SC upholds verdict compelling Sulpicio Lines to pay heirs of M/V Princess of the Orient victims

The Supreme Court has affirmed the Court of Appeals ruling directing Sulpicio Lines Inc., to pay P2 million worth of moral damages and exemplary damages on one of the survivors of the ill-fated M/V Princess of the Orient which sank off Fortune Island, in Batangas in September 1998.

In a 19-page decision penned by Justice Lucas P. Bersamin in GR No. 172682 (Sulpicio Lines, Inc. v. Napoleon Sesante, now substituted by Maribel Atilano, Kristen Marie, Christian Ione, Kenneth Kerrn and Karisna Kate, All Surnamed Sesante), the high court affirmed the June 2005 CA decision upholding an earlier ruling of the Quezon City Regional Trial Court, Branch 91 that ordered Sulpicio Lines, Inc. to pay damages to Napoleon Sesante, one of the survivors of the sinking of the M/V Princess of the Orient.

"Moral damages are meant to enable the injured party to obtain the means, diversions or amusements in order to alleviate the moral suffering. Exemplary damages are designed to permit the courts to reshape the behavior that is socially deleterious in its consequence by creating negative incentives or deterrents against such behavior," the order said.

In the decision promulgated on July 27, the High Court affirmed the CA's June 27, 2005 decision with the modifications that: (a) the amount of moral damages is fixed at P1,000,000; (b) the amount of P1,000,000 is granted as exemplary damages; and (c) the sum of P120,000 is allowed as temperate damages, all to be paid to the heirs of the late Napoleon Sesante. In addition, all the amounts hereby awarded shall earn interest of 6-percent per annum from the finality of this decision until fully paid. The Court also ordered Sulpicio to pay the costs of suit.

Napoleon died and was substituted by his heirs during the pending the appeal in the CA. The CA affirmed with modification the judgment of the Quezon City RTC holding petitioner liable to pay temperate and moral damages due to breach of contract of carriage.

The High Court ruled that Sulpicio's appeal lacks merit.

Sulpicio called for the dismissal of complaint, contending that, among others, Sesante's complaint for damages was purely personal and cannot be transferred to his heirs upon his death.

The Court, however, held that this argument was unwarranted citing Sec. 16, Rule 3 of the Rules of Court, which states that "Whenever a party to a pending action dies, and the claim is not thereby extinguished the heirs of the deceased may be allowed to be substituted for the deceased." Citing the Rules of Court, it held that Sesante's claim against Sulpicio involved his personal injury caused by the breach of the contract of carriage and, pursuant to the aforecited rules, the complaint survived his death, and could be continued by this heirs following the rule on substitution.

The Court stressed that Sulpicio was guilty of breach of contract of carriage contrary to its claims. It added that even assuming the seaworthiness of the M/V Princess of the Orient, Sulpicio could not escape liability considering that, as borne out by the findings of the Board of Marine Inquiry (BMI), the immediate and proximate cause of the sinking of the vessel had been the gross negligence of its captain in maneuvering the vessel. Furthermore, the BMI observed that M/V Princess of the Orient, which had a volume of 13,734 gross tones, should have been capable of withstanding the then Storm Signal No. 1 considering that the responding fishing boats of less than 500 gross tons had been able to weather through the same waves and winds to go to the succor of the sinking vessel and had actually rescued several of the latter's distressed passengers.

Furthermore, the High Court held that the negligent acts of the officers and crew of M/V Princess of the Orient could not be ignored in view of the extraordinary duty of the common carrier to ensure the safety of the passengers. The totality of the negligence by its officers and crew coupled with the seeming indifference of the petitioner to render assistance to Sesante, warranted the award of moral damages. It further held that the award of temperate damages was proper.

The High Court further said that Sulpicio and its agents on the scene acted wantonly and recklessly. These actuations attending the unfortunate sinking of the M/V Princess of the Orient were far below the standard of care and circumspection that the law on common carriers demanded. It held that the P1M would not be excessive, but proper "in order to serve fully the objective of exemplarity among those engaged in the business of transporting passengers and cargo by sea."

On Sept. 18, 1998, M/V Princess of the Orient, a passenger vessel owned and operated by the petitioner Sulpicio, sank near Fortune Island in Batangas. Of the 388 recorded passengers, 150 were lost. Napoleon Sesante, then a member of the Philippine National Police and a lawyer, was one of the passengers who survived the sinking. He sued the petitioner for breach of contract and damages. He alleged that Sulpicio committed bad faith in allowing the vessel to sail despite the storm signal.

In its defense, Sulpicio insisted on the seaworthiness of the M/V Princess of the Orient; that the sinking had been due to force majeure; that it had not been negligent; and that its officers and crew had also not been negligent.

On Oct. 12, 2001, the RTC rendered judgment in favor of respondent, ordering Sulpicio to pay P400,000 temperate damages, P1 million moral damages, and costs of suit

On appeal the CA lowered the temperate damages to P120,000, which approximated the cost of Sesante's lost personal belongings. Sulpicio moved for reconsideration and elevated the same to the High Court when the CA denied the motion. (PNA)