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SmithBellDodwellShippingAgencyCorpvsBorja:143008:June10,2002:J.Panganiban:ThirdDivision

THIRDDIVISION

[G.R.No.143008.June10,2002]

SMITH BELL DODWELL SHIPPING AGENCY CORPORATION, petitioner, vs.

CATALINO BORJA and INTERNATIONAL TO WAGE AND TRANSPORT
CORPORATION,respondents.
DECISION
PANGANIBAN,J.:

The owner or the person in possession and control of a vessel is liable for all natural and proximate
damagescausedtopersonsandpropertybyreasonofnegligenceinitsmanagementornavigation.Theliability
forthelossoftheearningcapacityofthedeceasedisfixedbytakingintoaccountthenetincomeofthevictimat
thetimeofdeathoftheincidentinthiscaseandthatpersonsprobablelifeexpectancy.
TheCase
BeforeusisaPetitionforReviewonCertiorariunderRule45oftheRulesofCourt,challengingtheMarch
6,2000Decision[1] and the April 25, 2000 Resolution[2] of the Court ofAppeals[3] (CA) in CAGR CV No.
57470.TheassailedDecisiondisposedasfollows:
WHEREFORE,premisesconsidered,theinstantappealisherebyDENIED.Thequestioneddecisionofthe
lowercourtisherebyAFFIRMEDintoto.Nopronouncementastocosts.[4]
ReconsiderationwasdeniedintheassailedResolution.
TheFacts
ThefactsofthecasearesetforthbytheCAasfollows:
ItappearsthatonSeptember23,1987,SmithBell[hereinpetitioner]filedawrittenrequestwiththeBureauof
CustomsfortheattendanceofthelattersinspectionteamonvesselM/TKingFamilywhichwasduetoarriveat
theportofManilaonSeptember24,1987.
Saidvesselcontained750metrictonsofalkylbenzeneandmethylmethacrylatemonomer.
Onthesameday,SupervisingCustomsInspectorManuelMa.D.Nalganinstructed[RespondentCatalinoBorja]
toboardsaidvesselandperformhisdutiesasinspectoruponthevesselsarrivaluntilitsdeparture.Atthattime,
[Borja]wasacustomsinspectoroftheBureauofCustomsreceivingasalaryofP31,188.25perannum.
"Atabout11oclockinthemorningonSeptember24,1987,whileM/TKingFamilywasunloadingchemicals
untotwo(2)barges[]ITTC101andCLC1002[]ownedby[Respondent]ITTC,asuddenexplosion
occurredsettingthevesselsafire.Uponhearingtheexplosion,[Borja],whowasatthattimeinsidethecabin
preparingreports,ranoutsidetocheckwhathappened.Again,anotherexplosionwasheard.
Seeingthefireandfearingforhislife,[Borja]hurriedlyjumpedoverboardtosavehimself.However,the
[water][was]likewiseonfireduemainlytothespilledchemicals.Despitethetremendousheat,[Borja]swam
hiswayforone(1)houruntilhewasrescuedbythepeoplelivinginthesquattersareaandsenttoSanJuanDe
DiosHospital.
Afterweeksofintensivecareatthehospital,hisattendingphysiciandiagnosed[Borja]tobepermanently
disabledduetotheincident.[Borja]madedemandsagainstSmithBellandITTCforthedamagescausedbythe
explosion.However,bothdeniedliabilitiesandattributedtoeachothernegligence.[5]
Thetrialcourt[6](RTC)ruledinfavorofRespondentBorjaandheldpetitionerliablefordamagesandloss
ofincome.TheRTCdisposedasfollows:
WHEREFORE,premisesconsidered,judgmentisherebyrenderedordering[Petitioner]SmithBellDodwell
[S]hippingAgencyCorporationtopay[Borja]:
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1.TheamountofP495,360.00asactualdamagesforlossofearningcapacity:
2.TheamountofP100,000.00formoraldamagesand
3.TheamountofP50,000.00forandasreasonableattorneysfees.
