Republic of the Philippines

Supreme Court

Manila

 

 

FIRST DIVISION

 

 

PHILIPPINE CHARTER INSURANCE CORPORATION,

                     Petitioner,

 

-  versus  -

 

EXPLORER MARITIME CO., LTD., OWNER OF THE VESSEL M/V “EXPLORER”, WALLEM PHILS. SHIPPING, INC., ASIAN TERMINALS, INC. AND FOREMOST INTERNATIONAL PORT SERVICES, INC.,

                     Respondents.

 

G.R. No.  175409

 

Present:

 

CORONA, C.J.,

     Chairperson,     

LEONARDO-DE CASTRO,

BERSAMIN,

DEL CASTILLO, and

VILLARAMA, JR., JJ.

 

Promulgated:

 

September 7, 2011

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D E C I S I O N

 

 

LEONARDO-DE CASTRO, J.:

 

 

This is a Petition for Review on Certiorari assailing the Decision[1] of the Court of Appeals dated July 20, 2006 in CA-G.R. CV No. 78834, which affirmed the Order[2] of Branch 37, Regional Trial Court (RTC) of Manila dated February 14, 2001 dismissing the Complaint for failure of the plaintiff to prosecute the same for an unreasonable length of time.

 

On March 22, 1995, petitioner Philippine Charter Insurance Corporation (PCIC), as insurer-subrogee, filed with the RTC of Manila a Complaint against respondents, to wit: the unknown owner of the vessel M/V “Explorer” (common carrier), Wallem Philippines Shipping, Inc. (ship agent), Asian Terminals, Inc. (arrastre), and Foremost International Port Services, Inc. (broker).  PCIC sought to recover from the respondents the sum of P342,605.50, allegedly representing the value of lost or damaged shipment paid to the insured, interest and attorney’s fees.  The case was docketed as Civil Case No. 95-73340 and was raffled to Branch 37.  On the same date, PCIC filed a similar case against respondents Wallem Philippines Shipping, Inc., Asian Terminals, Inc., and Foremost International Port Services, Inc., but, this time, the fourth defendant is “the unknown owner of the vessel M/V “Taygetus.”  This second case was docketed as Civil Case No. 95-73341 and was raffled to Branch 38.

 

Respondents filed their respective answers with counterclaims in Civil Case No. 95-73340, pending before Branch 37.  PCIC later filed its answer to the counterclaims.  On September 18, 1995, PCIC filed an ex parte motion to set the case for pre-trial conference, which was granted by the trial court in its Order dated September 26, 1995.  However, before the scheduled date of the pre-trial conference, PCIC filed on September 19, 1996 its Amended Complaint.  The “Unknown Owner” of the vessel M/V “Explorer” and Asian Terminals, Inc. filed anew their respective answers with counterclaims.

 

Foremost International Port Services, Inc. filed a Motion to Dismiss, which was later denied by the trial court in an Order dated December 4, 1996.

 

On December 5, 2000, respondent common carrier, “the Unknown Owner” of the vessel M/V “Explorer,” and Wallem Philippines Shipping, Inc. filed a Motion to Dismiss on the ground that PCIC failed to prosecute its action for an unreasonable length of time.  PCIC allegedly filed its Opposition, claiming that the trial court has not yet acted on its Motion to Disclose which it purportedly filed on November 19, 1997.  In said motion, PCIC supposedly prayed for the trial court to order respondent Wallem Philippines Shipping, Inc. to disclose the true identity and whereabouts of defendant “Unknown Owner of the Vessel M/V ‘Explorer.’” 

 

On February 14, 2001, the trial court issued an Order dismissing Civil Case No. 95-73340 for failure of petitioner to prosecute for an unreasonable length of time.  Upon receipt of the order of dismissal on March 20, 2001, PCIC allegedly realized that its Motion to Disclose was inadvertently filed with Branch 38 of the RTC of Manila, where the similar case involving the vessel M/V “Taygetus” (Civil Case No. 95-73341) was raffled to, and not with Branch 37, where the present case (Civil Case No. 95-73340) was pending.

