G.R. No.

L-30741 January 30, 1930

TOMAS BERNAL and FORTUNATA ENVERSO, plaintiffs-appellants,

vs.
J. V. HOUSE and TACLOBAN ELECTRIC and ICE PLANT, LTD., defendants-appellee.

Kapunan and Kapunan for appellants.

Camus and Delgado for appellees.

MALCOLM, J.:

The parents of the five-year old child, Purificacion Bernal, appeal from a judgment of the Court of First Instance of Leyte, which denied
them P15,000 damages from J.V. House and the Tacloban Electric & Ice Plant, Ltd., for the death of the child as a consequence of
burns alleged to have been caused by the fault and negligence of the defendants.

The salient facts as found by the trial judge are the following:

On the evening of April 10, 1925, the procession of Holy Friday was held in Tacloban, Leyte. Fortunata Enverso with her daughter
Purificacion Bernal came from another municipality to attend the religious celebration. After the procession was over, the woman and
her daughter, accompanied by two other persons by the names of Fausto and Elias, passed along a public street named Gran Capitan.
The little girl was allowed to get a short distance in advance of her mother and her friends. When in front of the offices of the Tacloban
Electric & Ice Plant, Ltd., and automobile appeared from the opposite direction which so frightened the child that she turned to run, with
the result that she fell into the street gutter. At that time there was hot water in this gutter or ditch coming from the Electric Ice Plant of
J.V. House. When the mother and her companions reached the child, they found her face downward in the hot water. Her clothes were
immediately removed and, then covered with a garment, the girl was taken to the provincial hospital. There she was attended by the
resident physician, Dr. Victoriano A. Benitez. Despite his efforts, the child died that same night at 11:40 o'clock.

Dr. Benitez, who, of course, was in a better position than any one to know the cause of the death, and who had no reason to depart
from the true facts, certified that the cause of death was "Burns, 3rd Degree, whole Body", and that the contributory causes were
"Congestion of the Brain and visceras of the chest & abdomen". The same physician in his general record in the Leyte Hospital for this
patient, under diagnosis in full, stated: "Burned 3rd Degree, whole body". The treatment record of the attending nurse was much to the
same effect.

The defense was that the hot water was permitted to flow down the side of the street Gran Captain with the knowledge and consent of
the authorities; that the cause of death was other than the hot water; and that in the death the plaintiffs contributed by their own fault
and negligence. The trial judge, however, after examination of the evidence presented by the defendants, failed to sustain their theory
of the case, except as to the last mentioned special defense. We are shown no good reason for the departing from the conclusion of the
trial judge to the effect that the sudden death of the child Purification Bernal was due principally to the nervous shock and organic
calefaction produced by the extensive burns from the hot water. "The danger from burns is proportional rather to the extent of surface
involved than to the depth of the burn". (Wharton & Stille's Medical Jurisprudence, vol. 3, p. 263). The same authority continues. "Burns
of the first degree, covering two-thirds of the body surface, are rarely recovered from. . . . Children seem especially susceptible to the
effect of burns." (Pp. 263, 264).

Although the trial judge made the findings of fact hereinbefore outlined, he nevertheless was led to order the dismissal of the action
because of the contributory negligence of the plaintiffs. It is from this point that a majority of the court depart from the stand taken by the
trial judge. The mother and her child had a perfect right to be on the principal street of Tacloban, Leyte, on the evening when the
religious procession was held. There was nothing abnormal in allowing the child to run along a few paces in advance of the mother. No
one could foresee the coincidence of an automobile appearing and of a frightened child running and falling into a ditch filled with hot
water. The doctrines announced in the much debated case of Rakes vs. Atlantic, Gulf and Pacific Co. ([1907], 7 Phil., 359), still rule.
Article 1902 of the Civil Code must again be enforced. The contributory negligence of the child and her mother, if any, does not operate
as a bar to recovery, but in its strictest sense could only result in reduction of the damages.

Having reached the conclusion that liability exists, we next turn to discover who can recover damages for the obligation, and against
whom the action will lie. The plaintiffs are Tomas Bernal and Fortunata Enverso. The latter was the mother of Purificacion Bernal and
the former was the natural father, who had never legally recognized his child. The daughter lived with the mother, and presumably was
supported by her. Under these facts, recovery should be permitted the mother but not the father. As to the defendants, they are J.V.
House and the Tacloban Electric & Ice Plant, Ltd., J.V. House was granted a franchise by Act No. 2700 of the Philippine Legislature
approved on March 9, 1917. He only transferred this franchise formally to the Tacloban Electric & Ice Plant, Ltd. on March 30, 1926,
that is, nearly a year after the death of the child Purificacion Bernal. Under these facts, J.V. House is solely responsible.

Counsel for appellees point out that there is no satisfactory proof to establish the pecuniary loss. That is true. But in cases of this
character the law presumes a loss because of the impossibility of exact computation. There is not enough money in the entire world to
compensate a mother for the death of her child. In criminal cases, the rule has been to allow as a matter of course P1,000 as indemnity
to the heirs of the deceased. In the case of Manzanares vs.Moreta ([1918], 38 Phil., 821), which in many respects is on all fours with
the case at bar, the same amount of P1,000 was allowed the mother of the dead boy eight or nine years of age. The same criterion will
have to be followed in this instance.

The result will, therefore, be to accept the findings of fact made by the trial judge; to set aside the legal deductions flowing from those
facts; to hold that the death of the child Purificacion Bernal was the result of fault and negligence in permitting hot water to flow through
the public streets, there to endanger the lives of passers-by who were unfortunately enough to fall into it; to rule that the proper plaintiff
is the mother Fortunata Enverso and not the natural father Tomas Bernal; to likewise rule that the person responsible to the plaintiff is
J.V. House and not the entity the Tacloban Electric & Ice Plant, Ltd.; and finally to adjudge that the amount of recovery, without the
tendering of special proof, should be fixed, as in other cases, at P1,000.

Concordant with the pronouncements just made, the judgment appealed from shall in part be reversed and in the court of origin another
judgment shall issue in favor of Fortunata Enverso and against J.V. House for the amount of P1,000, and for the costs of both
instances.
Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

FAR EASTERN SHIPPING COMPANY, petitioner, vs. COURT OF APPELAS and PHILIPPINE PORTS AUTHORITY, respondents.

[G.R. No. 130150. October 1, 1998]

MANILA PILOTS ASSOCIATION, petitioner, vs. PHILIPPINE PORTS AUTHORITY and FAR EASTERN SHIPPING
COMPANY, respondents.

DECISION
REGALADO, J.:

These consolidated petitions for review on certiorari seek in unison to annul and set aside the decision[1] of respondent Court of
Appeals of November 15, 1996 and its resolution[2]dated July 31, 1997 in CA-G.R. CV No. 24072, 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 --

x x x 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 brevitys sake), arrived at the Port of Manila from Vancouver, British Columbia at about 7:00 oclock 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 brevitys 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 commotion about, Kavankov assured
Gavino that there was nothing of 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,[4] praying that the 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 cost 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 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 it found no employer-
employee relationship existing between herein private respondents Manila Pilots Association (MPA, for short) and Capt. Gavino. [6] This
being 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,[7] and 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 on certiorari.
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.

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 a 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 the 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. [12] It further argues that there was erroneous reliance 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 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 basis 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 ambiguous 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[17] by FESC dated April 24, 1998 in G.R. No. 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.
Section 2, Rule 42 of the 1997 Rules of Civil Procedure[19] incorporates the former Circular No. 28-91 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:
xxxxxxxxx

The petitioner shall also submit together with the petition a certification under oath that he has not therefore 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. (Italics supplied.)
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.[20] Said motion contained the following certification against forum shopping[21] signed by Atty. Herbert A. Tria as affiant:
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,[22] to wit:
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 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.[23] Counsel of record for
MPA, Atty. Jesus P. Amparo, in his verification accompanying said petition dutifully revealed to the Court that--
xxxxxxxxx

3. Petitioner has not commenced any other action or proceeding involving the same issues in his Honorable 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, 1997. 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.[24] (Italics supplied.)
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 has 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 in
this Honorable Court."[25] Scouring the records page by 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. [26] He is an officer of the court
exercising a privilege which is indispensable in the administration of justice.[27] Candidness, 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.[28] Candor in all dealings is the very essence of honorable membership in the legal profession. [29] More specifically, a
lawyer is obliged to observe the rules of procedure and not to misuse them to defeat the ends of justice.[30] It behooves a lawyer,
therefore, to exert every effort and consider it his duty to assist in the speedy and efficient administration of justice.[31] Being an officer of
the court, a lawyer has a 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 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.[33] We 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.-
xxxxxxxxx

(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 n 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.[34]
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 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. [35] This, despite the fact that said office was required to file its
comment way back on November 12, 1997.[36] A closer scrutiny of the records likewise indicates that petitioner 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.[37] The OSG fared 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. [38] And while it properly furnished 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 initiative 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 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, be 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 government service in the discharge of their official tasks. [43] These ethical duties are rendered even more
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.[44] Furthermore, it is incumbent upon the OSG, as part of the government bureaucracy, to perform
and discharge its duties with the highest degree of professionalism, intelligence and skill[45] and to extend 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,[47] which provides that:

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. x x x

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 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.

SEC. 32. Duties and responsibilities of the Pilot or Pilots' Association. - The duties and responsibilities of the Harbor Pilot shall be as
follows:

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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 his order.

Customs Administrative Order No. 15-65 issued twenty years earlier likewise provided in Chapter I thereof for the responsibilities of
pilots:

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.

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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 caused 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.[48] It likewise holds the appellate court in error for 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.[50] In the 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.[51] Logic and
experience support this 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 not 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. [53] However, 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 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 on 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 of 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.[57] A pilot should have a thorough knowledge 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 circumstances, a pilot must exercise
extraordinary care.[58]
In Atlee vs. The Northwestern Union Packet Company,[59] Mr. Justice Miller spelled out in great detail the duties of a pilot:

x x x (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 or barges. All this he must 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.

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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 stated 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 is 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.
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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. [62] Those 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. [65] Generally, 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:
xxxxxxxxx

x x x 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 but 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.

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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 463, 60 L ed. 384, 57 Am Jur. 2d 12age 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. Kabankov 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[69] and supersedes the 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,[70] there is
overwhelming authority to 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 not 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?
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.
xxxxxxxxx
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 the 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.
xxxxxxxxx
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 not 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 timely because you are not well aware of the seabed,
is that correct?
A Yes sir, that, is right.
xxxxxxxxx
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.
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.
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Solicitor Abad (to the witness)
Q Now, you were standing with the pilot on the bridge of the vessel before the incident 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 pilot 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.
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Q Assuming 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 not 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)
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 take 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.
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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 but 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 you 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.
xxxxxxxxx
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]
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 pilot'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 knowledge 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, aid even maneuver the
vessel himself, in case of imminent danger to the vessel and the port.

In fact, in his testimony, Capt. Kavankov admitted that all throughout 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 above-mentioned 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.

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It is apparent that Gavino was negligent but Far Eastern's employee Capt. Kavankov was no less 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 defendant 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.

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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 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,[78] that 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, at his discretion.
In 1895, the U.S. Supreme Court, this time through Mr. Justice Brown, emphatically ruled that:
 Nor are we 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.

xxx (N)otwithstanding 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. x
x x 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."[79] (Italics for emphasis.)

In Jure vs. United Fruit Co.,[80] which, like the present 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. x x x 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 plaintiff'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 x x x 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 timely admonition to the pilot
proximately 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 conduct 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. (Italics 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] (Italics 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 duty 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 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.[90] Except 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 Tico & 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. x x x.

x x x (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. x x x.

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 order's 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 "x x x 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 that 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 plaintiff'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 tortfeasor.[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 solidarity 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.
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 P1300,999.77.
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.
xxxxxxxxx
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 piles.
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 solidarity liable to pay this amount to plaintiff. [104]

The Solicitor General rightly commented that the adjudicated amount of damages represents the proportional cost of repair and
rehabilitation of the damaged section of the pier.[105]
Except insofar as their liability is limited or exempted by statute, the vessel or her owners are liable for all damages caused by the
negligence or other wrongs of the owners or those in charge of the vessel. As a general rule, the owners or those in possession and
control of a vessel and the vessel are liable for all natural and proximate damages caused to persons or property by reason of her
negligent management or navigation.[106]
 FESC's imputation of PPA's failure to provide a safe and reliable berthing place is obtuse, not only because it appears to be a mere
afterthought, being tardily raised only in this petition, but also because there is no allegation or evidence on record about Berth No. 4
being unsafe and unreliable, although perhaps it is a modest pier by international standards. There was, therefore, no error on the part
of the Court of Appeals in dismissing FESC's counterclaim.

II. G.R. No. 130150

This consolidated case treats on whether the Court of Appeals erred in holding MPA jointly and solidarity liable with its member
pilot, Capt. Gavino, in the absence of employer-employee relationship and in applying Customs Administrative Order No. 15-65, as
basis for the adjudged solidary liability of MPA and Capt. Gavino.
The pertinent provisions in Chapter I of Customs Administrative Order No. 15-65 are:

"PAR. XXVII.-- In all pilotage districts where pilotage is compulsory, there shall be created and maintained by the pilots or pilots'
association, in the manner hereinafter prescribed, a reserve fund equal to P1,000.00 for each pilot thereof for the purpose of paying
claims for damages to vessels or property caused through acts or omissions of its members while rendered in compulsory pilotage
service. In Manila, the reserve fund shall be P2,000.00 for each pilot.

