PNOC Shipping and Transport Corporation vs. Maria Efigenia Fishing Corporation

Actual damages must be proved with a reasonable degree of certainty by competent evidence; hearsay evidence — even if admitted without objection — has no probative value and cannot support an award of damages. Where a plaintiff proves a violation of a right but fails to adequately prove the extent of pecuniary loss, nominal damages, not actual damages, are the proper remedy.

In the early morning of September 21, 1977, the fishing vessel M/V Maria Efigenia XV, owned by Maria Efigenia Fishing Corporation, was navigating near Fortune Island, Nasugbu, Batangas, en route to Navotas, Metro Manila. The vessel was struck by the tanker Petroparcel, then owned by Luzon Stevedoring Corporation, and sank with its cargo, equipment, and fishing gear. The Board of Marine Inquiry found the Petroparcel at fault. During the pendency of the subsequent suit for damages, PNOC Shipping and Transport Corporation acquired the Petroparcel and expressly assumed the liabilities arising from the collision.

• The Collision and Determination of Fault: On September 21, 1977, the fishing vessel M/V Maria Efigenia XV, a wooden motor boat of 128.23 gross tonnage built in 1965 and owned by private respondent Maria Efigenia Fishing Corporation, was navigating near Fortune Island, Nasugbu, Batangas, on its way to Navotas, Metro Manila. The tanker Petroparcel, then owned by Luzon Stevedoring Corporation (LSC) and navigated by Captain Edgardo Doruelo, collided with the fishing vessel, causing it to sink. The Board of Marine Inquiry investigated the accident; on November 21, 1978, the Philippine Coast Guard Commandant rendered a decision finding that the collision was caused by the reckless and imprudent navigation of the Petroparcel and declaring that vessel at fault. The Ministry of National Defense affirmed the decision on June 23, 1979, dismissing the appeal of Captain Doruelo and the chief mate.

• Transfer of Ownership and Assumption of Liability: On April 2, 1978, LSC executed a Deed of Transfer in favor of PNOC Shipping and Transport Corporation covering several vessels, including the Petroparcel. On the same date (the decision notes “on 2 April 1979” but context indicates same transaction), an Agreement of Transfer was executed under which PNOC assumed, without qualification, all obligations arising from the rights it acquired over the Petroparcel. A further agreement dated July 6, 1979 specifically identified Board of Marine Inquiry Case No. 332 (the collision) as an obligation assumed by PNOC.

• Proceedings before the Trial Court: After unsuccessful demands, private respondent filed a complaint for damages in the Court of First Instance of Caloocan City against LSC and Captain Doruelo, paying P1,252.00 in docket fees. The original complaint prayed for P692,680.00 representing the value of fishing nets, boat equipment, and cargo, plus interest and attorney’s fees. Private respondent later amended the complaint to claim the lost value of the hull — alleging an actual value of P800,000.00 and deducting P200,000.00 in insurance proceeds, for a net claim of P600,000.00 — and to seek adjustment for inflation and lost profits. A second amended complaint impleaded PNOC as a defendant; the trial court granted the amendment on September 16, 1985. PNOC filed an answer.

• Pre‑trial Stipulations: In its pre‑trial order of February 5, 1987, the trial court recorded, among others, the following stipulations: (1) the collision occurred as alleged and the vessel sank; (2) the Board of Marine Inquiry found the Petroparcel at fault; (3) PNOC acquired the Petroparcel and assumed all obligations, including those arising from the collision; (4) as a result of the sinking, private respondent suffered actual damages by the loss of its fishing nets, boat equipment, and cargoes, the replacement value of which was to be left to the sound discretion of the court.

• Evidence for Private Respondent: Private respondent presented a single witness, its general manager Edilberto del Rosario, and several documentary exhibits:

  • Exhibit A: Certified copy of the certificate of ownership of M/V Maria Efigenia XV.
  • Exhibit B: A “Marine Protest” executed the day after the collision stating the vessel sustained a hole and sank with 1,050 bañeras of assorted fish valued at P170,000.00.
  • Exhibit C: A January 26, 1987 quotation from I.A. Magalong Engineering and Construction for the construction of a 95‑footer trawler at P2,250,000.00.
  • Exhibit D: A January 20, 1987 pro forma invoice from Power Systems, Inc. quoting two Cummins marine engines at P1,160,000.00.
  • Exhibit E: A January 20, 1987 quotation from Scan Marine Inc. for radar and video sounder totaling P145,000.00.
  • Exhibit F: A January 21, 1987 quotation from Seafgear Sales, Inc. for ropes, binoculars, compass, and floats totaling P197,150.00.
  • Exhibit G: Retainer agreement between Del Rosario and counsel.
  • Exhibit H: An April 10, 1987 price quotation from Seafgear Sales, Inc. for poly nettings and bañeras totaling P414,065.00.

