In Lorenzo Shipping Corporation v. National Power Corporation, the Supreme Court addressed liability for damages when a vessel under compulsory pilotage collides with another structure. The Court ruled that while a harbor pilot is responsible for directing a vessel, the master of the vessel retains overall command and must exercise vigilance. This means that ship owners can still be held liable for damages if their captain fails to act when a pilot’s actions lead to a dangerous situation, highlighting the shared responsibility in maritime navigation.

Whose Hand on the Helm? Determining Liability in a Maritime Collision Under Pilotage

On March 20, 1993, the MV Lorcon Luzon, owned by Lorenzo Shipping Corporation, collided with Power Barge 104, owned by National Power Corporation (NPC), while docking at Makar Wharf in General Santos City. At the time of the incident, the MV Lorcon Luzon was under the pilotage of Captain Homer Yape, a harbor pilot from the General Santos City pilotage district. NPC filed a complaint for damages against Lorenzo Shipping, alleging negligence led to the collision and resulting damages.

Lorenzo Shipping argued that because the vessel was under compulsory pilotage, any liability should fall on the harbor pilot. They also contended that NPC assumed the risk by berthing a non-self-propelled vessel at Makar Wharf, which they claimed was intended only for self-propelled vessels. The Regional Trial Court (RTC) initially ruled in favor of Lorenzo Shipping, finding that NPC failed to prove Lorenzo Shipping’s negligence and that due diligence was observed in the selection and supervision of the vessel’s captain, Captain Mariano Villarias. However, the Court of Appeals (CA) reversed this decision, holding Lorenzo Shipping liable for damages, a decision which eventually led to the present Supreme Court review.

The central legal question before the Supreme Court was whether Lorenzo Shipping could be held liable for the damage to Power Barge 104, given that the MV Lorcon Luzon was under the mandatory pilotage of Captain Yape at the time of the incident. Additionally, the Court considered what damages, if any, should be awarded to NPC if liability was established.

The Supreme Court noted the established principle that the master of a vessel, also known as the captain, is in command. Citing Yu Con v. Ipil, the Court clarified that the terms “captain” and “master” are often used synonymously, designating the person in charge of a vessel. However, the Court also acknowledged that there are circumstances, such as compulsory pilotage, where control of the vessel is temporarily yielded to a pilot. Philippine Ports Authority (PPA) Administrative Order No. 03-85 outlines these instances, specifying when vessels engaged in coastwise and foreign trade must be under compulsory pilotage when entering harbors, docking, or shifting berths.

Despite the presence of a harbor pilot, the Supreme Court emphasized that the master retains overall command of the vessel. This principle is enshrined in Section 11 of PPA Administrative Order No. 03-85, which states that “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.” This provision underscores the shared responsibility between the pilot and the master in ensuring the safe navigation of the vessel.

The Supreme Court referenced Far Eastern Shipping Co. V. Court of Appeals, highlighting the intertwined responsibilities of pilots and masters. The Court explained that while a master is generally justified in relying on a pilot, this reliance is not absolute. The master must exercise reasonable vigilance and intervene if the pilot’s actions are leading the vessel into danger. This duty arises when the master observes, or should have observed, that the pilot’s navigation is likely to cause harm, and there is an opportunity to prevent the impending danger.

Applying these principles to the case, the Supreme Court determined that Captain Villarias, as the master of MV Lorcon Luzon, was remiss in his duties. The Court noted that Captain Villarias admitted that approximately six minutes passed before he realized there was an engine failure and that Captain Yape’s orders were not being heeded. The Court found this delay unacceptable, stating that Captain Villarias should have been vigilant and taken immediate action to avert the collision. This inaction, the Court concluded, constituted negligence on the part of Captain Villarias, for which Lorenzo Shipping, as his employer, was liable.

