Philippine Supreme Court Jurisprudence


Philippine Supreme Court Jurisprudence > Year 1954 > September 1954 Decisions > G.R. No. L-6060 September 30, 1954 - FERNANDO A. FROILAN v. PAN ORIENTAL SHIPPING CO.

095 Phil 905:




PHILIPPINE SUPREME COURT DECISIONS

EN BANC

[G.R. No. L-6060. September 30, 1954.]

FERNANDO A. FROILAN, Plaintiff-Appellee, v. PAN ORIENTAL SHIPPING CO., Defendant-Appellant, REPUBLIC OF THE PHILIPPINES, Intervenor-Appellee.

Quisumbing, Sycip, Quisumbing & Salazar, for Appellant.

Ernesto Zaragoza, for Appellee.

Hilarion U. Jarencio, for the intervenor.


SYLLABUS


1. PLEADING AND PRACTICE; COMPLAINT IN INTERVENTION; COUNTERCLAIM NOT BARRED BY PRIOR JUDGMENT FOR FAILURE TO APPEAL FROM DISMISSAL OF COMPLAINT IN INTERVENTION WITH RESERVATION. — An order dismissing the complaint in intervention after a counterclaim has been filed but reserving the right of the defendant as against the intervenor, does not bar at the defendant from proceeding with its counterclaim against the intervenor, notwithstanding the failure of the defendant to appeal from said order.

2. ID.; ID.; ID.; COUNTERCLAIM FOR SPECIFIC PERFORMANCE STATES A CAUSE OF ACTION. — The complaint in the intervention sought to recover possession of the vessel in question from the plaintiff, which claim is adverse to the position assumed by the defendant that it has a better right to said possession than the plaintiff, on the theory that the latter had already lost his rights over the same, and that, on the other hand, the defendant is relying on the charter contract executed in its favor by the intervenor. Held: The counterclaim calls for specific performance on the part of the intervenor and therefore states a cause of action.

3. ID.; ID.; ID.; ID.; FILING OF COMPLAINT N INTERVENTION BY THE GOVERNMENT IS WAIVER OF NONSUABILITY. — The filing by the Government of a complaint in intervention is in effect a wavier of its right of nonsuability.


D E C I S I O N


PARAS, C.J. :


The factual antecedents of this case are sufficiently recited in the brief filed by the intervenor-appellee as follows:jgc:chanrobles.com.ph

"1. On February 3, 1951, plaintiff-appellee, Fernando A. Froilan, filed a complaint against the defendant-appellant, Pan Oriental Shipping Co., alleging that he purchased from the Shipping Commission the vessel FS-197 for P200,000, paying P50,000 down and agreeing to pay the balance in installments; that to secure the payment of the balance of the purchase price, he executed a chattel mortgage of said vessel in favor of the Shipping Commission; that for various reasons, among them the non-payment of the installments, the Shipping Commission tool possession of said vessel and considered the contract of sale cancelled; that the Shipping Commission chartered and delivered said vessel to the defendant-appellant Pan Oriental Shipping Co. subject to the approval of the President of the Philippines; that he appealed the action of the Shipping Commission to the President of the Philippines and, in its meeting on August 25, 1950, the Cabinet restored him to all his rights under his original contract with the Shipping Commission; that he had repeatedly demanded from the Pan Oriental Shipping Co. the possession of the vessel in question but the latter refused to do so. He, therefore, prayed that, upon the approval of the bond accompanying his complaint, a writ of replevin be issued for the seizure of said vessel with all its equipment and appurtenances, and that after hearing, he be adjudged to have the rightful possession thereof (Rec. on App. pp. 2-8).

"2. On February 3, 1951, the lower court issued the writ of replevin prayed for by Froilan and by virtue thereof the Pan Oriental Shipping Co. was divested of its possession of said vessel (Rec. on App. p. 47).

"3. On March 1, 1951, Pan Oriental Shipping Co. filed its answer denying the right of Froilan to the possession of the said vessel; it alleged that the action of the Cabinet on August 25, 1950, restoring Froilan to his rights under his original contract with the Shipping Commission was null and void; that, in any event, Froilan had not complied with the condition precedent imposed by the Cabinet for the restoration of his rights to the vessel under the original contract; that it suffered damages in the amount of P22, 764.59 for wrongful replevin in the month of February, 1951, and the sum of P17,651.84 a month as damages suffered for wrongful replevin from March 1, 1951; it is alleged that it has incurred necessary and useful expenses on the vessel amounting to P127,057.31 and claimed the right to retain said vessel until its useful and necessary expenses had been reimbursed (Rec. on App. pp. 8-53).

