Aleson Shipping Lines, Inc. v. CGU International Insurance Plc.
REITERATIONFacts
1. The Antecedents: On July 14, 2002, M/V Romeo, owned by Candano Shipping Lines, Inc. and time-chartered by Apo Cement Corporation for the transport of cement, collided with M/V Aleson Carrier 5, owned by Aleson Shipping Lines, Inc. The collision occurred as M/V Romeo was exiting the Apo channel. M/V Aleson's front hull struck the side of M/V Romeo, causing it to sink with its cargo of 31,250 bags of cement, valued at P3,427,500. The cargo was insured by CGU International Insurance PLC (CGU Insurance). Following the incident, Apo Cement claimed and received payment from CGU Insurance. CGU Insurance subsequently filed a case for damages against both Candano Shipping and Aleson Shipping. 2. Procedural History: CGU Insurance filed a complaint for damages against Candano Shipping and Aleson Shipping before the Regional Trial Court (RTC). Aleson Shipping denied liability, asserting Candano Shipping's fault, while Candano Shipping blamed Aleson Shipping and raised the issue of CGU Insurance's failure to observe an arbitration clause. The RTC found Aleson Shipping solely liable for the collision, ordering it to pay damages and attorney's fees, while dismissing the complaint against Candano Shipping. Aleson Shipping appealed this decision to the Court of Appeals (CA). The CA affirmed the RTC's decision, finding no strong reason to depart from the lower court's conclusions. Aleson Shipping then filed a motion for reconsideration, which was also denied. 3. The Petition: Aleson Shipping filed a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the CA's decision. The petitioner argues that the lower courts erred in applying the law on common carriers, as it had no contract of carriage with CGU Insurance or Apo Cement, and that the cause of action was based on maritime tort, not breach of contract. Petitioner contends that there should be no presumption of negligence against it and that the doctrine of last clear chance is inapplicable. It further argues that Candano Shipping was solely at fault and that it exercised ordinary diligence. Petitioner also questions the admissibility of certain testimonies admitted under the res gestae rule, claiming they were hearsay and that the witnesses lacked personal knowledge. The petition seeks to reverse the factual findings of the lower courts regarding liability and the application of relevant laws.
Issue(s)
Whether the petition raises questions of fact that are beyond the scope of a Rule 45 petition. Whether the testimonies of respondents' witnesses (Lopez and Flores) are inadmissible for being hearsay and improperly admitted under the res gestae rule. Whether the lower courts erred in applying the Civil Code provisions on common carriers instead of the Code of Commerce provisions on maritime tort and vessel collision. Whether Aleson Shipping exercised the degree of diligence required under the applicable law. Whether Candano Shipping exercised the required diligence as a common carrier.
Ruling
The Supreme Court denied the petition for review and affirmed the Decision and Resolution of the Court of Appeals. Aleson Shipping Lines, Inc. was held liable for the damages resulting from the vessel collision.
Ratio Decidendi
On the issue of whether the petition raises questions of fact: The Court reiterated that as a rule, only questions of law may be raised in a Rule 45 petition, and the Supreme Court is not a trier of facts. It found that the petition's resolution necessarily required a re-evaluation of the lower courts' factual findings and an assessment of the evidence. Since the petitioner failed to allege and demonstrate that its case falls under the exceptions to this rule, the Court was bound to affirm the lower courts' factual findings. Therefore, the petition, in essence, sought a review of factual matters already settled by the RTC and CA. On the admissibility of respondents' witnesses' testimonies under the res gestae rule: The Court clarified that res gestae is an exception to the hearsay rule, allowing statements made during a startling occurrence or immediately before or after it. It found that the collision and sinking of M/V Romeo constituted a startling occurrence. The statements made by the declarants interviewed by Lopez and Flores were made shortly after the incident and concerned the collision itself. The Court held that the spontaneity of these statements, made by witnesses who experienced a near-death event, satisfied the requirements of res gestae, making the testimonies admissible even if the declarants themselves were not presented in court. The petitioner's misconstruction of the rule, focusing solely on the hearsay aspect without considering the exception, was noted. On the applicable law (Civil Code vs. Code of Commerce): The Court distinguished between actions based on contract of carriage and those based on maritime tort. It explained that if the cause of action is based on contract, the Civil Code provisions on common carriers apply, requiring extraordinary diligence. However, if the cause of action is based on tort, as in this case where CGU Insurance's claim stemmed from the collision itself and not a breach of a carriage contract between Aleson Shipping and Apo Cement, the provisions of the Code of Commerce on vessel collision govern. Under the Code of Commerce, the standard of diligence is ordinary diligence, and liability arises from fault, negligence, or lack of skill. The Court found that Aleson Shipping's petition incorrectly framed the issue as solely about common carriers, when the core of the dispute was maritime tort. On whether Aleson Shipping exercised the required diligence: The Court found that Aleson Shipping failed to observe ordinary diligence. Captain Cabeltes admitted to not verifying the radio message allowing M/V Aleson to enter the pier, relying instead on a relayed message from his crew. This demonstrated a lack of caution. Furthermore, he admitted to having the opportunity to maneuver M/V Aleson to avoid the collision but chose not to, fearing it would run aground, despite knowing M/V Romeo was a larger, fully loaded vessel. This failure to act prudently, coupled with the violation of navigation rules by not sounding its horn, established negligence. The strong impact of the collision also contradicted Aleson Shipping's claim of slow navigation. On whether Candano Shipping exercised the required diligence: The Court affirmed the lower courts' findings that Candano Shipping exercised the required diligence as a common carrier. Evidence showed M/V Romeo was seaworthy, had a full complement of officers and crew, and had requested M/V Aleson to slow down as it had the right of way. Therefore, Candano Shipping was not found liable for the collision.
Main Doctrine
In maritime collision cases, the applicable law depends on the cause of action: if based on contract of carriage, the Civil Code provisions on common carriers apply; if based on tort, the Code of Commerce provisions on vessel collision govern. A vessel owner is liable for damages if it fails to exercise the required diligence under the applicable law.