Archive for January, 2011






Anent the first procedural issue, the Court has summarized the jurisprudential principles on the matter in Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue.[1][15]  In said case, we held that a President of a corporation, among other enumerated corporate officers and employees, can sign the verification and certification against of non-forum shopping in behalf of the said corporation without the benefit of a board resolution.  We quote the pertinent portion of the decision here:

It must be borne in mind that Sec. 23, in relation to Sec. 25 of the Corporation Code, clearly enunciates that all corporate powers are exercised, all business conducted, and all properties controlled by the board of directors. A corporation has a separate and distinct personality from its directors and officers and can only exercise its corporate powers through the board of directors. Thus, it is clear that an individual corporate officer cannot solely exercise any corporate power pertaining to the corporation without authority from the board of directors. This has been our constant holding in cases instituted by a corporation.

In a slew of cases, however, we have recognized the authority of some corporate officers to sign the verification and certification against forum shopping. In Mactan-Cebu International Airport Authority v. CA, we recognized the authority of a general manager or acting general manager to sign the verification and certificate against forum shopping; in Pfizer v. Galan, we upheld the validity of a verification signed by an “employment specialist” who had not even presented any proof of her authority to represent the company; in Novelty Philippines, Inc. v. CA, we ruled that a personnel officer who signed the petition but did not attach the authority from the company is authorized to sign the verification and non-forum shopping certificate; and in Lepanto Consolidated Mining Company v. WMC Resources International Pty. Ltd. (Lepanto), we ruled that the Chairperson of the Board and President of the Company can sign the verification and certificate against non-forum shopping even without the submission of the board’s authorization.



In sum, we have held that the following officials or employees of the company can sign the verification and certification without need of a board resolution: (1) the Chairperson of the Board of Directors, (2) the President of a corporation, (3) the General Manager or Acting General Manager, (4) Personnel Officer, and (5) an Employment Specialist in a labor case.

While the above cases do not provide a complete listing of authorized signatories to the verification and certification required by the rules, the determination of the sufficiency of the authority was done on a case to case basis. The rationale applied in the foregoing cases is to justify the authority of corporate officers or representatives of the corporation to sign the verification or certificate against forum shopping, being “in a position to verify the truthfulness and correctness of the allegations in the petition.”[2][16] (Emphases supplied.)




Nonetheless, under the circumstances of this case, it bears reiterating that the requirement of the certification of non-forum shopping is rooted in the principle that a party-litigant shall not be allowed to pursue simultaneous remedies in different fora, as this practice is detrimental to an orderly judicial procedure.  However, the Court has relaxed, under justifiable circumstances, the rule requiring the submission of such certification considering that, although it is obligatory, it is not jurisdictional.  Not being jurisdictional, it can be relaxed under the rule of substantial compliance.[3][18]

[1][15]          G.R. No. 151413, February 13, 2008, 545 SCRA 10.

[2][16]          Id. at 17-19.

[3][18]          PNCC Skyway Traffic Management and Security Division Workers Organization (PSTMSDWO) v. PNCC Skyway Corporation, G.R. No. 171231, February 17, 2010.



x —————————————————————– x





This case is about the trial court’s grant of a petition for the issuance of a writ of possession before the possessor of the property could be heard on her opposition and its subsequent denial of her motion for reconsideration.

The Facts and the Case

In a foreclosure sale, petitioner China Banking Corporation (China Bank) acquired title[1][1] over respondent Armi S. Abel’s property at La Vista Subdivision, Quezon City, she having failed to pay her loan.  To enforce its ownership, in January 2003 China Bank filed with the Regional Trial Court (RTC) of Quezon City in LRC Case Q-16014(03) an ex parte petition for the issuance of a writ of possession in its favor.

On October 2, 2003 the RTC rendered a decision, granting China Bank’s petition and directing the issuance of a writ of possession over the property in its favor.  Abel appealed from this decision but lost her appeal[2][2] in the Court of Appeals (CA).  She filed a petition for review before this Court in G.R. 169229 but this, too, failed.  She filed a motion for reconsideration and a second similar motion without success.  The Court’s judgment became final and executory and, eventually, the record of her case was remanded to the RTC for execution.

China Bank filed a motion for execution with the RTC, setting it for hearing on June 8, 2007.  On June 7, 2007 Abel filed a motion to cancel and reset the hearing on the ground that she needed more time to comment on or oppose the bank’s motion.  On June 8, 2007 the RTC granted her the 10-day period she asked but “from notice.”

