Caltex (Philippines), Inc. vs. Singzon-Aguirre

A waiver of the defense of prescription cannot be given effect to revive a complaint whose dismissal has already become final and executory, where the party invoking the waiver voluntarily submitted to the jurisdiction of the dismissing court and thereafter failed to avail of any legal remedy to challenge the dismissal within the reglementary period.

The M/V Doña Paz, an inter-island passenger vessel owned and operated by Sulpicio Lines, Inc., collided with M/T Vector, a commercial tanker owned by Vector Shipping Corporation, on the night of December 20, 1987, while M/T Vector was chartered by the Caltex entities (petitioners) to transport petroleum products. The collision caused an estimated 4,000 casualties and was described as the world's worst peacetime maritime disaster. The respondents are the heirs of the victims, numbering 1,689 claimants, who sought damages for breach of contract of carriage and quasi-delict. Three consolidated cases concerning the same collision were already pending before the RTC of Manila, Branch 39.

On the night of December 20, 1987, the M/V Doña Paz, an inter-island passenger vessel owned and operated by Sulpicio Lines, Inc., collided with M/T Vector, a commercial tanker owned by Vector Shipping Corporation, while traversing its Leyte to Manila route. M/T Vector had been chartered by the Caltex entities (petitioners) to transport petroleum products. The collision produced an inferno at sea with an estimated 4,000 casualties, described as the world's worst peacetime maritime disaster.

In December 1988, the heirs of the victims (respondents) instituted a class action before the Civil District Court for the Parish of Orleans, Louisiana, docketed as Civil Case No. 88-24481. On November 30, 2000, the Louisiana Court entered a conditional judgment dismissing the case on the ground of forum non conveniens. This prompted 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 RTC of Catbalogan, Samar, Branch 28, against the petitioners, Sulpicio, Vector Shipping, and Steamship Mutual Underwriting Association, Bermuda Limited, docketed as Civil Case No. 7277.

On March 28, 2001, the RTC of Catbalogan dismissed the complaint motu proprio pursuant to Section 1, Rule 9 of the 1997 Rules of Civil Procedure on the ground that the respondents' cause of action had already prescribed. In an unusual turn of events, the petitioners, who had not been served with summons, filed a motion for reconsideration alleging that they were waiving their defense of prescription. The RTC of Catbalogan merely noted the petitioners' motion on September 4, 2001, on the impression that the defense of prescription could not be waived. The dismissal prompted the respondents to seek reinstatement before the Louisiana Court, but the petitioners argued that the Philippines—specifically the RTC of Manila, Branch 39, where three consolidated cases concerning the same collision were pending—offered a more convenient forum. On March 27, 2002, the Louisiana Court again conditionally dismissed the action, ordering the respondents to intervene in the consolidated cases before the RTC of Manila.

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 RTC of Manila. The petitioners unconditionally waived the defense of prescription in their Manifestation dated April 24, 2002 and reiterated the same in their Comment/Consent to Intervention dated May 16, 2002. Sulpicio and Steamship likewise expressed no objection. On July 2, 2002, however, the RTC of Manila denied the motion to intervene, ruling that the RTC of Catbalogan had already dismissed the case with finality and that the waivers of prescription were of no moment. The motion for reconsideration was denied on August 30, 2002. The CA affirmed, holding that the finality of the RTC of Catbalogan's order constituted res judicata and that the petitioners' filing of a motion for reconsideration before that court amounted to voluntary submission to its jurisdiction.

• Absence of Res Judicata Elements: Petitioner contended that not all elements of res judicata were present because the RTC of Catbalogan did not acquire jurisdiction over their persons and the judgment was not one on the merits.
• Lack of Due Process: Petitioner argued 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.
• Inconsistent Treatment of Prescribed Claims: Petitioner bewailed that other complaints were accepted by the RTC of Manila in the consolidated cases despite prescription of the cause of action.
• Waiver of Prescription as the Real Issue: Petitioner posited that the real issue of merit was whether the defense of prescription that has matured can be waived, invoking Article 1112 of the Civil Code as substantive law prevailing over the procedural rule on motu proprio dismissal.
• Preclusion by Respondents: Petitioner explained that they were unable to file an action for annulment of judgment against the RTC of Catbalogan's order because the respondents precluded them by filing a motion for intervention in the consolidated cases before the RTC of Manila.

