
vessel piloted by him, there is overwhelming authority to
70
the effect that the master does not surrender his vessel to
the pilot and the pilot is not the master. The master is still
in command of the vessel notwithstanding the presence of
a pilot. There are occasions when the master may and
should interfere and even displace the pilot, as when the
pilot is obviously incompetent or intoxicated and the
circumstances may require the master to displace a
compulsory pilot because of incompetency or physical
incapacity. If, however, the master does nor observe that a
compulsory pilot is incompetent or physically
incapacitated, the master is justified in relying on the pilot,
but not blindly.71
The master is not wholly absolved from his duties while a
pilot is on board his vessel, and may advise with or offer
suggestions to him. He is still in command of the vessel,
except so far as her navigation is concerned, and must
cause the ordinary work of the vessel to be properly
carried on and the usual precaution taken. Thus, in
particular, he is bound to see that there is sufficient watch
on deck, and that the men are attentive to their duties,
also that engines are stopped, towlines cast off, and the
anchors clear and ready to go at the pilot's order. 72
A perusal of Capt. Kabankov's testimony makes it apparent
that he was remiss in the discharge of his duties as master
of the ship, leaving the entire docking procedure up to the
pilot, instead of maintaining watchful vigilance over this
risky maneuver:
Q Will you please tell us whether you have the right to
intervene in docking of your ship in the harbor?
Transportation Law - 8th Set
A No sir, I have no right to intervene in time of docking,
only in case there is imminent danger to the vessel and to
the pier.
Q Did you ever intervene during the time that your ship
was being docked by Capt. Gavino?
A No sir, I did not intervene at the time when the pilot was
docking my ship.
Q Up to the time it was actually docked at the pier, is that
correct?
A No sir, I did not intervene up to the very moment when
the vessel was docked.
xxx xxx xxx
Atty. Del Rosario (to the witness)
Q Mr. Witness, what happened, if any, or was there
anything unusual that happened during the docking?
A Yes sir, our ship touched ihe pier and the pier was
damaged.
Court (to the witness)
Q When you said touched the pier, are you leading the
court to understand that your ship bumped the pier?
A I believe that my vessel only touched the pier but the
impact was very weak.
Q Do you know whether the pier was damaged as a result
of that slight or weak impact?
A Yes sir, after the pier was damaged.
xxx xxx xxx
Q Being most concerned with the safety of your vessel, in
the maneuvering of your vessel to the port, did you
observe anything irregular in the maneuvering by Capt.
Gavino at the time he was trying to cause the vessel to be
docked at the pier?
A You mean the action of Capt. Gavino or his condition?
Court:
Q Not the actuation that conform to the safety maneuver
of the ship to the harbor?
A No sir, it was a usual docking.
Q By that statement of yours, you are leading the court to
understand that there was nothing irregular in the docking
of the ship?
A Yes sir, during the initial period of the docking, there was
nothing unusual that happened.
Q What about in the last portion of the docking of the ship,
was there anything unusual or abnormal that happened?
A None Your Honor, I believe that Capt. Gavino thought
that the anchor could keep or hold the vessel.
Q You want us to understand, Mr. Witness, that the
dropping of the anchor of the vessel was nor timely?
A I don't know the depth of this port but I think, if the
anchor was dropped earlier and with more shackles, there
could not have been an incident.
Q So you could not precisely tell the court that the
dropping of the anchor was timery because you are not
well aware of the seabed, is that correct?
A Yes sir, that is right.
xxx xxx xxx
Q Alright, Capt. Kavankov, did you come to know later
whether the anchor held its ground so much so that the
vessel could not travel?
A It is difficult for me to say definitely. I believe that the
anchor did not hold the ship.
Q You mean you don't know whether the anchor blades
stuck to the ground to stop the ship from further moving?
A Yes sir, it is possible.
Q What is possible?
A I think, the 2 shackles were not enough to hold the
vessel.
Q Did you know that the 2 shackles were dropped?
A Yes sir, I knew that.
16
Q If you knew that the shackles were not enough to hold
the ship, did you not make any protest to the pilot?
A No sir, after the incident, that was my assumption.
Q Did you come to know later whether that presumption
is correct?
A I still don't know the ground in the harbor or the depths.
Q So from the beginning, you were not competent
whether the 2 shackles were also dropped to hold the
ship?
A No sir, at the beginning, I did not doubt it because I
believe Capt. Gavino to be an experienced pilot and he
should be more aware as to the depths of the harbor and
the ground and I was confident in his actions.
xxx xxx xxx
Solicitor Abad (to the witness)
Q Now, you were standing with the pilot on the bridge of
the vessel before the inicident happened, were you not?
A Yes sir, all the time, I was standing with the pilot.
Q And so whatever the pilot saw, you could also see from
that point of view?
A That is right.
Q Whatever the piler can read from the panel of the
bridge, you also could read, is that correct?
A What is the meaning of panel?
Q All indications necessary for men on the bridge to be
informed of the movements of the ship?
A That is right.
Q And whatever sound the captain . . . Capt. Gavino would
hear from the bridge, you could also hear?
A That is right.
Q Now, you said that when the command to lower the
anchor was given, it was obeyed, is that right?
A This command was executed by the third mate and
boatswain.
Court (to the witness)
Q Mr. Witness, earlier in today's hearing, you said that you
did not intervene with the duties of the pilot and that, in
your opinion, you can only intervene if the ship is placed in
imminent danger, is that correct?
A That is right, I did say that.
Q In your observation before the incident actually
happened, did you observe whether or not the ship,
before the actual incident, the ship was placed in
imminent danger?
A No sir, I did not observe.
Q By that answer, are you leading the court to understand
that because you did not intervene and because you
believed that it was your duty to intervene when the
vessel is placed in imminent danger to which you did not
observe any imminent danger thereof, you have not
intervened in any manner to the command of the pilot?
A That is right, sir.
xxx xxx xxx
Q Assuminp that you disagreed with the pilot regarding
the step being taken by the pilot in maneuvering the
vessel, whose command will prevail, in case of imminent
danger to the vessel?
A I did nor consider the situation as having an imminent
danger. I believed that the vessel will dock alongside the
pier.
Q You want us to understand that you did not see an
imminent danger to your ship, is that what you mean?
A Yes sir, up to the very last moment, I believed that there
was no imminent danger.
Q Because of that, did you ever intervene in the command
of the pilot?
A Yes sir, I did not intervene because I believed that the
command of the pilot to be correct.
Solicitor Abad (to the witness)
Transportation Law - 8th Set
Q As a captain of M/V Pavlodar, you consider docking
maneuvers a serious matter, is it not?
A Yes sir, that is right.
Q Since it affects not only the safety of the port or pier,
but also the safety of the vessel and the cargo, is it not?
A That is right.
Q So that, I assume that you were watching Capt. Gavino
very closely at the time he was making his commands?
A I was close to him, I was hearing his command and being
executed.
Q And that you were also alert for any possible mistakes
he might commit in the maneuvering of the vessel?
A Yes sir, that is right.
Q But at no time during the maneuver did you issue order
contrary to the orders Capt. Gavino made?
A No sir.
Q So that you were in full accord with all of Capt. Gavino's
orders?
A Yes sir.
Q Because, otherwise, you would have issued order that
would supersede his own order?
A In that case, I should t,ke him away from his command
or remove the command from him.
Court (to the witness)
Q You were in full accord with the steps being taken by
Capt. Gavino because you relied on his knowledge, on his
familiarity of the seabed and shoals and other
surroundings or conditions under the sea, is that correct?
A Yes sir, that is right.
xxx xxx xxx
Solicitor Abad (to the witness)
Q And so after the anchors were ordered dropped and
they did not take hold of the seabed, you were alerted
that there was danger already on hand?
A No sir, there was no imminent danger to the vessel.
Q Do you mean to tell us that even if the anchor was
supposed to take hold of the bottom and it did not, there
was no danger to the ship?
A Yes sir, because the anchor dragged on the ground later.
Q And after a few moments when the anchor should have
taken hold the seabed bur not done (sic), as you expected,
you already were alerted that there was danger to the ship,
is that correct?
A Yes sir, I was alerted but there was no danger.
Q And you were alerted that somebody was wrong?
A Yes sir, I was alerted.
Q And this alert vou assumed was the ordinary alertness
that you have for normal docking?
A Yes sir, I mean that it was usual condition of any man in
time of docking to be alert.
Q And that is the same alertness when the anchor did not
hold onto the ground, is that correct?
A Yes sir, me and Capt. Gavino (thought) that the anchor
will hold the ground.
Q Since, as you said that you agreed all the while with the
orders of Capt. Gavino, you also therefore agreed with him
in his failure to take necessary precaution against the
eventuality that the anchor will not hold as expected?
Atty. Del Rosario:
May I ask that the question . . .
Solicitor Abad:
Never mind, I will reform the question.
xxx xxx xxx
Solicitor Abad (to the witness)
Q Is it not a fact that the vessel bumped the pier?
A That is right, it bumped the pier.
Q For the main reason that the anchor of the vessel did
not hold the ground as expected?
A Yes sir, that is my opinion. 73
17
Further, on redirect examination, Capt. Kabankov fortified
his apathetic assessment of the situation:
Q Now, after the anchor was dropped, was there any point
in time that you felt that the vessel was in imminent
danger.
A No, at that time, the vessel was not in imminent, danger,
sir.
74
This cavalier appraisal of the event by Capt. Kabankov is
disturbingly antipodal to Capt. Gavino's anxious
assessment of the situation:
Q When a pilot is on board a vessel, it is the piler's
command which should be followed at that moment until
the vessel is, or goes to port or reaches port?
A Yes, your Honor, but it does not take away from the
Captain his prerogative to countermand the pilot.
Q In what way?
A In any case, which he thinks the pilot is not maneuvering
correctly, the Captain always has the prerogative to
countermand the pilot's order.
Q But insofar as competence, efficiency and functional
knowledee of the seabed which are vital or decisive in the
safety (sic) bringing of a vessel to the port, he is not
competent?
A Yes, your Honor. That is why they hire a pilot in an
advisory capacity, but still, the safety of the vessel rest(s)
upon the Captain, the Master of the vessel.
Q In this case, there was not a disagreement between you
and the Captain of the vessel in the bringing of the vessel
to port?
A No, your Honor.
Court:
May proceed.
Atty. Catris:
In fact, the Master of the vessel testified here that he was
all along in conformity with the orders you, gave to him,
and, as matter of fact, as he said, he obeyed all your
orders. Can you tell, if in the course of giving such normal
orders for the saf(e) docking of the MV Pavlodar, do you
remember of any instance that the Master of the vessel
did not obey your command for the safety docking of the
MV Pavlodar?
Atty. del Rosario:
Already answered, he already said yes sir.
Court:
Yes, he has just answered yes sir to the Court that there
was no disagreement insofar as the bringing of the vessel
safely to the port.
Atty. Catris:
But in this instance of docking of the MV Pavlodar, do you
remember of a time during the course of the docking that
the MV Pavlodar was in imminent danger of bumping the
pier?
A When we were about more than one thousand meters
from the pier, I think, the anchor was not holding, so I
immediately ordered to push the bow at a fourth quarter,
at the back of the vessel in order to swing the bow away
from the pier and at the same time, I ordered for a full
astern of the engine. 75
These conflicting reactions can only imply, at the very least,
unmindful disregard or, worse, neglectful relinquishment
of duty by the shipmaster, tantamount to negligence.
The findings of the trial court on this aspect is noteworthy:
For, while the pilot Gavino may indeed have been charged
with the task of docking the vessel in the berthing space, it
is undisputed that the master of the vessel had the
corresponding duty to countermand any of the orders
made by the pilot, and even maneuver the vessel himself,
in case of imminent danger to the vessel and the port.
Transportation Law - 8th Set
In fact, in his testimony, Capt. Kavankov admitted that all
throughour the man(eu)vering procedures he did not
notice anything was going wrong, and even observed that
the order given to drop the anchor was done at the proper
time. He even ventured the opinion that the accident
occurred because the anchor failed to take hold but that
this did not alarm him because.there was still time to drop
a second anchor.
Under normal circumstances, the abovementioned facts
would have caused the master of a vessel to take charge
of the situation and see to the man(eu)vering of the vessel
himself. Instead, Capt. Kavankov chose to rely blindly upon
his pilot, who by this time was proven ill-equipped to cope
with the situation.
xxx xxx xxx
It is apparent that Gavino was negligent but Far Eastern's
employee Capt. Kavankov was no lesss responsible for as
master of the vessel he stood by the pilot during the
man(eu)vering procedures and was privy to every move
the latter made, as well as the vessel's response to each of
the commands. His choice to rely blindly upon the pilot's
skills, to the point that despite being appraised of a notice
of alert he continued to relinquish control of the vessel to
Gavino, shows indubitably that he was not performing his
duties with the diligence required of him and therefore
may be charged with negligence along with defend;int
Gavino. 76
As correctly affirmed by the Court of Appeals
We are in full accord with the findings and disquisitions of
the Court a quo.
In the present recourse, Captain Viktor Kavankov had been
a mariner for thirty-two years before the incident. When
Gavino was (in) the command of the vessel, Kavankov was
beside Gavino, relaying the commands or orders of Gavino
to the crewmembers-officers of the vessel concerned. He
was thus fully aware of the docking maneuvers and
procedure Gavino undertook to dock the vessel.
Irrefragably, Kavankov was fully aware of the bulk and size
of the vessel and its cargo as well as the weight of the
vessel. Kavankov categorically admitted that, when the
anchor and two (2) shackles were dropped to the sea floor,
the claws of the anchor did not hitch on to any hard object
in the seabed. The momentum of the vessel was not
arrested. The use of the two (2) tugboats was insufficient.
The momentum of the vessel, although a little bit arrested,
continued (sic) the vessel going straightforward with its
bow towards the port (Exhibit "A-1 ). There was thus a
need for the vessel to move "full-astern" and to drop the
other anchor with another shackle or two (2), for the
vessel to avoid hitting the pier. Kavankov refused to act
even as Gavino failed to act. Even as Gavino gave mere
"half-astern" order, Kavankov supinely stood by. The
vessel was already about twenty (20) meters away from
the pier when Gavino gave the "full-astern" order. Even
then, Kavankov did nothing to prevent the vessel from
hitting the pier simply because he relied on the
competence and plan of Gavino. While the "full-astern''
maneuver momentarily arrested the momentum of the
vessel, it was, by then, too late. All along, Kavankov stood
supinely beside Gavino, doing nothing but relay the
commands of Gavino. Inscrutably, then, Kavankov was
negligent.
xxx xxx xxx
The stark incompetence of Kavankov is competent
evidence to prove the unseaworthiness of the vessel. It
has been held that the incompetence of the navigator, the
master of the vessel or its crew makes the vessel
unseaworthy (Tug Ocean Prince versus United States of
America, 584 F. 2nd, page 1151). Hence, the Appellant
18
FESC is likewise liable for the damage sustained by the
Appellee. 77
We find strong and well-reasoned support in time-tested
American maritime jurisprudence, on which much of our
laws and jurisprudence on the matter are based, for the
conclusions of the Court of Appeals adjudging both Capt.
Gavino and Capt. Kabankov negligent.
As early as 1869, the U.S. Supreme Court declared,
through Mr. Justice Swayne, in The Steamship China vs.
Walsh, that it is the duty of the master to interfere in
78
cases of the pilot's intoxication or manifest incapacity, in
cases of danger which he does not foresee, and in all cases
of great necessity. The master has the same power to
displace the pilot that he has to remove any subordinate
officer of the vessel, at his discretion.
In 1895, the U.S. Supreme Court, this time through Mr.
Justice Brown, emphatically ruled that:
Nor are rye satisfied with the conduct of the master in
leaving the pilot in sole charge of the vessel. While the
pilot doubtless supersedes the master for the time being
in the command and navigation of the ship, and his orders
must be obeyed in all matters connected with her
navigation, the master is not wholly absolved from his
duties while the pilot is on board, and may advise with him,
and even displace him in case he is intoxicated or
manifestly incompetent. He is still in command of the
vessel, except so far as her navigation is concerned, and
bound to see that there is a sufficient watch on deck, and
that the men are attentive to their duties.
. . . (N)orwithstanding the pilot has charge, it is the duty of
the master to prevent accident, and not to abandon the
vessel entirely to the pilot; but that there are certain duties
he has to discharge (notwithstanding there is a pilot on
board) for the benefit of the owners. . . . that in well
conducted ships the master does not regard the presence
of a duly licensed pilot in compulsory pilot waters as
freeing him from every, obligation to attend to the safety
of the vessel; but that, while the master sees that his
officers and crew duly attend to the pilot's orders, he
himself is bound to keep a vigilant eye on the navigation of
the vessel, and, when exceptional circumstances exist, not
only to urge upon the pilot to use every precaution, but to
insist upon such being taken. (Italics for emphasis.)
79
In Jure vs. United Fruit Co., which, like the present
80
petitions, involved compulsory pilotage, with a similar
scenario where at and prior to the time of injury, the
vessel was in the charge of a pilot with the master on the
bridge of the vessel beside said pilot, the court therein
ruled:
The authority of the master of a vessel is not in complete
abeyance while a pilot, who is required by law to be
accepted, is in discharge of his functions. . . . It is the duty
of the master to interfere in cases of the pilot's
intoxication or manifest incapacity, in cases of danger
which he does not foresee, and in all cases of great
necessity. The master has the same power to displace the
pilot that he has to remove any subordinate officer of the
vessel. He may exercise it, or not, according to his
discretion. There was evidence to support findings that
piaintiff's injury was due to the negligent operation of the
Atenas, and that the master of that vessel was negligent in
failing to take action to avoid endangering a vessel
situated as the City of Canton was and persons or property
thereon.
A phase of the evidence furnished support for the
inferences . . . that he negligently failed to suggest to the
pilot the danger which was disclosed, and means of
avoiding such danger; and that the master's negligence in
failing to give timelt admonition to the pilot proximately
Transportation Law - 8th Set
contributed to the injury complained of. We are of opinion
that the evidence mentioned tended to prove conduct of
the pilot, known to the master, giving rise to a case of
danger or great necessity, calling for the intervention of
the master. A master of a vessel is not without fault in
acquiescing in canduct of a pilot which involves apparent
and avoidable danger, whether such danger is to the
vessel upon which the pilot is, or to another vessel, or
persons or property thereon or on shore. (Emphasis ours.)
Still in another case involving a nearly identical setting, the
captain of a vessel alongside the compulsory pilot was
deemed to be negligent, since, in the words of the court,
"he was in a position to exercise his superior authority if
he had deemed the speed excessive on the occasion in
question. I think it was clearly negligent of him not to have
recognized the danger to any craft moored at Gravell Dock
and that he should have directed the pilot to reduce his
speed as required by the local governmental
regulations. His failure amounted to negligence and
renders the respondent liable." 81 (Emphasis supplied.)
Though a compulsory pilot might be regarded as an
independent contractor, he is at all times subject to the
ultimate control of the ship's master. 82
In sum, where a compulsory pilot is in charge of a ship, the
master being required to permit him to navigate it, if the
master observes that the pilot is incompetent or physically
incapable, then it is the dury of the master to refuse to
permit the pilot to act. But if no such reasons are present,
then the master is justified in relying upon the pilot, but
not blindly. Under the circumstances of this case, if a
situation arose where the master, exercising that
reasonable vigilance which the master of a ship should
exercise, observed, or should have observed, that the pilot
was so navigating the vessel that she was going, or was
likely to go, into danger, and there was in the exercise of
reasonable care and vigilance an opportunity for the
master to intervene so as to save the ship from danger,
the master should have acted accordingly. 83 The master of
a vessel must exercise a degree of vigilance commensurate
with the circumstances. 84
Inasmuch as the matter of negligence is a question of
fact, 85 we defer to the findings of the trial court, especially as
this is affirmed by the Court of Appeals. 86 But even beyond
that, our own evaluation is that Capt. Kabankov's shared
liability is due mainly to the fact that he failed to act when
the perilous situation should have spurred him into quick and
decisive action as master of the ship. In the face of imminent
or actual danger, he did not have to wait for the
happenstance to occur before countermanding or overruling
the pilot. By his own admission, Capt. Kabankov concurred
with Capt. Gavino's decisions, and this is precisely the reason
why he decided not to countermand any of the latter's orders.
Inasmuch as both lower courts found Capt. Gavino negligent,
by expressing full agreement therewith Capt. Kabankov was
just as negligent as Capt. Gavino.