Thecrossclaimof[Petitioner]SmithBellDodwellShippingAgencyCorporationagainstcodefendant
InternationalTowageandTransportCorporationandthelatterscounterclaimagainst[Borja]andcrossclaim
withcompulsorycounterclaimagainstSmithBellareherebyordereddismissed.[7]
RulingoftheCourtofAppeals
Affirming the trial court, the CA rejected the plea of petitioner that it be exonerated from liability for
RespondentBorjasinjuries.Contrarytotheclaimofpetitionerthatnophysicalevidencewasshowntoprove
thattheexplosionhadoriginatedfromitsvessel,theCAheldthatthefirehadoriginatedfromM/TKingFamily.
This conclusion was amply supported by the testimonies of Borja and Eulogio Laurente (the eyewitness of
International Towage and Transport Corporation or ITTC) as well as by the investigation conducted by the
SpecialBoardofMarineInquiryandaffirmedbythesecretaryoftheDepartmentofNationalDefense.Onthe
otherhand,theRTC,whichtheCAsustained,hadnotgivenprobativevaluetotheevidenceofpetitioner,whose
soleeyewitnesshadnotshownupforcrossexamination.
Hence,thisPetition.[8]
TheIssues
InitsMemorandum,[9]petitionerraisesthefollowingissues:
1.WhetherpetitionershouldbeheldliablefortheinjuriesofRespondentCatalinoBorja.
2.WhetherRespondentITTCshouldbeheldliablefortheinjuriesofRespondentCatalinoBorja.
3.AssumingwithoutadmittingthatRespondentCatalinoBorjaisentitledtodamages,whetherRespondent
Borjaisentitledtotheamountofdamagesawardedtohimbythetrialcourt.[10]
Simply put, these issues can be summed up in these two questions: (1) Who, if any, is liable for Borjas
injuries?(2)Whatistheproperamountofliability?
ThisCourtsRuling
ThePetitionispartlymeritorious.
FirstIssue:
ResponsibilityforInjuries
Petitioner avers that both lower courts labored under a misapprehension of the facts. It claims that the
documentsadducedintheRTCconclusivelyrevealedthattheexplosionthatcausedthefireonM/TKingFamily
hadoriginatedfromthebargeITTC101,aconclusionbasedonthreegrounds.First,the Survey Report (Exh.
10)datedOctober21,1987submittedbytheAdmiralSurveyorsandAdjusters,Inc.,showedthatnopartofM/T
KingFamilysustainedanysharporviolentdamagethatwouldotherwisebeobservedifindeedanexplosionhad
occurredonit.Ontheotherhand,thefactthatthevesselsustainedcracksonitsshellplatingwasnotedintwo
SurveyReportsfromGreutzmanDiversUnderwaterSpecialist,datedOctober6,1987(Exh.11),andduringthe
underwaterinspectiononthesunkenbargeITTC101.
Second,externalfiredamageonthehullofM/TKingFamilyindicatedthatthefirehadstartedfromoutside
thevesselandfromITTC101.The port side of the vessel to which the ITTC barge was tied was completely
guttedbyfire,whilethestarboardsidetowhichthebargeCLC1002wastiedsustainedonlyslightfiredamage.
Third,testimonial evidence proved that the explosion came from the barge of the ITTC and not from its
vessel. Security Guard Vivencio Estrella testified that he had seen the sudden explosion of monomer on the
barge with fire that went up to about 60 meters. Third Mate Choi Seong Hwan and Second Mate Nam Bang
Choun of M/T King Family narrated that while they were discharging the chemicals, they saw and heard an
explosionfromthebargeITTC101.ChiefSecurityGuardReynaldoPatron,inturn,testifiedthathewas7to10
metersawayfromthebargewhenheheardtheexplosionfromtheportsideofM/TKingFamilyandsawthe
bargealreadyonfire.