"4. On November 10, 1951, after the leave of the lower court had been obtained, the intervenor-appellee, Government of the Republic of the Philippines, filed a complaint in intervention alleging that Froilan had failed to pay to the Shipping Commission (which name was later changed to Shipping Administration) the balance due on the purchase price of the vessel in question, the interest excluding the dry-docking expenses incurred on said vessel by the session of the said vessel either under the terms of the original contract as supplemented by Froilan’s letter dated January 28, 1949, or in order that it may cause the extrajudicial sale thereof under the Chattel Mortgage Law. It, therefore, prayed that Froilan be declared to be without any rights on said vessel and the amounts he paid thereon forfeited or alternately that the said vessel be delivered to the Board of Liquidators in order that the intervenor may have its chattel mortgage extrajudicially foreclosed in accordance with the provisions of the Chattel Mortgage Law; and that pending the hearing on the merits, the said vessel be delivered to its (Rec. on App. pp. 54-66).

"5. On November 29, 1951, the Pan Oriental Shipping Co. filed an answer to the complaint in intervention alleging that the Government of the Republic of the Philippines was obligated to deliver the vessel in question to it by virtue of a contract of bareboat charter with option to purchase executed on June 16, 1949, by the latter in favor of the former; it also alleged that it had made necessary and useful expenses of the vessel and claimed the right of retention of the vessel. It, therefore, prayed that, if the Republic vessel, to comply with its obligations of delivering to it (Pan Oriental Shipping Co.) or causing its delivery by recovering it from Froilan (Rec. on App. pp. 69-81).

"6. On November 29, 1951, Froilan tendered to the Board of Liquidators, which was liquidating the affairs of the Shipping Administration, a check in the amount of P162,576.96 in payment of his obligation to the Shipping Administration for the said vessel as claimed in the complaint in intervention of the Government of the Republic of the Philippines. The Board of Liquidators issued an official report therefor stating that it was a ’deposit pending the issuance of an order of the Court of First Instance of Manila’ (Rec. on App. pp. 92-93).

"7. On December 7, 1951, the Government of the Republic of the Philippines brought the matter of said payment and the circumstances surrounding it to the attention of the lower court ’in order that they may be taken into account by this Honorable Court in connection with question that are now pending before it for determination’ (Rec. on App. pp. 82-86).

"8. On February 3, 1952, the lower court held that the payment by Froilan of the amount of P162,576.96 On November 29, 1951, to the Board of Liquidators constituted a payment and a discharge of Froilan’s obligation to the Government of the Republic of the Philippines and ordered the dismissal of the latter’s complaint in intervention. In the same order, the lower court made it very clear that said order did not pre-judge the question involved between Froilan and the Oriental Shipping Co. which was also pending determination in said court (Rec. on App. pp. 92-93). This order dismissing the complaint in intervention, but reserving for future adjudication the controversy between Froilan and the Pan Oriental Shipping Co. had already become final since neither the Government of the Republic of the Philippines nor the Pan Oriental Shipping Co. had appealed therefrom.

"9. On May 10, 1952, the Government of the Republic of the Philippines filed a motion to dismiss the counterclaim of the Pan Oriental Shipping Co. against it on the ground that the purpose of said counterclaim was to compel the Government of the Republic of the Philippines to deliver the vessel to it (Pan Oriental Shipping Co.) in the event that the Government of the Republic of the Philippines recovers the vessel in question from Froilan. In view, however, of the order of the order of the lower court dated February 3, 1952, holding that the payment made by Froilan’s obligation to the Shipping Administration, which order had already become final, the counterclaim of the Pan Oriental Shipping Co. against the Republic of the Philippines was no longer feasible, said counterclaim was barred by prior judgment and stated no cause of action. It was also alleged that movant was not subject to the jurisdiction of the court in connection with the counterclaim. (Rec. on App. pp. 94-97). This motion was opposed by the Pan Oriental Shipping Co. in its written opposition dated June 4, 1952 (Rec. on App. pp. 19-104).