PAR. XXVIII.-- A pilots' association shall not be liable under these regulations for damage to any vessel, or other property, resulting
from acts of a member of an association in the actual performance of his duty for a greater amount than seventy-five per centum (75%)
of its prescribed reserve fund; it being understood that if the association is held liable for an amount greater than the amount above-
stated, the excess shall be paid by the personal funds of the member concerned.

PAR. XXXI.-- If a payment is made from the reserve fund of an association on account of damages caused by a member thereof, and
he shall have been found at fault, such member shall reimburse the association in the amount so paid as soon as practicable; and for
this purpose, not less than twenty-five per centum of his dividends shall be retained each month until the full amount has been returned
to the reserve fund.

PAR. XXXIV. - Nothing in these regulations shall relieve any pilots' association or members thereof, individually or collectively, from civil
responsibility for damages to life or property resulting from the acts of members in the performance of their duties.

Correlatively, the relevant provisions of PPA Administrative Order No. 03-85, which timely amended this applicable maritime
regulation, state:

Article IV
SEC. 17. Pilots' Association -- The Pilots in a Pilotage District shall organize themselves into a Pilots' Association or firm, the members
of which shall promulgate their own By-Laws not in conflict with the rules and regulations promulgated by the Authority. These By-Laws
shall be submitted not later than one (1) month after the organization of the Pilots' Association for approval by the General Manager of
the Authority. Subsequent amendments thereto shall likewise be submitted for approval.

SEC. 25. Indemnity Insurance and Reserve Fund--

a) Each Pilots' Association shall collectively insure its membership at the rate of P50,000.00 each member to cover in
whole or in part any liability arising from any accident resulting in damage to vessel(s), port facilities and other
properties and/or injury to persons or death which any member may have caused in the course of his performance
of pilotage duties. x x x.

b) The Pilotage Association shall likewise set up and maintain a reserve fund which shall answer for any part of the liability
referred to in the immediately preceding paragraph which is left unsatisfied by the insurance proceeds, in the
following manner:

1) Each pilot in the Association shall contribute from his own account an amount of P4,000.00 (P6,000.00 in the Manila
Pilotage District) to the reserve fund. This fund shall not be considered part of the capital of the Association nor
charged as an expense thereof.

2) Seventy-five percent (75%) of the reserve fund shall be set aside for use, in the payment of damages referred to
above incurred in the actual performance of pilots' duties and the excess shall be paid from the personal funds of
the member concerned.

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5) If payment is made from the reserve fund of an Association on account of damage caused by a member thereof who
is found at fault, he shall reimburse the Association in the amount so paid as soon as practicable; and for this
purpose, not less than twenty-five percentum (25%) of his dividend shall be retained each month until the full
amount has been returned to the reserve fund. Thereafter, the pilot involved shall be entitled to his full dividend.

6) When the reimbursement has been completed as prescribed in the preceding paragraph, the ten percentum (10%)
and the interest withheld from the shares of the other pilots in accordance with paragraph (4) hereof shall be
returned to them.

c) Liability of Pilots' Association -- Nothing in these regulations shall relieve any Pilots' Association or members thereof,
individually or collectively, from any civil, administrative and/or criminal responsibility for damages to life or
property resulting from the individual acts of its members as well as those of the Association's employees and
crew in the performance of their duties.
 The Court of Appeals, while affirming the trial court's finding of solidary liability on the part of FESC, MPA and Capt. Gavino,
correctly based MPA's liability not on the concept of employer-employee relationship between Capt. Gavino and itself, but on the
provisions of Customs Administrative Order No. 15-65:

The Appellant MPA avers that, contrary to the findings and disquisitions of the Court a quo, the Appellant Gavino was not and has
never been an employee of the MPA but was only a member thereof. The Court a quo, it is noteworthy,, did not state the factual basis
on which it anchored its finding that Gavino was the employee of MPA. We are in accord with MPA's pose.Case law teaches Us that,
for an employer-employee relationship to exist the confluence of the following elements must be established: (1) selection and
engagement of employees; (2) the payment of wages; (3) the power of dismissal; (4) the employer's power to control the employees
with respect to the means and method by which the work is to be performed (Ruga versus NLRC, 181SCRA 266).

xxxxxxxxx

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 light 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 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 solidarity
liable for the negligence of its member pilots, without prejudice to subsequent reimbursement from the pilot at fault.
 Article 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:

x x x 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]

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 petitioners 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 General 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.
Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

[G.R. No. 120554. September 21, 1999]

SO PING BUN, petitioner, vs. COURT OF APPEALS, TEK HUA ENTERPRISING CORP. and MANUEL C. TIONG, respondents.

DECISION
QUISUMBING, J.:

This petition for certiorari challenges the Decision[1] of the Court of Appeals dated October 10, 1994, and the Resolution [2] dated
June 5, 1995, in CA-G.R. CV No. 38784. The appellate court affirmed the decision of the Regional Trial Court of Manila, Branch 35,
except for the award of attorneys fees, as follows:

"WHEREFORE, foregoing considered, the appeal of respondent-appellant So Ping Bun for lack of merit is DISMISSED. The appealed
decision dated April 20, 1992 of the court a quo is modified by reducing the attorney's fees awarded to plaintiff Tek Hua Enterprising
Corporation from P500,000.00 to P200,000.00."[3]

The facts are as follows:

In 1963, Tek Hua Trading Co, through its managing partner, So Pek Giok, entered into lease agreements with lessor Dee C. Chuan
& Sons Inc. (DCCSI). Subjects of four (4) lease contracts were premises located at Nos. 930, 930-Int., 924-B and 924-C, Soler Street,
Binondo, Manila. Tek Hua used the areas to store its textiles. The contracts each had a one-year term. They provided that should the
lessee continue to occupy the premises after the term, the lease shall be on a month-to-month basis.
When the contracts expired, the parties did not renew the contracts, but Tek Hua continued to occupy the premises. In 1976, Tek
Hua Trading Co. was dissolved. Later, the original members of Tek Hua Trading Co. including Manuel C. Tiong, formed Tek Hua
Enterprising Corp., herein respondent corporation.
So Pek Giok, managing partner of Tek Hua Trading, died in 1986. So Pek Gioks grandson, petitioner So Ping Bun, occupied the
warehouse for his own textile business, Trendsetter Marketing.
On August 1, 1989, lessor DCCSI sent letters addressed to Tek Hua Enterprises, informing the latter of the 25% increase in rent
effective September 1, 1989. The rent increase was later on reduced to 20% effective January 1, 1990, upon other lessees
demand. Again on December 1, 1990, the lessor implemented a 30% rent increase. Enclosed in these letters were new lease contracts
for signing. DCCSI warned that failure of the lessee to accomplish the contracts shall be deemed as lack of interest on the lessees part,
and agreement to the termination of the lease. Private respondents did not answer any of these letters. Still, the lease contracts were
not rescinded.
On March 1, 1991, private respondent Tiong sent a letter to petitioner, which reads as follows:

March 1, 1991

Mr. So Ping Bun

930 Soler Street

Binondo, Manila

Dear Mr. So,

Due to my closed (sic) business associate (sic) for three decades with your late grandfather Mr. So Pek Giok and late father, Mr. So
Chong Bon, I allowed you temporarily to use the warehouse of Tek Hua Enterprising Corp. for several years to generate your personal
business.

Since I decided to go back into textile business, I need a warehouse immediately for my stocks. Therefore, please be advised to vacate
all your stocks in Tek Hua Enterprising Corp. Warehouse. You are hereby given 14 days to vacate the premises unless you have good
reasons that you have the right to stay. Otherwise, I will be constrained to take measure to protect my interest.

Please give this urgent matter your preferential attention to avoid inconvenience on your part.

Very truly yours,

(Sgd) Manuel C. Tiong

MANUEL C. TIONG

President[4]

Petitioner refused to vacate. On March 4, 1992, petitioner requested formal contracts of lease with DCCSI in favor Trendsetter
Marketing. So Ping Bun claimed that after the death of his grandfather, So Pek Giok, he had been occupying the premises for his textile
business and religiously paid rent. DCCSI acceded to petitioners request. The lease contracts in favor of Trendsetter were executed.
In the suit for injunction, private respondents pressed for the nullification of the lease contracts between DCCSI and petitioner. They
also claimed damages.
 After trial, the trial court ruled:

WHEREFORE, judgment is rendered:

1. Annulling the four Contracts of Lease (Exhibits A, A-1 to A-3, inclusive) all dated March 11, 1991, between defendant So
Ping Bun, doing business under the name and style of Trendsetter Marketing, and defendant Dee C. Chuan & Sons, Inc.
over the premises located at Nos. 924-B, 924-C, 930 and 930, Int., respectively, Soler Street, Binondo Manila;
2. Making permanent the writ of preliminary injunction issued by this Court on June 21, 1991;
3. Ordering defendant So Ping Bun to pay the aggrieved party, plaintiff Tek Hua Enterprising Corporation, the sum of
P500,000.00, for attorneys fees;
4. Dismissing the complaint, insofar as plaintiff Manuel C. Tiong is concerned, and the respective counterclaims of the
defendant;
5. Ordering defendant So Ping Bun to pay the costs of this lawsuit;

This judgment is without prejudice to the rights of plaintiff Tek Hua Enterprising Corporation and defendant Dee C. Chuan & Sons, Inc.
to negotiate for the renewal of their lease contracts over the premises located at Nos. 930, 930-Int., 924-B and 924-C Soler Street,
Binondo, Manila, under such terms and conditions as they agree upon, provided they are not contrary to law, public policy, public order,
and morals.

SO ORDERED.[5]

Petitioners motion for reconsideration of the above decision was denied.

On appeal by So Ping Bun, the Court of Appeals upheld the trial court. On motion for reconsideration, the appellate court modified
the decision by reducing the award of attorneys fees from five hundred thousand (P500,000.00) pesos to two hundred thousand
(P200,000.00) pesos.
Petitioner is now before the Court raising the following issues:
I. WHETHER THE APPELLATE COURT ERRED IN AFFIRMING THE TRIAL COURTS DECISION FINDING SO PING BUN
GUILTY OF TORTUOUS INTERFERENCE OF CONTRACT?
II. WHETHER THE APPELLATE COURT ERRED IN AWARDING ATTORNEYS FEES OF P200,000.00 IN FAVOR OF
PRIVATE RESPONDENTS.
The foregoing issues involve, essentially, the correct interpretation of the applicable law on tortuous conduct, particularly unlawful
interference with contract. We have to begin, obviously, with certain fundamental principles on torts and damages.
 Damage is the loss, hurt, or harm which results from injury, and damages are the recompense or compensation awarded for the
damage suffered.[6] One becomes liable in an action for damages for a nontrespassory invasion of anothers interest in the private use
and enjoyment of asset if (a) the other has property rights and privileges with respect to the use or enjoyment interfered with, (b) the
invasion is substantial, (c) the defendants conduct is a legal cause of the invasion, and (d) the invasion is either intentional and
unreasonable or unintentional and actionable under general negligence rules.[7]
The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the part of the third person of the existence
of contract; and (3) interference of the third person is without legal justification or excuse.[8]
A duty which the law of torts is concerned with is respect for the property of others, and a cause of action ex delicto may be
predicated upon an unlawful interference by one person of the enjoyment by the other of his private property. [9] This may pertain to a
situation where a third person induces a party to renege on or violate his undertaking under a contract. In the case before us,
petitioners Trendsetter Marketing asked DCCSI to execute lease contracts in its favor, and as a result petitioner deprived respondent
corporation of the latters property right. Clearly, and as correctly viewed by the appellate court, the three elements of tort interference
above-mentioned are present in the instant case.
Authorities debate on whether interference may be justified where the defendant acts for the sole purpose of furthering his own
financial or economic interest.[10] One view is that, as a general rule, justification for interfering with the business relations of another
exists where the actors motive is to benefit himself. Such justification does not exist where his sole motive is to cause harm to the
other.Added to this, some authorities believe that it is not necessary that the interferers interest outweigh that of the party whose rights
are invaded, and that an individual acts under an economic interest that is substantial, not merely de minimis, such that wrongful and
malicious motives are negatived, for he acts in self-protection.[11] Moreover, justification for protecting ones financial position should not
be made to depend on a comparison of his economic interest in the subject matter with that of others.[12] It is sufficient if the impetus of
his conduct lies in a proper business interest rather than in wrongful motives. [13]
As early as Gilchrist vs. Cuddy,[14] we held that where there was no malice in the interference of a contract, and the impulse behind
ones conduct lies in a proper business interest rather than in wrongful motives, a party cannot be a malicious interferer. Where the
alleged interferer is financially interested, and such interest motivates his conduct, it cannot be said that he is an officious or malicious
intermeddler.[15]
In the instant case, it is clear that petitioner So Ping Bun prevailed upon DCCSI to lease the warehouse to his enterprise at the
expense of respondent corporation. Though petitioner took interest in the property of respondent corporation and benefited from it,
nothing on record imputes deliberate wrongful motives or malice on him.
Section 1314 of the Civil Code categorically provides also that, Any third person who induces another to violate his contract shall be
liable for damages to the other contracting party. Petitioner argues that damage is an essential element of tort interference, and since
the trial court and the appellate court ruled that private respondents were not entitled to actual, moral or exemplary damages, it follows
that he ought to be absolved of any liability, including attorneys fees.
It is true that the lower courts did not award damages, but this was only because the extent of damages was not quantifiable. We
had a similar situation in Gilchrist, where it was difficult or impossible to determine the extent of damage and there was nothing on
record to serve as basis thereof. In that case we refrained from awarding damages. We believe the same conclusion applies in this
case.
While we do not encourage tort interferers seeking their economic interest to intrude into existing contracts at the expense of
others, however, we find that the conduct herein complained of did not transcend the limits forbidding an obligatory award for damages
in the absence of any malice. The business desire is there to make some gain to the detriment of the contracting parties. Lack of
malice, however, precludes damages. But it does not relieve petitioner of the legal liability for entering into contracts and causing
breach of existing ones. The respondent appellate court correctly confirmed the permanent injunction and nullification of the lease
contracts between DCCSI and Trendsetter Marketing, without awarding damages. The injunction saved the respondents from further
damage or injury caused by petitioners interference.
Lastly, the recovery of attorneys fees in the concept of actual or compensatory damages, is allowed under the circumstances
provided for in Article 2208 of the Civil Code.[16] One such occasion is when the defendants act or omission has compelled the plaintiff
to litigate with third persons or to incur expenses to protect his interest. [17] But we have consistently held that the award of considerable
damages should have clear factual and legal bases.[18] In connection with attorneys fees, the award should be commensurate to the
benefits that would have been derived from a favorable judgment. Settled is the rule that fairness of the award of damages by the trial
court calls for appellate review such that the award if far too excessive can be reduced. [19] This ruling applies with equal force on the
award of attorneys fees.In a long line of cases we said, It is not sound policy to place a penalty on the right to litigate. To compel the
defeated party to pay the fees of counsel for his successful opponent would throw wide open the door of temptation to the opposing
party and his counsel to swell the fees to undue proportions. [20]
Considering that the respondent corporations lease contract, at the time when the cause of action accrued, ran only on a month-to-
month basis whence before it was on a yearly basis, we find even the reduced amount of attorneys fees ordered by the Court of
Appeals still exorbitant in the light of prevailing jurisprudence.[21] Consequently, the amount of two hundred thousand (P200,000.00)
awarded by respondent appellate court should be reduced to one hundred thousand (P100,000.00) pesos as the reasonable award for
attorneys fees in favor of private respondent corporation.
WHEREFORE, the petition is hereby DENIED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV No.
38784 are hereby AFFIRMED, with MODIFICATION that the award of attorneys fees is reduced from two hundred thousand
(P200,000.00) to one hundred thousand (P100,000.00) pesos. No pronouncement as to costs.
SO ORDERED.
Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

