Pinewood Marine (Phils.), Inc. v. Emco Plywood Corporation
REITERATIONFacts
The Antecedents: EMCO Plywood Corporation (EMCO) filed a Complaint for Replevin, Attachment and Damages against Shenzhen Guangda Shipping Co. (Shenzhen), Dalian Ocean Shipping Company, Pinewood Marine (Phils.), Inc. (Pinewood), the vessel MV Tao Hua Ling, its owner/charterer, and later, Ever Commercial Co., Ltd. (Ever) as the vessel's charterer. EMCO sought the release of 2,638 pieces of PNG round logs, valued at US $691,898.62, which were loaded on MV Tao Hua Ling under a contract with Ever. Shenzhen, claiming to be the disponent owner, exercised a lien over the cargo for unpaid demurrage, detention, and deviation, instructing its agent, Pinewood, and the vessel's master to withhold delivery. EMCO objected, deeming the lien invalid, and offered a compromise and a bond, but the logs were not released. A writ of replevin was issued the day after EMCO filed its complaint, leading to the release of the logs to EMCO. EMCO also sought attachment of the vessel, but it had already left Philippine territory. Procedural History: The Regional Trial Court (RTC) of Butuan City, Branch 4, ruled in favor of EMCO, ordering Ever to pay damages. The RTC also granted Ever's cross-claim against Shenzhen, Dalian Ocean Shipping Co., and Pinewood, ordering them to reimburse Ever and pay damages, interests, and attorney's fees. The RTC found the lien for demurrage and detention invalid as it was not among the claims enumerated in Section 1505 of the Customs and Tariff Code that give rise to a lien. Shenzhen, Dalian, and Pinewood were declared in default for failing to file an answer. The Court of Appeals (CA) affirmed the RTC decision in toto. Pinewood filed a Motion for Reconsideration, which the CA denied. Pinewood then filed a petition for review on certiorari with the Supreme Court. The Petition: Pinewood assailed the CA's denial of its Motion for Reconsideration, raising issues regarding the CA's alleged failure to take cognizance of its complaint for disbarment against Attys. Del Rosario and Kato, the reinstatement of its appeal despite alleged treachery and negligence by its former counsel, and the denial of its Motion for Reconsideration without resolving other issues such as Ever's alleged non-payment of filing fees for its cross-claim, award of unliquidated damages, failure to implead Pinewood in the cross-claim, and lack of sufficient evidence to prove Pinewood's liability.
Issue(s)
Whether the Court of Appeals erred in not taking cognizance of or referring to the Integrated Bar of the Philippines (IBP) and the Supreme Court Pinewood’s Complaint for disbarment against Attys. Del Rosario and Kato. Whether the Court of Appeals erred in not reinstating Pinewood’s appeal despite alleged treachery, abandonment, and negligence by its counsel. Whether the Court of Appeals erred in denying Pinewood’s Motion for Reconsideration without resolving other issues raised therein, specifically: (a) Ever’s non-payment of filing fees for its cross-claim, (b) award of unliquidated damages, (c) failure of Ever to implead Pinewood in its cross-claim, and (d) lack of sufficient evidence to prove the liability of Pinewood as a mere ship agent. Whether the interest rates imposed on the damages awarded by the RTC and CA should be modified pursuant to recent jurisprudence.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals with modifications regarding the computation of interest rates. The petition of Pinewood Marine (Phils.), Inc. was denied for lack of merit.
Ratio Decidendi
On the CA's alleged failure to take cognizance of the disbarment complaint: The Supreme Court held that the CA is not conferred with the authority to take cognizance of complaints for disbarment against lawyers. Such authority is vested solely in the Supreme Court under Section 27, Rule 138 of the Rules of Court. While the CA is not precluded from making a referral for investigation, it is not mandated to do so, and its omission does not constitute reversible error. The Court reiterated that disbarment proceedings are within the exclusive jurisdiction of the Supreme Court, which may refer cases for investigation as provided in Section 13, Rule 139-B of the Rules of Court. On the reinstatement of Pinewood's appeal: The Supreme Court ruled that the CA did not err in denying Pinewood's Motion for Reconsideration seeking reinstatement of its appeal. The RTC Decision dated May 14, 1997, had long become final as far as Pinewood was concerned. A judgment becomes final and executory by operation of law when the reglementary period to appeal lapses without an appeal being perfected. The Court emphasized the principle of immutability and inalterability of a final judgment, which serves to avoid delay in the administration of justice and put an end to controversies. Pinewood's failure to file an Answer and its subsequent abandonment of its appeal, despite being furnished copies of pleadings indicating the dismissal of its appeal, demonstrated a negligent and dilatory conduct, precluding it from invoking exceptions to the rule on finality of judgments. On the other issues raised in Pinewood's Motion for Reconsideration: The Supreme Court held that no grounds exist compelling it to resolve the substantive issues and sub-issues raised by Pinewood, such as the alleged non-payment of filing fees, award of unliquidated damages, and lack of evidence. The rule is settled that points of law, theories, issues, and arguments not brought to the attention of the trial court cannot be raised for the first time on appeal. Pinewood's prolonged silence throughout the proceedings, from its default status in the RTC to the abandonment of its appeal in the CA, meant that these issues were not properly ventilated. The Court noted that it was too late for Pinewood to assail these matters after approximately 10 years of negligently attending to its concerns. On the modification of interest rates: The Supreme Court found it proper to modify the reckoning period for the imposition of interests on the monetary awards granted to EMCO and Ever, pursuant to recent jurisprudence, specifically citing Unknown Owner of the Vessel M/V China Joy v. Asian Terminals, Inc. and Nacar v. Gallery Frames. The Court held that the 6% per annum interest should be computed from the finality of its Resolution until full satisfaction thereof. This modification aligns the case with the established guidelines on the imposition of legal interest on damages, ensuring consistency and adherence to current legal standards.
Main Doctrine
A party who fails to file an Answer and is declared in default, and subsequently abandons its appeal, is deemed to have waived its right to assail the judgment, and the same becomes final and executory. The Court may only modify the interest rates on damages awarded based on recent jurisprudence.