"10. In an order dated July 1, 1952, the lower court dismissed the counterclaim of the Pan Oriental Shipping Co. as prayed for by the Republic of the Philippines (Rec. App. pp. 104-106).

"11. It is from this order of the lower court dismissing its counterclaim against the Government of the Republic of the Philippines that Pan Oriental Shipping Co. has perfected the present appeal (Rec. App. pp. 107)."cralaw virtua1aw library

The order of the Court of First Instance of Manila, dismissing the counterclaim of the defendant Pan Oriental Shipping Co., from which the latter has appealed, reads as follows:jgc:chanrobles.com.ph

"This is a motion to dismiss the counterclaim interposed by the defendant in its answer to the complaint in intervention.

"The counterclaim stated as follows:chanrob1es virtual 1aw library

‘COUNTERCLAIM

‘As counterclaim against the intervenor Republic of the Philippines, the defendant alleges:chanrob1es virtual 1aw library

‘1. That the defendant reproduces herein all the pertinent allegations of the foregoing answer to the complaint in intervention.

‘2. That, as shown by the allegations of the foregoing answer to the complaint in intervention, the defendant Pan Oriental Shipping Company is entitled to the possession of the vessel and the intervenor Republic of the Philippines is bound under the contract of charter with option to purchase it entered into with the defendant to deliver that possession to the defendant — whether it actually has the said possession from the plaintiff Fernando A. Froilan and deliver the same to the defendant;

‘3. That, notwithstanding demand, the intervenor Republic of the Philippines has not to date complied with its obligation of delivering or causing the delivery of the vessel to the defendant Pan Oriental Shipping Company.

‘RELIEF

‘WHEREFORE, the defendant respectfully prays that judgment be rendered ordering the intervenor Republic of the Philippines alternatively to deliver to the defendants the possession of the said vessel, or to comply with its obligation to the defendant causing the delivery to the latter of the said vessel by recovering the same from plaintiff, with costs.

‘The defendant prays for such other remedy as the Court may deem just and equitable in the premises."cralaw virtua1aw library

"The ground of the motion to dismiss are (a) That the cause of action is barred by prior judgment; (b) That the counterclaim stated no cause of action; (c) That this Honorable Court has no jurisdiction over the intervenor government of the Republic of the Philippines in connection with the counterclaim of the defendant Pan Oriental Shipping Co.

"The intervenor contends that the complaint in intervention having been dismissed and no appeal having been taken, the dismissal of said complaint is tantamount to a judgment.

"The complaint in intervention did not contain any claim whatsoever against the defendant Pan Oriental Shipping Co.; hence, the counterclaim has no foundation.

"The question as to whether the Court has jurisdiction over the intervenor with regard to the counterclaim, the Court is of the opinion that it has no jurisdiction over said intervenor.

"It appearing, therefore, that the grounds of the motion to dismiss are well taken, the counterclaim of the defendant is dismissed, without pronouncement as to costs."cralaw virtua1aw library

The defendant’s appeal is predicated upon the following assignments of error:jgc:chanrobles.com.ph

"I. The lower court erred in dismissing the counterclaim on the ground of prior judgment.

II. The lower court erred in dismissing the counterclaim on the ground that the counterclaim had no foundation because made to a complaint in intervention that over the intervenor Republic of the Philippines.

III. The lower court erred in dismissing the counterclaim on the ground of alleged lack of jurisdiction over the intervenor Republic of the Philippines."cralaw virtua1aw library

We agree with appellant’s contention that its counterclaim is not barred by prior judgment (order of February 8, 1952, dismissing the complaint in intervention), first, because said counterclaim was filed on November 29, 1951, before the issuance of the order invoked; and, secondly, because in said order of February 8, the court dismissed the complaint in intervention, "without, of course, precluding the determination of the right of the defendant in the instant case," and subject to the condition that the "release and cancellation of the chattel mortgage does not, however, prejudge the question involved between the plaintiff and the defendant which is still the subject of determination in this case." It is to be noted that the first condition referred to the right of the defendant, as distinguished from the second condition that expressly specified the controversy between the plaintiff and the defendant. That the first condition reserved the right of the defendant as against the intervenor, is clearly to be deduced from the fact that the order of February 8 mentioned the circumstance that "the question of the expenses of drydocking incurred by the counterclaim against the plaintiff," apparently as one of the grounds for granting the motion to dismiss the complaint in intervention.