[G.R. No. 132266. December 21, 1999]

CASTILEX INDUSTRIAL CORPORATION, petitioner, vs. VICENTE VASQUEZ, JR. and LUISA SO VASQUEZ, and CEBU
DOCTORS HOSPITAL, INC., respondents.

DECISION
DAVIDE, JR., C.J.:

The pivotal issue in this petition is whether an employer may be held vicariously liable for the death resulting from the negligent
operation by a managerial employee of a company-issued vehicle.
The antecedents, as succinctly summarized by the Court of Appeals, are as follows:

On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So Vasquez, was driving a Honda motorcycle around Fuente
Osmea Rotunda. He was traveling counter-clockwise, (the normal flow of traffic in a rotunda) but without any protective helmet or
goggles. He was also only carrying a Students Permit to Drive at the time. Upon the other hand, Benjamin Abad [was a] manager
of Appellant Castilex Industrial Corporation, registered owner [of] a Toyota Hi-Lux Pick-up with plate no. GBW-794. On the same
date and time, Abad drove the said company car out of a parking lot but instead of going around the Osmea rotunda he made a
short cut against [the] flow of the traffic in proceeding to his route to General Maxilom St. or to Belvic St.

In the process, the motorcycle of Vasquez and the pick-up of Abad collided with each other causing severe injuries to the
former. Abad stopped his vehicle and brought Vasquez to the Southern Islands Hospital and later to the Cebu Doctors Hospital.

On September 5, 1988, Vasquez died at the Cebu Doctors Hospital. It was there that Abad signed an acknowledgment of
Responsible Party (Exhibit K) wherein he agreed to pay whatever hospital bills, professional fees and other incidental charges
Vasquez may incur.

After the police authorities had conducted the investigation of the accident, a Criminal Case was filed against Abad but which was
subsequently dismissed for failure to prosecute. So, the present action for damages was commenced by Vicente Vasquez, Jr. and
Luisa So Vasquez, parents of the deceased Romeo So Vasquez, against Jose Benjamin Abad and Castilex Industrial
Corporation. In the same action, Cebu Doctors Hospital intervened to collect unpaid balance for the medical expense given to
Romeo So Vasquez.[1]

The trial court ruled in favor of private respondents Vicente and Luisa Vasquez and ordered Jose Benjamin Abad (hereafter
ABAD) and petitioner Castilex Industrial Corporation (hereafter CASTILEX) to pay jointly and solidarily (1) Spouses Vasquez, the
amounts of P8,000.00 for burial expenses; P50,000.00 as moral damages; P10,000.00 as attorneys fees; and P778,752.00 for
loss of earning capacity; and (2) Cebu Doctors Hospital, the sum of P50,927.83 for unpaid medical and hospital bills at 3% monthly
interest from 27 July 1989 until fully paid, plus the costs of litigation.[2]
CASTILEX and ABAD separately appealed the decision.
 In its decision[3] of 21 May 1997, the Court of Appeals affirmed the ruling of the trial court holding ABAD and CASTILEX liable
but held that the liability of the latter is only vicarious and not solidary with the former. It reduced the award of damages
representing loss of earning capacity from P778,752.00 to P214,156.80; and the interest on the hospital and medical bills, from 3%
per month to 12% per annum from 5 September 1988 until fully paid.
Upon CASTILEXs motion for reconsideration, the Court of Appeals modified its decision by (1) reducing the award of moral
damages from P50,000 to P30,000 in view of the deceaseds contributory negligence; (b) deleting the award of attorneys fees for
lack of evidence; and (c) reducing the interest on hospital and medical bills to 6% per annum from 5 September 1988 until fully
paid.[4]
Hence, CASTILEX filed the instant petition contending that the Court of Appeals erred in (1) applying to the case the fifth
paragraph of Article 2180 of the Civil Code, instead of the fourth paragraph thereof; (2) that as a managerial employee, ABAD was
deemed to have been always acting within the scope of his assigned task even outside office hours because he was using a
vehicle issued to him by petitioner; and (3) ruling that petitioner had the burden to prove that the employee was not acting within
the scope of his assigned task.
Jose Benjamin ABAD merely adopted the statement of facts of petitioner which holds fast on the theory of negligence on the
part of the deceased.
On the other hand, respondents Spouses Vasquez argue that their sons death was caused by the negligence of petitioners
employee who was driving a vehicle issued by petitioner and who was on his way home from overtime work for petitioner; and that
petitioner is thus liable for the resulting injury and subsequent death of their son on the basis of the fifth paragraph of Article
2180. Even if the fourth paragraph of Article 2180 were applied, petitioner cannot escape liability therefor. They moreover argue
that the Court of Appeals erred in reducing the amount of compensatory damages when the award made by the trial court was
borne both by evidence adduced during the trial regarding deceaseds wages and by jurisprudence on life expectancy. Moreover,
they point out that the petition is procedurally not acceptable on the following grounds: (1) lack of an explanation for serving the
petition upon the Court of Appeals by registered mail, as required under Section 11, Rule 13 of the Rules of Civil Procedure; and
(2) lack of a statement of the dates of the expiration of the original reglementary period and of the filing of the motion for extension
of time to file a petition for review.
For its part, respondent Cebu Doctors Hospital maintains that petitioner CASTILEX is indeed vicariously liable for the injuries
and subsequent death of Romeo Vasquez caused by ABAD, who was on his way home from taking snacks after doing overtime
work for petitioner. Although the incident occurred when ABAD was not working anymore the inescapable fact remains that said
employee would not have been situated at such time and place had he not been required by petitioner to do overtime work.
Moreover, since petitioner adopted the evidence adduced by ABAD, it cannot, as the latters employer, inveigle itself from the ambit
of liability, and is thus estopped by the records of the case, which it failed to refute.
We shall first address the issue raised by the private respondents regarding some alleged procedural lapses in the petition.
Private respondents contention of petitioners violation of Section 11 of Rule 13 and Section 4 of Rule 45 of the 1997 Rules of
Civil Procedure holds no water.
 Section 11 of Rule 13 provides:

SEC. 11. Priorities in modes of service and filing. -- Whenever practicable, the service and filing of pleadings and other papers
shall be done personally. Except with respect to papers emanating from the court, a resort to other modes must be accompanied
by a written explanation why the service or filing was not done personally. A violation of this Rule may be cause to consider the
paper as not filed.

The explanation why service of a copy of the petition upon the Court of Appeals was done by registered mail is found on Page
28 of the petition. Thus, there has been compliance with the aforequoted provision.
As regards the allegation of violation of the material data rule under Section 4 of Rule 45, the same is unfounded. The material
dates required to be stated in the petition are the following: (1) the date of receipt of the judgment or final order or resolution
subject of the petition; (2) the date of filing of a motion for new trial or reconsideration, if any; and (3) the date of receipt of the
notice of the denial of the motion. Contrary to private respondents claim, the petition need not indicate the dates of the expiration of
the original reglementary period and the filing of a motion for extension of time to file the petition. At any rate, aside from the
material dates required under Section 4 of Rule 45, petitioner CASTILEX also stated in the first page of the petition the date it filed
the motion for extension of time to file the petition.
Now on the merits of the case.
The negligence of ABAD is not an issue at this instance. Petitioner CASTILEX presumes said negligence but claims that it is
not vicariously liable for the injuries and subsequent death caused by ABAD.
Petitioner contends that the fifth paragraph of Article 2180 of the Civil Code should only apply to instances where the employer
is not engaged in business or industry. Since it is engaged in the business of manufacturing and selling furniture it is therefore not
covered by said provision. Instead, the fourth paragraph should apply.
Petitioners interpretation of the fifth paragraph is not accurate. The phrase even though the former are not engaged in any
business or industry found in the fifth paragraph should be interpreted to mean that it is not necessary for the employer to be
engaged in any business or industry to be liable for the negligence of his employee who is acting within the scope of his assigned
task.[5]
A distinction must be made between the two provisions to determine what is applicable. Both provisions apply to
employers: the fourth paragraph, to owners and managers of an establishment or enterprise; and the fifth paragraph, to employers
in general, whether or not engaged in any business or industry. The fourth paragraph covers negligent acts of employees
committed either in the service of the branches or on the occasion of their functions, while the fifth paragraph encompasses
negligent acts of employees acting within the scope of their assigned task. The latter is an expansion of the former in both
employer coverage and acts included. Negligent acts of employees, whether or not the employer is engaged in a business or
industry, are covered so long as they were acting within the scope of their assigned task, even though committed neither in the
service of the branches nor on the occasion of their functions. For, admittedly, employees oftentimes wear different hats. They
perform functions which are beyond their office, title or designation but which, nevertheless, are still within the call of duty.
 This court has applied the fifth paragraph to cases where the employer was engaged in a business or industry such as truck
operators[6] and banks.[7] The Court of Appeals cannot, therefore, be faulted in applying the said paragraph of Article 2180 of the
Civil Code to this case.
Under the fifth paragraph of Article 2180, whether or not engaged in any business or industry, an employer is liable for the torts
committed by employees within the scope of his assigned tasks. But it is necessary to establish the employer-employee
relationship; once this is done, the plaintiff must show, to hold the employer liable, that the employee was acting within the scope
of his assigned task when the tort complained of was committed. It is only then that the employer may find it necessary to
interpose the defense of due diligence in the selection and supervision of the employee. [8]
It is undisputed that ABAD was a Production Manager of petitioner CASTILEX at the time of the tort occurrence. As to whether
he was acting within the scope of his assigned task is a question of fact, which the court a quo and the Court of Appeals resolved
in the affirmative.
Well-entrenched in our jurisprudence is the rule that the factual findings of the Court of Appeals are entitled to great respect,
and even finality at times. This rule is, however, subject to exceptions such as when the conclusion is grounded on speculations,
surmises, or conjectures.[9] Such exception obtain in the present case to warrant review by this Court of the finding of the Court of
Appeals that since ABAD was driving petitioners vehicle he was acting within the scope of his duties as a manager.
Before we pass upon the issue of whether ABAD was performing acts within the range of his employment, we shall first take
up the other reason invoked by the Court of Appeals in holding petitioner CASTILEX vicariously liable for ABADs negligence, i.e.,
that the petitioner did not present evidence that ABAD was not acting within the scope of his assigned tasks at the time of the
motor vehicle mishap. Contrary to the ruling of the Court of Appeals, it was not incumbent upon the petitioner to prove the same. It
was enough for petitioner CASTILEX to deny that ABAD was acting within the scope of his duties; petitioner was not under
obligation to prove this negative averment. Ei incumbit probatio qui dicit, non qui negat (He who asserts, not he who denies, must
prove). The Court has consistently applied the ancient rule that if the plaintiff, upon whom rests the burden of proving his cause of
action, fails to show in a satisfactory manner facts which he bases his claim, the defendant is under no obligation to prove his
exception or defense.[10]
Now on the issue of whether the private respondents have sufficiently established that ABAD was acting within the scope of
his assigned tasks.
ABAD, who was presented as a hostile witness, testified that at the time of the incident, he was driving a company-issued
vehicle, registered under the name of petitioner. He was then leaving the restaurant where he had some snacks and had a chat
with his friends after having done overtime work for the petitioner.
No absolutely hard and fast rule can be stated which will furnish the complete answer to the problem of whether at a given
moment, an employee is engaged in his employers business in the operation of a motor vehicle, so as to fix liability upon the
employer because of the employees action or inaction; but rather, the result varies with each state of facts. [11]
 In Filamer Christian Institute v. Intermediate Appellate Court,[12] this Court had the occasion to hold that acts done within the
scope of the employees assigned tasks includes any act done by an employee in furtherance of the interests of the employer or for
the account of the employer at the time of the infliction of the injury or damages.
The court a quo and the Court of Appeals were one in holding that the driving by a manager of a company-issued vehicle is
within the scope of his assigned tasks regardless of the time and circumstances.
We do not agree. The mere fact that ABAD was using a service vehicle at the time of the injurious incident is not of itself
sufficient to charge petitioner with liability for the negligent operation of said vehicle unless it appears that he was operating the
vehicle within the course or scope of his employment.
The following are principles in American Jurisprudence on the employers liability for the injuries inflicted by the negligence of
an employee in the use of an employers motor vehicle:

