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LORENZO SHIPPING CORPORATION v. NATIONAL POWER CORPORATION

FACTS:

This case involves the collision between MV Lorcon Luzon, owned by Lorenzo Shipping Corporation, and Power Barge 104, owned by National Power Corporation. The incident occurred while MV Lorcon Luzon was attempting to dock at the Makar Wharf and was being piloted by Captain Yape. National Power Corporation filed a Complaint for Damages against Lorenzo Shipping, alleging physical damage to Power Barge 104 and generation losses. The Regional Trial Court initially absolved Lorenzo Shipping of liability, but the Court of Appeals reversed the decision, holding Lorenzo Shipping liable for the damages. Both parties filed petitions for review before the Supreme Court. The main issue is whether Lorenzo Shipping is liable for the damages and what damages may be awarded to National Power Corporation.

The case explores the roles and responsibilities of a ship captain and a harbor pilot. The ship captain is responsible for the operation, preservation, and protection of the vessel, passengers, crew, and cargo. The captain also possesses the authority to sign bills of lading, carry goods, and enter into contracts related to the vessel. However, in certain situations, control of the vessel is handed over to a pilot. Compulsory pilotage is required for entry into a harbor, passage through certain areas, and docking at a pier/wharf. Exceptions to compulsory pilotage apply to specific circumstances such as undocking at certain ports or vessels authorized by BOT for daily ferry service.

The responsibility of a harbor pilot, as stated in PPA Administrative Order No. 03-85, includes directing the vessel from the time the pilot assumes duty until the vessel is safely anchored or berthed. The pilot's responsibility ceases if the vessel's master neglects or refuses to follow the pilot's orders. The order also addresses liability for damage, attributing responsibility to the harbor pilot for negligent or faulty actions and to the registered owner of the vessel for damages caused by the master's fault or negligence.

Previous jurisprudence clarifies the relationship between harbor pilots, masters, and crew members. The Supreme Court ruled that when a compulsory pilot is in control of a ship, the master becomes subordinate to the pilot. In this case, the officers and crew of the MV Lorcon Luzon are responsible for implementing the pilot's directives, and any failure to follow those instructions absolves the harbor pilots of accountability.

These facts form the basis of the consolidated Petitions for Review on Certiorari filed by Lorenzo Shipping Corporation and National Power Corporation.

ISSUES:

  1. Whether or not the Harbor Pilot, Captain Yape, can be held liable for the damage caused to the power barge due to his negligence or fault.

  2. Whether or not the Master of the vessel, Captain Villarias, can be held liable for the damage caused to the power barge.

  3. Whether Captain Villarias and his crew had enough time to arrest the momentum of the vessel.

  4. Whether the crew's response to Captain Villarias' voice would cause confusion or paralysis.

  5. Whether National Power Corporation (NPC) is entitled to actual damages in the amount of P876,826.00.

  6. Whether or not Exhibit "F" is admissible as evidence to establish the extent of National Power Corporation's pecuniary loss.

  7. Whether or not the testimony of Nelson Homena and NPC Disbursement Voucher No. 093-121304 are sufficient evidence to prove the pecuniary loss.

  8. Whether or not the decision of the Court of Appeals should be affirmed.

RULING:

  1. Yes, the Harbor Pilot, Captain Yape, can be held liable for the damage caused to the power barge due to his negligence or fault. Under Section 11 of PPA Administrative Order No. 03-85, a Harbor Pilot providing service to a vessel shall be responsible for any damage caused to the vessel or to life and property at ports due to his negligence or fault.

  2. Yes, the Master of the vessel, Captain Villarias, can also be held liable for the damage caused to the power barge. The Master retains overall command of the vessel even when a pilot is present, and can countermand or overrule the orders or commands of the Harbor Pilot. Thus, if the Master observes or should have observed that the pilot is navigating the vessel in a dangerous manner and has the opportunity to intervene and save the vessel, the Master should act accordingly. The liability of the Master or owner of the vessel shall be determined by competent authority in appropriate proceedings.

  3. The Court held that six (6) minutes was enough time for Captain Villarias and his crew to take measures to remedy the situation. The vessel had been moving fast and was about to collide with the docks, so it was reasonable for Captain Villarias, as the Master of the vessel, to remain vigilant and support Captain Yape's orders. The Court rejected the argument that the crew needed more time to react.

  4. The Court found it ridiculous to think that simply hearing Captain Villarias' voice would throw the crew into confusion or paralysis. The crew should have been trained to follow the Master's commands and was already listening to both Captain Villarias and Captain Yape's voices. The failure of Captain Villarias to timely act despite the crew's readiness to heed his command highlighted his negligence.

  5. The Court of Appeals denied the award of actual damages to NPC due to fatal flaws in the evidence presented. The "Total Incidental Cost for Drydock and Repair," which listed the actual damages sustained by Power Barge 104, was denied admission for lack of identification and authentication. The testimony of Nelson Homena, who estimated the cost of damage to be around P1,000,000.00, was deemed insufficient. And the disbursement voucher presented by NPC was silent on the exact cost of repairing Power Barge 104. NPC failed to rebut these flaws and did not comply with the requirements for admitting private documents as evidence. Therefore, the Court denied the award of actual damages to NPC.

  6. Exhibit "F" was ruled to be inadmissible for failure to comply with Rule 132, Section 20, thus, it failed the standard of competency. Therefore, it cannot be relied upon to establish the extent of National Power Corporation's pecuniary loss.

  7. The testimony of Nelson Homena, which is only an estimate, does not suffice as proof of actual pecuniary loss. NPC Disbursement Voucher No. 093-121304 only attests to the release of funds to PHILSECO without specifying a transaction. Thus, these pieces of evidence fall short of the standard required for proving pecuniary loss.

  8. The decision of the Court of Appeals is affirmed.

PRINCIPLES:

  • Harbor Pilots are liable for damage caused to a vessel or to life and property at ports due to their negligence or fault.

  • The Master of a vessel retains overall command and can countermand or overrule the orders or commands of a Harbor Pilot.

  • The Master of a vessel must exercise a degree of vigilance commensurate with the circumstances.

  • A moving vessel that strikes a stationary object is presumed to be at fault. The burden is on the moving vessel to prove that it was without fault or that the collision was caused by the fault of the stationary object or was the result of inevitable accident. The moving vessel must show that it did all that reasonable care required. In the absence of sufficient proof in rebuttal, the presumption of fault attaches to the moving vessel.

  • The Master of a vessel should be on his toes and ready to make decisions in a split second, especially in a precarious situation. The failure to timely act and take measures to remedy a dangerous situation can be considered negligence.

  • Compensation by way of actual damages is awarded only for pecuniary loss proven with a reasonable degree of certainty. (Article 2199 of the Civil Code)

  • Actual damages must be proved with specific facts and competent evidence. Speculations, conjectures, and uncorroborated testimony are insufficient.

  • Private documents offered as authentic evidence must be duly identified and authenticated in accordance with the Revised Rules on Evidence. (Rule 132, Section 30)

  • Evidence must have relevance and competency to be admissible.

  • The weight accorded to evidence is evaluated after it has been admitted.

  • When pecuniary loss has been suffered but its exact amount cannot be proven with certainty, temperate damages may be awarded.

  • Temperate damages must be reasonable under the circumstances.

  • Temperate damages may be awarded even if pecuniary loss could theoretically have been proved with certainty.

  • Monetary awards for damages shall earn interest at the legal rate of 6% per annum from the date of the finality of the judgment until fully paid.