do battle instead with the earthly representative, his
estate. The clash has been for now interrupted by a
[G.R. No. 139325. April 12, 2005]
PRISCILLA C. MIJARES, LORETTA ANN P.
ROSALES, HILDA B. NARCISO, SR.
MARIANI DIMARANAN, SFIC, and JOEL
C. LAMANGAN in their behalf and on
behalf of the Class Plaintiffs in Class
Action No. MDL 840, United States
District Court of Hawaii, petitioners, vs.
HON. SANTIAGO JAVIER RANADA, in his
capacity as Presiding Judge of Branch
137, Regional Trial Court, Makati City, and
the ESTATE OF FERDINAND E. MARCOS,
through its court appointed legal
representatives in Class Action MDL 840,
United States District Court of Hawaii,
namely: Imelda R. Marcos and Ferdinand
Marcos, Jr., respondents.
DECISION
TINGA, J.:
Our martial law experience bore strange
unwanted fruits, and we have yet to finish weeding
out its bitter crop. While the restoration of freedom
and the fundamental structures and processes of
democracy have been much lauded, according to a
significant number, the changes, however, have not
sufficiently healed the colossal damage wrought
under the oppressive conditions of the martial law
period. The cries of justice for the tortured, the
murdered, and the desaparecidos arouse outrage and
sympathy in the hearts of the fair-minded, yet the
dispensation of the appropriate relief due them cannot
be extended through the same caprice or whim that
characterized the ill-wind of martial rule. The damage
done was not merely personal but institutional, and
the proper rebuke to the iniquitous past has to involve
the award of reparations due within the confines of
the restored rule of law.
The petitioners in this case are prominent
victims of human rights violations[1] who, deprived of
the opportunity to directly confront the man who once
held absolute rule over this country, have chosen to
the US District Court certified the case as a class
action and created three (3) sub-classes of torture,
trial court ruling, seemingly comported to legal logic,
that required the petitioners to pay a whopping filing
fee of over Four Hundred Seventy-Two Million Pesos
(P472,000,000.00) in order that they be able to
enforce a judgment awarded them by a foreign court.
There is an understandable temptation to cast the
struggle within the simplistic confines of a morality
tale, and to employ short-cuts to arrive at what might
seem the desirable solution. But easy, reflexive resort
to the equity principle all too often leads to a result
that may be morally correct, but legally wrong.
Nonetheless, the application of the legal
principles involved in this case will comfort those who
maintain that our substantive and procedural laws, for
all their perceived ambiguity and susceptibility to
myriad interpretations, are inherently fair and just. The
relief sought by the petitioners is expressly mandated
by our laws and conforms to established legal
principles. The granting of this petition for certiorari is
warranted in order to correct the legally infirm and
unabashedly unjust ruling of the respondent judge.
The essential facts bear little elaboration. On 9
May 1991, a complaint was filed with the United
States District Court (US District Court), District of
Hawaii, against the Estate of former Philippine
President Ferdinand E. Marcos (Marcos Estate). The
action was brought forth by ten Filipino citizens[2] who
each alleged having suffered human rights abuses
such as arbitrary detention, torture and rape in the
hands of police or military forces during the Marcos
regime.[3] The Alien Tort Act was invoked as basis for
the US District Courts jurisdiction over the complaint,
as it involved a suit by aliens for tortious violations of
international law.[4] These plaintiffs brought the action
on their own behalf and on behalf of a class of
similarly situated individuals, particularly consisting of
all current civilian citizens of the Philippines, their
heirs and beneficiaries, who between 1972 and 1987
were tortured, summarily executed or had
disappeared while in the custody of military or
paramilitary groups. Plaintiffs alleged that the class
consisted of approximately ten thousand (10,000)
members; hence, joinder of all these persons was
impracticable.
The institution of a class action suit was
warranted under Rule 23(a) and (b)(1)(B) of the US
Federal Rules of Civil Procedure, the provisions of
which were invoked by the plaintiffs. Subsequently,
summary execution and disappearance
victims.[5] Trial ensued, and subsequently a jury
rendered a verdict and an award of compensatory
and exemplary damages in favor of the plaintiff class.
Then, on 3 February 1995, the US District Court,
presided by Judge Manuel L. Real, rendered a Final
Judgment (Final Judgment) awarding the plaintiff
class a total of One Billion Nine Hundred Sixty Four
Million Five Thousand Eight Hundred Fifty Nine
Dollars and Ninety Cents ($1,964,005,859.90).
The Final Judgment was eventually affirmed by the
US Court of Appeals for the Ninth Circuit, in a
decision rendered on 17 December 1996.[6]
On 20 May 1997, the present petitioners
filed Complaint with the Regional Trial Court, City of
Makati (Makati RTC) for the enforcement of the Final
Judgment. They alleged that they are members of the
plaintiff class in whose favor the US District Court
awarded damages.[7] They argued that since the
Marcos Estate failed to file a petition for certiorari with
the US Supreme Court after the Ninth Circuit Court of
Appeals had affirmed the Final Judgment, the
decision of the US District Court had become final
and executory, and hence should be recognized and
enforced in the Philippines, pursuant to Section 50,
Rule 39 of the Rules of Court then in force.[8]
On 5 February 1998, the Marcos Estate filed a
motion to dismiss, raising, among others, the non-
payment of the correct filing fees. It alleged that
petitioners had only paid Four Hundred Ten Pesos
(P410.00) as docket and filing fees, notwithstanding
the fact that they sought to enforce a monetary
amount of damages in the amount of over Two and a
Quarter Billion US Dollars (US$2.25 Billion). The
Marcos Estate cited Supreme Court Circular No. 7,
pertaining to the proper computation and payment of
docket fees. In response, the petitioners claimed that
an action for the enforcement of a foreign judgment is
not capable of pecuniary estimation; hence, a filing
fee of only Four Hundred Ten Pesos (P410.00) was
proper, pursuant to Section 7(c) of Rule 141.[9]
On 9 September 1998, respondent Judge
Santiago Javier Ranada[10] of the Makati RTC issued
the subject Order dismissing the complaint without
prejudice. Respondent judge opined that contrary to
the petitioners submission, the subject matter of the
complaint was indeed capable of pecuniary
estimation, as it involved a judgment rendered by a
foreign court ordering the payment of definite sums of
money, allowing for easy determination of the value of
the foreign judgment. On that score, Section 7(a) of
Rule 141 of the Rules of Civil Procedure would find
application, and the RTC estimated the proper
amount of filing fees was approximately Four Hundred
Seventy Two Million Pesos, which obviously had not
been paid.
Not surprisingly, petitioners filed a Motion for
Reconsideration, which Judge Ranada denied in
an Order dated 28 July 1999. From this denial,
petitioners filed a Petition for Certiorari under Rule 65
assailing the twin orders of respondent judge. [11] They
prayed for the annulment of the questioned orders,
and an order directing the reinstatement of Civil Case
No. 97-1052 and the conduct of appropriate
proceedings thereon.
Petitioners submit that their action is incapable
of pecuniary estimation as the subject matter of the
suit is the enforcement of a foreign judgment, and not
an action for the collection of a sum of money or
recovery of damages. They also point out that to
require the class plaintiffs to pay Four Hundred
Seventy Two Million Pesos (P472,000,000.00) in filing
fees would negate and render inutile the liberal
construction ordained by the Rules of Court, as
required by Section 6, Rule 1 of the Rules of Civil
Procedure, particularly the inexpensive disposition of
every action.
Petitioners invoke Section 11, Article III of the
Bill of Rights of the Constitution, which provides that
Free access to the courts and quasi-judicial bodies
and adequate legal assistance shall not be denied to
any person by reason of poverty, a mandate which is
essentially defeated by the required exorbitant filing
fee. The adjudicated amount of the filing fee, as
arrived at by the RTC, was characterized as
indisputably unfair, inequitable, and unjust.
The Commission on Human Rights (CHR) was
permitted to intervene in this case.[12] It urged that the
petition be granted and a judgment rendered, ordering
the enforcement and execution of the District Court
judgment in accordance with Section 48, Rule 39 of
the 1997 Rules of Civil Procedure. For the CHR, the
Makati RTC erred in interpreting the action for the
execution of a foreign judgment as a new case, in
violation of the principle that once a case has been
decided between the same parties in one country on
the same issue with finality, it can no longer be
relitigated again in another country.[13] The CHR
likewise invokes the principle of comity, and of vested
rights.
The Courts disposition on the issue of filing fees
will prove a useful jurisprudential guidepost for courts
confronted with actions enforcing foreign judgments,
particularly those lodged against an estate. There is
no basis for the issuance a limited pro hac vice ruling
based on the special circumstances of the petitioners
as victims of martial law, or on the emotionally-
charged allegation of human rights abuses.
An examination of Rule 141 of the Rules of
Court readily evinces that the respondent judge
ignored the clear letter of the law when he concluded
that the filing fee be computed based on the total sum
claimed or the stated value of the property in litigation.
In dismissing the complaint, the respondent
judge relied on Section 7(a), Rule 141 as basis for the
computation of the filing fee of over P472 Million. The
provision states:
SEC. 7. Clerk of Regional Trial Court.-
(a) For filing an action or a permissive
counterclaim or money claim against an estate
not based on judgment, or for filing with leave
of court a third-party, fourth-party, etc.,
complaint, or a complaint in intervention, and for
all clerical services in the same time, if the total
sum claimed, exclusive of interest, or the started
value of the property in litigation, is:
1. Less than P 100,00.00 P 500.00
2. P 100,000.00 or more - P 800.00
but less than P 150,000.00
3. P 150,000.00 or more but - P 1,000.00
less than P 200,000.00
4. P 200,000.00 or more but
less than P 250,000.00 - P 1,500.00
5. P 250,000.00 or more but
less than P 300,00.00 - P 1,750.00
6. P 300,000.00 or more but
not more than P 400,000.00 -
P 2,000.00
7. P 350,000.00 or more but not
more than P400,000.00 - P 2,250.00
8. For each P 1,000.00 in excess of
P 400,000.00 - P 10.00
...
(Emp
hasis
suppl
ied)
Obviously, the above-quoted provision covers,
on one hand, ordinary actions, permissive
counterclaims, third-party, etc. complaints and
complaints-in-interventions, and on the other, money
claims against estates which are not based on
judgment. Thus, the relevant question for purposes of
the present petition is whether the action filed with the
lower court is a money claim against an estate not
based on judgment.
Petitioners complaint may have been lodged
against an estate, but it is clearly based on a
judgment, the Final Judgment of the US District Court.
The provision does not make any distinction between
a local judgment and a foreign judgment, and where
the law does not distinguish, we shall not distinguish.
A reading of Section 7 in its entirety reveals
several instances wherein the filing fee is computed
on the basis of the amount of the relief sought, or on
the value of the property in litigation. The filing fee for
requests for extrajudicial foreclosure of mortgage is
based on the amount of indebtedness or the
mortgagees claim.[14] In special proceedings involving
properties such as for the allowance of wills, the filing
fee is again based on the value of the property.[15] The
aforecited rules evidently have no application to
petitioners complaint.
Petitioners rely on Section 7(b), particularly the
proviso on actions where the value of the subject
matter cannot be estimated. The provision reads in
full:
SEC. 7. Clerk of Regional Trial Court.-
(b) For filing
1. Actions where the value
of the subject
matter
cannot be
estimated --- P 600.00
2. Special civil actions except
judicial
foreclosure which
shall be governed
by
paragraph (a)
above --- P 600.00
3. All other actions not
involving property ---
P 600.00
In a real action, the assessed value of the property, or if
there is none, the estimated value, thereof shall be alleged
by the claimant and shall be the basis in computing the
fees.
It is worth noting that the provision also provides
that in real actions, the assessed value or estimated
value of the property shall be alleged by the claimant
and shall be the basis in computing the fees. Yet
again, this provision does not apply in the case at bar.
A real action is one where the plaintiff seeks the
recovery of real property or an action affecting title to
or recovery of possession of real property.[16] Neither
the complaint nor the award of damages adjudicated
by the US District Court involves any real property of
the Marcos Estate.
Thus, respondent judge was in clear and serious
error when he concluded that the filing fees should be
computed on the basis of the schematic table of
Section 7(a), as the action involved pertains to a claim
against an estate based on judgment. What provision,
if any, then should apply in determining the filing fees
for an action to enforce a foreign judgment?
To resolve this question, a proper understanding
is required on the nature and effects of a foreign
judgment in this jurisdiction.
The rules of comity, utility and convenience of
nations have established a usage among civilized
states by which final judgments of foreign courts of
competent jurisdiction are reciprocally respected and
rendered efficacious under certain conditions that
may vary in different countries.[17] This principle was
prominently affirmed in the leading American case
of Hilton v. Guyot[18] and expressly recognized in our
jurisprudence beginning with Ingenholl v. Walter E.