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Wearenotpersuaded.BoththeRTCandtheCAruledthatthefireandtheexplosionhadoriginatedfrom
petitionersvessel.Saidthetrialcourt:
Theattemptsof[Petitioner]SmithBelltoshifttheblameonxxxITTCwereallfornaught.First,thetestimony
ofitsallegedeyewitnesswasstrickenofftherecordforhisfailuretoappearforcrossexamination(p.361,
Record).Second,thedocumentsofferedtoprovethatthefireoriginatedfrombargeITTC101werealldenied
admissionbythe[c]ourtforbeing,ineffect,hearsay(pp.335and362).xxxThus,thereisnothingintherecord
tosupport[petitioners]contentionthatthefireandexplosionoriginatedfrombargeITTC101.[11]
Wefindnocogentreasontooverturnthesefactualfindings.Nothingismoresettledinjurisprudencethan
thatthisCourtisboundbythefactualfindingsoftheCourtofAppealswhenthesearesupportedbysubstantial
evidence and are not under any of the exceptions in Fuentes v. Court of Appeals[12] more so, when such
findingsaffirmthoseofthetrialcourt.[13]Verily,thisCourtreviewsonlyissuesoflaw.
Negligenceisconductthatcreatesundueriskofharmtoanother.Itisthefailuretoobservethatdegreeof
care,precautionandvigilancethatthecircumstancesjustlydemand,wherebythatotherpersonsuffersinjury.[14]
Petitionersvesselwascarryingchemicalcargoalkylbenzeneandmethylmethacrylatemonomer.[15] While
knowingthattheirvesselwascarryingdangerousinflammablechemicals,itsofficersandcrewfailedtotakeall
thenecessaryprecautionstopreventanaccident.Petitionerwas,therefore,negligent.
Thethreeelementsofquasidelictare:(a)damagessufferedbytheplaintiff,(b)faultornegligenceofthe
defendant,and(c)theconnectionofcauseandeffectbetweenthefaultornegligenceofthedefendantandthe
damagesinflictedontheplaintiff.[16]Alltheseelementswereestablishedinthiscase.Knowingfullywellthatit
was carrying dangerous chemicals, petitioner was negligent in not taking all the necessary precautions in
transportingthecargo.
As a result of the fire and the explosion during the unloading of the chemicals from petitioners vessel,
Respondent Borja suffered the following damage: and injuries: (1) chemical burns of the face and arms (2)
inhalationoffumesfromburningchemicals(3)exposuretotheelements[while]floatinginseawaterforabout
three(3)hours(4)homonymoushemianopsiaorblurringoftherighteye[whichwasof]possibletoxicorigin
and (5) [c]erebral infract with neovascularization, left occipital region with right sided headache and the
blurringofvisionofrighteye.[17]
Hence,theownerorthepersoninpossessionandcontrolofavesselandthevesselareliableforallnatural
andproximatedamagecausedtopersonsandpropertybyreasonofnegligentmanagementornavigation.[18]
SecondIssue:
AmountofLiability
Petitioner insists that Borja is not entitled to the full amount of damages awarded by the lower courts. It
disputestheuseofhisgrossearningasbasisforthecomputationoftheawardforlossofearningcapacity.Both
courts,incomputingthevalueofsuchloss,usedtheremainingyearsofthevictimasagovernmentemployee
andtheamounthehadbeenreceivingperannumatthetimeoftheincident.
CounselforRespondentBorja,ontheotherhand,claimsthatpetitionerhadnocausetocomplain,because
the miscomputation had ironically been in its favor. The multiplier used in the computation was erroneously
basedontheremainingyearsingovernmentservice,insteadofthelifeexpectancy,ofthevictim.Borjascounsel
alsopointsoutthattheawardwasbasedontheformersmeagersalaryin1987,orabout23yearsagowhenthe
foreign exchange was still P14 to $1. Hence, the questioned award is consistent with the primary purpose of
givingwhatisjust,moralandlegallyduethevictimastheaggrievedparty.