In general, a pilot is personally liable for damages caused
by his own negligence or default to the owners of the
vessel, and to third parties for damages sustained in a
collision. Such negligence of the pilot in the performance
of duty constitutes a maritime tort. 87 At common law, a
shipowner is not liable for injuries inflicted exclusively by the
negligence of a pilot accepted by a vessel compulsorily. 88 The
exemption from liability for such negligence shall apply if the
pilot is actually in charge and solely in fault. Since, a pilot is
responsible only for his own personal negligence, he cannot
be held accountable for damages proximately caused by the
default of others, 89 or, if there be anything which concurred
with the fault of the pilot in producing the accident, the
vessel master and owners are liable.
Since the colliding vessel is prima facie responsible, the
burden of proof is upon the party claiming benefit of the
19
exemption from liability. It must be shown affirmatively
that the pilot was at fault, and that there was no fault on
the part of the officers or crew, which might have been
conducive to the damage. The fact that the law compelled
the master to take the pilot does not exonerate the vessel
from liability. The parties who suffer are entitled to have
their remedy against the vessel that occasioned the
damage, and are not under necessity to look to the pilot
from whom redress is not always had for compensation.
The owners of the vessel are responsible to the injured
party for the acts of the pilot, and they must be left to
recover the amount as well as they can against him. It
cannot be maintained that the circumstance of having a
pilot on board, and acting in conformity to his directions
operate as a discharge of responsibility of the
owners. 90Except insofar as their liability is limited or
exempted by statute, the vessel or her owner are liable for all
damages caused by the negligence or other wrongs of the
owners or those in charge of the vessel. Where the pilot of a
vessel is not a compulsory one in the sense that the owner or
master of the vessel are bound to accept him, but is
employed voluntarily, the owners of the vessel are, all the
more, liable for his negligent act. 91
In the United States, the owners of a vessel are not
personally liable for the negligent acts of a compulsory
pilot, but by admiralty law, the fault or negligence of a
compulsory pilot is imputable to the vessel and it may be
held liable therefor in rem. Where, however, by the
provisions of the statute the pilot is compulsory only in the
sense that his fee must be paid, and is not in compulsory
charge of the vessel, there is no exemption from
liability. Even though the pilot is compulsory, if his
negligence was not the sole cause of the injury, but the
negligence of the master or crew contributed thereto, the
owners are liable. 92 But the liability of the ship in rem does
not release the pilot from the consequences of his own
negligence. 93 The rationale for this rule is that the master is
not entirely absolved of responsibility with respect to
navigation when a compulsory pilot is in charge. 94
By way of validation and in light of the aforecited
guidepost rulings in American maritime cases, we declare
that our rulings during the early years of this century
in City of Manila vs. Gambe, 95 China Navigation Co., Ltd. vs.
Vidal, 96 and Yap Tica & Co. vs. Anderson, et al. 97 have
withstood the proverbial test of time and remain good and
relevant case law to this day.
City of Manila stands for the doctrine that the pilot who
was in command and complete control of a vessel, and not
the owners, must be held responsible for an accident
which was solely the result of the mistake of the pilot in
not giving proper orders, and which did not result from
the failure of the owners to equip the vessel with the most
modern and improved machinery. In China Navigation Co.,
the pilot deviated from the ordinary and safe course,
without heeding the warnings of the ship captain. It was
this careless deviation that caused the vessel to collide
with a pinnacle rock which, though uncharted, was known
to pilots and local navigators. Obviously, the captain was
blameless. It was the negligence of the pilot alone which
was the proximate cause of the collision. The Court could
not but then rule that
The pilot in the case at bar having deviated from the usual
and ordinary course followed by navigators in passing
through the strait in question, without a substantial
reason, was guilty of negligence, and that negligence
having been the proximate cause of the damages, he is
liable for such damages as usually and naturally flow
therefrom. . . .
Transportation Law - 8th Set
. . . (T)he defendant should have known of the existence
and location of the rock upon which the vessel struck
while under his control and management. . . . .
Consistent with the pronouncements in these two earlier
cases, but on a slightly different tack, the Court in Yap Tico
& Co. exonerated the pilot from liability for the accident
where the orders of the pilot in the handling of the ship
were disregarded by the officers and crew of the ship.
According to the Court, a pilot is ". . . responsible for a full
knowledge of the channel and the navigation only so far as
he can accomplish it through the officers and crew of the
ship, and I don't see chat he can be held responsible for
damage when the evidence shows, as it does in this case,
that the officers and crew of the ship failed to obey his
orders." Nonetheless, it is possible for a compulsory pilot
and the master of the vessel to be concurrently negligent
and thus share the blame for the resulting damage as joint
tortfeasors, 98 but only under the circumstances obtaining in
and demonstrated by the instant petitions.
It may be said, as a general rule, that negligence in order
to render a person liable need not be the sole cause of an
injury. It is sufficient that his negligence, concurring with
one or more efficient causes other than piaintiff's, is the
proximate cause of the injury. Accordingly, where several
causes combine to produce injuries, a person is not
relieved from liability because he is responsible for only
one of them, it being sufficient that the negligence of the
person charged with injury is an efficient cause without
which the injury would not have resulted to as great an
extent, and that such cause is not attributable to the
person injured. It is no defense to one of the concurrent
tortfeasors that the injury would not have resulted from
his negligence alone, without the negligence or wrongful
acts of the other concurrent rortfeasor. 99 Where several
causes producing an injury are concurrent and each is an
efficient cause without which the injury would not have
happened, the injury may be attributed to all or any of the
causes and recovery may be had against any or all of the
responsible persons although under the circumstances of the
case, it may appear that one of them was more culpable, and
that the duty owed by them to the injured person was not
the same. No actor's negligence ceases to be a proximate
cause merely because it does not exceed the negligence of
other actors. Each wrongdoer is responsible for the entire
result and is liable as though his acts were the sole cause of
the injury. 100
There is no contribution between joint tortfeasors whose
liability is solidary since both of them are liable for the
total damage. Where the concurrent or successive
negligent acts or omissions of two or more persons,
although acting independently, are in combination the
direct and proximate cause of a single injury to a third
person, it is impossible to determine in what proportion
each contributed to the injury and either of them is
responsible for the whole injury. Where their concurring
negligence resulted in injury or damage to a third party,
they become joint tortfeasors and are solidarily liable for
the resulting damage under Article 2194 101 of the Civil
Code. 102
As for the amount of damages awarded by the trial court,
we find the same to be reasonable. The testimony of Mr.
Pascual Barral, witness for PPA, on cross and redirect
examination, appears to be grounded on practical
considerations:
Q So that the cost of the two additional piles as well as the
(two) square meters is already included in this
P1,300,999.77.
A Yes sir, everything. It is (the) final cost already.
Q For the eight piles.
A Including the reduced areas and other reductions.
20
Q (A)nd the two square meters.
A Yes sir.
Q In other words, this P1,300,999.77 does not represent
only for the six piles that was damaged as well as the
corresponding two piles.
A The area was corresponding, was increased by almost
two in the actual payment. That was why the contract was
decreased, the real amount was P1,124,627.40 and the
final one is P1,300,999.77.
Q Yes, but that P1,300,999.77 included the additional two
new posts.
A It was increased.
Q Why was it increased?
A The original was 48 and the actual was 46.
Q Now, the damage was somewhere in 1980. It took place
in 1980 and you started the repair and reconstruction in
1982, that took almost two years?
A Yes sir.
Q May it not happen that by natural factors, the existing
damage in 1980 was aggravated for the 2 year period that
the damage portion was not repaired?
A I don't think so because that area was at once marked
and no vehicles can park, it was closed.
Q Even if or even natural elements cannot affect the
damage?
A Cannot, sir.
xxx xxx xxx
Q You said in the cross-examination that there were six
piles damaged by the accident, but that in the
reconstruction of the pier, PPA drove and constructed 8
piles. Will you explain to us why there was change in the
number of piles from the original number?
A In piers where the piles are withdrawn or pulled out, you
cannot re-drive or drive piles at the same point. You have
to redesign the driving of the piles. We cannot drive the
piles at the same point where the piles are broken or
damaged or pulled out. We have to redesign, and you will
note that in the reconstruction, we redesigned such that it
necessitated 8 plies.
Q Why not, why could you not drive the same number of
piles and on the same spot?
A The original location was already disturbed. We cannot
get required bearing capacity. The area is already
disturbed.
Q Nonetheless, if you drove the original number of piles,
six, on different places, would not that have sustained the
same load?
A It will not suffice, sir. 103
We quote the findings of the lower court with approval.
With regards to the amount of damages that is to be
awarded to plaintiff, the Court finds that the amount of
P1,053,300.00 is justified. Firstly, the doctrine of res ipsa
loquitur best expounded upon in the landmark case
of Republic vs. Luzon Stevedoring Corp. (21 SCRA 279)
establishes the presumption that in the ordinary course of
events the ramming of the dock would not have occurred
if proper care was used.
Secondly, the various estimates and plans justify the cost
of the port construction price. The new structure
constructed not only replaced the damaged one but was
built of stronger materials to forestall the possibility of any
similar accidents in the future.
The Court inevitably finds that the plaintiff is entitled to an
award of P1,053,300.00 which represents actual damages
caused by the damage to Berth 4 of the Manila
International Port. Co-defendants Far Eastern Shipping,
Capt. Senen Gavino and Manila Pilots Association are
solidariiy liable to pay this amount to plaintiff. 104
Transportation Law - 8th Set 21

The Solicitor General rightly commented that the adjudicated submitted not later than one (1) month after the
amount of damages represents the proportional cost of organization of the Pilots' Association for approval by the
repair and rehabilitation of the damaged section of the General Manager of the Authority. Subsequent
pier. 105 amendments thereto shall likewise be submitted for
Except insofar as their liability is limited or exempted by approval.
statute, the vessel or her owners are liable for all damages Sec. 25. Indemnity Insurance and Reserve Fund
caused by the negligence or other wrongs of the owners or a) Each Pilots' Association shall collectively insure its
those in charge of the vessel. As a general rule, the owners or membership at the rate of P50,000.00 each member to
those in possession and control of a vessel and the vessel are
cover in whole or in part any liability arising from any
liable for all natural and proximate damages caused to
accident resulting in damage to vessel(s), port facilities
persons or property by reason of her negligent management
and other properties and/or injury to persons or death
or navigation. 106
which any member may have caused in the course of his
FESC's imputation of PPA's failure to provide a safe and
performance of pilotage duties. . . . .
reliable berthing place is obtuse, not only because it
b) The Pilotage Association shall likewise set up and
appears to be a mere afterthought, being tardily raised
maintain a reserve fund which shall answer for any part of
only in this petition, but also because there is no allegation
the liability referred to in the immediately preceding
or evidence on record about Berth No. 4 being unsafe and
paragraph which is left unsatisfied by the insurance
unreliable, although perhaps it is a modest pier by
proceeds, in the following manner:
international standards. There was, therefore, no error on
1) Each pilot in the Association shall contribute from his
the part of the Court of Appeals in dismissing FESC's
own account an amount of P4,000.00 (P6,000.00 in the
counterclaim.
Manila Pilotage District) to the reserve fund. This fund
II. G.R. No. 130150
shall not be considered part of the capital of the
This consolidated case treats on whether the Court of
Association nor charged as an expense thereof.
Appeals erred in holding MPA jointly and solidarily liable
2) Seventy-five percent (75 %) of the reserve fund shall be
with its member pilot. Capt. Gavino, in the absence of
set aside for use in the payment of damages referred to
employer-employee relationship and in applying Customs
above incurred in the actual performance of pilots' duties
Administrative Order No. 15-65, as basis for the adjudged
and the excess shall be paid from the personal funds of
solidary liability of MPA and Capt. Gavino.
the member concerned.
The pertinent provisions in Chapter I of Customs
xxx xxx xxx
Administrative Order No. 15-65 are:
5) If payment is made from the reserve fund of an
PAR. XXVII. In all pilotage districts where pilotage is
Association on account of damage caused by a member
compulsory, there shall be created and maintained by the
thereof who is found at fault, he shall reimburse the
pilots or pilots' association, in the manner hereinafter
Association in the amount so paid as soon as practicable;
prescribed, a reserve fund equal to P1,000.00 for each
and for this purpose, not less than twenty-five percentum
pilot thereof for the purpose of paying claims for damages
(25 %) of his dividend shall be retained each month until
to vessels or property caused through acts or omissions of
the full amount has been returned to the reserve fund.
its members while rendered in compulsory pilotage
Thereafter, the pilot involved shall be entitled to his full
service. In Manila, the reserve fund shall be P2,000.00 for
dividend.
each pilot.
6) When the reimbursement has been completed as
PAR. XXVIII. A pilots' association shall not be liable
prescribed in the preceding paragraph, the ten percentum
under these regulations for damage to any vessel, or other
(10%) and the interest withheld from the shares of the
property, resulting from acts of a member of an
other pilots in accordance with paragraph (4) hereof shall
association in the actual performance of his duty for a
be returned to them.
greater amount than seventy-five per centum (75%) of its
c) Liability of Pilots' Association Nothing in these
prescribed reserve fund; it being understood that if the
regulations shall relieve any Pilots' Association or
association is held liable for an amount greater than the
members thereof, individually or collectively, from any
amount above-stated, the excess shall be paid by the
civil, administrative and/or criminal responsibility for
personal funds of the member concerned.
damages to life or property resulting from the individual
PAR. XXXI. If a payment is made from the reserve fund
acts of its members as well as those of the Association's
of an association on account of damages caused by a
employees and crew in the performance of their duties.
member thereof, and he shall have been found at fault,
The Court of Appeals, while affirming the trial court's
such member shall reimburse the association in the
finding of solidary liability on the part of FESC, MPA and
amount so paid as soon as practicable; and for this
Capt. Gavino, correctly based MPA' s liability not on the
purpose, not less than twenty-five per centum of his
concept of employer-employee relationship between Capt.
dividends shall be retained each month until the full
Gavino and itself, but on the provisions of Customs
amount has been returned to the reserve fund.
Administrative Order No. 15-65:
PAR. XXXIV. Nothing in these regulations shall relieve
The Appellant MPA avers that, contrary to the findings and
any pilots' association or members thereof, individually or
disquisitions of the Court a quo, the Appellant Gavino was
collectively, from civil responsibility for damages to life or
not and has never been an employee of the MPA but was
property resulting from the acts of members in the
only a member thereof. The Court a quo, it is noteworthy,
performance of their duties.
did not state the factual basis on which it anchored its
Correlatively, the relevant provisions of PPA
finding that Gavino was the employee of MPA. We are in
Administrative Order No. 03-85, which timery amended
accord with MPA's pose. Case law teaches Us that, for an
this applicable maritime regulation, state:
employer-employee relationship to exist, the confluence
Art. IV
of the following elements must be established: (1)
Sec. 17. Pilots' Association The Pilots in a Pilotage
selection and engagement of employees; (2) the payment
District shall organize themselves into a Pilots' Association
of wages; (3) the power of dismissal; (4) the employer's
or firm, the members of which shall promulgate their own
power to control the employees with respect to the means
By-Laws not in conflict with the rules and regulations
promulgated by the Authority. These By-Laws shall be
Transportation Law - 8th Set
and method by which the work is to be performed (Ruga
versus NLRC, 181 SCRA 266).
xxx xxx xxx
The liability of MPA for damages is not anchored on Article
2180 of the New Civil Code as erroneously found and
declared by the Court a quo but under the provisions of
Customs Administrative Order No. 15-65, supra, in tandem
with the by-laws of the MPA. 107
There being no employer-employee relationship, clearly
Article 2180 108 of the Civil Code is inapplicable since there is
no vicarious liability of an employer to speak of. It is so stated
in American law, as follows:
The well established rule is that pilot associations are
immune to vicarious liability for the tort of their members.
They are not the employer of their members and exercise
no control over them once they take the helm of the
vessel. They are also not partnerships because the
members do not function as agents for the association or
for each other. Pilots' associations are also not liable for
negligently assuring the competence of their members
because as professional associations they made no
guarantee of the professional conduct of their members to
the general public. 109
Where under local statutes and regulations, pilot associations
lack the necessary legal incidents of responsibility, they have
been held not liable for damages caused by the default of a
member pilot. 110 Whether or not the members of a pilots'
association are in legal effect a copartnership depends wholly
on the powers and duties of the members in relation to one
another under the provisions of the governing statutes and
regulations. The relation of a pilot to his association is not
that of a servant to the master, but of an associate assisting
and participating in a common purpose. Ultimately, the rights
and liabilities between a pilots' association and an individual
member depend largely upon the constitution, articles or
by-laws of the association, subject to appropriate
government regulations. 111
No reliance can be placed by MPA on the cited American
rulings as to immunity from liability of a pilots' association
in ljght of existing positive regulation under Philippine law.
The Court of Appeals properly applied the clear and
unequivocal provisions of Customs Administrative Order
No. 15-65. In doing so, it was just being consistent with its
finding of the non-existence of employer-employee
relationship between MPA and Capt. Gavino which
precludes the application of Article 2180 of the Civil Code.
True. Customs Administrative Order No. 15-65 does not
categorically characterize or label MPA's liability as
solidary in nature. Nevertheless, a careful reading and
proper analysis of the correlated provisions lead to the
conclusion that MPA is solidarily liable for the negligence
of its member pilots, without prejudice to subsequent
reimbursement from the pilot at fault.
Art. 1207 of the Civil Code provides that there is solidary
liability only when the obligation expressly so states, or
when the law or the nature of the obligation requires
solidarity. Plainly, Customs Administrative Order No. 15-65,
which as an implementing rule has the force and effect of
law, can validly provide for solidary liability.We note the
Solicitor General's comment hereon, to wit:
. . . Customs Administrative Order No. 15-65 may be a
mere rule and regulation issued by an administrative
agency pursuant to a delegated authority to fix "the
details" in the execution or enforcement of a policy set out
in the law itself. Nonetheless, said administrative order,
which adds to the procedural or enforcing provisions of
substantive law, is legally binding and receives the same
statutory force upon going into effect. In that sense, it has
equal, not lower, statutory force and effect as a regular
statute passed by the legislature. 112
22
MPA's prayer for modification of the appellate court's
decision under review by exculpating petitioner MPA "from
liability beyond seventy-five percent (75 %) of Reserve Fund"
is unnecessary because the liability of MPA under Par. XXVIII
of Customs Administrative Order No. 15-65 is in fact limited
to seventy-five percent (75 %) of its prescribed reserve fund,
any amount of liability beyond that being for the personal
account of the erring pilot and subject to reimbursement in
case of a finding of fault by the member concerned. This is
clarified by the Solicitor General:
Moreover, contrary to petitioner's pretensions, the
provisions of Customs Administrative Order No. 15-65 do
not limit the liability of petitioner as a pilots' association to
an absurdly small amount of seventy-five per centum
(75 %) of the member pilots' contribution of P2,000.00 to
the reserve fund. The law speaks of the entire reserve
fund required to be maintained by the pilots' association
to answer (for) whatever liability arising from the tortious
act of its members. And even if the association is held
liable for an amount greater than the reserve fund, the
association may not resist the liability by claiming to be
liable only up to seventy-five per centum (75 %) of the
reserve fund because in such instance it has the right to be
reimbursed by the offending member pilot for the
excess. 113
WHEREFORE, in view of all of the foregoing, the consolidated
petitions for review are DENIED and the assailed decision of
the Court of Appeals is AFFIRMED in toto.
Counsel for FESC, the law firm of Del Rosario and Del
Rosario, specifically its associate, Atty. Herbert A. Tria, is
REPRIMANDED and WARNED that a repetition of the same
or similar acts of heedless disregard of its undertakings
under the Rules shall be dealt with more severely.
The original members of the legal team of the Office of the
Solicitor General assigned to this case, namely, Assistant
Solicitor General Roman G. Del Rosario and Solicitor Luis F.
Simon, are ADMONISHED and WARNED that a repetition
of the same or similar acts of unduly delaying proceedings
due to delayed filing of required pleadings shall also be
dealt with more stringently.
The Solicitor Genral is DIRECTED to look into the
circumstances of this case and to adopt provident
measures to avoid a repetition of this incident and which
would ensure prompt compliance with orders of this Court
regarding the timely filing of requisite pleadings, in the
interest of just, speedy and orderly administration of
justice.
Let copies of this decision be spread upon the personal
records of the lawyers named herein in the Office of the
Bar Confidant.
SO ORDERED.
[G.R. No. 119602. October 6, 2000]
WILDVALLEY SHIPPING CO., LTD. petitioner, vs. COURT OF
APPEALS and PHILIPPINE PRESIDENT LINES INC.,
respondents.
DECISION
BUENA, J.:
This is a petition for review on certiorari seeking to set
aside the decision of the Court of Appeals which reversed
the decision of the lower court in CA-G.R. CV No. 36821,
entitled "Wildvalley Shipping Co., Ltd., plaintiff-appellant,
versus Philippine President Lines, Inc.,
defendant-appellant."