Olsen & Co.[19] The conditions required by the
Philippines for recognition and enforcement of a
foreign judgment were originally contained in Section
311 of the Code of Civil Procedure, which was taken
from the California Code of Civil Procedure which, in
turn, was derived from the California Act of March 11,
1872.[20] Remarkably, the procedural rule now
outlined in Section 48, Rule 39 of the Rules of Civil
Procedure has remained unchanged down to the last
word in nearly a century. Section 48 states:
SEC. 48. Effect of foreign judgments. The effect of a
judgment of a tribunal of a foreign country, having
jurisdiction to pronounce the judgment is as follows:
(a) In case of a judgment upon a specific thing, the
judgment is conclusive upon the title to the thing;
(b) In case of a judgment against a person, the judgment is
presumptive evidence of a right as between the parties and
their successors in interest by a subsequent title;
In either case, the judgment or final order may be repelled
by evidence of a want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact.
There is an evident distinction between a foreign
judgment in an action in rem and one in personam.
For an action in rem, the foreign judgment is deemed
conclusive upon the title to the thing, while in an
action inpersonam, the foreign judgment is
presumptive, and not conclusive, of a right as
between the parties and their successors in interest
by a subsequent title.[21] However, in both cases, the
foreign judgment is susceptible to impeachment in our
local courts on the grounds of want of jurisdiction or
notice to the party,[22] collusion, fraud,[23] or clear
mistake of law or fact.[24] Thus, the party aggrieved by
the foreign judgment is entitled to defend against the
enforcement of such decision in the local forum. It is
essential that there should be an opportunity to
challenge the foreign judgment, in order for the court
in this jurisdiction to properly determine its efficacy.[25]
It is clear then that it is usually necessary for an
action to be filed in order to enforce a foreign
judgment[26], even if such judgment has conclusive
effect as in the case of in rem actions, if only for the
purpose of allowing the losing party an opportunity to
challenge the foreign judgment, and in order for the
court to properly determine its
efficacy.[27] Consequently, the party attacking a
foreign judgment has the burden of overcoming the
presumption of its validity.[28]
The rules are silent as to what initiatory
procedure must be undertaken in order to enforce a
foreign judgment in the Philippines. But there is no
question that the filing of a civil complaint is an
appropriate measure for such purpose. A civil action
is one by which a party sues another for the
enforcement or protection of a right,[29] and clearly an
action to enforce a foreign judgment is in essence a
vindication of a right prescinding either from a
conclusive judgment upon title or the presumptive
evidence of a right.[30] Absent perhaps a statutory
grant of jurisdiction to a quasi-judicial body, the claim
for enforcement of judgment must be brought before
the regular courts.[31]
There are distinctions, nuanced but discernible,
between the cause of action arising from the
enforcement of a foreign judgment, and that arising
from the facts or allegations that occasioned the
foreign judgment. They may pertain to the same set of
facts, but there is an essential difference in the right-
duty correlatives that are sought to be vindicated. For
example, in a complaint for damages against a
tortfeasor, the cause of action emanates from the
violation of the right of the complainant through the
act or omission of the respondent. On the other hand,
in a complaint for the enforcement of a foreign
judgment awarding damages from the same
tortfeasor, for the violation of the same right through
the same manner of action, the cause of action
derives not from the tortious act but from the foreign
judgment itself.
More importantly, the matters for proof are
different. Using the above example, the complainant
will have to establish before the court the tortious act
or omission committed by the tortfeasor, who in turn is
allowed to rebut these factual allegations or prove
extenuating circumstances. Extensive litigation is thus
conducted on the facts, and from there the right to
and amount of damages are assessed. On the other
hand, in an action to enforce a foreign judgment, the
matter left for proof is the foreign judgment itself, and
not the facts from which it prescinds.
As stated in Section 48, Rule 39, the actionable
issues are generally restricted to a review of
jurisdiction of the foreign court, the service of personal
notice, collusion, fraud, or mistake of fact or law. The
limitations on review is in consonance with a strong
and pervasive policy in all legal systems to limit
repetitive litigation on claims and issues.[32] Otherwise
known as the policy of preclusion, it seeks to protect
party expectations resulting from previous litigation, to
safeguard against the harassment of defendants, to
insure that the task of courts not be increased by
never-ending litigation of the same disputes, and in a
larger sense to promote what Lord Coke in
the Ferrers Case of 1599 stated to be the goal of all
law: rest and quietness.[33] If every judgment of a
foreign court were reviewable on the merits, the
plaintiff would be forced back on his/her original
cause of action, rendering immaterial the previously
concluded litigation.[34]
Petitioners appreciate this distinction, and rely
upon it to support the proposition that the subject
matter of the complaintthe enforcement of a foreign
judgmentis incapable of pecuniary estimation.
Admittedly the proposition, as it applies in this case, is
counter-intuitive, and thus deserves strict scrutiny. For
in all practical intents and purposes, the matter at
hand is capable of pecuniary estimation, down to the
last cent. In the assailed Order, the respondent judge
pounced upon this point without equivocation:
The Rules use the term where the value of the subject
matter cannot be estimated. The subject matter of the
present case is the judgment rendered by the foreign court
ordering defendant to pay plaintiffs definite sums of
money, as and for compensatory damages. The Court finds
that the value of the foreign judgment can be estimated;
indeed, it can even be easily determined. The Court is not
minded to distinguish between the enforcement of a
judgment and the amount of said judgment, and separate
the two, for purposes of determining the correct filing fees.
Similarly, a plaintiff suing on promissory note for P1
million cannot be allowed to pay only P400 filing
fees (sic), on the reasoning that the subject matter of his
suit is not the P1 million, but the enforcement of the
promissory note, and that the value of such enforcement
cannot be estimated.[35]
The jurisprudential standard in gauging whether
the subject matter of an action is capable of pecuniary
estimation is well-entrenched. The Marcos Estate
cites Singsong v. Isabela Sawmill and Raymundo v.
Court of Appeals, which ruled:
[I]n determining whether an action is one the subject matter
of which is not capable of pecuniary estimation this Court
has adopted the criterion of first ascertaining the nature of
the principal action or remedy sought. If it is primarily for
the recovery of a sum of money, the claim is considered
capable of pecuniary estimation, and whether jurisdiction is
in the municipal courts or in the courts of first instance
would depend on the amount of the claim. However, where
the basic issue is something other than the right to recover a
sum of money, where the money claim is purely incidental
to, or a consequence of, the principal relief sought, this
Court has considered such actions as cases where the
subject of the litigation may not be estimated in terms of
money, and are cognizable exclusively by courts of first
instance (now Regional Trial Courts).
On the other hand, petitioners cite
the ponencia of Justice JBL Reyes in Lapitan v.
Scandia,[36] from which the rule
in Singsong and Raymundo actually derives, but
which incorporates this additional nuance omitted in
the latter cases:
xxx However, where the basic issue is something other than
the right to recover a sum of money, where the money
claim is purely incidental to, or a consequence of, the
principal relief sought, like in suits to have the defendant
perform his part of the contract (specific performance)
and in actions for support, or for annulment of
judgment or to foreclose a mortgage, this Court has
considered such actions as cases where the subject of the
litigation may not be estimated in terms of money, and are
cognizable exclusively by courts of first instance.[37]
Petitioners go on to add that among the actions
the Court has recognized as being incapable of
pecuniary estimation include legality of conveyances
and money deposits,[38] validity of a mortgage,[39] the
right to support,[40] validity of documents,[41] rescission
of contracts,[42] specific performance,[43] and validity or
annulment of judgments.[44] It is urged that an action
for enforcement of a foreign judgment belongs to the
same class.
This is an intriguing argument, but ultimately it is
self-evident that while the subject matter of the action
is undoubtedly the enforcement of a foreign judgment,
the effect of a providential award would be the
adjudication of a sum of money. Perhaps in theory,
such an action is primarily for the enforcement of the
foreign judgment, but there is a certain obtuseness to
that sort of argument since there is no denying that
the enforcement of the foreign judgment will
necessarily result in the award of a definite sum of
money.
But before we insist upon this conclusion past
beyond the point of reckoning, we must examine its
possible ramifications. Petitioners raise the point that
a declaration that an action for enforcement of foreign
judgment may be capable of pecuniary estimation
might lead to an instance wherein a first level court
such as the Municipal Trial Court would have
jurisdiction to enforce a foreign judgment. But under
the statute defining the jurisdiction of first level courts,
B.P. 129, such courts are not vested with jurisdiction
over actions for the enforcement of foreign judgments.
Sec. 33. Jurisdiction of Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial Courts
in civil cases. Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts shall exercise:
(1) Exclusive original jurisdiction over civil
actions and probate proceedings, testate
and intestate, including the grant of
provisional remedies in proper cases,
where the value of the personal property,
estate, or amount of the demand does not
exceed One hundred thousand pesos
(P100,000.00) or, in Metro Manila where
such personal property, estate, or amount
of the demand does not exceed Two
hundred thousand pesos (P200,000.00)
exclusive of interest damages of whatever
kind, attorney's fees, litigation expenses,
and costs, the amount of which must be
specifically alleged: Provided, That where
there are several claims or causes of
action between the same or different
parties, embodied in the same complaint,
the amount of the demand shall be the
totality of the claims in all the causes of
action, irrespective of whether the causes
of action arose out of the same or different
transactions;
(2) Exclusive original jurisdiction over
cases of forcible entry and unlawful
detainer: Provided, That when, in such
cases, the defendant raises the question of
ownership in his pleadings and the
question of possession cannot be resolved
without deciding the issue of ownership,
 the issue of ownership shall be resolved
only to determine the issue of possession.
(3) Exclusive original jurisdiction in all civil
actions which involve title to, or possession
of, real property, or any interest therein
where the assessed value of the property
or interest therein does not exceed Twenty
thousand pesos (P20,000.00) or, in civil
actions in Metro Manila, where such
assessed value does not exceed Fifty
thousand pesos (P50,000.00) exclusive of
interest, damages of whatever kind,
attorney's fees, litigation expenses and
costs: Provided, That value of such
property shall be determined by the
assessed value of the adjacent lots.[45]
Section 33 of B.P. 129 refers to instances
wherein the cause of action or subject matter pertains
to an assertion of rights and interests over property or
a sum of money. But as earlier pointed out, the
subject matter of an action to enforce a foreign
judgment is the foreign judgment itself, and the cause
of action arising from the adjudication of such
judgment.
An examination of Section 19(6), B.P. 129
reveals that the instant complaint for enforcement of a
foreign judgment, even if capable of pecuniary
estimation, would fall under the jurisdiction of the
Regional Trial Courts, thus negating the fears of the
petitioners. Indeed, an examination of the provision
indicates that it can be relied upon as jurisdictional
basis with respect to actions for enforcement of
foreign judgments, provided that no other court or
office is vested jurisdiction over such complaint:
Sec. 19. Jurisdiction in civil cases. Regional Trial Courts
shall exercise exclusive original jurisdiction:
xxx
(6) In all cases not within the exclusive jurisdiction of any
court, tribunal, person or body exercising jurisdiction or
any court, tribunal, person or body exercising judicial or
quasi-judicial functions.
Thus, we are comfortable in asserting the
obvious, that the complaint to enforce the US District
Court judgment is one capable of pecuniary
estimation. But at the same time, it is also an action
based on judgment against an estate, thus placing it
beyond the ambit of Section 7(a) of Rule 141. What
provision then governs the proper computation of the
filing fees over the instant complaint? For this case
and other similarly situated instances, we find that it is
covered by Section 7(b)(3), involving as it does, other
actions not involving property.
Notably, the amount paid as docket fees by the
petitioners on the premise that it was an action
incapable of pecuniary estimation corresponds to the
same amount required for other actions not involving
property. The petitioners thus paid the correct amount
of filing fees, and it was a grave abuse of discretion
for respondent judge to have applied instead a clearly
inapplicable rule and dismissed the complaint.
There is another consideration of supreme
relevance in this case, one which should disabuse the
notion that the doctrine affirmed in this decision is
grounded solely on the letter of the procedural rule.
We earlier adverted to the the internationally
recognized policy of preclusion,[46] as well as the
principles of comity, utility and convenience of
nations[47] as the basis for the evolution of the rule
calling for the recognition and enforcement of foreign
judgments. The US Supreme Court in Hilton v.
Guyot[48] relied heavily on the concept of comity, as
especially derived from the landmark treatise of
Justice Story in his Commentaries on the Conflict of
Laws of 1834.[49] Yet the notion of comity has since
been criticized as one of dim contours[50] or suffering
from a number of fallacies.[51] Other conceptual bases
for the recognition of foreign judgments have evolved
such as the vested rights theory or the modern
doctrine of obligation.[52]
There have been attempts to codify through
treaties or multilateral agreements the standards for
the recognition and enforcement of foreign judgments,
but these have not borne fruition. The members of the
European Common Market accede to the Judgments
Convention, signed in 1978, which eliminates as to
participating countries all of such obstacles to
recognition such as reciprocity and rvision au
fond.[53] The most ambitious of these attempts is
the Convention on the Recognition and Enforcement
of Foreign Judgments in Civil and Commercial
Matters, prepared in 1966 by the Hague Conference
of International Law.[54] While it has not received the
ratifications needed to have it take effect, [55] it is
recognized as representing current scholarly thought
on the topic.[56] Neither the Philippines nor the United
States are signatories to the Convention.