On June 19, 2007, noting Abel’s failure to file her opposition to or comment on the motion for execution, the RTC issued an Order granting China Bank’s motion.  After being served with the notice to vacate, Abel filed on June 21, 2007 an omnibus urgent motion for reconsideration and to admit her opposition to the bank’s motion for execution.  She set her urgent motion for hearing on June 29, 2007.  On June 22, 2007, however, the day after receiving her motion, the RTC denied the same for lack of merit.

On June 25, 2007 the sheriff implemented the writ against Abel and placed China Bank in possession of the subject property.  On even date, Abel filed a petition for certiorari with the CA in CA-G.R. SP 99413, assailing the RTC’s June 19 and 22, 2007 Orders.  On July 2, 2007, a Saturday, Abel took back possession of the premises on the strength of a Temporary Restraining Order (TRO) that the CA issued on June 29, 2007.

On January 3, 2008 the CA rendered a decision,[3][3] setting aside the assailed orders of the RTC.  China Bank moved for its reconsideration but the CA denied this in an April 9, 2008 Resolution.[4][4]  The CA ruled that the RTC committed grave abuse of discretion in granting the bank’s motion for execution, noting that the latter court gave Abel 10 days from notice of its order, not 10 days from the issuance of such order, within which to file her opposition.  Parenthetically, the shorter period was what she asked for in her motion for postponement.  But there was no proof, said the CA, as to when Abel had notice of the RTC’s June 8, 2007 Order as to determine when the 10-day period actually began to run.

China Bank thus filed this petition for review on certiorari against the CA decision and resolution denying its motion for reconsideration. 

The Issue Presented

The issue in this case is whether or not the CA erred in setting aside the assailed RTC’s June 19 and 22, 2007 Orders on the ground of failure to observe due process respecting Abel’s right to be heard on the bank’s motion for execution.

The Court’s Ruling

The CA erred in attributing grave abuse of discretion to the RTC.  Although the RTC caused the issuance of the writ of execution before it could establish that Abel’s 10 days “from notice” within which to file her opposition had lapsed, she filed with that court on June 21, 2007 an urgent motion for reconsideration with her opposition to the motion for execution attached.  The Court, acting on her motion, denied it on the following day, June 22, 2007.  Any perceived denial of her right to be heard on the bank’s motion for execution had been cured by her motion for reconsideration and the RTC’s action on the same. 

True, Abel gave notice to China Bank that she would submit her motion for reconsideration for the RTC’s consideration on June 29, 2007 but that notice is for the benefit of the bank, not for her, that it may be heard on the matter.  She cannot complain that the court acted on her motion more promptly than she expected especially since she actually offered no legitimate reason for opposing the issuance of a writ of possession in the bank’s favor. 

Orders for the issuance of a writ of possession are issued as a matter of course upon the filing of the proper motion and approval of the corresponding bond since no discretion is left to the court to deny it.[5][5]  The RTC’s issuance of such writ conformably with the express provisions of law cannot be regarded as done without jurisdiction or with grave abuse of discretion.  Such issuance being ministerial, its execution by the sheriff is likewise ministerial.[6][6]  In truth, the bank has failed to take possession of the property after more than seven years on account of Abel’s legal maneuverings.

ACCORDINGLY, the Court GRANTS the petition of China Banking Corporation, REVERSES and SETS ASIDE the Court of Appeals decision dated January 3, 2008 and resolution dated April 9, 2008 in CA-G.R. SP 99413, and REINSTATES the orders of the Regional Trial Court (Branch 220) in LRC Case Q-16014(03) dated June 19 and 22, 2007.  With costs against respondent Armi S. Abel.




                                                              Associate Justice





Associate Justice


                  Associate Justice                                    Associate Justice


Associate Justice


          I attest 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.

                                                      ANTONIO T. CARPIO

                                                   Associate Justice

                                Chairperson, Second Division                  





          Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, 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][1]  Transfer Certificate of Title N-241387 in the name of China Banking Corporation.

[2][2]  CA-G.R. CV 80522.

[3][3] Rollo, pp. 49-61; penned by Associate Justice Vicente S.E. Veloso, with the concurrence of Associate Justices Juan Q. Enriquez, Jr. and Marlene Gonzales-Sison.

[4][4]  Id. at 62-63.

[5][5]  Spouses Camacho v. Philippine National Bank, 415 Phil. 581, 586 (2001).

[6][6]  Mamerto Maniquiz Foundation, Inc. v. Pizarro, 489 Phil. 127, 138 (2005).