• Bar by Prior Judgment, Not Waiver: Respondent maintained that the issue was not waiver of prescription but bar by prior judgment, because when the motion for intervention was filed, the RTC of Catbalogan's dismissal was already final.
• Failure to Pursue Available Remedies: Respondent argued that if the petitioners intended to reverse the dismissal, they should have appealed from the RTC of Catbalogan's order, filed a petition for certiorari, or an action to nullify the same.
• No Preclusion by Respondents: Respondent elucidated that they could not have precluded the petitioners from assailing the RTC of Catbalogan's orders because the motion for intervention before the RTC of Manila was filed only on May 6, 2002, more than a year after the Catbalogan dismissal, and only in deference to the Louisiana Court's second order of dismissal.
• Prohibition on Collateral Attack: Respondent contended that the CA correctly held that the petitioners could not collaterally attack the final order of the RTC of Catbalogan, as conflicting rulings between two co-equal courts must be avoided.

• Bar by Prior Judgment: 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.
• Waiver of Prescription vs. Finality of Judgment: Whether the CA erred in affirming the RTC of Manila's disregard of the petitioners' waiver of prescription on the ground of bar by prior judgment.

• Bar by Prior Judgment: No. The final and executory dismissal of the complaint by the RTC of Catbalogan barred the filing of the complaint-in-intervention before the RTC of Manila, there being no appeal or other legal remedy perfected in due time by either party.
• Waiver of Prescription vs. Finality of Judgment: No. The petitioners' waiver of prescription was ineffectual once the dismissal became final and executory as to them, they having voluntarily submitted to the RTC of Catbalogan's jurisdiction and then failed to pursue available remedies to challenge the dismissal.

• Bar by Prior Judgment: The respondents' cause of action had unquestionably prescribed, as they filed suit more than thirteen years after the December 20, 1987 collision. The RTC of Catbalogan properly dismissed the complaint motu proprio under Section 1, Rule 9 of the 1997 Rules of Civil Procedure, as the facts supporting prescription were apparent from the pleadings. Although the petitioners had not been served with summons, they voluntarily submitted to the RTC of Catbalogan's jurisdiction by filing a motion for reconsideration on July 2, 2001, seeking affirmative relief. Under Section 20, Rule 14 of the Rules of Court, voluntary appearance is equivalent to service of summons. The order of March 28, 2001 was final as to the respondents on April 13, 2001, but not yet final as to the petitioners, who were not yet under the court's jurisdiction at that point. It was only when the RTC of Catbalogan noted the petitioners' motion for reconsideration on September 4, 2001—effectively denying it—that the reglementary period to assail the order commenced to run for the petitioners. Neither party appealed or sought any other remedy, and the dismissal thus became final and executory as to both. A dismissal on a technicality is no different in effect from a dismissal on the merits. Because the dismissal was final, the RTC of Manila could no longer entertain a similar action from the same parties.

• Waiver of Prescription vs. Finality of Judgment: Article 1112 of the Civil Code allows persons with capacity to alienate property to renounce prescription already obtained, and the Court acknowledged that the right to prescription may be waived. The petitioners expressly renounced the defense of prescription on multiple occasions. However, the waiver could not serve as a basis to reverse the lower courts' rulings because the dismissal had already become final and binding on both parties. The petitioners' attempt to justify their failure to file an action for annulment of judgment by claiming that the respondents precluded them was untenable, as the respondents filed their complaint-in-intervention more than a year after the Catbalogan dismissal. The petitioners had available remedies—an appeal from the order noting their motion for reconsideration, an action for annulment of judgment, or a petition for certiorari under Rule 65—but pursued none. The only logical conclusion was that the petitioners abandoned their right to waive the defense of prescription. The Court further noted that in related cases, the petitioners had already been exonerated from third-party liability as a mere voyage charterer, so allowing reinstatement would risk conflicting decisions, while deciding in favor of the petitioners would yield the same result as a dismissal.

• Voluntary Submission to Jurisdiction — A court acquires jurisdiction over the person of a defendant by valid service of summons or through voluntary submission. Filing a motion seeking affirmative relief, such as a motion for reconsideration, constitutes voluntary appearance equivalent to service of summons under Section 20, Rule 14 of the Rules of Court. The Court applied this doctrine to hold that the petitioners, though not served with summons, voluntarily submitted to the RTC of Catbalogan's jurisdiction when they filed their motion for reconsideration seeking to overturn the dismissal.

• Finality of Judgment — A judgment or order that has become final and executory is immutable and unalterable, and a party is barred from assailing the correctness of a judgment not appealed. A dismissal on a technicality is no different in effect and consequences from a dismissal on the merits. The Court applied this principle to hold that because neither party appealed the RTC of Catbalogan's orders, the dismissal became final and binding, precluding the RTC of Manila from entertaining a similar action.