Yet even if there is no unanimity as to the
applicable theory behind the recognition and
enforcement of foreign judgments or a universal treaty
rendering it obligatory force, there is consensus that
the viability of such recognition and enforcement is
essential. Steiner and Vagts note:
. . . The notion of unconnected bodies of national law on
private international law, each following a quite separate
path, is not one conducive to the growth of a transnational
community encouraging travel and commerce among its
members. There is a contemporary resurgence of writing
stressing the identity or similarity of the values that systems
of public and private international law seek to further a
community interest in common, or at least reasonable, rules
on these matters in national legal systems. And such
generic principles as reciprocity play an important role in
both fields.[57]
Salonga, whose treatise on private international
law is of worldwide renown, points out:
Whatever be the theory as to the basis for recognizing
foreign judgments, there can be little dispute that the end is
to protect the reasonable expectations and demands of the
parties. Where the parties have submitted a matter for
adjudication in the court of one state, and proceedings there
are not tainted with irregularity, they may fairly be
expected to submit, within the state or elsewhere, to the
enforcement of the judgment issued by the court.[58]
There is also consensus as to the requisites for
recognition of a foreign judgment and the defenses
against the enforcement thereof. As earlier discussed,
the exceptions enumerated in Section 48, Rule 39
have remain unchanged since the time they were
adapted in this jurisdiction from long standing
American rules. The requisites and exceptions as
delineated under Section 48 are but a restatement of
generally accepted principles of international law.
Section 98 of The Restatement, Second, Conflict of
Laws, states that a valid judgment rendered in a
foreign nation after a fair trial in a contested
proceeding will be recognized in the United States,
and on its face, the term valid brings into play
requirements such notions as valid jurisdiction over
the subject matter and parties.[59] Similarly, the notion
that fraud or collusion may preclude the enforcement
of a foreign judgment finds affirmation with foreign
jurisprudence and commentators,[60] as well as the
doctrine that the foreign judgment must not constitute
a clear mistake of law or fact.[61] And finally, it has
been recognized that public policy as a defense to the
recognition of judgments serves as an umbrella for a
variety of concerns in international practice which may
lead to a denial of recognition.[62]
The viability of the public policy defense against
the enforcement of a foreign judgment has been
recognized in this jurisdiction.[63] This defense allows
for the application of local standards in reviewing the
foreign judgment, especially when such judgment
creates only a presumptive right, as it does in cases
wherein the judgment is against a person.[64] The
defense is also recognized within the international
sphere, as many civil law nations adhere to a broad
public policy exception which may result in a denial of
recognition when the foreign court, in the light of the
choice-of-law rules of the recognizing court, applied
the wrong law to the case.[65] The public policy
defense can safeguard against possible abuses to the
easy resort to offshore litigation if it can be
demonstrated that the original claim is noxious to our
constitutional values.
There is no obligatory rule derived from treaties
or conventions that requires the Philippines to
recognize foreign judgments, or allow a procedure for
the enforcement thereof. However, generally
accepted principles of international law, by virtue of
the incorporation clause of the Constitution, form part
of the laws of the land even if they do not derive from
treaty obligations.[66] The classical formulation in
international law sees those customary rules
accepted as binding result from the combination two
elements: the established, widespread, and
consistent practice on the part of States; and a
psychological element known as the opinion juris sive
necessitates (opinion as to law or necessity). Implicit
in the latter element is a belief that the practice in
question is rendered obligatory by the existence of a
rule of law requiring it.[67]
While the definite conceptual parameters of the
recognition and enforcement of foreign judgments
have not been authoritatively established, the Court
can assert with certainty that such an undertaking is
among those generally accepted principles of
international law.[68] As earlier demonstrated, there is
a widespread practice among states accepting in
principle the need for such recognition and
enforcement, albeit subject to limitations of varying
degrees. The fact that there is no binding universal
treaty governing the practice is not indicative of a
widespread rejection of the principle, but only a
disagreement as to the imposable specific rules
governing the procedure for recognition and
enforcement.
Aside from the widespread practice, it is
indubitable that the procedure for recognition and
enforcement is embodied in the rules of law, whether
statutory or jurisprudential, adopted in various foreign
jurisdictions. In the Philippines, this is evidenced
primarily by Section 48, Rule 39 of the Rules of Court
which has existed in its current form since the early
1900s. Certainly, the Philippine legal system has long
ago accepted into its jurisprudence and procedural
rules the viability of an action for enforcement of
foreign judgment, as well as the requisites for such
valid enforcement, as derived from internationally
accepted doctrines. Again, there may be distinctions
as to the rules adopted by each particular state, [69] but
they all prescind from the premise that there is a rule
of law obliging states to allow for, however generally,
the recognition and enforcement of a foreign
judgment. The bare principle, to our mind, has
attained the status of opinio juris in international
practice.
This is a significant proposition, as it
acknowledges that the procedure and requisites
outlined in Section 48, Rule 39 derive their efficacy
not merely from the procedural rule, but by virtue of
the incorporation clause of the Constitution. Rules of
procedure are promulgated by the Supreme
Court,[70] and could very well be abrogated or revised
by the high court itself. Yet the Supreme Court is
obliged, as are all State components, to obey the laws
of the land, including generally accepted principles of
international law which form part thereof, such as
those ensuring the qualified recognition and
enforcement of foreign judgments.[71]
Thus, relative to the enforcement of foreign
judgments in the Philippines, it emerges that there is
a general right recognized within our body of laws,
and affirmed by the Constitution, to seek recognition
and enforcement of foreign judgments, as well as a
right to defend against such enforcement on the
grounds of want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact.
The preclusion of an action for enforcement of a
foreign judgment in this country merely due to an
exhorbitant assessment of docket fees is alien to
generally accepted practices and principles in
international law. Indeed, there are grave concerns in
conditioning the amount of the filing fee on the
pecuniary award or the value of the property subject
of the foreign decision. Such pecuniary award will
almost certainly be in foreign denomination, computed
in accordance with the applicable laws and standards
of the forum.[72] The vagaries of inflation, as well as
the relative low-income capacity of the Filipino, to
date may very well translate into an award virtually
unenforceable in this country, despite its integral
validity, if the docket fees for the enforcement thereof
were predicated on the amount of the award sought to
be enforced. The theory adopted by respondent judge
and the Marcos Estate may even lead to absurdities,
such as if applied to an award involving real property
situated in places such as the United States or
Scandinavia where real property values are
inexorably high. We cannot very well require that the
filing fee be computed based on the value of the
foreign property as determined by the standards of
the country where it is located.
As crafted, Rule 141 of the Rules of Civil
Procedure avoids unreasonableness, as it recognizes
that the subject matter of an action for enforcement of
a foreign judgment is the foreign judgment itself, and
not the right-duty correlatives that resulted in the
foreign judgment. In this particular circumstance,
given that the complaint is lodged against an estate
and is based on the US District Courts Final
Judgment, this foreign judgment may, for purposes of
classification under the governing procedural rule, be
deemed as subsumed under Section 7(b)(3) of Rule
141, i.e., within the class of all other actions not
involving property. Thus, only the blanket filing fee of
minimal amount is required.
Finally, petitioners also invoke Section 11,
Article III of the Constitution, which states that [F]ree
access to the courts and quasi-judicial bodies and
adequate legal assistance shall not be denied to any
person by reason of poverty. Since the provision is
among the guarantees ensured by the Bill of Rights, it
certainly gives rise to a demandable right. However,
now is not the occasion to elaborate on the
parameters of this constitutional right. Given our
preceding discussion, it is not necessary to utilize this
provision in order to grant the relief sought by the
petitioners. It is axiomatic that the constitutionality of
an act will not be resolved by the courts if the
controversy can be settled on other grounds [73] or
unless the resolution thereof is indispensable for the
determination of the case.[74]
One more word. It bears noting that Section 48,
Rule 39 acknowledges that the Final Judgment is not
conclusive yet, but presumptive evidence of a right of
the petitioners against the Marcos Estate. Moreover,
the Marcos Estate is not precluded to present
evidence, if any, of want of jurisdiction, want of notice
to the party, collusion, fraud, or clear mistake of law or
fact. This ruling, decisive as it is on the question of
filing fees and no other, does not render verdict on the
enforceability of the Final Judgment before the courts
under the jurisdiction of the Philippines, or for that
matter any other issue which may legitimately be
presented before the trial court. Such issues are to be
litigated before the trial court, but within the confines
of the matters for proof as laid down in Section 48,
Rule 39. On the other hand, the speedy resolution of
this claim by the trial court is encouraged, and
contumacious delay of the decision on the merits will
not be brooked by this Court.
WHEREFORE, the petition is GRANTED. The
assailed orders are NULLIFIED and SET ASIDE, and
a new order REINSTATING Civil Case No. 97-1052 is
hereby issued. No costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo,
Sr., and Chico-Nazario, JJ., concur.
G.R. No. 195432 August 27, 2014
EDELINA T. ANDO, Petitioner,
vs.
DEPARTMENT OF FOREIGN
AFFAIRS, Respondent.
DECISION
SERENO, CJ:
This is a Petition for Review under Rule 45 of the
Rules of Court, seeking the nullification of the Orders
dated 14 January and 8 February 2011 issued by the
Regional Trial Court (R TC), Third Judicial Region,
Branch 45,1 City of San Fernando, Pampanga, in Civil
Case No. 137, which dismissed the Petition for
Declaratory Relief filed therein.
STATEMENT OF THE FACTS AND OF THE CASE
The pertinent facts of the case, as alleged by
petitioner, are as follows:
3. On 16 September 2001, petitioner married
Yuichiro Kobayashi, a Japanese National, in
a civil wedding solemnized at Candaba,
Pampanga. A copy of their Certificate of
Marriage is hereto attached as Annex 'A' and
made an integral part hereof.
4. On 16 September 2004, Yuichiro
Kobayashi sought in Japan, and was validly
granted under Japaneselaws, a divorce in
respect of his marriage with petitioner. A
copy of the Divorce Certificate duly issued by
the Consulate-General of Japan and duly
authenticated by the Department of Foreign
Affairs, Manila, is heretoas Annex ‘B’ and
made an integral part hereof. 5. Said Divorce
Certificate was duly registered with the
Office of the Civil Registry of Manila. A copy
of the Certification dated 28 October 2005 is
hereto attached as Annex ‘C’ and made an
integral part hereof.
6. Believing in good faith that said divorce
capacitated her to remarry and that by such
she reverted to her single status, petitioner
married Masatomi Y. Ando on 13 September
2005 in a civil wedding celebrated in Sta.
Ana, Pampanga. A copy of their Certificate
of Marriage is hereto attached as Annex ‘D’
and made an integral part hereof.
7. In the meantime, Yuichiro Kobayashi
married Ryo Miken on 27 December 2005. A
copy of the JapaneseFamily Registry Record
of Kobayashi showing the divorce he
obtained and his remarriage with Ryo Miken,
duly authenticated by the Consulate-General
of Japan and the Department of Foreign
Affairs, Manila, is hereto attached as Annex
‘E’ and made an integral part hereof.
8. Recently, petitioner applied for the
renewal of her Philippine passport to indicate
her surname withher husband Masatomi Y.
Ando but she was told at the Department of
Foreign Affairs that the same cannot be
issued to her until she can prove
bycompetent court decision that her
marriage with her said husband Masatomi Y.
Ando is valid until otherwise declared.
xxxx
12. Prescinding from the foregoing,
petitioner’s marriage with her said husband
Masatomi Y. Ando musttherefore be
honored, considered and declared valid, until
otherwise declared by a competent court.
Consequently, and until then, petitioner
therefore is and must be declared entitled to
the issuance of a Philippine passport under
the name ‘Edelina Ando y Tungol.’ Hence,
this petitioner pursuant to Rule 63 of the
Rules of Court.2
On 29 October 2010, petitioner filed with the RTC a
Petition for Declaratory Relief, which was later raffled
off to Branch 46. She impleaded the Department of
Foreign Affairs (DFA) as respondent and prayed for
the following reliefs before the lower court:
WHEREFORE, petitioner most respectfully prays of
this Honorable Court that after proper proceedings,
judgment be rendered, as follows:
(a) declaring as valid and subsisting the
marriage between petitioner Edelina T. Ando
and her husband Masatomi Y. Ando until
otherwise declared by a competent court;
(b) declaring petitioner entitled to the
issuance of a Philippine Passport under the
name "Edelina Ando y Tungol"; and
(c) directing the Department ofForeign
Affairs to honor petitioner’s marriage to her
husband Masatomi Y. Ando and to issue a
Philippine Passport to petitioner under the
name "Edelina Ando y Tungol".
