conflict case

8/13/2019 Conflict Case

1/33

[G.R. No. 103493. June 19, 1997]

PHILSEC INVESTMENT CORPORATION, PI!INTERNATIONAL "INANCE LIMITE#, $n%ATHONA HOL#INGS, N.V., petitioners, vs. THE HONORALE CO&RT O"

APPEALS, 14'', INC., #RAGO #AIC, VENT&RA O. #&CAT, PRECIOSO R.PERLAS, $n% (ILLIAM H. CRAIG, respondents.

This case presents for determination the conclusiveness of a foreign judgment upon therights of the parties under the same cause of action asserted in a case in our localcourt. Petitioners brought this case in the Regional Trial Court of Makati, Branch 5, !hich, invie! of the pendenc" at the time of the foreign action, dismissed Civil Case #o. $5% on theground of litis pendentia, in addition to forum non conveniens. &n appeal, the Court of 'ppealsaffirmed. (ence this petition for revie! on certiorari .

"ACTS)

• Private respondent )ucat obtained separate loans from petitioners '*'+' andP(+-C secured b" shares of stock o!ned b" )ucat.

• Private respondent $/00, nc., through its president, private respondent )rago )aic,assumed )ucat1s obligation under an 'greement !hereb" $/00, nc. e2ecuted a3arrant" )eed !ith 4endor1s +ien b" !hich it sold to petitioner 'T(' a parcel ofland in (arris Count", Te2as, .-.'., for -67,089,78:.87, !hile P(+-C and

'*'+' e2tended a loan to 'T(' in the amount of -67,588,888.88 as initialpa"ment of the purchase price. The balance of -6%89,78:.87 !as to be paid b"means of a promissor" note e2ecuted b" 'T(' in favor of $/00, nc.-ubse;uentl", upon their receipt of the -67,588,888.88 from $/00, nc., P(+-Cand '*'+' released )ucat from his indebtedness and delivered to $/00, nc. all theshares of stock in their possession belonging to )ucat.

• 's 'T(' failed to pa" the interest on the balance of -6%89,78:.87, the entireamount covered b" the note became due and demandable.

• 'ccordingl", private respondent $/00, nc. sued petitioners P(+-C, '*'+', and 'T(' in the nited -tates for pa"ment of the and for damages for breach ofcontract and for fraud allegedl" perpetrated b" petitioners in misrepresenting themarketabilit" of the shares of stock delivered to $/00, nc. under the 'greement.

• &riginall" instituted in the nited -tates )istrict Court of Te2as the venue of the

action !as later transferred to the nited -tates )istrict Court for the -outhern)istrict of Te2as, !here $/00, nc. filed an amended complaint, reiterating itsallegations in the original complaint.

• 'T(' filed an ans!er !ith counterclaim, impleading private respondents hereinas counterdefendants, for allegedl" conspiring in selling the propert" at a price overits market value. Private respondent Perlas, !ho had allegedl" appraised thepropert", !as later dropped as counterdefendant. 'T(' sought the recover" of


2/33

damages and e2cess pa"ment allegedl" made to $/00, nc. and, in the alternative,the rescission of sale of the propert".

•


3/33

Petitioners appealed to the Court of 'ppeals, arguing that the trial court erred in appl"ingthe principle of litis pendentia and forum non conveniens and in ruling that it had no jurisdictionover the defendants, despite the previous attachment of shares of stocks belonging to $/00,nc. and )aic.

&n Eanuar" , $::7, the Court of 'ppeals ?/@ affirmed the dismissal of Civil Case #o. $5%against )ucat, $/00, nc., and )aic on the ground of litis pendentia, thusG

The plaintiffs in the .-. court are $/00 nc. andFor )rago )aic, !hile the defendants are

Philsec, the '"ala nternational


4/33

respondents, !as affirmed on appeal b" the Circuit Court of 'ppeals. ?@ Thus, the principal issueto be resolved in this case is 6ee+ C/*/ C$e No. 1?@3? / =$++e% =5 e ;u%8en o e&.S. 2ou+.

Private respondents contend that for a foreign judgment to be pleaded as res judicata, a judgment admitting the foreign decision is not necessar". &n the other hand, petitioners arguethat the foreign judgment cannot be given the effect of res judicata !ithout giving them anopportunit" to impeach it on grounds stated in Rule %:, K58 of the Rules of Court, to !itG >!antof jurisdiction, !ant of notice to the part", collusion, fraud, or clear mistake of la! or fact.A

Petitioners1 contention is meritorious. 3hile this Court has given the effect of res judicata toforeign judgments in several cases, ?9@ it !as after the parties opposed to the judgment had beengiven ample opportunit" to repel them on grounds allo!ed under the la!. ?0@ t is not necessar"for this purpose to initiate a separate action or proceeding for enforcement of the foreign

judgment. 3hat is essential is that there is opportunit" to challenge the foreign judgment, inorder for the court to properl" determine its efficac". This is because in this jurisdiction, !ithrespect to actions in personam, as distinguished from actions in rem, a foreign judgment merel"constitutes prima facie evidence of the justness of the claim of a part" and, as such, is subjectto proof to the contrar".?:@ Rule %:, K58 providesG

-C. 58. Effect of foreign judgments. The effect of a judgment of a tribunal of a foreigncountr", having jurisdiction to pronounce the judgment is as follo!sG

aD n case of a judgment upon a specific thing, the judgment is conclusive upon the title to thethingH

bD n case of a judgment against a person, the judgment is presumptive evidence of a right asbet!een the parties and their successors in interest b" a subse;uent titleH but the judgment ma"be repelled b" evidence of a !ant of jurisdiction, !ant of notice to the part", collusion, fraud, orclear mistake of la! or fact.

Thus, in the case of General Corporation of the Philippines v. Union Insurance Societ ofCanton, !td.,?$8@ !hich private respondents invoke for claiming conclusive effect for the foreign

judgment in their favor, the foreign judgment !as considered res judicata because this Courtfound >from the evidence as !ell as from appellant1s o!n pleadingsA ?$$@ that the foreign court didnot make a >clear mistake of la! or factA or that its judgment !as void for !ant of jurisdiction orbecause of fraud or collusion b" the defendants. Trial had been previousl" held in the lo!ercourt and onl" after!ard !as a decision rendered, declaring the judgment of the -upreme Courtof the -tate of 3ashington to have the effect of res judicata in the case before the lo!ercourt. n the same vein, in Philippine International Shipping Corp. v. Court of "ppeals ,?$7@ thisCourt held that the foreign judgment !as valid and enforceable in the Philippines there being nosho!ing that it !as vitiated b" !ant of notice to the part", collusion, fraud or clear mistake of la!or fact. The prima facie presumption under the Rule had not been rebutted.

