Seven Brothers Shipping Corporation v. Oriental Assurance Corporation
REITERATIONFacts
The Antecedents: A charter party was executed between C. Alcantara & Sons, Inc. (Alcantara & Sons) and Seven Brothers Shipping Corporation (Seven Brothers) for the vessel M/V "Diamond Bear" to load lauan logs. Oriental Assurance Corporation (Oriental Assurance) insured the cargo for P8,000,000.00. The vessel sank off the coast of Mati, Davao Oriental, resulting in the loss of the entire cargo. Alcantara & Sons filed a claim against both Oriental Assurance and Seven Brothers. Oriental Assurance paid Alcantara & Sons P8,000,000.00 as full settlement. Procedural History: Oriental Assurance, as subrogee, filed a complaint against Seven Brothers for recovery of the P8,000,000.00. The Regional Trial Court (RTC), Branch 37, Manila, dismissed the complaint. The Court of Appeals (CA) reversed the RTC decision, holding Seven Brothers liable for the loss due to the unseaworthiness of the vessel and failure to exercise extraordinary diligence as a common carrier. The CA ordered Seven Brothers to pay P8,000,000.00 plus legal interest. Seven Brothers' motion for reconsideration was denied. Seven Brothers filed a petition for review on certiorari with the Supreme Court (SC), which was dismissed for lack of a certification of non-forum shopping, and the dismissal became final and executory. The Petition: The RTC granted Oriental Assurance's motion for a writ of execution. The sheriff levied on Seven Brothers' vessels, M/V "Diamond Deer" and M/V "Diamond Rabbit." Seven Brothers filed a motion to quash the writ and lift the levy, arguing invalidity of the levy on M/V "Diamond Deer" (owned by a foreign company), violation of Rules of Court in levying M/V "Diamond Rabbit" (no prior demand for cash payment), and extinguishment of liability under the Limited Liability Rule. The RTC granted Seven Brothers' motion. Oriental Assurance filed a petition for certiorari with the CA, which reversed the RTC order, holding that the RTC judge acted with grave abuse of discretion and without jurisdiction. The CA reinstated the writ of execution and the levy. Seven Brothers filed the present petition for review on certiorari with the SC.
Issue(s)
Whether the Court of Appeals erred in not applying the Limited Liability Act and pertinent decisions. Whether the Court of Appeals committed reversible error in reinstating the levy on the chartered vessel M/V "Diamond Deer." Whether the Court of Appeals erred in not ruling that the Sheriff violated the Rules of Court in levying upon the vessels M/V "Diamond Deer" and M/V "Diamond Rabbit."
Ruling
The Supreme Court denied the petition and affirmed the Decision of the Court of Appeals dated July 19, 1999, in CA-G.R. SP No. 50262, which reversed and set aside the orders of the RTC for having been issued with grave abuse of discretion and absence of jurisdiction, and reinstated the lifted levy and quashed execution.
Ratio Decidendi
On the issue of the Limited Liability Act and pertinent decisions: The Court reiterated the rule that once a decision has become final and executory, no further amendment or correction can be made by the court, except to order its execution and to correct clerical errors. The court loses jurisdiction over the case, and not even an appellate court can review a judgment that has acquired finality. Therefore, Seven Brothers could no longer raise matters that had been passed upon and decided with finality in a previous case, specifically the dismissal of their petition for review on certiorari (G.R. No. 128982) which became final and executory. On the issue of the levy on M/V "Diamond Deer" and M/V "Diamond Rabbit" and violation of Rules of Court: The Court found Seven Brothers' contention regarding improper levy to be without merit. Citing Torres vs. Cabling, the Court held that a sheriff is not required to give the judgment debtor time to raise cash, as the property may be placed in danger of being lost or absconded. Based on evidence submitted by Oriental Assurance, the CA found that Seven Brothers' existing assets were insufficient to satisfy the final judgment, and Seven Brothers made no attempt to disprove this finding. The sheriff's immediate levy was recognized as Seven Brothers was in no position to pay in cash, and the vessels would otherwise sail beyond the reach of Philippine courts. The Court emphasized that while procedural rules are important, they are mere tools to facilitate justice, and their strict application that frustrates substantial justice must be avoided, citing Cometa vs. Court of Appeals and Dayag vs. Canizares. On the overall procedural aspect of the RTC's order: The Court found that the RTC judge acted with grave abuse of discretion and in the absence of jurisdiction when it quashed the writ of execution and lifted the levy on Seven Brothers' vessels, despite the judgment having become final and executory. The CA correctly reversed this order, reinstating the execution and levy, as the RTC's actions undermined the principle of immutability of final judgments and the winning party's right to the fruits of the verdict.
Main Doctrine
Once a judgment becomes final and executory, it can no longer be amended or corrected, except for clerical errors, and the court loses jurisdiction over the case, making its execution mandatory.