I. Operation of Employers Motor Vehicle in Going to or from Meals

It has been held that an employee who uses his employers vehicle in going from his work to a place where he intends to eat or
in returning to work from a meal is not ordinarily acting within the scope of his employment in the absence of evidence of some
special business benefit to the employer. Evidence that by using the employers vehicle to go to and from meals, an employee is
enabled to reduce his time-off and so devote more time to the performance of his duties supports the finding that an employee is
acting within the scope of his employment while so driving the vehicle. [13]

II. Operation of Employers Vehicle in Going to or from Work

In the same vein, traveling to and from the place of work is ordinarily a personal problem or concern of the employee, and not
a part of his services to his employer. Hence, in the absence of some special benefit to the employer other than the mere
performance of the services available at the place where he is needed, the employee is not acting within the scope of his
employment even though he uses his employers motor vehicle. [14]
The employer may, however, be liable where he derives some special benefit from having the employee drive home in the
employers vehicle as when the employer benefits from having the employee at work earlier and, presumably, spending more time
at his actual duties. Where the employees duties require him to circulate in a general area with no fixed place or hours of work, or
to go to and from his home to various outside places of work, and his employer furnishes him with a vehicle to use in his work, the
courts have frequently applied what has been called the special errand or roving commission rule, under which it can be found that
the employee continues in the service of his employer until he actually reaches home. However, even if the employee be deemed
to be acting within the scope of his employment in going to or from work in his employers vehicle, the employer is not liable for his
negligence where at the time of the accident, the employee has left the direct route to his work or back home and is pursuing a
personal errand of his own.

III. Use of Employers Vehicle Outside Regular Working Hours

An employer who loans his motor vehicle to an employee for the latters personal use outside of regular working hours is
generally not liable for the employees negligent operation of the vehicle during the period of permissive use, even where the
employer contemplates that a regularly assigned motor vehicle will be used by the employee for personal as well as business
purposes and there is some incidental benefit to the employer. Even where the employees personal purpose in using the vehicle
has been accomplished and he has started the return trip to his house where the vehicle is normally kept, it has been held that he
has not resumed his employment, and the employer is not liable for the employees negligent operation of the vehicle during the
return trip.[15]
The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on the doctrine of respondeat
superior, not on the principle of bonus pater familias as in ours. Whether the fault or negligence of the employee is conclusive on
his employer as in American law or jurisprudence, or merely gives rise to the presumption juris tantum of negligence on the part of
the employer as in ours, it is indispensable that the employee was acting in his employers business or within the scope of his
assigned task.[16]
In the case at bar, it is undisputed that ABAD did some overtime work at the petitioners office, which was located in
Cabangcalan, Mandaue City. Thereafter, he went to Goldies Restaurant in Fuente Osmea, Cebu City, which is about seven
kilometers away from petitioners place of business.[17] A witness for the private respondents, a sidewalk vendor, testified that
Fuente Osmea is a lively place even at dawn because Goldies Restaurant and Back Street were still open and people were
drinking thereat. Moreover, prostitutes, pimps, and drug addicts littered the place.[18]
At the Goldies Restaurant, ABAD took some snacks and had a chat with friends. It was when ABAD was leaving the restaurant
that the incident in question occurred. That same witness for the private respondents testified that at the time of the vehicular
accident, ABAD was with a woman in his car, who then shouted: Daddy, Daddy![19] This woman could not have been ABADs
daughter, for ABAD was only 29 years old at the time.
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a personal purpose not in line with his
duties at the time he figured in a vehicular accident. It was then about 2:00 a.m. of 28 August 1988, way beyond the normal
working hours. ABADs working day had ended; his overtime work had already been completed. His being at a place which, as
petitioner put it, was known as a haven for prostitutes, pimps, and drug pushers and addicts, had no connection to petitioners
business; neither had it any relation to his duties as a manager. Rather, using his service vehicle even for personal purposes was
a form of a fringe benefit or one of the perks attached to his position.
Since there is paucity of evidence that ABAD was acting within the scope of the functions entrusted to him, petitioner
CASTILEX had no duty to show that it exercised the diligence of a good father of a family in providing ABAD with a service
vehicle. Thus, justice and equity require that petitioner be relieved of vicarious liability for the consequences of the negligence of
ABAD in driving its vehicle.[20]
WHEREFORE, the petition is GRANTED, and the appealed decision and resolution of the Court of Appeals is AFFIRMED with
the modification that petitioner Castilex Industrial Corporation be absolved of any liability for the damages caused by its employee,
Jose Benjamin Abad.
SO ORDERED.
Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

G.R. No. L-19331 April 30, 1965

VICTORIA G. CAPUNO and JOSEPHINE G. CAPUNO, plaintiffs-appellants,

vs.
PEPSI-COLA BOTTLING COMPANY OF THE PHILIPPINES and JON ELORDI, defendants-appellees.

Federico Andres for plaintiffs-appellants.

Vicente J. Francisco for defendants-appellees.

MAKALINTAL, J.:

This appeal (in forma pauperis), certified here by the Court of Appeals, is from the order of the Court of First Instance of Tarlac
dismissing appellant's complaint in Civil Case No. 3315 for recovery of damages for the death of Cipriano Capuno.

The case arose from a vehicular collision which occurred on January 3, 1953 in Apalit, Pampanga. Involved were a Pepsi-Cola delivery
truck driven by Jon Elordi and a private car driven by Capuno. The collision proved fatal to the latter as well as to his passengers, the
spouses Florencio Buan and Rizalina Paras.

On January 5, 1953 Elordi was charged with triple homicide through reckless imprudence in the Court of First Instance of Pampanga
(criminal case No. 1591). The information was subsequently amended to include claims for damages by the heirs of the three victims.

It is urged for the applicant that no opposition has been registered against his petition on the issues above-discussed. Absence of
opposition, however, does not preclude the scanning of the whole record by the appellate court, with a view to preventing the
conferment of citizenship to persons not fully qualified therefor (Lee Ng Len vs. Republic, G.R. No. L-20151, March 31, 1965). The
applicant's complaint of unfairness could have some weight if the objections on appeal had been on points not previously passed upon.
But the deficiencies here in question are not new but well-known, having been ruled upon repeatedly by this Court, and we see no
excuse for failing to take them into account.1äwphï1.ñët
On October 1, 1953, while the criminal case was pending, the Intestate Estate of the Buan spouses and their heirs filed a civil action,
also for damages, in the Court of First Instance of Tarlac against the Pepsi-Cola Bottling Company of the Philippines and Jon Elordi
(civil case No. 838). Included in the complaint was a claim for indemnity in the sum of P2,623.00 allegedly paid by the Estate to the
heirs of Capuno under the Workmen's Compensation Act.

In the criminal case both the heirs of Capuno and the Estate of Buan — the former being appellants herein — were represented by their
respective counsel as private prosecutors: Attorney Ricardo Y. Navarro and Attorneys Jose W. Diokno and Augusto M. Ilagan. In view
of the filing of the civil action the accused Jon Elordi moved to strike out the appearances of these private prosecutors in the criminal
case. Grounds for the motion were (1) that as the Capuno heirs were concerned, they no longer had any interest to protect in the
criminal case since they had already claimed and received compensation for the death of their decedent; and (2) that on the part of the
Estate of Buan its right to intervene in said case had been abated by the civil action.

The appearance and intervention of Attorneys Diokno and Ilagan was disallowed by the Court in an order dated September 23, 1953,
and that of Attorney Navarro was disallowed in an amending order dated October 23, 1954. No appeal was taken from either of the two
orders.

On June 11, 1958 the parties in Civil Case No. 838 entered into a "Compromise and Settlement." For P290,000.00 the Buan Estate
gave up its claims for damages, including the claim for reimbursement of the sum of P2,623.00 previously paid to the heirs of Capuno
"under the Workmen's Compensation Act." The Court approved the compromise and accordingly dismissed the case on the following
June 17.

At that time the criminal case was still pending; judgment was rendered only on April 15, 1959, wherein the accused Elordi was
acquitted of the charges against him. Prior thereto, or on September 26, 1958, however, herein appellants commenced a civil action for
damages against the Pepsi-Cola Bottling Company of the Philippines and Jon Elordi. This is the action which, upon appellees' motion,
was dismissed by the Court a quo in its order of February 29, 1960, from which order the present appeal has been taken.

The grounds upon which appellees based their motion for dismissal and which the Court found to be "well taken" were; (1) that the
action had already prescribed; and (2) that appellees had been released from appellants' claim for damages by virtue of the payment to
the latter of the sum of P2,623.00 by the Buan Estate under the Workmen's Compensation Act, which sum, in turn, was sought to be
recovered by the said Estate from appellees in Civil Case No. 838 but finally settled by them in their compromise.

The ruling of the court below on both points is now assailed by appellants as erroneous. In our opinion the question of prescription is
decisive. There can be no doubt that the present action is one for recovery of damages based on a quasi-delict, which action must be
instituted within four (4) years (Article 1146, Civil Code). Appellants originally sought to enforce their claim ex-delicto, that is, under the
provisions of the Penal Code, when they intervened in the criminal case against Jon Elordi. The information therein, it may be recalled,
was amended precisely to include an allegation concerning damages suffered by the heirs of the victims of the accident for which Elordi
was being prosecuted. But appellants' intervention was subsequently disallowed and they did not appeal from the Court's order to the
effect. And when they commenced the civil action on September 26, 1958 the criminal case was still pending, showing that appellants
then chose to pursue the remedy afforded by the Civil Code, for otherwise that action would have been premature and in any event
would have been concluded by the subsequent judgment of acquittal in the criminal case.

In filing the civil action as they did appellants correctly considered it as entirely independent of the criminal action, pursuant to Articles
31 and 33 of the Civil Code, which read:

ART. 31. When the civil action is based on an obligation not arising from the act or omission complained of as a felony, such civil
action may proceed independently of the criminal proceedings and regardless of the result of the latter.

ART. 33. In cases of defamation, fraud, and physical injuries, a civil action for damages, entirely separate and distinct from the
criminal action, may be brought by the injured party. Such civil action shall proceed independently of the criminal prosecution,
and shall require only a preponderance of evidence.

The term "physical injuries" in Article 33 includes bodily injuries causing death (Dyogi v. Yatco, G.R. No. L-9623, Jan. 22, 1957, 22 L.J.
175). In other words, the civil action for damages could have been commenced by appellants immediately upon the death of their
decedent, Cipriano Capuno, on January 3, 1953 or thereabouts, and the same would not have been stayed by the filing of the criminal
action for homicide through reckless imprudence. But the complaint here was filed only on September 26, 1958, or after the lapse of
more than five years.

In the case of Diocosa Paulan, et al. vs. Zacarias Sarabia, et al., G.R. No. L-10542, promulgated July 31, 1958, this Court held that an
action based on a quasi-delict is governed by Article 1150 of the Civil Code as to the question of when the prescriptive period of four
years shall begin to run, that is, "from the day (the action) may be brought," which means from the day the quasi-delict occurred or was
committed.

The foregoing considerations dispose of appellants' contention that the four-year period of prescription in this case was interrupted by
the filing of the criminal action against Jon Elordi inasmuch as they had neither waived the civil action nor reserved the right to institute
it separately. Such reservation was not then necessary; without having made it they could file — as in fact they did — a separate civil
action even during the pendency of the criminal case (Pacheco v. Tumangday, L-14500, May 25, 1960; Azucena v. Potenciano, L-
14028, June 30, 1962); and consequently, as held in Paulan v. Sarabia, supra, "the institution of a criminal action cannot have the
effect of interrupting the institution of a civil action based on a quasi-delict."

As to whether or not Rule 111, Section 2, of the Revised Rules of Court which requires the reservation of the right to institute a
separate and independent civil action in the cases provided for in Articles 31, 32, 33, 34, and 2177 of the Civil Code affects the question
of prescription, we do not now decide. The said rule does not apply in the present case.

Having found the action of appellants barred by the statute of limitations, we do not consider it necessary to pass upon the other issues
raised in their brief.

The order appealed from is affirmed, without costs

Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

[G.R. No. 107518. October 8, 1998]

PNOC SHIPPING AND TRANSPORT CORPORATION, petitioner, vs. HONORABLE COURT OF APPEALS and MARIA EFIGENIA
FISHING CORPORATION, respondents.