Bothpartieshaveapoint.IndeterminingthereasonablenessofthedamagesawardedunderArticle1764in
conjunction with Article 2206 of the Civil Code, the factors to be considered are: (1) life expectancy
(consideringthehealthofthevictimandthemortalitytablewhichisdeemedconclusive)andlossofearning
capacity (b) pecuniary loss, loss of support and service and (c) moral and mental sufferings.[19] The loss of
earningcapacityisbasedmainlyonthenumberofyearsremaininginthepersonsexpectedlifespan.Inturn,
thisnumberisthebasisofthedamagesthatshallbecomputedandtherateatwhichthelosssustainedbythe
heirsshallbefixed.[20]
Theformulaforthecomputationoflossofearningcapacityisasfollows:[21]
Netearningcapacity=Lifeexpectancyx[GrossAnnualIncomeLivingExpenses(50%ofgross
annualincome)],wherelifeexpectancy=2/3(80theageofthedeceased).[22]
Petitioneriscorrectinarguingthatitisnetincome(orgrossincomelesslivingexpenses)whichistobe
usedinthecomputationoftheawardforlossofincome.VillaReyTransitv.CourtofAppeals[23]explainedthat
theamountrecoverableisnotthelossoftheentireearning,butratherthelossofthatportionoftheearnings
which the beneficiary would have received. Hence, in fixing the amount of the said damages, the necessary
expensesofthedeceasedshouldbedeductedfromhisearnings.
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Inotherwords,onlynetearnings,notgrossearnings,aretobeconsideredthatis,thetotaloftheearnings
less expenses necessary in the creation of such earnings or income, less living and other incidental expenses.
Whenthereisnoshowingthatthelivingexpensesconstitutedasmallerpercentageofthegrossincome,wefix
the living expenses at half of the gross income. To hold that one would have used only a small part of the
income,withthelargerpartgoingtothesupportofoneschildren,wouldbeconjecturalandunreasonable.[24]
Counsel for Respondent Borja is also correct in saying that life expectancy should not be based on the
retirementageofgovernmentemployees,whichispeggedat65.InNegrosNavigationCo,Inc.v.CA,[25] the
Court resolved that in calculating the life expectancy of an individual for the purpose of determining loss of
earning capacity under Article 2206(1) of the Civil Code, it is assumed that the deceased would have earned
incomeevenafterretirementfromaparticularjob.
Respondent Borja should not be situated differently just because he was a government employee. Private
employees,giventheretirementpackagesprovidedbytheircompanies,usuallyretireearlierthangovernment
employeesyet,thelifeexpectancyoftheformerisnotpeggedat65years.
PetitioneraversthatRespondentBorjadiednineyearsaftertheincidentand,hence,hislifeexpectancyof
80yearsshouldyieldtotherealitythathewasonly59whenheactuallydied.
Wedisagree.TheCourtusestheAmericanExperience/ExpectancyTableofMortalityortheActuarialor
Combined Experience Table of Mortality, which consistently pegs the life span of the average Filipino at 80
years, from which it extrapolates the estimated income to be earned by the deceased had he or she not been
killed.[26]
RespondentBorjasdemiseearlierthantheestimatedlifespanisofnomoment.Forpurposesofdetermining
lossofearningcapacity,lifeexpectancyremainsat80.Otherwise,thecomputationoflossofearningcapacity
willneverbecomefinal,beingalwayssubjecttotheeventualityofthevictimsdeath.Thecomputationshould
notchangeevenifBorjalivedbeyond80years.Fairisfair.
Basedontheforegoingdiscussion,theawardforlossofearningcapacityshouldbecomputedasfollows:
Lossofearning=[2(8050)]x[(P2,752x12)16,512]
capacity3
=P330,240
Havingbeendulyproven,themoraldamagesandattorneysfeesawardedarejustifiedundertheCivilCodes
Article2219,paragraph2andArticle2208,paragraph11,respectively.
