Home Insurance v. United States Lines
REITERATIONFacts
The Antecedents: SS "Pioneer Moon" arrived in Manila and discharged 200 cartons of carbonized adding machine rolls to the custody of the Bureau of Customs as arrastre operator. Upon delivery to the consignee, Burroughs, Limited, several cartons were found damaged, with the damage amounting to P2,605.64. The consignee claimed from the Bureau of Customs, United Lines Company (owner of the vessel), and Home Insurance Company (insurer of the cargo). Home Insurance Company paid the claim and, as subrogee, demanded reimbursement from either the arrastre operator or the carrier. Both rejected the claim. Procedural History: Home Insurance Company filed an action against the Republic of the Philippines, the Bureau of Customs, and United States Lines in the alternative for recovery of P2,605.64. The United States Lines disclaimed liability, stating the damage occurred while the cargo was in the possession of its co-defendants. The Republic of the Philippines and the Bureau of Customs alleged non-suability and non-compliance with Act 3083, as amended by Commonwealth Act 327, which requires money claims to be filed with the Auditor General. The Petition: On December 7, 1965, the date set for pre-trial, only the counsel for the plaintiff appeared. The counsel asserted verbal authority to compromise, but the court dismissed the case for failure of the plaintiff to appear. The plaintiff's motion for reconsideration was denied, leading to the present appeal.
Issue(s)
Whether the lower court erred in dismissing the case for failure of the plaintiff to appear at the pre-trial conference. Whether the dismissal of the case against the Republic of the Philippines and the Bureau of Customs is proper.
Ruling
The appealed order of dismissal is affirmed, without costs.
Ratio Decidendi
On the issue of dismissal for failure to appear at pre-trial: The Supreme Court affirmed the lower court's dismissal of the case. Section 1, Rule 20 of the Revised Rules of Court mandates that the court shall direct the parties and their attorneys to appear for a conference, a departure from the old Rules of Court which allowed discretion. Section 2 of the same Rule provides that a party failing to appear may be non-suited or considered in default, underscoring the purpose of compelling parties to appear personally for potential compromise. While the plaintiff's counsel asserted verbal authority to compromise, the Court held that Section 23, Rule 138 of the Rules of Court requires "special authority" for attorneys to compromise litigation. Although not explicitly requiring written authority, the court has the right to expect such authority to be duly established by evidence other than the self-serving assertion of counsel. In this case, the court below was not satisfied that such authority existed, thus, its dismissal of the suit for non-appearance of the plaintiff was sanctioned by the Rules. Authority to compromise cannot be lightly presumed. On the dismissal against the Republic of the Philippines and the Bureau of Customs: The Supreme Court sustained the dismissal against these defendants in light of previous rulings, such as Mobil Philippines Exploration v. Customs Arrastre Service and Bureau of Customs, L-23139, December 17, 1966. These rulings established that on grounds of public policy, the Republic of the Philippines or its agencies cannot be sued for the performance of arrastre operations, as this is a function necessarily incidental to the governmental function of taxation. Therefore, the dismissal of the case in its entirety, with respect to all defendants, was proper.
Main Doctrine
The dismissal of a case for failure of the plaintiff to appear at a pre-trial conference, where the plaintiff's counsel asserted verbal authority to compromise but failed to duly establish such authority by evidence other than his self-serving assertion, is sanctioned by the Rules of Court, particularly Section 2, Rule 20 of the Revised Rules of Court, which allows for non-suiting a party who fails to appear.