 

Thus, PCIC filed a Motion for Reconsideration of the February 14, 2001 Order, explaining that its Motion to Disclose was erroneously filed with Branch 38.  PCIC claimed that the mistake stemmed from the confusion created by an error of the docket section of the RTC of Manila in stamping the same docket number to the simultaneously filed cases.  According to PCIC, it believed that it was still premature to move for the setting of the pre-trial conference with the Motion to Disclose still pending resolution.  On May 6, 2003, the trial court issued the Order denying PCIC’s Motion for Reconsideration.

 

On May 21, 2003, PCIC, through new counsel, appealed to the Court of Appeals.  On July 20, 2006, the Court of Appeals rendered the assailed Decision affirming the February 14, 2001 Order of the RTC.  On November 6, 2006, the Court of Appeals issued its Resolution[3] denying PCIC’s Motion for Reconsideration.

 

Hence, this Petition for Review on Certiorari.  On June 27, 2007, this Court required the counsel of the “Unknown Owner” of the vessel M/V Explorer and Wallem Philippines Shipping, Inc. to submit proof of identification of the owner of said vessel.[4]  On September 17, 2007, this Court, pursuant to the information provided by Wallem Philippines Shipping, Inc., directed its Division Clerk of Court to change “Unknown Owner” to “Explorer Maritime Co., Ltd.” in the title of this case.[5]

 

In affirming the dismissal of Civil Case No. 95-73340, the Court of Appeals held that PCIC should have filed a motion to resolve the Motion to Disclose after a reasonable time from its alleged erroneous filing.  PCIC could have also followed up the status of the case by making inquiries on the court’s action on their motion, instead of just waiting for any resolution from the court for more than three years.  The appellate court likewise noted that the Motion to Disclose was not the only erroneous filing done by PCIC’s former counsel, the Linsangan Law Office.  The records of the case at bar show that on November 16, 1997, said law office filed with Branch 37 a Pre-trial Brief for the case captioned as “Philippine Charter Insurance Corporation v. Unknown Owners of the Vessel MV ‘Taygetus’, et al., Civil Case No. 95-73340.”  The firm later filed a Manifestation and Motion stating that the same was intended for Civil Case No. 95-73341 which was pending before Branch 38.  All these considered, the Court of Appeals ruled that PCIC must bear the consequences of its counsel’s inaction and negligence, as well as its own. [6]

 

PCIC claims that the merits of its case warrant that it not be decided on technicalities.  Furthermore, PCIC claims that its former counsel merely committed excusable negligence when it erroneously filed the Motion to Disclose with the wrong branch of the court where the case is pending. 

 

The basis for the dismissal by the trial court of Civil Case No. 95-73340 is Section 3, Rule 17 and Section 1, Rule 18 of the Rules of Court, which respectively provide:

 

Section 3.  Dismissal due to the fault of the plaintiff. – If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may be dismissed upon motion of the defendant or upon the court’s own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action.  This dismissal shall have the effect of adjudication upon the merits, unless otherwise declared by the court.

 

x x x x

 

Section 1. When conducted. – After the last pleading has been served and filed, it shall be the duty of the plaintiff to promptly move ex parte that the case be set for pre-trial.

 

 

In the fairly recent case of Espiritu v. Lazaro,[7] this Court, in affirming the dismissal of a case for failure to prosecute on account of the omission of the plaintiff therein to move to set the case for pre-trial for almost one year from their receipt of the Answer, issued several guidelines in effecting such dismissal:

 

Respondents Lazaro filed the Cautionary Answer with Manifestation and Motion to File a Supplemental/Amended Answer on July 19, 2002, a copy of which was received by petitioners on August 5, 2002. Believing that the pending motion had to be resolved first, petitioners waited for the court to act on the motion to file a supplemental answer. Despite the lapse of almost one year,[8] petitioners kept on waiting, without doing anything to stir the court into action.

 

In any case, petitioners should not have waited for the court to act on the motion to file a supplemental answer or for the defendants to file a supplemental answer.  As previously stated, the rule clearly states that the case must be set for pre-trial after the last pleading is served and filed.  Since respondents already filed a cautionary answer and [petitioners did not file any reply to it] the case was already ripe for pre-trial. 

