Digest: LORENZO SHIPPING CORPORATION v. NATIONAL POWER CORPORATION, G.R. No. 181683, October 07, 2015

LORENZO SHIPPING CORPORATION v. NATIONAL POWER CORPORATION, 

G.R. No. 181683, October 07, 2015

LEONEN, J.:

FACTS: 

Lorenzo Shipping is the owner and operator of the commercial vessel MV Lorcon Luzon.National Power Corporation is the owner of Power Barge 104, "a non-propelled power plant barge.

On March 20, 1993, Power Barge 104 was berthed and stationed at the Makar Wharf in General Santos City when the MV Lorcon Luzon "hit and rammed Power Barge 104."

At the time of the incident, Captain Mariano Villarias (Captain Villarias) served as the Master of the MV Lorcon Luzon. However, the MV Lorcon Luzon was then being piloted by Captain Homer Yape (Captain Yape), a Harbor Pilot from the General Santos City pilotage district.As underscored by Lorenzo Shipping, the MV Lorcon Luzon was under Captain Yape's pilotage as it was mandatory to yield navigational control to the Harbor Pilot while docking.

Testifying before the Board of Marine Inquiry, Captain Villarias recalled that while the MV Lorcon Luzon was under Captain Yape's pilotage, he nevertheless "always" remained at the side of Captain Yape. He likewise affirmed that he heard and knew of Captain Yape's orders, "because I have to repeat his order."

As the MV Lorcon Luzon was docking, Captain Yape ordered the vessel to proceed "slow ahead," making it move at the speed of about one (1) knot. As it moved closer to dock, Captain Yape gave the order "dead slow ahead," making the vessel move even slower. He then ordered the engine stopped.

As the MV Lorcon Luzon moved "precariously close" to the wharf, Captain Yape ordered the vessel to move backward, i.e., go "slow astern," and subsequently "full astern." Despite his orders, the engine failed to timely respond. Thus, Captain Yape ordered the dropping of the anchor. Despite this, the MV Lorcon Luzon rammed into Power Barge 104.

Following this incident, Nelson Homena, Plant Manager of Power Barge 104, filed a Marine Protest before the Board of Marine Inquiry. Captain Villarias also filed his own Marine Protest. For his part, Captain Yape filed a Marine Accident Report. The Board of Marine Inquiry conducted joint hearings on the Marine Protests and Captain Yape's report.

To forestall the prescription of its cause of action for damages, National Power Corporation filed before the Quezon City Regional Trial Court a Complaint for Damages against Lorenzo Shipping.

The Regional Trial Court issued the Decision dated February 18, 2002 absolving Lorenzo Shipping of liability. It concluded that National Power Corporation failed to establish Lorenzo Shipping's negligence. It underscored that while the ramming was found to have been the result of the engine's stoppage, no malfunctioning was recorded before and after the incident. The Regional Trial Court further stated that Lorenzo Shipping was sued in its capacity as the employer of Captain Villarias and that any liability it incurred would have been only subsidiary. Nevertheless, as Lorenzo Shipping supposedly exercised due diligence in its selection and supervision of Captain Villarias, no liability could be attributed to it.

National Power Corporation appealed before the Court of Appeals.

The Court of Appeals rendered the Decision²dated September 14, 2007 reversing and setting aside the February 18, 2002 Decision of the Regional Trial Court and entering another judgment ordering Lorenzo Shipping to pay National Power Corporation the amount of P876,286.00 as actual damages and P50,000.00 as attorney's fees and expenses of litigation.

Lorenzo Shipping filed a Motion for Reconsideration.

The Court of Appeals then issued the Amended Decision dated February 12, 2008.³⁴ Noting that the amount of actual damages was not proven by National Power Corporation, it awarded National Power Corporation the amount of P300,000.00 as temperate damages in lieu of actual damages. 

National Power Corporation then filed a Motion for Reconsideration, which the Court of Appeals denied in its Resolution dated September 17, 2008.

