205. Lorenzo Shipping Corp v.

National Power Corporation

G.R. No. 181683 & 184568 | 7 October 2015 | Leonen, J.
Aggy | Topic: ​Damages - Requisites: alleged & proved with certainty
TLDR: ​MV Vessel Lorcon Luzon, owned by Lorenzo Shipping, rammed into NPC’s Power Barge 104 when
the latter was berthed and stationed at Makar Wharf in GenSan. At the time of the collision, the Lorcon was
under the mandatory pilotage of Captain Yape, while Captain Villarias, as master of the vessel, stayed
beside Yape to repeat the latter’s orders. The collision took place when upon reaching precariously close to
the barge, Yape’s orders to move the vessel backwards were not heeded. NPC filed a complaint for
damages. Lorenzo Shipping argued that it should not be made liable since operational control of the vessel
was yielded to the pilot. RTC absolved Lorenzo Shipping. CA reversed and awarded P878,286.00 as actual
damages. Upon MR of Lorenzo Shipping, CA amended its decision and deleted the award of actual
damages, and instead awarded P300K temperate damages. Lorenzo Shipping assail the award and argued
that temperate damages are only awarded when pecuniary loss is unascertainable because of the nature of
the injury, and NOT in cases where there may be proof adduced to determine the amount but was not done
so. NPC also assailed the amended decision and maintained that they are entitled to actual damages for
having been able to prove its amount through competent evidence.

SC held that Lorenzo Shipping is liable for damages despite the mandatory pilotage of Yape because the
Master of the vessel does not lose control and command of the vessel just because of such pilotage.
Villarias was ultimately remiss of his duties when he did nothing even after the orders of Yape became
unheeded. Hence, Lorenzo Shipping, as Villarias’ employer, is liable for damages. The award of temperate
damages is proper since NPC was not able to prove the actual amount of loss, which is necessary before
actual damages may be awarded. Further, SC debunked Lorenzo Shipping’s argument that temperate is
only available in cases where loss is unascertainable even through evidence. Temperate damages will be
awarded so long as the loss is not ascertained, regardless of whether proof could be adduced to determine
the actual amount of loss.

Doctrine:​ (see holding)

This is a consolidation of both petitions for review of CA’s decision of Lorenzo Shipping Corp & NPC. So
technically they’re both petitioners and respondents of each other.
GR181683​: Lorenzo Shipping’s petition; ​GR184568​: NPC’s petition

