THIRD DIVISION
G.R. No. 179789, June 17, 2015
PINEWOOD MARINE (PHILS.), INC., Petitioner, v. EMCO PLYWOOD CORPORATION, EVER COMMERCIAL CO., LTD., DALIAN OCEAN SHIPPING CO., AND SHENZHEN GUANGDA SHIPPING CO., Respondents.
R E S O L U T I O N
REYES, J.:
WHEREFORE, decision is rendered in favor of plaintiff [EMCO Plywood Corporation (EMCO)] against defendant Ever Commercial Co., Ltd. [Ever] and [Ever] is ordered to pay [EMCO]:
(a) the sum of Sixteen Million Six Hundred Eighty[-]Six Thousand Forty[-]Eight Pesos and Forty[-]Six Centavos (P16,686,048.46) representing damages plus Six Percent (6%) interest on said amount from the filing of the Complaint until [Ever] fully pays the same.
As to the cross [-] claim of defendant Ever, the Court finds defendants [Shenzhen Guangda Shipping Co. (Shenzhen)] and/or charterer/owner of the vessel "TAO HUA LING" and Pinewood Marine (Phils.)[,] [Inc. (Pinewood)] to be jointly and severally liable to defendant Ever and are ordered to pay [Ever]:
(a) the amount of Sixteen Million Six Hundred Eighty[-]Six Thousand Forty[-]Eight Pesos and Forty[-]Six Centavos (P16,686,048.46), plus six percent (6%) interest thereon from the filing of the complaint until full payment thereof, by way of reimbursement and indemnification; (b) the amount of Two Million Pesos (P2,000,000.00) as damages, plus Six Percent (6%) interest thereon; and (c) attorney's fees in the amount of One Hundred Seventy-Three Thousand [Six Hundred] Pesos (P173,600.00).5
SO ORDERED.6cralawlawlibrary
On December 11, 1995, [EMCO] filed a Complaint for "Replevin, Attachment and Damages" impleading the following as defendants namely: [Shenzhen], Dalian Ocean Shipping Company x x x, [Pinewood], the vessel MV Tao Hua Ling, and its Unknown Owner and/or Demise Charterer and the Master of said vessel. In its Amended Complaint, EMCO impleaded, additionally, [Ever as the vessel's charterer].
EMCO is primarily engaged in the business of manufacturing plywood and the subject matter of its replevin action was its cargo of 2,638 pieces of PNG round logs fresh cut from Papua New Guinea, with a total invoice value of US $691,898.62. EMCO had entered into a contract with [Ever] for the loading, transporting and unloading of the logs at Butuan City, Philippines. EMCO had paid [Ever] the full freight of its cargo in the amount of US $241,223.04. [Ever] then chartered the vessel MV Tao Hua Ling from Kanetomi (HK) Ltd., which, in turn, chartered the said vessel from defendant [Shenzhen]. The local ship agent of the latter, [Pinewood], represents it in the Philippines.
The subject cargo was loaded on board the said vessel. Sometime thereafter, EMCO received a letter, dated December 5, 1995, from the law office of Sycip Salazar Hernandez [Gatmaitan &] Associates informing EMCO that their client, [Shenzhen], the "disponent owner" of the vessel Tao Hua Ling, was exercising its lien over the cargo of logs for unpaid demurrage, detention and deviation. The letter further advised EMCO that [Shenzhen] had instructed both the master of the vessel and its ship agent, [Pinewood], to exercise the shipowner's lien on the cargo. A similar letter was also sent to the Collector of Customs, Port of Masao, Butuan, Agusan del Norte, requesting the latter to withhold the discharge of the cargo for the said reason. Whereupon, the Bureau of Customs District II, sub-port of Nasipit, issued a memorandum directing the inspector of the vessel to withhold delivery of the cargo to EMCO.
EMCO objected to the withholding of the cargo and assailed the lien as invalid. EMCO nonetheless offered a compromise with defendants and even declared its willingness to put up a bond in the amount of US $300,000.00 for the release of the cargo. From [Ever], it demanded the immediate release of the logs. For its part, [Ever] took the initiative to effect the release of the logs to the extent of negotiating with the shipowner and other defendants. But all these were to no avail.
The day following the filing of EMCO's complaint, the [RTC] issued the writ of replevin. Whereupon, the logs were released and delivered to EMCO.
In its Amended Complaint, EMCO had also sought the attachment of the vessel MV Tao ITua Ling. Since the vessel had left [the] Philippine territory, EMCO did not pursue this relief.
In addition to replevin and attachment, EMCO sought to recover damages for the unwarranted refusal of defendants to release the cargo.
