11/14/2018 CALTEX LIMITED v. MA. FLOR A.

SINGZON AGUIRRE

DIVISION

[ GR Nos. 170746-47, Mar 07, 2016 ]

CALTEX LIMITED v. MA. FLOR A. SINGZON AGUIRRE

DECISION

REYES, J.:

Facts

Dubbed as the Asia's Titanic,[1] the M/V Dona Paz was an inter-island passenger
vessel owned and operated by Sulpicio Lines, Inc. (Sulpicio) traversing its Leyte to
Manila route on the night of December 20, 1987, when it collided with M/T Vector, a
commercial tanker owned and operated by Vector Shipping Corporation, Inc., (Vector
Shipping). On that particular voyage, M/T Vector was chartered by Caltex
(Philippines) Inc., et al.[2] (petitioners) to transport petroleum products. The
collision brought forth an inferno at sea with an estimate of about 4,000 casualties,
and was described as the "world's worst peace time maritime disaster."[3] It
precipitated the filing of numerous lawsuits, the instant case included.

In December 1988, the heirs of the victims of the tragedy (respondents), instituted a
class action with the Civil District Court for the Parish of Orleans, State of Louisiana,
United States of America (Louisiana Court), docketed as Civil Case No. 88-24481
entitled "Sivirino Carreon, et al. v. Caltex (Philippines), Inc., et al."[4] On November
30, 2000, the Louisiana Court entered a conditional judgment dismissing the said
case on the ground of forum non-conveniens.[5] This led the respondents, composed
of 1,689 claimants, to file on March 6, 2001 a civil action for damages for breach of
contract of carriage and quasi-delict with the Regional Trial Court (RTC) of
Catbalogan, Samar, Branch 28 (RTC of Catbalogan), against the herein petitioners,
Sulpicio, Vector Shipping, and Steamship Mutual Underwriting Association, Bermuda
Limited (Steamship). This was docketed as Civil Case No. 7277 entitled "Ma. Flor
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Singzon-Aguirre, et al. v. Sulpicio Lines, Inc., et al."[6]

In its Order[7] dated March 28, 2001, the RTC of Catbalogan, motu proprio dismissed
the complaint pursuant to Section 1, Rule 9 of the 1997 Rules of Civil Procedure as the
respondents' cause of action had already prescribed. In an unusual turn of events
however, the petitioners as defendants therein, who were not served with summons,
filed a motion for reconsideration, alleging that they are waiving their defense of
prescription, among others. The RTC of Catbalogan, however, merely noted the
petitioners' motion.[8]

The dismissal of the complaint prompted the respondents to have the case reinstated
with the Louisiana Court. The petitioners, as defendants, however argued against it
and contended that the Philippines offered a more convenient forum for the parties,
specifically the RTC of Manila, Branch 39 (RTC of Manila), where three consolidated
cases[9] concerning the M/V Dona Paz collision were pending.[10]

In its Judgment[11] dated March 27, 2002, the Louisiana Court once again
conditionally dismissed the respondents' action, ordering the latter to bring their
claims to the RTC of Manila by intervening in the consolidated cases filed before the
latter court. It was also stated in the judgment that the Louisiana Court will allow the
reinstatement of the case if the Philippine court "is unable to assume jurisdiction over
the parties or does not recognize such cause of action or any cause of action arising
out of the same transaction or occurrence."[12]

Following the Louisiana Court's order, the respondents filed a motion for intervention
on May 6, 2002, and a complaint in intervention on May 13, 2002 with the pending
consolidated cases before the RTC of Manila. Also, co-defendants in the consolidated
cases, Sulpicio and Steamship were furnished with a copy of the respondents' motion
to intervene.

