G.R. No. 88052. December 14, 1989

JOSE P. MECENAS, ROMEO P. MECENAS, LILIA P. MECENAS, ORLANDO P. MECENAS, VIOLETA M. ACERVO, LUZVIMINDA P. MECENAS; AND OFELIA M. JAVIER, PETITIONERS, VS. HON. COURT OF APPEALS, …

Decisions / Signed Resolutions December 14, 1989 THIRD DIVISION FELICIANO, J.:
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FELICIANO, J.:


At 6:20 o’clock in the
morning of 22 April 1980, the M/T “Tacloban
City,” a barge-type oil tanker of Philippine registry, with a gross
tonnage of 1,241.68 tons, owned by the Philippine National Oil Company (PNOC)
and operated by the PNOC Shipping and Transport Corporation (PNOC Shipping),
having unloaded its cargo of petroleum products, left Amlan,
Negros Occidental, and headed towards Bataan.  At about
1:00 o’clock in the
afternoon of that same day, the M/V “Don
Juan,” an inter-island vessel, also of Philippine registry,
of
2,391.31 tons gross weight, owned and operated by the Negros
Navigation Co., Inc. (Negros Navigation) left Manila
bound for Bacolod with seven hundred fifty (750)
passengers listed in its manifest, and a complete set of officers and crew
members.

On the evening of that same day, 22 April 1980, at about 10:30
o’clock, the “Tacloban
City” and the “Don
Juan” collided at the Talbas
Strait near Maestra
de Campo Island in the vicinity of the island
of Mindoro.  When the collision occurred, the sea was
calm, the weather fair and visibility good. 
As a result of this collision, the M/V “Don Juan” sank and
hundreds of its passengers perished. 
Among the ill-fated passengers were the parents of petitioners, the
spouses Perfecto Mecenas and Sofia Mecenas, whose bodies were never found despite intensive
search by petitioners.

On 29 December 1980,
petitioners filed a complaint in the then Court of First Instance of Quezon City, docketed as Civil Case No. Q-31525, against
private respondents Negros Navigation and Capt. Roger
Santisteban, the captain of the “Don Juan”
without, however, impleading either PNOC or PNOC
Shipping.  In their complaint,
petitioners alleged that they were the seven (7) surviving legitimate children
of Perfecto Mecenas and Sofia Mecenas
and that the latter spouses perished in the collision which had resulted from
the negligence of Negros Navigation and Capt. Santisteban. 
Petitioners prayed for actual damages of not less than P100,000.00 as
well as moral and exemplary damages in such amount as the Court may deem
reasonable to award to them.

Another complaint,
docketed as Civil Case No. Q-33932, was filed in the same court by Lilia Ciocon claiming damages against Negros
Navigation, PNOC and PNOC Shipping for the death of her husband Manuel Ciocon, another of the luckless passengers of the “Don
Juan.” Manuel Ciocon’s body, too, was never
found.

The two (2) cases were
consolidated and heard jointly by the Regional Trial Court of Quezon City, Branch 82. 
On
17 July 1986, after trial, the trial court rendered a
decision, the dispositive part of which read as
follows:

“WHEREFORE, the Court hereby renders judgment ordering:

a) The defendant Negros
Navigation Co., Inc. and Capt. Roger Santisteban
jointly and severally liable to pay plaintiffs in Civil Case No. Q-31525, the
sum of P400,000.00 for the death of plaintiffs’ parents, Perfecto A. Mecenas and Sofia P. Mecenas; to
pay said plaintiffs the sum of P15,000.00 as and for attorney’s fees; plus costs of the suit.

b) Each of the defendants Negros Navigation Co, Inc. and Philippine National Oil
Company/PNOC Shipping and Transportation Company, to pay the plaintiff in Civil
Case No. Q-33932, the sum of P100,000.00
for the death of Manuel Ciocon, to pay said
plaintiff jointly and severally, the sum of P15,000.00 as and for attorney’s
fees, plus costs of the suit.”[1]

Negros Navigation, Capt. Santisteban,
PNOC and PNOC Shipping appealed the trial court’s decision to the Court of
Appeals.  Later, PNOC and PNOC Shipping withdrew their
appeal citing a compromise agreement reached by them with Negros
Navigation; the Court of Appeals granted the motion by a resolution dated 5
September 1988, subject to the reservation made by Lilia Ciocon
that she could not be bound by the compromise agreement and would enforce the
award
granted her by the trial court.

