SECOND DIVISION

[G.R. No. 125483. February 1, 2001.]

LUDO AND LUYM CORPORATION , petitioner, v s . COURT OF

APPEALS, GABISAN SHIPPING LINES, INC. and/or ANSELMO
OLASIMAN, respondents.

Baduel, Espina & Associates for petitioner.

Atty. Adelino B. Sitoy for private respondents.

SYNOPSIS

When private respondents' vessel came to dock at petitioner's wharf, it

rammed and destroyed a fender pile cluster. Petitioner subsequently filed a
damage suit for the cost of repair. Eyewitness Naval, petitioner's employee,
testified that he guided the vessel to its docking place and shouted "Reverse"
to the vessel's crew, but it was too late when the latter responded.

Petitioners' witnesses, marine surveyor Degamo and diver Alferez who

dived two or three times after the incident, confirmed the damage caused by
private respondents' vessel. On the other hand, private respondents presented
diver, Lazara, a mere bodegero, who stated that there was no damage, but
later testified in court that he found a crack on one side of the pile cluster and
saw seashells and seaweeds underneath an uprooted post.
After trial, the trial court rendered judgment ordering private respondents
to pay damages to petitioner. The Court of Appeals, however, reversed the
decision, finding: petitioner's eyewitness Naval as incompetent; there were
other vessels which also used the wharf for berthing; there was no positive
proof to show that it was private respondents' vessel which rammed the pile
cluster; and the seashells and seaweeds under the uprooted post indicated that
the breaking happened a long time ago.
On appeal, petitioner argued; that private respondents did not assign as
an error Naval's incompetence to testify on the negligence of private
respondents' officers and crew; and maintained that they did not ram and
damage the pile cluster.

The Supreme Court held: that the Court of Appeals can rule on the
competency of Naval to testify to determine the issue of negligence of private
respondents' officers and crew, which was a properly assigned error; that the
trial court's finding that witnesses of the prosecution are credible is entitled to
respect for it was the trial judge who had the chance to observe the witnesses
below; and that applying the doctrine of res ipsa loquitur, there exists a
presumption of negligence against private respondents which the latter failed
to overcome.

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 SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; PETITION FOR REVIEW ON

CERTIORARI; REVIEW IS LIMITED ONLY TO QUESTIONS OF LAW; EXCEPTIONS. —
While the rule is that this Court is limited only to questions of law in a petition
for review, there are exceptions, among which are when the factual findings of
the Court of Appeals and the trial court conflict, and when the appellate court
based its conclusion entirely on speculations, surmises, or conjectures.
2. ID; EVIDENCE; CREDIBILITY OF WITNESSES; FINDINGS OF THE TRIAL
COURT THEREON ARE ENTITLED TO RESPECT ON APPEAL; CASE AT BAR. — Our
review of the records constrains us to conclude that indeed MV Miguela
rammed and damaged petitioner's fender pile cluster. Naval and Espina
witnessed the incident, saw the impact and heard cracking sounds thereafter.
The trial court found them credible. We respect this observation of the trial
court, for in the appreciation of testimonial evidence and attribution of values
to the declaration of witnesses, it is the trial judge who had the chance to
observe the witnesses and was in a position to determine if the witnesses are
telling the truth or not.
3. CIVIL LAW; DAMAGES; APPLICABILITY OF THE DOCTRINE OF RES
IPSA LOQUITUR IN CASE AT BAR. — The doctrine of res ipsa loquitur was
explained in Batiquin vs. Court of Appeals, 258 SCRA 334 (1996), . . . The
doctrine recognizes that parties may establish prima facie negligence without
direct proof and allows the principle to substitute for specific proof of
negligence. This is invoked when under the circumstances, direct evidence is
absent and not readily available. In our view, all the requisites for recourse to
this doctrine exist. First, MV Miguela was under the exclusive control of its
officers and crew. Petitioner did not have direct evidence on what transpired
within as the officers and crew maneuvered the vessel to its berthing place. We
note the Court of Appeals' finding that Naval and Espina were not
knowledgeable on the vessel's maneuverings, and could not testify on the
negligence of the officers and crew. Second, aside from the testimony that MV
Miguela rammed the cluster pile, private respondent did not show persuasively
other possible causes of the damage. Applying now the above, there exists a
presumption of negligence against private respondents which we opine the
latter failed to overcome. cCTaSH