The defendant’s failure to appeal from the order of February 8 cannot, therefore, be held as barring the defendant from proceeding with its counterclaim, since, as already stated, said order preserved its right as against the intervenor. Indeed, the maintenance of said right is in consonance with Rule 30, section 2, of the Rules of Court providing that "if a counterclaim has been pleaded by a defendant prior to the service upon him of the plaintiff’s motion to dismiss, the action shall not be dismissed against the defendant’s objection unless the counterclaim can remain pending for independent adjudication by the court."cralaw virtua1aw library

The lower court also erred in holding that, as the intervenor had not made any claim against the defendant, the latter’s counterclaim had no foundation. The complaint in intervention sought to recover possession of the vessel in question from the plaintiff, and this claim is logically adverse to the position assumed by the defendant that it has a better right to said possession than the plaintiff who alleges in his complaint that he is entitled to recover the vessel from the defendant. At any rate a counterclaim should judge by its own allegations, and not by the averments of the adverse party. It should be recalled that the defendant’s theory is that the plaintiff had already lost his rights under the contract with the Shipping Administration and that, on the other hand, the defendant is relying on the charter contract executed in its favor by the intervenor which is bound to protect the defendant in its possession of the vessel. In other words, the counter-claim calls for specific performance on the part of the intervenor. As to whether this counterclaim is meritorious is another question is not now before us.

The other ground for dismissing the defendant’s counterclaim is that the State is immune from suit. This is untenable, because by filing its complaint in intervention the Government in effect waived its right of nonsuability.

"The immunity of the state from the suits does not deprive it of the right to sue private parties in its own courts. The state as plaintiff may avail itself of the different forms of actions open to private litigants. In short, by taking the initiative in an action against a private party, the state surrenders its privileged position and comes down to the level of the defendant. The latter automatically acquires, within certain limits, the right to set up whatever claims and other defense he might have against the state. The United States Supreme Court thus explains:chanrob1es virtual 1aw library

‘No direct suit can be maintained against the United States. But when an action is brought by the United States to recover money in the hands of a party who has a legal claim against them, it would be a very rigid principle to deny to him the right of setting up such claim in a court of justice, and turn him around to an application to Congress.’." (Sinco, Philippine Political Law, Tenth Ed., pp. 36-37. citing U.S. v. Ringgold, 8 Pet. 150, 8 L. ed. 899.)

It is however, contended for the intervenor that, if there was at all any waiver, it was in favor of the plaintiff against whom the complainant in intervention was directed. This contention is untenable. As already stated, the complaint in intervention was in a sense in derogation of the defendant’s claim over the possession of the vessel in question.

Wherefore, the appealed order is hereby reversed and set aside and the case remanded to the lower court for further proceedings. So ordered, without costs.

Pablo, Padilla, Montemayor, Reyes, A., Jugo, Bautista Angelo, Concepcion and Reyes, J.B.L., JJ., concur.




Back to Home | Back to Main




















chanrobles.com





ChanRobles On-Line Bar Review

ChanRobles Internet Bar Review : www.chanroblesbar.com

ChanRobles MCLE On-line

ChanRobles Lawnet Inc. - ChanRobles MCLE On-line : www.chanroblesmcleonline.com






September-1954 Jurisprudence                 

  • G.R. No. L-6647 September 2, 1954 - PEOPLE OF THE PHIL. v. MANUEL VIROLA, ET AL.

    095 Phil 759

  • G.R. Nos. L-7594 & 7596 September 8, 1954 - INSUREFCO PAPER PULP & PROJECT WORKER’S UNION v. SUGAR REFINING CORPORATION

    095 Phil 761

  • G.R. No. L-6312 September 9, 1954 - PEOPLE OF THE PHIL. v. W. D. CHAPMAN

    095 Phil 770

  • G.R. No. L-5585 September 16, 1954 - IN RE: ROMAN OZAETA v. ROSA GONZALES VDA. DE PALANCA, ET AL.

    095 Phil 775

  • G.R. No. L-6017 September 16, 1954 - ONG SE LUN AND GO UAN v. BOARD OF IMMIGRATION COMMISSIONERS, ET AL.

