SMITH BELL AND COMPANY (PHILS) INC. v. CA Company, Inc.
Company, Inc. against Go Thong, which was presided over by then Judge
Accidents and Damages in Maritime Commerce - Collisions | 20 May 1991 |
J. Feliciano
Nature of Case: Petition for certiorari to review CA Decision
Digest maker: Ponio
SUMMARY: M/V Don Carlos and M/S Yotai Maru collided, and all of Yotai Maru’s
cargo was damaged as a result. The consignees of the cargo got paid by their
insurance companies, who in turn filed actions against the owner of M/V Don
Carlos, private respondent Go Thong before the CFI Manila: one presided by J.
Fernandez and the other presided by J. Cuevas. Both ruled in favour of the
insurance companies. Upon appeals to the CA, J. Reyes affirmed J. Fernandez (and
this was affirmed by the SC), while J. Sison reversed J. Cuevas. Hence, this petition
by the insurance company, who argues that J. Sison disregarded the rule of res
judicata. The SC rules in favour of the insurance companies, saying that the issue
of which vessel had been negligent or had proximately caused the collision and
was therefore liable had been litigated in the Reyes Decision and became final and
executory; therefore, the rule of conclusiveness of judgment as a concept of res
judicata should apply. The SC further ruled that 3 principal factors constituted
negligence on the part of M/V Don Carlos, such as the failure to have a proper
look-out.
DOCTRINE: The "look-out" should have no other duty to perform. He has only one
duty, that which its name implies—to keep "look-out". So, a deckhand who has
other duties, is not a proper "look-out". The navigating officer is not a sufficient
"look-out". Neither the captain nor the [helmsman] in the pilothouse can be
considered to be a "look-out" within the meaning of the maritime law. Nor should
he be stationed in the bridge. He should be as near as practicable to the surface of
the water so as to be able to see low-lying lights.
FACTS:
● At 03:50 on 3 May 1970, 2 vessels, on the approaches to the port of Manila near
Caballo Island, collided. The M/V Don Carlos, an inter-island vessel owned and
operated by private respondent Carlos Go Thong and Company and sailing
southbound for Cebu from Manila, rammed the portside of the M/S Yotai Maru, a
merchant vessel of Japanese registry owned by Sanyo Shipping Company, inflicting
a three cm. gaping hole on her portside near Hatch No. 3, through which seawater
rushed in and flooded that hatch and her bottom tanks, damaging all the cargo
stowed therein.
● The consignees of the damaged cargo got paid by their insurance companies. The
insurance companies in turn, having been subrogated to the interests of the
consignees of the damaged cargo, commenced actions against private respondent
Go Thong for damages sustained by the various shipments before the then CFI
Manila.
● Two cases were filed before the CFI Manila:
▪ In Branch 3, Civil Case No. 82567, commenced in 1971 by petitioner Smith
Bell and Company (Philippines), Inc. and Sumitomo Marine and Fire Insurance
Company Ltd., against Go Thong, which was presided over by Judge
Fernandez.
▪ In Branch 4, Civil Case No. 82556, filed 2 days after by petitioners Smith
Bell and Company (Philippines), Inc. and Tokyo Marine and Fire Insurance
Cuevas, later SC Associate Justice.
● Civil Cases Nos. 82567 (J. Fernandez) and 82556 (J. Cuevas) were tried
under the same issues and evidence, relating to the collision between the Don
Carlos and the Yotai Maru, the parties in both cases having agreed that the evidence
on the collision presented in one case would be simply adopted in the other. In
both cases, the CFI held that the officers and crew of the Don Carlos had
been negligent, that such negligence was the proximate cause of the collision, and
accordingly held respondent Go Thong liable for damages to the plaintiff
insurance companies.
● The decision of Judge Fernandez was appealed by respondent Go Thong to the CA.
The decision of Judge Cuevas was also appealed by Go Thong to the CA
Substantially identical assignments of errors were made by Go Thong.
● The CA through J. Reyes rendered a Decision on affirming the Decision of
Judge Fernandez. Private respondent Go Thong’s MR was denied. Go Thong then
went to the SC on Petition for Review, and the SC denied the Petition for lack of
merit through a minute resolution. Go Thong’s MR was also denied.
● As for the other case (the one decided by J. Cuevas), the CA through J. Sison
reversed the J. Cuevas trial court decision and held the officers of the Yotai
Maru at fault in the collision with the Don Carlos and dismissed the insurance
companies' complaint. This was almost two years after the CA Decision of J. Reyes
in the first case had been affirmed by the SC on Petition for Review.
▪ Petitioners asked for reconsideration to no avail. Hence, this petition.
ISSUE/S & RATIO:
1. W/N the Sison Decision had disregarded the rule of res judicata – YES
a. The Court discussed the 2 concepts of res judicata – bar by former
judgment and conclusiveness of judgment (see pp. 209-210 of full
text).
 Bar by former judgment: identity of parties, subject-matter, and cause of action;
Conclusiveness of judgment: bars the re-litigation of particular facts or issues in
another litigation between the same parties on a different claim or cause of action
 APPLICATION IN THE CASE: The issue of which vessel had been negligent or had
proximately caused the collision between them was, directly and expressly raised,
controverted, and litigated in the J. Reyes CA Decision (affirmed by the SC) where
it held the Don Carlos to have been negligent. The Reyes Decision became final
and executory two years before the Sison Decision was promulgated. Applying the
rule of conclusiveness of judgment, the question of which vessel had been
negligent in the collision had long been settled by the SC and could no longer be
relitigated in the Sison Decision. Private respondent Go Thong was certainly bound
by the ruling or judgment of J. Reyes and that of the SC. Therefore, the CA
committed reversible error when it disregarded the SC Decision affirming the
Reyes Decision.