The antecedent facts of the case are as follows:
Sometime in February 1988, the Philippine Roxas, a vessel
owned by Philippine President Lines, Inc., private
Transportation Law - 8th Set
respondent herein, arrived in Puerto Ordaz, Venezuela, to
load iron ore. Upon the completion of the loading and
when the vessel was ready to leave port, Mr. Ezzar del
Valle Solarzano Vasquez, an official pilot of Venezuela, was
designated by the harbour authorities in Puerto Ordaz to
navigate the Philippine Roxas through the Orinoco River.[1]
He was asked to pilot the said vessel on February 11,
1988[2] boarding it that night at 11:00 p.m.[3]
The master (captain) of the Philippine Roxas, Captain
Nicandro Colon, was at the bridge together with the pilot
(Vasquez), the vessel's third mate (then the officer on
watch), and a helmsman when the vessel left the port[4]
at 1:40 a.m. on February 12, 1988.[5] Captain Colon left
the bridge when the vessel was under way.[6]
The Philippine Roxas experienced some vibrations when it
entered the San Roque Channel at mile 172.[7] The vessel
proceeded on its way, with the pilot assuring the watch
officer that the vibration was a result of the shallowness of
the channel.[8]
Between mile 158 and 157, the vessel again experienced
some vibrations.[9] These occurred at 4:12 a.m.[10] It was
then that the watch officer called the master to the
bridge.[11]
The master (captain) checked the position of the vessel[12]
and verified that it was in the centre of the channel.[13]
He then went to confirm, or set down, the position of the
vessel on the chart.[14] He ordered Simplicio A. Monis,
Chief Officer of the President Roxas, to check all the
double bottom tanks.[15]
At around 4:35 a.m., the Philippine Roxas ran aground in
the Orinoco River,[16] thus obstructing the ingress and
egress of vessels.
As a result of the blockage, the Malandrinon, a vessel
owned by herein petitioner Wildvalley Shipping Company,
Ltd., was unable to sail out of Puerto Ordaz on that day.
Subsequently, Wildvalley Shipping Company, Ltd. filed a
suit with the Regional Trial Court of Manila, Branch III
against Philippine President Lines, Inc. and Pioneer
Insurance Company (the underwriter/insurer of Philippine
Roxas) for damages in the form of unearned profits, and
interest thereon amounting to US $400,000.00 plus
attorney's fees, costs, and expenses of litigation. The
complaint against Pioneer Insurance Company was
dismissed in an Order dated November 7, 1988.[17]
At the pre-trial conference, the parties agreed on the
following facts:
"1. The jurisdictional facts, as specified in their respective
pleadings;
"2. That defendant PPL was the owner of the vessel
Philippine Roxas at the time of the incident;
"3. That defendant Pioneer Insurance was the insurance
underwriter for defendant PPL;
"4. That plaintiff Wildvalley Shipping Co., Inc. is the owner
of the vessel Malandrinon, whose passage was obstructed
by the vessel Philippine Roxas at Puerto Ordaz, Venezuela,
as specified in par. 4, page 2 of the complaint;
23
"5. That on February 12, 1988, while the Philippine Roxas
was navigating the channel at Puerto Ordaz, the said
vessel grounded and as a result, obstructed navigation at
the channel;
"6. That the Orinoco River in Puerto Ordaz is a compulsory
pilotage channel;
"7. That at the time of the incident, the vessel, Philippine
Roxas, was under the command of the pilot Ezzar
Solarzano, assigned by the government thereat, but
plaintiff claims that it is under the command of the
master;
"8. The plaintiff filed a case in Middleburg, Holland which
is related to the present case;
"9. The plaintiff caused the arrest of the Philippine Collier,
a vessel owned by the defendant PPL;
"10. The Orinoco River is 150 miles long and it takes
approximately 12 hours to navigate out of the said river;
"11. That no security for the plaintiff's claim was given
until after the Philippine Collier was arrested; and
"12. That a letter of guarantee, dated 12-May-88 was
issued by the Steamship Mutual Underwriters Ltd."[18]
The trial court rendered its decision on October 16, 1991
in favor of the petitioner, Wildvalley Shipping Co., Ltd. The
dispositive portion thereof reads as follows:
"WHEREFORE, judgment is rendered for the plaintiff,
ordering defendant Philippine President Lines, Inc. to pay
to the plaintiff the sum of U.S. $259,243.43, as actual and
compensatory damages, and U.S. $162,031.53, as
expenses incurred abroad for its foreign lawyers, plus
additional sum of U.S. $22,000.00, as and for attorney's
fees of plaintiff's local lawyer, and to pay the cost of this
suit.
"Defendant's counterclaim is dismissed for lack of merit.
"SO ORDERED."[19]
Both parties appealed: the petitioner appealing the
non-award of interest with the private respondent
questioning the decision on the merits of the case.
After the requisite pleadings had been filed, the Court of
Appeals came out with its questioned decision dated June
14, 1994,[20] the dispositive portion of which reads as
follows:
"WHEREFORE, finding defendant-appellant's appeal to be
meritorious, judgment is hereby rendered reversing the
Decision of the lower court. Plaintiff-appellant's Complaint
is dismissed and it is ordered to pay defendant-appellant
the amount of Three Hundred Twenty-three Thousand,
Forty-two Pesos and Fifty-three Centavos (P323,042.53) as
and for attorney's fees plus cost of suit.
Plaintiff-appellant's appeal is DISMISSED.
"SO ORDERED."[21]
Petitioner filed a motion for reconsideration[22] but the
same was denied for lack of merit in the resolution dated
March 29, 1995.[23]
Transportation Law - 8th Set
Hence, this petition.
The petitioner assigns the following errors to the court a
quo:
1. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN
FINDING THAT UNDER PHILIPPINE LAW NO FAULT OR
NEGLIGENCE CAN BE ATTRIBUTED TO THE MASTER NOR
THE OWNER OF THE "PHILIPPINE ROXAS" FOR THE
GROUNDING OF SAID VESSEL RESULTING IN THE
BLOCKAGE OF THE RIO ORINOCO;
2. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN
REVERSING THE FINDINGS OF FACTS OF THE TRIAL COURT
CONTRARY TO EVIDENCE;
3. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN
FINDING THAT THE "PHILIPPINE ROXAS" IS SEAWORTHY;
4. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN
DISREGARDING VENEZUELAN LAW DESPITE THE FACT
THAT THE SAME HAS BEEN SUBSTANTIALLY PROVED IN
THE TRIAL COURT WITHOUT ANY OBJECTION FROM
PRIVATE RESPONDENT, AND WHOSE OBJECTION WAS
INTERPOSED BELATEDLY ON APPEAL;
5. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN
AWARDING ATTORNEY'S FEES AND COSTS TO PRIVATE
RESPONDENT WITHOUT ANY FAIR OR REASONABLE BASIS
WHATSOEVER;
6. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN
NOT FINDING THAT PETITIONER'S CAUSE IS MERITORIOUS
HENCE, PETITIONER SHOULD BE ENTITLED TO ATTORNEY'S
FEES, COSTS AND INTEREST.
The petition is without merit.
The primary issue to be determined is whether or not
Venezuelan law is applicable to the case at bar.
It is well-settled that foreign laws do not prove themselves
in our jurisdiction and our courts are not authorized to
take judicial notice of them. Like any other fact, they must
be alleged and proved.[24]
A distinction is to be made as to the manner of proving a
written and an unwritten law. The former falls under
Section 24, Rule 132 of the Rules of Court, as amended,
the entire provision of which is quoted hereunder. Where
the foreign law sought to be proved is "unwritten," the
oral testimony of expert witnesses is admissible, as are
printed and published books of reports of decisions of the
courts of the country concerned if proved to be commonly
admitted in such courts.[25]
Section 24 of Rule 132 of the Rules of Court, as amended,
provides:
"Sec. 24. Proof of official record. -- The record of public
documents referred to in paragraph (a) of Section 19,
when admissible for any purpose, may be evidenced by an
official publication thereof or by a copy attested by the
officer having the legal custody of the record, or by his
deputy, and accompanied, if the record is not kept in the
Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a
foreign country, the certificate may be made by a
24
secretary of the embassy or legation, consul general,
consul, vice consul, or consular agent or by any officer in
the foreign service of the Philippines stationed in the
foreign country in which the record is kept, and
authenticated by the seal of his office." (Underscoring
supplied)
The court has interpreted Section 25 (now Section 24) to
include competent evidence like the testimony of a
witness to prove the existence of a written foreign
law.[26]
In the noted case of Willamette Iron & Steel Works vs.
Muzzal,[27] it was held that:
" Mr. Arthur W. Bolton, an attorney-at-law of San
Francisco, California, since the year 1918 under oath,
quoted verbatim section 322 of the California Civil Code
and stated that said section was in force at the time the
obligations of defendant to the plaintiff were incurred, i.e.
on November 5, 1928 and December 22, 1928. This
evidence sufficiently established the fact that the section
in question was the law of the State of California on the
above dates. A reading of sections 300 and 301 of our
Code of Civil Procedure will convince one that these
sections do not exclude the presentation of other
competent evidence to prove the existence of a foreign
law.
"`The foreign law is a matter of fact You ask the witness
what the law is; he may, from his recollection, or on
producing and referring to books, say what it is.' (Lord
Campbell concurring in an opinion of Lord Chief Justice
Denman in a well-known English case where a witness was
called upon to prove the Roman laws of marriage and was
permitted to testify, though he referred to a book
containing the decrees of the Council of Trent as
controlling, Jones on Evidence, Second Edition, Volume 4,
pages 3148-3152.) x x x.
We do not dispute the competency of Capt. Oscar Leon
Monzon, the Assistant Harbor Master and Chief of Pilots at
Puerto Ordaz, Venezuela,[28] to testify on the existence of
the Reglamento General de la Ley de Pilotaje (pilotage law
of Venezuela)[29] and the Reglamento Para la Zona de
Pilotaje No 1 del Orinoco (rules governing the navigation
of the Orinoco River). Captain Monzon has held the
aforementioned posts for eight years.[30] As such he is in
charge of designating the pilots for maneuvering and
navigating the Orinoco River. He is also in charge of the
documents that come into the office of the harbour
masters.[31]
Nevertheless, we take note that these written laws were
not proven in the manner provided by Section 24 of Rule
132 of the Rules of Court.
The Reglamento General de la Ley de Pilotaje was
published in the Gaceta Oficial[32]of the Republic of
Venezuela. A photocopy of the Gaceta Oficial was
presented in evidence as an official publication of the
Republic of Venezuela.
The Reglamento Para la Zona de Pilotaje No 1 del Orinoco
is published in a book issued by the Ministerio de
Comunicaciones of Venezuela.[33] Only a photocopy of
the said rules was likewise presented as evidence.
Transportation Law - 8th Set
Both of these documents are considered in Philippine
jurisprudence to be public documents for they are the
written official acts, or records of the official acts of the
sovereign authority, official bodies and tribunals, and
public officers of Venezuela.[34]
For a copy of a foreign public document to be admissible,
the following requisites are mandatory: (1) It must be
attested by the officer having legal custody of the records
or by his deputy; and (2) It must be accompanied by a
certificate by a secretary of the embassy or legation,
consul general, consul, vice consular or consular agent or
foreign service officer, and with the seal of his office.[35]
The latter requirement is not a mere technicality but is
intended to justify the giving of full faith and credit to the
genuineness of a document in a foreign country.[36]
It is not enough that the Gaceta Oficial, or a book
published by the Ministerio de Comunicaciones of
Venezuela, was presented as evidence with Captain
Monzon attesting it. It is also required by Section 24 of
Rule 132 of the Rules of Court that a certificate that
Captain Monzon, who attested the documents, is the
officer who had legal custody of those records made by a
secretary of the embassy or legation, consul general,
consul, vice consul or consular agent or by any officer in
the foreign service of the Philippines stationed in
Venezuela, and authenticated by the seal of his office
accompanying the copy of the public document. No such
certificate could be found in the records of the case.
With respect to proof of written laws, parol proof is
objectionable, for the written law itself is the best
evidence. According to the weight of authority, when a
foreign statute is involved, the best evidence rule requires
that it be proved by a duly authenticated copy of the
statute.[37]
At this juncture, we have to point out that the Venezuelan
law was not pleaded before the lower court.
A foreign law is considered to be pleaded if there is an
allegation in the pleading about the existence of the
foreign law, its import and legal consequence on the event
or transaction in issue.[38]
A review of the Complaint[39] revealed that it was never
alleged or invoked despite the fact that the grounding of
the M/V Philippine Roxas occurred within the territorial
jurisdiction of Venezuela.
We reiterate that under the rules of private international
law, a foreign law must be properly pleaded and proved as
a fact. In the absence of pleading and proof, the laws of a
foreign country, or state, will be presumed to be the same
as our own local or domestic law and this is known as
processual presumption.[40]
Having cleared this point, we now proceed to a thorough
study of the errors assigned by the petitioner.
Petitioner alleges that there was negligence on the part of
the private respondent that would warrant the award of
damages.
There being no contractual obligation, the private
respondent is obliged to give only the diligence required of
a good father of a family in accordance with the provisions
of Article 1173 of the New Civil Code, thus:
25
Art. 1173. The fault or negligence of the obligor consists in
the omission of that diligence which is required by the
nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the place.
When negligence shows bad faith, the provisions of
articles 1171 and 2201, paragraph 2, shall apply.
If the law or contract does not state the diligence which is
to be observed in the performance, that which is expected
of a good father of a family shall be required.
The diligence of a good father of a family requires only
that diligence which an ordinary prudent man would
exercise with regard to his own property. This we have
found private respondent to have exercised when the
vessel sailed only after the "main engine, machineries, and
other auxiliaries" were checked and found to be in good
running condition;[41] when the master left a competent
officer, the officer on watch on the bridge with a pilot who
is experienced in navigating the Orinoco River; when the
master ordered the inspection of the vessel's double
bottom tanks when the vibrations occurred anew.[42]
The Philippine rules on pilotage, embodied in Philippine
Ports Authority Administrative Order No. 03-85, otherwise
known as the Rules and Regulations Governing Pilotage
Services, the Conduct of Pilots and Pilotage Fees in
Philippine Ports enunciate the duties and responsibilities
of a master of a vessel and its pilot, among other things.
The pertinent provisions of the said administrative order
governing these persons are quoted hereunder:
Sec. 11. Control of Vessels and Liability for Damage. -- On
compulsory pilotage grounds, the Harbor Pilot providing
the service to a vessel shall be responsible for the damage
caused to a vessel or to life and property at ports due to
his negligence or fault. He can be absolved from liability if
the accident is caused by force majeure or natural
calamities provided he has exercised prudence and extra
diligence to prevent or minimize the damage.
The Master shall retain overall command of the vessel
even on pilotage grounds whereby he can countermand or
overrule the order or command of the Harbor Pilot on
board. In such event, any damage caused to a vessel or to
life and property at ports by reason of the fault or
negligence of the Master shall be the responsibility and
liability of the registered owner of the vessel concerned
without prejudice to recourse against said Master.
Such liability of the owner or Master of the vessel or its
pilots shall be determined by competent authority in
appropriate proceedings in the light of the facts and
circumstances of each particular case.
xxx
Sec. 32. Duties and Responsibilities of the Pilots or Pilots
Association. -- The duties and responsibilities of the
Harbor Pilot shall be as follows:
xxx
f) A pilot shall be held responsible for the direction of a
vessel from the time he assumes his work as a pilot
thereof until he leaves it anchored or berthed safely;
Provided, however, that his responsibility shall cease at
Transportation Law - 8th Set
the moment the Master neglects or refuses to carry out
his order."
The Code of Commerce likewise provides for the
obligations expected of a captain of a vessel, to wit:
Art. 612. The following obligations shall be inherent in the
office of captain:
xxx
"7. To be on deck on reaching land and to take command
on entering and leaving ports, canals, roadsteads, and
rivers, unless there is a pilot on board discharging his
duties. x x x.
The law is very explicit. The master remains the overall
commander of the vessel even when there is a pilot on
board. He remains in control of the ship as he can still
perform the duties conferred upon him by law[43] despite
the presence of a pilot who is temporarily in charge of the
vessel. It is not required of him to be on the bridge while
the vessel is being navigated by a pilot.
However, Section 8 of PPA Administrative Order No. 03-85,
provides:
Sec. 8. Compulsory Pilotage Service - For entering a harbor
and anchoring thereat, or passing through rivers or straits
within a pilotage district, as well as docking and undocking
at any pier/wharf, or shifting from one berth or another,
every vessel engaged in coastwise and foreign trade shall
be under compulsory pilotage.
xxx.
The Orinoco River being a compulsory pilotage channel
necessitated the engaging of a pilot who was presumed to
be knowledgeable of every shoal, bank, deep and shallow
ends of the river. In his deposition, pilot Ezzar Solarzano
Vasquez testified that he is an official pilot in the Harbour
at Port Ordaz, Venezuela,[44] and that he had been a pilot
for twelve (12) years.[45] He also had experience in
navigating the waters of the Orinoco River.[46]
The law does provide that the master can countermand or
overrule the order or command of the harbor pilot on
board. The master of the Philippine Roxas deemed it best
not to order him (the pilot) to stop the vessel,[47] mayhap,
because the latter had assured him that they were
navigating normally before the grounding of the vessel.[48]
Moreover, the pilot had admitted that on account of his
experience he was very familiar with the configuration of
the river as well as the course headings, and that he does
not even refer to river charts when navigating the Orinoco
River.[49]
Based on these declarations, it comes as no surprise to us
that the master chose not to regain control of the ship.
Admitting his limited knowledge of the Orinoco River,
Captain Colon relied on the knowledge and experience of
pilot Vasquez to guide the vessel safely.
Licensed pilots, enjoying the emoluments of compulsory
pilotage, are in a different class from ordinary employees,
for they assume to have a skill and a knowledge of
navigation in the particular waters over which their
licenses extend superior to that of the master; pilots are
bound to use due diligence and reasonable care and skill.
26
A pilot's ordinary skill is in proportion to the pilot's
responsibilities, and implies a knowledge and observance
of the usual rules of navigation, acquaintance with the
waters piloted in their ordinary condition, and nautical skill
in avoiding all known obstructions. The character of the
skill and knowledge required of a pilot in charge of a vessel
on the rivers of a country is very different from that which
enables a navigator to carry a vessel safely in the ocean.
On the ocean, a knowledge of the rules of navigation, with
charts that disclose the places of hidden rocks, dangerous
shores, or other dangers of the way, are the main
elements of a pilot's knowledge and skill. But the pilot of a
river vessel, like the harbor pilot, is selected for the
individual's personal knowledge of the topography
through which the vessel is steered."[50]
We find that the grounding of the vessel is attributable to
the pilot. When the vibrations were first felt the watch
officer asked him what was going on, and pilot Vasquez
replied that "(they) were in the middle of the channel and
that the vibration was as (sic) a result of the shallowness
of the channel."[51]
Pilot Ezzar Solarzano Vasquez was assigned to pilot the
vessel Philippine Roxas as well as other vessels on the
Orinoco River due to his knowledge of the same. In his
experience as a pilot, he should have been aware of the
portions which are shallow and which are not. His failure
to determine the depth of the said river and his decision to
plod on his set course, in all probability, caused damage to
the vessel. Thus, we hold him as negligent and liable for its
grounding.
In the case of Homer Ramsdell Transportation Company vs.
La Compagnie Generale Transatlantique, 182 U.S. 406, it
was held that:
x x x The master of a ship, and the owner also, is liable for
any injury done by the negligence of the crew employed in
the ship. The same doctrine will apply to the case of a pilot
employed by the master or owner, by whose negligence
any injury happens to a third person or his property: as,
for example, by a collision with another ship, occasioned
by his negligence. And it will make no difference in the
case that the pilot, if any is employed, is required to be a
licensed pilot; provided the master is at liberty to take a
pilot, or not, at his pleasure, for in such a case the master
acts voluntarily, although he is necessarily required to
select from a particular class. On the other hand, if it is
compulsive upon the master to take a pilot, and, a fortiori,
if he is bound to do so under penalty, then, and in such
case, neither he nor the owner will be liable for injuries
occasioned by the negligence of the pilot; for in such a
case the pilot cannot be deemed properly the servant of
the master or the owner, but is forced upon them, and the
maxim Qui facit per alium facit per se does not apply."
(Underscoring supplied)
Anent the river passage plan, we find that, while there was
none,[52] the voyage has been sufficiently planned and
monitored as shown by the following actions undertaken
by the pilot, Ezzar Solarzano Vasquez, to wit: contacting
the radio marina via VHF for information regarding the
channel, river traffic,[53] soundings of the river, depth of
the river, bulletin on the buoys.[54] The officer on watch
also monitored the voyage.[55]
We, therefore, do not find the absence of a river passage
plan to be the cause for the grounding of the vessel.