Furthermore, the Supreme Court rejected Lorenzo Shipping’s argument that NPC assumed the risk by berthing a non-propelled barge at Makar Wharf. The Court stated that Lorenzo Shipping failed to provide any evidence that Makar Wharf was exclusively for self-propelled vessels or that NPC was prohibited from using it as a berthing place for a power barge. The Court also noted that the MV Lorcon Luzon’s ramming of a stationary object created a presumption of fault against the moving vessel, a presumption that Lorenzo Shipping failed to rebut.

Regarding damages, the Supreme Court upheld the Court of Appeals’ award of P300,000 as temperate damages to NPC. While NPC sought actual damages, the Court found that the evidence presented to prove the precise amount of pecuniary loss was insufficient. Specifically, a “Total Incidental Cost for Drydock and Repair” document was not properly authenticated, and the testimony of NPC’s plant manager, Nelson Homena, was merely an estimate. Additionally, a disbursement voucher attesting to expenses paid to a shipyard did not specify the exact cost for the repair of Power Barge 104.

Despite the lack of specific proof of actual damages, the Court recognized that NPC had indeed suffered pecuniary loss as a result of the collision. Relying on Articles 2224 and 2225 of the Civil Code, the Court concluded that temperate damages, which are more than nominal but less than compensatory, were appropriate in this situation. The Court rejected Lorenzo Shipping’s argument that temperate damages were only available when pecuniary loss could not, by its nature, be ascertained, citing jurisprudence that allows for temperate damages even when pecuniary loss could theoretically have been proven with certainty, referencing the case of Republic of the Philippines v. Tuvera. Ultimately, the Supreme Court affirmed the Court of Appeals’ decision, holding Lorenzo Shipping liable for temperate damages and emphasizing the importance of vigilance and shared responsibility in maritime navigation.

FAQs

What was the key issue in this case?	The central issue was whether Lorenzo Shipping was liable for damages caused when their vessel, under compulsory pilotage, collided with a stationary power barge. The court examined the extent of responsibility of a vessel’s master versus that of a harbor pilot.
What is compulsory pilotage?	Compulsory pilotage refers to situations where vessels are required to yield navigational control to a harbor pilot when entering a harbor, docking, or shifting berths. This requirement is usually mandated by port authorities to ensure safety and prevent accidents.
What is the role of a harbor pilot?	A harbor pilot is responsible for directing a vessel within a port or harbor, using their specialized knowledge of local conditions. Their primary duty is to ensure the safe navigation and maneuvering of the vessel to prevent accidents.
What is the master’s responsibility during pilotage?	Even during compulsory pilotage, the master of the vessel retains overall command and must exercise vigilance. They are responsible for intervening if they observe the pilot’s actions are endangering the vessel or other property.
What are temperate damages?	Temperate damages are awarded when the court finds that some pecuniary loss has been suffered, but the amount cannot be proved with certainty. They are more than nominal but less than compensatory damages, providing a reasonable recompense under the circumstances.
Why were actual damages not awarded in this case?	Actual damages were not awarded because NPC failed to provide sufficient evidence to prove the precise amount of their pecuniary loss. The court found that the presented documents were either not properly authenticated or were merely estimates.
What evidence did NPC present to claim actual damages?	NPC presented a “Total Incidental Cost for Drydock and Repair” document, testimony from their plant manager estimating the damage, and a disbursement voucher. However, the court found these insufficient to establish the exact amount of loss.
How did the court determine liability in this case?	The court determined that while the vessel was under pilotage, the master failed to act when the pilot’s orders were not followed, leading to the collision. This failure to exercise reasonable vigilance made the shipping company liable for the damages.

The Supreme Court’s decision in Lorenzo Shipping Corporation v. National Power Corporation clarifies the division of responsibility between harbor pilots and vessel masters, underscoring that masters must remain vigilant even during compulsory pilotage. This ruling highlights the importance of clear communication and proactive intervention to prevent maritime accidents. The case also illustrates the necessity of providing concrete evidence when claiming actual damages, distinguishing it from awards for temperate damages.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: LORENZO SHIPPING CORPORATION VS. NATIONAL POWER CORPORATION, G.R. Nos. 181683 & 184568, October 07, 2015