Petitioner prays for such other just and equitable
reliefs.3
On 15 November 2010, in an Order dismissing the
Petition for want of cause and action, as well as
jurisdiction, the RTC held thus:
Records of the case would reveal that prior to
petitioner’s marriage to Masatomi Y. Ando, herein
petitioner was married to Yuichiro Kobayashi, a
Japanese National, in Candaba, Pampanga, on
September 16, 2001, and that though a divorce was
obtained and granted in Japan, with respect to the
their (sic) marriage, there is no showing that petitioner
herein complied with the requirements set forth in Art.
13 of the Family Code – that is obtaining a judicial
recognition of the foreign decree of absolute divorce
in our country.
It is therefore evident, under the foregoing
circumstances, that herein petitioner does not have
any causeof action and/or is entitled to the reliefs
prayed for under Rule 63 of the Rules of Court. In the
same vein, though there is other adequate remedy
available to the petitioner, such remedy is however
beyond the authority and jurisdiction of this court to
act upon and grant, as it isonly the family court which
is vested with such authority and jurisdiction.4
On 3 December 2010, petitioner filed an Ex
ParteMotion for Reconsideration of the Order dated
15 November 2010. In anOrder dated 14 December
2010, the RTC granted the motion in this wise:
WHEREFORE, considering that the allegations and
reliefs prayed for by the petitioner in her petition and
the instant Motion for Reconsideration falls within the
jurisdiction of the Special Family Court of this
jurisdiction and for the interest ofsubstantial justice,
the Order of the Court dated November 15, 2010 is
hereby reconsidered.
Let the record of this case be therefore referred back
to the Office of the Clerk of Court for proper
endorsement to the Family Court of this jurisdiction for
appropriateaction and/or disposition.5 Thereafter, the
case was raffled to Branch 45 of the RTC. On 14
January 2011, the trial court dismissed the Petition
anew on the ground that petitioner had no cause of
action. The Order reads thus:
The petition specifically admits that the marriage she
seeks to be declared as valid is already her second
marriage, a bigamous marriage under Article 35(4) of
the Family Codeconsidering that the first one, though
allegedly terminated by virtue of the divorce obtained
by Kobayashi, was never recognized by a Philippine
court, hence, petitioner is considered as still married
to Kobayashi. Accordingly, the second marriage with
Ando cannot be honored and considered asvalid at
this time.
Petitioner’s allegation of Sec. 2 (a) of A.M. No. 02-11-
10-SC is misplaced. The fact that no judicial
declaration of nullity of her marriage with Ando was
rendered does not make the same valid because
such declaration under Article 40 ofthe Family Code is
applicable onlyin case of re-marriage. More
importantly, the absence of a judicial declaration of
nullity of marriage is not even a requisite to make a
marriage valid.
In view of the foregoing, the dismissal of this case is
imperative.6
On 1 February 2011,petitioner filed an Ex ParteMotion
for Reconsideration of the Order dated 14 January
2011. The motion was denied by the RTC in open
court on 8 February2011, considering that neither the
Office of the Solicitor General (OSG) nor respondent
was furnished with copies of the motion.
On 24 March 2011, petitioner filed the instant Petition
for Review, raising the sole issue of whether or not
the RTC erred in ruling that she had no cause of
action.
Petitioner argues that under A.M. No. 02-11-10-SC, or
the Rule on the Declaration of Absolute Nullity of Void
Marriages and Annulment of Voidable Marriages, it is
solely the wife or the husband who can file a petition
for the declaration of the absolute nullity of a void
marriage. Thus, as the state is not even allowed to
filea direct petition for the declaration of the absolute
nullity of a void marriage,with even more reason can it
not collaterally attack the validity of a marriage, as in
a petition for declaratory relief. Further, petitioner
alleges that under the law, a marriage – even one that
is void or voidable – shall be deemed valid until
declared otherwise in a judicial proceeding.
Petitioner also argues that assuming a court judgment
recognizing a judicial decree of divorce is required
under Article 13 of the Family Code, noncompliance
therewith is a mere irregularity in the issuance of a
marriage license. Any irregularity in the formal
requisites of marriage, such as with respect to the
marriage license, shall notaffect the legality of the
marriage. Petitioner further claims that all the
requisites for a petition for declaratory relief have
been complied with.
With respect to the failure to furnish a copy of the Ex
ParteMotion for Reconsideration to the OSG and the
DFA, petitioner avers that at the time of the filing, the
RTC had yet to issue a summons to respondent; thus,
it had yet to acquire jurisdiction over them.
Thereafter, the DFA, through the OSG, filed a
Comment on the Petition. The latter raised the
following arguments: (1) the Petition was improperly
verified, as the juratin the Verification thereof only
stated that the affiant had exhibited "her currentand
valid proof of identity," which proof was not properly
indicated, however; (2) prior judicial recognition by a
Philippine court of a divorce decree obtained by the
alien spouse is required before a Filipino spouse can
remarry and be entitled to the legal effects of
remarriage; (3) petitioner failed to show that she had
first exhausted all available administrative remedies,
such as appealing to the Secretary of the DFA under
Republic Act No. (R.A.) 8239, or the Philippine
Passport Act of 1996, before resorting to the special
civil action of declaratory relief; and (4) petitioner’s
Motion for Reconsideration before the RTC was a
mere scrap of paper and did not toll the running of the
period to appeal. Hence, the RTC Order dated 14
January 2011 is now final.
On 29 November 2011, petitioner filed her Reply to
the Comment, addressing the issues raised therein.
THE COURT’S RULING
The Court finds the Petition to be without merit.
First, with respect to her prayer tocompel the DFA to
issue her passport, petitioner incorrectly filed a
petition for declaratory relief before the RTC. She
should have first appealed before the Secretary of
Foreign Affairs, since her ultimate entreaty was
toquestion the DFA’s refusal to issue a passport to
her under her second husband’s name.
Under the Implementing Rules and Regulations (IRR)
of R.A. 8239, which was adopted on 25 February
1997, the following are the additional documentary
requirements before a married woman may obtain a
passport under the name of her spouse:
SECTION 2. The issuance of passports to married,
divorced or widowed women shall be made
inaccordance with the following provisions:
a) In case of a woman who is married and
who decides to adopt the surname of her
husband pursuant to Art. 370 of Republic Act
No. 386, she must present the original or
certifiedtrue copy of her marriage contract,
and one photocopy thereof.
In addition thereto, a Filipino who contracts
marriage in the Philippines to a foreigner,
shall be required to present a Certificate of
Attendance in a Guidance and Counselling
Seminar conducted by the CFO when
applying for a passport for the first time.
b) In case of annulment of marriage, the
applicant must present a certified true copy
of her annotated Marriage Contract or
Certificate of Registration and the Court
Order effecting the annulment.
c) In case of a woman who was divorced by
her alien husband, she must present a
certified true copy of the Divorce Decree duly
authenticated by the Philippine Embassy or
consular post which has jurisdiction over the
place where the divorce is obtained or by the
concerned foreign diplomatic or consular
mission in the Philippines.
When the divorcee is a Filipino Muslim, she must
present a certified true copy of the Divorce Decree or
a certified true copy of the Certificate of Divorce from
the Shari’ah Court or the OCRG. d) In the event that
marriage is dissolved by the death of the husband,
the applicant must present the original or certified true
copy of the Death Certificate of the husband or the
Declaration of Presumptive Death by a Civil or
Shari’ah Court, in which case the applicant may
choose to continue to use her husband’s surname or
resume the use of her maiden surname. From the
above provisions, it is clear that for petitioner to obtain
a copy of her passport under her married name, all
she needed to present were the following: (1) the
original or certified true copyof her marriage contract
and one photocopy thereof; (2) a Certificate of
Attendance in a Guidance and Counseling Seminar, if
applicable; and (3) a certified true copy of the Divorce
Decree duly authenticated by the Philippine Embassy
or consular post that has jurisdiction over the place
where the divorce is obtained or by the concerned
foreign diplomatic or consular mission in the
Philippines.
In this case, petitioner was allegedly told that she
would not be issued a Philippine passport under her
second husband’s name.1âwphi1 Should her
application for a passport be denied, the remedies
available to her are provided in Section 9 of R.A.
8239, which reads thus:
Sec. 9. Appeal. — Any person who feels aggrieved as
a result of the application of this Act of the
implementing rules and regulations issued by the
Secretary shall have the right to appeal to the
Secretary of Foreign Affairs from whose decision
judicial review may be had to the Courts in due
course.
The IRR further provides in detail:
ARTICLE
Appeal
In the event that an application for a passport is
denied, or an existing one cancelled or restricted, the
applicant or holder thereof shall have the right to
appeal in writing to the Secretary within fifteen (15)
days from notice of denial, cancellation or restriction.
Clearly, she should have filed anappeal with the
Secretary of the DFA in the event of the denial of her
application for a passport, after having complied with
the provisions of R.A. 8239. Petitioner’s argument that
her application "cannot be said to havebeen either
denied, cancelled or restricted by [the DFA ], so as to
make her an aggrieved party entitled to appeal",7 as
instead she "was merely told"8 that her passport
cannot be issued, does not persuade. The law
provides a direct recourse for petitioner in the event of
the denial of her application.
Second, with respect to her prayer for the recognition
of her second marriage as valid, petitioner should
have filed, instead, a petition for the judicial
recognition of her foreign divorce from her first
husband.
In Garcia v. Recio,9 we ruled that a divorce obtained
abroad by an alien may be recognized in our
jurisdiction, provided the decree is valid according to
the national law of the foreigner. The presentation
solely of the divorce decree is insufficient; both the
divorce decree and the governing personal law of the
alien spouse who obtained the divorce must be
proven. Because our courts do not take judicial notice
of foreign laws and judgment, our law on evidence
requires that both the divorce decree and the national
law of the alien must be alleged and proven and like
any other fact.10
While it has been ruled that a petition for the authority
to remarry filed before a trial court actually constitutes
a petition for declaratory relief,11 we are still unable to
grant the prayer of petitioner. As held by the RTC,
there appears to be insufficient proof or evidence
presented on record of both the national law of her
first husband, Kobayashi, and of the validity of the
divorce decree under that national law.12 Hence, any
declaration as to the validity of the divorce can only
be made upon her complete submission of evidence
10 proving the divorce decree and the national law of her
alien spouse, in an action instituted in the proper
forum.
WHEREFORE, the instant Petition is DENIED without
prejudice to petitioner's recourse to the proper
remedies available.
SO ORDERED.
[G.R. No. 136804. February 19, 2003]
MANUFACTURERS HANOVER TRUST CO. and/or
CHEMICAL BANK, petitioners,
vs. RAFAEL MA.
GUERRERO, respondent.
DECISION
CARPIO, J.:
The Case
This is a petition for review under Rule 45 of the
Rules of Court to set aside the Court of
Appeals[1] Decision of August 24, 1998 and
Resolution of December 14, 1998 in CA-G.R. SP No.
42310[2] affirming the trial courts denial of petitioners
motion for partial summary judgment.
The Antecedents
On May 17, 1994, respondent Rafael Ma.
Guerrero (Guerrero for brevity) filed a complaint for
damages against petitioner Manufacturers Hanover
Trust Co. and/or Chemical Bank (the Bank for brevity)
with the Regional Trial Court of Manila (RTC for
brevity). Guerrero sought payment of
damages allegedly for (1) illegally withheld taxes
charged against interests on his checking account
with the Bank; (2) a returned check worth
US$18,000.00 due to signature verification problems;
and (3) unauthorized conversion of his
account. Guerrero amended his complaint on April 18,
1995.
On September 1, 1995, the Bank filed its
Answer alleging, inter alia, that by stipulation
Guerreros account is governed by New York law and
this law does not permit any of Guerreros claims
except actual damages.Subsequently, the Bank filed
a Motion for Partial Summary Judgment seeking the
dismissal of Guerreros claims for consequential,
nominal, temperate, moral and exemplary damages
as well as attorneys fees on the same ground alleged
in its Answer. The Bank contended that the trial
should be limited to the issue of actual
damages. Guerrero opposed the motion.
The affidavit of Alyssa Walden, a New York
attorney, supported the Banks Motion for Partial
Summary Judgment. Alyssa Waldens affidavit
(Walden affidavit for brevity) stated that Guerreros
New York bank account stipulated that the governing
law is New York law and that this law bars all of
Guerreros claims except actual damages. The
Philippine Consular Office in New York authenticated
the Walden affidavit.
The RTC denied the Banks Motion for Partial
Summary Judgment and its motion for
reconsideration on March 6, 1996 and July 17, 1996,
respectively. The Bank filed a petition for certiorari
and prohibition with the Court of Appeals assailing the
RTC Orders. In its Decision dated August 24, 1998,
the Court of Appeals dismissed the petition. On
December 14, 1998, the Court of Appeals denied the
Banks motion for reconsideration.