Transportation Law - 8th Set
The doctrine of res ipsa loquitur does not apply to the case
at bar because the circumstances surrounding the injury
do not clearly indicate negligence on the part of the
private respondent. For the said doctrine to apply, the
following conditions must be met: (1) the accident was of
such character as to warrant an inference that it would not
have happened except for defendant's negligence; (2) the
accident must have been caused by an agency or
instrumentality within the exclusive management or
control of the person charged with the negligence
complained of; and (3) the accident must not have been
due to any voluntary action or contribution on the part of
the person injured.[56]
As has already been held above, there was a temporary
shift of control over the ship from the master of the vessel
to the pilot on a compulsory pilotage channel. Thus, two of
the requisites necessary for the doctrine to apply, i.e.,
negligence and control, to render the respondent liable,
are absent.
As to the claim that the ship was unseaworthy, we hold
that it is not.
The Lloyds Register of Shipping confirmed the vessels
seaworthiness in a Confirmation of Class issued on
February 16, 1988 by finding that "the above named ship
(Philippine Roxas) maintained the class "+100A1
Strengthened for Ore Cargoes, Nos. 2 and 8 Holds may be
empty (CC) and +LMC" from 31/12/87 up until the time of
casualty on or about 12/2/88."[57] The same would not
have been issued had not the vessel been built according
to the standards set by Lloyd's.
Samuel Lim, a marine surveyor, at Lloyd's Register of
Shipping testified thus:
"Q Now, in your opinion, as a surveyor, did top side tank
have any bearing at all to the seaworthiness of the vessel?
"A Well, judging on this particular vessel, and also basing
on the class record of the vessel, wherein
recommendations were made on the top side tank, and it
was given sufficient time to be repaired, it means that the
vessel is fit to travel even with those defects on the ship.
"COURT
What do you mean by that? You explain. The vessel is fit to
travel even with defects? Is that what you mean? Explain.
"WITNESS
"A Yes, your Honor. Because the class society which
register (sic) is the third party looking into the condition of
the vessel and as far as their record states, the vessel was
class or maintained, and she is fit to travel during that
voyage."
xxx
"ATTY. MISA
Before we proceed to other matter, will you kindly tell us
what is (sic) the 'class +100A1 Strengthened for Ore
Cargoes', mean?
"WITNESS
27
"A Plus 100A1 means that the vessel was built according to
Lloyd's rules and she is capable of carrying ore bulk
cargoes, but she is particularly capable of carrying Ore
Cargoes with No. 2 and No. 8 holds empty.
xxx
"COURT
The vessel is classed, meaning?
"A Meaning she is fit to travel, your Honor, or
seaworthy."[58]
It is not required that the vessel must be perfect. To be
seaworthy, a ship must be reasonably fit to perform the
services, and to encounter the ordinary perils of the
voyage, contemplated by the parties to the policy.[59]
As further evidence that the vessel was seaworthy, we
quote the deposition of pilot Vasquez:
"Q Was there any instance when your orders or directions
were not complied with because of the inability of the
vessel to do so?
"A No.
"Q. Was the vessel able to respond to all your commands
and orders?
"A. The vessel was navigating normally.[60]
Eduardo P. Mata, Second Engineer of the Philippine Roxas
submitted an accident report wherein he stated that on
February 11, 1988, he checked and prepared the main
engine, machineries and all other auxiliaries and found
them all to be in good running condition and ready for
maneuvering. That same day the main engine, bridge and
engine telegraph and steering gear motor were also
tested.[61] Engineer Mata also prepared the fuel for
consumption for maneuvering and checked the engine
generators.[62]
Finally, we find the award of attorneys fee justified.
Article 2208 of the New Civil Code provides that:
"Art. 2208. In the absence of stipulation, attorney's fees
and expenses of litigation, other than judicial costs, cannot
be recovered, except:
xxx
"(11) In any other case where the court deems it just and
equitable that attorney's fees and expenses of litigation
should be recovered.
xxx
Due to the unfounded filing of this case, the private
respondent was unjustifiably forced to litigate, thus the
award of attorneys fees was proper.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is
DENIED and the decision of the Court of Appeals in CA G.R.
CV No. 36821 is AFFIRMED.
Transportation Law - 8th Set
SO ORDERED.
G.R. No. L-65442 April 5, 1985
HAVERTON SHIPPING LTD. and OFSI SERVICES, INC.,
petitioners,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION, THE HON.
CRESENCIO M. SIDDAYAO, in his capacity as
Officer-in-Charge of the NATIONAL SEAMEN BOARD and
ALFREDO BENITEZ, respondents.
Taada, Sanchez, Tanada & Tanada for petitioners.
Legal Service (LACE) for respondents.
MELENCIO-HERRERA, J.:
This Petition for certiorari seeks to annul and set aside the
Decision of the National Labor Relations Commission (First
Division), dated August 17, 1983, affirming on appeal the
Decision of the National Seamen's Board (NSB) in NSB
Case No. 3716-82 entitled "Alfredo Benitez, complainant,
vs. Haverton Shipping Ltd. and OFSI Services, Inc.,
respondents." The decretal portion of the NLRC Decision
reads:
WHEREFORE, all the foregoing premises considered, a
decision is hereby rendered ordering the respondents,
jointly and severally to pay to complainant the sum of US
DOLLARS FOUR THOUSAND SIX HUNDRED SEVEN
(US$4,607.00) or its equivalent in the Philippine Currency,
as salary for the unexpired portion of the employment
contract.
Counter-claim dismissed. 1
On November 4, 1983, we issued a Temporary Restraining
Order enjoining respondents from enforcing said Decision.
For resolution is the question of whether or not private
respondent BENITEZ was terminated for just cause even
before the expiration of his employment contract
The records show that on March 12, 1982, Alfredo
BENITEZ was hired by OFSI Services, the local manning
agent of Haverton Shipping, as a boatswain on the M.V.
Gold
Alisa, owned and operated by the latter, for a period of
one year with a monthly salary of US $485.00. On May 24,
1982, while the vessel was berthed at the port of Durban,
South Africa, a fight occurred between BENITEZ and his
shipmates, Arnel Candelaria and Maximo Espiritu, as a
result of which the latter suffered injury on the fingers of
his left hand. An investigation of the incident was
conducted by the Master who made a written report of his
findings and decision in the ship's "log book". BENITEZ was
found to have breached the disciplinary code of merchant
service on several counts among which was "assault with a
knife on a member of the ship's crews," which behavior
"seriously detract(ed) from the safe and efficient working
of the ship." He was then repatriated to the Philippines
after serving only two and a half months of his contract.
BENITEZ's version of the incident, as set forth in his
Affidavit submitted to the NSB, follows:
28
On May 24, 1982, or thereabout, the ship M.V. Gold Alisa
was in port at Durban, South Africa, I asked permission
from my officer for shore leave and was granted. Espiritu
and Candelaria went also on shore leave but they arrived
ahead of me. At that time I arrived late for my duty and
upon arrival I changed on my working clothes to assume
my work. I saw Espiritu in the mess hall with Candelaria
and I noticed they were drunk. Espiritu asked me why I did
not work on my duty, though he has no business to
question me he being my immediate subordinate, but I
answered him that he better go to sleep because he was
drunk. Espiritu did not like my comment that he was drunk,
he even called me some nasty words, then he went to the
pantry, got a knife and attacked me. Candelaria tried to
pacify him and separate us, in the process he was able to
hit me at the right eyelid and on my right hand, these (2)
injuries leaving scars on my hand and right eyelid. When
Espiritu saw I was bleeding he ran away and locked himself
in his cabin. After the incident the 1st officer and 2nd
officer came and asked me about the incident and I told
them everything what had happened. The following
morning I told the Captain of the ship of the incident. I told
the Captain that Espiritu and Candelaria were drunk, it was
Espiritu who provoked me to a fight, it was Espiritu who
got a knife and attacked me, I told him I did not have any
knife with me during the incident and I was not able to
inflict any injury on Espiritu as he was the one with a knife,
and he and Candelaria were grappling with the knife as
Candelaria was trying to get the knife from him. If ever
Espiritu was injured, the same must have been caused by
the knife he was holding when Candelaria tried to get it
from him. 2
On the other hand, petitioners presented before the NSB a
copy of the Official Entry in the Ship's Log Book, dated May
25, 1982, to wit:
Place of Occurence: Durban
Date of Occurence: 24th and 25th May 1982
"24th May 1982
1800 Bosun Alfredo Benitez did not report for duty when
his watch commenced at 1800.
125th May 1982
0200 It was reported to the Duty Officer, Mr. T.A.
Andrews, that the bosun had returned and that there
were problems'. Mr. Andrews proceeded to the crew
messroom where he heard the bosun shouting loudly, and
in an obviously highly excitable state, at A/B's Maximo
Espiritu and Arnel Candelaria. The second officer noticed
blood on the bosun's shirt. The bosun was quietened and
led to his cabin. The second officer applied first aid to two
cuts on the fingers of Maximo Espiritu's left hand. (Later
required two stitches each.) It was stated by Espiritu that
the bosun had attacked him with a knife and that he had
grabbed the knife, causing the cuts on his fingers.
Candelaria had then pulled the bosun away from Espiritu.
The master found the injuries consistent with this
allegation.
1100 The master received evidence from second officer T.
A. Andrews.
Transportation Law - 8th Set
1215 Hearing in the master's cabin. Present: The master,
the chief officer, Bosun Alfredo Benitez and A/B's Maximo
Espiritu and Arnel Candelaria.
Statements were received from the two A/B's, who were
then asked to leave.
After a thorough and careful investigation of all the events,
the master found that the Disciplinary Code of the British
Merchant Service, and of the Filipino National Seaman's
Board, to which Alfredo Benitez had agreed when he
signed the Crew Agreement and his Company Contract,
had been breached on the following counts:
i) Absent from duty.
ii) Assault with an offensive weapon (knife) on a
member of the ships crew.
iii) Intimidation, and interference with the work of a
member of the ship's crew.
iv) Behaviour which seriously detracts from the safe and
efficient working of the ship.
v) Behaviour which seriously detracts from the social
well-being of any other person on board. (Maximo Espiritu.
The bosun had threatened 'to kill him'. Afterwards,
Espiritu was too frightened to sleep in his own cabin and
had spent the night in the cabin of a shipmate.)
The master then asked Alfredo Benitez if he had anything
to say.
Benitez replied that he admitted all the charges and that
he was guilty of wielding a knife towards Espiritu and that
the attack had been thwarted by Candelaria pulling him
away. In mitigation he stated that he had on the previous
day received a letter from home which had contained bad
news; and this had placed him in a depressed state of
mind. Benitez stated that he regreted the incident.
The master said that, while he was aware that the initial
argument was not solely caused by the bosun, Ws assault
on Espiritu had nevertheless been no way to settle the
dispute. The master found the bosun guilty of all the
charges and bearing in mind possible problems between
Benitez and the crew, especially during the long sea
voyage to Singapore, the master had no alternative but to
dismiss Benitez immediately from his service with the ship.
Benitez' Account of Wages was drawn up and the sum of
United States Dollars 719.60 (Seven Hundred and
Nineteen Dollars 60 cents,) the total payable under the
account was paid to Benitez in cash. Arrangements were
made with the company's agents, Polaris Shipping, to
receive Benitez and arrange for his repatriation to Manila.
Benitez was then signed off the Crew Agreement. 3
On June 7, 1982, BENITEZ filed with the NSB a complaint
for illegal dismissal and unlawful termination of contract.
On the basis of the parties' position papers, decision was
rendered adopting BENITEZ's version and ruling that the
copy of the Official Entry in the Ship's Log Book was
"purely hearsay and could not legally be binding." 4 The
NLRC also rejected the Affidavits of able seamen
Candelaria and Espiritu for the reason that they were
presented only when the case was already on appeal
before it.
29
Generally, the rule is that findings of fact of the NLRC are
entitled to great respect. 5 But the judgment below can be
reversed when public respondents have overlooked
certain significant facts, which are sufficient to alter the
questioned decision. 6 That situation confronts us now.
In declaring that copy of the Official Entry in the Ship's Log
Book was not legally binding for being hearsay, public
respondents overlooked the fact that under our laws the
ship's captain is obligated to keep a "log book" where,
among others, he records the decisions he has adopted. 7
Even according to the law of the vessel's registry, that
book is also "required by law" as disclosed by the entry
itself. 8 There is no controversy as to the genuineness of
the said entry. The vessel's log book is an official record
and entries made by a person in the performance of a duty
required by law are prima facie evidence of the facts
stated therein. 9
That an investigation was conducted on the incident is
admitted by BENITEZ. 10 The reason, as stated in the entry,
as to why BENITEZ was not given a copy before he
disembarked from the vessel was that the vessel had
sailed for Singapore on the same day and it was not
possible in the short time available to provide BENITEZ
with a copy of the entry. 11
The two cut wounds sustained by Espiritu in his fingers,
which required two stitches each, conforms to his
narration that BENITEZ lunged at him and tried to stab him
with the knife and that in protecting himself he held the
blade of the knife with his left hand and injured himself.12
As stated in the entry, "(T)he master found the injuries
consistent with this allegation".13 Candelaria's Affidavit 14
corroborates Espiritu's narrative of the incident.
It is true that the Affidavits of Candelaria and Espiritu,
dated April 4 & 11, 1983, were submitted only when the
case was on appeal to the NLRC. Still, that should not have
precluded the NLRC from taking them into account. There
was plausible reason for the delay in the submittal of their
Affidavits in that the affiants were out of the country
plying back and forth between the ports of the Far East
and South and West Africa during the period from March
12, 1982 to March 16, 1983. It was only after the
expiration of their contract of employment that they
returned to the Philippines and executed their sworn
statements before the Labor Arbiter.15 As the Labor Code
specifically provides, rules of evidence prevailing in Courts
of law shall not be controlling and every and all reasonable
means to ascertain the facts in each case shall be used
without regard to technicalities.16
On the other hand, BENITEZ's claim that "(I)f ever Espiritu
was injured, the same must have been caused by the knife
he was holding when Candelaria tried to get it from him,"
stands uncorroborated.
Reliance was placed by the NSB on the Master's rating of
BENITEZ upon his discharge that his ability and conduct
was "very good," and that he was a good professional
man.17 This rating was considered as offsetting the
Master's entries in the log book. The Master, J.B. Cullen of
M.V. Gold Alisa, explained this, however, in a transmittal
letter dated June 10,1982 to OFSI Services, thus: "Benitez
in himself was not all that bad a person. But he had had a
few drinks ashore, and chose to settle his differences with
a knife, which action is absolutely unacceptable aboard. ...
Transportation Law - 8th Set
Because I did not want to make Benitez bear the
consequences of this incident for the rest of Ms sea career,
I did not make any specific remark in his Seaman's Book
however, it goes without saying that he should not under
any circumstances be appointed to a Haverton vessel
again." 18
In the light of all the foregoing, the inevitable conclusion is
that public respondents had misappreciated the
significance of the entry in the vessel's official log book
regarding the incident. The probative value of the facts
stated therein has not been overcome by BENITEZ's
submittals.
We are constrained to hold, therefore, that BENITEZ's
actuations were tantamount to serious misconduct in
connection with his work and is a just cause for
termination of employment.19 As a consequence, he is
not entitled to any salary for the unexpired portion of his
employment contract.
WHEREFORE, the Petition for certiorari is granted, the
questioned Decisions are REVERSED, and the complaint
dismissed. The Temporary Restraining Order heretofore
issued is made permanent. No costs.
SO ORDERED.
CENTENNIAL TRANSMARINE, G.R. No. 180719
INC., CENTENNIAL MARITIME
SERVICES CORPORATION
AND/OR B+H EQUIMAR
SINGAPORE, PTE. LTD.,
Petitioners, Present:
Ynares-Santiago, J. (Chairperson),
- versus - Austria-Martinez,
Chico-Nazario,
Nachura, and
Reyes, JJ.
RUBEN G. DELA CRUZ,
Respondent. Promulgated:
August 22, 2008
x rendered a Decision dismissing respondents complaint. He
------------------------------------------------------------------------------
---------- x
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the August 31,
2007 Decision[1] of the Court of Appeals in CA-G.R. SP No.
91054 reversing the Decision of the National Labor
Relations Commission and finding that respondent Ruben
G. Dela Cruz was illegally dismissed from service, as well as
the November 16, 2007 Resolution[2] denying the motion
for reconsideration.
On May 9, 2000, petitioner Centennial Transmarine, Inc.,
for and in behalf of its foreign principal, petitioner
Centennial Maritime Services, Corp., hired respondent
Dela Cruz as Chief Officer of the oil tanker vessel MT
Aquidneck, owned by petitioner B+H Equimar, Singapore,
Pte. Ltd., for a period of nine months.
On May 15, 2000, respondent boarded MT Aquidneck and
performed his functions as Chief Officer. However, on
September 14, 2000, respondent was relieved of his duties
and repatriated to the Philippines. Failing to get a
30
satisfactory explanation from petitioners for his relief,
respondent filed a complaint for illegal dismissal with
prayer for payment of his salaries for the unexpired
portion of contract, moral and exemplary damages and
attorneys fees on October 7, 2000.
Respondent alleged that while the vessel was docked in
Lake Charles in the United States, another Chief Officer
boarded the vessel. He inquired from the master of the
vessel, Captain Kowalewski, why he had a reliever,
however the latter disclaimed any knowledge. At the same
time, he showed respondent an electronic mail (e-mail)
from petitioner B+H Equimar Singapore, Pte. Ltd. stating
that there was an incoming Chief Officer who was to take
over the operations upon boarding.
On September 19, 2000, Captain Kowalewski gave
respondent his flight schedule. He was subsequently
repatriated on September 22, 2000.[3]
Upon arrival in Manila, respondent inquired from Mr.
Eduardo Jabla, President of petitioner Centennial
Transmarine, Inc., why he was relieved. However, Jabla
could only surmise that his relief was possibly due to the
arguments he had with Capt. P. Bajaj, a company
superintendent who came on board in August 2000 while
the vessel was berthed in Los Angeles,[4] regarding deck
operations and deck work, and documentation and safety
procedures in the cargo control room.[5]
On the other hand, petitioner alleged that respondent was
relieved of his functions as Chief Officer due to his
inefficiency and lack of job knowledge. Capt. Kowalewski
allegedly informed them of respondents lack of experience
in tanker operations which exposed the vessel and its crew
to danger and caused additional expenses. Petitioners
allegedly advised respondent to take a refresher course in
order to facilitate his deployment to another vessel.
However, instead of taking a refresher course, respondent
filed a case for illegal dismissal.
On April 23, 2001,[6] Labor Arbiter Francisco A. Robles
found that respondent was validly dismissed because he
committed acts in violation of his duties as Chief Officer,
amounting to breach of trust and confidence. He noted
that on September 6, 2000, Capt. Kowalewski wrote in the
official log book of the vessel that respondent failed to
follow entry procedures in loading oil tanks while the
vessel was navigating to Aruba; that the Safety Officer of
the vessel also submitted a report on the violations
committed by respondent regarding safety rules on entry
procedures; that respondent admitted his inadequacy or
lack of knowledge in tanker operations; and that
respondent was properly apprised of his violations and
was given ample opportunity to be heard.
Respondent appealed to the National Labor Relations
Commission which rendered its Decision[7] on November
24, 2003 dismissing respondents appeal for lack of merit.
Respondent filed a motion for reconsideration but it was
denied.[8] Hence, he filed a petition for certiorari before
the Court of Appeals which rendered the herein assailed
Decision on August 31, 2007 disposing thus:
WHEREFORE, the petition is granted and the Decision
dated November 24, 2003 and Resolution dated April 20,
Transportation Law - 8th Set
2005 of public respondent NLRC are reversed and set
aside.
Private respondents are ordered to pay petitioner the
amount of unpaid salaries from the time of his dismissal
on September 22, 2000 up to the expiration of the term of
his employment contract, plus moral damages of
P50,000.00, exemplary damages of P50,000.00 and
attorneys fees of 10% of the aggregate monetary reward.
SO ORDERED.[9]
According to the Court of Appeals, petitioners, as
employers, have the burden of proof to show by
substantial evidence that respondents employment was
validly terminated; that for a dismissal based on loss of
trust and confidence, it is incumbent to establish that the
employee holds a managerial position; that petitioners
failed to adduce evidence showing that respondent was a
managerial employee; that the log book entries of Capt.
Kowalewski and the letter dated September 1, 2000
should be disregarded for being self-serving; that
respondent was not apprised of the cause for his dismissal;
that petitioners failed to observe the two-notice rule
hence the dismissal was illegal; consequently, respondent
is entitled to his salaries for the unexpired portion of the
employment contract, full reimbursement of placement
fee, moral and exemplary damages and attorneys fees.