n the case at bar, it cannot be said that petitioners !ere given the opportunit" to challengethe judgment of the .-. court as basis for declaring it res judicata or conclusive of the rights of

private respondents. The proceedings in the trial court !ere summar". #either the trial courtnor the appellate court !as even furnished copies of the pleadings in the .-. court or apprisedof the evidence presented thereat, to assure a proper determination of !hether the issues thenbeing litigated in the .-. court !ere e2actl" the issues raised in this case such that the

judgment that might be rendered !ould constitute res judicata. 's the trial court stated in itsdisputed order dated March :, $:00G

http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/103493.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/103493.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/103493.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/103493.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/103493.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/103493.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/103493.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/103493.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/103493.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/103493.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/103493.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/103493.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/103493.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/103493.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/103493.htm#_edn12


5/33

&n the plaintiff1s claim in its &pposition that the causes of action of this case and thepending case in the nited -tates are not identical, precisel" the &rder of Eanuar" 7,$:00 never found that the causes of action of this case and the case pending before the-' Court, !ere identical. emphasis addedD

I 6$ e++o+ e+eo+e o+ e Cou+ o A--e$ o u$+/5 +ue $ -e//one+ $2/on /=$++e% =5 e -+/n2/-e o res judicata. Petitioners in fact ;uestioned the jurisdiction of the.-. court over their persons, but their claim !as brushed aside b" both the trial court and theCourt of 'ppeals.?$%@

Moreover, the Court notes that on 'pril 77, $::7, $/00, nc. and )aic filed a petition for theenforcement of judgment in the Regional Trial Court of Makati, !here it !as docketed as CivilCase #o. :7$898 and assigned to Branch $%/, although the proceedings !ere suspendedbecause of the pendenc" of this case. To sustain the appellate court1s ruling that the foreign

judgment constitutes res judicata and is a bar to the claim of petitioners !ould effectivel"preclude petitioners from repelling the judgment in the case for enforcement. 'n absurdit"could then ariseG a foreign judgment is not subject to challenge b" the plaintiff against !hom it isinvoked, if it is pleaded to resist a claim as in this case, but it ma" be opposed b" the defendantif the foreign judgment is sought to be enforced against him in a separate proceeding. This isplainl" untenable. t has been held therefore thatG

[A] o+e/8n ;u%8en $5 no =e eno+2e% / / / no +e2o8n/Be% /n e ;u+/%/2/on 6e+e$/+$/*e +e/e / =e/n8 ou8. (ence, in the interest of justice, the complaint should beconsidered as a petition for the recognition of the (ongkong judgment under -ection 58 bD,Rule %: of the Rules of Court in order that the defendant, private respondent herein, ma"present evidence of lack of jurisdiction, notice, collusion, fraud or clear mistake of fact and la!, ifapplicable.?$/@

'ccordingl", to insure the orderl" administration of justice, this case and Civil Case #o. :7$898 should be consolidated.?$5@ 'fter all, the t!o have been filed in the Regional Trial Court ofMakati, albeit in different salas, this case being assigned to Branch 5 Eudge


6/33

effected out of the Philippines b" leave of Court !here, among others, >the propert" of thedefendant has been attached !ithin the Philippines.A?$0@ t is not disputed that the properties, realand personal, of the private respondents had been attached prior to service of summons underthe &rder of the trial court dated 'pril 78, $:09.?$:@

Fourth. 's for the temporar" restraining order issued b" the Court on Eune 7:, $::/, tosuspend the proceedings in Civil Case #o. :7$//5 filed b" dgardo 4. =uevarra to enforcesocalled Rule $$ sanctions imposed on the petitioners b" the .-. court, the Court finds thatthe judgment sought to be enforced is severable from the main judgment under consideration in

Civil Case #o. $5%. The separabilit" of =uevarra1s claim is not onl" admitted b" petitioners,?78@ it appears from the pleadings that petitioners onl" belatedl" impleaded =uevarra asdefendant in Civil Case #o. $5%. ?7$@ (ence, the TR& should be lifted and Civil Case #o. :7$//5 allo!ed to proceed.

3(R


7/33

G.R. No. 1''03 Se-e=e+ @, 199'

ASIAVEST LIMITE#, -e//one+,*.

THE CO&RT O" APPEALS $n% ANTONIO HERAS, +e-on%en.

)'4), ER., $.%

n issue is the eno+2e$=//5 /n e P//--/ne o $ o+e/8n ;u%8en. The antecedents aresummariLed in the 7/ 'ugust $::8 )ecision $ of Branch $89 of the Regional Trial Court ofJueLon Cit" in Civil Case #o. J57/57H thusG

The plaintiff 'siavest +imited filed a complaint against the defendant 'ntonio(eras pra"ing that said defendant be ordered to pa" to the plaintiff the amounts

a!arded b" the (ong Iong Court Eudgment dated to !itG

$D -6$,0$8,75./8 or its e;uivalent in (ong Iongcurrenc" at the time of pa"ment !ith legal interestfrom )ecember 70, $:0/ until full" paidH

7D interest on the sum of -6$,588.88 at :.095per annum from &ctober %$, $:0/ to )ecember 70,$:0/H and

%D (I6:85.88 at fi2ed cost in the actionH and

/D at least 608,888.88 representing attorne"Ns fees,litigation e2penses and cost, !ith interest thereonfrom the date of the judgment until full" paid.

The defendant filed a Motion to )ismiss. (o!ever, before the court could resolvethe said motion, a fire !hich partiall" raLed the JueLon Cit" (all Building totall"destro"ed the office of this Court, together !ith all its records, e;uipment andproperties. The plaintiff, through counsel filed a Motion for Reconstitution of CaseRecords. The Court, after allo!ing the defendant to react thereto, granted thesaid Motion and admitted the anne2es attached thereto as the reconstitutedrecords of this case per &rder. Thereafter, the Motion to )ismiss, the resolutionof !hich had been deferredH !as denied b" the Court .

)efendant filed his 'ns!er. The case !as then set for pretrial conference. 't theconference, the parties could not arrive at an" settlement. (o!ever, the" agreedon the follo!ing stipulations of factsG

$. The defendant admits the e2istence of the judgment dated )ecember 70, $:0/ as !ell as its


8/33

amendment dated 'pril $%, $:09, but notnecessaril" the authenticit" or validit" thereofH

7. The plaintiff is not doing business and is notlicensed to do business in the PhilippinesH

%. The residence of defendant, 'ntonio (eras, is#e! Manila, JueLon Cit".

The onl" issue for this Court to determine is, !hether or not the judgment of the(ong Iong Court has been repelled b" evidence of !ant of jurisdiction, !ant ofnotice to the part", collusion, fraud or clear mistake of la! or fact, such as toovercome the presumption established in -ection 58, Rule %: of the Rules ofCourt in favor of foreign judgments.

n vie! of the admission b" the defendant of the e2istence of the aforementioned judgment, as !ell as the legal presumption in favor of the plaintiff as provided forin paragraph bDH -ec. 58, I&id .D, the plaintiff presented onl" documentar"evidence to sho! rendition, e2istence, and authentication of such judgment b"the proper officials concerned Pls. -ee 2hibits O'O thru OBO, !ith their

submarkingsD. n addition, the plaintiff presented testimonial and documentar"evidence to sho! its entitlement to attorne"Ns fees and other e2penses oflitigation. . . . .