Hence, the instant petition.
The Ruling of the Court of Appeals
The Court of Appeals sustained the RTC orders
denying the motion for partial summary judgment. The
Court of Appeals ruled that the Walden affidavit does
not serve as proof of the New York law and
jurisprudence relied on by the Bank to support its
motion. The Court of Appeals considered the New
York law and jurisprudence as public documents
defined in Section 19, Rule 132 of the Rules on
Evidence, as follows:
SEC. 19. Classes of Documents. For the purpose of their
presentation in evidence, documents are either public or
private.
Public documents are:
(a) The written official acts, or records of the
official acts of the sovereign authority,
official bodies and tribunals, and public
officers, whether of the Philippines, or of
a foreign country;
x x x.
The Court of Appeals opined that the following
procedure outlined in Section 24, Rule 132 should be
followed in proving foreign law:
SEC. 24. Proof of official record. The record of public
documents referred to in paragraph (a) of Section 19, when
admissible for any purpose, may be evidenced by an
official publication thereof or by a copy attested by the
officer having the legal custody of the record, or by his
deputy, and accompanied, if the record is not kept in the
Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a
foreign country, the certificate may be made by a secretary
of the embassy or legation, consul general, consul, vice
consul, or consular agent or by any officer in the foreign
service of the Philippines stationed in the foreign country in
which the record is kept, and authenticated by the seal of
his office.
The Court of Appeals likewise rejected the
Banks argument that Section 2, Rule 34 of the old
Rules of Court allows the Bank to move with the
supporting Walden affidavit for partial summary
judgment in its favor. The Court of Appeals clarified
that the Walden affidavit is not the supporting affidavit
referred to in Section 2, Rule 34 that would prove the
lack of genuine issue between the parties. The Court
of Appeals concluded that even if the Walden affidavit
is used for purposes of summary judgment, the Bank
must still comply with the procedure prescribed by the
Rules to prove the foreign law.
The Issues
The Bank contends that the Court of Appeals
committed reversible error in -
x x x HOLDING THAT [THE BANKS] PROOF OF
FACTS TO SUPPORT ITS MOTION FOR SUMMARY
JUDGMENT MAY NOT BE GIVEN BY AFFIDAVIT;
x x x HOLDING THAT [THE BANKS] AFFIDAVIT,
WHICH PROVES FOREIGN LAW AS A FACT, IS
HEARSAY AND THEREBY CANNOT SERVE AS
PROOF OF THE NEW YORK LAW RELIED UPON BY
PETITIONERS IN THEIR MOTION FOR SUMMARY
JUDGMENT x x x.[3]
 First, the Bank argues that in moving for partial
summary judgment, it was entitled to use the Walden
affidavit to prove that the stipulated foreign law bars
the claims for consequential, moral, temperate,
nominal and exemplary damages and attorneys
fees. Consequently, outright dismissal by summary
judgment of these claims is warranted.
Second, the Bank claims that the Court of
Appeals mixed up the requirements of Rule 35 on
summary judgments and those of a trial on the merits
in considering the Walden affidavit as hearsay. The
Bank points out that the Walden affidavit is not
hearsay since Rule 35 expressly permits the use of
affidavits.
Lastly, the Bank argues that since Guerrero did
not submit any opposing affidavit to refute the facts
contained in the Walden affidavit, he failed to show
the need for a trial on his claims for damages other
than actual.
The Courts Ruling
The petition is devoid of merit.
The Bank filed its motion for partial summary
judgment pursuant to Section 2, Rule 34 of the old
Rules of Court which reads:
Section 2. Summary judgment for defending party. A party
against whom a claim, counterclaim, or cross-claim is
asserted or a declaratory relief is sought may, at any time,
move with supporting affidavits for a summary judgment in
his favor as to all or any part thereof.
A court may grant a summary judgment to settle
expeditiously a case if, on motion of either party, there
appears from the pleadings, depositions, admissions,
and affidavits that no important issues of fact are
involved, except the amount of damages. In such
event, the moving party is entitled to a judgment as a
matter of law.[4]
In a motion for summary judgment, the crucial
question is: are the issues raised in the
pleadings genuine, sham or fictitious, as shown by
affidavits, depositions or admissions accompanying
the motion?[5]
A genuine issue means an issue of fact which
calls for the presentation of evidence as distinguished
from an issue which is fictitious or contrived so as not
to constitute a genuine issue for trial.[6]
A perusal of the parties respective pleadings
would show that there are genuine issues of fact that
necessitate formal trial. Guerreros complaint before
the RTC contains a statement of the ultimate facts on
which he relies for his claim for damages. He is
seeking damages for what he asserts as illegally
withheld taxes charged against interests on his
checking account with the Bank, a returned check
worth US$18,000.00 due to signature verification
problems, and unauthorized conversion of his
account. In its Answer, the Bank set up its defense
that the agreed foreign law to govern their contractual
relation bars the recovery of damages other than
actual. Apparently, facts are asserted in Guerreros
complaint while specific denials and affirmative
defenses are set out in the Banks answer.
True, the court can determine whether there are
genuine issues in a case based merely on the
affidavits or counter-affidavits submitted by the parties
to the court. However, as correctly ruled by the Court
of Appeals, the Banks motion for partial summary
judgment as supported by the Walden affidavit does
not demonstrate that Guerreros claims are sham,
fictitious or contrived. On the contrary, the Walden
affidavit shows that the facts and material allegations
as pleaded by the parties are disputed and there are
substantial triable issues necessitating a formal trial.
There can be no summary judgment where
questions of fact are in issue or where material
allegations of the pleadings are in dispute. [7] The
resolution of whether a foreign law allows only the
recovery of actual damages is a question of fact as far
as the trial court is concerned since foreign laws do
not prove themselves in our courts.[8] Foreign laws are
not a matter of judicial notice.[9] Like any other fact,
they must be alleged and proven. Certainly, the
conflicting allegations as to whether New York law or
Philippine law applies to Guerreros claims present a
clear dispute on material allegations which can be
resolved only by a trial on the merits.
Under Section 24 of Rule 132, the record of
public documents of a sovereign authority or tribunal
may be proved by (1) an official publication thereof
or (2) a copy attested by the officer having the
legal custody thereof. Such official publication or
copy must be accompanied, if the record is not kept in
the Philippines, with a certificate that the attesting
officer has the legal custody thereof. The certificate
may be issued by any of the authorized Philippine
embassy or consular officials stationed in the foreign
country in which the record is kept, and authenticated
by the seal of his office. The attestation must state, in
substance, that the copy is a correct copy of the
original, or a specific part thereof, as the case may
be, and must be under the official seal of the attesting
officer.
Certain exceptions to this rule were recognized
in Asiavest Limited v. Court of Appeals[10] which
held that:
x x x:
Although it is desirable that foreign law be proved in
accordance with the above rule, however, the Supreme
Court held in the case of Willamette Iron and Steel Works
v. Muzzal, that Section 41, Rule 123 (Section 25, Rule 132
of the Revised Rules of Court) does not exclude the
presentation of other competent evidence to prove the
existence of a foreign law. In that case, the Supreme Court
considered the testimony under oath of an attorney-at-law
of San Francisco, California, who quoted verbatim a
section of California Civil Code and who stated that the
same was in force at the time the obligations were
contracted, as sufficient evidence to establish the existence
of said law. Accordingly, in line with this view, the
Supreme Court in the Collector of Internal Revenue v.
Fisher et al., upheld the Tax Court in considering the
pertinent law of California as proved by the respondents
witness. In that case, the counsel for respondent testified
that as an active member of the California Bar since 1951,
he is familiar with the revenue and taxation laws of the
State of California. When asked by the lower court to state
the pertinent California law as regards exemption of
intangible personal properties, the witness cited Article 4,
Sec. 13851 (a) & (b) of the California Internal and Revenue
Code as published in Derrings California Code, a
publication of Bancroft-Whitney Co., Inc. And as part of
his testimony, a full quotation of the cited section was
offered in evidence by respondents. Likewise, in several
naturalization cases, it was held by the Court that evidence
of the law of a foreign country on reciprocity regarding the
acquisition of citizenship, although not meeting the
prescribed rule of practice, may be allowed and used as
basis for favorable action, if, in the light of all the
circumstances, the Court is satisfied of the authenticity of
the written proof offered. Thus, in a number of decisions,
mere authentication of the Chinese Naturalization Law by
the Chinese Consulate General of Manila was held to be
competent proof of that law. (Emphasis supplied)
The Bank, however, cannot rely on Willamette
Iron and Steel Works v. Muzzal or Collector of
Internal Revenue v. Fisher to support its cause.
These cases involved attorneys testifying in open
court during the trial in the Philippines and quoting the
particular foreign laws sought to be established. On
the other hand, the Walden affidavit was taken
abroad ex parte and the affiant never testified in open
court. The Walden affidavit cannot be considered as
proof of New York law on damages not only because
it is self-serving but also because it does not state the
specific New York law on damages. We reproduce
portions of the Walden affidavit as follows:
3. In New York, [n]ominal damages are damages in name
only, trivial sums such as six cents or $1. Such damages are
awarded both in tort and contract cases when the plaintiff
establishes a cause of action against the defendant, but is
unable to prove actual damages. Dobbs, Law of Remedies,
3.32 at 294 (1993). Since Guerrero is claiming for actual
damages, he cannot ask for nominal damages.
4. There is no concept of temperate damages in New York
law. I have reviewed Dobbs, a well-respected treatise,
which does not use the phrase temperate damages in its
index. I have also done a computerized search for the
phrase in all published New York cases, and have found no
cases that use it. I have never heard the phrase used in
American law.
5. The Uniform Commercial Code (UCC) governs many
aspects of a Banks relationship with its depositors. In this
case, it governs Guerreros claim arising out of the non-
payment of the $18,000 check. Guerrero claims that this
was a wrongful dishonor. However, the UCC states that
justifiable refusal to pay or accept as opposed to dishonor,
occurs when a bank refuses to pay a check for reasons such
as a missing indorsement, a missing or illegible signature or
a forgery, 3-510, Official Comment 2. .. to the
Complaint, MHT returned the check because it had no
signature card on . and could not verify Guerreros
signature. In my opinion, consistent with the UCC, that is a
legitimate and justifiable reason not to pay.
6. Consequential damages are not available in the ordinary
case of a justifiable refusal to pay. UCC 1-106 provides
that neither consequential or special or punitive damages
may be had except as specifically provided in the Act or by
other rule of law. UCC 4-103 further provides that
consequential damages can be recovered only where there
is bad faith. This is more restrictive than the New York
common law, which may allow consequential damages in a
breach of contract case (as does the UCC where there is a
wrongful dishonor).
7. Under New York law, requests for lost profits, damage
to reputation and mental distress are considered
consequential damages. Kenford Co., Inc. v. Country of
Erie, 73 N.Y.2d 312, 319, 540 N.Y.S.2d 1, 4-5 (1989) (lost
profits); Motif Construction Corp. v. Buffalo Savings Bank,
50 A.D.2d 718, 374 N.Y.S..2d 868, 869-70 (4th Dept 1975)
damage to reputation); Dobbs, Law of Remedies 12.4(1) at
63 (emotional distress).
8. As a matter of New York law, a claim for emotional
distress cannot be recovered for a breach of contract. Geler
v. National Westminster Bank U.S.A., 770 F. Supp. 210,
215 (S.D.N.Y. 1991); Pitcherello v. Moray Homes,
Ltd., 150 A.D.2d 860,540 N.Y.S.2d 387, 390 (3d Dept
1989) Martin v. Donald Park Acres, 54 A.D.2d 975, 389
N.Y.S..2d 31, 32 (2nd Dept 1976). Damage to reputation is
also not recoverable for a contract. Motif Construction
Corp. v. Buffalo Savings Bank, 374 N.Y.S.2d at 869-70.
9. In cases where the issue is the breach of a contract to
purchase stock, New York courts will not take into
consideration the performance of the stock after the
breach. Rather, damages will be based on the value of the
stock at the time of the breach, Aroneck v. Atkin, 90
A.D.2d 966, 456 N.Y.S.2d 558, 559 (4th Dept 1982), app.
den. 59 N.Y.2d 601, 449 N.E.2d 1276, 463 N.Y.S.2d 1023
(1983).
10. Under New York law, a party can only get
consequential damages if they were the type that would
naturally arise from the breach and if they were brought
within the contemplation of parties as the probable result of
the breach at the time of or prior to contracting. Kenford
Co., Inc. v. Country of Erie, 73 N.Y.2d 312, 319, 540
N.Y.S.2d 1, 3 (1989), (quoting Chapman v. Fargo, 223
N.Y. 32, 36 (1918).
11. Under New York law, a plaintiff is not entitled to
attorneys fees unless they are provided by contract or
statute. E.g., Geler v. National Westminster Bank, 770 F.