Petitioners filed a motion for reconsideration but it was
denied by the appellate court on November 16, 2007.
Hence, the instant petition raising the following issues:[10]
I Lim Co. v. Laguesma,[14] the Court held that the Chief
WHETHER OR NOT THIS CASE FALLS WITHIN THE
EXCEPTION TO THE RULE THAT ONLY QUESTIONS OF LAW
MAY BE RAISED ON APPEAL TO THIS HONORABLE COURT
II
WHETHER OR NOT THE POSITION OF CHIEF OFFICER OF AN
OCEAN GOING VESSEL IS A MANAGERIAL POSITION OR
ONE OF TRUST AND CONFIDENCE
III
WHETHER OR NOT ENTRIES IN THE OFFICIAL LOGBOOK OF
A VESSEL SHOULD NOT BE GIVEN WEIGHT FOR BEING
SELF-SERVING
IV
WHETHER OR NOT LACK OF SKILL OR INCOMPETENCE IN
HANDLING AN OIL TANKER VESSEL MAY BE CONSIDERED
AS AN ANALOGOUS CAUSE FOR A VALID TERMINATION OF
EMPLOYMENT OF A CHIEF OFFICER
V entry by Captain Kowalewski in the ships logbook
WHETHER OR NOT A CHIEF OFFICER OF AN OIL TANKER
VESSEL REQUIRED TO EXPLAIN WHY HE SHOULD NOT BE
RELIEVED FOR BEING INCOMPETENT WAS DEPRIVED OF
DUE PROCESS OF LAW
VI
WHETHER OR NOT MORAL DAMAGES AND ATTORNEYS
FEES MAY BE AWARDED WITHOUT A CLEAR SHOWING
THAT THE DISMISSAL OF AN EMPLOYEE WAS ATTENDED
WITH BAD FAITH
The petition lacks merit.
31
Petitioners allege loss of trust and confidence due to
incompetence as the ground for respondents dismissal.[11]
Loss of trust and confidence is premised on the fact that
the employee holds a position whose functions may only
be performed by someone who has the confidence of
management.[12] Such employee may be managerial or
rank-and-file, but the nature of his position determines
the requirements for a valid dismissal.
With respect to a managerial employee, the mere
existence of a basis for believing that such employee has
breached the trust of his employer would suffice for his
dismissal. Proof beyond reasonable doubt is not required,
only substantial evidence which must establish clearly and
convincingly the facts on which the loss of confidence
rests.[13]
Article 627 of the Code of Commerce defines the Chief
Mate, also called Chief Officer or Sailing Mate, as the
second chief of the vessel, and unless the agent orders
otherwise, shall take the place of the captain in cases of
absence, sickness, or death, and shall then assume all his
powers, duties, and responsibilities. A Chief Officer,
therefore, is second in command, next only to the captain
of the vessel.
Moreover, the Standards of Training, Certification and
Watchkeeping for Seafarers 1978 (STCW 78), to which the
Philippines is a signatory, defines a Chief Mate as the deck
officer next in rank to the master and upon whom the
command of the ship will fall in the event of incapacity of
the master.
In Association of Marine Officers and Seamen of Reyes and
Mate is a managerial employee because the said officer
performed the functions of an executive officer next in
command to the captain; that in the performance of such
functions, he is vested with powers or prerogatives to lay
down and execute management policies.
The exercise of discretion and judgment in directing a
ships course is as much managerial in nature as decisions
arrived at in the confines of the more conventional board
room or executive office. Important functions pertaining
to the navigation of the vessel like assessing risks and
evaluating the vessels situation are managerial in
nature.[15]
Thus, respondent, as Chief Officer, is a managerial
employee; hence, petitioners need to show by substantial
evidence the basis for their claim that respondent has
breached their trust and confidence.
Petitioners basis for dismissing respondent was the alleged
regarding respondents inexperience and inefficiency. A
ships log/logbook is the official record of a ships voyage
which its captain is obligated by law to keep wherein he
records the decisions he has adopted, a summary of the
performance of the vessel, and other daily events. A
logbook is a respectable record that can be relied upon
when the entries therein are presented in evidence.
In the instant case, however, respondent correctly pointed
out that the issue is not whether an official logbook entry
is acceptable in evidence, but whether a document
purporting to be a copy of a logbook entry has been duly
established to be authentic and not spurious.[16]
Transportation Law - 8th Set
The document dated September 6, 2000 (Annex E)
purports to be a copy of an entry in the official logbook
which reads:
Name of the ship: Aquidneck
Port of registry: Nassau, Bahamas
Official Number: 706596
Gross tonnage: 23709
Register (net) tonnage: 8517
Page: OFFICIAL LOG of the m/t Aquidneck
Entries required by Regulations made under Section 143 of
the Merchant Shipping Act 1976
Date of the occurrence: 06.09.00. Pace: At Sea. Date of
entry: 06.09.00
It was found today on the 06th September 2000 that C/O
Mr. Ruben dela Cruz has breached all international safety
rules regarding tank entry procedures. In spite of tank
entry form properly filled, non-of safety precautions were
implemented. Crew was working in cargo tanks without
any supervision and without safety arrangement.
Emergency rescue equipment was not readied on the
scene. By this neglect safety and lives of working
personnel in cargo tanks were put in potential hazard. As
the senior officer responsible for the safety of his
personnel he should be relieved from his duties as the
Chief Officer.
Signed: S. Kowalewski, Master[17]
In Wallem Maritime Services, Inc. v. National Labor
Relations Commission,[18] citing Haverton Shipping Ltd. v.
National Labor Relations Commission,[19] the Court ruled
that a copy of an official entry in the logbook is legally
binding and serves as an exception to the hearsay rule. In
the said case, however, there was no controversy as to the
genuineness of the said entry and the authenticity of the
copy presented in evidence.
In the instant case, respondent has consistently assailed
the genuineness of the purported entry and the
authenticity of such copy. He alleged that before his
repatriation, there was no entry in the ships official
logbook regarding any incident that might have caused his
relief;[20] that Captain Kowalewskis signature in such
purported entry was forged.[21] In support of his
allegations, respondent submitted three official
documents[22] bearing the signature of Capt. Sczepan
Kowalewski which is different from the one appearing in
Annex E. Thus, it was incumbent upon petitioners to prove
the authenticity of Annex E, which they failed to do.
Likewise, the purported report of Capt. Kowalewski dated
September 1, 2000 (Annex D),[23] and the statements of
Safety Officer Khaldun Nacem Faridi and Chief Officer Josip
Milin (Annexes G[24] and H[25]) also cannot be given
weight for lack of authentication.
Although technical rules of evidence do not strictly apply
to labor proceedings, however, in the instant case,
authentication of the above-mentioned documents is
necessary because their genuineness is being assailed, and
since petitioners offered no corroborating evidence. These
documents and their contents have to be duly identified
and authenticated lest an injustice would result from a
blind adoption of such contents.[26] Thus, the
unauthenticated documents relied upon by petitioners are
32
mere self-serving statements of their own officers and
were correctly disregarded by the Court of Appeals.
This Court notes that during the initial proceedings of the
case, petitioners contend that respondent was not
dismissed but only temporarily relieved from his position
due to lack of skill or incompetence. However, as the case
progressed, petitioners claimed that respondent was
dismissed from employment because he committed
certain violations of the vessels safety rules. This is
objectionable; a party should decide early what cause or
defense he is going to advance; he cannot change his
theory in the latter stage of the proceeding because it is
contrary to the rules of fair play, justice and due
process.[27]
Moreover, records show that respondent was not afforded
due process. For officers and crew who are working in
foreign vessels involved in overseas shipping, there must
be compliance with the applicable laws on overseas
employment as well as with the regulations issued by the
Philippine Overseas Employment Administration (POEA),
such as those embodied in the Standard Contract for
Seafarers Employed Abroad (Standard Contract).[28]
Section 17 of the Standard Contract provides:
SEC. 17. DISCIPLINARY PROCEDURES. The Master shall
comply with the following disciplinary procedures against
an erring seafarer:
A. The Master shall furnish the seafarer with a written
notice containing the following:
1. Grounds for the charges as listed in Section 33 of this
Contract or analogous act constituting the same;
2. Date, time and place for a formal investigation of the
charges against the seafarer concerned.
B. The Master or his authorized representative shall
conduct the investigation or hearing, giving the seafarer
the opportunity to explain or defend himself against the
charges. These procedures must be duly documented and
entered into the ships logbook.
C. If after investigation or hearing, the Master is convinced
that imposition of a penalty is justified, the Master shall
issue a written notice of penalty and the reasons for it to
the seafarer, with copies furnished to the Philippine Agent.
D. Dismissal for just cause may be effected by the Master
without furnishing the seafarer with a notice of dismissal if
there is a clear and existing danger to the safety of the
crew or the vessel. The Master shall send a complete
report to the manning agency substantiated by witnesses,
testimonies, and other documents in support thereof.
Except for the self-serving allegation that respondent was
required to explain why he should not be relieved for
being incompetent, petitioners offered no proof to show
that they furnished respondent a written notice of the
charges against him, or that there was a formal
investigation of the charges, or that respondent was
furnished a written notice of the penalty imposed upon
him. Respondent was verbally ordered to disembark the
vessel and was repatriated to the Philippines without
being told of the reasons for his relief.
Transportation Law - 8th Set
Respondents dismissal was not for just cause and without
due process. He is therefore entitled to be paid his salaries
for the unexpired portion of his employment contract.
However, the payment of overtime pay and leave pay
should be disallowed in light of our ruling in Cagampan v.
National Labor Relations Commission,[29] to wit:
[T]he rendition of overtime work and the submission of
sufficient proof that said was actually performed are
conditions to be satisfied before a seaman could be
entitled to overtime pay which should be computed on the
basis of 30% of the basic monthly salary. In short, the
contract provision guarantees the right to overtime pay
but the entitlement to such benefit must first be
established.
In the same vein, the claim for the day's leave pay for the
unexpired portion of the contract is unwarranted since the
same is given during the actual service of the seamen.
Pursuant to Republic Act No. 8042, or the Migrant
Workers and Overseas Filipino Act, respondent is also
entitled to full reimbursement of his placement fee with
interest at 12% per annum. Section 10 thereof provides:
SECTION 10. Money Claims
xxxx
In case of termination of overseas employment without
just, valid or authorized cause as defined by law or
contract, the worker shall be entitled to the full
reimbursement of his placement fee with interest at
twelve percent (12%) per annum, x x x.
We affirm the award of moral damages in the amount of
P50,000.00, exemplary damages in the amount of
P50,000.00, and attorneys fees at the rate of 10% of the
aggregate monetary award, the dismissal having been
effected without just cause and without observance of due
process.
WHEREFORE, in view of the foregoing, the petition is
DENIED. The August 31, 2007 Decision of the Court of
Appeals in CA-G.R. SP No. 91054 and its November 16,
2007 Resolution are AFFIRMED with MODIFICATION.
Petitioners Centennial Transmarine, Inc., Centennial
Maritime Services, Corp., and B+H Equimar, Singapore, Pte.
Ltd. are ordered to pay, jointly and severally, respondent
Ruben G. Dela Cruz: (1) his salaries corresponding to the
unexpired portion of his employment contract, at the rate
of USD1,750.00 monthly, or its peso equivalent at the time
of actual payment;[30] (2) his placement fee with 12%
interest per annum, pursuant to Section 10 of Republic Act
No. 8042; (3) P50,000.00 as moral damages; (4)
P50,000.00 as exemplary damages; and (5) attorneys fees
of 10% of the aggregate monetary award. Costs against
petitioners.
SO ORDERED.
ABOITIZ SHIPPING CORPORATION, G.R. No. 121833
Petitioner,
- versus - Present:
COURT OF APPEALS, MALAYAN QUISUMBING, J.,
INSURANCE COMPANY, INC., Chairperson,
COMPAGNIE MARITIME DES CARPIO MORALES,
CHARGEURS REUNIS, and F.E. TINGA,
33
ZUELLIG (M), INC., *LEONARDO DE CASTRO, and
Respondents. BRION, JJ.
x-----------------------------------------x
ABOITIZ SHIPPING CORPORATION, G.R. No. 130752
Petitioner,
- versus -
COURT OF APPEALS, THE HON.
JUDGE REMEGIO E. ZARI, in his
capacity as Presiding Judge of the
RTC, Branch 20; ASIA TRADERS
INSURANCE CORPORATION,
and ALLIED GUARANTEE
INSURANCE CORPORATION,
Respondents.
x-----------------------------------------x
ABOITIZ SHIPPING CORPORATION, G.R. No. 137801
Petitioner,
- versus -
EQUITABLE INSURANCE Promulgated:
CORPORATION,
Respondent. October 17, 2008
x----------------------------------------------------------------------------
---x
DECISION
TINGA, J.:
Before this Court are three consolidated Rule 45 petitions
all involving the issue of whether the real and hypothecary
doctrine may be invoked by the shipowner in relation to
the loss of cargoes occasioned by the sinking of M/V P.
Aboitiz on 31 October 1980. The petitions filed by Aboitiz
Shipping Corporation (Aboitiz) commonly seek the
computation of its liability in accordance with the Courts
pronouncement in Aboitiz Shipping Corporation v. General
Accident Fire and Life Assurance Corporation, Ltd.[1]
(hereafter referred to as the 1993 GAFLAC case).
The three petitions stemmed from some of the several
suits filed against Aboitiz before different regional trial
courts by shippers or their successors-in-interest for the
recovery of the monetary value of the cargoes lost, or by
the insurers for the reimbursement of whatever they paid.
The trial courts awarded to various claimants the amounts
of P639,862.02, P646,926.30, and P87,633.81 in G.R. Nos.
121833, 130752 and 137801, respectively.
ANTECEDENTS
G.R. No. 121833
Respondent Malayan Insurance Company, Inc. (Malayan)
filed five separate actions against several defendants for
the collection of the amounts of the cargoes allegedly paid
by Malayan under various marine cargo policies[2] issued
to the insurance claimants. The five civil cases, namely,
Civil Cases No. 138761, No. 139083, No. 138762, No.
Transportation Law - 8th Set
R-81-526 and No. 138879, were consolidated and heard
before the Regional Trial Court (RTC) of Manila, Branch 54.
The defendants in Civil Case No. 138761 and in Civil Case
No. 139083 were Malayan International Shipping
Corporation, a foreign corporation based in Malaysia, its
local ship agent, Litonjua Merchant Shipping Agency
(Litonjua), and Aboitiz. The defendants in Civil Case No.
138762 were Compagnie Maritime des Chargeurs Reunis
(CMCR), its local ship agent, F.E. Zuellig (M), Inc. (Zuellig),
and Aboitiz. Malayan also filed Civil Case No. R-81-526
only against CMCR and Zuellig. Thus, defendants CMCR
and Zuellig filed a third-party complaint against Aboitiz. In
the fifth complaint docketed as Civil Case No. 138879, only
Aboitiz was impleaded as defendant.
The shipments were supported by their respective bills of
lading and insured separately by Malayan against the risk
of loss or damage. In the five consolidated cases, Malayan
sought the recovery of amounts totaling P639,862.02.
Aboitiz raised the defenses of lack of jurisdiction, lack of
cause of action and prescription. It also claimed that M/V
P. Aboitiz was seaworthy, that it exercised extraordinary
diligence and that the loss was caused by a fortuitous
event.
After trial on the merits, the RTC of Manila rendered a
Decision dated 27 November 1989, adjudging Aboitiz
liable on the money claims. The decretal portion reads:
WHEREFORE, judgment is hereby rendered as follows:
1. In Civil Case No. 138072 (R-81-526-CV), the defendants
are adjudged liable and ordered to pay to the plaintiffs
jointly and severally the amount of P128,896.79; the
third-party defendant Aboitiz is adjudged liable to
reimburse and ordered to pay the defendants or
whosoever of them paid the plaintiff up to the said
amount;
2. In Civil Case No. 138761, Aboitiz is adjudged liable and
ordered to pay plaintiff the amount of One Hundred Sixty
Three-Thousand Seven Hundred Thirteen Pesos and
Thirty-Eight Centavos (P163,713.38).
3. In Civil Case No. 138762, defendant Aboitiz is adjudged
liable and ordered to pay plaintiff the sum of Seventy
Three Thousand Five Hundred Sixty-Nine Pesos and
Ninety-Four Centavos (P73,569.94); and Sixty-Four
Thousand Seven Hundred Four Pesos and Seventy-Seven
Centavos (P64,704.77);
4. In Civil Case No. 139083, defendant Aboitiz is adjudged
liable and ordered to pay plaintiff the amount of One
Hundred Fifty-Six Thousand Two Hundred Eighty-Seven
Pesos and Sixty-Four Centavos (P156,287.64);
In Civil Case No. 138879, defendant Aboitiz is adjudged
liable and ordered to pay plaintiff the amount of Fifty-Two
Thousand Six Hundred Eighty-Nine Pesos and Fifty
Centavos (P52,689.50).
All the aforesaid award shall bear interest at the legal rate
from the filing of the respective complaints. Considering
that there is no clear showing that the cases fall under
Article 2208, Nos. 4 and 5, of the Civil Code, and in
consonance with the basic rule that there be no penalty
34
(in terms of attorneys fees) imposed on the right to litigate,
no damages by way of attorneys fees are awarded;
however, costs of the party/parties to whom judgment
awards are made shall be made by the party ordered to
pay the said judgment awards.
SO ORDERED.[3]
Aboitiz, CMCR and Zuellig appealed the RTC decision to
the Court of Appeals. The appeal was docketed as CA-G.R.
SP No. 35975-CV. During the pendency of the appeal, the
Court promulgated the decision in the 1993 GAFLAC case.
On 31 March 1995, the Court of Appeals (Ninth Division)
affirmed the RTC decision. It disregarded Aboitizs
argument that the sinking of the vessel was caused by a
force majeure, in view of this Courts finding in a related
case, Aboitiz Shipping Corporation v. Court of Appeals, et
al. (the 1990 GAFLAC case).[4] In said case, this Court
affirmed the Court of Appeals finding that the sinking of
M/V P. Aboitiz was caused by the negligence of its officers
and crew. It is one of the numerous collection suits against
Aboitiz, which eventually reached this Court in connection
with the sinking of M/V P. Aboitiz.
As to the computation of Aboitizs liability, the Court of
Appeals again based its ruling on the 1990 GAFLAC case
that Aboitizs liability should be based on the declared
value of the shipment in consonance with the exceptional
rule under Section 4(5)[5] of the Carriage of Goods by Sea
Act.
Aboitiz moved for reconsideration[6] to no avail. Hence, it
filed this petition for review on certiorari docketed as G.R.
No. 121833.[7] The instant petition is based on the
following grounds:
THE COURT OF APPEALS SHOULD HAVE LIMITED THE
RECOVERABLE AMOUNT FROM ASC TO THAT AMOUNT
STIPULATED IN THE BILL OF LADING.
IN THE ALTERNATIVE, THE COURT OF APPEALS SHOULD
HAVE FOUND THAT THE TOTAL LIABILITY OF ASC IS
LIMITED TO THE VALUE OF THE VESSEL OR THE
INSURANCE PROCEEDS THEREOF.[8]
On 4 December 1995, the Court issued a Resolution[9]
denying the petition. Aboitiz moved for reconsideration,
arguing that the limited liability doctrine enunciated in the
1993 GAFLAC case should be applied in the computation
of its liability. In the Resolution[10] dated 6 March 1996,
the Court granted the motion and ordered the
reinstatement of the petition and the filing of a comment.
G.R. No. 130752
Respondents Asia Traders Insurance Corporation (Asia
Traders) and Allied Guarantee Insurance Corporation
(Allied) filed separate actions for damages against Aboitiz
to recover by way of subrogation the value of the cargoes
insured by them and lost in the sinking of the vessel M/V P.
Aboitiz. The two actions were consolidated and heard
before the RTC of Manila, Branch 20.
Aboitiz reiterated the defense of force majeure. The trial
court rendered a decision[11] on 25 April 1990 ordering
Transportation Law - 8th Set
Aboitiz to pay damages in the amount of P646,926.30.
Aboitiz sought reconsideration, arguing that the trial court
should have considered the findings of the Board of
Marine Inquiry that the sinking of the M/V P. Aboitiz was
caused by a typhoon and should have applied the real and
hypothecary doctrine in limiting the monetary award in
favor of the claimants. The trial court denied Aboitizs
motion for reconsideration.