Del Rosario testified that the vessel carried 1,060 tubs of assorted fish, two Cummins engines (250 hp), radar, pathometer, and compass, all lost. He stated he paid P10,000 to counsel for the Board of Marine Inquiry proceeding and P50,000 for the civil suit.

• Evidence for Petitioner (PNOC): Petitioner presented Lorenzo Lazaro, a senior estimator at PNOC Dockyard & Engineering Corporation, who testified that private respondent’s price quotations were “excessive.” He claimed he used his own suppliers’ quotations but failed to present them, explaining the breakdown was “a sort of secret scheme.”

• RTC Decision: On November 18, 1989, the trial court ordered PNOC to pay P6,438,048.00 as the replacement value of the fishing boat, with interest at 6% per annum from the filing of the complaint, P50,000.00 attorney’s fees, and costs. The court dismissed the case against Captain Doruelo for lack of jurisdiction and dismissed PNOC’s counterclaim. The award was based on the sum of the 1987 price quotations, the court noting that petitioner’s sole witness did not rebut the documentary evidence with any documentary proof of his own.

• Post‑Judgment Motions and Appeal: PNOC moved for reconsideration, arguing, among other things, that the trial court lacked jurisdiction due to insufficient docket fees, that the award exceeded the prayer, and that the damages were not properly proved. The motion was denied on January 25, 1990. PNOC’s subsequent motion for leave to file a reply was denied as moot. On appeal, the Court of Appeals affirmed the RTC decision in its entirety, holding that the price quotations were admissible in the trial court’s sound discretion and that the award was within the relief prayed for. The appellate court also ruled that the unpaid docket fees constituted a lien on the judgment under Sun Insurance Office, Ltd. v. Asuncion.

• Lack of Jurisdiction over the Amended Complaint: Petitioner contended that the trial court did not acquire jurisdiction over the amended complaint because private respondent failed to pay the correct docket fee corresponding to the increased claim of P600,000.00 for the hull.

• Actual Damages Not Proved with Reasonable Certainty: Petitioner argued that the award of P6,438,048.00 was not supported by competent and admissible evidence. The price quotations were hearsay, not authenticated, and did not reflect the value of the lost items at the time of the loss in 1977.

• Award Not Based on Value at Time of Loss and Lack of Evidence of Inflation: Petitioner maintained that the trial court erroneously based the award on 1987 replacement costs without proof of extraordinary inflation that would justify an adjustment from the 1977 value.

• Discrepancy in the Amounts: Petitioner pointed out that even if the price quotations were considered, the items listed therein totaled only P4,336,215.00, not P6,438,048.00.

• No Proof of Unrealized Profits: Petitioner argued that private respondent failed to adduce evidence to support its claim for unrealized profit and lost business opportunities.

• Estoppel argument (implicitly raised in the trial court): Although the Supreme Court treated the jurisdictional issue as barred by estoppel, petitioner had raised the lack of jurisdiction for the first time only in its motion for reconsideration.

• Admissibility and Probative Value of Price Quotations: Private respondent maintained that the price quotations were admissible. The Court of Appeals, affirming the trial court, considered them as documents akin to “market reports or quotations” and “commercial lists” that could be received in the sound discretion of the trial court. Del Rosario, as owner of the vessel, was competent to identify the lost equipment and cargo; the documentary exhibits served to establish their current replacement value.

• Sufficiency of Evidence: Private respondent argued that the amount of P6,438,048.00 was duly established by documentary evidence that stood uncontroverted because petitioner’s own expert witness failed to present any countervailing documentary proof and merely gave a bare claim that the amounts were excessive.

• Jurisdiction over the Amended Complaint: Private respondent relied on Sun Insurance Office, Ltd. v. Asuncion, contending that any deficiency in docket fees could be enforced as a lien on the judgment and did not divest the trial court of jurisdiction. Moreover, petitioner’s active participation in the case without raising the objection earlier estopped it from challenging jurisdiction.