In their Manifestation[13] dated April 24, 2002, the petitioners unconditionally

waived the defense of prescription of the respondents' cause of action. The petitioners
also reiterated a similar position in their Comment/Consent to Intervention[14] dated
May 16, 2002. Likewise, Sulpicio and Steamship filed their Manifestation of No
Objection dated May 30, 2002 and Manifestation dated June 20, 2002 with the RTC
of Manila, expressing concurrence with the petitioners.[15]

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On July 2, 2002, the RTC of Manila issued its Order[16] denying the respondents'
motion to intervene for lack of merit. The RTC of Manila ruled that the RTC of
Catbalogan had already dismissed the case with finality; that a final and executory
prior judgment is a bar to the filing of the complaint in intervention of the
respondents; and that the waivers of the defense of prescription made by the
petitioners, Sulpicio and Steamship are of no moment.[17] The motion for
reconsideration filed by the petitioners, Sulpicio and Steamship was denied as well on
August 30, 2002.[18]

On September 25, 2002, the petitioners instituted a petition for certiorari before the
Court of Appeals (CA) docketed as CA-G.R. SP No. 72994. On November 12, 2002,
Sulpicio and Steamship also filed a separate petition docketed as CA-G.R. SP No.
73793. These petitions were consolidated in an order of the CA dated March 31, 2004.
[19]

On April 27, 2005, the CA dismissed[20] the consolidated petitions in this wise:

WHEREFORE, premises considered, the consolidated petitions under

consideration are hereby DISMISSED. Accordingly, the assailed orders of the
[RTC of Manila] dated July 2, 2002 and August 30, 2002 are AFFIRMED. No
pronouncement as to costs.

[21]
SO ORDERED.

The CA concurred with the RTC of Manila that the finality of the Order dated March
28, 2001 issued by the RTC of Catbalogan has the effect of res judicata, which barred
the respondents' motion to intervene and complaint-in-intervention with the RTC of
Manila.[22] The CA also considered the filing of motion for reconsideration by the
petitioners before the RTC of Catbalogan as tantamount to voluntary submission to
the jurisdiction of the said court over their person.[23] The CA rationalized that "[i]t is
basic that as long as the party is given the opportunity to defend his interests in due
course, he would have no reason to complain, for it is this opportunity to be heard that
makes up the essence of due process."[24]

The motions for reconsideration having been denied by the CA in its Order[25] dated
December 8, 2005, only the petitioners elevated the matter before this Court by way
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of petition for review on certiorari[26] under Rule 45.

The Parties' Arguments

The petitioners contended that not all the elements of res judicata are present in this
case which would warrant its application as the RTC of Catbalogan did not acquire
jurisdiction over their persons and that the judgment therein is not one on the merits.
[27] It was also adduced that only the respondents were heard in the RTC of
Catbalogan because when the petitioners filed their motion for reconsideration, the
order of dismissal was already final and executory.[28] The petitioners also bewailed
that other complaints were accepted by the RTC of Manila in the consolidated cases
despite prescription of the cause of action[29] and that the real issue of merit is
whether the defense of prescription that has matured can be waived.[30] They
explained that they were not able to file for the annulment of judgment or order of the
RTC of Catbalogan since the respondents precluded them from seeking such remedy
by filing a motion for intervention in the consolidated cases before the RTC of Manila.
[31]

On the other side, the respondents maintained that the waiver on prescription is not
the issue but bar by prior judgment is, because when they filed their motion for
intervention, the dismissal meted out by the RTC of Catbalogan was already final.[32]
According to the respondents, if the petitioners intended to have the dismissal
reversed, the latter should have appealed from the order of the RTC of Catbalogan or
filed a petition for certiorari against the said order or an action to nullify the same.
[33] The respondents also elucidated that they could not have precluded the
petitioners from assailing the RTC of Catbalogan's orders because it was not until May
6, 2002 when the respondents filed a motion for intervention with the consolidated
cases before the RTC of Manila[34] and only in deference to the 2nd order of
dismissal of the Louisiana Court.[35] Finally, for the respondents, the CA correctly
held that the petitioners cannot collaterally attack the final order of the RTC of
Catbalogan, the reason being that a situation wherein there could be two conflicting
rulings between two co-equal courts must be avoided.[36]