Aboitiz elevated the case to the Court of Appeals. While
the appeal was pending, this Court promulgated the
decision in the 1993 GAFLAC case. The Court of Appeals
subsequently rendered a decision on 30 May 1994,
affirming the RTC decision.[12]
Aboitiz appealed the Court of Appeals decision to this
Court.[13] In a Resolution dated 20 September 1995,[14]
the Court denied the petition for raising factual issues and
for failure to show that the Court of Appeals committed
any reversible error. Aboitizs motion for reconsideration
was also denied in a Resolution dated 22 November
1995.[15]
The 22 November 1995 Resolution became final and
executory. On 26 February 1996, Asia Traders and Allied
filed a motion for execution before the RTC of Manila,
Branch 20. Aboitiz opposed the motion. On 16 August
1996, the trial court granted the motion and issued a writ
of execution.
Alleging that it had no other speedy, just or adequate
remedy to prevent the execution of the judgment, Aboitiz
filed with the Court of Appeals a petition for certiorari and
prohibition with an urgent prayer for preliminary
injunction and/or temporary restraining order docketed as
CA-G.R. SP No. 41696.[16] The petition was mainly
anchored on this Courts ruling in the 1993 GAFLAC case.
On 8 August 1997, the Court of Appeals (Special
Seventeenth Division) rendered the assailed decision
dismissing the petition.[17] Based on the trial courts
finding that Aboitiz was actually negligent in ensuring the
seaworthiness of M/V P. Aboitiz, the appellate court held
that the real and hypothecary doctrine enunciated in the
1993 GAFLAC case may not be applied in the case.
In view of the denial of its motion for reconsideration,[18]
Aboitiz filed before this Court the instant petition for
review on certiorari docketed as G.R. No. 130752.[19] The
petition attributes the following errors to the Court of
Appeals:
THE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED
THAT THE LOWER COURT HAD MADE AN EXPRESS
FINDING OF THE ACTUAL NEGLIGENCE OF ABOITIZ IN THE
SINKING OF THE M/V P. ABOITIZ THEREBY DEPRIVING
ABOITIZ OF THE BENEFIT OF THE DOCTRINE OF THE REAL
AND HYPOTHECARY NATURE OF MARITIME LAW.[20]
THE COURT OF APPEALS ERRED IN NOT GIVING WEIGHT
TO THE GAFLAC CASE DECIDED BY THE HONORABLE
COURT WHICH SUPPORTS THE APPLICABILITY OF THE REAL
AND HYPOTHECARY NATURE OF MARITIME LAW IN THE
PRESENT CASE.[21]
G.R. No. 137801
On 27 February 1981, Equitable Insurance Corporation
(Equitable) filed an action for damages against Aboitiz to
35
recover by way of subrogation the value of the cargoes
insured by Equitable that were lost in the sinking of M/V P.
Aboitiz.[22] The complaint, which was docketed as Civil
Case No. 138395, was later amended to implead Seatrain
Pacific Services S.A. and Citadel Lines, Inc. as party
defendants.[23] The complaint against the latter
defendants was subsequently dismissed upon motion in
view of the amicable settlement reached by the parties.
On 7 September 1989, the RTC of Manila, Branch 7,
rendered judgment[24] ordering Aboitiz to pay Equitable
the amount of P87,633.81, plus legal interest and
attorneys fees.[25] It found that Aboitiz was guilty of
contributory negligence and, therefore, liable for the loss.
In its appeal, docketed as CA-G.R. CV No. 43458, Aboitiz
invoked the doctrine of limited liability and claimed that
the typhoon was the proximate cause of the loss. On 27
November 1998, the Court of Appeals rendered a decision,
affirming the RTC decision.[26]
The Court of Appeals (Fifteenth Division) ruled that the
loss of the cargoes and the sinking of the vessel were due
to its unseaworthiness and the failure of the crew to
exercise extraordinary diligence. Said findings were
anchored on the 1990 GAFLAC case and on this Courts
resolution dated November 13, 1989 in G.R. No. 88159,
dismissing Aboitizs petition and affirming the findings of
the appellate court on the vessels unseaworthiness and
the crews negligence.
Its motion for reconsideration[27] having been denied,[28]
Aboitiz filed before this Court a petition for review on
certiorari, docketed as G.R. No. 137801,[29] raising this
sole issue, to wit:
WHETHER OR NOT THE DOCTRINE OF REAL AND
HYPOTHECARY NATURE OF MARITIME LAW (ALSO KNOWN
AS THE LIMITED LIABILITY RULE) APPLIES.[30]
ISSUES
The principal issue common to all three petitions is
whether Aboitiz can avail limited liability on the basis of
the real and hypothecary doctrine of maritime law.
Corollary to this issue is the determination of actual
negligence on the part of Aboitiz.
These consolidated petitions similarly posit that Aboitizs
liability to respondents should be limited to the value of
the insurance proceeds of the lost vessel plus pending
freightage and not correspond to the full insurable value
of the cargoes paid by respondents, based on the Courts
ruling in the 1993 GAFLAC case.
Respondents in G.R. No. 121833 counter that the limited
liability rule should not be applied because there was a
finding of negligence in the care of the goods on the part
of Aboitiz based on this Courts Resolution dated 4
December 1995 in G.R. No. 121833, which affirmed the
trial courts finding of negligence on the part of the vessels
captain. Likewise, respondent in G.R. No. 137801 relies on
the finding of the trial court, as affirmed by the appellate
court, that Aboitiz was guilty of negligence.
Respondents in G.R No. 130752 argue that this Court had
already affirmed in toto the appellate courts finding that
the vessel was not seaworthy and that Aboitiz failed to
exercise extraordinary diligence in the handling of the
Transportation Law - 8th Set
cargoes. This being the law of the case, Aboitiz should not
be entitled to the limited liability rule as far as this petition
is concerned, respondents contend.
RULING of the COURT
These consolidated petitions are just among the many
others elevated to this Court involving Aboitizs liability to
shippers and insurers as a result of the sinking of its vessel,
M/V P. Aboitiz, on 31 October 1980 in the South China Sea.
One of those petitions is the 1993 GAFLAC case, docketed
as G.R. No. 100446.[31]
The 1993 GAFLAC case was an offshoot of an earlier final
and executory judgment in the 1990 GAFLAC case, where
the General Accident Fire and Life Assurance Corporation,
Ltd. (GAFLAC), as judgment obligee therein, sought the
execution of the monetary award against Aboitiz. The trial
court granted GAFLACs prayer for execution of the full
judgment award. The appellate court dismissed Aboitizs
petition to nullify the order of execution, prompting
Aboitiz to file a petition with this Court.
In the 1993 GAFLAC case, Aboitiz argued that the real and
hypothecary doctrine warranted the immediate stay of
execution of judgment to prevent the impairment of the
other creditors shares. Invoking the rule on the law of the
case, private respondent therein countered that the 1990
GAFLAC case had already settled the extent of Aboitizs
liability.
Following the doctrine of limited liability, however, the
Court declared in the 1993 GAFLAC case that claims
against Aboitiz arising from the sinking of M/V P. Aboitiz
should be limited only to the extent of the value of the
vessel. Thus, the Court held that the execution of
judgments in cases already resolved with finality must be
stayed pending the resolution of all the other similar
claims arising from the sinking of M/V P. Aboitiz.
Considering that the claims against Aboitiz had reached
more than 100, the Court found it necessary to collate all
these claims before their payment from the insurance
proceeds of the vessel and its pending freightage. As a
result, the Court exhorted the trial courts before whom
similar cases remained pending to proceed with trial and
adjudicate these claims so that the pro-rated share of each
claim could be determined after all the cases shall have
been decided.[32]
In the 1993 GAFLAC case, the Court applied the limited
liability rule in favor of Aboitiz based on the trial courts
finding therein that Aboitiz was not negligent. The Court
explained, thus:
x x x In the few instances when the matter was considered
by this Court, we have been consistent in this jurisdiction
in holding that 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 x x x. The pivotal
question, thus, is whether there is finding of such
negligence on the part of the owner in the instant case.
A careful reading of the decision rendered by the trial
court in Civil Case No. 144425 as well as the entirety of the
records in the instant case will show that there has been
no actual finding of negligence on the part of petitioner. x
xx
36
The same is true of the decision of this Court in G.R. No.
89757 affirming the decision of the Court of Appeals in
CA-G.R. CV No. 10609 since both decisions did not make
any new and additional finding of fact. Both merely
affirmed the factual findings of the trial court, adding that
the cause of the sinking of the vessel was because of
unseaworthiness due to the failure of the crew and the
master to exercise extraordinary diligence. Indeed, there
appears to have been no evidence presented sufficient to
form a conclusion that petitioner shipowner itself was
negligent, and no tribunal, including this Court, will add or
subtract to such evidence to justify a conclusion to the
contrary.[33] (Citations entitled) (Emphasis supplied)
The ruling in the 1993 GAFLAC case cited the real and
hypothecary doctrine in maritime law that the shipowner
or agents liability is merely co-extensive with his interest
in the vessel such that a total loss thereof results in its
extinction. No vessel, no liability expresses in a nutshell
the limited liability rule.[34]
In this jurisdiction, the limited liability rule is embodied in
Articles 587, 590 and 837 under Book III of the Code of
Commerce, thus:
Art. 587. The ship agent shall also be civilly liable for the
indemnities in favor 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 her
equipment and the freight it may have earned during the
voyage.
Art. 590. The co-owners of the vessel shall be civilly liable
in the proportion of their interests in the common fund for
the results of the acts of the captain referred to in Art.
587.
Each co-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 shipowners in the
case prescribed in this section, shall be understood as
limited to the value of the vessel with all its appurtenances
and freightage served during the voyage.
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.[35]
When the vessel is totally lost in which case there is no
vessel to abandon, abandonment is not required. Because
of such total loss the liability of the shipowner or agent for
damages is extinguished.[36] However, despite the total
loss of the vessel, its insurance answers for the damages
for which a shipowner or agent may be held liable.[37]
Nonetheless, there are exceptional circumstances wherein
the ship agent could still be held answerable despite the
abandonment of the vessel, as where the loss or injury
was due to the fault of the shipowner and the captain. The
international rule is to the effect that the right of
abandonment of vessels, as a legal limitation of a
shipowners liability, does not apply to cases where the
injury or average was occasioned by the shipowners own
fault.[38] Likewise, the shipowner may be held liable for
injuries to passengers notwithstanding the exclusively real
Transportation Law - 8th Set
and hypothecary nature of maritime law if fault can be
attributed to the shipowner.[39]
As can be gleaned from the foregoing disquisition in the
1993 GAFLAC case, the Court applied the doctrine of
limited liability in view of the absence of an express finding
that Aboitizs negligence was the direct cause of the sinking
of the vessel. The circumstances in the 1993 GAFLAC case,
however, are not obtaining in the instant petitions.
A perusal of the decisions of the courts below in all three
petitions reveals that there is a categorical finding of
negligence on the part of Aboitiz. For instance, in G.R. No.
121833, the RTC therein expressly stated that the captain
of M/V P. Aboitiz was negligent in failing to take a course
of action that would prevent the vessel from sailing into
the typhoon. In G.R. No. 130752, the RTC concluded that
Aboitiz failed to show that it had exercised the required
extraordinary diligence in steering the vessel before,
during and after the storm. In G.R. No. 137801, the RTC
categorically stated that the sinking of M/V P. Aboitiz was
attributable to the negligence or fault of Aboitiz. In all
instances, the Court of Appeals affirmed the factual
findings of the trial courts.
The finding of actual fault on the part of Aboitiz is central
to the issue of its liability to the respondents. Aboitizs
contention, that with the sinking of M/V P. Aboitiz, its
liability to the cargo shippers and shippers should be
limited only to the insurance proceeds of the vessel absent
any finding of fault on the part of Aboitiz, is not supported
by the record. Thus, Aboitiz is not entitled to the limited
liability rule and is, therefore, liable for the value of the
lost cargoes as so duly alleged and proven during trial.
Events have supervened during the pendency of the
instant petitions. On two other occasions, the Court ruled
on separate petitions involving monetary claims against
Aboitiz as a result of the 1980 sinking
of the vessel M/V P. Aboitiz. One of them is the
consolidated petitions of Monarch Ins. Co., Inc v. Court of
Appeals,[40] Allied Guarantee Insurance Company v. Court
of Appeals[41] and Equitable Insurance Corporation v.
Court of Appeals[42] (hereafter collectively referred to as
Monarch Insurance) promulgated on 08 June 2000. This
time, the petitioners consisted of claimants against Aboitiz
because either the execution of the judgment awarding
full indemnification of their claims was stayed or set aside
or the lower courts awarded damages only to the extent
of the claimants proportionate share in the insurance
proceeds of the vessel.
In Monarch Insurance, the Court deemed it fit to settle
once and for all this factual issue by declaring that the
sinking of M/V P. Aboitiz was caused by the concurrence
of the unseaworthiness of the vessel and the negligence of
both Aboitiz and the vessels crew and master and not
because of force majeure. Notwithstanding this finding,
the Court did not reverse but reiterated instead the
pronouncement in GAFLAC to the effect that the claimants
be treated as creditors in an insolvent corporation whose
assets are not enough to satisfy the totality of claims
against it.[43] The Court explained that the peculiar
circumstances warranted that procedural rules of
evidence be set aside to prevent frustrating the just claims
37
of shippers/insurers. Thus, the Court in Monarch Insurance
ordered Aboitiz to institute the necessary limitation and
distribution action before the proper RTC and to deposit
with the said court the insurance proceeds of and the
freightage earned by the ill-fated ship.
However, on 02 May 2006, the Court rendered a decision
in Aboitiz Shipping Corporation v. New India Assurance
Company, Ltd.[44] (New India), reiterating the well-settled
principle that the exception to the limited liability doctrine
applies when the damage is due to the fault of the
shipowner or to the concurrent negligence of the
shipowner and the captain. Where the shipowner fails to
overcome the presumption of negligence, the doctrine of
limited liability cannot be applied.[45] In New India, the
Court clarified that the earlier pronouncement in Monarch
Insurance was not an abandonment of the doctrine of
limited liability and that the circumstances therein still
made the doctrine applicable.[46]
In New India, the Court declared that Aboitiz failed to
discharge its burden of showing that it exercised
extraordinary diligence in the transport of the goods it had
on board in order to invoke the limited liability doctrine.
Thus, the Court rejected Aboitizs argument that the award
of damages to respondent therein should be limited to its
pro rata share in the insurance proceeds from the sinking
of M/V P. Aboitiz.
The instant petitions provide another occasion for the
Court to reiterate the well-settled doctrine of the real and
hypothecary nature of maritime law. As a general rule, a
ship owners liability is merely co-extensive with his
interest in the vessel, except where actual fault is
attributable to the shipowner. Thus, as an exception to the
limited
liability doctrine, a shipowner or ship agent may be held
liable for damages when the sinking of the vessel is
attributable to the actual fault or negligence of the
shipowner or its failure to ensure the seaworthiness of the
vessel. The instant petitions cannot be spared from the
application of the exception to the doctrine of limited
liability in view of the unanimous findings of the courts
below that both Aboitiz and the crew failed to ensure the
seaworthiness of the M/V P. Aboitiz.
WHEREFORE, the petitions in G.R. Nos. 121833, 130752
and 137801 are DENIED. The decisions of the Court of
Appeals in CA-G.R. SP No. 35975-CV, CA-G.R. SP No. 41696
and CA-G.R. CV No. 43458 are hereby AFFIRMED. Costs
against petitioner.
SO ORDERED.
G.R. No. L-8431 October 30, 1958
MADRIGAL SHIPPING COMPANY, INC., petitioner,
vs.
JESUS G. OGILVIE, SALVADOR ORTILE, MIGUEL M. FERMIN,
ANTONIO C. MILITAR and THE COURT OF APPEALS,
respondents.
Bausa and Ampil for petitioner.
Luis Manalang and Flor Garcia-Manalang and Galang,
Angeles and Galang for respondents.
PADILLA, J.:
Transportation Law - 8th Set
Jesus G. Ogilvie, Salvador Ortile, Miguel M. Fermin and
Antonio C. Militar brought an action in the Court of First
Instance of Manila to collect from the Madrigal Shipping
Company, Inc., the aggregate sum of P12,104.50 for
salaries and subsistence from 19 March to 30 September
1948 (Civil No. 8446, Annex A). The defendant moved for
the dismissal of the complaint on the ground of lack of
jurisdiction over the subject matter of the action (Annex B).
The Court denied the motion and directed the defendant
to answer the complaint within ten days from receipt of a
copy of the order (Annex C). As the defendant failed to
answer the complaint as directed, upon motion of the
plaintiffs (Annex D) the Court declared it in default and set
the case for hearing on 30 September 1949 (Annex E). The
defendant filed a motion to set aside the order of default
(Annex F) which was denied (Annex I). A motion for
reconsideration of the previous order (Annex J) was
likewise denied (Annex K). The defendant filed a petition
for a writ of certiorari with preliminary injunction in this
Court to annul and set aside the order of default, which
was dismissed for the reason that appeal was the proper
remedy (Annex L).1 The trial court then proceed to hear
the plaintiffs' evidence and after the hearing it rendered
judgment dismissing the plaintiffs' complaint upon the
sole ground that the plaintiffs failed to prove that the
defendant is a corporation duly organized and existing
under the laws of the Philippines. A motion was filed
praying that plaintiffs be allowed to submit evidence to
prove that the defendant is a duly organized and existing
corporation under the laws of the Philippines (Annex O),
which was granted (Annex P). After hearing the additional
evidence presented by the plaintiffs showing that the
defendant is an organized and existing juridical entity
under the laws of the Philippines, the trial court dismissed
the complaint on the ground that the evidence was not
new but forgotten (Annex Q). The plaintiffs appealed to
the Court of Appeals. The judgment appealed from was
reversed and the defendant was ordered to pay Jesus G.
Ogilvie the sum of P3,226.50 and Salvador Ortile, Miguel
M. Fermin and Antonio C. Militar the sum of P2,934 each.
The defendant has brought the case to this Court by way
of certiorari to have the judgment of the Court of Appeals
reviewed.
The respondents herein, appellants in the Court of Appeals,
did not furnish the herein petitioner, defendant in the
court of first instance, with a copy of their brief in the
Court of Appeals for the reason that as the petitioner had
been declared in default by the trial court it had lost its
standing in court and hence was not entitled to service of
appellants' brief on appeal. In a special division of five
justices of the Court of Appeals, a majority of four and one
dissenting upheld the respondents contention that the
case was deemed submitted and ready for disposition or
judgment, and proceeded to determine the case on appeal
without the petitioner's brief, a view now assailed by the
petitioner who claims that it had been deprived of its day
in court.
In Lim To Co vs. Go Fay, 80 Phil. 166, interpreting section 9,
Rule 27, which provides:
No service of papers shall be necessary on a party in
default except when he files a motion to set aside the
order of default, in which event he is entitled to notice of
all further proceedings, this Court held that "a defendant
in default is not entitled to notice of the proceedings until
38
the final termination of the case, and therefore he has no
right to be heard or file brief or memoranda on appeal."2
A defendant in default loses his standing in or is
considered out of Court, and consequently can not appear
in court; adduce evidence; and be heard, and for that
reason he is not entitled to notice. If he is not entitled to
notice of the proceedings in the case and to be heard, he
can not appeal from the judgment rendered by the court
on the merits, because he can not file a notice of appeal,
and file an appeal bond and the record on appeal, for
approval by the court. The only exception provided by law
is when the defendant in default files a motion to set aside
the order of default on the grounds stated in Rule 38 "in
which event he is entitled to notice of all further
proceedings." That a defendant in default can not be
heard in the suit, not only in the trial court but also in the
final hearing, that is, on appeal which is part of the
proceedings in a suit, is the ruling laid down for guidance
of courts and practitioners by this Court in the case of
Velez vs. Ramos, 40 Phil., 787, . . . . (Lim To Co vs. Go Fay,
supra, p. 169.)
And the remedy available to a party who was declared in
default to regain his standing in court and be entitled once
more to notice of the proceedings is to move for the
setting aside of the order of default under section 2, Rule
38 and to appeal therefrom if denied.3
Counsel argue that an order of default being interlocutory,
the petitioner could not appeal therefrom. True, but from
a denial of a motion to set aside an order of default, as the
petitioner's "urgent motion to set aside order of default"
(Annex F), which may be deemed to fall under section 2,
Rule 38, the petitioner could have appealed. Instead of
taking an appeal from such denial, the petitioner chose to
bring the matter to this Court by petition for a writ of
certiorari with a prayer for a writ of preliminary injunction
which was correctly dismissed for the remedy was an
appeal from the order denying the motion to set aside the
order of default entered against the petitioner because of
mistake or excusable neglect. Not having appealed from
the order denying the motion to set aside the order of
default under section 2, Rule 38, the order of default
remained in force with all the consequences that the party
against whom it had been entered must suffer. One of
them is the loss of the right to be served with the brief of
the herein respondents, appellants in the Court of
Appeals.