In time, the Court of
Appeals rendered
a decision
dated
26 January 1989
which decreed the following:

“WHEREFORE, in view of the foregoing, the decision of the
court a quo is hereby affirmed as modified with respect to Civil
Case No. 31525, wherein defendant appellant Negros
Navigation Co. Inc. and Capt. Roger Santisteban are
held jointly and severally liable to pay the plaintiffs the amount of P100,000.00 as actual and compensatory
damages and P15,000.00 as
attorney’s fees and the cost of the suit.”[2]

The issue to be resolved
in this Petition for Review is whether or not the Court of Appeals had erred in
reducing the amount of the damages awarded by the trial court to the
petitioners from P400,000.00 to P
100,000.00.

We note that the trial
court had granted petitioners the sum of P400,000.00 “for the death of
[their parents]
” plus P15,000.00
as attorney’s fees, while the Court of Appeals awarded them P100,000.00 “as actual and compensatory damages” and P15,000.00 as
attorney’s fees.  To determine whether
such reduction of the damages awarded was proper, we
must first
determine whether petitioners were entitled to an award of damages other
than
actual or compensatory damages, that is, whether they were entitled to
award of moral and exemplary damages.

We begin by noting that both the trial court and the Court of
Appeals considered the action (Civil Case No. Q-31525) brought by the sons and
daughters of the deceased Mecenas spouses against Negros Navigation as
based on quasi-delict.  We believe
that that action is more appropriately regarded as grounded on contract, the
contract of carriage between the Mecenas spouses as
regular passengers who paid for their boat tickets and Negros Navigation; the surviving children while not themselves
passengers are in effect suing the carrier in representation of their deceased
parents.[3]
Thus, the suit (Civil Case No. Q-33932)
filed by the widow Lilia Ciocon was correctly treated
by the trial and appellate courts as based
on contract (vis-a-vis Negros
Navigation) and as well on
quasi-delict (vis-a-vis
PNOC and PNOC Shipping).  In an action
based upon a breach of the contract of carriage, the carrier under our civil
law is liable for the death of passengers arising from the negligence or wilful act of the carrier’s employees although such
employees may have acted beyond the scope of their authority or even in violation
of the instructions of the carrier[4],
which liability may include liability
for moral damages.
[5] It follows that petitioners would be
entitled to moral damages so long as the collision with the “
Tacloban City” and the sinking of the “Don
Juan” were caused or attended by negligence on the part of private
respondents.

In respect of the petitioners’ claim for exemplary damages, it is
only necessary to refer to Article 2232 of the Civil Code:

“Article 2332.  In contracts and quasi-contracts, the court may award
exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.”[6]

Thus,
whether petitioners are entitled to exemplary damages
as claimed must depend upon whether or not private respondents acted recklessly,
that is, with gross negligence.

We turn, therefore, to a consideration of whether or not Negros Navigation and Capt. Santisteban
were grossly negligent during the events which culminated in the collision with
“Tacloban
City” and the sinking of the
“Don Juan” and the resulting heavy loss of lives.

The then Commandant of the Philippine Coast Guard, Commodore B.C.
Ochoco, in a decision dated 2 March 1981, held that
the “Tacloban City” was “primarily and
solely [sic] at fault and responsible
for the collision.”
[7] Initially, the Minister of National Defense
upheld the decision of Commodore Ochoco.
[8] On Motion for Reconsideration, however, the
Minister of National Defense reversed himself and held that
both vessels had
been at fault:

“It is therefore evident from a close and thorough review of
the evidence that fault is imputable
to both vessels for the collision
.  Accordingly, the decision
dated March 12, 1982
,
subject of the Motion for Reconsideration
filed by counsel of M/T Tacloban City, is hereby reversed.  However,
the administrative penalties imposed on both vessels and their respective crew
concerned are hereby affirmed.[9]