    095 Phil 785

  • G.R. No. L-6074 September 16, 1954 - DAMASO RODRIGO v. GUILLERMO CABRERA, ET AL.

    095 Phil 790

  • G.R. No. L-6851 September 16, 1954 - FEDERICO MAGALLANES, ET AL. v. COURT OF APPEALS, ET AL.

    095 Phil 795

  • G.R. No. L-6902 September 16, 1954 - URBANO CASILLAN v. FRANCISCA E. VDA. DE ESPARTERO, ET AL.

    095 Phil 799

  • G.R. No. L-7344 September 16, 1954 - SUSANA VILLORIA v. EDMUNDO PICCIO, ET AL.

    095 Phil 802

  • G.R. No. L-7648 September 17, 1954 - JOSE DE LEON, ET AL. v. ASUNCION SORIANO, ET AL.

    095 Phil 806

  • G.R. No. L-6711 September 20, 1954 - REGISTER OF DEEDS OF MANILA v. MAXIMA TINOCO VDA. DE CRUZ, ET AL.

    095 Phil 818

  • G.R. No. L-6442 September 21, 1954 - TRADERS INSURANCE & SURETY CO. v. JUAN GOLANGCO Y OTRA

    095 Phil 824

  • G.R. No. L-6760 September 22, 1954 - IN RE: FRANCISCA GARCIA v. RODOLFO RIVERA

    095 Phil 831

  • G.R. No. L-7201 September 22, 1954 - DEE C. CHUAN & SONS, INC. v. BENITO NAHAG, ET AL.

    095 Phil 837

  • G.R. No. L-5877 September 28, 1954 - PEOPLE OF THE PHIL. v. ARTURO MENDOZA

    095 Phil 845

  • G.R. No. L-6205 September 28, 1954 - DIONISIA CAÑAVERAL, ET AL. v. DEMETRIO C. ENCARNACION, ET AL.

    095 Phil 848

  • G.R. No. L-6801 September 28, 1954 - HERBERT BROWNELL v. MACARIO BAUTISTA

    095 Phil 853

  • G.R. No. L-6866 September 28, 1954 - PEOPLE OF THE PHIL. v. SOTERO ANITO

    095 Phil 865

  • G.R. No. L-6920 September 28, 1954 - BLUE BAR COCONUT COMPANY, ET AL. v. JOAQUIN BOO

    095 Phil 867

  • G.R. No. L-5295 September 29, 1954 - CARLOS IÑIGO, ET AL. v. NATIONAL ABACA & OTHER FIBERS CORPORATION, ET AL.

    095 Phil 875

  • G.R. No. L-5828 September 29, 1954 - EUFEMIA ACIERTO, ET AL. v. FRANCISCO DE LOS SANTOS, ET AL.

    095 Phil 887

  • G.R. No. L-6379 September 29, 1954 - IN RE: WILFRED UYTENGSU v. REPUBLIC OF THE PHIL.

    095 Phil 890

  • G.R. No. L-6606 September 29, 1954 - JOSE M. LEZAMA v. EMUNDO PICCIO, ET AL.

    095 Phil 899

  • G.R. No. L-6060 September 30, 1954 - FERNANDO A. FROILAN v. PAN ORIENTAL SHIPPING CO.

    095 Phil 905

  • G.R. No. L-6425 September 30, 1954 - MAGDALEN VILLADORES Y ORTO v. EL HONORABLE DEMETRIO B. ENCARNACION

    095 Phil 913

  • G.R. No. L-6629 September 30, 1954 - EUFROCINA HIDALGO CABACUNGAN, ET AL. v. QUINTIN CORRALES, ET AL.

    095 Phil 919

  • G.R. No. L-6637 September 30, 1954 - WARNER BARNES & CO., LTD. v. LUZON SURETY CO., INC.

    095 Phil 924

  • G.R. No. L-6904 September 30, 1954 - PINEDA & AMPIL MANUFACTURING CO., ET AL. v. ARSENIO BARTOLOME, ET AL.

    095 Phil 930

  • G.R. No. L-7199 September 30, 1954 - CONCEPCION NAVAL, ET AL. v. DOLORES JONSAY, ET AL.

    095 Phil 939