Turning now to the merits of the case, the Court of
Appeals found that the services of Jesus G. Ogilvie,
Salvador Ortile, Antonio C. Militar and Miguel M. Fermin
were engaged by Manuel Mascuana, master or captain
employed by the petitioner Madrigal Shipping Company,
Inc., to man and fetch the vessel "S.S. Bridge" from Sasebu,
Japan, as evidenced by a contract executed on 24
December 1947 in Manila (Exhibit A), the pertinent
provision of which is as follows:
(a) The several persons whose names are hereto
subscribed, and whose descriptions are contained herein,
engaged as seamen, hereby agree to serve on board the
S.S. Bridge of which M. MASCUANA is master, in the
several capacities expressed against their respective
names, on a voyage from THE CREW WILL ENPLANE FROM
MANILA TO JAPAN. IN JAPAN THE CREW WILL MAN THE
SHIP TO MANILA. THIS CONTRACT EXPIRES ON THE
ARRIVAL OF THIS BOAT AT THE PORT OF MANILA.
Transportation Law - 8th Set
EXTENSION OF THIS CONTRACT IS VALID ONLY WHEN
SIGNED BY THE OFFICIAL SKIPPER.
On 7 January 1948, another contract of similar terms and
conditions was executed in Manila before the Consul
General of the Republic of Panama (Exhibit A-1) for the
reason that the S.S. Bridge was registered under the laws
of that Republic. Pursuant thereto the respondents were
flown to Sasebu, Japan, and they manned the vessel out of
the port of Sasebu. On 16 March 1948, when the vessel
reached Hongkong, the respondents were dismissed and
replaced by a crew of Chinese nationality. The
respondents were flown back to Manila and paid their
respective salaries up to the date of their dismissal. The
total sum of P12,104.50 which the respondents seek to
collect represents salaries and subsistence allowance from
17 March 1948 to 30 September 1948 when the vessel
arrived in the port of Manila.
In its motion to dismiss the complaint the petitioner
invoked and relied solely upon lack of jurisdiction of the
court over the subject matter of the action and did not
deny ownership of the S.S. Bridge nor disavow the
authority of Manuel Mascuana, its captain, to engage the
services of the respondents. More, in the answer of the
petitioner (Annex H) attached to its "urgent motion to set
aside order of default" (Annex F), the averments under its
special defenses substantially admit the allegations of the
respondents' complaint. The termination of the services of
the respondents as members of the crew was not due to
their fault. Upon the ship's arrival in Hongkong it was
found that repairs had to be made on her before she could
proceed on her voyage to Manila. A motion to dismiss an
action must include all the grounds available at the time of
its filing, and all grounds not so included are deemed
waived, except lack of jurisdiction over the subject
matter.4 In the same motion to dismiss the complaint the
petitioner, defendant in the court of first instance, alleged
that "On the date of the execution of the service contract
between the plaintiff and the defendant (January 7, 1948),
the subject vessel was in Sasebu, Japan, . . .," thereby
implying that the petitioner in truth and in fact contracted
the service of the respondents, plaintiffs in the court of
first instance, to man its vessel. Furthermore, Moises J.
Lopez, manager of the defendant shipping company,
testified that he recalled having contracted the services of
several persons to form a crew to man the S.S. Bridge
belonging to the petitioner. How could the latter now
disclaim ownership of the S.S. Bridge and the authority of
Manuel Mascuana, its captain, to engage the services of
the respondents?
Granting that the petitioner may not be sued for lack of
juridical personality, as held by the trial court, and pressed
by its counsel in this Court, it is now estopped from
denying the existence of such personality to evade
responsibility on the contract it had entered into, because
it has taken advantage of the respondents' services and
has profited thereby. Moreover, the trial court committed
an error when it refused to take into account the evidence
presented by the respondents to prove that the petitioner
was a corporation duly organized and existing under the
laws of the Philippines, the documents showing that fact
having been reconstituted only after the first hearing of
the case, upon the sole ground that it was not new but
forgotten evidence. Such ground could be relied upon to
deny a motion for new trial, but not after the motion had
been granted, for official or public documents presented
to show or prove the juridical personality or entity of a
39
party to an action not known or available at the first
hearing could not be ignored. The trial court could not
close its eyes to reality.
Again, granting that it was not the Madrigal Shipping
Company, Inc., that owned the S.S. Bridge but the
Madrigal & Company, a corporation with a juridical
personality distinct from the former, yet as the former was
the subsidiary of the latter, and that the former was a
business conduit of the latter, as found by the Court of
Appeals, the fiction of corporate existence may be
disregarded and the real party ordered to pay the
respondents their just due.
The services of the respondents were engaged by the
petitioner to man its vessel for a determinate time or
voyage, with an express stipulation that "this contract
expires on the arrival of this boat at the port of Manila."
Article 605 of the Code of Commerce provides:
If the contracts of the captain and members of the crew
with the ship agent should he for a definite period or
voyage, they may not be discharged until after the
fulfillment of their contracts except by reason of
insubordination in serious matters, robbery, theft, habitual
drunkenness, or damage caused to the vessel or its cargo
through malice or manifest or proven negligence.
Not having been discharged for any of the causes
enumerated in the foregoing article, the respondents are
entitled to the amounts they respectively seek to collect
from the petitioner.
The petition is denied, with costs against the petitioner.
G.R. No. L-50734-37 February 20, 1981
WALLEM PHILIPPINES SHIPPING, INC., petitioner,
vs.
THE HON. MINISTER OF LABOR, in his capacity as Chairman
of the National Seamen Board Proper, JAIME CAUNCA,
ANTONIO CABRERA, EFREN GARCIA, JOSE OJEDA and
RODOLFO PAGWAGAN, respondents.
DE CASTRO, J.:
Petition for certiorari with preliminary injunction with
prayer that the Orders dated December 19, 1977 and April
3, 1979 of the National Seamen Board (NSB) be declared
null and void. Private respondents were hired by
petitioner sometime in May 1975 to work as seamen for a
period of ten months on board the M/V Woermann
Sanaga, a Dutch vessel owned and operated by
petitioner's European principals. While their employment
contracts were still in force, private respondents were
dismissed by their employer, petitioner herein, and were
discharged from the ship on charges that they instigated
the International Transport Federation (ITF) to demand
the application of worldwide ITF seamen's rates to their
crew.
Private respondents were repatriated to the Philippines on
October 27, 1975 and upon their arrival in Manila, they
instituted a complaint against petitioner for illegal
dismissal and recovery of wages and other benefits
corresponding to the five months' unexpired period of
their shipboard employment contract.
Transportation Law - 8th Set
In support of their complaint, private respondents
submitted a Joint Affidavit 1 stating the circumstances
surrounding their employment and subsequent
repatriation to the Philippines, material averments of
which are herein below reproduced:
JOINTAFFIDAVIT
xxx xxx xxx
5. That aside from our basic monthly salary we are
entitled to two (2) months vacation leave, daily
subsistence allowance of US$8.14 each, daily food
allowance of US$2.50. as well as overtime pay which we
failed to receive because our Shipboard Employment
Contract was illegally terminated;
6. That while we were in Rotterdam, on or about July 9,
1975, representative of the ITF boarded our vessel and
talked with the Ship's Captain;
7. That the following day, the representatives of the ITF
returned and was followed by Mr. M.S.K. Ogle who is the
Company's Administrative Manager, again went to see the
Captain;
8. That at around 7:00 in the evening all the crew
members were called in the Mess Hall where the ITF
representatives informed us that they have just entered
into a "Special Agreement" with the Wallem Shipping
Management, Ltd., represented by Mr. M.S.K. Ogle,
Administrative Manager, wherein new salary rates was
agreed upon and that we were going to be paid our salary
differentials in view of the new rates;
9. That in the same meeting, Mr. M.S.K. Ogle also spoke
where he told that a Special Agreement has been signed
and that we will be receiving new pay rate and enjoined us
to work hard and be good boys;
10. That the same evening we received our salary
differentials based on the new rates negotiated for us by
the ITF.
11. That while we were in the Port Dubai, Saudi Arabia,
we were not receiving our pay, since the Ship's Captain
refused to implement the world-wide rates and insisted on
paying us the Far East Rate;
12. That the Port Dubai is one that is within the
Worldwide rates sphere.
13. That on October 22, 1975, Mr. Greg Nacional
Operation Manager of respondent corporation, arrived in
Dubai Saudi Arabia and boarded our ship;
14. That on October 23, 1975, Mr. Nacional called all the
crew members, including us to a meeting at the Mess Hall
and there he explained that the Company cannot accept
the worldwide rate. The Special Agreement signed by Mr.
Ogle in behalf of the Company is nothing but a scrap of
paper. Mr. Jaime Caunca then asked Mr. Nacional, in view
of what he was saying, whether the Company will honor
the Special Agreement and Mr. Nacional answered "Yes".
That we must accept the Far East Rates which was put to a
vote. Only two voted for accepting the Far East Rates;
15. That immediately thereafter Mr. Nacional left us;
40
16. That same evening, Mr. Nacional returned and
threatened that he has received a cable from the Home
Office that if we do not accept the Far East Rate, our
services will be terminated and there will be a change in
crew;
17. That when Mr. Nacional left, we talked amongst
ourselves and decided to accept the Far East Rates;
18. That in the meeting that evening because of the
threat we informed Mr. Nacional we were accepting the
Far East Rate and he made us sign a document to that
effect;
19. That we the complainants with the exception of
Leopoldo Mamaril and Efren Garcia, were not able to sign
as we were at the time on work schedules, and Mr.
Nacional did not bother anymore if we signed or not;
20. That after the meeting Mr. Nacional cabled the Home
Office, informing them that we the complainants with the
exception of Messrs. Mamaril and Garcia were not
accepting the Far East Rates;
21. That in the meeting of October 25, 1975, Mr.
Nacional signed a document whereby he promised to give
no priority of first preference in "boarding a vessel and
that we are not blacklisted";
22. That in spite of our having accepted the Far East Rate,
our services were terminated and advised us that there
was a change in crew;
23. That on October 27, 1975, which was our scheduled
flight home, nobody attended us, not even our clearance
for our group travel and consequently we were not able to
board the plane, forcing us to sleep on the floor at the
airport in the evening of October 27, 1975;
24. That the following day we went back to the hotel in
Dubai which was a two hours ride from the airport, where
we were to await another flight for home via Air France;
25. That we were finally able to leave for home on
November 2, 1975 arriving here on the 3rd of November;
26. That we paid for all excess baggages;
27. That Mr. Nacional left us stranded, since he went
ahead on October 27, 1975;
28. That immediately upon arriving in Manila, we went to
respondent Company and saw Mr. Nacional, who
informed us that we were not blacklisted, however, Mr.
Mckenzie, Administrative Manager did inform us that we
were all blacklisted;
29. That we were asking from the respondent Company
our leave pay, which they refused to give, if we did not
agree to a US$100.00 deduction;
30. That with the exception of Messrs. Jaime Caunca
Amado Manansala and Antonio Cabrera, we received our
leave pay with the US$100.00 deduction;
31. That in view of the written promise of Mr. Nacional in
Dubai last October 23, 1975 to give us priority and
preference in boarding a vessel and that we were not
blacklisted we have on several occasions approached him
Transportation Law - 8th Set
regarding his promise, which up to the present he has
refused to honor.
xxx xxx xxx
Answering the complaint, petitioner countered that when
the vessel was in London, private respondents together
with the other crew insisted on worldwide ITF rate as per
special agreement; that said employees threatened the
ship authorities that unless they agreed to the increased
wages the vessel would not be able to leave port or would
have been picketed and/or boycotted and declared a hot
ship by the ITF; that the Master of the ship was left with
no alternative but to agree; that upon the vessel's arrival
at the Asian port of Dubai on October 22, 1975, a
representative of petitioner went on board the ship and
requested the crew together with private respondents to
desist from insisting worldwide ITF rate and instead accept
the Far East rate; that said respondents refused to accept
Far East ITF rates while the rest of the Filipino crew
members accepted the Far East rates; that private
respondents were replaced at the expense of petitioner
and it was prayed that respondents be required to comply
with their obligations under the contract by requiring
them to pay their repatriation expenses and all other
incidental expenses incurred by the master and crew of
the vessel.
After the hearing on the merits, the hearing Officer of the
Secretariat rendered a decision 2 on March 14, 1977
finding private respondents to have violated their contract
of employment when they accepted salary rates different
from their contract verified and approved by the National
Seamen Board. As to the issue raised by private
respondents that the original contract has been novated, it
was held that:
xxx xxx xxx
For novation to be a valid defense, it is a legal requirement
that all parties to the contract should give their consent. In
the instant case only the complainants and respondents
gave their consent. The National Seamen Board had no
participation in the alleged novation of the previously
approved employment contract. It would have been
different if the consent of the National Seamen Board was
first secured before the alleged novation of the approved
contract was undertaken, hence, the defense of novation
is not in order.
xxx xxx xxx
The Hearing Officer likewise rules that petitioner violated
the contract when its representative signed the Special
Agreement and he signed the same at his own risk and
must bear the consequence of such act, and since both
parties are in paridelicto, complaint and counterclaim
were dismissed for lack of merit but petitioner was
ordered to pay respondents Caunca and Cabrera their
respective leave pay for the period that they have served
M/V Woermann Sanaga plus attorney's fees.
Private respondents filed a motion for reconsideration
with the Board which modified the decision of the
Secretariat in an Order 3 of December 19, 1977 and ruled
that petitioner is liable for breach of contract when it
ordered the dismissal of private respondents and their
subsequent repatriation before the expiration of their
respective employment contracts. The Chairman of the
41
Board stressed that "where the contract is for a definite
period, the captain and the crew members may not be
discharged until after the contract shall have been
performed" citing the case of Madrigal Shipping Co., Inc.
vs. Ogilvie, et al. (104 Phil. 748). He directed petitioner to
pay private respondents the unexpired portion of their
contracts and their leave pay, less the amount they
received as differentials by virtue of the special
agreements entered in Rotterdam, and ten percent of the
total amounts recovered as attorney's fees.
Petitioner sought clarification and reconsideration of the
said order and asked for a confrontation with private
respondents to determine the specific adjudications to be
made. A series of conferences were conducted by the
Board. It was claimed by petitioner that it did not have in
its possession the records necessary to determine the
exact amount of the judgment since the records were in
the sole custody of the captain of the ship and demanded
that private respondents produce the needed records. On
this score, counsel for respondents manifested that to
require the master of the ship to produce the records
would result to undue delay in the disposition of the case
to the detriment of his clients, some of whom are still
unemployed.
Under the circumstances, the Board was left with no
alternative but to issue an Order dated April 3, 1979 4
fixing the amount due private respondents at their three
(3) months' salary equivalent without qualifications or
deduction. Hence,the instant petition before Us alleging
grave abuse of discretion on the part of the respondent
official as Chairman of the Board, in issuing said order
which allegedly nullified the findings of the Secretariat and
premised adjudication on imaginary conditions which
were never taken up with full evidence in the course of
hearing on the merits.
The whole controversy is centered around the liability of
petitioner when it ordered the dismissal of herein private
respondents before the expiration of their respective
employment contracts.
In its Order of December 19, 1977 5 the Board, thru its
Chairman, Minister Blas F. Ople, held that there is no
showing that the seamen conspired with the ITF in
coercing the ship authorities to grant salary increases, and
the Special Agreement was signed only by petitioner and
the ITF without any participation from the respondents
who, accordingly, may not be charged as they were, by the
Secretariat, with violation of their employment contract.
The Board likewise stressed that the crew members may
not be discharged until after the expiration of the contract
which is for a definite period, and where the crew
members are discharged without just cause before the
contract shall have been performed, they shall be entitled
to collect from the owner or agent of the vessel their
unpaid salaries for the period they were engaged to
render the services, applying the case of Madrigal Shipping
Co., Inc. vs. Jesus Ogilivie et al. 6
The findings and conclusion of the Board should be
sustained. As already intimated above, there is no logic in
the statement made by the Secretariat's Hearing Officer
that the private respondents are liable for breach of their
employment contracts for accepting salaries higher than
their contracted rates. Said respondents are not
signatories to the Special Agreement, nor was there any
showing that they instigated the execution thereof.
Transportation Law - 8th Set
Respondents should not be blamed for accepting higher
salaries since it is but human for them to grab every
opportunity which would improve their working
conditions and earning capacity. It is a basic right of all
workingmen to seek greater benefits not only for
themselves but for their families as well, and this can be
achieved through collective bargaining or with the
assistance of trade unions. The Constitution itself
guarantees the promotion of social welfare and protection
to labor. It is therefore the Hearing Officer that gravely
erred in disallowing the payment of the unexpired portion
of the seamen's respective contracts of employment.
Petitioner claims that the dismissal of private respondents
was justified because the latter threatened the ship
authorities in acceeding to their demands, and this
constitutes serious misconduct as contemplated by the
Labor Code. This contention is not well-taken. The records
fail to establish clearly the commission of any threat. But
even if there had been such a threat, respondents'
behavior should not be censured because it is but natural
for them to employ some means of pressing their
demands for petitioner, who refused to abide with the
terms of the Special Agreement, to honor and respect the
same. They were only acting in the exercise of their rights,
and to deprive them of their freedom of expression is
contrary to law and public policy. There is no serious
misconduct to speak of in the case at bar which would
justify respondents' dismissal just because of their
firmness in their demand for the fulfillment by petitioner
of its obligation it entered into without any coercion,
specially on the part of private respondents.
On the other hand, it is petitioner who is guilty of breach
of contract when they dismissed the respondents without
just cause and prior to the expiration of the employment
contracts. As the records clearly show, petitioner
voluntarily entered into the Special Agreement with ITF
and by virtue thereof the crew men were actually given
their salary differentials in view of the new rates. It cannot
be said that it was because of respondents' fault that
petitioner made a sudden turn-about and refused to
honor the special agreement.
In brief, We declare petitioner guilty of breach of contract
and should therefore be made to comply with the
directives contained in the disputed Orders of December
19, 1977 and April 3, 1979.
WHEREFORE, premises considered, the decision dated
March 14, 1977 of the Hearing Officer is SET ASIDE and the
Orders dated December 19, 1977 and April 3, 1979 of the
National Seamen Board are AFFIRMED in toto. This
decision is immediately executory. Without costs.
SO ORDERED.
G.R. No. L-51165 June 21, 1990
HEIRS OF AMPARO DE LOS SANTOS, HEIRS OF ERNANIE
DELOS SANTOS, HEIRS OF AMABELLA DELOS SANTOS,
HEIRS OF LENNY DELOS SANTOS, HEIRS OF MELANY DELOS
SANTOS, HEIRS OF TERESA PAMATIAN, HEIRS OF DIEGO
SALEM, AND RUBEN REYES, petitioners,
vs.
HONORABLE COURT OF APPEALS AND COMPANIA
MARITIMA, respondents.
Severino Z. Macavinta, Jr. for petitioners.
42
Dinglasan Law Office for private respondent.
MEDIALDEA. J.:
This petition for review on certiorari seeks to set aside the
decision of the Court of Appeals in CA-G.R. No. 58118-R
affirming the decision in Civil Case No. 74593 of the then
Court of First Instance (now Regional Trial Court), Branch
XI, Manila which dismissed the petitioners' claim for
damages against Compania Maritima for the injury to and
death of the victims as a result of the sinking of M/V
Mindoro on November 4, 1967.
The trial court found the antecedent facts to be as follows:
This is a complaint originally filed on October 21, 1968 (p.
1, rec.) and amended on October 24, 1968 (p. 16 rec.) by
the heirs of Delos Santos and others as pauper litigants
against the Compania Maritima, for damages due to the
death of several passengers as a result of the sinking of
the vessel of defendant, the M/V 'Mindoro', on November
4, 1967.
There is no dispute in the record that the M/V 'Mindoro'
sailed from pier 8 North Harbor, Manila, on November
2,1967 at about 2:00 (should have been 6:00 p.m.) in the
afternoon bound for New Washington, Aklan, with many
passengers aboard. It appears that said vessel met
typhoon 'Welming' on the Sibuyan Sea, Aklan, at about
5:00 in the morning of November 4, 1967 causing the
death of many of its passengers, although about 136
survived.
Mauricio delos Santos declared that on November 2, 1967
he accompanied his common-law wife, Amparo delos
Santos, and children, namely: Romeo, Josie, Hernani, who
was 10 years old, Abella, 7 years old, Maria Lemia, 5 years
old and Melany, 5 months old, to pier 8, North Harbor,
Manila, to board the M/V Mindoro 'bound for Aklan. It
appears that Amparo delos Santos and the aforesaid
children brought all their belongings, including household
utensils valued at P 1,000.00, with the intention of living in
Aklan permanently.
As already stated, the boat met typhoon 'Welming' and
due to the strong waves it sank causing the drowning of
many passengers among whom were Amparo delos Santos
and all the aforesaid children. It appears also that Teresa
Pamatian and Diego Salim, who were also passengers also
drowned. Plaintiff Ruben Reyes was one of the survivors.
