FACTS:

This case involves a vessel collision between M/V Romeo, owned by Candano Shipping Lines, Inc., and M/V Aleson Carrier 5, owned by Aleson Shipping Lines, Inc. On July 14, 2002, M/V Romeo collided with M/V Aleson while on its way out of the pier in Apo channel, causing M/V Romeo to sink and resulting in the loss of the cargo. Apo Cement demanded payment from both Candano Shipping and Aleson Shipping, but they refused. CGU Insurance then filed a case against them in the Regional Trial Court, seeking damages. Aleson Shipping denied liability and claimed that only Candano Shipping should be held liable. Candano Shipping argued that Aleson Shipping was at fault for the collision. The trial court held Aleson Shipping solely liable for the collision and ordered it to pay damages to CGU Insurance. The complaint against Candano Shipping was dismissed. The Court of Appeals affirmed the decision of the trial court. Aleson Shipping filed a motion for reconsideration, which was denied. Aleson Shipping then filed a petition claiming that the lower courts erred in applying the law on common carriers and raising questions of fact. However, the Supreme Court ruled that the issues raised required a determination of factual matters and the petition failed to fall under any of the exceptions to the general rule. Therefore, the decision of the Court of Appeals affirming the trial court's decision holding Aleson Shipping liable for the collision and ordering it to pay damages to CGU Insurance stands.

ISSUES:

1. Whether or not the petition may raise questions of fact;

2. Whether or not the testimonies of respondents' witnesses are inadmissible for being hearsay;

3. Whether or not there is cause of action against the petitioner, including the sub-issues of whether the lower courts erred in applying the civil law provisions on common carriers and whether the petitioner exercised the degree of diligence required.

4. Whether the testimonies of witnesses who did not personally witness the collision are admissible under the res gestae rule.

5. Whether the petitioner can be held liable for damages as a common carrier.

6. What is the applicable law in resolving complaints for damages in cases involving maritime collision, based on contract of carriage or tort?

7. Whether the petitioner, Candano Shipping Lines, Inc., exercised ordinary diligence in commanding their vessel, M/V Aleson, and is therefore liable for damages caused by the said vessel.

8. The issue of this case is whether the trial and appellate courts overlooked or misconstrued significant evidence that would alter the resolution of the case.

RULING:

1. As a rule, only questions of law may be raised in a Rule 45 petition. This Court is not a trier of facts and will not delve into factual questions already settled by the lower courts unless the petition falls under the exceptions. In this case, the resolution of the petition requires a re-evaluation of the lower courts' factual findings, and the petitioner fails to demonstrate that the petition falls under the exceptions. Therefore, the lower courts' factual findings must be affirmed.

2. Testimonies that are hearsay are generally inadmissible as evidence. However, there are exceptions, including res gestae. To be considered part of res gestae, an utterance must be made before the declarant had time to contrive or devise, must concern the occurrence in question and its immediate attending circumstances, and must be spontaneous and free from contrivance or fabrication. In this case, the testimonies of respondents' witnesses fall under the exception of res gestae, and thus, are admissible.

3. The cause of action against the petitioner will not prosper. The lower courts correctly applied the civil law provisions on common carriers and found the petitioner at fault for the collision. The petitioner failed to exercise the degree of diligence required, and therefore, is liable for the damages caused by the collision.

4. The testimonies of witnesses who did not personally witness the collision are admissible under the res gestae rule. The requirements of res gestae were satisfied as the collision of the vessels and sinking of M/V Romeo is a startling occurrence, the statements made are with respect to the collision, and the statements were made immediately after the incident. The spontaneity of the statements of the witnesses satisfies the rule on res gestae, making their testimonies admissible.