All the defendants, except [Ever], filed a motion to dismiss citing improper venue as their sole ground. The [RTC] denied the motion. [Ever] filed its Answer with compulsory counterclaim and cross-claim. The rest of the defendants failed to answer and, upon motion, were declared in default pursuant to the [RTC's] Order dated June 17,1996.7 (Citations omitted and emphasis ours)
However, the RTC found that Ever did not directly participate in the unjustified withholding of the logs and even negotiated for the prompt release thereof. On the other hand, Shenzhen and/or the charterer/owner of Tao Hua Ling, the vessel's master and the local ship agent, Pinewood, acted in bad faith in recklessly withholding the logs causing Ever to breach its obligation to EMCO. Hence, Ever has a right to seek for reimbursement and indemnification from Kanetomi. Moreover, the incident also strained Ever's business relationship with EMCO and tarnished the former's reputation. Consequently, the RTC also directed Shenzhen and/or the charterer/owner of Tao Hua Ling to pay Ever the amounts of (1) P2,000,000.00 as a reasonable estimate of the profits Ever would be deprived of as a result of the incident, and (2) PI73,600.00 as attorney's fees. The RTC declared as well that under the Code of Commerce, Pinewood is solidarily liable with Shenzhen and/or charterer/owner of Tao Hua Ling in reimbursing and indemnifying Ever.18
Operational Losses (Net Loss) - - P10,686,924.05Labor cost ------------------------------- P 2,092,748.85Deterioration cost----------------------- P 2,956,375.56Attorney's fees-------------------------- P 500,000.00Miscellaneous Expenses-------------------------- P 450,000.00 ----------------------Total------------------------------------- P16,686,048.4617
[Dalian] may, however, be reminded that it had been declared in default for its failure to file answer, x x x:Pinewood filed a Motion for Reconsideration24 dated July 18, 2006 to the foregoing. Pinewood alleged that Del Rosario abandoned the appeal without the former's knowledge and consent. Pinewood likewise claimed that it was never impleaded by Ever as a party defendant in the latter's cross-claim. Pinewood further argued that Articles 586 and 587 of the Code of Commerce find no application in the instant case because the withholding of the cargo arose from the conduct of the shipowner and not of the vessel's captain.
xxxx
It bears reiterating that the serious or adverse consequence of a default declaration is that it paves the way for the rendition by the court of a judgment by default, and such a judgment may be rendered even without any evidentiary hearing and may grant plaintiff such relief as his pleading may warrant. This is in consonance with the very nature of default: a defaulting party has foiled to utilize the opportunity under the Rules to deny the allegations in the complaint, x x x In the case at bench, among the matters deemed admitted is that [Dalian] is the registered owner of the vessel, xxx.
Moreover, [the CA] cannot turn a blind eye to the fact that this appeal is suffused with admissions that [Dalian] is indeed the owner of the vessel MV Tao Hua Ling. Principal among these are [Dalian's] Notice of Appeal xxx, [Dalian's] counsel's formal appearance x x x, and Manifestation xxx, all of which refer to [Dalian] as "owner of the vessel 'Tao Hua Ling'". Under the circumstances of the case, the parenthetical phrase "as owner of the vessel 'Tao Hua Ling'" was entirely unnecessary to establish [Dalian's] credentials as appellant, xxx.
xxx [T]he appeal was being undertaken x x x by [Dalian which], not being directly mentioned in the corpus of the decision nor in its fallo, really did not need to appeal. For if, indeed, [Dalian] was not the owner of the subject vessel, it had no reason to be concerned about being held liable under the [RTC] decision, x x x If [Dalian] were not the owner/charterer, its concern would be utterly baseless.
x x x x
Possession, command and navigational control are natural attributes of ownership of a vessel. The complete and utter relinquishment of these attributes is not [to be] presumed. In the absolute absence of any proof otherwise, the presumption that must be indulged is that an owner has retained all or some of [its] attributes.