On November 24, 2008, National Power Corporation filed its Comment to Lorenzo Shipping's Petition. It maintained that it was Lorenzo Shipping that must be held liable and that it was able to show by "competent testimonial and documentary evidence"that it must be compensated for actual damages in the amount of P876,826.00. On April 7, 2009, Lorenzo Shipping filed its Reply.

In the meantime, on November 18, 2008, National Power Corporation filed its own Petition for Review on Certiorari docketed as G.R. No. 184568, arguing how it had supposedly proven by competent evidence that it was entitled to actual damages in the amount of F876,826.00.

Admissibility of evidence and weight accorded to evidence are two distinct affairs. Rule 128, Section 3 of the Revised Rules on Evidence governs admissibility and provides that "[e]vidence is admissible when it is relevant to the issue and is not excluded by the law of these rules." When evidence has "such a relation to the fact in issue as to induce belief in its existence or non-existence,"⁷⁹ it is said to be relevant. When evidence is not excluded by law or by the Rules, it is said to be competent.

The weight accorded to evidence is properly considered only after evidence has been admitted. To this end, courts evaluate evidence in accordance with the rules stipulated by Rule 133 of the Revised Rules on Evidence,⁸⁰ consistent with basic precepts of rationality and guided by judicially established standards. It is improper to even speak of evidentiary weight when the piece of evidence in question has not even been admitted.

Exhibit "F" was ruled to have been inadmissible for failing to comply with Rule 132, Section 20 thus, it failed the standard of competency. Consistent with this, reliance on National Power Corporation's Exhibit "F" and its contents, so as to establish the extent of National Power Corporation's pecuniary loss, is misplaced. Not having been admitted, Exhibit "F" does not form part of the body of evidence worthy of judicial consideration.

National Power Corporation bewails the Court of Appeals' observation that the basis of its claims was "not properly receipted." It recalls these pieces of evidence:

a.    Testimony of Mr. Nelson Homena, manager of Power Barge 104 [who] testified on the damages [sic] sustained by said barge as a result of the ramming incident caused by the negligence of M/V Lorcon Luzon.

b.    The "Total Incidental Cost for Drydock and Repair" prepared by the Philippine Shipyard and Engineering Corporation ("PHILSECO") dated 14 October 1993 was presented which clearly enumerated and itemized the actual damages [sic] sustained by Power Barge 104 and repaired by PHILSECO.

c.    NPC Disbursement Voucher No. 093-121304 in the amount of P6,775,839.02 covering a period up to 14 January 1994 as proof of payment made by [National Power Corporation] to PHILSECO for drydocking repairs of Power Barge 104.

the Regional Trial Court ruled on National Power Corporation's Formal Offer of Evidence, it denied the admission of Exhibit "F" for not having been identified nor authenticated. It emphasized that no witness came forward to attest to its authenticity and due execution, let alone allowed himself or herself to be cross-examined on these points.

ISSUE:

Whether or no RTC erred denied the admission of “Total Incidental Cost for Drydock and Repair” marked as exhibit “f”

RULING: 

Admissibility of evidence and weight accorded to evidence are two distinct affairs. Rule 128, Section 3 of the Revised Rules on Evidence governs admissibility and provides that "[e]vidence is admissible when it is relevant to the issue and is not excluded by the law of these rules." When evidence has "such a relation to the fact in issue as to induce belief in its existence or non-existence," it is said to be relevant. When evidence is not excluded by law or by the Rules, it is said to be competent.

The weight accorded to evidence is properly considered only after evidence has been admitted. To this end, courts evaluate evidence in accordance with the rules stipulated by Rule 133 of the Revised Rules on Evidence,⁸⁰ consistent with basic precepts of rationality and guided by judicially established standards. It is improper to even speak of evidentiary weight when the piece of evidence in question has not even been admitted.

Exhibit "F" was ruled to have been inadmissible for failing to comply with Rule 132, Section 20 thus, it failed the standard of competency. Consistent with this, reliance on National Power Corporation's Exhibit "F" and its contents, so as to establish the extent of National Power Corporation's pecuniary loss, is misplaced. Not having been admitted, Exhibit "F" does not form part of the body of evidence worthy of judicial consideration.