5. The petitioner can be held liable for damages as a common carrier. Article 1759 of the Civil Code imposes liability on common carriers for the death or injuries to passengers through the negligence or willful acts of the carrier's employees, even if they acted beyond the scope of their authority or in violation of the carrier's orders. The liability of the common carrier does not cease upon proof of exercise of diligence in the selection and supervision of their employees. Moreover, common carriers are bound to observe extraordinary diligence in the vigilance over the goods they transport. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the carrier's possession until they are delivered to the consignee. The carrier is presumed to be at fault or to have acted negligently in cases where cargo is lost, destroyed, or deteriorated, unless they can prove that the loss, destruction, or deterioration was caused by a natural disaster or calamity or that they observed extraordinary diligence.

6. f the action is based on contract of carriage, the provisions of the Civil Code on common carrier are applicable. However, if the cause of action is based on tort, the provisions of the Code of Commerce on vessel collision apply.

7. The Supreme Court finds that the petitioner failed to exercise ordinary diligence and is therefore liable for damages caused by their vessel, M/V Aleson. The lower courts' ruling is affirmed.

8. The Supreme Court denied the petition for review and affirmed the Decision and Resolution of the Court of Appeals. The Court held that the findings of the trial court, especially when affirmed by the appellate court, deserve great respect and are binding. Upon review of the evidence and law, the Court did not find any compelling reason to disregard the factual findings of the lower courts.

PRINCIPLES:

• Only questions of law may be raised in a Rule 45 petition.

• Testimonies that are hearsay are generally inadmissible as evidence but may be admissible under the exception of res gestae.

• Res gestae refers to circumstances that are the undesigned incidents of a particular litigated act and are admissible when illustrative of such act.

• To be admissible under res gestae, an utterance must be spontaneous, made before the declarant had time to contrive or devise, and must concern the occurrence in question and its immediate attending circumstances.

• A common carrier is required to exercise the degree of diligence required by law in transporting passengers or goods.

• Res gestae is an exception to the hearsay rule and allows testimonial evidence on matters not personally witnessed by the witness but relayed by a declarant. The requirements for admissibility are that the occurrence must be startling, the statements made must relate to the occurrence, and the statements must be made immediately after the incident.

• Common carriers are liable for damages for the death or injuries to passengers through the negligence or willful acts of the carrier's employees, even if they acted beyond their authority or violated the carrier's orders. Their liability does not cease upon proof of diligence in the selection and supervision of their employees.

• Common carriers are bound to observe extraordinary diligence in the vigilance over the goods they transport, from the time the goods are unconditionally placed in their possession until they are delivered to the consignee. They are presumed to be at fault or to have acted negligently in cases where cargo is lost, destroyed, or deteriorated, unless they can prove that the loss, destruction, or deterioration was caused by a natural disaster or calamity or that they observed extraordinary diligence.

• In cases where cargos are lost, destroyed, or deteriorated, an action based on the contract of carriage may be filed against the shipowner of the vessel based on Civil Code provisions on common carrier.

• The shipowner, as a common carrier, is required to observe extraordinary diligence in the transportation of goods under Article 1734 of the Civil Code.

• If the cause of action is based on maritime collision, the provisions of the Code of Commerce on vessel collision apply.

• In cases of damages resulting from maritime collision, if the collision is imputable to both vessels, they are solidarily liable for the damages under Article 827 of the Code of Commerce.

• The agent of the shipowner is also liable to the shippers and owners of the cargo if the obligation arises from a tortious act, without prejudice to the agent's rights against the owner of the ship.

• The applicable law in resolving complaints for damages depends on the complainant's cause of action, whether it is based on contract of carriage or tort.

• A vessel must exercise ordinary diligence to avoid liability for damages. Ordinary diligence is the level of diligence which an ordinary prudent man would exercise with regard to his own property.

• The captain of a vessel is required to be on deck and take command upon entering and leaving ports.

• A vessel must send sound signals to other vessels in accordance with the rules of navigation.

• The lower court's assessment of witness testimony is accorded the highest respect and is generally not disturbed by the Supreme Court unless there is a clear misappreciation of evidence.

• Findings of the trial court, especially when affirmed by the appellate court, deserve great respect and are binding upon the Supreme Court.

• The Supreme Court will not overturn the factual findings of the lower courts unless there is a showing that they overlooked or misconstrued significant evidence that would alter the resolution of the case.