&n the other hand, the defendant presented t!o !itnesses, namel".


9/33

The defendant !as sued on the basis of his personal guarantee ofthe obligations of Compania (ermanos de #avegacion -.'. Thereis no record that a !rit of summons !as served on the person ofthe defendant in (ong Iong, or that an" such attempt at service!as made. +ike!ise, there is no record that a cop" of the

judgment of the (igh Court !as furnished or served on thedefendantH an"!a", it is not a legal re;uirement to do so under(ong Iong la!sH

aD The !rit of summons or claim can be served b"the solicitor la!"erD of the claimant or plaintiff. n(ong Iong there are no Court personnel !ho serve!rits of summons andFor most other processes.

bD f the !rit of summons or claim or complaintD isnot contested, the claimant or the plaintiff is notre;uired to present proof of his claim or complaintnor present evidence under oath of the claim inorder to obtain a Eudgment.

cD There is no legal re;uirement that such aEudgment or decision rendered b" the Court in(ong Iong ?to@ make a recitation of the facts or thela! upon !hich the claim is based.

dD There is no necessit" to furnish the defendant!ith a cop" of the Eudgment or decision renderedagainst him.

eD n an action based on a guarantee, there is noestablished legal re;uirement or obligation under(ong Iong la!s that the creditor must first bring

proceedings against the principal debtor. Thecreditor can immediatel" go against the guarantor.

&n cross e2amination, Mr. +ousich stated that before he !as commissioned b"the la! firm of the defendantNs counsel as an e2pert !itness and to verif" therecords of the (ong Iong case, he had been acting as counsel for the defendantin a number of commercial mattersH that there !as an application for service ofsummons upon the defendant outside the jurisdiction of (ong IongH that there!as an order of the Court authoriLing service upon (eras outside of (ong Iong,particularl" in Manila or an" other place in the Philippines p. :, T-#, 7F$/F:8DHthat there must be ade;uate proof of service of summons, other!ise the (ongIong Court !ill refuse to render judgment p. $8, i&id DH that the mere fact that the

(ong Iong Court rendered judgment, it can be presumed that there !as serviceof summonsH that in this case, it is not just a presumption because there !as anaffidavit stating that service !as effected in ?sic @ a particular man here in ManilaHthat such affidavit !as filed b" one Eose R.


10/33

$7, i&id .DH that upon filing of that affidavit, the Court !as asked and granted judgment against the /th defendantH and that if the summons or claim is notcontested, the claimant of the plaintiff is not re;uired to present proof of his claimor complaint or present evidence under oath of the claim in order to obtain

judgmentH and that such judgment can be enforced in the same manner as a judgment rendered after full hearing.

The trial court held that since the (ong Iong court judgment had been dul" proved, it is apresumptive evidence of a right as bet!een the partiesH hence, the part" impugning it had theburden to prove !ant of jurisdiction over his person. (R'- failed to discharge that burden. (edid not testif" to state categoricall" and under oath that he never received summons. ven hiso!n !itness +ousich admitted that (R'- !as served !ith summons in his JueLon Cit"residence. 's to )e la 4egaNs testimon" regarding nonservice of summons, the same !ashearsa" and had no probative value.

's to (R'-N contention that the (ong Iong court judgment violated the Constitution and theprocedural la!s of the Philippines because it contained no statements of the facts and the la!on !hich it !as based, the trial court ruled that since the issue relate to procedural matters, thela! of the forum, i .e., (ong Iong la!s, should govern. 's testified b" the e2pert !itness+ousich, such legalities !ere not re;uired under (ong Iong la!s. The trial Court also debunked(R'-N contention that the principle of e2cussion under 'rticle 7850 of the Civil Code of thePhilippines !as violated. t declared that matters of substance are subject to the la! of the place!here the transaction occurredH in this case, (ong Iong la!s must govern.

The trial court concluded that the (ong Iong court judgment should be recogniLed and giveneffect in this jurisdiction for failure of (R'- to overcome the legal presumption in favor of theforeign judgment. t then decreedH thusG

3(R


11/33

The Court of 'ppeals agreed !ith the trial court that matters of remed" and procedure, such asthose relating to service of summons upon the defendant are governed b" the le' fori , !hich!as, in this case, the la! of (ong Iong. Relative thereto, it gave !eight to +ousichNs testimon"that under the (ong Iong la!, the substituted service of summons upon (R'- effected in thePhilippines b" the clerk of -"cip -alaLar (ernandeL =atmaitan firm !ould be valid providedthat it !as done in accordance !ith Philippine la!s. t then stressed that !here the action is in

personam and the defendant is in the Philippines, the summons should be personall" served onthe defendant pursuant to -ection 9, Rule $/ of the Rules of Court. / -ubstituted service ma"onl" be availed of !here the defendant cannot be promptl" served in person, the fact of

impossibilit" of personal service should be e2plained in the proof of service. t also found aspersuasive (R'-N argument that instead of directl" using the clerk of the -"cip -alaLar(ernandeL =atmaitan la! office, !ho !as not authoriLed b" the judge of the court issuing thesummons, '-'4-T should have asked for leave of the local courts to have the foreignsummons served b" the sheriff or other court officer of the place !here service !as to be made,or for special reasons b" an" person authoriLed b" the judge.

The Court of 'ppeals agreed !ith (R'- that Onotice sent outside the state to a non(resident isunavailing to give jurisdiction in an action against him personall" for mone" recover".O-ummons should have been personall" served on (R'- in (ong Iong, for, as claimed b"

'-'4-T, (R'- !as ph"sicall" present in (ong Iong for nearl" $/ "ears. -ince there !asnot even an attempt to serve summons on (R'- in (ong Iong, the (ong Iong -upremeCourt did not ac;uire jurisdiction over (R'-. #onetheless it did not totall" foreclose the claimof '-'4-TH thusG

3hile 3e are not full" convinced that ?(R'-@ has a meritorious defenseagainst ?'-'4-TNs@ claims or that ?(R'-@ ought to be absolved of an"liabilit", nevertheless, in vie! of the foregoing discussion, there is a need todeviate front the findings of the lo!er court in the interest of justice and fair pla".This, ho!ever, is !ithout prejudice to !hatever action ?'-'4-T@ might deemproper in order to enforce its claims against ?(R'-@.


12/33

4.

. . . T( (= I= -MM- -(&+) ('4 B# -R4) 3T(+'4 &< P(+PP# C&RT-H

4.