Essentially, the issues can be summed up as follows:

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I. WHETHER THE CA ERRED IN RULING THAT THE ORDERS OF THE

RTC OF CATBALOGAN BARRED THE FILING OF THE MOTION AND
COMPLAINT FOR INTERVENTION BEFORE THE RTC OF MANILA; and

II. WHETHER THE CA ERRED IN AFFIRMING THE RTC OF MANILA'S

DISREGARD OF THE PETITIONERS' WAIVER OF PRESCRIPTION ON
[37]
THE GROUND OF BAR BY PRIOR JUDGMENT.

Ruling of the Court

The petition lacks merit.

The petitioners cannot be permitted to assert their right to waive the defense of
prescription when they had foregone the same through their own omission, as will be
discussed below.

The Court shall first discuss the prescription of the respondents' cause of action
against the petitioners. Article 1106 of the Civil Code provides that "[b]y prescription,
one acquires ownership and other real rights through the lapse of time in the manner
and under the conditions laid down by law. In the same way, rights and conditions are
lost by prescription." The first sentence refers to acquisitive prescription, which is a
mode of "acquisition of ownership and other real rights through the lapse of time in
the manner and under the conditions provided by law." The second sentence pertains
to extinctive prescription "whereby rights and actions are lost by the lapse of time."
[38] It is also called limitation of action.[39]

This case involves the latter type of prescription, the purpose of which is to protect the
diligent and vigilant, not the person who sleeps on his rights, forgetting them and
taking no trouble of exercising them one way or another to show that he truly has such
rights.[40] The rationale behind the prescription of actions is to suppress fraudulent
and stale claims from springing up at great distances of time when all the proper
vouchers and evidence are lost or the facts have become obscure from the lapse of
time or defective memory or death or removal of witnesses.[41]

There is no dispute that the respondents' cause of action against the petitioners has
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prescribed under the Civil Code.[42] In fact, the same is evident on the complaint
itself. The respondents brought their claim before a Philippine court only on March 6,
2001, more than 13 years after the collision occurred.[43] Article 1139 of the Civil
Code states that actions prescribe by the mere lapse of time fixed by law. Accordingly,
the RTC of Catbalogan cannot be faulted for the motu proprio dismissal of the
complaint filed before it. It is settled that prescription may be considered by the
courts motu proprio if the facts supporting the ground are apparent from the
pleadings or the evidence on record.[44]

The peculiarity in this case is that the petitioners, who were the defendants in the
antecedent cases before the RTCs of Catbalogan and Manila, are most adamant in
invoking their waiver of the defense of prescription while the respondents, to whom
the cause of action belong, have acceded to the dismissal of their complaint. The
petitioners posit that there is a conflict between a substantive law and procedural law
in as much as waiver of prescription is allowed under Article 1112 of the Civil Code, a
substantive law even though the motu proprio dismissal of a claim that has prescribed
is mandated under Section 1, Rule 9 of the Rules of Court.[45]

The Court has previously held that the right to prescription may be waived or
renounced pursuant to Article 1112 of the Civil Code:[46]

Art. 1112. Persons with capacity to alienate property may renounce prescription
already obtained, but not the right to prescribe in the future.

Prescription is deemed to have been tacitly renounced when the renunciation

results from acts which imply the abandonment of the right acquired.

In the instant case, not only once did the petitioners expressly renounce their defense
of prescription. Nonetheless, the Court cannot consider such waiver as basis in order
to reverse the rulings of the courts below as the dismissal of the complaint had
become final and binding on both the petitioners and the respondents.