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          This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court assailing the August 24, 2007 Decision[1][1] of the Court of Appeals (CA) in CA-G.R. CV No. 82822, entitled “R&B Insurance Corporation v. Glodel Brokerage Corporation and Loadmasters Customs Services, Inc.,” which held petitioner Loadmasters Customs Services, Inc. (Loadmasters) liable to respondent Glodel Brokerage Corporation (Glodel) in the amount of P1,896,789.62 representing the insurance indemnity which R&B Insurance Corporation (R&B Insurance) paid to the insured-consignee, Columbia Wire and Cable Corporation (Columbia).


          On August 28, 2001, R&B Insurance issued Marine Policy No. MN-00105/2001 in favor of Columbia to insure the shipment of 132 bundles of electric copper cathodes against All Risks.  On August 28, 2001, the cargoes were shipped on board the vessel “Richard Rey” from Isabela, Leyte, to Pier 10, North Harbor, Manila.  They arrived on the same date.

Columbia engaged the services of Glodel for the release and withdrawal of the cargoes from the pier and the subsequent delivery to its warehouses/plants.  Glodel, in turn, engaged the services of Loadmasters for the use of its delivery trucks to transport the cargoes to Columbia’s warehouses/plants in Bulacan and Valenzuela City.

The goods were loaded on board twelve (12) trucks owned by Loadmasters, driven by its employed drivers and accompanied by its employed truck helpers.  Six (6) truckloads of copper cathodes were to be delivered to Balagtas, Bulacan, while the other six (6) truckloads were destined for Lawang Bato, Valenzuela City.  The cargoes in six truckloads for Lawang Bato were duly delivered in Columbia’s warehouses there.  Of the six (6) trucks en route to Balagtas, Bulacan, however, only five (5) reached the destination.  One (1) truck, loaded with 11 bundles or 232 pieces of copper cathodes, failed to deliver its cargo.

          Later on, the said truck, an Isuzu with Plate No. NSD-117, was recovered but without the copper cathodes.  Because of this incident, Columbia filed with R&B Insurance a claim for insurance indemnity in the amount of P1,903,335.39.  After the requisite investigation and adjustment, R&B Insurance paid Columbia the amount of P1,896,789.62 as insurance indemnity.

R&B Insurance, thereafter, filed a complaint for damages against both Loadmasters and Glodel before the Regional Trial Court, Branch 14, Manila (RTC), docketed as Civil Case No. 02-103040.  It sought reimbursement of the amount it had paid to Columbia for the loss of the subject cargo.  It claimed that it had been subrogated “to the right of the consignee to recover from the party/parties who may be held legally liable for the loss.”[2][2]

          On November 19, 2003, the RTC rendered a decision[3][3] holding Glodel liable for damages for the loss of the subject cargo and dismissing Loadmasters’ counterclaim for damages and attorney’s fees against R&B Insurance.  The dispositive portion of the decision reads:

WHEREFORE, all premises considered, the plaintiff having established by preponderance of evidence its claims against defendant Glodel Brokerage Corporation, judgment is hereby rendered ordering the latter:

1.       To pay plaintiff R&B Insurance Corporation the sum of P1,896,789.62 as actual and compensatory damages, with interest from the date of complaint until fully paid;

2.      To pay plaintiff R&B Insurance Corporation the amount equivalent to 10% of the principal amount recovered as and for attorney’s fees plus P1,500.00 per appearance in Court;

3.      To pay plaintiff R&B Insurance Corporation the sum of P22,427.18 as litigation expenses.

WHEREAS, the defendant Loadmasters Customs Services, Inc.’s counterclaim for damages and attorney’s fees against plaintiff are hereby dismissed.

With costs against defendant Glodel Brokerage Corporation.


Both R&B Insurance and Glodel appealed the RTC decision to the CA. 

On August 24, 2007, the CA rendered the assailed decision which reads in part:

Considering that appellee is an agent of appellant Glodel, whatever liability the latter owes to appellant R&B Insurance Corporation as insurance indemnity must likewise be the amount it shall be paid by appellee Loadmasters.

WHEREFORE, the foregoing considered, the appeal is PARTLY GRANTED in that the appellee Loadmasters is likewise held liable to appellant Glodel in the amount of P1,896,789.62 representing the insurance indemnity appellant Glodel has been held liable to appellant R&B Insurance Corporation.

Appellant Glodel’s appeal to absolve it from any liability is herein DISMISSED.