DECISION
ROMERO, J.:

A party is entitled to adequate compensation only for such pecuniary loss actually suffered and duly proved.[1] Indeed, basic is the
rule that to recover actual damages, the 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 obtainable of the actual amount thereof. [2] The
claimant is duty-bound to point out specific facts that afford a basis for measuring whatever compensatory damages are borne. [3] A
court cannot merely rely on speculations, conjectures, or guesswork as to the fact and amount of damages[4] as well as hearsay[5] or
uncorroborated testimony whose truth is suspect.[6] Such are the jurisprudential precepts that the Court now applies in resolving the
instant petition.
The records disclose that in the early morning of September 21, 1977, the M/V Maria Efigenia XV, owned by private respondent
Maria Efigenia Fishing Corporation, was navigating the waters near Fortune Island in Nasugbu, Batangas on its way to Navotas, Metro
Manila when it collided with the vessel Petroparcel which at the time was owned by the Luzon Stevedoring Corporation (LSC).
After investigation was conducted by the Board of Marine Inquiry, Philippine Coast Guard Commandant Simeon N. Alejandro
rendered a decision finding the Petroparcel at fault. Based on this finding by the Board and after unsuccessful demands on
petitioner,[7] private respondent sued the LSC and the Petroparcel captain, Edgardo Doruelo, before the then Court of First Instance of
Caloocan City, paying thereto the docket fee of one thousand two hundred fifty-two pesos (P1,252.00) and the legal research fee of two
pesos (P2.00).[8] In particular, private respondent prayed for an award of P692,680.00, allegedly representing the value of the fishing
nets, boat equipment and cargoes of M/V Maria Efigenia XV, with interest at the legal rate plus 25% thereof as attorneys
fees. Meanwhile, during the pendency of the case, petitioner PNOC Shipping and Transport Corporation sought to be substituted in
place of LSC as it had already acquired ownership of the Petroparcel.[9]
For its part, private respondent later sought the amendment of its complaint on the ground that the original complaint failed to plead
for the recovery of the lost value of the hull of M/V Maria Efigenia XV.[10] Accordingly, in the amended complaint, private respondent
averred that M/V Maria Efigenia XV had an actual value of P800,000.00 and that, after deducting the insurance payment
of P200,000.00, the amount of P600,000.00 should likewise be claimed. The amended complaint also alleged that inflation resulting
from the devaluation of the Philippine peso had affected the replacement value of the hull of the vessel, its equipment and its lost
cargoes, such that there should be a reasonable determination thereof. Furthermore, on account of the sinking of the vessel, private
respondent supposedly incurred unrealized profits and lost business opportunities that would thereafter be proven.[11]
Subsequently, the complaint was further amended to include petitioner as a defendant [12] which the lower court granted in its order
of September 16, 1985.[13] After petitioner had filed its answer to the second amended complaint, on February 5, 1987, the lower court
issued a pre-trial order[14] containing, among other things, a stipulations of facts, to wit:
1. On 21 September 1977, while the fishing boat `M/V MARIA EFIGENIA owned by plaintiff was navigating in the vicinity of
Fortune Island in Nasugbu, Batangas, on its way to Navotas, Metro Manila, said fishing boat was hit by the LSCO tanker
Petroparcel causing the former to sink.
2. The Board of Marine Inquiry conducted an investigation of this marine accident and on 21 November 1978, the Commandant
of the Philippine Coast Guard, the Honorable Simeon N. Alejandro, rendered a decision finding the cause of the accident to be
the reckless and imprudent manner in which Edgardo Doruelo navigated the LSCO Petroparcel and declared the latter vessel at
fault.
3. On 2 April 1978, defendant Luzon Stevedoring Corporation (LUSTEVECO), executed in favor of PNOC Shipping and
Transport Corporation a Deed of Transfer involving several tankers, tugboats, barges and pumping stations, among which was
the LSCO Petroparcel.
4. On the same date on 2 April 1979 (sic), defendant PNOC STC again entered into an Agreement of Transfer with co-
defendant Lusteveco whereby all the business properties and other assets appertaining to the tanker and bulk oil departments
including the motor tanker LSCO Petroparcel of defendant Lusteveco were sold to PNOC STC.
5. The aforesaid agreement stipulates, among others, that PNOC-STC assumes, without qualifications, all obligations arising
from and by virtue of all rights it obtained over the LSCO `Petroparcel.
6. On 6 July 1979, another agreement between defendant LUSTEVECO and PNOC-STC was executed wherein Board of
Marine Inquiry Case No. 332 (involving the sea accident of 21 September 1977) was specifically identified and assumed by the
latter.
7. On 23 June 1979, the decision of Board of Marine Inquiry was affirmed by the Ministry of National Defense, in its decision
dismissing the appeal of Capt. Edgardo Doruelo and Chief mate Anthony Estenzo of LSCO `Petroparcel.
8. LSCO `Petroparcel is presently owned and operated by PNOC-STC and likewise Capt. Edgardo Doruelo is still in their
employ.
9. As a result of the sinking of M/V Maria Efigenia caused by the reckless and imprudent manner in which LSCO Petroparcel
was navigated by defendant Doruelo, plaintiff suffered actual damages by the loss of its fishing nets, boat equipments (sic) and
cargoes, which went down with the ship when it sank the replacement value of which should be left to the sound discretion of
this Honorable Court.
 After trial, the lower court[15] rendered on November 18, 1989 its decision disposing of Civil Case No. C-9457 as follows:
WHEREFORE, and in view of the foregoing, judgment is hereby rendered in favor of the plaintiff and against the defendant
PNOC Shipping & Transport Corporation, to pay the plaintiff:

a. The sum of P6,438,048.00 representing the value of the fishing boat with interest from the date of the filing of the complaint
at the rate of 6% per annum;

b. The sum of P50,000.00 as and for attorneys fees; and

c. The costs of suit.

The counterclaim is hereby DISMISSED for lack of merit. Likewise, the case against defendant Edgardo Doruelo is hereby
DISMISSED, for lack of jurisdiction.
SO ORDERED.
In arriving at the above disposition, the lower court cited the evidence presented by private respondent consisting of the testimony
of its general manager and sole witness, Edilberto del Rosario. Private respondents witness testified that M/V Maria Efigenia XV was
owned by private respondent per Exhibit A, a certificate of ownership issued by the Philippine Coast Guard showing that M/V Maria
Efigenia XV was a wooden motor boat constructed in 1965 with 128.23 gross tonnage. According to him, at the time the vessel sank, it
was then carrying 1,060 tubs (baeras) of assorted fish the value of which was never recovered. Also lost with the vessel were two
cummins engines (250 horsepower), radar, pathometer and compass. He further added that with the loss of his flagship vessel in his
fishing fleet of fourteen (14) vessels, he was constrained to hire the services of counsel whom he paid P10,000 to handle the case at
the Board of Marine Inquiry and P50,000.00 for commencing suit for damages in the lower court.
As to the award of P6,438,048.00 in actual damages, the lower court took into account the following pieces of documentary
evidence that private respondent proffered during trial:
(a) Exhibit A certified xerox copy of the certificate of ownership of M/V Maria Efigenia XV;
(b) Exhibit B a document titled Marine Protest executed by Delfin Villarosa, Jr. on September 22, 1977 stating that as a
result of the collision, the M/V Maria Efigenia XV sustained a hole at its left side that caused it to sink with its cargo of
1,050 baeras valued at P170,000.00;
(c) Exhibit C a quotation for the construction of a 95-footer trawler issued by Isidoro A. Magalong of I. A. Magalong
Engineering and Construction on January 26, 1987 to Del Rosario showing that construction of such trawler would
cost P2,250,000.00;
(d) Exhibit D pro forma invoice No. PSPI-05/87-NAV issued by E.D. Daclan of Power Systems, Incorporated on January 20,
1987 to Del Rosario showing that two (2) units of CUMMINS Marine Engine model N855-M, 195 bhp. at 1800 rpm.
would cost P1,160,000.00;
 (e) Exhibit E quotation of prices issued by Scan Marine Inc. on January 20, 1987 to Del Rosario showing that a unit of
Furuno Compact Daylight Radar, Model FR-604D, would cost P100,000.00 while a unit of Furuno Color Video
Sounder, Model FCV-501 would cost P45,000.00 so that the two units would cost P145,000.00;
(f) Exhibit F quotation of prices issued by Seafgear Sales, Inc. on January 21, 1987 to Del Rosario showing that two (2) rolls
of nylon rope (5 cir. X 300fl.) would cost P140,000.00; two (2) rolls of nylon rope (3 cir. X 240fl.), P42,750.00; one (1)
binocular (7 x 50), P1,400.00, one (1) compass (6), P4,000.00 and 50 pcs. of floats, P9,000.00 or a total of P197,
150.00;
(g) Exhibit G retainer agreement between Del Rosario and F. Sumulong Associates Law Offices stipulating an acceptance
fee of P5,000.00, per appearance fee of P400.00, monthly retainer of P500.00, contingent fee of 20% of the total
amount recovered and that attorneys fee to be awarded by the court should be given to Del Rosario; and
(h) Exhibit H price quotation issued by Seafgear Sales, Inc. dated April 10, 1987 to Del Rosario showing the cost of poly
nettings as: 50 rolls of 400/18 3kts. 100md x 100mtrs., P70,000.00; 50 rolls of 400/18 5kts. 100md x
100mtrs., P81,500.00; 50 rolls of 400/18 8kts. 100md x 100mtrs., P116,000.00, and 50 rolls of 400/18 10kts. 100md x
100mtrs., P146,500 and banera (tub) at P65.00 per piece or a total of P414,065.00
The lower court held that the prevailing replacement value of P6,438,048.00 of the fishing boat and all its equipment would
regularly increase at 30% every year from the date the quotations were given.
On the other hand, the lower court noted that petitioner only presented Lorenzo Lazaro, senior estimator at PNOC Dockyard &
Engineering Corporation, as sole witness and it did not bother at all to offer any documentary evidence to support its position. Lazaro
testified that the price quotations submitted by private respondent were excessive and that as an expert witness, he used the quotations
of his suppliers in making his estimates. However, he failed to present such quotations of prices from his suppliers, saying that he could
not produce a breakdown of the costs of his estimates as it was a sort of secret scheme. For this reason, the lower court concluded:
Evidently, the quotation of prices submitted by the plaintiff relative to the replacement value of the fishing boat and its
equipments in the tune of P6,438,048.00 which were lost due to the recklessness and imprudence of the herein defendants
were not rebutted by the latter with sufficient evidence. The defendants through their sole witness Lorenzo Lazaro relied heavily
on said witness bare claim that the amount afore-said is excessive or bloated, but they did not bother at all to present any
documentary evidence to substantiate such claim. Evidence to be believed, must not only proceed from the mouth of the
credible witness, but it must be credible in itself. (Vda. de Bonifacio vs. B. L. T. Bus Co., Inc. L-26810, August 31, 1970).
Aggrieved, petitioner filed a motion for the reconsideration of the lower courts decision contending that: (1) the lower court erred in
holding it liable for damages; that the lower court did not acquire jurisdiction over the case by paying only P1,252.00 as docket fee; (2)
assuming that plaintiff was entitled to damages, the lower court erred in awarding an amount greater than that prayed for in the second
amended complaint; and (3) the lower court erred when it failed to resolve the issues it had raised in its memorandum. [16] Petitioner
likewise filed a supplemental motion for reconsideration expounding on whether the lower court acquired jurisdiction over the subject
matter of the case despite therein plaintiffs failure to pay the prescribed docket fee.[17]
 On January 25, 1990, the lower court declined reconsideration for lack of merit. [18] Apparently not having received the order denying
its motion for reconsideration, petitioner still filed a motion for leave to file a reply to private respondents opposition to said
motion.[19] Hence, on February 12, 1990, the lower court denied said motion for leave to file a reply on the ground that by the issuance
of the order of January 25, 1990, said motion had become moot and academic.[20]
Unsatisfied with the lower courts decision, petitioner elevated the matter to the Court of Appeals which, however, affirmed the
same in toto on October 14, 1992.[21] On petitioners assertion that the award of P6,438,048.00 was not convincingly proved by
competent and admissible evidence, the Court of Appeals ruled that it was not necessary to qualify Del Rosario as an expert witness
because as the owner of the lost vessel, it was well within his knowledge and competency to identify and determine the equipment
installed and the cargoes loaded on the vessel. Considering the documentary evidence presented as in the nature of market reports or
quotations, trade journals, trade circulars and price lists, the Court of Appeals held, thus:
Consequently, until such time as the Supreme Court categorically rules on the admissibility or inadmissibility of this class of
evidence, the reception of these documentary exhibits (price quotations) as evidence rests on the sound discretion of the trial
court. In fact, where the lower court is confronted with evidence which appears to be of doubtful admissibility, the judge should
declare in favor of admissibility rather than of non-admissibility (The Collector of Palakadhari, 124 [1899], p. 43, cited in
Francisco, Revised Rules of Court, Evidence, Volume VII, Part I, 1990 Edition, p. 18). Trial courts are enjoined to observe the
strict enforcement of the rules of evidence which crystallized through constant use and practice and are very useful and
effective aids in the search for truth and for the effective administration of justice. But in connection with evidence which may
appear to be of doubtful relevancy or incompetency or admissibility, it is the safest policy to be liberal, not rejecting them on
doubtful or technical grounds, but admitting them unless plainly irrelevant, immaterial or incompetent, for the reason that their
rejection places them beyond the consideration of the court. If they are thereafter found relevant or competent, can easily be
remedied by completely discarding or ignoring them. (Banaria vs. Banaria, et al., C.A. No. 4142, May 31, 1950; cited in
Francisco, Supra). [Underscoring supplied].
Stressing that the alleged inadmissible documentary exhibits were never satisfactorily rebutted by appellants own sole witness in
the person of Lorenzo Lazaro, the appellate court found that petitioner ironically situated itself in an inconsistent posture by the fact that
its own witness, admittedly an expert one, heavily relies on the very same pieces of evidence (price quotations) appellant has so
vigorously objected to as inadmissible evidence. Hence, it concluded:
x x x. The amount of P6,438,048.00 was duly established at the trial on the basis of appellees documentary exhibits (price
quotations) which stood uncontroverted, and which already included the amount by way of adjustment as prayed for in the
amended complaint. There was therefore no need for appellee to amend the second amended complaint in so far as to the
claim for damages is concerned to conform with the evidence presented at the trial. The amount of P6,438,048.00 awarded is
clearly within the relief prayed for in appellees second amended complaint.
On the issue of lack of jurisdiction, the respondent court held that following the ruling in Sun Insurance Ltd. v. Asuncion,[22] the
additional docket fee that may later on be declared as still owing the court may be enforced as a lien on the judgment.
Hence, the instant recourse.
 In assailing the Court of Appeals decision, petitioner posits the view that the award of P6,438,048 as actual damages should have
been in light of these considerations, namely: (1) the trial court did not base such award on the actual value of the vessel and its
equipment at the time of loss in 1977; (2) there was no evidence on extraordinary inflation that would warrant an adjustment of the
replacement cost of the lost vessel, equipment and cargo; (3) the value of the lost cargo and the prices quoted in respondents
documentary evidence only amount to P4,336,215.00; (4) private respondents failure to adduce evidence to support its claim for
unrealized profit and business opportunities; and (5) private respondents failure to prove the extent and actual value of damages
sustained as a result of the 1977 collision of the vessels.[23]
Under Article 2199 of the Civil Code, actual or compensatory damages are those awarded in satisfaction of, or in recompense for,
loss or injury sustained. They proceed from a sense of natural justice and are designed to repair the wrong that has been done, to
compensate for the injury inflicted and not to impose a penalty. [24] In actions based on torts or quasi-delicts, actual damages include all
the natural and probable consequences of the act or omission complained of. [25] There are two kinds of actual or compensatory
damages: one is the loss of what a person already possesses (dao emergente), and the other is the failure to receive as a benefit that
which would have pertained to him (lucro cesante).[26] Thus:
Where goods are destroyed by the wrongful act of the defendant the plaintiff is entitled to their value at the time of
destruction, that is, normally, the sum of money which he would have to pay in the market for identical or essentially similar
goods, plus in a proper case damages for the loss of use during the period before replacement. In other words, in the case of
profit-earning chattels, what has to be assessed is the value of the chattel to its owner as a going concern at the time and place
of the loss, and this means, at least in the case of ships, that regard must be had to existing and pending engagements.x x x.
x x x. If the market value of the ship reflects the fact that it is in any case virtually certain of profitable employment, then nothing
can be added to that value in respect of charters actually lost, for to do so would be pro tanto to compensate the plaintiff twice
over. On the other hand, if the ship is valued without reference to its actual future engagements and only in the light of its profit-
earning potentiality, then it may be necessary to add to the value thus assessed the anticipated profit on a charter or other
engagement which it was unable to fulfill. What the court has to ascertain in each case is the `capitalised value of the vessel as
a profit-earning machine not in the abstract but in view of the actual circumstances, without, of course, taking into account
considerations which were too remote at the time of the loss.[27] [Underscoring supplied].
As stated at the outset, to enable an injured party to recover actual or compensatory damages, he is required to prove the actual
amount of loss with reasonable degree of certainty premised upon competent proof and on the best evidence available. [28] The burden
of proof is on the party who would be defeated if no evidence would be presented on either side. He must establish his case by a
preponderance of evidence which means that the evidence, as a whole, adduced by one side is superior to that of the other. [29] In other
words, damages cannot be presumed and courts, in making an award must point out specific facts that could afford a basis for
measuring whatever compensatory or actual damages are borne. [30]
In this case, actual damages were proven through the sole testimony of private respondents general manager and certain pieces of
documentary evidence. Except for Exhibit B where the value of the 1,050 baeras of fish were pegged at their September 1977 value
when the collision happened, the pieces of documentary evidence proffered by private respondent with respect to items and equipment
lost show similar items and equipment with corresponding prices in early 1987 or approximately ten (10) years after the
collision. Noticeably, petitioner did not object to the exhibits in terms of the time index for valuation of the lost goods and equipment. In
objecting to the same pieces of evidence, petitioner commented that these were not duly authenticated and that the witness (Del
Rosario) did not have personal knowledge on the contents of the writings and neither was he an expert on the subjects
thereof.[31] Clearly ignoring petitioners objections to the exhibits, the lower court admitted these pieces of evidence and gave them due
weight to arrive at the award of P6,438,048.00 as actual damages.
The exhibits were presented ostensibly in the course of Del Rosarios testimony. Private respondent did not present any other
witnesses especially those whose signatures appear in the price quotations that became the bases of the award. We hold, however,
that the price quotations are ordinary private writings which under the Revised Rules of Court should have been proffered along with
the testimony of the authors thereof. Del Rosario could not have testified on the veracity of the contents of the writings even though he
was the seasoned owner of a fishing fleet because he was not the one who issued the price quotations. Section 36, Rule 130 of the
Revised Rules of Court provides that a witness can testify only to those facts that he knows of his personal knowledge.
For this reason, Del Rosarios claim that private respondent incurred losses in the total amount of P6,438,048.00 should be admitted
with extreme caution considering that, because it was a bare assertion, it should be supported by independent evidence. Moreover,
because he was the owner of private respondent corporation [32] whatever testimony he would give with regard to the value of the lost
vessel, its equipment and cargoes should be viewed in the light of his self-interest therein. We agree with the Court of Appeals that his
testimony as to the equipment installed and the cargoes loaded on the vessel should be given credence [33] considering his familiarity
thereto. However, we do not subscribe to the conclusion that his valuationof such equipment, cargo and the vessel itself should be
accepted as gospel truth.[34] We must, therefore, examine the documentary evidence presented to support Del Rosarios claim as
regards the amount of losses.
The price quotations presented as exhibits partake of the nature of hearsay evidence considering that the persons who issued them
were not presented as witnesses.[35] Any evidence, whether oral or documentary, is hearsay if its probative value is not based on the
personal knowledge of the witness but on the knowledge of another person who is not on the witness stand. Hearsay evidence,
whether objected to or not, has no probative value unless the proponent can show that the evidence falls within the exceptions to the
hearsay evidence rule.[36] On this point, we believe that the exhibits do not fall under any of the exceptions provided under Sections 37
to 47 of Rule 130.[37]
It is true that one of the exceptions to the hearsay rule pertains to commercial lists and the like under Section 45, Rule 130 of the
Revised Rules on Evidence. In this respect, the Court of Appeals considered private respondents exhibits as commercial lists. It added,
however, that these exhibits should be admitted in evidence until such time as the Supreme Court categorically rules on the
admissibility or inadmissibility of this class of evidence because the reception of these documentary exhibits (price quotations) as
evidence rests on the sound discretion of the trial court.[38] Reference to Section 45, Rule 130, however, would show that the conclusion
of the Court of Appeals on the matter was arbitrarily arrived at. This rule states:
Commercial lists and the like. Evidence of statements of matters of interest to persons engaged in an occupation contained in a
list, register, periodical, or other published compilation is admissible as tending to prove the truth of any relevant matter so
stated if that compilation is published for use by persons engaged in that occupation and is generally used and relied upon by
them there.
Under Section 45 of the aforesaid Rule, a document is a commercial list if: (1) it is a statement of matters of interest to persons
engaged in an occupation; (2) such statement is contained in a list, register, periodical or other published compilation; (3) said
compilation is published for the use of persons engaged in that occupation, and (4) it is generally used and relied upon by persons in
the same occupation.
Based on the above requisites, it is our considered view that Exhibits B, C, D, E, F and H [39] are not commercial lists for these do
not belong to the category of other published compilations under Section 45 aforequoted. Under the principle of ejusdem
generis, (w)here general words follow an enumeration of persons or things, by words of a particular and specific meaning, such general
words are not to be construed in their widest extent, but are to be held as applying only to persons or things of the same kind or class
as those specifically mentioned.[40] The exhibits mentioned are mere price quotations issued personally to Del Rosario who requested
for them from dealers of equipment similar to the ones lost at the collision of the two vessels. These are not published in any list,
register, periodical or other compilation on the relevant subject matter. Neither are these market reports or quotations within the purview
of commercial lists as these are not standard handbooks or periodicals, containing data of everyday professional need and relied upon
in the work of the occupation.[41] These are simply letters responding to the queries of Del Rosario. Thus, take for example Exhibit D
which reads:

January 20, 1987

PROFORMA INVOICE NO. PSPI-05/87-NAV

MARIA EFIGINIA FISHING CORPORATION

Navotas, Metro Manila

Attention: MR. EDDIE DEL ROSARIO

Gentlemen:

In accordance to your request, we are pleased to quote our Cummins Marine Engine, to wit.

Two (2) units CUMMINS Marine Engine model N855-M, 195 bhp.
at 1800 rpm., 6-cylinder in-line, 4-stroke cycle, natural aspirated, 5 in. x 6 in. bore and stroke, 855 cu. In.
displacement, keel-cooled, electric starting coupled with Twin-Disc Marine gearbox model MG-509, 4.5:1
reduction ratio, includes oil cooler, companion flange, manual and standard accessories as per attached
sheet.
Price FOB Manila - - - - - - - - - - - - - - - P 580,000.00/unit
Total FOB Manila - - - - - - - - - - - - - - - P 1,160,000.00
vvvvvvvvv

T E R M S : CASH
 DELIVERY : 60-90 days from date of order.

VALIDITY : Subject to our final confirmation.

WARRANTY : One (1) full year against factory defect.

Very truly yours,

POWER SYSTEMS, INC.

(Sgd.)
E. D. Daclan
To be sure, letters and telegrams are admissible in evidence but these are, however, subject to the general principles of evidence
and to various rules relating to documentary evidence.[42] Hence, in one case, it was held that a letter from an automobile dealer
offering an allowance for an automobile upon purchase of a new automobile after repairs had been completed, was not a price current
or commercial list within the statute which made such items presumptive evidence of the value of the article specified therein. The letter
was not admissible in evidence as a commercial list even though the clerk of the dealer testified that he had written the letter in due
course of business upon instructions of the dealer.[43]
But even on the theory that the Court of Appeals correctly ruled on the admissibility of those letters or communications when it
held that unless plainly irrelevant, immaterial or incompetent, evidence should better be admitted rather than rejected on doubtful or
technical grounds,[44] the same pieces of evidence, however, should not have been given probative weight. This is a distinction we
wish to point out. Admissibility of evidence refers to the question of whether or not the circumstance (or evidence) is to considered at
all.[45] On the other hand, the probative value of evidence refers to the question of whether or not it proves an issue.[46] Thus, a letter
may be offered in evidence and admitted as such but its evidentiary weight depends upon the observance of the rules on
evidence. Accordingly, the author of the letter should be presented as witness to provide the other party to the litigation the opportunity
to question him on the contents of the letter. Being mere hearsay evidence, failure to present the author of the letter renders its
contents suspect. As earlier stated, hearsay evidence, whether objected to or not, has no probative value. Thus:
The courts differ as to the weight to be given to hearsay evidence admitted without objection. Some hold that when hearsay has
been admitted without objection, the same may be considered as any other properly admitted testimony. Others maintain that it
is entitled to no more consideration than if it had been excluded.
The rule prevailing in this jurisdiction is the latter one. Our Supreme Court held that although the question of admissibility of
evidence can not be raised for the first time on appeal, yet if the evidence is hearsay it has no probative value and should be
disregarded whether objected to or not. `If no objection is made quoting Jones on Evidence - `it (hearsay) becomes evidence by
reason of the want of such objection even though its admission does not confer upon it any new attribute in point of weight. Its
nature and quality remain the same, so far as its intrinsic weakness and incompetency to satisfy the mind are concerned, and
as opposed to direct primary evidence, the latter always prevails.
 The failure of the defense counsel to object to the presentation of incompetent evidence, like hearsay evidence or evidence that
violates the rules of res inter alios acta, or his failure to ask for the striking out of the same does not give such evidence any
probative value. But admissibility of evidence should not be equated with weight of evidence. Hearsay evidence whether
objected to or not has no probative value.[47]
Accordingly, as stated at the outset, damages may not be awarded on the basis of hearsay evidence. [48]
Nonetheless, the non-admissibility of said exhibits does not mean that it totally deprives private respondent of any redress for the
loss of its vessel. This is because in Lufthansa German Airlines v. Court of Appeals,[49] the Court said:
In the absence of competent proof on the actual damage suffered, private respondent is `entitled to nominal damages which, as
the law says, is adjudicated in order that a right of the plaintiff, which has been violated or invaded by defendant, may be
vindicated and recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered. [Underscoring supplied].
Nominal damages are awarded in every obligation arising from law, contracts, quasi-contracts, acts or omissions punished by law,
and quasi-delicts, or in every case where property right has been invaded. [50] Under Article 2223 of the Civil Code, (t)he adjudication of
nominal damages shall preclude further contest upon the right involved and all accessory questions, as between the parties to the suit,
or their respective heirs and assigns.
Actually, nominal damages are damages in name only and not in fact. Where these are allowed, they are not treated as an
equivalent of a wrong inflicted but simply in recognition of the existence of a technical injury.[51] However, the amount to be awarded as
nominal damages shall be equal or at least commensurate to the injury sustained by private respondent considering the concept and
purpose of such damages.[52] The amount of nominal damages to be awarded may also depend on certain special reasons extant in the
case.[53]
Applying now such principles to the instant case, we have on record the fact that petitioners vessel Petroparcel was at fault as well
as private respondents complaint claiming the amount of P692,680.00 representing the fishing nets, boat equipment and cargoes that
sunk with the M/V Maria Efigenia XV. In its amended complaint, private respondent alleged that the vessel had an actual value
of P800,000.00 but it had been paid insurance in the amount of P200,000.00 and, therefore, it claimed only the amount
of P600,000.00. Ordinarily, the receipt of insurance payments should diminish the total value of the vessel quoted by private respondent
in his complaint considering that such payment is causally related to the loss for which it claimed compensation. This Court believes
that such allegations in the original and amended complaints can be the basis for determination of a fair amount of nominal damages
inasmuch as a complaint alleges the ultimate facts constituting the plaintiff's cause of action. [54] Private respondent should be bound by
its allegations on the amount of its claims.
With respect to petitioners contention that the lower court did not acquire jurisdiction over the amended complaint increasing the
amount of damages claimed to P600,000.00, we agree with the Court of Appeals that the lower court acquired jurisdiction over the case
when private respondent paid the docket fee corresponding to its claim in its original complaint. Its failure to pay the docket fee
corresponding to its increased claim for damages under the amended complaint should not be considered as having curtailed the lower
courts jurisdiction. Pursuant to the ruling in Sun Insurance Office, Ltd. (SIOL) v. Asuncion,[55] the unpaid docket fee should be
considered as a lien on the judgment even though private respondent specified the amount of P600,000.00 as its claim for damages in
its amended complaint.
 Moreover, we note that petitioner did not question at all the jurisdiction of the lower court on the ground of insufficient docket fees in
its answers to both the amended complaint and the second amended complaint. It did so only in its motion for reconsideration of the
decision of the lower court after it had received an adverse decision. As this Court held in Pantranco North Express, Inc. v. Court of
Appeals,[56] participation in all stages of the case before the trial court, that included invoking its authority in asking for affirmative relief,
effectively barred petitioner by estoppel from challenging the courts jurisdiction. Notably, from the time it filed its answer to the second
amended complaint on April 16, 1985,[57] petitioner did not question the lower courts jurisdiction. It was only on December 29,
1989[58] when it filed its motion for reconsideration of the lower courts decision that petitioner raised the question of the lower courts lack
of jurisdiction. Petitioner thus foreclosed its right to raise the issue of jurisdiction by its own inaction.
WHEREFORE, the challenged decision of the Court of Appeals dated October 14, 1992 in CA-G. R. CV No. 26680 affirming that of
the Regional Trial Court of Caloocan City, Branch 121, is hereby MODIFIED insofar as it awarded actual damages to private
respondent Maria Efigenia Fishing Corporation in the amount of P6,438,048.00 for lack of evidentiary bases therefor. Considering the
fact, however, that: (1) technically petitioner sustained injury but which, unfortunately, was not adequately and properly proved, and (2)
this case has dragged on for almost two decades, we believe that an award of Two Million (P2,000,000.00)[59] in favor of private
respondent as and for nominal damages is in order.
No pronouncement as to costs.
SO ORDERED.
Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