The trial court, after a
review of the evidence submitted during the trial, arrived at the same
conclusion that the Minister of National Defense had reached that both the
“
Tacloban City” and the “Don Juan” were at
fault in the collision.  The trial court
summarized the testimony and evidence of PNOC and PNOC Shipping
as well as of Negros
Navigation in the following terms:

“Defendant PNOC’s version of the
incident:

“M/V Don Juan was first sighted at about 5 or 6 miles from Tacloban City
(TSN, January 21, 1985, p. 13); it was on the starboard (right) side of Tacloban City.  This was a visual contact; not picked up by
radar (p. 15, ibid).  Tacloban City
was travelling 310 degrees with a speed of 6 knots,
estimated speed of Don Juan of 16 knots (TSN, May 9, pp. 5-6).  As Don Juan approached, Tacloban City
gave a leeway of 10 degrees to the left. 
‘The purpose was to enable Tacloban to see the
direction of Don Juan (p. 19, ibid).  Don
Juan switched to green light, signifying that it will pass Tacloban City’s
right side; it will be a starboard to starboard passing (p. 21, ibid).’ Tacloban City’s
purpose in giving a leeway of 10 degrees at this point, is to give Don Juan
more space for her passage (p. 22, ibid). 
This was increased by Tacloban
City to an additional 15 degrees
towards the left (p. 22, ibid).  The way
was clear and Don Juan has not changed its course (TSN, May 9, 1985, p. 39).

“When Tacloban
City altered its course the second
time, from 300 degrees to 285 degrees, Don Juan was about 4.5 miles away (TSN,
May 9, 1985, p. 7).

“Despite executing a hardport
maneuver, the collision nonetheless occurred. 
Don Juan rammed the Tacloban
City near the starboard bow (p. 7,
ibid).”

NENACO’s [Negros
Navigation] version.

“Don Juan first sighted Tacloban
City 4 miles away, as shown by radar (p. 13, May 24, 1983).  Tacloban
City showed its red and green
lights twice; it proceeded to, and will cross, the path of Don Juan.  Tacloban was on the
left side of Don Juan (TSN, April 20, 1983, p. 4).

“Upon seeing Tacloban’s red and green lights, Don Juan executed hard
starboard (TSN, p. 4, ibid).  This
maneuver is in conformity with the rule that ‘when both vessels are head on or
nearly head on, each vessel must turn to the right in order to avoid each
other.’ (p. 5, ibid).  Nonetheless, Tacloban appeared to be heading towards Don Juan (p. 6,
ibid).

“When Don Juan executed hard starboard, Tacloban
was about 1,500 feet away (TSN, May 24, 1983, p. 6).  Don Juan, after execution of hard starboard,
will move forward 200 meters before the vessel will respond to such maneuver
(p. 7, ibid).  The speed of Don Juan at
that time was 17 knots; Tacloban City 6.3 knots.

“Between 9 to 15 seconds from execution of hard starboard,
collision occurred (p. 8, ibid).  (pp.
3-4 Decision).”[10]

The
trial court concluded:

“M/V Don Juan and Tacloban City
became aware of each other’s presence in the area by visual contact at a
distance of something like 6 miles from each other.  They were fully aware that if they
continued on their course, they will meet head
on.  Don Juan steered to the right; Tacloban City
continued its course to the left.  There
can be no
excuse for them not to realize that, with such maneuvers,
they will collide
.  They executed
maneuvers inadequate, and too late, to avoid collision
.

“The Court is of the considered view that the defendants
are equally negligent and are liable for damages
.  (p. 4, Decision).”[11]

The Court of Appeals, for
its part, reached the same conclusion.
[12]

There is, therefore, no question that the “Don Juan”
was at least as negligent as the M/T “Tacloban City”
in the events leading up to the collision and the sinking of the “Don
Juan.” The remaining question is whether the negligence on the part of the
“Don Juan” reached that level of recklessness or gross negligence
that our Civil Code requires for the imposition of exemplary damages.  Our own review of the record in the case at
bar requires us to answer this in the affirmative.