Hence, Loadmasters filed the present petition for review on certiorari before this Court presenting the following


1.  Can Petitioner Loadmasters be held liable to Respondent      Glodel in spite of the fact that the latter respondent Glodel did not file a cross-claim against it (Loadmasters)?


2.  Under the set of facts established and undisputed in the case, can petitioner Loadmasters be legally considered as an Agent of respondent Glodel?[6][6]

To totally exculpate itself from responsibility for the lost goods, Loadmasters argues that it cannot be considered an agent of Glodel because it never represented the latter in its dealings with the consignee. At any rate, it further contends that Glodel has no recourse against it for its (Glodel’s) failure to file a cross-claim pursuant to Section 2, Rule 9 of the 1997 Rules of Civil Procedure. 

          Glodel, in its Comment,[7][7] counters that Loadmasters is liable to it under its cross-claim because the latter was grossly negligent in the transportation of the subject cargo.  With respect to Loadmasters’ claim that it is already estopped from filing a cross-claim, Glodel insists that it can still do so even for the first time on appeal because there is no rule that provides otherwise.  Finally, Glodel argues that its relationship with Loadmasters is that of Charter wherein the transporter (Loadmasters) is only hired for the specific job of delivering the merchandise.  Thus, the diligence required in this case is merely ordinary diligence or that of a good father of the family, not the extraordinary diligence required of common carriers.

          R&B Insurance, for its part, claims that Glodel is deemed to have interposed a cross-claim against Loadmasters because it was not prevented from presenting evidence to prove its position even without amending its Answer.  As to the relationship between Loadmasters and Glodel, it contends that a contract of agency existed between the two corporations.[8][8]

Subrogation is the substitution of one person in the place of another with reference to a lawful claim or right, so that he who is substituted succeeds to the rights of the other in relation to a debt or claim, including its remedies or securities.[9][9] Doubtless, R&B Insurance is subrogated to the rights of the insured to the extent of the amount it paid the consignee under the marine insurance, as provided under Article 2207 of the Civil Code, which reads:

ART. 2207.  If the plaintiff’s property has been insured, and he has received indemnity from the insurance company for the injury or loss arising out of the wrong or breach of contract complained of, the insurance company shall be subrogated to the rights of the insured against the wrong-doer or the person who has violated the contract.  If the amount paid by the insurance company does not fully cover the injury or loss, the aggrieved party shall be entitled to recover the deficiency from the person causing the loss or injury.

As subrogee of the rights and interest of the consignee, R&B Insurance has the right to seek reimbursement from either Loadmasters or Glodel or both for breach of contract and/or tort.

          The issue now is who, between Glodel and Loadmasters, is liable to pay R&B Insurance for the amount of the indemnity it paid Columbia.

          At the outset, it is well to resolve the issue of whether Loadmasters and Glodel are common carriers to determine their liability for the loss of the subject cargo.  Under Article 1732 of the Civil Code, common carriers are persons, corporations, firms, or associations engaged in the business of carrying or transporting passenger or goods, or both by land, water or air for compensation, offering their services to the public.

Based on the aforecited definition, Loadmasters is a common carrier because it is engaged in the business of transporting goods by land, through its trucking service.  It is a common carrier as distinguished from a private carrier wherein the carriage is generally undertaken by special agreement and it does not hold itself out to carry goods for the general public.[10][10]  The distinction is significant in the sense that “the rights and obligations of the parties to a contract of private carriage are governed principally by their stipulations, not by the law on common carriers.”[11][11]   

In the present case, there is no indication that the undertaking in the contract between Loadmasters and Glodel was private in character.  There is no showing that Loadmasters solely and exclusively rendered services to Glodel. 

In fact, Loadmasters admitted that it is a common carrier.[12][12]

In the same vein, Glodel is also considered a common carrier within the context of Article 1732.  In its Memorandum,[13][13] it states that it “is a corporation duly organized and existing under the laws of the Republic of the Philippines and is engaged in the business of customs brokering.”  It cannot be considered otherwise because as held by this Court in Schmitz Transport & Brokerage Corporation v. Transport Venture, Inc.,[14][14] a customs broker is also regarded as a common carrier, the transportation of goods being an integral part of its business.