 Also take note of Footnote 10 on p. 211 in case Sir asks. The gist: 32 cases
against Go Thong’s agents were also filed resulting from the collision. The RTC of
Manila held both vessels at fault, while the CA as decided by J. Nocon followed the
Reyes Decision and expressly acknowledged that the rule on conclusiveness of
judgment was applicable.
 See notes for administrative proceedings involving the Board of Marine Inquiry,
the Philippine Coast Guard, the Ministry of National Defence, and the Office of the
President.
  German's apparent lack of sufficient knowledge of the basic and generally
2. W/N J. Sison committed error in in accepting Go Thong's defence that the question established rules of navigation (e.g. being unaware of the necessity of
of fault on the part of the Yotai Maru had been settled by the compromise employing a "look-out") showed that there was every reasonable ground to
agreement between the owners of the 2 vessels - YES believe that his inability to grasp the actual situation brought about by
a. Under the compromise agreement between Go Thong and Sanyo, Sanyo paid inadequacy of experience and technical know-how was mainly responsible
Go Thong P268k. Go Thong argues this settles that the Yotai Maru had been and decidedly accounted for the collision of the vessels.
at fault. b. The SC stated that J. Sison disregarded all of J. Cuevas’ findings of fact and
b. SC says that the familiar rule – that an offer of compromise is not an instead found a duty of the Yotai Maru alone to avoid collision and give way to
admission that anything is due and is not admissible in evidence against the the Don Carlos.
person making the offer – applies. Said rule is anchored on public policy, such
that the incidence of litigation should be reduced, and its duration shortened RULING: Decision REVERSED and SET ASIDE.
to the maximum extent feasible.
NOTES:
3. W/N J. Sison committed error in holding that the Yotai Maru had been MINIMAL ISSUE ANSWERED IMMEDIATELY: Go Thong argues that the SC in rendering its minute
negligent and at fault – YES Resolution of the J. Reyes CA Decision had merely dismissed Go Thong's Petition for Review for lack of
a. The SC stated that there were 3 principal factors that constituted negligence merit but had not affirmed in toto that Decision. SC rejects this by saying that a minute Resolution
denying a Petition for Review of a Decision of the CA can only mean that the Supreme Court agrees
on the part of the Don Carlos: with or adopts the findings and conclusions of the CA – in other words, the Decision sought to be
 The failure of the Don Carlos to comply with the requirements of Rule 18(a) of reviewed and set aside is correct.
the International Rules of the Road
 “When two power driven-vessels are meeting end on, or nearly end on, so ADMINISTRATIVE PROCEEDINGS: Aside from sets of litigations, administrative proceedings also
as to involve risk of collision, each shall alter her course to starboard, so resulted from the collision. The Board of Marine Inquiry found both vessels to have been negligent. 9
that each may pass on the port side of the other…” (see p. 217 of full years later, the Philippine Coast Guard absolved the Yotai Maru. Go Thong failed to appeal on time, but
text) it still appealed. On appeal by Go Thong to the Ministry of National Defence, the PCG Decision was
reversed (Yotai Maru therefore held liable). Hence, Yotai Maru’s owners filed an MR before the Office of
 Each vessel made a visual sighting of each other ten minutes before the the President. The OP held that the Ministry of National Defence could validly modify or alter the PCG
collision which occurred at 03:50. Decision. The Supreme Court held that the OP was wrong on three accounts:
 As the Yotai Maru found herself on an "end-on" or a "nearly end-on" 1) The OP took account of the Sison Decision which was still not final.
situation with the Don Carlos, the Yotai Maru turned starboard and at the 2) The OP either ignored or was unaware of the SC Decision affirming the Reyes Decision.
same time gave the required signal consisting of one short horn blast. The 3) The OP mistakenly believed that a Decision of the CFI Cebu held that the Yotai Maru was
Don Carlos turned to portside, instead of turning to starboard as solely responsible for the collision, when in fact, it dismissed the case based on the
demanded by Rule 18 (a). The Don Carlos also violated Rule 2(c) for it compromise agreement.
failed to give the required signal of two short horn blasts meaning "I am
altering my course to port."
 When the Yotai Maru saw that the Don Carlos was turning to port, the
master of the Yotai Maru ordered the vessel turned hard starboard at
03:45 and stopped her engines; at about 03:46 the Yotai Maru went "full
astern engine.
 The failure of the Don Carlos to have on board that night a proper look-out as
required by Rule I(B)
 A "proper look-out" is one who has been trained as such and who is given
no other duty save to act as a look-out and who is stationed where he can
see and hear best and maintain good communication with the officer in
charge of the vessel, and who must, of course, be vigilant. The look-out
should have no other duty to perform (see doctrine).
 The failure of the Don Carlos to recognise in a timely manner the risk of
collision with the Yotai Maru coming in from the opposite direction, was at
least in part due to the failure of the Don Carlos to maintain a proper look-
out.
 Second Mate Benito German was in command of the Don Carlos although its
captain, Captain Rivera, was very much in the said vessel at the time and the
evidence appears bereft of any explanation as to why second mate German was
at the helm of the aforesaid vessel.