 

It bears stressing that the sanction of dismissal may be imposed even absent any allegation and proof of the plaintiff's lack of interest to prosecute the action, or of any prejudice to the defendant resulting from the failure of the plaintiff to comply with the rules.  The failure of the plaintiff to prosecute the action without any justifiable cause within a reasonable period of time will give rise to the presumption that he is no longer interested in obtaining the relief prayed for.

 

In this case, there was no justifiable reason for petitioners' failure to file a motion to set the case for pre-trial. Petitioners' stubborn insistence that the case was not yet ripe for pre-trial is erroneous. Although petitioners state that there are strong and compelling reasons justifying a liberal application of the rule, the Court finds none in this case. The burden to show that there are compelling reasons that would make a dismissal of the case unjustified is on petitioners, and they have not adduced any such compelling reason.[9] (Emphases supplied.)

 

 

In the case at bar, the alleged Motion to Disclose was filed on November 19, 1997.  Respondents filed the Motion to Dismiss on December 5, 2000.  By that time, PCIC’s inaction was thus already almost three years.  There is therefore no question that the failure to prosecute in the case at bar was for an unreasonable length of time.  Consequently, the Complaint may be dismissed even absent any allegation and proof of the plaintiff's lack of interest to prosecute the action, or of any prejudice to the defendant resulting from the failure of the plaintiff to comply with the rules.  The burden is now on PCIC to show that there are compelling reasons that would render the dismissal of the case unjustified.

 

The only explanation that the PCIC can offer for its omission is that it was waiting for the resolution of its Motion to Disclose, which it allegedly filed with another branch of the court.  According to PCIC, it was premature for it to move for the setting of the pre-trial conference before the resolution of the Motion to Disclose.

 

We disagree.  Respondent Explorer Maritime Co., Ltd., which was then referred to as the “Unknown Owner of the vessel M/V ‘Explorer,’” had already been properly impleaded pursuant to Section 14, Rule 3 of the Rules of Court, which provides:

 

Section 14.  Unknown identity or name of defendant – Whenever the identity or name of a defendant is unknown, he may be sued as the unknown owner, heir, devisee, or by such other designation as the case may require; when his identity or true name is discovered, the pleading must be amended accordingly.

 

 

In the Amended Complaint, PCIC alleged that defendant “Unknown Owner of the vessel M/V ‘Explorer’” is a foreign corporation whose identity or name or office address are unknown to PCIC but is doing business in the Philippines through its local agent, co-defendant Wallem Philippines Shipping, Inc., a domestic corporation.[10]  PCIC then added that both defendants may be served with summons and other court processes in the address of Wallem Philippines Shipping, Inc.,[11] which was correctly done[12] pursuant to Section 12, Rule 14 of the Rules of Court, which provides:

 

Sec. 12. Service upon foreign private juridical entity.When the defendant is a foreign private juridical entity which has transacted business in the Philippines, service may be made on its resident agent designated in accordance with law for that purpose, or, if there be no such agent, on the government official designated by law to that effect, or on any of its officers or agents within the Philippines.

 

As all the parties have been properly impleaded, the resolution of the Motion to Disclose was unnecessary for the purpose of setting the case for pre-trial. 

 

Furthermore, Section 3, Rule 3 of the Rules of Court likewise provides that an agent acting in his own name and for the benefit of an undisclosed principal may sue or be sued without joining the principal except when the contract involves things belonging to the principal.  Since Civil Case No. 95-73340 was an action for damages, the agent may be properly sued without impleading the principal.  Thus, even assuming that petitioner had filed its Motion to Disclose with the proper court, its pendency did not bar PCIC from moving for the setting of the case for pre-trial as required under Rule 18, Section 1 of the Rules of Court.[13]

 