In the first place, the report of the Philippine Coast Guard
Commandant (Exhibit “10”), while holding the “Tacloban City”
as “primarily and solely [sic] at fault and responsible for the
collision,” did itself set out that there had been fault or negligence on
the part of Capt. Santisteban and his officers and
crew before the collision and immediately after contact of the two (2)
vessels.  The decision of Commodore Ochoco said:

“x x x             x x x                 x x x

MS Don Juan’s Master, Capt. Rogelio Santisteban,
was playing mahjong before and up to the time of collision.  Moreover, after the collision, he failed
to institute appropriate measures to delay the sinking of MS Don Juan
and to
supervise properly the execution of his order of abandonship
.  As regards the officer on watch, Senior 3rd
Mate Rogelio Devera, he admitted that he failed or
did not call or inform Capt. Santisteban of the
imminent danger of collision and of the actual collision itself
.  Also, he failed to assist his master to
prevent the fast sinking of the ship
. 
The record also indicates that Auxiliary Chief Mate Antonio Labordo displayed laxity in maintaining order among the
passengers after the collision
.

x x x              x x x                 x x x.”[13]

We
believe that the behaviour of the captain of the
“Don Juan” in this instance — playing mahjong “before and up to
the time of collision” — constitutes behaviour
that is simply unacceptable on the part of the master of a vessel to whose
hands the lives and welfare of at least seven hundred fifty (750) passengers
had been entrusted.  Whether or not Capt.
Santisteban was “off-duty” or
“on-duty” at or around the time of actual collision is quite
immaterial; there is, both realistically speaking and in contemplation of law,
no such thing
as “off-duty”
hours
for the master of a vessel at sea that is a common carrier upon
whom the law imposes the duty of extraordinary diligence –?

“[t]he duty to carry the passengers safely as far as human
care and foresight can provide
, using the utmost diligence of very
cautious
persons, with a due regard for all the circumstances.[14]

The
record does not show that that was the first or only time that Capt. Santisteban had entertained himself during
a voyage by playing mahjong with his officers
and passengers; Negros Navigation in permitting, or
in failing to discover and correct such behaviour,
must be deemed grossly negligent.

Capt. Santisteban
was also faulted in the Philippine Coast Guard decision for failing after the
collision, “to institute appropriate measures to delay the sinking of M/V
Don Juan.” This appears to us to be a euphemism for failure to maintain
the seaworthiness or the water-tight integrity of the “Don Juan.” The
record shows that the “Don Juan” sank within ten (10) to fifteen (15)
minutes after initial contact with the “
Tacloban City.”[15] While the failure of Capt. Santisteban to supervise his officers and crew in the
process of abandoning the ship and his failure to avail of measures to prevent
the too rapid sinking of his vessel after
collision, did not cause the collision by themselves, such failures
doubtless contributed materially to the consequent loss of life and, moreover,
were indicative of the kind and level of diligence exercised by Capt. Santisteban in respect of his vessel and his officers and
men prior to actual contact between the two (2) vessels.  The officer-on-watch in the “Don
Juan” admitted that he had failed to inform Capt. Santisteban
not only of the
“imminent danger of collision” but even of “the actual collision
itself.
“

There is also evidence
that the “Don Juan” was carrying more passengers than she had been
certified
as allowed to
carry.  The Certificate of Inspection,
[16] dated 27 August 1979, issued by the Philippine Coast Guard
Commander at
Iloilo
City, the Don Juan’s home port, states:

Passengers allowed

:

810

Total Persons Allowed

:

864

The
report of the Philippine Coast Guard (Exhibit “10”) stated that the
“Don Juan” had been “officially cleared with 878 passengers
on-board when she sailed from the
port of Manila on April 22, 1980 at about 1:00 p.m.” This head-count of the passengers
“did not include the 126 crew members, children below three (3)
years old and two (2) half-paying passengers” which had been counted as
one adult passenger.
[17] Thus, the total number of persons on board
the “Don Juan” on that ill-starred night of
22 April
1980
was 1,004,
or 140 persons more than the maximum number that could be safely carried by
the “Don Juan,” per its own Certificate of Inspection
.
[18] We note in addition, that only 750
passengers had been listed in its manifest
for its final voyage; in other
words, at least 128 passengers on board had not even been entered into
the “Don Juan’s” manifest.  The
“Don Juan’s Certificate of Inspection showed that she carried life boat
and life raft accommodations for only 864 persons, the maximum number of
persons she was permitted to carry; in other words, she did not carry enough
boats and life rafts for all the persons actually on board that tragic night of
22 April 1980.