Supp. 210, 213 (S.D.N.Y. 1991); Camatron Sewing Mach,
Inc. v. F.M. Ring Assocs., Inc., 179 A.D.2d 165, 582
N.Y.S.2d 396 (1st Dept 1992); Stanisic v. Soho Landmark
Assocs., 73 A.D.2d 268, 577 N.Y.S.2d 280, 281 (1 st Dept
1991). There is no statute that permits attorneys fees in a
case of this type.
12. Exemplary, or punitive damages are not allowed for a
breach of contract, even where the plaintiff claims the
defendant acted with malice. Geler v. National Westminster
Bank, 770 F.Supp. 210, 215 (S.D.N.Y. 1991); Catalogue
Service of chester[11]_v. Insurance Co. of North America,
74 A.D.2d 837, 838, 425 N.Y.S.2d 635, 637 (2d Dept
1980); Senior v. Manufacturers Hanover Trust Co., 110
A.D.2d 833, 488 N.Y.S.2d 241, 242 (2d Dept 1985).
13. Exemplary or punitive damages may be recovered only
where it is alleged and proven that the wrong supposedly
committed by defendant amounts to a fraud aimed at the
public generally and involves a high moral
culpability. Walker v. Sheldon, 10 N.Y.2d 401, 179 N.E.2d
497, 223 N.Y.S.2d 488 (1961).
14. Furthermore, it has been consistently held under New
York law that exemplary damages are not available for a
mere breach of contract for in such a case, as a matter of
law, only a private wrong and not a public right is
involved. Thaler v. The North Insurance Company, 63
A.D.2d 921, 406 N.Y.S.2d 66 (1st Dept 1978).[12]
The Walden affidavit states conclusions from the
affiants personal interpretation and opinion of the
facts of the case vis a vis the alleged laws and
jurisprudence without citing any law in particular. The
citations in the Walden affidavit of various U.S. court
decisions do not constitute proof of the official records
or decisions of the U.S. courts. While the Bank
attached copies of some of the U.S. court decisions
cited in the Walden affidavit, these copies do not
comply with Section 24 of Rule 132 on proof of official
records or decisions of foreign courts.
The Banks intention in presenting the Walden
affidavit is to prove New York law and jurisprudence.
However, because of the failure to comply with
Section 24 of Rule 132 on how to prove a foreign law
and decisions of foreign courts, the Walden affidavit
did not prove the current state of New York law and
jurisprudence. Thus, the Bank has only alleged, but
has not proved, what New York law and jurisprudence
are on the matters at issue.
Next, the Bank makes much of Guerreros failure
to submit an opposing affidavit to the Walden
affidavit. However, the pertinent provision of Section
3, Rule 35 of the old Rules of Court did not make the
submission of an opposing affidavit mandatory, thus:
SEC. 3. Motion and proceedings thereon. The motion shall
be served at least ten (10) days before the time specified for
the hearing. The adverse party prior to the day of
hearing may serve opposing affidavits. After the hearing,
the judgment sought shall be rendered forthwith if the
pleadings, depositions and admissions on file, together with
the affidavits, show that, except as to the amount of
damages, there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a
matter of law. (Emphasis supplied)
It is axiomatic that the term may as used in remedial
law, is only permissive and not mandatory.[13]
Guerrero cannot be said to have admitted the
averments in the Banks motion for partial summary
judgment and the Walden affidavit just because he
failed to file an opposing affidavit. Guerrero opposed
the motion for partial summary judgment, although he
did not present an opposing affidavit. Guerrero may
not have presented an opposing affidavit, as there
was no need for one, because the Walden affidavit
did not establish what the Bank intended to
prove. Certainly, Guerrero did not admit, expressly or
impliedly, the veracity of the statements in the Walden
affidavit. The Bank still had the burden of proving New
York law and jurisprudence even if Guerrero did not
present an opposing affidavit. As the party moving for
summary judgment, the Bank has the burden of
clearly demonstrating the absence of any genuine
issue of fact and that any doubt as to the existence of
such issue is resolved against the movant.[14]
Moreover, it would have been redundant and
pointless for Guerrero to submit an opposing affidavit
considering that what the Bank seeks to be opposed
is the very subject matter of the complaint. Guerrero
need not file an opposing affidavit to the Walden
affidavit because his complaint itself controverts the
matters set forth in the Banks motion and the Walden
affidavit. A party should not be made to deny matters
already averred in his complaint.
There being substantial triable issues between
the parties, the courts a quo correctly denied the
Banks motion for partial summary judgment. There is
a need to determine by presentation of evidence in a
regular trial if the Bank is guilty of any wrongdoing
and if it is liable for damages under the applicable
laws.
This case has been delayed long enough by the
Banks resort to a motion for partial summary
judgment. Ironically, the Bank has successfully
defeated the very purpose for which summary
judgments were devised in our rules, which is, to aid
parties in avoiding the expense and loss of time
involved in a trial.
WHEREFORE, the petition is DENIED for lack
of merit. The Decision dated August 24, 1998 and the
Resolution dated December 14, 1998 of the Court of
Appeals in CA-G.R. SP No. 42310 is AFFIRMED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug and Azcuna,
JJ., concur.
Ynares-Santiago, J., no part.
WILDVALLEY SHIPPING CO., LTD. petitioner,
vs. COURT OF APPEALS and PHILIPPINE
PRESIDENT LINES INC., respondents.
DECISION
BUENA, J.:
This is a petition for review on certiorari seeking
to set aside the decision of the Court of Appeals
which reversed the decision of the lower court in CA-
G.R. CV No. 36821, entitled "Wildvalley Shipping Co.,
Ltd., plaintiff-appellant, versus Philippine President
Lines, Inc., defendant-appellant."
The antecedent facts of the case are as follows:
Sometime in February 1988, the Philippine
Roxas, a vessel owned by Philippine President Lines,
Inc., private respondent herein, arrived in Puerto
Ordaz, Venezuela, to load iron ore. Upon the
completion of the loading and when the vessel was
ready to leave port, Mr. Ezzar del Valle Solarzano
Vasquez, an official pilot of Venezuela, was
designated by the harbour authorities in Puerto Ordaz
to navigate the Philippine Roxas through the Orinoco
River.[1] He was asked to pilot the said vessel on
February 11, 1988[2] boarding it that night at 11:00
p.m.[3]
The master (captain) of the Philippine Roxas,
Captain Nicandro Colon, was at the bridge together
with the pilot (Vasquez), the vessel's third mate (then
the officer on watch), and a helmsman when the
vessel left the port[4] at 1:40 a.m. on February 12,
1988.[5] Captain Colon left the bridge when the vessel
was under way.[6]
The Philippine Roxas experienced some
vibrations when it entered the San Roque Channel at
mile 172.[7] The vessel proceeded on its way, with the
pilot assuring the watch officer that the vibration was
a result of the shallowness of the channel.[8]
Between mile 158 and 157, the vessel again
experienced some vibrations.[9] These occurred at
4:12 a.m.[10] It was then that the watch officer called
the master to the bridge.[11]
The master (captain) checked the position of the
vessel[12] and verified that it was in the centre of the
channel.[13] He then went to confirm, or set down, the
position of the vessel on the chart.[14] He ordered
Simplicio A. Monis, Chief Officer of the President
Roxas, to check all the double bottom tanks.[15]
At around 4:35 a.m., the Philippine Roxas ran
aground in the Orinoco River,[16] thus obstructing the
ingress and egress of vessels.
As a result of the blockage, the Malandrinon, a
vessel owned by herein petitioner Wildvalley Shipping
Company, Ltd., was unable to sail out of Puerto
Ordaz on that day.
Subsequently, Wildvalley Shipping Company,
Ltd. filed a suit with the Regional Trial Court of Manila,
Branch III against Philippine President Lines, Inc. and
Pioneer Insurance Company (the underwriter/insurer
of Philippine Roxas) for damages in the form of
unearned profits, and interest thereon amounting to
US $400,000.00 plus attorney's fees, costs, and
expenses of litigation. The complaint against Pioneer
Insurance Company was dismissed in an Order dated
November 7, 1988.[17]
At the pre-trial conference, the parties agreed on
the following facts:
"1. The jurisdictional facts, as specified in their respective "WHEREFORE, judgment is rendered for the plaintiff, 2. RESPONDENT COURT OF APPEALS
pleadings; ordering defendant Philippine President Lines, Inc. to pay SERIOUSLY ERRED IN REVERSING
to the plaintiff the sum of U.S. $259,243.43, as actual and THE FINDINGS OF FACTS OF THE
"2. That defendant PPL was the owner of the vessel compensatory damages, and U.S. $162,031.53, as expenses TRIAL COURT CONTRARY TO
Philippine Roxas at the time of the incident; incurred abroad for its foreign lawyers, plus additional sum EVIDENCE;
of U.S. $22,000.00, as and for attorney's fees of plaintiff's
local lawyer, and to pay the cost of this suit. 3. RESPONDENT COURT OF APPEALS
"3. That defendant Pioneer Insurance was the insurance SERIOUSLY ERRED IN FINDING
underwriter for defendant PPL; THAT THE "PHILIPPINE ROXAS" IS
"Defendant's counterclaim is dismissed for lack of merit. SEAWORTHY;
"4. That plaintiff Wildvalley Shipping Co., Inc. is the 4. RESPONDENT COURT OF APPEALS
owner of the vessel Malandrinon, whose passage was "SO ORDERED."[19]
SERIOUSLY ERRED IN
obstructed by the vessel Philippine Roxas at Puerto Ordaz, DISREGARDING VENEZUELAN LAW
Venezuela, as specified in par. 4, page 2 of the complaint; Both parties appealed: the petitioner appealing DESPITE THE FACT THAT THE
the non-award of interest with the private respondent SAME HAS BEEN SUBSTANTIALLY
"5. That on February 12, 1988, while the Philippine Roxas questioning the decision on the merits of the case. PROVED IN THE TRIAL COURT
was navigating the channel at Puerto Ordaz, the said vessel After the requisite pleadings had been filed, the WITHOUT ANY OBJECTION FROM
grounded and as a result, obstructed navigation at the Court of Appeals came out with its questioned PRIVATE RESPONDENT, AND
channel; decision dated June 14, 1994,[20] the dispositive WHOSE OBJECTION WAS
portion of which reads as follows: INTERPOSED BELATEDLY ON
"6. That the Orinoco River in Puerto Ordaz is a compulsory APPEAL;
pilotage channel; "WHEREFORE, finding defendant-appellant's appeal to be 5. RESPONDENT COURT OF APPEALS
meritorious, judgment is hereby rendered reversing the SERIOUSLY ERRED IN AWARDING
"7. That at the time of the incident, the vessel, Philippine Decision of the lower court. Plaintiff-appellant's Complaint ATTORNEY'S FEES AND COSTS TO
Roxas, was under the command of the pilot Ezzar is dismissed and it is ordered to pay defendant-appellant the PRIVATE RESPONDENT WITHOUT
Solarzano, assigned by the government thereat, but plaintiff amount of Three Hundred Twenty-three Thousand, Forty- ANY FAIR OR REASONABLE BASIS
claims that it is under the command of the master; two Pesos and Fifty-three Centavos (P323,042.53) as and WHATSOEVER;
for attorney's fees plus cost of suit. Plaintiff-appellant's
appeal is DISMISSED. 6. RESPONDENT COURT OF APPEALS
"8. The plaintiff filed a case in Middleburg, Holland which SERIOUSLY ERRED IN NOT FINDING
is related to the present case; THAT PETITIONER'S CAUSE IS
"SO ORDERED."[21] MERITORIOUS HENCE, PETITIONER
"9. The plaintiff caused the arrest of the Philippine Collier, SHOULD BE ENTITLED TO
a vessel owned by the defendant PPL; Petitioner filed a motion for ATTORNEY'S FEES, COSTS AND
reconsideration[22] but the same was denied for lack of INTEREST.
"10. The Orinoco River is 150 miles long and it takes merit in the resolution dated March 29, 1995.[23]
The petition is without merit.
approximately 12 hours to navigate out of the said river; Hence, this petition.