DECISION

QUISUMBING, J : p

This petition for review 1 under Rule 45 of the Revised Rules of Court
seeks to annul and set aside the decision 2 dated January 10, 1996 of the Court
of Appeals which reversed and set aside the decision of the Regional Trial Court
of Cebu City, Branch IX, and the resolution 3 dated June 11, 1996, denying
petitioner's motion for reconsideration.
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 Petitioner Ludo & Luym Corporation is a domestic corporation engaged in
copra processing with plant and business offices in Cebu City. Private
Respondent Gabisan Shipping Lines was the registered owner and operator of
the motor vessel MV Miguela, while the other private respondent, Anselmo
Olasiman, was its captain.
Petitioner owns and operates a private wharf used by vessels for loading
and unloading of copra and other processed products. Among its wharf's
facilities are fender pile clusters for docking and mooring.
On May 21, 1990, at around 1:30 P.M., while MV Miguela was docking at
petitioner's wharf, it rammed and destroyed a fender pile cluster. Petitioner
demanded damages from private respondents. The latter refused. Hence,
petitioner filed a complaint for damages before the Regional Trial Court of
Cebu.
Petitioner's evidence during trial showed that on May 21, 1990, at 1:30
P.M., MV Miguela came to dock at petitioner's wharf. Ireneo Naval, petitioner's
employee, guided the vessel to its docking place. After the guide (small rope)
was thrown from the vessel and while the petitioner's security guard was
pulling the big rope to be tied to the bolar, MV Miguela did not slow down. The
crew did not release the vessel's anchor. Naval shouted "Reverse" to the
vessel's crew, but it was too late when the latter responded, for the vessel
already rammed the pile cluster. The impact disinclined the pile cluster and
deformed the cable wires wound around it. Naval immediately informed the
vessel's captain and its chiefmate of the incident, and instructed the guard-on-
duty, Alfredo Espina, to make a spot report. The incident was reported to Atty.
Du, petitioner's vice-president for legal and corporate affairs. Atty. Du in turn
sent formal demand letters to private respondents. Marine surveyor Carlos
Degamo inspected the damage on the pile cluster and found that one post was
uprooted while two others were loosened and that the pile cluster was leaning
shoreward. Degamo hired skin diver Marvin Alferez, who found that one post
was broken at about 7 inches from the seabed and two other posts rose and
cracked at the bottom. Based on these findings, Degamo concluded that the
two raised posts were also broken under the seabed and estimated the cost of
repair and replacement at P95,000.00.

Private respondents denied the incident and the damage. Their witnesses
claimed that the damage, if any, must have occurred prior to their arrival and
caused by another vessel or by ordinary wear and tear. They averred that MV
Miguela started to slow down at 100 meters and the crew stopped the engine at
50 meters from the pier; that Capt. Anselmo Olasiman did not order the
anchor's release and chief mate Manuel Gabisan did not hear Naval shout
"Reverse". Respondents claimed that Naval had no business in the vessels'
maneuvering. When Naval informed the vessel's officers of the incident,
Olasiman sent their bodega man, Ronilo Lazara, to dive on the same afternoon
to check on the alleged damage. Lazara told Olasiman that there was no
damage. However, during direct examination, Lazara testified that he found a
crack on the side of the pile cluster, one post detached from the seabed at a
distance of about 7 inches, and seashells and seaweeds directly underneath the
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 uprooted post. There were scattered pieces of copra at the place where MV
Miguela docked, which indicated the prior docking by other vessels. After MV
Miguela left, another vessel docked in the same area. Petitioner did not prevent
MV Miguela from departing. When chiefmate Gabisan went to Atty. Du, the
latter told him not to mind the incident.

On rebuttal, petitioner presented Atty. Du who testified that Gabisan

never went to his office after receiving the letter-complaint; that petitioner
never received any reply to its demand letters; and that the first time Atty. Du
saw Gabisan was during the pre-trial.
On May 14, 1993, the trial court disposed the case in favor of petitioner,
thus:
WHEREFORE, premises considered, this court hereby renders
judgment in favor of the plaintiff, ordering the defendants, jointly and
severally, to pay the plaintiff the following:

1) Php70,000.00 actual damages, plus interest at the rate of

12% per annum from the time the decision is received by defendants
until fully paid;
2) Php15,000.00 exemplary damages;
3) Php15,000.00 attorney's fees;

4) Php10,000.00 litigation expenses.

COSTS AGAINST THE DEFENDANTS.

SO ORDERED. 4

In finding in favor of petitioner, the trial court found that it was able to
prove by preponderance of evidence that MV Miguela rammed and damaged
the pile cluster; that petitioner's witnesses, Naval and Espina, actually saw the
incident; that respondents failed to refute the testimony of marine surveyor
Degamo and skin diver Alferez on the damages; that the officers and crew of
MV Miguela were negligent; and that respondents are solidarily liable for the
damages.
Upon private respondent's appeal, the Court of Appeals reversed the trial
court on January 10, 1996, in its decision that reads:
WHEREFORE, in view of the foregoing, judgment is rendered
REVERSING and SETTING aside the decision of the Court a quo, hereby
entering a new one DISMISSING the Complaint for lack of merit.