We hold that under these
circumstances,
a presumption of gross negligence on the
part of the vessel (her officers and crew) and of its shipowner
arises; this presumption was never rebutted by Negros
Navigation.

The grossness of the
negligence of the “Don Juan” is underscored when one considers the
foregoing circumstances in the context of the following facts:  Firstly, the “Don Juan” was more
than twice as fast as the “
Tacloban City.” The “Don Juan’s” top speed
was 17 knots; while that of the “
Tacloban City” was 6.3 knots.[19] Secondly, the “Don Juan” carried the
full complement of officers and crew members specified for a passenger vessel
of her class.  Thirdly, the “Don
Juan” was equipped with radar
which was functioning that night. 
Fourthly, the “Don
Juan’s” officer on-watch had sighted the “Tacloban City”
on his radar screen while the latter was still four (4) nautical miles away.  Visual
confirmation of radar contact was established
by the “Don Juan” while the “Tacloban City”
was still 2.7 miles away.[20]
In the total set of circumstances which existed in the instant case, the
“Don Juan,” had it taken seriously its duty of extraordinary
diligence, could have easily avoided the collision with the “Tacloban City.”
Indeed, the “Don Juan” might well have avoided the collision even if it had exercised ordinary diligence merely.

It is true that the
“Tacloban
City” failed to
follow Rule 18 of the International Rules of the Road which requires two (2)
power-driven vessels meeting end on or nearly end on each to alter her course
to starboard (right) so that each vessel may pass on the port side (left) of
the other.
[21] The “Tacloban City,” when the two (2) vessels were only three-tenths (0.3) of a mile apart, turned (for
the second time)
15º to port side while the “Don Juan” veered hard to starboard.  This circumstance, while it may have made the
collision immediately inevitable, cannot, however, be viewed in isolation from
the rest of the factual circumstances obtaining before and up to the
collision.  In any case, Rule 18 like all
other International Rules of the Road, are not to be obeyed and construed
without regard to all the circumstances surrounding a particular encounter
between two (2) vessels.
[22] In ordinary circumstances, a vessel
discharges her duty to another by
a faithful and literal observance of the Rules of Navigation,[23] and she cannot be held at fault for so doing
even though a different course would have prevented the collision.  This rule, however, is not to be applied
where it is apparent, as in the instant case, that her captain was guilty of
negligence or of a want of seamanship in not perceiving the necessity for, or
in so acting as to create such necessity for,
a departure from the
rule and acting accordingly.
[24] In other words, “rote observance”
of the International Rules of the Road will not relieve a vessel from
responsibility if the collision could have been avoided by proper care and
skill on her part or even by a departure from the rules.
[25]

In the petition at bar,
the “Don Juan” having sighted the “Tacloban
City” when
it was still a long way off was negligent
in failing to take early preventive action and in allowing the two (2) vessels
to come to such close quarters as to render the collision inevitable when there
was no necessity for passing so near to the “Tacloban
City” as to create that hazard or inevitability, for the “Don
Juan” could choose its own distance.
[26] It is noteworthy that the “Tacloban City,” upon turning hard to port shortly
before the moment of collision, signalled its
intention to do so by giving two (2) short blasts
with its horn.26A The “Don Juan” gave no answering
horn blast to signal its own intention and proceeded to turn hard to starboard.
26B

We conclude that Capt. Santisteban and Negros Navigation
are properly held liable for gross negligence in connection with the collision
of the “Don Juan” and “
Tacloban City” and the sinking of the “Don
Juan” leading to the death of hundreds of passengers.  We find no necessity for passing upon the
degree of negligence or culpability properly attributable to PNOC and PNOC
Shipping or the master of the “
Tacloban City,” since they were never impleaded here.