Indeed, we find no error on the part of the lower courts in not giving credit to the purportedly erroneously filed Motion to Disclose. The only document presented by PCIC to prove the same, a photocopy thereof attached to their Motion for Reconsideration with the RTC, is highly suspicious.  Said photocopy[14] of the Motion to Disclose contains an explanation why the same was filed through registered mail.  However, it was also stamped as “RECEIVED” by the RTC on November 19, 1997,[15] indicating that said attachment was a receiving copy.  The receiving copy was not signed by any court personnel[16] and does not contain any proof of service on the parties.  The Motion sets the hearing thereon on the same date of its filing, November 19, 1997.[17]

 

Likewise, PCIC’s attempt to shift the blame to the docket section of the RTC of Manila, which allegedly stamped the same docket number to Civil Case No. 95-73340 (involving M/V Explorer) and Civil Case No. 95-73341 (involving M/V Taygetus), is completely unfounded.  A perusal of the Complaint in the case at bar shows that it was correctly stamped Civil Case No. “95-73340,” and the branch number was correctly written as 37.[18]  PCIC did not bother to attach the alleged complaint filed in Branch 38 involving M/V Taygetus.  However, it does not escape our attention that PCIC in its own pleadings repeatedly refer to the case pending in Branch 38 as Civil Case No. 95-73341, contrary to its claim that the two cases were docketed with the same number.  In all, PCIC failed to adequately account how its counsel could have mistakenly filed the Motion intended for Branch 37 in Branch 38. Worse, said counsel also allegedly only discovered the error after three years from the filing of the Motion to Disclose. Such a circumstance could have only occurred if both PCIC and its counsel had indeed been uninterested and lax in prosecuting the case.  

 

We therefore hold that the RTC was correct in dismissing Civil Case No. 95-73340 for failure of the plaintiff to prosecute the same for an unreasonable length of time.  As discussed by the Court of Appeals, PCIC could have filed a motion for the early resolution of their Motion to Disclose after the apparent failure of the court to do so.  If PCIC had done so, it would possibly have discovered the error in the filing of said motion much earlier.  Finally, it is worth noting that the defendants also have the right to the speedy disposition of the case; the delay of the pre-trial and the trial might cause the impairment of their defenses.[19] 

 

 

WHEREFORE, the Petition is DENIED.  The Decision of the Court of Appeals dated July 20, 2006 in CA-G.R. CV No. 78834 is hereby AFFIRMED.

 

Costs against petitioner Philippine Charter Insurance Corporation.

 

SO ORDERED.

 

 

 

                                                 TERESITA J. LEONARDO-DE CASTRO

                                       Associate Justice

 

 

 

WE CONCUR:

 

 

 

RENATO C. CORONA

Chief Justice

Chairperson

 

 

 

 

 

 

LUCAS P. BERSAMIN

Associate Justice

MARIANO C. DEL CASTILLO

Associate Justice

 

 

 

 

 

 

 

 

 

 

 

 

MARTIN S. VILLARAMA, JR.

Associate Justice

 

 

 

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

 

 

 

RENATO C. CORONA
Chief Justice


[1]               Rollo, pp. 33-40; penned by Associate Justice Jose Catral Mendoza (now a member of this Court) with Associate Justices Elvi John S. Asuncion and Arturo G. Tayag, concurring.

[2]               CA rollo, p. 36.

[3]               Rollo, p. 43.

[4]               Id. at 90.

[5]               Id. at 110a.

[6]               Id. at 38-39.

[7]               G.R. No. 181020, November 25, 2009, 605 SCRA 566.

[8]               The trial court in the cited case dismissed the complaint on July 24, 2003, slightly less than one year from the plaintiff’s receipt of the Cautionary Answer on August 5, 2002. (Id. at 570.) 

[9]               Id. at 572-573.

[10]             Records, p. 75.

[11]             Id.

[12]             Id. at 37.

[13]             Rule 18, Section 1 provides that “[a]fter the last pleading has been served and filed, it shall be the duty of the plaintiff to promptly move ex parte that the case be set for pretrial.”

[14]             Records, pp. 141-144.

[15]             Id. at 141.

[16]             Id.

[17]             Id.

[18]             Id. at 1.

[19]             See Olave v. Mistas, G.R. No. 155193, November 26, 2004, 444 SCRA 479, 493.