Loadmasters and Glodel, being both common carriers, are mandated from the nature of their business and for reasons of public policy, to observe the extraordinary diligence in the vigilance over the goods transported by them according to all the circumstances of such case, as required by Article 1733 of the Civil Code.  When the Court speaks of extraordinary diligence, it is that extreme measure of care and caution which persons of unusual prudence and circumspection observe for securing and preserving their own property or rights.[15][15]  This exacting standard imposed on common carriers in a contract of carriage of goods is intended to tilt the scales in favor of the shipper who is at the mercy of the common carrier once the goods have been lodged for shipment.[16][16] Thus, in case of loss of the goods, the common carrier is presumed to have been at fault or to have acted negligently.[17][17]  This presumption of fault or negligence, however, may be rebutted by proof that the common carrier has observed extraordinary diligence over the goods.   

With respect to the time frame of this extraordinary responsibility, the Civil Code provides that the exercise of extraordinary diligence lasts from the time the goods are unconditionally placed in the possession of, and received by, the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them.[18][18] 

Premises considered, the Court is of the view that both Loadmasters and Glodel are jointly and severally liable to R & B Insurance for the loss of the subject cargo.  Under Article 2194 of the New Civil Code, “the responsibility of two or more persons who are liable for a quasi-delict is solidary.”

 Loadmasters’ claim that it was never privy to the contract entered into by Glodel with the consignee Columbia or R&B Insurance as subrogee, is not a valid defense.  It may not have a direct contractual relation with Columbia, but it is liable for tort under the provisions of Article 2176 of the Civil Code on quasi-delicts which expressly provide:

ART. 2176.  Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done.  Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. 

Pertinent is the ruling enunciated in the case of Mindanao Terminal and Brokerage Service, Inc. v. Phoenix Assurance Company of New York,/McGee & Co., Inc.[19][19] where this Court held that a tort may arise despite the absence of a contractual relationship, to wit:

            We agree with the Court of Appeals that the complaint filed by Phoenix and McGee against Mindanao Terminal, from which the present case has arisen, states a cause of action. The present action is based on quasi-delict, arising from the negligent and careless loading and stowing of the cargoes belonging to Del Monte Produce. Even assuming that both Phoenix and McGee have only been subrogated in the rights of Del Monte Produce, who is not a party to the contract of service between Mindanao Terminal and Del Monte, still the insurance carriers may have a cause of action in light of the Court’s consistent ruling that the act that breaks the contract may be also a tort.  In fine, a liability for tort may arise even under a contract, where tort is that which breaches the contract.  In the present case, Phoenix and McGee are not suing for damages for injuries arising from the breach of the contract of service but from the alleged negligent manner by which Mindanao Terminal handled the cargoes belonging to Del Monte Produce. Despite the absence of contractual relationship between Del Monte Produce and Mindanao Terminal, the allegation of negligence on the part of the defendant should be sufficient to establish a cause of action arising from quasi-delict.  [Emphases supplied]

In connection therewith, Article 2180 provides:

ART. 2180.  The obligation imposed by Article 2176 is demandable not only for one’s own acts or omissions, but also for those of persons for whom one is responsible.

x x x x

Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.

It is not disputed that the subject cargo was lost while in the custody of Loadmasters whose employees (truck driver and helper) were instrumental in the hijacking or robbery of the shipment.  As employer, Loadmasters should be made answerable for the damages caused by its employees who acted within the scope of their assigned task of delivering the goods safely to the warehouse. 

Whenever an employee’s negligence causes damage or injury to another, there instantly arises a presumption juris tantum that the employer failed to exercise diligentissimi patris families in the selection (culpa in eligiendo) or supervision (culpa in vigilando) of its employees.[20][20]  To avoid liability for a quasi-delict committed by its employee, an employer must overcome the presumption by presenting convincing proof that he exercised the care and diligence of a good father of a family in the selection and supervision of his employee.[21][21]  In this regard, Loadmasters failed.

Glodel is also liable because of its failure to exercise extraordinary diligence.  It failed to ensure that Loadmasters would fully comply with the undertaking to safely transport the subject cargo to the designated destination.  It should have been more prudent in entrusting the goods to Loadmasters by taking precautionary measures, such as providing escorts to accompany the trucks in delivering the cargoes.  Glodel should, therefore, be held liable with Loadmasters.  Its defense of force majeure is unavailing.