[Dalian's] ownership of the vessel having been established, it was incumbent upon it to raise and substantiate the defense that it was the demise owner of a vessel "under a bareboat charter and, therefore, not liable under the charter. But, having been declared in default, [Dalian] has failed to allege and establish this defense. It may not do so now on appeal.
x x x x
Professor Agbayani commented further on the primary liability of the shipowner, its agents and employees:chanroblesvirtuallawlibraryxxx [I]t is a general principle, well established in maritime law and custom, that shipowners and ship agents are civilly liable for the acts of the captain (Code of Commerce, Article 586) and for the indemnities due [to] third persons (Article 587); so that injured parties may immediately look for reimbursement to the owner of the ship, it being universally recognized that the ship master or captain is primarily the representative of the owner. This direct liability, moderated and limited by the owner's right of abandonment of the vessel and earned freight (Article 587), has been declared to exist, not only in case of breached contracts, but also in cases of tortious negligence.23 (Citations omitted and italics in the original)
The records show that on June 17, 1997 [,] Pinewood received a copy of the [RTC's] Decision. The record is, however, bereft of any indication as to what Pinewood did upon notice of the Decision which was adverse to it. Specifically, the record does not show that Pinewood had engaged the services of [Del Rosario]. A scrutiny of Pinewood's "Motion for Reconsideration" and its "Reply to Verified Comment" discloses no categorical statement that it had indeed engaged [Del Rosario] as counsel. Likewise[,] the cited pleadings do not state when and how Pinewood supposedly engaged the law firm to press its appeal. The [CA] notes that, in insisting that the law firm had abandoned it, Pinewood relies entirely upon the earlier pleadings of Attys. [Valeriano R.] Del Rosario [Atty. Del Rosario] and [Allan G.] Kato [Atty. Kato] before [the CA] manifesting that they were appealing on Pinewood's behalf.
Pinewood does not deny having been furnished copies of [Del Rosario's] January 15, 1999 Manifestation that it was appealing on behalf of Dalian only or of the Appellant's Brief, simultaneously submitted by the said law firm, which stated that the firm was acting in behalf of Dalian only. Despite notice of these pleadings, Pinewood failed to act. In fact, it was only on July 20, 2006, or more than seven (7) years after notice of the aforementioned pleadings, that Pinewood filed the present Motion for Reconsideration praying for the reinstatement of its appeal. The [CA] entertains no doubt that Pinewood is now estopped from contesting this Court's dismissal of Pinewood's appeal.
x x x x
The [CA] notes that Pinewood includes in its "Reply to Verified Comment" a prayer for the disbarment [of Attys. Del Rosario and Kato], a prayer not found in the Motion for Reconsideration. The [CA] denies this prayer for the reasons: first, that it is doubtful if [the CA] has jurisdiction to hear and decide cases for disbarment[,] which Pinewood insists upon as the appropriate sanction against the said lawyers; second, that no prima facie case for disbarment is appreciated against the said attorneys as should be obvious from the preceding disquisition; and third, that such proceedings against the cited attorneys will unduly further delay the resolution of the case at bench.26 (Citations omitted and emphasis ours)
SEC. 27. Disbarment or suspension of attorneys by Supreme Court; grounds therefor. - A member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office, grossly immoral conduct, or by reason of his conviction of a crime involving moral turpitude, or for any violation of the oath which he is required to take before admission to practice, or for a wilful disobedience appearing as an attorney for a party to a case without authority so to do. The practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers, constitutes malpractice. (Underscoring ours)On the other hand, Section 13 of Rule 139-B reads:chanroblesvirtuallawlibrary
SEC. 13. Supreme Court Investigators. - In proceedings initiated motu proprio by the Supreme Court or in other proceedings when the interest of justice so requires, the Supreme Court may refer the case for investigation to the Solicitor General or to any officer of the Supreme Court or judge of a lower court, in which case, the investigation shall proceed in the same manner provided in Sections 6 to 11 hereof, save that the review report of the investigation shall be conducted directly by the Supreme Court. (Underscoring ours)In the instant petition, Pinewood asserts that the CA erroneously made the omission of not referring the complaint for disbarment against Attys. Del Rosario and Kato to the Court or the IBP.
A judgment becomes "final and executory" by operation of law. Finality becomes a fact when the reglementary period to appeal lapses and no appeal is perfected within such period. As a consequence, no court (not even this Court) can exercise appellate jurisdiction to review a case or modify a decision that has became final.The rule on the finality of judgments, however, admits of exceptions, to wit:chanroblesvirtuallawlibrary
When a final judgment is executory, it becomes immutable and unalterable. It may no longer be modified in any respect either by the court which rendered it or even by this Court. The doctrine is founded on considerations of public policy and sound practice that, at the risk of occasional errors, judgments must become final at some definite point in time.