• Admissibility and Probative Value of Price Quotations: Whether the price quotations (Exhibits C, D, E, F, H) were hearsay; whether they fell under the “commercial lists” exception of Section 45, Rule 130; and whether — even if admitted — they possessed probative value sufficient to support an award of actual damages.

• Proof of Actual Damages: Whether private respondent proved the amount of actual loss with a reasonable degree of certainty by competent evidence.

• Award of Nominal Damages: Whether, in the absence of competent proof of actual damages, nominal damages could be awarded in favor of private respondent.

• Jurisdiction over the Amended Complaint: Whether the trial court acquired jurisdiction over the amended complaint despite the non-payment of additional docket fees for the increased claim, and whether petitioner was estopped from raising the jurisdictional issue.

• Admissibility and Probative Value of Price Quotations: The price quotations were hearsay. They were ordinary private writings issued to Del Rosario upon his request; the persons who prepared them were not presented as witnesses, depriving petitioner of the opportunity to cross-examine on their contents. The exhibits did not fall under the “commercial lists” exception of Section 45, Rule 130 because they were not part of any published list, register, periodical, or other compilation generally used and relied upon by persons in the occupation. Under the principle of ejusdem generis, the phrase “other published compilation” refers to materials of the same kind as a list, register, or periodical — not privately solicited letters or pro forma invoices. Even assuming the exhibits were admissible, hearsay evidence, whether objected to or not, has no probative value and cannot be the basis for an award of damages. The trial court therefore erred in giving weight to the quotations and in using them to fix actual damages.

• Proof of Actual Damages: Actual damages were not proved with the required certainty. The sole witness, Del Rosario, had no personal knowledge of the contents of the price quotations, and his valuation could not be accepted as conclusive given his self-interest. The documentary evidence, being hearsay, lacked probative force. In the absence of competent proof of the pecuniary loss actually suffered, the award of P6,438,048.00 in actual damages was set aside.

• Award of Nominal Damages: Private respondent nonetheless suffered a technical injury: the fault of petitioner’s vessel was established, and a right was violated. Where actual damages are not adequately proved, the injured party is entitled to nominal damages under Article 2222 of the Civil Code to vindicate that right. The Court fixed nominal damages at P2,000,000.00, taking into account the allegations in the original complaint (claim of P692,680.00 for nets, equipment, and cargo) and the amended complaint (net claim of P600,000.00 for the hull after insurance), as well as the fact that the case had dragged on for nearly two decades. The amount was deemed commensurate to the injury sustained and within the discretion granted by Article 2216.

• Jurisdiction over the Amended Complaint: The trial court acquired jurisdiction upon the filing of the original complaint and payment of the corresponding docket fee. Under Sun Insurance Office, Ltd. v. Asuncion, the unpaid docket fee on the increased claim in the amended complaint merely constituted a lien on the judgment and did not defeat jurisdiction. Moreover, petitioner participated in all stages of the case without questioning jurisdiction; it raised the issue for the first time only in its motion for reconsideration after an adverse decision. By such participation and delay, petitioner was estopped from challenging the court’s jurisdiction.

• Hearsay Evidence — No Probative Value: Hearsay evidence, whether objected to or not, has no probative value. Its admission does not confer upon it any new attribute in point of weight; it remains intrinsically weak and cannot prevail over direct, primary evidence. A party cannot recover damages based on hearsay alone.

• Distinction Between Admissibility and Probative Value: Admissibility refers to whether evidence may be considered at all; probative value refers to whether it proves an issue. Even if evidence is erroneously admitted, it may still be disregarded if it lacks probative force. Hearsay evidence, even if admitted without objection, must be disregarded.

• “Commercial Lists” Exception — Requisites: Under Section 45, Rule 130, a document qualifies as a commercial list if: (1) it is a statement of matters of interest to persons engaged in an occupation; (2) it is contained in a list, register, periodical, or other published compilation; (3) the compilation is published for use by persons in that occupation; and (4) it is generally used and relied upon by them. Privately solicited price quotations and pro forma invoices that are not part of any published compilation do not meet these requisites. Under ejusdem generis, “other published compilation” is limited to materials of the same class as a list, register, or periodical.

• Actual Damages — Burden and Quantum of Proof: Actual or compensatory damages (both daño emergente and lucro cesante) must be proved with a reasonable degree of certainty by competent proof and the best evidence available. The claimant bears the burden of pointing out specific facts that afford a basis for measuring the loss. Courts may not rely on speculation, conjecture, or guesswork. Damages cannot be presumed.