It will be recalled that
the trial court had rendered a lump sum of P400,000.00 to petitioners for the
death of their parents in the “Don Juan” tragedy.  Clearly, the trial court should have included
a breakdown of the lump sum award into its component parts:  compensatory damages, moral damages and
exemplary damages.  On appeal, the Court
of Appeals could have and should have itself broken down the lump sum award of
the trial court into its constituent parts; perhaps, it did, in its own mind.  In any case, the Court of Appeals apparently
relying upon
Manchester
Development Corporation v. Court of Appeals
[27] reduced
the P400,000.00 lump sum award into a P1
00,000.00 for actual and
compensatory damages only.

We believe that the Court
of Appeals erred in doing so.  It is true
that the petitioners’ complaint before the trial court had in the body
indicated that the petitioner-plaintiffs believed that moral damages in the
amount of at least P1,400,000.00 were properly due to them (not
P12,000,000.00
as the Court of
Appeals erroneously stated)
as well
as exemplary damages in the sum of
P100,000.00
and that in the prayer of their
complaint, they did not specify the amount of moral and exemplary damages
sought from the trial court. 
We do not believe, however, that the Manchester doctrine, which has
been modified and clarified in subsequent decision by the Court in
Sun Insurance Office, Ltd. (SIOL), et al. v.
Asuncion, et
al.,[28] can be applied in the instant case so as to
work a striking out of that portion of the trial court’s award which could be
deemed notionally to constitute an award of moral and exemplary damages. 
Manchester was promulgated by the Court on 7 May 1987. 
Circular No. 7 of this Court, which embodied the doctrine in
Manchester, is dated 24 March 1988.  Upon
the other hand, the complaint in the
case at bar was filed on
29 December 1980, that is, long before either Manchester or Circular No. 7 of 24 March
1988
emerged.  The decision of the trial court was itself promulgated on 17
July
1986, again, before Manchester and Circular No. 7 were promulgated.  We do not believe that Manchester should have been applied retroactively to
this case where a decision on the merits had already been rendered by the trial
court, even though such decision was then under appeal and had not yet reached
finality.  There is no indication at
all
that petitioners here sought simply to
evade payment of the court’s filing fees or to mislead the court in the
assessment of the filing fees.  In any
event, we apply
Manchester as clarified and amplified by Sun Insurance Office Ltd. (SIOL),
by holding that the petitioners shall pay the additional filing fee that is
properly payable given the
award
specified below, and that such
additional filing fee shall constitute a lien upon the judgment.

We consider, finally, the
amount of damages — compensatory, moral and exemplary — properly imposable
upon private respondents in this case. 
The original award of the trial court of P400,000.00 could well have
been disaggregated by the trial court and the Court of Appeals in the following
manner:

(1)  actual or compensatory
damages proved in the course of trial consisting of actual expenses incurred by
petitioners in their search for their parents’ bodies  —          P126,000.00

(2)  actual or compensatory
damages in case of wrongful death (P30,000.00 x 2)

—          P
60,000.00[29]

(3)  moral damages             —          P107,000.00

(4)  exemplary damages      —          P107,000.00

T o t a l          —          P400,000.00

vvvvvvvvvvvv

Considering that petitioners, legitimate children of the deceased
spouses Mecenas, are seven (7) in number and that
they lost both father and mother in one fell blow of fate, and considering the
pain and anxiety they doubtless experienced while searching for their parents
among the survivors and the corpses recovered from the sea or washed ashore, we
believe that an additional amount of P200,000.00 for moral damages, making a
total of P307,000.00 as moral damages, would be quite reasonable.

