G.R. No. 160088 and G.R. No. 160565; July 13, 2011
AGUSTIN P. DELA TORRE, Petitioner, vs. THE HONORABLE COURT OF APPEALS, CRISOSTOMO G. CONCEPCION, RAMON “BOY” LARRAZABAL, PHILIPPINE TRIGON SHIPYARD CORPORATION, and ROLAND G. DELA TORRE, Respondents. / PHILIPPINE TRIGON SHIPYARD CORPORATION and ROLAND G. DELA TORRE, Petitioners, vs. CRISOSTOMO G. CONCEPCION, AGUSTIN DELA TORRE and RAMON “BOY” LARRAZABAL, Respondents.

FACTS

Respondent Crisostomo G. Concepcion owned the vessel LCT-Josephine. On February 1, 1984, he entered into a “Preliminary Agreement” with Roland de la Torre for its dry-docking, repair, and subsequent charter. On June 20, 1984, Concepcion and Philippine Trigon Shipyard Corporation (PTSC), represented by Roland, formalized a “Contract of Agreement” to charter the vessel retroactive to May 1, 1984. On August 1, 1984, PTSC/Roland sub-chartered the vessel to Trigon Shipping Lines (TSL), a single proprietorship owned by Roland’s father, Agustin de la Torre. On November 22, 1984, TSL, represented by Roland under a Special Power of Attorney from Agustin, sub-chartered the vessel to Ramon Larrazabal for cargo transport.
On November 23, 1984, while Larrazabal’s payloader was on the vessel’s deck unloading sand and gravel at Leyte, the vessel’s ramp moved downward, causing the vessel to tilt, allowing seawater to rush in, and resulting in the sinking of LCT-Josephine. Concepcion’s demand for PTSC/Roland to refloat the vessel was not heeded.
Concepcion filed a complaint for “Sum of Money and Damages” against PTSC and Roland before the RTC. PTSC and Roland filed an answer with a third-party complaint against Agustin. Agustin filed an answer with a fourth-party complaint against Larrazabal, who was later declared in default. The RTC found that the “efficient cause of the sinking of the LCT-JOSEPHINE was the improper lowering or positioning of the ramp,” which was the responsibility of the vessel’s captain and crew under TSL/Agustin’s employ. The RTC held PTSC, Roland, and Agustin jointly and severally liable to Concepcion. The Court of Appeals affirmed the RTC decision in toto.

ISSUE

The core issue is whether the Court of Appeals erred in affirming the RTC’s decision holding petitioners Philippine Trigon Shipyard Corporation, Roland de la Torre, and Agustin de la Torre jointly and severally liable to respondent Crisostomo G. Concepcion for the value of the sunken vessel LCT-Josephine and other damages.

RULING

The Supreme Court DENIED the petitions and AFFIRMED the Court of Appeals’ Decision with MODIFICATION regarding the award of attorney’s fees.
The Court ruled that the contractual relationships established a chain of contracts of charter party (lease of the vessel). The contract between Concepcion and PTSC/Roland was a contract of charter party. PTSC/Roland’s sub-charter to TSL/Agustin, and TSL/Agustin’s subsequent sub-charter to Larrazabal, were valid sub-leases. As the immediate lessee of Concepcion, PTSC/Roland was liable for the loss of the vessel under Articles 1659 and 1665 of the Civil Code, which oblige a lessee to return the thing leased upon termination and make them responsible for its loss unless due to an inevitable cause. The loss was not due to an inevitable cause but to the improper handling of the vessel’s ramp during unloading, which was the responsibility of the crew under the employ of TSL/Agustin, the sub-lessee.
Agustin, as the sub-lessee (TSL), was also directly liable to the lessor, Concepcion, under Article 1651 of the Civil Code, which binds the sublessee to the lessor for acts referring to the use and preservation of the thing leased. The negligence of Agustin’s crew in the vessel’s operation was the proximate cause of the sinking.
Therefore, PTSC/Roland (as lessee) and Agustin (as sub-lessee) were correctly held jointly and severally liable to Concepcion for the value of the vessel. The Court modified the award by deleting the attorney’s fees for lack of factual and legal justification.