No pronouncement as to costs.
SO ORDERED. 5

The CA found that petitioner's eyewitness Naval was incompetent to

testify on the negligence of the crew and officers of MV Miguela; that there
were other vessels that used the wharf for berthing and petitioner's evidence
did not positively prove that it was MV Miguela that rammed the pile cluster;
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 that the photographs of the pile cluster taken after the incident showed no
visible damages; that, as shown by private respondents' witness, there were
seashells and seaweeds directly under the uprooted post, which indicated that
the breaking happened a long time ago.

The CA denied the motion for reconsideration. Hence, this petition for
review where petitioner assigns the following errors:
A. THE COURT OF APPEALS ACTED IN EXCESS OF ITS
JURISDICTION WHEN IT WENT BEYOND THE ISSUES RAISED IN
THE ASSIGNMENT OF ERRORS OF PRIVATE RESPONDENT.

B. THE DECISION OF THE COURT OF APPEALS IS GROUNDED ON

SPECULATION, SURMISES AND CONJECTURES AND HAS
DEPARTED FROM THE RULES ON EVIDENCE.

C. THE COURT OF APPEALS MISAPPREHENDED THE FACTS AND

ITS FINDINGS IS TOTALLY NOT IN ACCORD WITH THE
EVIDENCE ON RECORD.
D. THE COURT OF APPEALS DEPARTED FROM THE RULE OF RES
IPSA LOQUITUR. 6 EcICSA

The issues for resolution can be reduced into three:

1. Did the CA go beyond the issues raised?

2. Can this Court review factual questions in this case?

3. Is the doctrine of res ipsa loquitur applicable to this case?

On the first issue, petitioner argues that private respondents did not
assign as an error eyewitness Ireneo Naval's incompetence to testify on the
negligence of MV Miguela's officers and crew. Private respondent's brief
contained nothing but general statements and reproductions of excerpts of the
transcript of stenographic notes (TSN) which could not pass for a valid
assignment of errors.

We note that Naval's incompetence was not one of the assigned errors in
private respondents' brief. 7 However, private respondents raised it in
connection with the issue of their negligence, which appeared in the second
assigned error. In reproducing the portion of the TSN consisting of Naval's cross
examination, private respondents' counsel was indirectly attacking Naval's
competence and invoking it vis a vis the trial court's finding, based on Naval's
testimony, that MV Miguela was sailing at a speed unusual for a docking vessel.
8 The CA did not err in addressing the matter. An appellate court can consider

an unassigned error on which depends the determination of the question in the

properly assigned error. 9 The issue of negligence of MV Miguela's officers and
crew depends significantly on the determination of whether Naval is competent
to testify on the maneuvering of a docking vessel.

T h e second issue is whether or not we can review questions of fact.

Petitioner, in its second and third assigned errors, claims that the appellate
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 court relied on speculations and conjectures when it ruled that MV Miguela
could not have rammed the pile cluster because of the presence of other
vessels; that petitioner's evidence, corroborated by those of private
respondents, is positive and sufficient to prove respondents' liability; that
evidence on record showed the negligence and recklessness of MV Miguela's
officers and crew; and that the crew were grossly incompetent and incapable to
man the vessel.
Private respondents claim that the above are conclusions of fact which
this Court may not review.

While the rule is that this Court is limited only to questions of law in a
petition for review, there are exceptions, among which are when the factual
findings of the Court of Appeals and the trial court conflict, and when the
appellate court based its conclusion entirely on speculations, surmises, or
conjectures. 10
Our review of the records constrains us to conclude that indeed MV
Miguela rammed and damaged petitioner's fender pile cluster. Naval and
Espina witnessed the incident, saw the impact and heard cracking sounds
thereafter. The trial court found them credible. We respect this observation of
the trial court, for in the appreciation of testimonial evidence and attribution of
values to the declaration of witnesses, it is the trial judge who had the chance
to observe the witnesses and was in a position to determine if the witnesses are
telling the truth or not. 11 Further, private respondents' witnesses, Olasiman
and Gabisan, acknowledged that Naval was at the pier waving a handkerchief
to direct them to their berthing place. 12

Private respondents' claim that they could not have rammed and
damaged the pile cluster because other vessels used the same area for
berthing is a mere speculation unworthy of credence.