WHEREFORE, the Petition is PARTLY GRANTED. The assailed Decision is AFFIRMED with the
following MODIFICATIONS: petitioner is ordered to pay the heirs of the victim damages in the amount of
P320,240 as loss of earning capacity, moral damages in the amount of P100,000, plus another P50,000 as
attorneysfees.Costsagainstpetitioner.
SOORDERED.
SandovalGutierrez,andCarpio,JJ.,concur.
Puno,J.,(Chairman),abroadonofficialleave.
[1]Rollo,pp.3945.
[2]Ibid.,p.57.
[3]WrittenbyJusticeBernardoP.AbesamiswiththeconcurrenceofJusticesEugenioS.Labitoria(Divisionchairman)andElviJohn
S.Asuncion(member).
[4]AssailedDecision,p.7rollo,p.45.
[5]Ibid.,pp.14ibid.,pp.3942.
[6]RegionalTrialCourt(RTC)ofQuezonCity(Branch81),docketedasCivilCaseNo.Q88800.
[7]Rollo,p.40.
[8]ThecasewasdeemedsubmittedfordecisiononMay9,2001,whenthisCourtreceivedRespondentBorjasMemorandumsigned
byAttys.AmadorZ.TolentinoJr.andRonaldRexS.RecidoroofManaloPunoJocson&PlacidoLawOffices.Insteadoffilinga
memorandum,RespondentITTCmerelyadoptedtheargumentsofRespondentBorjainsofarasthesameaffirmsthecorrectnessofthe
assailedDecisionandResolutionperitsManifestationandMotiondatedApril26,2001,signedbyAttys.ManuelJosephR.Bretaa
IIIandSimonetteE.SibalofCastilloandPoblador.
[9]SignedbyAtty.CharlesJayD.delaCruzofDelRosarioandDelRosario.
[10]Page8rollo,p.107.
[11]CADecision,pp.56rollo,pp.4344.

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[12]268SCRA703,708709,February26,1997BaricuatroJr.v.CA,supra,325SCRA137,145,February9,2000.
[13]Borromeov.Sun,317SCRA176,182,October22,1999CompaniaMaritima,Inc.v.CourtofAppeals,318SCRA169,177,
November16,1999.
[14]Valenzuelav.CourtofAppeals,253SCRA303,320,February7,1996Bulilanv.CommissiononAudit,300SCRA445,452,
December22,1998JarcoMarketingCorp.v.CourtofAppeals,321SCRA375,386,December21,1999.
[15]Rollo,p.27.
[16]PhilippineBankofCommercev.CourtofAppeals,269SCRA695,702703,March14,1997FGUInsuranceCorporationv.
CourtofAppeals,287SCRA718,720721,March23,1998.
[17]Rollo,p.129.
[18]FarEasternShippingCompanyv.CourtofAppeals,297SCRA30,87,October1,1998.
[19]BaliwagTransit,Inc.v.CourtofAppeals,262SCRA230,235,September20,1996.
[20]Ibid.,Peoplev.Arellano,334SCRA775,792793,June30,2000Pestaov.Sumayang,346SCRA870,880,December4,2000.
[21]Peoplev.Matignas,GRNo.126146,March12,2002,citingPeoplev.Verde,302SCRA690,707,February10,1999.
[22]Ibid.,citingPeoplev.Sanchez,GRNos.12103945,October18,2001.
[23]31SCRA511,517,February18,1970Peoplev.Marollano,276SCRA84,115,July24,1997.
[24]NegrosNavigationCo.,Inc.v.CourtofAppeals,281SCRA534,548,November7,1997.
[25]Ibid.,pp.546547.
[26]Peoplev.Villanueva,302SCRA380,401,January29,1999.

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