• Nominal Damages as Alternative Remedy: Where a right has been violated but actual loss is not adequately proved, the injured party is entitled to nominal damages under Article 2222 of the Civil Code, not for indemnification of loss but to vindicate the right and preclude further contest. The amount is left to the court’s discretion, taking into account the circumstances of the case (Article 2216).

• Estoppel on Jurisdictional Challenges (Docket Fees): A party who actively participates in all stages of a case and invokes the court’s authority by seeking affirmative relief cannot later challenge the court’s jurisdiction on the ground of insufficient docket fees; such challenge is barred by estoppel. The ruling in Sun Insurance Office, Ltd. v. Asuncion permits the unpaid docket fee to be enforced as a lien on the judgment.

• “Hearsay evidence whether objected to or not has no probative value. … If no objection is made … it (hearsay) becomes evidence by reason of the want of such objection even though its admission does not confer upon it any new attribute in point of weight. Its nature and quality remain the same, so far as its intrinsic weakness and incompetency to satisfy the mind are concerned, and as opposed to direct primary evidence, the latter always prevails.”

• “In the absence of competent proof on the actual damage suffered, private respondent is ‘entitled to nominal damages which, as the law says, is adjudicated in order that a right of the plaintiff, which has been violated or invaded by defendant, may be vindicated and recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered.’”

• “Damages cannot be presumed and courts, in making an award must point out specific facts that could afford a basis for measuring whatever compensatory or actual damages are borne.”

• “A party is entitled to adequate compensation only for such pecuniary loss actually suffered and duly proved.”

• Sun Insurance Office, Ltd. (SIOL) v. Asuncion, 170 SCRA 274 (1989) — Controlling on the docket‑fee issue; the rule that unpaid docket fees on an amended complaint constitute a lien on the judgment and do not divest the trial court of jurisdiction was followed.

• Pantranco North Express, Inc. v. Court of Appeals, G.R. No. 105180, July 5, 1993, 224 SCRA 477 — Applied to hold petitioner estopped from challenging jurisdiction after participating in the proceedings and raising the objection only after an adverse decision.

• Lufthansa German Airlines v. Court of Appeals, 243 SCRA 600 (1995) — Cited as authority that nominal damages are proper where actual damages are not proved with competent evidence.

• Baguio v. Court of Appeals, G.R. No. 93417, September 14, 1993, 226 SCRA 366 — Cited for the rule that hearsay evidence has no probative value whether objected to or not.

• Robes-Francisco Realty & Development Corporation v. Court of First Instance of Rizal, L-41093, October 30, 1978, 86 SCRA 59 — Discussed the nature and purpose of nominal damages.

• Republic v. Migriño, G.R. No. 89483, August 30, 1990, 189 SCRA 289 — Cited for the principle of ejusdem generis in construing Section 45, Rule 130.

• Bates v. General Steel Tank Co., 55 So. 2d 213 (Ala. App. 1951) — American jurisprudence cited to support the ruling that a private letter quotation is not a “commercial list.”

• Article 2199, Civil Code — Defines actual or compensatory damages; applied to require proof of actual pecuniary loss.

• Article 2202, Civil Code — Provides that in quasi‑delicts, actual damages include all natural and probable consequences of the act or omission; referenced in discussing the scope of compensable loss.

• Articles 2222 and 2223, Civil Code — Mandate the award of nominal damages where a right has been violated but no actual loss is proved; the adjudication precludes further contest. These articles were the direct basis for substituting nominal damages for the unproved actual damages.

• Article 2216, Civil Code — Provides that the assessment of nominal, moral, temperate, and exemplary damages is left to the court’s discretion; relied upon in fixing the amount of P2,000,000.00.

• Section 36, Rule 130, Revised Rules of Court — Requires a witness to testify only to facts of his personal knowledge; cited to exclude Del Rosario’s testimony on the contents of the price quotations.

• Section 45, Rule 130, Revised Rules of Court — The “commercial lists” exception to the hearsay rule; its requisites were enumerated and held not satisfied by the price quotations.

• Section 37 to 47, Rule 130 — Enumerate exceptions to the hearsay rule; the Court noted that the exhibits did not fall under any of them.

Justice Kapunan and Justice Purisima concurred. Chief Justice Narvasa was on leave.