. . . T(


13/33

&n crosse2amination b" counsel for '-'4-T, +ousichN testified that the (ong Iong courtauthoriLed service of summons on (R'- outside of its jurisdiction, particularl" in thePhilippines. (e admitted also the e2istence of an affidavit of one Eose R.


14/33

There is, ho!ever, nothing in the testimon" of Mr. +ousich that touched on the specific la! of(ong Iong in respect of service of summons either in actions in rem or in personam, and !herethe defendant is either a resident or nonresident of (ong Iong. n vie! of the absence of proofof the (ong Iong la! on this particular issue, the presumption of identit" or similarit" or the socalled processual presumption shall come into pla". t !ill thus be presumed that the (ong Iongla! on the matter is similar to the Philippine la!. $9

's stated in almonte vs. Court of "ppeals, $0 it !ill be helpful to determine first !hether theaction is in personam, in rem, or quasi in rem because the rules on service of summons underRule $/ of the Rules of Court of the Philippines appl" according to the nature of the action.

'n action in personam is an action against a person on the basis of his personal liabilit". 'naction in rem is an action against the thing itself instead of against the person. $: 'n action quasiin rem is one !herein an individual is named as defendant and the purpose of the proceeding isto subject his interest therein to the obligation or lien burdening the propert". 78

n an action in personam, jurisdiction over the person of the defendant is necessar" for the courtto validl" tr" and decide the case. Eurisdiction over the person of a resident defendant !ho doesnot voluntaril" appear in court can be ac;uired b" personal service of summons as providedunder -ection 9, Rule $/ of the Rules of Court. f he cannot be personall" served !ith summons

!ithin a reasonable time, substituted service ma" be made in accordance !ith -ection 0 of saidRule. f he is temporaril" out of the countr", an" of the follo!ing modes of service ma" beresorted toG $D substituted service set forth in -ection 0H 7$ 7D personal service outside thecountr", !ith leave of courtH %D service b" publication, also !ith leave of courtH 77 or /D an" othermanner the court ma" deem sufficient. 7%

(o!ever, in an action in personam !herein the defendant is a non(resident !ho does notvoluntaril" submit himself to the authorit" of the court, personal service of summons !ithin thestate is essential to the ac;uisition of jurisdiction over her person. 7/ This method of service ispossible if such defendant is ph"sicall" present in the countr". f he is not found therein, thecourt cannot ac;uire jurisdiction over his person and therefore cannot validl" tr" and decide thecase against him. 75 'n e2ception !as laid do!n in Gemperle v. Schen*er 7 !herein a non

resident !as served !ith summons through his !ife, !ho !as a resident of the Philippines and!ho !as his representatives and attorne"infact in a prior civil case filed b" himH moreover, thesecond case !as a mere offshoot of the first case.

&n the other hand, in a proceeding in rem or quasi in rem, jurisdiction over the person of thedefendant is not a prere;uisite to confer jurisdiction on the court provided that the court ac;uires

jurisdiction over the res. #onetheless summons must be served upon the defendant not for thepurpose of vesting the court !ith jurisdiction but merel" for satisf"ing the due processre;uirements. 79 Thus, !here the defendant is a nonresident !ho is not found in the Philippinesand $D the action affects the personal status of the plaintiffH 7D the action relates to, or thesubject matter of !hich is propert" in the Philippines in !hich the defendant has or claims a lienor interestH %D the action seeks the e2clusion of the defendant from an" interest in the propert"

located in the PhilippinesH or /D the propert" of the defendant has been attached in thePhilippines Q service of summons ma" be effected b" aD personal service out of the countr",!ith leave of courtH bD publication, also !ith leave of court, or cD an" other manner the courtma" deem sufficient. 70

n the case at bar, the action filed in (ong Iong against (R'- !as in personam, since it !asbased on his personal guarantee of the obligation of the principal debtor. Before !e can appl"the foregoing rules, !e must determine first !hether (R'- !as a resident of (ong Iong.


15/33


16/33

(ong Iong in &ctober $:0/ Ofor good.O /8 (is absence in (ong Iong must have been thereason !h" summons !as not served on him thereinH thus, '-'4-T !as constrained to appl"for leave to effect service in the Philippines, and upon obtaining a favorable action on thematter, it commissioned the -"cip -alaLar (ernandeL =atmaitan la! firm to serve thesummons here in the Philippines.

n 2ro/n v. 2ro/n, /$ the defendant !as previousl" a resident of the Philippines. -everal da"safter a criminal action for concubinage !as filed against him, he abandoned the Philippines.+ater, a proceeding quasi in rem !as instituted against him. -ummons in the latter case !asserved on the defendantNs attorne"infact at the latterNs address. The Court held that under thefacts of the case, it could not be said that the defendant !as Ostill a resident of the Philippinesbecause he ha?d@ escaped to his countr" and ?!as@ therefore an absentee in the Philippines.O 'ssuch, he should have been Osummoned in the same manner as one !ho does not reside and isnot found in the Philippines.O

-imilarl", (R'-, !ho !as also an absentee, should have been served !ith summons in thesame manner as a nonresident not found in (ong Iong. -ection $9, Rule $/ of the Rules ofCourt providing for e2traterritorial service !ill not appl" because the suit against him !as in

personam. #either can !e appl" -ection $0, !hich allo!s e2traterritorial service on a residentdefendant !ho is temporaril" absent from the countr", because even if (R'- be consideredas a resident of (ong Iong, the undisputed fact remains that he left (ong Iong not onl"Otemporaril"O but Ofor good.O

# 43 &< '++ T(


17/33

[G.R. No. 13?'04. "e=+u$+5 19, 003]

MAN&"ACT&RERS HANOVER TR&ST CO. $n%Do+ CHEMICAL AN, petitioners,vs. RA"AEL MA. G&ERRERO, respondent .

) C - & #

C'RP&, $ .G

The Case

This is a petition for revie! under Rule /5 of the Rules of Court to set aside the Court of 'ppeals1?$@ )ecision of 'ugust 7/, $::0 and Resolution of )ecember $/, $::0 in C'=.R. -P#o. /7%$8?7@ affirming the trial court1s denial of petitioners1 motion for partial summar" judgment.

The 'ntecedents

http://sc.judiciary.gov.ph/jurisprudence/2003/feb2003/136804.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2003/feb2003/136804.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2003/feb2003/136804.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2003/feb2003/136804.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2003/feb2003/136804.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2003/feb2003/136804.htm#_ftn2


18/33

• Respondent =uerrero filed a complaint for damages against petitioner >the BankA!ith the RTC of Manila.

• =uerrero sought pa"ment of damages allegedl" for

o $D illegall" !ithheld ta2es charged against interests on his checking account!ith the BankH

o 7D a returned check !orth -6$0,888.88 due to signature verificationproblemsH and

o %D unauthoriLed conversion of his account. =uerrero amended hiscomplaint on 'pril $0, $::5.