The primary issue to be determined is whether
"11. That no security for the plaintiff's claim was given The petitioner assigns the following errors to the or not Venezuelan law is applicable to the case at bar.
until after the Philippine Collier was arrested; and court a quo:
It is well-settled that foreign laws do not prove
1. RESPONDENT COURT OF APPEALS themselves in our jurisdiction and our courts are not
"12. That a letter of guarantee, dated 12-May-88 was issued SERIOUSLY ERRED IN FINDING authorized to take judicial notice of them. Like any
by the Steamship Mutual Underwriters Ltd."[18] THAT UNDER PHILIPPINE LAW NO other fact, they must be alleged and proved.[24]
FAULT OR NEGLIGENCE CAN BE
ATTRIBUTED TO THE MASTER NOR A distinction is to be made as to the manner of
The trial court rendered its decision on October proving a written and an unwritten law. The former
16, 1991 in favor of the petitioner, Wildvalley Shipping THE OWNER OF THE "PHILIPPINE
ROXAS" FOR THE GROUNDING OF falls under Section 24, Rule 132 of the Rules of Court,
Co., Ltd. The dispositive portion thereof reads as as amended, the entire provision of which is quoted
follows: SAID VESSEL RESULTING IN THE
BLOCKAGE OF THE RIO ORINOCO; hereunder.Where the foreign law sought to be proved
is "unwritten," the oral testimony of expert witnesses
is admissible, as are printed and published books of
reports of decisions of the courts of the country
concerned if proved to be commonly admitted in such
courts.[25]
Section 24 of Rule 132 of the Rules of Court, as
amended, provides:
"Sec. 24. Proof of official record. -- The record of public
documents referred to in paragraph (a) of Section 19, when
admissible for any purpose, may be evidenced by an
official publication thereof or by a copy attested by the
officer having the legal custody of the record, or by his
deputy, and accompanied, if the record is not kept in the
Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a
foreign country, the certificate may be made by a secretary
of the embassy or legation, consul general, consul, vice
consul, or consular agent or by any officer in the foreign
service of the Philippines stationed in the foreign country in
which the record is kept, and authenticated by the seal of
his office." (Underscoring supplied)
The court has interpreted Section 25 (now
Section 24) to include competent evidence like the
testimony of a witness to prove the existence of a
written foreign law.[26]
In the noted case of Willamette Iron & Steel
Works vs. Muzzal,[27] it was held that:
" Mr. Arthur W. Bolton, an attorney-at-law of San
Francisco, California, since the year 1918 under oath,
quoted verbatim section 322 of the California Civil Code
and stated that said section was in force at the time the
obligations of defendant to the plaintiff were incurred, i.e.
on November 5, 1928 and December 22, 1928. This
evidence sufficiently established the fact that the section in
question was the law of the State of California on the above
dates. A reading of sections 300 and 301 of our Code of
Civil Procedure will convince one that these sections do not
exclude the presentation of other competent evidence to
prove the existence of a foreign law.
"`The foreign law is a matter of fact You ask the witness
what the law is; he may, from his recollection, or on
producing and referring to books, say what it is.' (Lord
Campbell concurring in an opinion of Lord Chief Justice
Denman in a well-known English case where a witness was
called upon to prove the Roman laws of marriage and was
permitted to testify, though he referred to a book containing
the decrees of the Council of Trent as controlling, Jones on
Evidence, Second Edition, Volume 4, pages 3148-3152.) x
x x.
We do not dispute the competency of Capt.
Oscar Leon Monzon, the Assistant Harbor Master and
Chief of Pilots at Puerto Ordaz, Venezuela,[28] to
testify on the existence of the Reglamento General de
la Ley de Pilotaje (pilotage law of Venezuela)[29] and
the Reglamento Para la Zona de Pilotaje No 1 del
Orinoco (rules governing the navigation of the
Orinoco River). Captain Monzon has held the
aforementioned posts for eight years.[30] As such he is
in charge of designating the pilots for maneuvering
and navigating the Orinoco River. He is also in charge
of the documents that come into the office of the
harbour masters.[31]
Nevertheless, we take note that these written
laws were not proven in the manner provided by
Section 24 of Rule 132 of the Rules of Court.
The Reglamento General de la Ley de
Pilotaje was published in the Gaceta Oficial[32]of the
Republic of Venezuela. A photocopy of the Gaceta
Oficial was presented in evidence as an official
publication of the Republic of Venezuela.
The Reglamento Para la Zona de Pilotaje No 1
del Orinoco is published in a book issued by
the Ministerio de Comunicaciones of
Venezuela.[33] Only a photocopy of the said rules was
likewise presented as evidence.
Both of these documents are considered in
Philippine jurisprudence to be public documents for
they are the written official acts, or records of the
official acts of the sovereign authority, official bodies
and tribunals, and public officers of Venezuela.[34]
For a copy of a foreign public document to be
admissible, the following requisites are mandatory: (1)
It must be attested by the officer having legal custody
of the records or by his deputy; and (2) It must be
accompanied by a certificate by a secretary of the
embassy or legation, consul general, consul, vice
consular or consular agent or foreign service officer,
and with the seal of his office.[35] The latter
requirement is not a mere technicality but is intended
to justify the giving of full faith and credit to the
genuineness of a document in a foreign country.[36]
It is not enough that the Gaceta Oficial, or a
book published by the Ministerio de
Comunicaciones of Venezuela, was presented as
evidence with Captain Monzon attesting it. It is also
required by Section 24 of Rule 132 of the Rules of
Court that a certificate that Captain Monzon, who
attested the documents, is the officer who had legal
custody of those records made by a secretary of the
embassy or legation, consul general, consul, vice
consul or consular agent or by any officer in the
foreign service of the Philippines stationed in
Venezuela, and authenticated by the seal of his office
accompanying the copy of the public document. No
such certificate could be found in the records of the
case.
With respect to proof of written laws, parol proof
is objectionable, for the written law itself is the best
evidence. According to the weight of authority, when a
foreign statute is involved, the best evidence rule
requires that it be proved by a duly authenticated
copy of the statute.[37]
At this juncture, we have to point out that the
Venezuelan law was not pleaded before the lower
court.
A foreign law is considered to be pleaded if
there is an allegation in the pleading about the
existence of the foreign law, its import and legal
consequence on the event or transaction in issue.[38]
A review of the Complaint[39] revealed that it was
never alleged or invoked despite the fact that the
grounding of the M/V Philippine Roxas occurred
within the territorial jurisdiction of Venezuela.
We reiterate that under the rules of private
international law, a foreign law must be properly
pleaded and proved as a fact. In the absence of
pleading and proof, the laws of a foreign country, or
state, will be presumed to be the same as our own
local or domestic law and this is known as processual
presumption.[40]
Having cleared this point, we now proceed to a
thorough study of the errors assigned by the
petitioner.
Petitioner alleges that there was negligence on
the part of the private respondent that would warrant
the award of damages.
 There being no contractual obligation, the
private respondent is obliged to give only the
diligence required of a good father of a family in
accordance with the provisions of Article 1173 of the
New Civil Code, thus:
Art. 1173. The fault or negligence of the obligor consists in
the omission of that diligence which is required by the
nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the
place. When negligence shows bad faith, the provisions of
articles 1171 and 2201, paragraph 2, shall apply.
If the law or contract does not state the diligence which is
to be observed in the performance, that which is expected
of a good father of a family shall be required.
The diligence of a good father of a family
requires only that diligence which an ordinary prudent
man would exercise with regard to his own
property. This we have found private respondent to
have exercised when the vessel sailed only after the
"main engine, machineries, and other auxiliaries"
were checked and found to be in good running
condition;[41] when the master left a competent officer,
the officer on watch on the bridge with a pilot who is
experienced in navigating the Orinoco River; when
the master ordered the inspection of the vessel's
double bottom tanks when the vibrations occurred
anew.[42]
The Philippine rules on pilotage, embodied in
Philippine Ports Authority Administrative Order No.
03-85, otherwise known as the Rules and Regulations
Governing Pilotage Services, the Conduct of Pilots
and Pilotage Fees in Philippine Ports enunciate the
duties and responsibilities of a master of a vessel and
its pilot, among other things.
The pertinent provisions of the said
administrative order governing these persons are
quoted hereunder:
Sec. 11. Control of Vessels and Liability for Damage. -- On
compulsory pilotage grounds, the Harbor Pilot providing
the service to a vessel shall be responsible for the damage
caused to a vessel or to life and property at ports due to his
negligence or fault. He can be absolved from liability if the
accident is caused by force majeure or natural calamities
provided he has exercised prudence and extra diligence to
prevent or minimize the damage.
The Master shall retain overall command of the vessel even
on pilotage grounds whereby he can countermand or
overrule the order or command of the Harbor Pilot on
board. In such event, any damage caused to a vessel or to
life and property at ports by reason of the fault or
negligence of the Master shall be the responsibility and
liability of the registered owner of the vessel concerned
without prejudice to recourse against said Master.
Such liability of the owner or Master of the vessel or its
pilots shall be determined by competent authority in
appropriate proceedings in the light of the facts and
circumstances of each particular case.
xxx
Sec. 32. Duties and Responsibilities of the Pilots or Pilots
Association. -- The duties and responsibilities of the Harbor
Pilot shall be as follows:
xxx
f) A pilot shall be held responsible for the direction of a
vessel from the time he assumes his work as a pilot thereof
until he leaves it anchored or berthed safely; Provided,
however, that his responsibility shall cease at the moment
the Master neglects or refuses to carry out his order."
The Code of Commerce likewise provides for
the obligations expected of a captain of a vessel, to
wit:
Art. 612. The following obligations shall be inherent in the
office of captain:
xxx
"7. 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. x x x.
The law is very explicit. The master remains the
overall commander of the vessel even when there is a
pilot on board. He remains in control of the ship as he
can still perform the duties conferred upon him by
law[43]despite the presence of a pilot who is
temporarily in charge of the vessel. It is not required
of him to be on the bridge while the vessel is being
navigated by a pilot.
However, Section 8 of PPA Administrative Order
No. 03-85, provides:
Sec. 8. Compulsory Pilotage Service - For entering a harbor
and anchoring thereat, or passing through rivers or straits
within a pilotage district, as well as docking and undocking
at any pier/wharf, or shifting from one berth or another,
every vessel engaged in coastwise and foreign trade shall
be under compulsory pilotage.
xxx.
The Orinoco River being a compulsory pilotage
channel necessitated the engaging of a pilot who was
presumed to be knowledgeable of every shoal, bank,
deep and shallow ends of the river. In his deposition,
pilot Ezzar Solarzano Vasquez testified that he is an
official pilot in the Harbour at Port Ordaz,
Venezuela,[44] and that he had been a pilot for twelve
(12) years.[45] He also had experience in navigating
the waters of the Orinoco River.[46]
The law does provide that the master can
countermand or overrule the order or command of the
harbor pilot on board. The master of the Philippine
Roxas deemed it best not to order him (the pilot) to
stop the vessel,[47] mayhap, because the latter had
assured him that they were navigating normally
before the grounding of the vessel.[48] Moreover, the
pilot had admitted that on account of his experience
he was very familiar with the configuration of the river
as well as the course headings, and that he does not
even refer to river charts when navigating the Orinoco
River.[49]
Based on these declarations, it comes as no
surprise to us that the master chose not to regain
control of the ship. Admitting his limited knowledge of
the Orinoco River, Captain Colon relied on the
knowledge and experience of pilot Vasquez to guide
the vessel safely.
Licensed pilots, enjoying the emoluments of compulsory
pilotage, are in a different class from ordinary employees,
for they assume to have a skill and a knowledge of
navigation in the particular waters over which their licenses
extend superior to that of the master; pilots are bound to
use due diligence and reasonable care and skill. A pilot's
ordinary skill is in proportion to the pilot's responsibilities,
and implies a knowledge and observance of the usual rules
of navigation, acquaintance with the waters piloted in their
ordinary condition, and nautical skill in avoiding all known
obstructions. The character of the skill and knowledge
required of a pilot in charge of a vessel on the rivers of a
country is very different from that which enables a
navigator to carry a vessel safely in the ocean. On the
ocean, a knowledge of the rules of navigation, with charts
that disclose the places of hidden rocks, dangerous shores,
or other dangers of the way, are the main elements of a
pilot's knowledge and skill. But the pilot of a river vessel,
like the harbor pilot, is selected for the individual's personal
knowledge of the topography through which the vessel is
steered."[50]
We find that the grounding of the vessel is
attributable to the pilot. When the vibrations were first
felt the watch officer asked him what was going on,
and pilot Vasquez replied that "(they) were in the
middle of the channel and that the vibration was as
(sic) a result of the shallowness of the channel."[51]
Pilot Ezzar Solarzano Vasquez was assigned to
pilot the vessel Philippine Roxas as well as other
vessels on the Orinoco River due to his knowledge of
the same. In his experience as a pilot, he should have
been aware of the portions which are shallow and
which are not. His failure to determine the depth of
the said river and his decision to plod on his set
course, in all probability, caused damage to the
vessel. Thus, we hold him as negligent and liable for
its grounding.
In the case of Homer Ramsdell Transportation
Company vs. La Compagnie Generale
Transatlantique, 182 U.S. 406, it was held that:
x x x The master of a ship, and the owner also, is liable for
any injury done by the negligence of the crew employed in
the ship. The same doctrine will apply to the case of a pilot
employed by the master or owner, by whose negligence any
injury happens to a third person or his property: as, for
example, by a collision with another ship, occasioned by
his negligence. And it will make no difference in the case
that the pilot, if any is employed, is required to be a
licensed pilot; provided the master is at liberty to take a
pilot, or not, at his pleasure, for in such a case the master
acts voluntarily, although he is necessarily required to
select from a particular class. On the other hand, if it is
compulsive upon the master to take a pilot, and, a
fortiori, if he is bound to do so under penalty, then, and
in such case, neither he nor the owner will be liable for
injuries occasioned by the negligence of the pilot; for in
such a case the pilot cannot be deemed properly the servant
of the master or the owner, but is forced upon them, and the
maxim Qui facit per alium facit per se does not apply."
