Title
Sulpicio Lines, Inc. vs. Court of Appeals
Case
G.R. No. 93291
Decision Date
Mar 29, 1999
Collision between M/V Don Sulpicio and F/B Aquarius 'G' in 1978; Supreme Court upheld negligence ruling against Sulpicio Lines, affirmed damages with modifications.
collision
fishing boats
sinking
A

Case Summary (G.R. No. 93291)

Factual Background and Trial Theory

The controversy stemmed from a complaint for damages filed by Aquarius Fishing Co., Inc. against Sulpicio Lines, Inc. and Cresencio G. Castaneda after a collision occurred between M/V Don Sulpicio and a fishing vessel identified in the record as F/B Aquarius ’G’. The trial court was tasked to determine which vessel’s negligence caused the collision. The trial court noted that, at about four miles away, M/V Don Sulpicio had sighted two fishing boats, identified as F/B Aquarius ’C’ and F/B Aquarius ’G’, though the defendants insisted the sighted vessel was F/B Aquarius ’B’. Evidence showed that the fishing boats had a speed of approximately seven and a half to eight knots per hour, while M/V Don Sulpicio was running at around fifteen and a half knots per hour. The weather was clear and visibility was good. The plaintiff’s theory was that the fishing boats continued at their speed and were rammed by M/V Don Sulpicio. The defendants’ theory was that the collision resulted from the negligence of the men of the fishing vessel, which allegedly had no lookout and, being ahead, should have given way.

The Trial Court’s Decision on Liability and Identity of the Sunk Vessel

On May 31, 1986, the Regional Trial Court rendered judgment in favor of the plaintiff. The trial court rejected the defendants’ argument that the following vessel bore no fault merely because the overtaken vessel had no lookout and had not given way. The trial court held that the faster and larger passenger vessel, M/V Don Sulpicio, had an incumbent duty to see to it that its direction of travel was clear, especially given the clear weather and visibility and the distance at which the vessels were sighted. The court found the evidence “abundant” to show negligence on the part of the master of the defendants and held the defendants responsible for the damages suffered by F/B Aquarius ’G’. It also resolved the alleged misidentification by finding that the fishing vessel that sunk was F/B Aquarius ’G’, and not F/B Aquarius ’B’. On damages, the trial court awarded: P564,448.80 as actual loss of F/B Aquarius ’G’ including its articles and provisions; P10,000.00 per month as deprivation of use and services from the date of the accident; P10,000.00 for actual expenses and costs of litigation; P10,000.00 as exemplary damages; attorney’s fees equivalent to 15% of the total claim plus P300.00 per court appearance; and legal rate of interest on all amounts from November 18, 1978 until full payment. The counterclaim was dismissed.

Issues Raised on Appeal and Petition for Review

The defendants appealed to the Court of Appeals, assigning seven errors, which the appellate court treated as two pivotal issues. The first was whether the trial court erred in disregarding the maritime “rule of the road” in determining which vessel was negligent and liable, given petitioners’ assertion that M/V Don Sulpicio complied with the applicable provisions while F/B Aquarius ’G’ did not. The second concerned whether the trial court erred in awarding damages, attorney’s fees, litigation costs, legal interest, and the manner and period for the computation of legal interest.

Before the Supreme Court, petitioners maintained that the lower courts erred by: (a) exonerating F/B Aquarius ’B’ and its master despite an alleged admission that they had no lookout; (b) disregarding the “rules of the road” that, in petitioners’ view, imposed the burden on the fishing vessel in a crossing situation; (c) imputing negligence to M/V Don Sulpicio despite its compliance with rules cited as Rules 19 and 21; and (d) awarding damages and the incidentals, including attorney’s fees and interest. Petitioners argued that Rule 29 of the Rules of the Road required a lookout for all vessels without exception and that the collision happened in a crossing situation governed by Rules 19, 21, 22, and 23. They further attacked the actual loss award as speculative because it allegedly lacked a valuation appraisal and was based on invoices and receipts drawn from years prior to the collision.