Facts:
1. Power Barge 104 (owned by National Power Corp) was berthed and stationed at Makar Wharf in
General Santos City when MV Lorcon Luzon (owned & operated by Lorenzo Shipping) hit it.
2. At the time of the incident, ​MV Lorcon Luzon’s Master was Captain Villarias & it was ​under the
pilotage of Captain Yape​. (​it’s mandatory to yield navigational control to a Harbor Pilot while docking​)
a. As MV Lorcon Luzon was docking, Yape ordered the vessel to proceed “slow ahead” (​speed of
about 1 knot​). As it moved closer to the dock, he gave the order “dead slow ahead” (​making the
vessel move even slower​). He then ordered the engine to be stopped.
b. As the vessel was moving “precariously close” to the wharf, Yape ordered the vessel to go “slow
astern” (​astern = backwards​) and subsequently “full astern.” Despite his orders, the engine
failed to timely respond. Thus, Yape ordered the dropping of the anchor. However, MV Lorcon
still rammed into Power Barge 104.
c. Villarias testified that despite Yape’s pilotage, he ​remained beside him at all times as he had to
repeat Yape’s orders​. Also, he stated that 6 minutes had passed before he realized that there
was an engine failure when he observed that Yape’s orders to move astern were not heeded.
 3. Both Nelson Homena (Plant Manager of the Power Barge) and Villarias filed their separate Marine
Protests before the Board of Marine Inquiry. Yape filed a Marine Accident Report. Board of Marine
Inquiry conducted joint hearings.
4. To forestall prescription, NPC filed a complaint for damages before RTC QC alleging that the damage
was due to the ramming of MV Lorcon to Power Barge and that in addition to the physical damage
incurred by the barge, NPC suffered generation losses as a result of the tripping of the line and the
failure of the Power Barge to generate electricity immediately after the accident.
a. Lorenzo Shipping filed a motion to dismiss for lack of jurisdiction. They alleged that it should be
heard and settled by the Board of Marine Inquiry/PH Coast Guard instead. RTC denied motion.
b. Lorenzo Shipping filed its answer and claimed that:
i. the vessel was commandeered by official harbor pilot Yape to whom it was “mandatory
to yield operational control” thus any liability should be attributed to the pilot and NOT to
the company
ii. Makar Wharf is a berthing place only for self-propelled vessel & the power barge in NOT
self-propelled, hence, it assumed the risk of such ramming because of its improper
presence
iii. NPC’s action was barred by laches as 4 years had already lapsed before it filed the
complaint.
5. RTC ABSOLVED LORENZO SHIPPING OF LIABILITY. It held that no malfunctioning was recorded
and that Lorenzo Shipping was sued in its capacity as employer, hence, any liability it would have
incurred is merely subsidiary. Nevertheless, Lorenzo Shipping exercised due diligence in its selection
and supervision of Villarias.
6. CA REVERSED​. It ordered Lorenzo Shipping to pay P878,286.00 as actual damages and P50,000.00
as attorney’s fees and expenses of litigation. It held that Villarias was remiss in his duties as he did
nothing when Yape’s orders to go astern appeared to not have been heeded.
a. Upon MR of Lorenzo Shipping, CA amended its decision and noted that the ​amount of actual
damages was NOT proven by NPC, hence, it awarded P300,000 temperate damages in
lieu of the actual damages.
7. Both Lorenzo Shipping and NPC filed their own petitions for review on certiorari with SC, and the court
consolidated them.
a. LORENZO SHIPPING: reiterated its position (​fact 4.b​) and assailed the award of ​temperate
damages arguing that it ​may only be awarded in cases where the amount of pecuniary loss
because of its nature cannot be ascertained​. Here, NPC is well in a position to adduce proof of
the exact amount of damage but merely failed to do so.
b. NPC: It maintained that it was able to show by “competent testimonial and documentary
evidence” that it must be compensated for actual damages of P878,286.00 in view of the
testimony of Nelson Homena and NPC disbursement voucher (​these pieces of evidence will be
discussed in detail sa holding​)

Issue/s and Holding:

So first question is W/N Lorenzo shipping is liable and ​YES LIABLE siya, so now we answer what type of
damages must be awarded to NPC? ​Regarding Lorenzo Shipping’s liability, refer to ​second issue.

[FOCUS] W/N NPC should be awarded temperate damages or actual damages? - ​Only temperate
damages.
 ● NPC failed to establish the precise amount of pecuniary loss it suffered. Hence, it is entitled only to
temperate damages.
○ ART 2199. ​“Except as provided by law or by stipulation, one is entitled to an adequate
compensation ​only for such pecuniary loss suffered by him as he has duly proved. Such
compensation is referred to as actual or compensatory damages.”
● To prove the amount of loss, NPC presented Nelson Homena’s testimony, Total Incidental Cost for
Drydock and Repair prepared by PHILSECO (PH Shipyard & Engineering Corp), and NPC
Disbursement Voucher for proof of payment to PHILSECO for repairs.
○ Nelson Homena’s testimony: all he indicated was how he and a certain Mr. Neri estimated the
cost of damage to be about P1M
○ Disbursement Voucher: attests to the expenses paid to PHILSECO, but it was silent on exact
cost paid for the repair of Power Barge 104.
○ Total Incidental Cost of PHILSECO​: RTC rendered it inadmissible for not having been
identified nor authenticated by any witness. (​SC held that it was a private document kasi so it
must first be authenticated, otherwise, it cannot be admitted as evidence pursuant to Rules of
Court so since they failed to authenticate it RTC held it inadmissible THUS, it cannot be used as
basis for computing the amount of loss, sayang i think it would have been good proof​)
● [​DOCTRINE​] Amount of loss must not only be capable of proof but must actually be proven with a
reasonable degree of certainty, premised upon competent proof or best evidence. The claimant is
duty-bound to point out specific facts that afford basis for measuring whatever compensatory damages
are borne. Court cannot rely merely on speculations, conjectures, or hearsay or uncorroborated
testimony.
● Since NPC failed to establish actual amount of loss, CA awarded temperate damages. ​Lorenzo
Shipping assailed this and argued that such kind of damages can only be awarded in cases where
pecuniary loss is unascertainable because of the nature of the injury.
● ART 2224​. ​Temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered ​when the court nds that some pecuniary loss has
been suffered but its amount can not, from the nature of the case, be provided with
certainty​.
○ Lorenzo Shipping relied on the phrase “from the nature of the case” when it maintained its
position. ​HOWEVER, SC held that such construction is erroneous and unduly restrictive.
Previous jurisprudence has already settled that ​ART 2224 is clear that temperate damages
may be awarded even in instances where pecuniary loss could theoretically have been
proved with certainty.
○ So basically temperate damages will be awarded so long as the loss is not provided with
certainty regardless of whether plaintiff could have provided proof to determine actual amount or
not. So Lorenzo Shipping is WRONG in saying that only in cases when the plaintiff cannot prove
amount of loss even with evidence will temperate damages be awarded.