(Underscoring supplied)
Anent the river passage plan, we find that, while
there was none,[52] the voyage has been sufficiently
planned and monitored as shown by the following
actions undertaken by the pilot, Ezzar Solarzano
Vasquez, to wit: contacting the radio marina via VHF
for information regarding the channel, river
traffic,[53] soundings of the river, depth of the river,
bulletin on the buoys.[54] The officer on watch also
monitored the voyage.[55]
We, therefore, do not find the absence of a river
passage plan to be the cause for the grounding of the
vessel.
The doctrine of res ipsa loquitur does not apply
to the case at bar because the circumstances
surrounding the injury do not clearly indicate
negligence on the part of the private respondent. For
the said doctrine to apply, the following conditions
must be met: (1) the accident was of such character
as to warrant an inference that it would not have
happened except for defendant's negligence; (2) the
accident must have been caused by an agency or
instrumentality within the exclusive management or
control of the person charged with the negligence
complained of; and (3) the accident must not have
been due to any voluntary action or contribution on
the part of the person injured.[56]
As has already been held above, there was a
temporary shift of control over the ship from the
master of the vessel to the pilot on a compulsory
pilotage channel. Thus, two of the requisites
necessary for the doctrine to apply, i.e., negligence
and control, to render the respondent liable, are
absent.
As to the claim that the ship was unseaworthy,
we hold that it is not.
The Lloyds Register of Shipping confirmed the
vessels seaworthiness in a Confirmation of Class
issued on February 16, 1988 by finding that "the
above named ship (Philippine Roxas) maintained the
class "+100A1 Strengthened for Ore Cargoes, Nos. 2
and 8 Holds may be empty (CC) and +LMC" from
31/12/87 up until the time of casualty on or about
12/2/88."[57] The same would not have been issued
had not the vessel been built according to the
standards set by Lloyd's.
Samuel Lim, a marine surveyor, at Lloyd's
Register of Shipping testified thus:
"Q Now, in your opinion, as a surveyor, did top
side tank have any bearing at all to the
seaworthiness of the vessel?
"A Well, judging on this particular vessel, and also
basing on the class record of the vessel,
wherein recommendations were made on
the top side tank, and it was given sufficient
time to be repaired, it means that the vessel
is fit to travel even with those defects on the
ship.
"COURT
What do you mean by that? You explain. The
vessel is fit to travel even with defects? Is
that what you mean? Explain.
"WITNESS
"A Yes, your Honor. Because the class society
which register (sic) is the third party looking
into the condition of the vessel and as far as
their record states, the vessel was class or
maintained, and she is fit to travel during that
voyage."
xxx
"ATTY. MISA
Before we proceed to other matter, will you kindly
tell us what is (sic) the 'class +100A1
Strengthened for Ore Cargoes', mean?
"WITNESS
"A Plus 100A1 means that the vessel was built
according to Lloyd's rules and she is capable
of carrying ore bulk cargoes, but she is
particularly capable of carrying Ore Cargoes
with No. 2 and No. 8 holds empty.
xxx
"COURT
The vessel is classed, meaning?
 "A Meaning she is fit to travel, your Honor, or
seaworthy."[58]
It is not required that the vessel must be
perfect. To be seaworthy, a ship must be reasonably
fit to perform the services, and to encounter the
ordinary perils of the voyage, contemplated by the
parties to the policy.[59]
As further evidence that the vessel was
seaworthy, we quote the deposition of pilot Vasquez:
"Q Was there any instance when your orders or
directions were not complied with because of
the inability of the vessel to do so?
"A No.
"Q. Was the vessel able to respond to all your
commands and orders?
"A. The vessel was navigating normally.[60]
Eduardo P. Mata, Second Engineer of the
Philippine Roxas submitted an accident report
wherein he stated that on February 11, 1988, he
checked and prepared the main engine, machineries
and all other auxiliaries and found them all to be in
good running condition and ready for
maneuvering. That same day the main engine, bridge
and engine telegraph and steering gear motor were
also tested.[61] Engineer Mata also prepared the fuel
for consumption for maneuvering and checked the
engine generators.[62]
Finally, we find the award of attorneys fee
justified.
Article 2208 of the New Civil Code provides that:
"Art. 2208. In the absence of stipulation, attorney's fees and
expenses of litigation, other than judicial costs, cannot be
recovered, except:
xxx
"(11) In any other case where the court deems it just and
equitable that attorney's fees and expenses of litigation
should be recovered.
xxx
Due to the unfounded filing of this case, the
private respondent was unjustifiably forced to litigate,
thus the award of attorneys fees was proper.
WHEREFORE, IN VIEW OF THE FOREGOING,
the petition is DENIED and the decision of the Court
of Appeals in CA G.R. CV No. 36821 is AFFIRMED.
SO ORDERED.
Bellosillo, (Chairman), Mendoza,
Quisumbing, and De leon, Jr., JJ., concur.
MITSUI O.S.K. LINES LTD., represented by
MAGSAYSAY AGENCIES, INC., petitioner,
vs. COURT OF APPEALS and LAVINE
LOUNGEWEAR MFG.
CORP., respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari of the
January 25, 1995 decision of the Court of
Appeals[1] and its resolution of March 22, 1995
denying petitioners motion for reconsideration. The
appellate court upheld orders of Branch 68 (Pasig) of
the Regional Trial Court, National Capital Judicial
Region, denying petitioners motion to dismiss in the
original action filed against petitioner by private
respondent.
The facts are not in dispute.[2]
Petitioner Mitsui O.S.K. Lines Ltd. is a foreign
corporation represented in the Philippines by its
agent, Magsaysay Agencies. It entered into a contract
of carriage through Meister Transport, Inc., an
international freight forwarder, with private respondent
Lavine Loungewear Manufacturing Corporation to
transport goods of the latter from Manila to Le Havre,
France. Petitioner undertook to deliver the goods to
France 28 days from initial loading. On July 24, 1991,
petitioners vessel loaded private respondents
container van for carriage at the said port of origin.
However, in Kaoshiung, Taiwan the goods were
not transshipped immediately, with the result that the
shipment arrived in Le Havre only on November 14,
1991. The consignee allegedly paid only half the
value of the said goods on the ground that they did
not arrive in France until the off season in that
country. The remaining half was allegedly charged to
the account of private respondent which in turn
demanded payment from petitioner through its agent.
As petitioner denied private respondents claim,
the latter filed a case in the Regional Trial Court on
April 14, 1992. In the original complaint, private
respondent impleaded as defendants Meister
Transport, Inc. and Magsaysay Agencies, Inc., the
latter as agent of petitioner Mitsui O.S.K. Lines
Ltd. On May 20, 1993, it amended its complaint by
impleading petitioner as defendant in lieu of its
agent. The parties to the case thus became private
respondent as plaintiff, on one side, and Meister
Transport Inc. and petitioner Mitsui O.S.K. Lines Ltd.
as represented by Magsaysay Agencies, Inc., as
defendants on the other.
Petitioner filed a motion to dismiss alleging that
the claim against it had prescribed under the Carriage
of Goods by Sea Act.
The Regional Trial Court, as aforesaid, denied
petitioners motion as well as its subsequent motion
for reconsideration. On petition for certiorari, the Court
of Appeals sustained the trial courts orders. Hence
this petition containing one assignment of error:
THE RESPONDENT COURT OF APPEALS
COMMITTED A SERIOUS ERROR OF LAW IN
RULING THAT PRIVATE RESPONDENTS
AMENDED COMPLAINT IS (sic) NOT PRESCRIBED
PURSUANT TO SECTION 3(6) OF THE CARRIAGE
OF GOODS BY SEA ACT.
The issue raised by the instant petition is
whether private respondents action is for loss or
damage to goods shipped, within the meaning of 3(6)
of the Carriage of Goods by Sea Act (COGSA).
Section 3 provides:
(6) Unless notice of loss or damage and the general
nature of such loss or damage be given in writing to
the carrier or his agent at the port of discharge or at
the time of the removal of the goods into the custody
of the person entitled to delivery thereof under the
contract of carriage, such removal shall be prima facie
evidence of the delivery by the carrier of the goods as
described in the bill of lading. If the loss or damage is
not apparent, the notice must be given within three
days of the delivery.
Said notice of loss or damage may be endorsed upon
the receipt for the goods given by the person taking
delivery thereof.
The notice in writing need not be given if the state of
the goods has at the time of their receipt been the
subject of joint survey or inspection.
In any event the carrier and the ship shall be
discharged from all liability in respect of loss or
damage unless suit is brought within one year after
delivery of the goods or the date when the goods
should have been delivered: Provided, that, if a notice
of loss or damage, either apparent or concealed, is
not given as provided for in this section, that fact shall
not affect or prejudice the right of the shipper to bring
suit within one year after the delivery of the goods or
the date when the goods should have been delivered.
In the case of any actual or apprehended loss or
damage, the carrier and the receiver shall give all
reasonable facilities to each other for inspecting and
tallying the goods.
In Ang v. American Steamship Agencies, Inc.,
the question was whether an action for the value of
goods which had been delivered to a party other than
the consignee is for loss or damage within the
meaning of 3(6) of the COGSA. It was held that there
was no loss because the goods had simply been
misdelivered. Loss refers to the deterioration or
disappearance of goods.[3]
As defined in the Civil Code and as applied to Section
3(6), paragraph 4 of the Carriage of Goods by Sea
Act, loss contemplates merely a situation where no
delivery at all was made by the shipper of the goods
because the same had perished, gone out of
commerce, or disappeared in such a way that their
existence is unknown or they cannot be recovered. [4]
Conformably with this concept of what
constitutes loss or damage, this Court held in another
case[5] that the deterioration of goods due to delay in
their transportation constitutes loss or damage within
the meaning of 3(6), so that as suit was not brought
within one year the action was barred:
Whatever damage or injury is suffered by the goods
while in transit would result in loss or damage to
either the shipper or the consignee. As long as it is
claimed, therefore, as it is done here, that the losses
or damages suffered by the shipper or consignee
were due to the arrival of the goods in damaged or
deteriorated condition, the action is still basically one
for damage to the goods, and must be filed within the
period of one year from delivery or receipt, under the
above-quoted provision of the Carriage of Goods by
Sea Act.[6]
But the Court allowed that
There would be some merit in appellants insistence
that the damages suffered by him as a result of the
delay in the shipment of his cargo are not covered by
the prescriptive provision of the Carriage of Goods by
Sea Act above referred to, if such damages were due,
not to the deterioration and decay of the goods while
in transit, but to other causes independent of the
condition of the cargo upon arrival, like a drop in their
market value. . . .[7]
The rationale behind limiting the said definitions
to such parameters is not hard to find or fathom. As
this Court held in Ang:
Said one-year period of limitation is designed to meet
the exigencies of maritime hazards. In a case where
the goods shipped were neither lost nor damaged in
transit but were, on the contrary, delivered in port to
someone who claimed to be entitled thereto, the
situation is different, and the special need for the
short period of limitation in cases of loss or damage
caused by maritime perils does not obtain.[8]
In the case at bar, there is neither deterioration
nor disappearance nor destruction of goods caused
by the carriers breach of contract. Whatever reduction
there may have been in the value of the goods is not
due to their deterioration or disappearance because
they had been damaged in transit.
Petitioner contends:
Although we agree that there are places in the section
(Article III) in which the phrase need have no broader
meaning than loss or physical damage to the goods,
we disagree with the conclusion that it must so be
limited wherever it is used. We take it that the phrase
has a uniform meaning, not merely in Section 3, but
throughout the Act; and there are a number of places
in which the restricted interpretation suggested would
be inappropriate. For example Section 4(2) [Article
IV(2) (sic) exempts exempts (sic) the carrier, the
ship (sic), from liability loss or damage (sic) resulting
from certain courses beyond their control.[9]
Indeed, what is in issue in this petition is not the
liability of petitioner for its handling of goods as
provided by 3(6) of the COGSA, but its liability under
its contract of carriage with private respondent as
covered by laws of more general application.
Precisely, the question before the trial court is
not the particular sense of damages as it refers to the
physical loss or damage of a shippers goods as
specifically covered by 3(6) of COGSA but petitioners
potential liability for the damages it has caused in the
general sense and, as such, the matter is governed
by the Civil Code, the Code of Commerce and
COGSA, for the breach of its contract of carriage with
private respondent.
We conclude by holding that as the suit below is
not for loss or damage to goods contemplated in 3(6),
the question of prescription of action is governed not
by the COGSA but by Art. 1144 of the Civil Code
which provides for a prescriptive period of ten years.
WHEREFORE, the decision of the Court of
Appeals is AFFIRMED.
SO ORDERED.