Respondent’s Position and Maritime Fault Assessment

Aquarius Fishing Co., Inc. opposed the petition and defended the factual and legal findings below. Respondent asserted that even if the petitioners’ witnesses could be treated as lookouts for M/V Don Sulpicio, their negligence was clearer because they allegedly could not determine the risk of collision, did not slacken speed, did not give warning signals, and did not change course to avoid the collision. Respondent also invoked a technical assessment attributed to the Coast Guard Judge Advocate, which was quoted in the record. That assessment stated that M/V Don Sulpicio was the overtaking vessel and, under the Rules on the Road, had the duty to take necessary actions to keep clear of the overtaken vessel; it allegedly did not alter course to reduce speed, was at close range without giving warning signals, and the absence of a lookout on the fishing vessel did not excuse M/V Don Sulpicio from observing its duty to keep clear, given that there was sufficient room to avoid the collision. Respondent also disputed the ownership and identification of the vessel F/B Aquarius ’B’, asserting that the vessel owned at the time was Aquarius ’G’, and that the correct identification of the sunk vessel was critical to the allocation of liability.

Supreme Court Treatment of Factual Findings and Negligence

The Supreme Court treated the petition largely as an attempt to re-litigate facts. It reiterated the settled doctrine that findings of the trial court, as affirmed by the Court of Appeals, are binding and will not be disturbed unless the trial court overlooked or ignored facts or circumstances of sufficient weight to alter the outcome. The Court emphasized that where both courts’ findings coincide, the assessment of credibility and the evaluation of evidence were not subject to re-examination in a Rule 45 petition.

On the negligence issue, the Supreme Court reviewed the key factual elements found by the trial court and affirmed by the appellate court. It noted that M/V Don Sulpicio was traveling at approximately fifteen and a half knots per hour, while F/B Aquarius ’G’ maintained a speed of about seven and a half knots per hour, and that visibility was clear. It further referenced that M/V Don Sulpicio first sighted F/B Aquarius ’G’ when the distance was roughly four miles and that the passenger vessel maintained its speed at about sixteen knots, changing course only about two minutes before the collision. Whether the collision involved a crossing situation was treated by the Court of Appeals as immaterial because the duty to keep out of the way remained even if the overtaking vessel could not determine with certainty whether it was forward of or abaft the other vessel by more than two points, in reliance on Rule 24-C of the Regulations for Preventing Collisions at Sea. The Supreme Court adopted this framing, holding that M/V Don Sulpicio bore responsibility because it was in a better position to avoid the collision. It was expected to blow its horn or give warning signals to apprise the other vessel of the intention to overtake.

The Supreme Court also addressed petitioners’ lookout defense. It held that even assuming F/B Aquarius ’G’ had no lookout, that omission did not suffice to exculpate Sulpicio Lines from liability because M/V Don Sulpicio had an independent duty to keep clear during the collision. The Court rejected petitioners’ effort to characterize M/V Don Sulpicio as a privileged vessel whose alleged portside position permitted it to maintain course and speed irrespective of danger. It ruled that when M/V Don Sulpicio overtook F/B Aquarius ’G’, it was duty bound during the collision to slacken speed and keep away, which it failed to do. It likewise held that petitioners’ insistence that F/B Aquarius ’G’ was the burdened vessel that should have kept out of the way of M/V Don Sulpicio was not supported by the facts as found below.

Assessment of Damages: Actual Loss, Deprivation of Use, Attorney’s Fees, Interest, and Exemplary Damages

As to damages, the Supreme Court sustained the award of actual loss of P564,448.80. It rejected petitioners’ claims that the award was exaggerated and speculative where petitioners did not controvert the receipts and invoices used as the basis for the private respondent’s accounting entries related to the construction and equipment of the vessel. The Court held that the respondent had amply established compensatory damages.

On attorney’s fees and interest, the Supreme Court held that attorney’s fees equivalent to 15% of the total amount sued upon were proper in view of the circumstances showing petitioners’ gross and evident bad faith in refusing to pay a valid claim, which compelled the respondent to litigate. It further held that payment of legal interest was warranted, but it corrected the computation point for legal interest. It held that interest should be computed from November 18, 1978, the time of collision and d

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