The doctrine of immutability and inalterability of a final judgment has a two-fold purpose: (1) to avoid delay in the administration of justice and thus, procedurally, to make orderly the discharge of judicial business and (2) to put an end to judicial controversies, at the risk of occasional errors, which is precisely why courts exist. Controversies cannot drag on indefinitely. The rights and obligations of every litigant must not hang in suspense for an indefinite period of time.50cralawlawlibrary
[T]his Court has relaxed this rule in order to serve substantial justice considering (a) matters of life, liberty, honor or property, (b) the existence of special or compelling circumstances, (c) the merits of the case, (d) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules, (e) a lack of any showing that the review sought is merely frivolous and dilatory, and (f) the other party will not be unjustly prejudiced thereby.51cralawlawlibraryBefore the exception to the general rule can be applied though, it is indispensable to prove that a party litigant did not (1) wantonly fail to observe the mandatory requirements of the rules, and (2) exhibit "negligent, irresponsible, contumacious, or dilatory" conduct as to provide substantial grounds for an appeal's dismissal.52
In Nacar v. Gallery Frames, the Court declared:The CA affirmed in toto the RTC Decision dated May 14, 1997, which imposes interests on the monetary awards payable to EMCO and Ever. To conform, however, to the declaration in Unknown Owner of the Vessel M/V China Joy,61 the Court deems it proper to modify the reckoning period when interests payable to EMCO and Ever should commence to run.
To recapitulate and for future guidance, the guidelines laid down in the case of Eastern Shipping Lines are accordingly modified to embody BSP-MB Circular No. 799, as follows:
I. When an obligation, regardless of its source, i.e., law, contracts, qua'si-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
- When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.
- When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages, except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.
- When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit. (Underscoring ours)
(a) | Sixteen Million Six Hundred Eighty-Six Thousand, Forty-Eight Pesos and Forty-Six Centavos (P16,686,048.46) by way of reimbursement and indemnification; |
(b) | Two Million Pesos (P2,000,000.00) as damages; |
(c) | Attorney's fees of One Hundred Seventy-Three Thousand Six Hundred Pesos (P173,600.00); and |
(d) | Interests of six percent (6%) per annum of the total monetary award computed from the finality of this Resolution until full satisfaction thereof. |
Endnotes:
* Designated as Acting Chairperson per Special Order No. 2059 dated June 17, 2015 vice Associate Justice Presbitero J. Velasco, Jr.
** Designated as Acting Member per Special Order No. 2060 dated June 17, 2015 vice Associate Justice Presbitero J. Velasco, Jr.
1Rollo, pp. 7-40.
2 Penned by Associate Justice Romulo V. Borja, with Associate Justices Ramon R. Garcia and Antonio L. Villamor, concurring; id. at 43-60.
3 Id. at 61-73.
4 Rendered by Judge Cipriano B. Alvizo, Jr.; id. at 199-211.
5 The amount in words does not match the numerical figure, but the CA corrected the typographical error by inserting in the assailed decision the words "Six Hundred," id. at 47.
6 Id. at 210-211.
7 Id. at 44-46.
8 Id. at 199-211.
9 Id. at 203-204.
10 Id. at 204.
11 Id. at 204-205.
12 Id. at 204-206.
13 Id. at 205.
14 Id. at 206.
15 Id. at 205-206.
16 Id. at 206.
17 Id. at 206-207.
18 Id. at 209-210.
19 Id. at 47, 218-219, 220-221.
20 Id. at 259-260.
21 Id. at 294-294A.
22 Id. at 232-258.
23 Id. at 51-53, 57-58.
24 Id. at 298-310.
25 Id. at 61-73.
26 Id. at 68-69, 72.
27 Id. at 16-17.
28 Id. at 18.
29 Id. at 23.
30 Id. at 25.
31 Id. at 27.
32 Id. at 33.
33 Id. at 29-30.
34 Id. at 31-32.
35 Id. at 32.
36 Id. at 32-33.
37 Id. at 413A-411.
38 Id. at 416.
39 Id. at 389-413.
40 Id. at 401-402.
41 Id. at 404.
42 Effective August 16, 2004.
43Rollo, p. 404.
44 Id. at 404-405.
45 Id. at 405.
46 Id. at 405-407
47 Id. at 410.
48 Id. at 411.
49 631 Phil. 257 (2010).
50 Id. at 277-278, citing Social Security System v. Isip, 549 Phil. 112, 116 (2007).
51 Id. at 278, citing Barnes v. Judge Padilla, 482 Phil. 903, 915 (2004).
52 Id. at 279-280.
53Rollo, p. 68.
54 Id. at 68-69.
55Nunez v. SLTEAS Phoenix Solutions, Inc., 632 Phi I. 143, 155 (2010).
56Rollo, pp. 76-90.
57 Id. at 118-127.
58 Id. at 199-211.
59 Id. at 294-294A.
60 G.R. No. 195661, March 11, 2015.
61 Id.