Petitioner's witnesses, marine surveyor Degamo and diver Alferez,

confirmed the damage. Degamo had eighteen years of experience as marine
surveyor and belonged to an independent survey company. Alferez was hired
and directly supervised by Degamo for the task. 13 The latter testified during
trial that he examined the pile cluster at the portion above the water line by
going near it and found that one cluster pile was moving, two were loose, and
the whole pile cluster was leaning shoreward and misaligned. 14 Alferez, under
oath, testified that he dived two or three times and saw one broken post and
two slightly uprooted ones with a crack on each. 15
On the other hand, private respondents' evidence on this matter was
contradictory. As testified by Olasiman, when he asked Lazara on the result of
his diving, the latter said that there was no damage. 16 However, when Lazara
testified in court, he said he found a crack on the side of the pile cluster, with
one pile no longer touching the seabed and directly underneath it were
seashells and seaweeds. Further, he said that he informed the captain about
this. 17 We find Lazara's testimony as an afterthought, lacking credibility. In
addition, Leonilo Lazara, was a mere bodegero of MV Miguela. He could not
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 possibly be a competent witness on marine surveys. 18

Finally, is the doctrine of res ipsa loquitur applicable to this case?

Petitioner argues that the Court of Appeals erred when it reversed the trial
court for the latter's heavy reliance on Naval's testimony. The appellate court
overlooked the fact that aside from Naval's testimony, the trial court also relied
on the principle of res ipsa loquitur to establish private respondents'
negligence.
The doctrine of res ipsa loquitur was explained in Batiquin vs. Court of
Appeals, 258 SCRA 334 (1996), thus:
Where the thing which causes injury is shown to be under the
management of the defendant, and the accident is such as in the
ordinary course of things does not happen if those who have the
management use proper care, it affords reasonable evidence, in the
absence of an explanation by the defendant, that the accident arose
from want of care.

The doctrine recognizes that parties may establish prima facie negligence
without direct proof and allows the principle to substitute for specific proof of
negligence. This is invoked when under the circumstances, direct evidence is
absent and not readily available. 19

In our view, all the requisites for recourse to this doctrine exist. First, MV
Miguela was under the exclusive control of its officers and crew. Petitioner did
not have direct evidence on what transpired within as the officers and crew
maneuvered the vessel to its berthing place. We note the Court of Appeals'
finding that Naval and Espina were not knowledgeable on the vessel's
maneuverings, and could not testify on the negligence of the officers and crew.
Second, aside from the testimony that MV Miguela rammed the cluster pile,
private respondent did not show persuasively other possible causes of the
damage. DTaSIc

Applying now the above, there exists a presumption of negligence against

private respondents which we opine the latter failed to overcome. Additionally,
petitioner presented tangible proof that demonstrated private respondents'
negligence. As testified by Capt. Olasiman, from command of "slow ahead" to
"stop engine", the vessel will still travel 100 meters before it finally stops.
However, he ordered "stop engine" when the vessel was only 50 meters from
the pier. Further, he testified that before the vessel is put to slow astern, the
engine has to be restarted. However, Olasiman can not estimate how long it
takes before the engine goes to slow astern after the engine is restarted. From
these declarations, the conclusion is that it was already too late when the
captain ordered reverse. By then, the vessel was only 4 meters from the pier, 20
and thus rammed it.
Respondent company's negligence consists in allowing incompetent crew
to man its vessel. As shown also by petitioner, both Captain Olasiman and Chief
Mate Gabisan did not have a formal training in marine navigation. The former
was a mere elementary graduate 21 while the latter is a high school graduate.
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 Their experience in navigation 22 was only as a watchman and a quartermaster,
respectively.
WHEREFORE, the petition is GRANTED. The decision and resolution of the
Court of Appeals are ANNULLED AND SET ASIDE, and the decision of the
Regional Trial Court of Cebu City, Branch IX, is hereby REINSTATED.
Costs against private respondents.
SO ORDERED.

Bellosillo, Mendoza, Buena and De Leon, Jr., JJ., concur.

Footnotes
1. Rollo , pp. 9-46.
2. Id. at 48-58.
3. Id. at 60.
4. Id at 75-75-A.
5. Id at 57.
6. Id. at 22.
7. CA Records, pp. 27-28.
8. Rollo , p. 73.
9. Añonuevo vs. CA, 244 SCRA 28, 39 (1995).
10. Severino Baricuatro, Jr. vs. CA & Nemenio et al., G.R. No. 105902, February
9, 2000, pp. 9-10.
11. PNB vs. CA and Consuelo Yu, GR No. 81524, February 4, 2000, p. 11.
12. TSN, December 11, 1991, pp. 29-30; February 27, 1992, p. 14.

13. TSN, November 25, 1991, pp. 20-21.

14. TSN, November 25, 1991, pp. 16-19.
15. TSN, August 12, 1991, pp. 4-6.
16. TSN, February 27, 1992, p. 8.
17. TSN, September 2, 1992, pp. 9-11.

18. TSN, February 27, 1992, p. 6.

19. Batiquin vs. CA, 258 SCRA 334, 345, (1996).
20. TSN, February 27, 1992, pp. 15-23.
21. Id. at 2.
22. TSN, Dec. 11, 1991, pp. 22-23.
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