G.R. No. L-22415 March 30, 1966

FERNANDO LOPEZ, ET AL., plaintiffs-appellants,

vs.
PAN AMERICAN WORLD AIRWAYS, defendant-appellant.

Ross, Selph and Carrascoso for the defendant-appellant.

Vicente J. Francisco for the plaintiffs-appellants.

BENGZON, J.P., J.:

Plaintiffs and defendant appeal from a decision of the Court of First Instance of Rizal. Since the value in controversy exceeds P200,000
the appeals were taken directly to this Court upon all questions involved (Sec. 17, par. 3[5], Judiciary Act).

Stated briefly the facts not in dispute are as follows: Reservations for first class accommodations in Flight No. 2 of Pan American World
Airways — hereinafter otherwise called PAN-AM — from Tokyo to San Francisco on May 24, 1960 were made with
PAN-AM on March 29, 1960, by "Your Travel Guide" agency, specifically, by Delfin Faustino, for then Senator Fernando Lopez, his wife
Maria J. Lopez, his son-in-law Alfredo Montelibano, Jr., and his daughter, Mrs. Alfredo Montelibano, Jr., (Milagros Lopez Montelibano).
PAN-AM's San Francisco head office confirmed the reservations on March 31, 1960.

First class tickets for the abovementioned flight were subsequently issued by
PAN-AM on May 21 and 23, 1960, in favor of Senator Lopez and his party. The total fare of P9,444 for all of them was fully paid before
the tickets were issued.

As scheduled Senator Lopez and party left Manila by Northwest Airlines on May 24, 1960, arriving in Tokyo at 5:30 P.M. of that day. As
soon as they arrived Senator Lopez requested Minister Busuego of the Philippine Embassy to contact PAN-AM's Tokyo office regarding
their first class accommodations for that evening's flight. For the given reason that the first class seats therein were all booked up,
however, PAN-AM's Tokyo office informed Minister Busuego that PAN-AM could not accommodate Senator Lopez and party in that trip
as first class passengers. Senator Lopez thereupon gave their first class tickets to Minister Busuego for him to show the same to PAN-
AM's Tokyo office, but the latter firmly reiterated that there was no accommodation for them in the first class, stating that they could not
go in that flight unless they took the tourist class therein.

Due to pressing engagements awaiting Senator Lopez and his wife, in the United States — he had to attend a business conference in
San Francisco the next day and she had to undergo a medical check-up in Mayo Clinic, Rochester, Minnesota, on May 28, 1960 and
needed three days rest before that in San Francisco — Senator Lopez and party were constrained to take PAN-AM's flight from Tokyo
to San Francisco as tourist passengers. Senator Lopez however made it clear, as indicated in his letter to PAN-AM's Tokyo office on
that date (Exh. A), that they did so "under protest" and without prejudice to further action against the airline.1äwphï1.ñët

Suit for damages was thereafter filed by Senator Lopez and party against PAN-AM on June 2, 1960 in the Court of First Instance of
Rizal. Alleging breach of contracts in bad faith by defendant, plaintiffs asked for P500,000 actual and moral damages, P100,000
exemplary damages, P25,000 attorney's fees plus costs. PAN-AM filed its answer on June 22, 1960, asserting that its failure to provide
first class accommodations to plaintiffs was due to honest error of its employees. It also interposed a counterclaim for attorney's fees of
P25,000.

Subsequently, further pleadings were filed, thus: plaintiffs' answer to the counterclaim, on July 25, 1960; plaintiffs' reply attached to
motion for its admittance, on December 2, 1961; defendant's supplemental answer, on March 8, 1962; plaintiffs' reply to supplemental
answer, on March 10, 1962; and defendant's amended supplemental answer, on July 10, 1962.

After trial — which took twenty-two (22) days ranging from November 25, 1960 to January 5, 1963 — the Court of First Instance
rendered its decision on November 13, 1963, the dispositive portion stating:

In view of the foregoing considerations, judgment is hereby rendered in favor of the plaintiffs and against the defendant, which is
accordingly ordered to pay the plaintiffs the following: (a) P100,000.00 as moral damages; (b) P20,000.00 as exemplary
damages; (c) P25,000.00 as attorney's fees, and the costs of this action.
 So ordered.

Plaintiffs, however, on November 21, 1963, moved for reconsideration of said judgment, asking that moral damages be increased to
P400,000 and that six per cent (6%) interest per annum on the amount of the award be granted. And defendant opposed the same.
Acting thereon the trial court issued an order on December 14, 1963, reconsidering the dispositive part of its decision to read as follows:

In view of the foregoing considerations, judgment is hereby rendered in favor of the plaintiffs and against the defendant, which is
accordingly ordered to pay the plaintiffs the following: (a) P150,000.00 as moral damages; (b) P25,000.00 as exemplary
damages; with legal interest on both from the date of the filing of the complaint until paid; and (c) P25,000.00 as attorney's fees;
and the costs of this action.

So ordered.

It is from said judgment, as thus reconsidered, that both parties have appealed.

Defendant, as stated, has from the start admitted that it breached its contracts with plaintiffs to provide them with first class
accommodations in its Tokyo-San Francisco flight of May 24, 1960. In its appeal, however, it takes issue with the finding of the court a
quo that it acted in bad faith in the branch of said contracts. Plaintiffs, on the other hand, raise questions on the amount of damages
awarded in their favor, seeking that the same be increased to a total of P650,000.

Anent the issue of bad faith the records show the respective contentions of the parties as follows.

According to plaintiffs, defendant acted in bad faith because it deliberately refused to comply with its contract to provide first class
accommodations to plaintiffs, out of racial prejudice against Orientals. And in support of its contention that what was done to plaintiffs is
an oftrepeated practice of defendant, evidence was adduced relating to two previous instances of alleged racial discrimination by
defendant against Filipinos in favor of "white" passengers. Said previous occasions are what allegedly happened to (1) Benito Jalbuena
and (2) Cenon S. Cervantes and his wife.

And from plaintiffs' evidence this is what allegedly happened; Jalbuena bought a first class ticket from PAN-AM on April 13, 1960; he
confirmed it on April 15, 1960 as to the Tokyo-Hongkong flight of April 20, 1960; PAN-AM similarly confirmed it on April 20, 1960. At the
airport he and another Oriental — Mr. Tung — were asked to step aside while other passengers - including "white" passengers —
boarded PAN-AM's plane. Then PAN-AM officials told them that one of them had to stay behind. Since Mr. Tung was going all the way
to London, Jalbuena was chosen to be left behind. PAN-AM's officials could only explain by saying there was "some mistake". Jalbuena
thereafter wrote PAN-AM to protest the incident (Exh. B).

As to Cenon S. Cervantes it would appear that in Flight No. 6 of PAN-AM on September 29, 1958 from Bangkok to Hongkong, he and
his wife had to take tourist class, although they had first class tickets, which they had previously confirmed, because their seats in first
class were given to "passengers from London."
Against the foregoing, however, defendant's evidence would seek to establish its theory of honest mistake, thus:

The first class reservations of Senator Lopez and party were made on March 29, 1960 together with those of four members of the
Rufino family, for a total of eight (8) seats, as shown in their joint reservation card (Exh. 1). Subsequently on March 30, 1960, two other
Rufinos secured reservations and were given a separate reservation card (Exh. 2). A new reservation card consisting of two pages
(Exhs. 3 and 4) was then made for the original of eight passengers, namely, Senator Lopez and party and four members of the Rufino
family, the first page (Exh. 3) referring to 2 Lopezes, 2 Montelibanos and 1 Rufino and the second page (Exh. 4) referring to 3 Rufinos.
On April 18, 1960 "Your Travel Guide" agency cancelled the reservations of the Rufinos. A telex message was thereupon sent on that
date to PAN-AM's head office at San Francisco by Mariano Herranz, PAN-AM's reservations employee at its office in Escolta, Manila.
(Annex A-Acker's to Exh. 6.) In said message, however, Herranz mistakenly cancelled all the seats that had been reserved, that is,
including those of Senator Lopez and party.

The next day — April 1960 — Herranz discovered his mistake, upon seeing the reservation card newly prepared by his co-employee
Pedro Asensi for Sen. Lopez and party to the exclusion of the Rufinos (Exh. 5). It was then that Herranz sent another telex wire to the
San Francisco head office, stating his error and asking for the reinstatement of the four (4) first class seats reserved for Senator Lopez
and party (Annex A-Velasco's to Exh. 6). San Francisco head office replied on April 22, 1960 that Senator Lopez and party are
waitlisted and that said office is unable to reinstate them (Annex B-Velasco's to Exh. 6).

Since the flight involved was still more than a month away and confident that reinstatement would be made, Herranz forgot the matter
and told no one about it except his co-employee, either Armando Davila or Pedro Asensi or both of them (Tsn., 123-124, 127, Nov. 17,
1961).

Subsequently, on April 27, 1960, Armando Davila, PAN-AM's reservations employee working in the same Escolta office as Herranz,
phoned PAN-AM's ticket sellers at its other office in the Manila Hotel, and confirmed the reservations of Senator Lopez and party.

PAN-AM's reservations supervisor Alberto Jose, discovered Herranz's mistake after "Your Travel Guide" phone on May 18, 1960 to
state that Senator Lopez and party were going to depart as scheduled. Accordingly, Jose sent a telex wire on that date to PAN-AM's
head office at San Francisco to report the error and asked said office to continue holding the reservations of Senator Lopez and party
(Annex B-Acker's to Exh. 6). Said message was reiterated by Jose in his telex wire of May 19, 1960 (Annex C-Acker's to Exh. 6). San
Francisco head office replied on May 19, 1960 that it regrets being unable to confirm Senator Lopez and party for the reason that the
flight was solidly booked (Exh. 7). Jose sent a third telex wire on May 20, 1960 addressed to PAN-AM's offices at San Francisco, New
York (Idlewild Airport), Tokyo and Hongkong, asking all-out assistance towards restoring the cancelled spaces and for report of
cancellations at their end (Annex D-Acker's to Exh. 6). San Francisco head office reiterated on May 20, 1960 that it could not reinstate
the spaces and referred Jose to the Tokyo and Hongkong offices (Exh. 8). Also on May 20, the Tokyo office of PAN-AM wired Jose
stating it will do everything possible (Exh. 9).

Expecting that some cancellations of bookings would be made before the flight time, Jose decided to withhold from Senator Lopez and
party, or their agent, the information that their reservations had been cancelled.
Armando Davila having previously confirmed Senator Lopez and party's first class reservations to PAN-AM's ticket sellers at its Manila
Hotel office, the latter sold and issued in their favor the corresponding first class tickets on the 21st and 23rd of May, 1960.