• The Bank contends that =uerrero1s account is governed b" Ne6 Fo+: $6 and thisla! does not permit an" of =uerrero1s 2$/ e>2e- $2u$%$$8e. -ubse;uentl", the Bank filed a Motion for Partial -ummar" Eudgment.The Bank contended that the trial should be limited to the issue of actual damages.

• =uerrero opposed the motion.

• The affidavit of A5$ ($%en, a #e! *ork attorne", supported the Bank’sMotion for Partial Summary Judgment. 3alden1s affidavit stated that =uerrero1s

#e! *ork bank account stipulated that the governing la! is #e! *ork la! and thatthis la! bars all of =uerrero1s claims e2cept actual damages. The PhilippineConsular &ffice in #e! *ork authenticated the 3alden affidavit.

• The RTC denied the Bank1s Motion for Partial -ummar" Eudgment and its motion forreconsideration. The Bank filed a petition for certiorari and prohibition !ith the Courtof 'ppeals assailing the RTC &rders. n its )ecision, the Court of 'ppealsdismissed the petition. Court of 'ppeals denied the Bank1s motion forreconsideration.

• (ence, the instant petition.

Te Ru/n8 o e Cou+ o A--e$

The C' sustained the RTC orders den"ing the motion for partial summar" judgment. TheC' ruled that the 3alden affidavit does not serve as proof of the #e! *ork la! and

jurisprudence relied on b" the Bank to support its motion. The C' considered the #e! *ork la!and jurisprudence as public documents defined in -ection $:, Rule $%7 of the Rules onvidence.

The Court of 'ppeals opined that the follo!ing procedure outlined in -ection 7/, Rule $%7should be follo!ed in proving foreign la!G

>-C. 7/. Proof of official record . The record of public documents referred to in paragraph aDof -ection $:, !hen admissible for an" purpose, ma" be evidenced b" an official publicationthereof or b" a cop" attested b" the officer having the legal custod" of the record, or b" hisdeput", and accompanied, if the record is not kept in the Philippines, !ith a certificate that suchofficer has the custod". f the office in !hich the record is kept is in a foreign countr", thecertificate ma" be made b" a secretar" of the embass" or legation, consul general, consul, viceconsul, or consular agent or b" an" officer in the foreign service of the Philippines stationed inthe foreign countr" in !hich the record is kept, and authenticated b" the seal of his office.A


19/33

The Court of 'ppeals like!ise rejected the Bank1s argument that -ection 7, Rule %/ of theold Rules of Court allo!s the Bank to move !ith the supporting 3alden affidavit for partialsummar" judgment in its favor. The C' clarified that the 3alden affidavit is not the supportingaffidavit referred to in -ection 7, Rule %/ that !ould prove the lack of genuine issue bet!een theparties. The C' concluded that even if the 3alden affidavit is used for purposes of summar"

judgment, the Bank must still compl" !ith the procedure prescribed b" the Rules to prove theforeign la!.

Te Iue

The Bank contends that the Court of 'ppeals committed reversible error in

>2 2 2 (&+)#= T('T ?T( B'#I1-@ PR&&< &<


20/33

n a motion for summar" judgment, the crucial ;uestion isG are the issues raised in thepleadings genuine, sham or fictitious, as sho!n b" affidavits, depositions or admissionsaccompan"ing the motion?5@

' genuine issue means an issue of fact !hich calls for the presentation of evidence asdistinguished from an issue !hich is fictitious or contrived so as not to constitute a genuine issuefor trial.?@

' perusal of the parties1 respective pleadings !ould sho! that there are genuine issues offact that necessitate formal trial. =uerrero1s complaint before the RTC contains a statement ofthe ultimate facts on !hich he relies for his claim for damages. (e is seeking damages for !hathe asserts as >illegall" !ithheld ta2es charged against interests on his checking account !iththe Bank, a returned check !orth -6$0,888.88 due to signature verification problems, andunauthoriLed conversion of his account.A n its 'ns!er, the Bank set up its defense that theagreed foreign la! to govern their contractual relation bars the recover" of damages other thanactual. 'pparentl", facts are asserted in =uerrero1s complaint !hile specific denials andaffirmative defenses are set out in the Bank1s ans!er.

True, the court can determine !hether there are genuine issues in a case based merel" onthe affidavits or counteraffidavits submitted b" the parties to the court. (o!ever, as correctl"ruled b" the Court of 'ppeals, the Bank1s motion for partial summar" judgment as supported b"the 3alden affidavit does not demonstrate that =uerrero1s claims are sham, fictitious or

contrived. &n the contrar", the 3alden affidavit sho!s that the facts and material allegationsas pleaded b" the parties are disputed and there are substantial triable issues necessitating aformal trial.

There can be no summar" judgment !here ;uestions of fact are in issue or !here materialallegations of the pleadings are in dispute. ?9@ The resolution of !hether a foreign la! allo!s onl"the recover" of actual damages is a ;uestion of fact as far as the trial court is concerned sinceforeign la!s do not prove themselves in our courts. ?0@


21/33

e2istence of said la!. 'ccordingl", in line !ith this vie!, the -upreme Court in the Collector ofInternal -evenue v. Fisher et al ., upheld the Ta2 Court in considering the pertinent la! ofCalifornia as proved b" the respondents1 !itness. n that case, the counsel for respondent>testified that as an active member of the California Bar since $:5$, he is familiar !ith therevenue and ta2ation la!s of the -tate of California. 3hen asked b" the lo!er court to state thepertinent California la! as regards e2emption of intangible personal properties, the !itness cited

'rticle /, -ec. $%05$ aD bD of the California nternal and Revenue Code as published in)erring1s California Code, a publication of Bancroft3hitne" Co., nc. 'nd as part of histestimon", a full ;uotation of the cited section !as offered in evidence b"

respondents.A +ike!ise, in several naturaliLation cases, it !as held b" the Court that evidenceof the la! of a foreign countr" on reciprocit" regarding the ac;uisition of citiLenship, althoughnot meeting the prescribed rule of practice, ma" be allo!ed and used as basis for favorableaction, if, in the light of all the circumstances, the Court is >satisfied of the authenticit" of the!ritten proof offered.A Thus, in a number of decisions, mere authentication of the Chinese#aturaliLation +a! b" the Chinese Consulate =eneral of Manila !as held to be competent proofof that la!.A mphasis suppliedD

The Bank, ho!ever, cannot rel" on )illamette Iron and Steel )or*s v. +ual or Collectorof Internal -evenue v. Fisher to support its cause. These cases involved attorne"s testif"ing inopen court during the trial in the Philippines and ;uoting the particular foreign la!s sought to beestablished. &n the other hand, the 3alden affidavit !as taken abroad e' parte and the affiantnever testified in open court. The 3alden affidavit cannot be considered as proof of #e! *orkla! on damages not onl" because it is selfserving but also because it does not state thespecific #e! *ork la! on damages. 3e reproduce portions of the 3alden affidavit as follo!sG

>%. n #e! *ork, >?n@ominal damages are damages in name onl", trivial sums such as si2cents or 6$. -uch damages are a!arded both in tort and contract cases !hen the plaintiffestablishes a cause of action against the defendant, but is unable to proveA actualdamages. )obbs, +a! of Remedies, K %.%7 at 7:/ $::%D. -ince =uerrero is claiming for actualdamages, he cannot ask for nominal damages.