• Waiver of Prescription — Pursuant to Article 1112 of the Civil Code, persons with capacity to alienate property may renounce prescription already obtained, but not the right to prescribe in the future. Prescription is deemed tacitly renounced when the renunciation results from acts implying abandonment of the right acquired. The Court held that while waiver of prescription is recognized, it cannot be invoked to revive a complaint whose dismissal has already become final and executory, especially where the waiving party failed to pursue available legal remedies to challenge the dismissal.

• Extinctive Prescription — Rights and actions are lost by the lapse of time fixed by law; the purpose is to protect the diligent and vigilant and to suppress fraudulent and stale claims. The Court found that the respondents' cause of action had prescribed, as suit was filed more than thirteen years after the collision, and courts may consider prescription motu proprio when the facts supporting it are apparent from the pleadings or evidence on record.

• "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." — This passage encapsulates the ratio decidendi: the Court's holding that waiver of prescription is unavailing where the party invoking it failed to pursue available remedies before the dismissal became final.

• "[A] dismissal on a technicality is no different in effect and consequences from a dismissal on the merits." — This formulation articulates the doctrinal equivalence between technical and merits-based dismissals for purposes of finality and bar by prior judgment, and is frequently cited in subsequent jurisprudence on finality of judgments.

• "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." — This passage clarifies the critical distinction between finality as to parties who were already under the court's jurisdiction and finality as to parties who submitted to jurisdiction only upon filing a motion, marking the point from which the reglementary period to appeal begins to run for the latter.

• Philippine Commercial International Bank vs. Spouses Dy Hong Pi, et al., 606 Phil. 615 (2009) — Followed. The Court relied on this case for the doctrine that filing a motion seeking affirmative relief constitutes voluntary submission to the jurisdiction of the court, and that failure to explicitly object to jurisdiction in an unequivocal manner amounts to voluntary appearance.

• Cua (Cua Hian Tek) vs. Wallem Philippines Shipping, Inc., et al., 690 Phil. 491 (2012) — Followed. Cited for the proposition that prescription may be considered by courts motu proprio if the facts supporting the ground are apparent from the pleadings or evidence on record.

• Vector Shipping Corporation, et al. vs. Macasa, et al., 581 Phil. 88 (2008) — Noted. The Court took judicial notice of this ruling where the petitioners, as a mere voyage charterer, were exonerated from third-party liability in the M/V Doña Paz collision, supporting the observation that allowing reinstatement would risk conflicting decisions.

• Caltex (Philippines) Inc. vs. Sulpicio Lines, Inc., 374 Phil. 325 (1999) — Noted. Similarly cited for the proposition that the petitioners had already been exonerated from liability in the same collision, reinforcing the practical consequence that dismissal would yield the same result as a decision on the merits in their favor.

• General Offset Press, Inc. vs. Anatalio, et al., 124 Phil. 80 (1966) — Followed. Cited for the principle that a dismissal on a technicality is no different in effect and consequences from a dismissal on the merits.

• Article 1106, Civil Code — Defines prescription as a mode of acquiring ownership and real rights through lapse of time (acquisitive prescription) and as the loss of rights and actions through lapse of time (extinctive prescription). The Court identified the case as involving extinctive prescription.

• Article 1112, Civil Code — Allows persons with capacity to alienate property to renounce prescription already obtained but not the right to prescribe in the future. The Court acknowledged this provision as the basis for waiver of prescription but held it unavailing once the dismissal became final.

• Article 1139, Civil Code — States that actions prescribe by the mere lapse of time fixed by law. Applied to confirm that the respondents' cause of action had prescribed.

• Articles 1144, 1145, and 1146, Civil Code — Set the prescriptive periods for various actions: ten years for written contracts, obligations created by law, and judgments; six years for oral contracts and quasi-contracts; and four years for injury to rights and quasi-delicts. Cited to underscore that the respondents' filing more than thirteen years after the collision was clearly beyond any applicable prescriptive period.

• Section 1, Rule 9, 1997 Rules of Civil Procedure — Authorizes courts to dismiss claims motu proprio on grounds apparent from the pleadings or evidence on record, including prescription. Applied to sustain the RTC of Catbalogan's dismissal.

• Section 20, Rule 14, 1997 Rules of Civil Procedure — Provides that the defendant's voluntary appearance in the action is equivalent to service of summons. Applied to hold that the petitioners' filing of a motion for reconsideration constituted voluntary submission to the RTC of Catbalogan's jurisdiction.

• Section 9, Rule 37, Rules of Court — Provides that the remedy against an order denying a motion for reconsideration is to appeal from the judgment or final order, not from the order of denial itself. Cited to show that the petitioners had an available remedy they failed to pursue.

Sereno, C.J., Velasco, Jr., J. (Chairperson), Perez, J., and Jardeleza, J., concurred.