From the foregoing evidence of defendant it is in effect admitted that defendant — through its agents — first cancelled plaintiffs,
reservations by mistake and thereafter deliberately and intentionally withheld from plaintiffs or their travel agent the fact of said
cancellation, letting them go on believing that their first class reservations stood valid and confirmed. In so misleading plaintiffs into
purchasing first class tickets in the conviction that they had confirmed reservations for the same, when in fact they had none, defendant
wilfully and knowingly placed itself into the position of having to breach its a foresaid contracts with plaintiffs should there be no last-
minute cancellation by other passengers before flight time, as it turned out in this case. Such actuation of defendant may indeed have
been prompted by nothing more than the promotion of its self-interest in holding on to Senator Lopez and party as passengers in its
flight and foreclosing on their chances to seek the services of other airlines that may have been able to afford them first class
accommodations. All the time, in legal contemplation such conduct already amounts to action in bad faith. For bad faith means a breach
of a known duty through some motive of interest or ill-will (Spiegel vs. Beacon Participations, 8 NE 2d 895, 907). As stated in Kamm v.
Flink, 113 N.J.L. 582, 175 A. 62, 99 A.L.R. 1, 7: "Self-enrichment or fraternal interest, and not personal ill-will, may well have been the
motive; but it is malice nevertheless."

As of May 18, 1960 defendant's reservations supervisor, Alberto Jose knew that plaintiffs' reservations had been cancelled. As of May
20 he knew that the San Francisco head office stated with finality that it could not reinstate plaintiffs' cancelled reservations. And yet
said reservations supervisor made the "decision" — to use his own, word — to withhold the information from the plaintiffs. Said Alberto
Jose in his testimony:

Q Why did you not notify them?

A Well, you see, sir, in my fifteen (15) years of service with the air lines business my experience is that even if the flights are
solidly booked months in advance, usually the flight departs with plenty of empty seats both on the first class and tourist class.
This is due to late cancellation of passengers, or because passengers do not show up in the airport, and it was our hope others
come in from another flight and, therefore, are delayed and, therefore, missed their connections. This experience of mine,
coupled with that wire from Tokyo that they would do everything possible prompted me to withhold the information, but
unfortunately, instead of the first class seat that I was hoping for and which I anticipated only the tourists class was open on
which Senator and Mrs. Lopez, Mr. and Mrs. Montelibano were accommodated. Well, I fully realize now the gravity of my
decision in not advising Senator and Mrs. Lopez, Mr. and Mrs. Montelibano nor their agents about the erroneous cancellation
and for which I would like them to know that I am very sorry.

xxx xxx xxx

Q So it was not your duty to notify Sen. Lopez and parties that their reservations had been cancelled since May 18, 1960?
 A As I said before it was my duty. It was my duty but as I said again with respect to that duty I have the power to make a decision
or use my discretion and judgment whether I should go ahead and tell the passenger about the cancellation. (Tsn., pp. 17-19,
28-29, March 15, 1962.)

At the time plaintiffs bought their tickets, defendant, therefore, in breach of its known duty, made plaintiffs believe that their reservation
had not been cancelled. An additional indication of this is the fact that upon the face of the two tickets of record, namely, the ticket
issued to Alfredo Montelibano, Jr. on May 21, 1960 (Exh. 22) and that issued to Mrs. Alfredo Montelibano, Jr., on May 23, 1960 (Exh.
23), the reservation status is stated as "OK". Such willful-non-disclosure of the cancellation or pretense that the reservations for
plaintiffs stood — and not simply the erroneous cancellation itself — is the factor to which is attributable the breach of the resulting
contracts. And, as above-stated, in this respect defendant clearly acted in bad faith.

As if to further emphasize its bad faith on the matter, defendant subsequently promoted the employee who cancelled plaintiffs'
reservations and told them nothing about it. The record shows that said employee — Mariano Herranz — was not subjected to
investigation and suspension by defendant but instead was given a reward in the form of an increase of salary in June of the following
year (Tsn., 86-88, Nov. 20, 1961).

At any rate, granting all the mistakes advanced by the defendant, there would at least be negligence so gross and reckless as to
amount to malice or bad faith (Fores vs. Miranda, L-12163, March 4, 1959; Necesito v. Paras, L-10605-06, June 30, 1958). Firstly,
notwithstanding the entries in the reservation cards (Exhs. 1 & 3) that the reservations cancelled are those of the Rufinos only, Herranz
made the mistake, after reading said entries, of sending a wire cancelling all the reservations, including those of Senator Lopez and
party (Tsn., pp. 108-109, Nov. 17, 1961). Secondly, after sending a wire to San Francisco head office on April 19, 1960 stating his error
and asking for reinstatement, Herranz simply forgot about the matter. Notwithstanding the reply of San Francisco head Office on April
22, 1960 that it cannot reinstate Senator Lopez and party (Annex B-Velasco's to Exh. 6), it was assumed and taken for granted that
reinstatement would be made. Thirdly, Armando Davila confirmed plaintiff's reservations in a phone call on April 27, 1960 to defendant's
ticket sellers, when at the time it appeared in plaintiffs' reservation card (Exh. 5) that they were only waitlisted passengers. Fourthly,
defendant's ticket sellers issued plaintiffs' tickets on May 21 and 23, 1960, without first checking their reservations just before issuing
said tickets. And, finally, no one among defendant's agents notified Senator Lopez and party that their reservations had been cancelled,
a precaution that could have averted their entering with defendant into contracts that the latter had already placed beyond its power to
perform.

Accordingly, there being a clear admission in defendant's evidence of facts amounting to a bad faith on its part in regard to the breach
of its contracts with plaintiffs, it becomes unnecessary to further discuss the evidence adduced by plaintiffs to establish defendant's bad
faith. For what is admitted in the course of the trial does not need to be proved (Sec. 2, Rule 129, Rules of Court).

Addressing ourselves now to the question of damages, it is well to state at the outset those rules and principles. First, moral damages
are recoverable in breach of contracts where the defendant acted fraudulently or in bad faith (Art. 2220, New Civil Code). Second, in
addition to moral damages, exemplary or corrective damages may be imposed by way of example or correction for the public good, in
breach of contract where the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner (Articles 2229, 2232,
New Civil Code). And, third, a written contract for an attorney's services shall control the amount to be paid therefor unless found by the
court to be unconscionable or unreasonable (Sec. 24, Rule 138, Rules of Court).

First, then, as to moral damages. As a proximate result of defendant's breach in bad faith of its contracts with plaintiffs, the latter
suffered social humiliation, wounded feelings, serious anxiety and mental anguish. For plaintiffs were travelling with first class tickets
issued by defendant and yet they were given only the tourist class. At stop-overs, they were expected to be among the first-class
passengers by those awaiting to welcome them, only to be found among the tourist passengers. It may not be humiliating to travel as
tourist passengers; it is humiliating to be compelled to travel as such, contrary to what is rightfully to be expected from the contractual
undertaking.

Senator Lopez was then Senate President Pro Tempore. International carriers like defendant know the prestige of such an office. For
the Senate is not only the Upper Chamber of the Philippine Congress, but the nation's treaty-ratifying body. It may also be mentioned
that in his aforesaid office Senator Lopez was in a position to preside in impeachment cases should the Senate sit as Impeachment
Tribunal. And he was former Vice-President of the Philippines. Senator Lopez was going to the United States to attend a private
business conference of the Binalbagan-Isabela Sugar Company; but his aforesaid rank and position were by no means left behind, and
in fact he had a second engagement awaiting him in the United States: a banquet tendered by Filipino friends in his honor as Senate
President Pro Tempore (Tsn., pp. 14-15, Nov. 25, 1960). For the moral damages sustained by him, therefore, an award of P100,000.00
is appropriate.

Mrs. Maria J. Lopez, as wife of Senator Lopez, shared his prestige and therefore his humiliation. In addition she suffered physical
discomfort during the 13-hour trip,(5 hours from Tokyo to Honolulu and 8 hours from Honolulu to San Francisco). Although Senator
Lopez stated that "she was quite well" (Tsn., p. 22, Nov. 25, 1960) — he obviously meant relatively well, since the rest of his statement
is that two months before, she was attackedby severe flu and lost 10 pounds of weight and that she was advised by Dr. Sison to go to
the United States as soon as possible for medical check-up and relaxation, (Ibid). In fact, Senator Lopez stated, as shown a few pages
after in the transcript of his testimony, that Mrs. Lopez was sick when she left the Philippines:

A. Well, my wife really felt very bad during the entire trip from Tokyo to San Francisco. In the first place, she was sick when we
left the Philippines, and then with that discomfort which she [experienced] or suffered during that evening, it was her worst
experience. I myself, who was not sick, could not sleep because of the discomfort. (Tsn., pp. 27-28, Nov. 25, 1960).

It is not hard to see that in her condition then a physical discomfort sustained for thirteen hours may well be considered a physical
suffering. And even without regard to the noise and trepidation inside the plane — which defendant contends, upon the strengh of
expert testimony, to be practically the same in first class and tourist class — the fact that the seating spaces in the tourist class are
quite narrower than in first class, there beingsix seats to a row in the former as against four to a row in the latter, and that in tourist class
there is very little space for reclining in view of the closer distance between rows (Tsn., p. 24, Nov. 25, 1960), will suffice to show that
the aforesaid passenger indeed experienced physical suffering during the trip. Added to this, of course, was the painfull thought that
she was deprived by defendant — after having paid for and expected the same — of the most suitable, place for her, the first class,
where evidently the best of everything would have been given her, the best seat, service, food and treatment. Such difference in
comfort between first class and tourist class is too obvious to be recounted, is in fact the reason for the former's existence, and is
recognized by the airline in charging a higher fare for it and by the passengers in paying said higher rate Accordingly, considering the
totality of her suffering and humiliation, an award to Mrs. Maria J. Lopez of P50,000.00 for moral damages will be reasonable.

Mr. and Mrs. Alfredo Montelibano, Jr., were travelling as immediate members of the family of Senator Lopez. They formed part of the
Senator's party as shown also by the reservation cards of PAN-AM. As such they likewise shared his prestige and humiliation. Although
defendant contends that a few weeks before the flight they had asked their reservations to be charged from first class to tourist class —
which did not materialize due to alleged full booking in the tourist class — the same does not mean they suffered no shared in having to
take tourist class during the flight. For by that time they had already been made to pay for first class seats and therefore to expect first
class accommodations. As stated, it is one thing to take the tourist class by free choice; a far different thing to be compelled to take it
notwithstanding having paid for first class seats. Plaintiffs-appellants now ask P37,500.00 each for the two but we note that in their
motion for reconsideration filed in the court a quo, they were satisfied with P25,000.00 each for said persons. (Record on Appeal, p.
102). For their social humiliation, therefore, the award to them of P25,000.00 each is reasonable.

The rationale behind exemplary or corrective damages is, as the name implies, to provide an example or correction for public good.
Defendant having breached its contracts in bad faith, the court, as stated earlier, may award exemplary damages in addition to moral
damages (Articles 2229, 2232, New Civil Code).

In view of its nature, it should be imposed in such an amount as to sufficiently and effectively deter similar breach of contracts in the
future by defendant or other airlines. In this light, we find it just to award P75,000.00 as exemplary or corrective damages.

Now, as to attorney's fees, the record shows a written contract of services executed on June 1, 1960 (Exh. F) whereunder plaintiffs-
appellants engaged the services of their counsel — Atty. Vicente J. Francisco — and agreedto pay the sum of P25,000.00 as attorney's
fees upon the termination of the case in the Court of First Instance, and an additional sum of P25,000.00 in the event the case is
appealed to the Supreme Court. As said earlier, a written contract for attorney's services shall control the amount to be paid therefor
unless found by the court to be unconscionable or unreasonable. A consideration of the subject matter of the present controversy, of
the professional standing of the attorney for plaintiffs-appellants, and of the extent of the service rendered by him, shows that said
amount provided for in the written agreement is reasonable. Said lawyer — whose prominence in the legal profession is well known —
studied the case, prepared and filed the complaint, conferred with witnesses, analyzed documentary evidence, personally appeared at
the trial of the case in twenty-two days, during a period of three years, prepared four sets of cross-interrogatories for deposition taking,
prepared several memoranda and the motion for reconsideration, filed a joint record on appeal with defendant, filed a brief for plaintiffs
as appellants consisting of 45 printed pages and a brief for plaintiffs as appellees consisting of 265 printed pages. And we are further
convinced of its reasonableness because defendant's counsel likewise valued at P50,000.00 the proper compensation for his services
rendered to defendant in the trial court and on appeal.

In concluding, let it be stressed that the amount of damages awarded in this appeal has been determined by adequately considering the
official, political, social, and financial standing of the offended parties on one hand, and the business and financial position of the
offender on the other (Domingding v. Ng, 55 O.G. 10). And further considering the present rate of exchange and the terms at which the
amount of damages awarded would approximately be in U.S. dollars, this Court is all the more of the view that said award is proper and
reasonable.
Wherefore, the judgment appealed from is hereby modified so as to award in favor of plaintiffs and against defendant, the following: (1)
P200,000.00 as moral damages, divided among plaintiffs, thus: P100,000.00 for Senate President Pro Tempore Fernando Lopez;
P50,000.00 for his wife Maria J. Lopez; P25,000.00 for his son-in-law Alfredo Montelibano, Jr.; and P25,000.00 for his daughter Mrs.
Alfredo Montelibano, Jr.; (2) P75,000.00 as exemplary or corrective damages; (3) interest at the legal rate of 6% per annum on the
moral and exemplary damages aforestated, from December 14, 1963, the date of the amended decision of the court a quo, until said
damages are fully paid; (4) P50,000.00 as attorney's fees; and (5) the costs. Counterclaim dismissed.So ordered.