/. There is no concept of temperate damages in #e! *ork la!. have revie!ed )obbs, a !ellrespected treatise, !hich does not use the phrase >temperate damagesA in its inde2. havealso done a computeriLed search for the phrase in all published #e! *ork cases, and havefound no cases that use it. have never heard the phrase used in 'merican la!.

5. The niform Commercial Code >CCAD governs man" aspects of a Bank1s relationship !ithits depositors. n this case, it governs =uerrero1s claim arising out of the nonpa"ment of the6$0,888 check. =uerrero claims that this !as a !rongful dishonor. (o!ever, the CC statesthat >justifiable refusal to pa" or acceptA as opposed to dishonor, occurs !hen a bank refuses topa" a check for reasons such as a missing indorsement, a missing or illegible signature or aforger", K %5$8, &fficial Comment 7. U.. to the Complaint, M(T returned the check because ithad no signature card on U. and could not verif" =uerrero1s signature. n m" opinion,consistent !ith the CC, that is a legitimate and justifiable reason not to pa".

. Conse;uential damages are not available in the ordinar" case of a justifiable refusal topa". CC $$8 provides that >neither conse;uential or special or punitive damages ma" behad e2cept as specificall" provided in the 'ct or b" other rule of la!A. CC /$8% furtherprovides that conse;uential damages can be recovered onl" !here there is bad faith. This ismore restrictive than the #e! *ork common la!, !hich ma" allo! conse;uential damages in abreach of contract case as does the CC !here there is a !rongful dishonorD.


22/33

9. nder #e! *ork la!, re;uests for lost profits, damage to reputation and mental distress areconsidered conse;uential damages. Ienford Co., nc. v. Countr" of rie, 9% #.*.7d %$7, %$:,5/8 #.*.-.7d $, /5 $:0:D lost profitsDH Motif Construction Corp. v. Buffalo -avings Bank, 58

'.).7d 9$0, %9/ #.*.-..7d 00, 0:98 /th )ep1t $:95D damage to reputationDH )obbs, +a! ofRemedies K$7./$D at % emotional distressD.

0. 's a matter of #e! *ork la!, a claim for emotional distress cannot be recovered for a breachof contract. =eler v. #ational 3estminster Bank .-.'., 998


23/33

Bank1s intention in presenting the 3alden affidavit is to prove #e! *ork la! and jurisprudence.(o!ever, because of the failure to compl" !ith -ection 7/ of Rule $%7 on ho! to prove aforeign la! and decisions of foreign courts, the 3alden affidavit did not prove the current stateof #e! *ork la! and jurisprudence. Thus, the Bank has onl" alleged, but has not proved, !hat#e! *ork la! and jurisprudence are on the matters at issue.#e2t, the Bank makes much of=uerrero1s failure to submit an opposing affidavit to the 3alden affidavit. (o!ever, thepertinent provision of -ection %, Rule %5 of the old Rules of Court did not make the submissionof an opposing affidavit mandator", thusG

>-C. %. +otion and proceedings thereon. The motion shall be served at least ten $8D da"sbefore the time specified for the hearing. The adverse part" prior to the da" of hearing ma"serve opposing affidavits. 'fter the hearing, the judgment sought shall be rendered forth!ith ifthe pleadings, depositions and admissions on file, together !ith the affidavits, sho! that, e2ceptas to the amount of damages, there is no genuine issue as to an" material fact and that themoving part" is entitled to a judgment as a matter of la!.A mphasis suppliedD

t is a2iomatic that the term >ma"A as used in remedial la!, is onl" permissive and notmandator".?$%@=uerrero cannot be said to have admitted the averments in the Bank1s motion forpartial summar" judgment and the 3alden affidavit just because he failed to file an opposingaffidavit. =uerrero opposed the motion for partial summar" judgment, although he did notpresent an opposing affidavit. =uerrero ma" not have presented an opposing affidavit, as there!as no need for one, because the 3alden affidavit did not establish !hat the Bank intended toprove. Certainl", =uerrero did not admit, e2pressl" or impliedl", the veracit" of the statementsin the 3alden affidavit. The Bank still had the burden of proving #e! *ork la! and

jurisprudence even if =uerrero did not present an opposing affidavit. 's the part" moving forsummar" judgment, the Bank has the burden of clearl" demonstrating the absence of an"genuine issue of fact and that an" doubt as to the e2istence of such issue is resolved againstthe movant.?$/@

Moreover, it !ould have been redundant and pointless for =uerrero to submit an opposingaffidavit considering that !hat the Bank seeks to be opposed is the ver" subject matter of thecomplaint. =uerrero need not file an opposing affidavit to the 3alden affidavit because hiscomplaint itself controverts the matters set forth in the Bank1s motion and the 3alden affidavit. '

part" should not be made to den" matters alread" averred in his complaint.

There being substantial triable issues bet!een the parties, the courts a quo correctl"denied the Bank1s motion for partial summar" judgment. There is a need to determine b"presentation of evidence in a regular trial if the Bank is guilt" of an" !rongdoing and if it is liablefor damages under the applicable la!s.

This case has been dela"ed long enough b" the Bank1s resort to a motion for partialsummar" judgment. ronicall", the Bank has successfull" defeated the ver" purpose for !hichsummar" judgments !ere devised in our rules, !hich is, to aid parties in avoiding the e2penseand loss of time involved in a trial.

3(R


24/33

(IL#VALLEF SHIPPING CO., LT#. petitioner, vs. CO&RT O" APPEALS $n% PHILIPPINEPRESI#ENT LINES INC., respondents.

) C - & #

B#', $ .G

This is a petition for revie! on certiorari seeking to set aside the decision of the Court of 'ppeals !hich reversed the decision of the lo!er court in C'=.R. C4 #o. %07$, entitled

O3ildvalle" -hipping Co., +td., plaintiffappellant, versus Philippine President +ines, nc.,defendantappellant.O

The antecedent facts of the case are as follo!sG

-ometime in


25/33

O/. That plaintiff 3ildvalle" -hipping Co., nc. is the o!ner of the vessel Malandrinon, !hosepassage !as obstructed b" the vessel Philippine Ro2as at Puerto &rdaL, 4eneLuela, asspecified in par. /, page 7 of the complaintH

O5. That on


26/33

O-& &R)R).O?7$@

Petitioner filed a motion for reconsideration ?77@ but the same !as denied for lack of merit inthe resolution dated March 7:, $::5.?7%@

(ence, this petition.