Exemplary damages are designed by our civil law to permit the courts to reshape behaviour that is socially deleterious in its consequence
by creating negative incentives or deterrents against such behaviour.  In requiring compliance with the standard of
extraordinary diligence, a standard
which is in fact that of the highest possible degree of diligence, from common
carriers and in creating a
presumption of negligence against them, the law seeks to compel them to control
their employees, to tame their reckless instincts and to force them to take
adequate care of human beings and their property.  The Court will take judicial notice of the
dreadful regularity with which grievous maritime disasters occur in our waters
with massive loss of life.  The bulk of
our population is too poor to afford domestic air transportation.  So it is that notwithstanding the frequent
sinking of passenger vessels in our waters, crowds of people continue to travel
by sea.  This Court is prepared to use
the instruments given to it by the law for securing the ends of law and public
policy.  One of those instruments is the
institution of exemplary damages; one of those ends, of special importance in
an archipelagic state like the Philippines,
is the safe and reliable carriage of people and goods by sea.  Considering the foregoing, we believe that an
additional award in the amount of P200,000.00 as exemplary damages, making a
total award of P307,000.00 as exemplary damages, is quite modest.

The Court is aware that petitioners here merely asked for the
restoration of the P400,000.00 award of the trial court.  We underscore once more, however, the firmly
settled doctrine that this Court may consider and resolve all issues which must
be decided in order to render substantial justice to the parties, including
issues not explicitly raised by the party affected.  In the case at bar, as in Kapalaran Bus Line v. Coronado, et al.,[30] both the demands of substantial
justice and the imperious requirements of public policy compel us to the
conclusion that the trial court’s implicit award of moral and exemplary damages
was erroneously deleted and must be restored and augmented and brought more
nearly to the level required by public policy and substantial justice.

WHEREFORE, the Petition for Review on Certiorari is
hereby GRANTED and the Decision of the Court of Appeals insofar as it reduced
the amount of damages awarded to petitioners to P100,000.00 is hereby REVERSED
and SET ASIDE.  The award granted by the
trial court is hereby RESTORED and AUGMENTED as follows:

(a) P126,000.00 for actual damages;

(b) P60,000.00 as
compensatory damages for wrongful death;

(c) P307,000.00 as moral damages;

(d) P307,000.00 as exemplary damages making a total of
P800,000.00; and

(e) P15,000.00 as attorney’s fees.

Petitioners
shall pay the additional filing fees properly due and payable in view of the award
here made, which fees shall be computed by the Clerk of Court of the trial
court and shall constitute a lien upon the judgment here awarded.  Costs against private respondents.

SO ORDERED.

Fernan, C.J., (Chairman), Gutierrez,
Jr., Bidin, and
Cortes, JJ., concur.


[1]
Rollo, p. 60.

[2]
Rollo, p. 40.

[3]
See e.g. Necesito v. Paras,
104 Phil. 84 (1958); Batangas Transportation Co. v.
Caguimbal, et al., 22 SCRA 171 (1968); and Davila v.
Philippine Airlines, 49 SCRA 497 (1973).

[4]
Article 1759, Civil Code.

[5]
Article 1764, Civil Code.

[6]
See, e.g., Marchan v. Mendoza,
26 SCRA 731 (1961); underscoring supplied.

[7]
BMI Case No. 415-80; Exhibit “10,” Folder of Exhibits.

[8]
See Decision, dated 12 March 1982,
of the Minister of National Defense; Exhibit “11,” Folder of
Exhibits; underscoring supplied.

[9]
Exhibit “13,” Folder of Exhibits; underscoring supplied.

[10]
Court of Appeals’ Decision; Rollo, pp. 33-34.

[11]
Regional Trial Court’s Decision; Rollo p. 59;
underscoring supplied.

[12]
Decision, C.A.
– G.R. CV No. 13802, p. 8; Rollo p. 38.

[13]
Exhibit “E,” Folder of Exhibits; underscoring supplied.

[14]
Article 1755, Civil Code; underscoring supplied.

[15]
Decision, dated 24 July 1984,
Minister of National Defense; Exhibit “13.” There, the M/T Tacloban City urged, that the Don Juan was in fact unseaworthy, that she sank in ten (10) minutes “after
only one of her holds was punctured when she was supposed to remain afloat even
with two (2) adjacent compartments completely flooded, suggesting that her
water-tight integrity had been tampered with x x x.”

[16]
Exhibit “1-A” (Negros
Navigation), Folder of Exhibits.

[17]
Exhibit “10,” p. 5.

[18]
See also the “Certificate of Stability,” dated 16 December 1976, of the Don Juan (“Exhibit
“6-A,” Folder of Exhibits) stating that the number of persons on
board shall not exceed the authorized number stipulated in the Certificate of
Inspection.