W/N Lorenzo Shipping is liable for damages? ​YES.

ON THE MANDATORY PILOTAGE
● A Master’s designation as commander of a vessel is long-settled. He performs 3 distinct roles: (1)
general agent of shipowner, (2) commander and technical director of the vessel, and (3) he is a
representative of the country under whose flag he navigates. He is committed with the governance,
care, and management of the vessel.
● Notwithstanding this, there are recognized instances when control of a vessel is yielded to a pilot:
 ○ Sec. 8 of PPA Administrative Order 03-85: For ​docking and undocking at any pier/wharf​,
every vessel engaged in coastwise and foreign trade shall be under compulsory pilotage.
However, ​Ship Captains may pilot their vessels ​xxx ​provided they meet/comply with the
following minimum classifications: (1) properly licensed as a harbor pilot, (2) have been a
master of an inter island vessel for at least 3 years, and (3) certified by a government physician
to be physically and mentally fit.
○ Sec. 11, PPA Admin Order​: Harbor Pilots are responsible for damage caused to the vessel or to
life and property at ports due to his negligence or fault. ​BUT 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​.
● Hence, if the master observes that the pilot is incompetent or physically incapable, then it is his duty to
refuse to permit the pilot to act. If no such reasons exist, master is justified in relying upon the pilot but
NOT​ blindly. Master must exercise a degree of vigilance commensurate with the circumstances.
● IN THE CASE AT BAR, ​Villarias was remiss in his duties. He testified that he only realized that there
was an engine failure after the lapse of 6 minutes. Lorenzo Shipping tried to justify this by saying that
the captain did not have enough time to deliberate and examine the circumstances for him to make a
judgment that the pilot had given a wrong command.
○ 6 minutes cannot be characterized as so quick and fleeting that it deprived Villarias the time
needed to arrest the momentum of the vessel. An entire song could have played in Villarias’
head within those 6 minutes ​(lol​)
○ It was only reasonable for Villarias to remain vigilant and support Yape’s orders and take
evasive and counter measures should Yape’s attempts be ineffectual. Even just a minute
without any response from the concerned department (​department that was supposed to
execute Yape’s orders​) could have alarmed him.
○ For 6 minutes, he simply did nothing when he should have been on his toes, keen, and ready to
make decisions.
○ HENCE, ​since Villarias is negligent. Lorenzo Shipping, as his employer, is liable for damages.

ON BARGE’S PRESENCE IN THE WHARF

● Lorenzo Shipping did not have any basis for arguing that Power Barge’s presence in the wharf was
improper for not being self-propelled. No evidence whatsoever was presented to support the contention
that only self-propelled vessels are allowed in the wharf.
● Further, there is a ​presumption of fault against a moving vessel that strikes a stationary object.
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.

Ruling:​ Consolidated petitions are ​DENIED.​ CA is affirmed.