The petitioner assigns the follo!ing errors to the court a quoG

$. R-P)#T C&RT &< 'PP'+- -R&-+* RR) #


27/33

consul, or consular agent or b" an" officer in the foreign service of the Philippines stationed inthe foreign countr" in !hich the record is kept, and authenticated b" the seal of his office.Onderscoring suppliedD

The court has interpreted -ection 75 no! -ection 7/D to include competent evidence likethe testimon" of a !itness to prove the e2istence of a !ritten foreign la!. ?7@

n the noted case of )illamette Iron 3 Steel )or*s vs. +ual, ?79@ it !as held thatG

OU Mr. 'rthur 3. Bolton, an attorne"atla! of -an


28/33

t is not enough that the Gaceta 7ficial , or a book published b" the +inisterio deComunicaciones of 4eneLuela, !as presented as evidence !ith Captain MonLon attesting it. tis also re;uired b" -ection 7/ of Rule $%7 of the Rules of Court that a certificate that CaptainMonLon, !ho attested the documents, is the officer !ho had legal custod" of those recordsmade b" a secretar" of the embass" or legation, consul general, consul, vice consul or consularagent or b" an" officer in the foreign service of the Philippines stationed in 4eneLuela, andauthenticated b" the seal of his office accompan"ing the cop" of the public document. #o suchcertificate could be found in the records of the case.

3ith respect to proof of !ritten la!s, parol proof is objectionable, for the !ritten la! itself isthe best evidence. 'ccording to the !eight of authorit", !hen a foreign statute is involved, thebest evidence rule re;uires that it be proved b" a dul" authenticated cop" of the statute.?%9@

't this juncture, !e have to point out that the 4eneLuelan la! !as not pleaded before thelo!er court.

' foreign la! is considered to be pleaded if there is an allegation in the pleading about thee2istence of the foreign la!, its import and legal conse;uence on the event or transaction inissue.?%0@

' revie! of the Complaint?%:@ revealed that it !as never alleged or invoked despite the factthat the grounding of the MF4 Philippine Ro2as occurred !ithin the territorial jurisdiction of4eneLuela.

3e reiterate that under the rules of private international la!, a foreign la! must be properl"pleaded and proved as a fact. n the absence of pleading and proof, the la!s of a foreigncountr", or state, !ill be presumed to be the same as our o!n local or domestic la! and this iskno!n as processual presumption.?/8@

(aving cleared this point, !e no! proceed to a thorough stud" of the errors assigned b" thepetitioner.

Petitioner alleges that there !as negligence on the part of the private respondent that !ould!arrant the a!ard of damages.

There being no contractual obligation, the private respondent is obliged to give onl" the

diligence re;uired of a good father of a famil" in accordance !ith the provisions of 'rticle $$9%of the #e! Civil Code, thusG

>'rt. $$9%. The fault or negligence of the obligor consists in the omission of that diligence !hichis re;uired b" the nature of the obligation and corresponds !ith the circumstances of thepersons, of the time and of the place. 3hen negligence sho!s bad faith, the provisions ofarticles $$9$ and 778$, paragraph 7, shall appl".

>f the la! or contract does not state the diligence !hich is to be observed in the performance,that !hich is e2pected of a good father of a famil" shall be re;uired.A

The diligence of a good father of a famil" re;uires onl" that diligence !hich an ordinar"

prudent man !ould e2ercise !ith regard to his o!n propert". This !e have found privaterespondent to have e2ercised !hen the vessel sailed onl" after the Omain engine, machineries,and other au2iliariesO !ere checked and found to be in good running conditionH ?/$@ !hen themaster left a competent officer, the officer on !atch on the bridge !ith a pilot !ho ise2perienced in navigating the &rinoco RiverH !hen the master ordered the inspection of thevesselNs double bottom tanks !hen the vibrations occurred ane!. ?/7@

The Philippine rules on pilotage, embodied in Philippine Ports 'uthorit" 'dministrative&rder #o. 8%05, other!ise kno!n as the Rules and Regulations =overning Pilotage -ervices,

http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn37http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn38http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn39http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn40http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn41http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn41http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn42http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn37http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn38http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn39http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn40http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn41http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn42


29/33

the Conduct of Pilots and Pilotage -ec. $$. Control of 4essels and +iabilit" for )amage. &n compulsor" pilotage grounds, the(arbor Pilot providing the service to a vessel shall be responsible for the damage caused to avessel or to life and propert" at ports due to his negligence or fault. (e can be absolved from

liabilit" if the accident is caused b" force majeure or natural calamities provided he hase2ercised prudence and e2tra diligence to prevent or minimiLe the damage.

>The Master shall retain overall command of the vessel even on pilotage grounds !hereb" hecan countermand or overrule the order or command of the (arbor Pilot on board. n such event,an" damage caused to a vessel or to life and propert" at ports b" reason of the fault ornegligence of the Master shall be the responsibilit" and liabilit" of the registered o!ner of thevessel concerned !ithout prejudice to recourse against said Master.

>-uch liabilit" of the o!ner or Master of the vessel or its pilots shall be determined b" competentauthorit" in appropriate proceedings in the light of the facts and circumstances of each particularcase.

>2 2 2

>-ec. %7. )uties and Responsibilities of the Pilots or Pilots1 'ssociation. The duties andresponsibilities of the (arbor Pilot shall be as follo!sG

>2 2 2

>fD ' pilot shall be held responsible for the direction of a vessel from the time he assumes his!ork as a pilot thereof until he leaves it anchored or berthed safel"H Provided, ho!ever, that hisresponsibilit" shall cease at the moment the Master neglects or refuses to carr" out his order.O

The Code of Commerce like!ise provides for the obligations e2pected of a captain of avessel, to !itG

>'rt. $7. The follo!ing obligations shall be inherent in the office of captainG

>2 2 2

O9. To be on deck on reaching land and to take command on entering and leaving ports, canals,roadsteads, and rivers, unless there is a pilot on board discharging his duties. 2 2 2.A

The la! is ver" e2plicit. The master remains the overall commander of the vessel even

!hen there is a pilot on board. (e remains in control of the ship as he can still perform theduties conferred upon him b" la!?/%@ despite the presence of a pilot !ho is temporaril" in chargeof the vessel. t is not re;uired of him to be on the bridge !hile the vessel is being navigated b"a pilot.

(o!ever, -ection 0 of PP' 'dministrative &rder #o. 8%05, providesG

>-ec. 0. Compulsor Pilotage Service


30/33

pierF!harf, or shifting from one berth or another, ever" vessel engaged in coast!ise and foreigntrade shall be under compulsor" pilotage.

>222.A

The &rinoco River being a compulsor" pilotage channel necessitated the engaging of apilot !ho !as presumed to be kno!ledgeable of ever" shoal, bank, deep and shallo! ends ofthe river. n his deposition, pilot LLar -olarLano 4as;ueL testified that he is an official pilot inthe (arbour at Port &rdaL, 4eneLuela, ?//@ and that he had been a pilot for t!elve $7D "ears.