It is not contested that the petitioners were not served with summons by the RTC of
Catbalogan prior to the motu proprio dismissal of the respondents' complaint. It is
basic that courts acquire jurisdiction over the persons of defendants or respondents,
by a valid service of summons or through their voluntary submission.[47] Not having
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been served with summons, the petitioners were not initially considered as under the
jurisdiction of the court. However, the petitioners voluntarily submitted themselves
under the jurisdiction of the RTC of Catbalogan by filing their motion for
reconsideration.

Section 20, Rule 14 of the 1997 Rules of Court states:

Sec. 20. Voluntary appearance. - The defendant's voluntary appearance in the

action shall be equivalent to service of summons. The inclusion in a motion to
dismiss of other grounds aside from lack of jurisdiction over the person of the
defendant shall not be deemed a voluntary appearance.

In Philippine Commercial International Bank v. Spouses Dy Hong Pi, et al.,[48] the

Court explained the following:

(1) Special appearance operates as an exception to the general rule on voluntary

appearance;

(2) Accordingly, objections to the jurisdiction of the court over the person of the
defendant must be explicitly made, i.e., set forth in an unequivocal manner; and

(3) Failure to do so constitutes voluntary submission to the jurisdiction of the

court, especially in instances where a pleading or motion seeking affirmative
[49]
relief is filed and submitted to the court for resolution.

Previous to the petitioners' filing of their motion for reconsideration, the RTC of
Catbalogan issued an Entry of Final Judgment[50] stating that its Order dated March
28, 2001 became final and executory on April 13, 2001. The petitioners claimed that
for this reason, they could not have submitted themselves to the jurisdiction of the
RTC of Catbalogan by filing such a belated motion.[51]

But the petitioners cannot capitalize on the supposed finality of the Order dated
March 28, 2001 to repudiate their submission to the jurisdiction of the RTC of
Catbalogan. It must be emphasized that before the filing of their motion for
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reconsideration, the petitioners were not under the RTC of Catbalogan's jurisdiction.
Thus, although the order was already final and executory with regard to the
respondents; it was not yet, on the part of the petitioners. As opposed to the
conclusion reached by the CA, the Order dated March 28, 2001 cannot be considered
as final and executory with respect to the petitioners. It was only on July 2, 2001,
when the petitioners filed a motion for reconsideration seeking to overturn the
aforementioned order, that they voluntarily submitted themselves to the jurisdiction
of the court. On September 4, 2001, the RTC of Catbalogan noted the petitioners'
motion for reconsideration on the flawed impression that the defense of prescription
cannot be waived.[52]

Consequently, it was only after the petitioners' failure to appeal or seek any other legal
remedy to challenge the subsequent Order dated September 4, 2001, that the
dismissal became final on their part. It was from the date of the petitioners' receipt of
this particular order that the reglementary period under the Rules of Court to assail it
commenced to run for the petitioners. But neither the petitioners nor the respondents
resorted to any action to overturn the orders of the RTC of Catbalogan, which
ultimately led to their finality. While the RTC of Catbalogan merely noted the motion
for reconsideration in its Order dated September 4, 2001, the effect is the same as a
denial thereof, for the intended purpose of the motion, which is to have the complaint
reinstated, was not realized. This should have prompted the petitioners to explore and
pursue other legal measures to have the dismissal reversed. Instead, nothing more
was heard from the parties until a motion for intervention was filed by the
respondents before the RTC of Manila, in conformity with the order of the Louisiana
Court. As the CA espoused in its decision:

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We concur with the observation of the [RTC of Manila] that the petitioners'
predicament was of their own making. The petitioners should have exhausted the
other available legal remedies under the law after the [RTC of Catbalogan]
denied their motion for reconsideration. Under Section 9, Rule 37 of the [Rules
of Court], the remedy against an order denying a motion for reconsideration is
not to appeal the said order of denial but to appeal from the judgment or final
order of the court. Moreover, the petitioners could have availed of an action for
annulment of judgment for the very purpose of having the final and executory
judgment be set aside so that there will be a renewal of litigation. An action for
annulment of judgment is grounded only on two justifications: (1) extrinsic
fraud; and (2) lack of jurisdiction or denial of due process. All that herein
petitioners have to prove was that the trial court had no jurisdiction; that they
were prevented from having a trial or presenting their case to the trial court by
some act or conduct of the private respondents; or that they have been denied
due process of law. Seasonably, the petitioners could have also interposed a
petition for certiorari under Rule 65 of the Rules [of Court] imputing grave abuse
of discretion on the part of the trial court judge in issuing the said order of
dismissal. For reasons undisclosed in the records, the petitioners did not bother
to mull over and consider the said legal avenues, which they could have readily
[53]
availed of during that time.

The RTC of Manila denied the respondents' motion for intervention on the ground of
the finality of the order of the RTC of Catbalogan, there being no appeal or any other
legal remedy perfected in due time by either the petitioners or the respondents. Since
the dismissal of the complaint was already final and executory, the RTC of Manila can
no longer entertain a similar action from the same parties. The bone of contention is
not regarding the petitioners' execution of waivers of the defense of prescription, but
the effect of finality of an order or judgment on both parties.

"Settled is the rule that a party is barred from assailing the correctness of a judgment
not appealed from by him" because the "presumption [is] that a party who did not
interject an appeal is satisfied with the adjudication made by the lower court."[54]
Whether the dismissal was based on the merits or technicality is beside the point. "[A]
dismissal on a technicality is no different in effect and consequences from a dismissal
on the merits."[55]

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The petitioners attempted to justify their failure to file an action to have the orders of
the RTC of Catbalogan annulled by ratiocinating that the respondents precluded them
from doing so when the latter filed their complaint anew with the RTC of Manila. This
is untenable, as it is clear that the respondents filed the said complaint-in-
intervention with the RTC of Manila more than a year after the case was ordered
dismissed by the RTC of Catbalogan.[56] Aside from this, the petitioners offered no
other acceptable excuse on why they did not raise their oppositions against the orders
of the RTC of Catbalogan when they had the opportunity to do so. Thus, the only
logical conclusion is that the petitioners abandoned their right to waive the defense of
prescription.

Lastly, the Court takes judicial notice of its ruling in Vector Shipping Corporation, et
al. v. Macasa, et al.[57] and Caltex (Philippines) Inc., v. Sulpicio Lines, Inc.[58]
wherein the petitioners, as a mere voyage charterer, were exonerated from third party
liability in the M/V Doña Paz collision. Should this Court allow the reinstatement of
the complaint against the petitioners, let the trial proceedings take its course, and
decide the same on the merits in favor of the respondents, then it would have led to
the promulgation of conflicting decisions. On the other hand, if this Court were to
decide this matter on the merits in favor of the petitioners, then the same result would
be obtained as with a dismissal now.

WHEREFORE, the petition is denied for lack of merit.

SO ORDERED.

Sereno,* C.J., Velasco, Jr., J., Chairperson, Perez, and Jardeleza, JJ., concur.

* Additional Member per Raffle dated March 7, 2016 vice Associate Justice Diosdado
M. Peralta.

[1] (visited October 9, 2015).

[2] Chevron Philippines, Inc. is formerly Caltex (Philippines) Inc., rollo, pp. 204, 215;
PT Chevron Pacific Indonesia is formerly PT Caltex Pacific Indonesia, rollo, p. 165;
Chevron Overseas Limited is formerly Caltex (Overseas) Limited, rollo, p. 171;
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Chevron Oil Corporation is formerly Caltex Oil Corporation, rollo, p. 177; Chevron
Holdings Inc., is formerly Caltex (Asia) Limited, rollo, p. 180; Chevron Global Energy
Inc. is formerly Caltex Petroleum Corporation and Caltex Texas Oil Corporation, rollo,
pp. 186, 189; Caltex International Limited withdrew as petitioner, rollo, p. 189;
Traders Insurance Limited is formerly Caltex Investment and Trading Limited, rollo,
p. 189.