[19]
Decision, dated 24 July 1984
of the Minister of National Defense, Exhibit “13,” Folder of
Exhibits.

[20]
BMI Case No. 415-80; Exhibit “10”, folder of Exhibits.  It should not escape notice that the “Tacloban City”
had visually sighted the “Don Juan” when the latter was still 5 or 6
miles away, much sooner than the
“Don Juan” had done.

[21]
“Rule 18.  (a) When two power-driven
vessels are meeting end on, or nearly end on, so as to involve risk of
collision, each shall alter her course to starboard, so that each may pass on
the port side of the other.  This Rule only applies to cases where
vessels
are meeting end on or nearly end on, in such a manner as to
involve risk of collision, and does not
apply to two vessels which must, if both keep on their respective course, pass
clear of each other.  The only cases to
which it does apply are when each of two vessels is end on, or nearly end on,
to the other; in other words, to cases in which, by day, each vessel sees the
masts of the other in a line or nearly in a line with her own; and by night to
cases in which each vessel is in such a position as to see both the sidelights
of the other.  It does not apply, by day,
to cases in which
a vessel sees
another ahead crossing her own course; or by night, to cases where the red
light of one vessel is opposed to the red light of the other or where the green
light of one vessel is opposed to the green light of the other or where a red
light without
a green light or a
green light without a red light is seen ahead, or where both green
and red lights are seen anywhere but ahead.

(b) For the purposes of this Rule and Rules 19 to 29 inclusive, except
Rule 20 (c) and Rule 28, a seaplane on the water shall be deemed to be a
vessel, and the expression ‘power-driven vessel’ shall be construed
accordingly.” (Annex A, Philippine Merchant Marine Rules and Regulations,
540-541 [published by the Philippine Coast Guard; 1977]).

[22]
Thus, e.g.:

“Rule 19.  When two-power driven vessels are crossing,
so as to involve risk of collision, the vessel which has the other on her own
starboard side shall keep out of the way of the other.”

“Rule 22.  Every vessel which is directed by these Rules
to keep out of the way of another vessel shall, so far as possible, take positive early action to comply with
this obligation
, and
shall, if the circumstances of the
case admit
, avoid
crossing ahead of the other.”

“Rule 27.  In obeying and construing these Rules, due
regard shall be had to all dangers of navigation and collision, and to any
special circumstances,
including
the limitations of the craft involved, which may render a departure from
the above Rules necessary in order to avoid immediate danger
.”

“Rule 29.  Nothing in these Rules shall exonerate any
vessel, or the owner, master or crew
thereof, from the consequences of
any neglect to
carry lights or signals, or of any neglect to keep a proper
look-out, or of the neglect of any precaution which may be required by the
ordinary  practice of seamen, or by the
special  circumstances of the case
.”
(Underscoring supplied)

[23]
The Oregon, 158 U.S.
186, 49 L ed. 943 (1895).

[24]
The Steamship Nacoochee v. Mosley, et al., 137
U.S. 330, 34 L
ed. 687 (1890).  See also Healy and
Sharpe, Cases and Materials on Admiralty
, 2nd ed. (1986) p. 585.

[25]
The New York 175 U.S.
187, 44 L ed. 126 (1899); The America,
92 U.S. 432, 23
L ed. 724 (1876).  See also Schoenbaum, Admiralty and Maritime Law
(1987), p. 449.

[26]
Urrutia & Co. v. Baco
River Plantation Co., 26 Phil. 632 (1913) quoting with approval “The
Genesee Chief” 12 How.  443.

26A
TSN, January 21, 1985, p.
23; see Rule 28, Inter­national Rules of the Road.

26B
Ibid, p. 30.

[27]
149 SCRA 562 (1987).

[28]
G.R. Nos. 79937-38, promulgated 13
February 1988.

[29]
See, e.g., Spouses Federico Franco and Felicisima R.
Franco v. Intermediate Appellate Court, et al., G.R. No. 71137,
promulgated 5 October 1989.

[30]
G.R. No. 85531, promulgated 25 August
1989.