?/5@ (e also had e2perience in navigating the !aters of the &rinoco River.?/@

The la! does provide that the master can countermand or overrule the order or commandof the harbor pilot on board. The master of the Philippine Ro2as deemed it best not to order himthe pilotD to stop the vessel, ?/9@ ma"hap, because the latter had assured him that the" !erenavigating normall" before the grounding of the vessel. ?/0@ Moreover, the pilot had admitted thaton account of his e2perience he !as ver" familiar !ith the configuration of the river as !ell asthe course headings, and that he does not even refer to river charts !hen navigating the&rinoco River.?/:@

Based on these declarations, it comes as no surprise to us that the master chose not toregain control of the ship. 'dmitting his limited kno!ledge of the &rinoco River, Captain Colonrelied on the kno!ledge and e2perience of pilot 4as;ueL to guide the vessel safel".

>+icensed pilots, enjo"ing the emoluments of compulsor" pilotage, are in a different class fromordinar" emplo"ees, for the" assume to have a skill and a kno!ledge of navigation in theparticular !aters over !hich their licenses e2tend superior to that of the masterH pilots are boundto use due diligence and reasonable care and skill. ' pilotNs ordinar" skill is in proportion to thepilotNs responsibilities, and implies a kno!ledge and observance of the usual rules of navigation,ac;uaintance !ith the !aters piloted in their ordinar" condition, and nautical skill in avoiding allkno!n obstructions. The character of the skill and kno!ledge re;uired of a pilot in charge of avessel on the rivers of a countr" is ver" different from that !hich enables a navigator to carr" avessel safel" in the ocean. &n the ocean, a kno!ledge of the rules of navigation, !ith chartsthat disclose the places of hidden rocks, dangerous shores, or other dangers of the !a", are themain elements of a pilotNs kno!ledge and skill. But the pilot of a river vessel, like the harbor

pilot, is selected for the individualNs personal kno!ledge of the topograph" through !hich thevessel is steered.O?58@

3e find that the grounding of the vessel is attributable to the pilot. 3hen the vibrations !erefirst felt the !atch officer asked him !hat !as going on, and pilot 4as;ueL replied that Othe"D!ere in the middle of the channel and that the vibration !as as sicD a result of the shallo!nessof the channel.O?5$@

Pilot LLar -olarLano 4as;ueL !as assigned to pilot the vessel Philippine Ro2as as !ell asother vessels on the &rinoco River due to his kno!ledge of the same. n his e2perience as apilot, he should have been a!are of the portions !hich are shallo! and !hich are not. (isfailure to determine the depth of the said river and his decision to plod on his set course, in all

probabilit", caused damage to the vessel. Thus, !e hold him as negligent and liable for itsgrounding.

n the case of 0omer -amsdell #ransportation Compan vs. !a Compagnie Generale#ransatlantique, $07 .-. /8, it !as held thatG

>2 2 2 The master of a ship, and the o!ner also, is liable for an" injur" done b" the negligence ofthe cre! emplo"ed in the ship. The same doctrine !ill appl" to the case of a pilot emplo"ed b"the master or o!ner, b" !hose negligence an" injur" happens to a third person or his

http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn44http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn45http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn46http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn47http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn48http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn49http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn50http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn51http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn44http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn45http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn46http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn47http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn48http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn49http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn50http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn51


31/33

propert"G as, for e2ample, b" a collision !ith another ship, occasioned b" his negligence. 'nd it!ill make no difference in the case that the pilot, if an" is emplo"ed, is re;uired to be a licensedpilotH provided the master is at libert" to take a pilot, or not, at his pleasure, for in such a casethe master acts voluntaril", although he is necessaril" re;uired to select from a particularclass. &n the other hand, if it is compulsive upon the master to take a pilot, and, a fortiori , if heis bound to do so under penalt", then, and in such case, neither he nor the o!ner !ill be liablefor injuries occasioned b" the negligence of the pilotH for in such a case the pilot cannot bedeemed properl" the servant of the master or the o!ner, but is forced upon them, and thema2im 8ui facit per alium facit per se does not appl".O nderscoring suppliedD

'nent the river passage plan, !e find that, !hile there !as none, ?57@ the vo"age has beensufficientl" planned and monitored as sho!n b" the follo!ing actions undertaken b" the pilot,LLar -olarLano 4as;ueL, to !itG contacting the radio marina via 4(< for information regardingthe channel, river traffic,?5%@ soundings of the river, depth of the river, bulletin on the buo"s.?5/@ Theofficer on !atch also monitored the vo"age. ?55@

3e, therefore, do not find the absence of a river passage plan to be the cause for thegrounding of the vessel.

The doctrine of res ipsa loquitur does not appl" to the case at bar because thecircumstances surrounding the injur" do not clearl" indicate negligence on the part of the privaterespondent.


32/33

O' *es, "our (onor. Because the class societ" !hich register sicD is the third part" lookinginto the condition of the vessel and as far as their record states, the vessel !as class ormaintained, and she is fit to travel during that vo"age.O

>2 2 2

O'TT*. M-'

Before !e proceed to other matter, !ill "ou kindl" tell us !hat is sicD the Nclass Z$88'$-trengthened for &re CargoesN, mean

O3T#--

O' Plus $88'$ means that the vessel !as built according to +lo"dNs rules and she is capableof carr"ing ore bulk cargoes, but she is particularl" capable of carr"ing &re Cargoes !ith#o. 7 and #o. 0 holds empt".

>2 2 2

OC&RT

The vessel is classed, meaning

O' Meaning she is fit to travel, "our (onor, or sea!orth".O?50@

t is not re;uired that the vessel must be perfect. To be sea!orth", a ship must bereasonabl" fit to perform the services, and to encounter the ordinar" perils of the vo"age,contemplated b" the parties to the polic". ?5:@

's further evidence that the vessel !as sea!orth", !e ;uote the deposition of pilot4as;ueLG

OJ 3as there an" instance !hen "our orders or directions !ere not complied !ith because ofthe inabilit" of the vessel to do so

O' #o.

OJ. 3as the vessel able to respond to all "our commands and orders

O'. The vessel !as navigating normall".A?8@

duardo P. Mata, -econd ngineer of the Philippine Ro2as submitted an accident report!herein he stated that on 2 2 2

O$$D n an" other case !here the court deems it just and e;uitable that attorne"Ns fees ande2penses of litigation should be recovered.

>2 2 2A

http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn58http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn59http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn60http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn61http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn62http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn58http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn59http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn60http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn61http://sc.judiciary.gov.ph/jurisprudence/2000/oct2000/119602.htm#_edn62


33/33

)ue to the unfounded filing of this case, the private respondent !as unjustifiabl" forced tolitigate, thus the a!ard of attorne"1s fees !as proper.

3(R

conflict case

Documents