[3] Supra note 1.

[4] Rollo, pp. 514-516.

[5] Id. at 516.

[6] Id. at 41.

[7] Rendered by Judge Sibanah E. Usman; id. at 102-103.

[8] Id. at 106-107.

[9] Civil Case No. 91-59592 entitled "Victorino Ondrada, et al. v. Sulpicio Lines, Inc.,
et. al"; Civil Case No. 91-59659 entitled "Paulita Artugue, et. al. v. Sulpicio Lines,
Inc., et. al"; and Civil Case No. 92-61026 entitled "Winefredo Acol, et al. v. Sulpicio
Lines, Inc., et al." Allegedly, Case No. 92-61026 was filed beyond its prescriptive
period but the herein petitioners waived the defense of prescription, which the RTC of
Manila allowed, id. at 39-40.

[10] Id. at 536.

[11] Id. at 470-471.

[12] Id. at 470.

[13] Id. at 108-110.

[14] Id. at 111-114.

[15] Id. at 11.

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[16] Rendered by Pairing Judge Placido C. Marquez; id. at 115-120.

[17] Id. at 119.

[18] Id. at 121-129.

[19] Id. at 44.

[20] Penned by Associate Justice Amelita G. Tolentino, with Associate Justices

Roberto A. Barrios and Vicente S.E. Veloso concurring; id. at 37-73.

[21] Id. at 72.

[22] Id. at 55.

[23] Id. at 59.

[24] Id. at 60.

[25] Id. at 96-99.

[26] Id. at 3-35.

[27] Id. at 14.

[28] Id. at 21.

[29] Id. at 23.

[30] Id. at 19.

[31] Id. at 26.

[32] Id. at 539.

[33] Id. at 539-540.

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[34] Id. at 543.

[35] Id. at 544.

[36] Id. at 547-548.

[37] Id. at 13.

[38] De Morales v. Court of First Instance of Misamis Occidental, Branch II, Ozamis
City, 186 Phil. 596, 598 (1980). Id.

[40] Tagarao v. Garcia, 61 Phil. 5, 20 (1934).

[41] Antonio Jr. v. Engr. Morales, 541 Phil. 306, 310 (2007).

Article 1144. The following actions must be brought within ten years from the time the
right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law; and
(3) Upon a judgment.

Article 1145. The following actions must be commenced within six years:
(1) Upon an oral contract; and
(2) Upon a quasi-contract.

Article 1146. The following actions must be instituted within four years:
(1) Upon an injury to the rights of the plaintiff; and
(2) Upon a quasi-delict[.]

[43] Rollo, pp. 445-462.

[44] Cua (Cua Hian Tek) v. Wallem Philippines Shipping, Inc., et al, 690 Phil. 491,
499 (2012).

[ ]
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[45] Rollo, p. 328.

[46] Development Bank of the Philippines (DBP) v. The Honorable Midpaintao L

Adil, Judge of the Second Branch of the Court of First Instance of Iloilo and Spouses
Patricia Confesor and Jovita Villafuerte, G.R. No. L-48889, May 11, 1989.

[47] Aurora N. De Pedro v. Romasan Development Corporation, G.R. No. 194751

November 26 2014.

[48] 606 Phil. 615(2009).

[49] Id. at 634.

[50] Rollo, p. 130.

[51] Id. at 16-17.

[52] Id. at 107.

[53] Id. at 60-61.

[54] George Pidlip P. Palileo and Jose De la Cruz v. Planters Development Bank, G.R.
No. 193650, October 8, 2014.

[55] General Offset Press, Inc. v. Anatalio, et al, 124 Phil. 80, 83 (1966).

[56] Rollo, pp. 472-489.

[57] 581 Phil. 88 (2008).

[58] 374 Phil. 325 (1999).

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