'The plaintiffs presented the birth and death certificates of
Amparo delos Santos and the children (Exhs. 1, I-1, J, J-1, K,
K-1, L, L-1, 0 to S, pp. 180 to 194 rec.). They also presented
copies of the manifest of passengers of the M/V 'Mindoro'
on November 2,1967 (Exhs. B & C, pp. 163 to 161 rec.).
Eliadora Crisostomo de Justo, one of the survivors,
corroborated the testimony of Mauricio delos Santos that
he accompanied Amparo delos Santos and her children to
the port to board the M/V Mindoro. She is a cousin of
Amparo delos Santos' husband. According to her, when
she boarded the second deck of the vessel, she saw about
200 persons therein. She tried to see whether she could
be accommodated in the third deck or first deck because
the second deck was very crowded. She admitted that she
was not included in the manifest because she boarded the
boat without a ticket, but she purchased one in the vessel.
She testified further that the boat was not able to reach its
Transportation Law - 8th Set
destination due to its sinking. During the typhoon before
the vessel sunk, she was able to board a 'balsa'.
Ruben Reyes, the other survivor, declared that he paid for
his ticket before boarding the M/V Mindoro. At that time
he had with him personal belongings and cash all in the
amount of P2,900.00. It appears that Felix Reyes
Jakusalem, Teresa Pamatian and Amparo delos Santos
drowned during the sinking of the vessel. He was able to
swim on (sic) an island and was with the others, rescued
later on and brought to the hospital. The survivors were
then taken ashore (Exh. M, p. 188, rec.).
Dominador Salim declared that Teresa Pamatian, his aunt
and Diego Salim, his father, drowned along with the
sinking of the M/V Mindoro. Tins witness declared that he
accompanied both his father and his aunt to the pier to
board the boat and at the time Teresa Pamatian was
bringing cash and personal belongings of about P250.00
worth. His father brought with him P200.00 in cash plus
some belongings. He admitted that when his father
boarded the vessel he did not have yet a ticket.
The plaintiffs further submitted in evidence a copy of a
Radiogram stating among other things that the MN
Mindoro was loaded also with 3,000 cases of beer, one
dump truck and 292 various goods (Exhs. D and D-1, p. 162
rec).
In alleging negligence on the part of the vessel, plaintiffs
introduced in evidence a letter sent to the Department of
Social Welfare concerning the resurvey of the M/V
Mindoro victims (Exh. F, p. 169 rec.) and a telegram to the
Social Welfare Administration (Exh. G, p. 170 rec.), a
resurvey of the M/V 'Mindoro' victims (Exh. H, p. 171 rec.),
a complete list of the M/V 'Mindoro' victims (Exhs. H-1 to
H-8, pp. 172179 rec.), a certified true copy of the Special
Permit to the Compania Maritima issued by the Bureau of
Customs limiting the vessel to only 193 passengers (Exh. X,
p. 318 rec.).
It appears that in a decision of the Board of Marine Inquiry,
dated February 2, 1970, it was found that the captain and
some officers of the crew were negligent in operating the
vessel and imposed upon them a suspension and/or
revocation of their license certificates. It appears, however,
that this decision cannot be executed against the captain
who perished with the vessel (Exhs. E, E-1, E-1-A, E-2 to
E-9, pp. 163- 168 rec.).
Upon agreement of the parties, the plaintiffs also
introduced in evidence the transcript of stenographic
notes of the testimony of Boanerjes Prado before Branch I
of this Court (Exh. U, pp. 203-220) and that of Felimon
Rebano in the same branch (Exh. V, pp. 225-260 rec.).
The defendant alleges that no negligence was ever
established and, in fact, the shipowners and their officers
took all the necessary precautions in operating the vessel.
Furthermore, the loss of lives as a result of the drowning
of some passengers, including the relatives of the herein
plaintiff, was due to force majeure because of the strong
typhoon 'Welming.' It appears also that there was a note
of marine protest in connection with the sinking of the
vessel as substantiated by affidavits (Exhs. 3, 3-A, 3-B, 3-C,
3-D, 3-E, 3-F and 3-G rec.). On this score Emer Saul,
member of the PC Judge Advocate General's Office,
brought to Court records of this case which were referred
to their office by the Board of Marine Inquiry. According to
43
him the decision referred to by the plaintiffs was appealed
to the Department of National Defense, although he did
not know the result of the appeal. At any rate, he knew
that the Department of National Defense remanded the
case to the Board of Marine Inquiry for further
investigation. In the second indorsement signed by Efren I.
Plana, Undersecretary of National Defense, it is stated,
among other things, that the hearings of the Board of
Marine Inquiry wherein the Philippine Coast Guard made
the decision lacked the necessary quorum as required by
Section 827 of the Tariff and Customs Code. Moreover, the
decision of the Commandant of the Philippine Coast Guard
relied principally on the findings reached by the Board of
Officers after an ex-parte investigation especially in those
aspects unfavorable to the captain (Exh. 1, folder of
exhibits).
It appears also that there were findings and
recommendations made by the Board of Marine Inquiry,
dated March 5, 1968, recommending among other things
that the captain of the M/V 'Mindoro,' Felicito Irineo,
should be exonerated. Moreover, Captain Irineo went
down with the vessel and his lips are forever sealed and
could no longer defend himself. This body also found that
the ship's compliment (sic) and crew were all complete
and the vessel was in seaworthy condition. If the M/V
Mindoro' sank, it was through force majeure (Exhs. 2 &
2-A, folder of exhibits).
Defendant also introduced in evidence the transcripts of
stenographic notes of the testimony of Francisco Punzalan,
marine officer, as well as of Abelardo F. Garcia, Harbor
Pilot in Zamboanga City, in Civil Case No. Q-12473 of
Branch XXVIII, Court of First Instance of Rizal, Quezon City
Branch (Exhs. 3-H & 10-H, folder of exhibits), and of Arturo
Ilagan, boat captain, in Civil Case No. Q-1 5962 of Branch V,
of the same Court (Exh. 9 folder of exhibits).
It appears that five other vessels left the pier at Manila on
November 2, 1967, aside from the M/V Mindoro' (Exhs 4 &
4-A). A certification of the Weather Bureau indicated the
place of typhoon 'Welming' on November 2, 1967 (Exh. 6).
A certification of the shipyard named El Varadero de
Manila stated among other things that the M/V 'Mindoro'
was dry-docked from August 25 to September 6, 1967 and
was found to be in a seaworthy condition (Exh. 5), and
that the said M/V 'Mindoro' was duly inspected by the
Bureau of Customs (Exhs. 7, 7-A & 7-B). Another
certification was introduced stating among other things
that the Bureau of Customs gave a clearance to the M/V
'Mindoro' after inspection (Exh. 8 folder of exhibits). (CFI
Decision, Records, pp. 468-471)
On the basis of these facts, the trial court sustained the
position of private respondent Compania Maritima
(Maritima, for short) and issued a decision on March 27,
1974, to wit:
WHEREFORE, the Court finds that in view of lack of
sufficient evidence, the case be, as it is hereby DISMISSED.
For lack of evidence, the counterclaim is also hereby
DISMISSED.
IT IS SO ORDERED. (Records, p. 474)
Forthwith, the petitioners' heirs and Reyes brought an
appeal to the Court of Appeals. As earlier mentioned, the
appellate court affirmed the decision on appeal. While it
Transportation Law - 8th Set
found that there was concurring negligence on the part of
the captain which must be imputable to Maritima, the
Court of Appeals ruled that Maritima cannot be held liable
in damages based on the principle of limited liability of the
shipowner or ship agent under Article 587 of the Code of
Commerce.
The heirs and Reyes now come to Us with the following
assignment of errors:
ERROR I
THE HONORABLE RESPONDENT COURT OF APPEALS ERRED
IN NOT CONCENTRATING TO (sic) THE PROVISION OF LAW
IN THE NEW CIVIL CODE AS EXPRESSED) IN,
Art. 1766. In all matters not regulated by this Code, the
rights and obligations of common carriers shall be
governed by the Code of Commerce and by special laws.
ERROR II
RESPONDENT COURT OF APPEALS ERRED IN NOT
REVERSING THE DECISION OF THE LOWER COURT OF
ORIGIN AFTER FINDING A SERIES OF FAULTS AND
NEGLIGENCE AND IN NOT ORDERING ITS CO-RESPONDENT
COMPANIA MARITIMA TO PAY THE DAMAGES IN
ACCORDANCE WITH THE LAW.
ERROR III
THE HONORABLE RESPONDENT COURT OF APPEALS ERRED
TO NOTE, OBSERVE AND COMPREHEND THAT ART. 587 OF
THE CODE OF COMMERCE IS ONLY FOR THE GOODS
WHICH THE VESSEL CARRIED AND DO NOT INCLUDE
PERSONS. (Rollo, p. 8)
The petition has merit. At the outset, We note that there is
no dispute as to the finding of the captain's negligence in
the mishap. The present controversy centers on the
questions of Maritima's negligence and of the application
of Article 587 of the Code of Commerce. The said article
provides:
Art. 587. The ship agent shall also be civilly liable for
indemnities in favor 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 her
equipments and the freight it may have earned during the
voyage.
Under this provision, a shipowner or agent has 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" (Yangco v.
Laserna, et al., 73 Phil. 330, 332). Notwithstanding the
passage of the New Civil Code, Article 587 of the Code of
Commerce is still good law. The reason lies in the peculiar
nature of maritime law which is 94 exclusively real and
hypothecary that operates to limit such liability to the
value of the vessel, or to the insurance thereon, if any
(Yangco v. Laserna, Ibid). As correctly stated by the
appellate court, "(t)his rule is found necessary to offset
against the innumerable hazards and perils of a sea voyage
and to encourage shipbuilding and marine commerce.
(Decision, Rollo, p. 29). Contrary to the petitioners'
supposition, the limited liability doctrine applies not only
44
to the 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
(Yangco v. Laserna, Ibid). It must be stressed at this point
that Article 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, Article 587
does not apply (see Manila Steamship Co., Inc. v.
Abdulhanan, et al., 100 Phil. 32, 38). Such a situation will
be covered by the provisions of the New Civil Code on
Common Carriers. Owing to the nature of their business
and for reasons of public policy, common carriers are
tasked to observe extraordinary diligence in the vigilance
over the goods and for the safety of its passengers (Article
1733, New Civil Code). Further, they are bound to carry
the passengers safely as far as human care and foresight
can provide, using the utmost diligence of very cautious
persons, with a due regard for all the circumstances
(Article 1755, New Civil Code). Whenever death or injury
to a passenger occurs, common carriers are presumed to
have been at fault or to have acted negligently unless they
prove that they observed extraordinary diligence as
prescribed by Articles 1733 and 1755 (Article 1756, New
Civil Code).
Guided by the above legal provisions, We painstakingly
reviewed the records of the case and found imprints of
Maritima's negligence which compel Us to reverse the
conclusion of the appellate court.
Maritima claims that it did not have any information about
typhoon 'Welming' until after the boat was already at sea.
Modem technology belie such contention. The Weather
Bureau is now equipped with modern apparatus which
enables it to detect any incoming atmospheric
disturbances. In his summary report on tropical cyclone
'Welming' which occurred within the Philippine Area of
Responsibility, Dr. Roman L. Kintanar, Weather Bureau
Director, stated that during the periods of November 15,
1967, the Bureau issued a total of seventeen (17) warnings
or advisories of typhoon 'Welming' to shipping companies.
Additionally, he reported that:
By 11:15 a.m. of November lst, or in less than twenty four
hours, the storm intensified into a typhoon. It was by then
located at 8.7 N 137.3 E with sea level pressure of 978
millibars, an eye diameter of about 18.53 kilometers and a
maximum surface wind of 139 kilometers per hour. "As it
moved along in the open sea, it intensified further and by
11.07 a.m. of November 2, when its center was at 103 N
131.4 E, it had attained surface winds of about 240
kilometers per hour. ... (Exh. Z, p. 131, Index of Exhibits, p.
11 5, Emphasis supplied).
Considering the above report and the evidence on record
showing the late departure of the ship at 6:00 p.m.
(instead of the scheduled 2:00 p.m. departure) on
November 2, 1967, We find it highly improbable that the
Weather Bureau had not yet issued any typhoon bulletin
at any time during the day to the shipping companies.
Maritima submitted no convincing evidence to show this
omission. It's evidence showing the Weather Bureau's
forecast of November 3, 1967 is not persuasive. It merely
indicated the weather bulletin of that day. Nowhere could
We find any statement therein from the Weather Bureau
that it had not issued any forecast on November I and 2,
1967 (Exh. 6, Records, p. 257). Significantly, the appellate
court found that the ship's captain through his action
showed prior knowledge of the typhoon. The court said:
Transportation Law - 8th Set
... It cannot be true that he was apprised of the typhoon
only at about 11:00 o'clock the following morning on
November 3, 1967 when the Weather report was
transmitted to him from the Weather Bureau at which
time he plotted its position. For in his radiogram sent to
defendant-appellee's office in Manila as early as 8:07 in
the morning of November 3, 1967 (Exh. D) he states in the
concluding portion 'still observing weather condition.'
thereby implicitly suggesting that he had known even
before departure of the unusual weather condition. ...
(Decision, Rollo, p. 26)
If the captain knew of the typhoon beforehand, it is
inconceivable for Maritima to be totally in the dark of
'Welming.' In allowing the ship to depart late from Manila
despite the typhoon advisories, Maritima displayed lack of
foresight and minimum concern for the safety of its
passengers taking into account the surrounding
circumstances of the case.
While We agree with the appellate court that the captain
was negligent for overloading the ship, We, however, rule
that Maritima shares equally in his negligence. We find
that while M/V Mindoro was already cleared by the
Bureau of Customs and the Coast Guard for departure at
2:00 p.m. the ship's departure was, however, delayed for
four hours. Maritima could not account for the delay
because it neither checked from the captain the reasons
behind the delay nor sent its representative to inquire into
the cause of such delay. It was due to this interim that the
appellate court noted that "(i)ndeed there is a great
probability that unmanifested cargo (such as dump truck,
3 toyota cars, steel bars, and 6,000 beer cases) and
passengers (about 241 more than the authorized 193
passengers) were loaded during the four (4) hour interval"
(Decision, p. 13, Rollo, p. 26). Perchance, a closer
supervision could have prevented the overloading of the
ship. Maritima could have directed the ship's captain to
immediately depart in view of the fact that as of 11:07 in
the morning of November 2, 1967, the typhoon had
already attained surface winds of about 240 kilometers
per hour. As the appellate court stated, '(v)erily, if it were
not for have reached (its) destination and this delay, the
vessel could thereby have avoided the effects of the
storm" (Decision, Rollo p. 26). This conclusion was
buttressed by evidence that another ship, M/V Mangaren,
an interisland vessel, sailed for New Washington, Aklan on
November 2, 1967, ahead of M/V Mindoro and took the
same route as the latter but it arrived safely (Exh. BB-2,
Index of Exhibits, pp. 143-144 and Exh. 4-A, Ibid, p. 254).
Maritima presents evidence of the seaworthy condition of
the ship prior to its departure to prove that it exercised
extraordinary diligence in this case. M/V Mindoro was
drydocked for about a month. Necessary repairs were
made on the ship. Life saving equipment and navigational
instruments were installed.
While indeed it is true that all these things were done on
the vessel, Maritima, however, could not present evidence
that it specifically installed a radar which could have
allowed the vessel to navigate safely for shelter during a
storm. Consequently, the vessel was left at the mercy of
''Welming' in the open sea because although it was
already in the vicinity of the Aklan river, it was unable to
enter the mouth of Aklan River to get into New
Washington, Aklan due to darkness and the Floripon
Lighthouse at the entrance of the Aklan River was not
45
functioning or could not be seen at all (Exh. 3-H, Index of
Exhibits, p. 192-195; see also Exh. 2-A, Ibid, p. 160). Storms
and typhoons are not strange occurrences. In 1967 alone
before 'Welming,' there were about 17 typhoons that hit
the country (Exh. M, Index of Exhibits, p. 115), the latest of
which was typhoon Uring which occurred on October
20-25, which cost so much damage to lives and properties.
With the impending threat of 'Welming,' an important
device such as the radar could have enabled the ship to
pass through the river and to safety.
The foregoing clearly demonstrates that Maritima's lack of
extraordinary diligence coupled with the negligence of the
captain as found by the appellate court were the
proximate causes of the sinking of M/V Mindoro.
Hence, Maritima is liable for the deaths and injury of the
victims. amount of With the above finding, We now come
to the damages due to the petitioners. Ordinarily, We
would remand the case to the trial court for the reception
of evidence. Considering however, that this case has been
pending for almost twenty-three (23) years now and that
since all the evidence had already been presented by both
parties and received by the trial court, We resolve to
decide the corresponding damages due to petitioners (see
Samal v. Court of Appeals, 99 Phil. 230; Del Castillo v.
Jaymalin, L-28256, March 17, 1982, 112 SCRA 629).
In their complaint filed with the Court of First Instance,
petitioners prayed for moral, actual and exemplary
damages, as well as for attorney's fees plus costs.
Under Article 1764 in relation to Article 2206 of the New
Civil Code, the amount of damages for the death of a
passenger caused by the breach of contract by a common
carrier is at least three thousand pesos (P3,000.00). The
prevailing jurisprudence has increased the amount of
P3,000.00 to P30,000.00 (De Lima v. Laguna Tayabas Co.,
L-35697-99, April 15, 1988, 160 SCRA 70). Consequently,
Maritima should pay the civil indemnity of P30,000.00 to
the heirs of each of the victims. For mental anguish
suffered due to the deaths of their relatives, Maritima
should also pay to the heirs the sum of P10,000.00 each as
moral damages.
In addition, it was proven at the trial that at the time of
death, (1) Amparo delos Santos had with her cash in the
sum of P1,000.00 and personal belongings valued at
P500.00; (2) Teresa Pamatian, cash in the sum of P250.00
and personal belongings worth P200.00; and (3) Diego
Salem, cash in the sum of P200.00 and personal
belongings valued at P100.00. Likewise, it was established
that the heirs of Amparo delos Santos and her deceased
children incurred transportation and incidental expenses
in connection with the trial of this case in the amount of
P500.00 while Dominador Salem, son of victim Diego
Salem and nephew of victim Teresa Pamatian spent about
P100.00 for expenses at the trial. With respect to
petitioner Reyes, the evidence shows that at the time of
the disaster, he had in his possession cash in the sum of
P2,900.00 and personal belongings worth P100.00. Further,
due to the disaster, Reyes was unable to work for three
months due to shock and he was earning P9.50 a day or in
a total sum of P855.00. Also, he spent about P100.00 for
court expenses. For such losses and incidental expenses at
the trial of this case, Maritima should pay the aforestated
amounts to the petitioners as actual damages.
Transportation Law - 8th Set 46

Reyes' claim for moral damages cannot be granted

inasmuch as the same is not recoverable in damage action
based on the breach of contract of transportation under
Articles 2219 and 2220 of the New Civil Code except (1)
where the mishap resulted in the death of a passenger and
(2) where it is proved that the carrier was guilty of fraud or
bad faith, even if death does not result (Rex Taxicab Co.,
Inc. v. Bautista, 109 Phil. 712). The exceptions do not apply
in this case since Reyes survived the incident and no
evidence was presented to show that Maritima was guilty
of bad faith. Mere carelessness of the carrier does not per
se constitute or justify an inference of malice or bad faith
on its part (Rex Taxicab Co., Inc. v. Bautista, supra).

Anent the claim for exemplary damages, We are not

inclined to grant the same in the absence of gross or
reckless negligence in this case.

As regards the claim for attorney's fees, the records reveal

that the petitioners engaged the services of a lawyer and
agreed to pay the sum of P 3,000.00 each on a contingent
basis (see TSN'S, July 21, 1971, p. 24; November 3, 1971,
pp. 18 and 29). In view hereof, We find the sum of P
10,000.00 as a reasonable compensation for the legal
services rendered.

ACCORDINGLY, the appealed decision is hereby REVERSED

and judgment is hereby rendered sentencing the private
respondent to pay the following: (1) P30,000.00 as
indemnity for death to the heirs of each of the victims; (2)
P10,000.00 as moral damages to the heirs of each of the
victims; (3) P6,805.00 as actual damages divided among
the petitioners as follows: heirs of Amparo Delos Santos
and her deceased children, P2,000.00; heirs of Teresa
Pamatian, P450.00; heirs of Diego Salem, P400.00; and
Ruben Reyes, P2,955.00; (4) P10,000.00 as attorney's fees;
and (5) the costs.

SO ORDERED.