 At this juncture, the Court clarifies that there exists no principal-agent relationship between Glodel and Loadmasters, as erroneously found by the CA.  Article 1868 of the Civil Code provides: “By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter.” The elements of a contract of agency are: (1) consent, express or implied, of the parties to establish the relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a representative and not for himself; (4) the agent acts within the scope of his authority.[22][22]

Accordingly, there can be no contract of agency between the parties.  Loadmasters never represented Glodel.  Neither was it ever authorized to make such representation.  It is a settled rule that the basis for agency is representation, that is, the agent acts for and on behalf of the principal on matters within the scope of his authority and said acts have the same legal effect as if they were personally executed by the principal.  On the part of the principal, there must be an actual intention to appoint or an intention naturally inferable from his words or actions, while on the part of the agent, there must be an intention to accept the appointment and act on it.[23][23]  Such mutual intent is not obtaining in this case.

What then is the extent of the respective liabilities of Loadmasters and Glodel?  Each wrongdoer is liable for the total damage suffered by R&B Insurance. Where there are several causes for the resulting damages, a party is not relieved from liability, even partially.  It is sufficient that the negligence of a party is an efficient cause without which the damage would not have resulted.  It is no defense to one of the concurrent tortfeasors that the damage would not have resulted from his negligence alone, without the negligence or wrongful acts of the other concurrent tortfeasor.  As stated in the case of Far Eastern Shipping v. Court of Appeals,[24][24]

X x x. Where several causes producing an injury are concurrent and each is an efficient cause without which the injury would not have happened, the injury may be attributed to all or any of the causes and recovery may be had against any or all of the responsible persons although under the circumstances of the case, it may appear that one of them was more culpable, and that the duty owed by them to the injured person was not the same. No actor’s negligence ceases to be a proximate cause merely because it does not exceed the negligence of other actors. Each wrongdoer is responsible for the entire result and is liable as though his acts were the sole cause of the injury.

There is no contribution between joint tortfeasors whose liability is solidary since both of them are liable for the total damage. Where the concurrent or successive negligent acts or omissions of two or more persons, although acting independently, are in combination the direct and proximate cause of a single injury to a third person, it is impossible to determine in what proportion each contributed to the injury and either of them is responsible for the whole injury. Where their concurring negligence resulted in injury or damage to a third party, they become joint tortfeasors and are solidarily liable for the resulting damage under Article 2194 of the Civil Code. [Emphasis supplied]

 The Court now resolves the issue of whether Glodel can collect from Loadmasters, it having failed to file a cross-claim against the latter.  

Undoubtedly, Glodel has a definite cause of action against Loadmasters for breach of contract of service as the latter is primarily liable for the loss of the subject cargo.  In this case, however, it cannot succeed in seeking judicial sanction against Loadmasters because the records disclose that it did not properly interpose a cross-claim against the latter.   Glodel did not even pray that Loadmasters be liable for any and all claims that it may be adjudged liable in favor of R&B Insurance.  Under the Rules, a compulsory counterclaim, or a cross-claim, not set up shall be barred.[25][25]  Thus, a cross-claim cannot be set up for the first time on appeal. 


For the consequence, Glodel has no one to blame but itself.  The Court cannot come to its aid on equitable grounds.  “Equity, which has been aptly described as ‘a justice outside legality,’ is applied only in the absence of, and never against, statutory law or judicial rules of procedure.”[26][26] The Court cannot be a lawyer and take the cudgels for a party who has been at fault or negligent.





WHEREFORE, the petition is PARTIALLY GRANTED.  The August 24, 2007 Decision of the Court of Appeals is MODIFIED to read as follows:

WHEREFORE, judgment is rendered declaring petitioner Loadmasters Customs Services, Inc. and respondent Glodel Brokerage Corporation jointly and severally liable to respondent R&B Insurance Corporation for the insurance indemnity it paid to consignee Columbia Wire & Cable Corporation and ordering both parties to pay, jointly and severally, R&B Insurance Corporation a] the amount of P1,896,789.62 representing the insurance indemnity; b] the amount equivalent to ten (10%) percent thereof for attorney’s fees; and c] the amount of P22,427.18 for litigation expenses. 

The cross-claim belatedly prayed for by respondent Glodel Brokerage Corporation against petitioner Loadmasters Customs Services, Inc. is DENIED.



                                                               JOSE CATRAL MENDOZA                                                                                 Associate Justice






 Associate Justice












                  Associate Justice                                    Associate Justice







Associate Justice




I attest 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.


                                                                 Associate Justice

                                                        Chairperson, Second Division




Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, 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][1] Rollo, pp. 33-48. Penned by Associate Justice Josefina Guevara-Salonga, with Associate Justice Vicente Q. Roxas and Associate Justice Ramon R. Garcia, concurring.

[2][2] Petition for review on certiorari, p. 4; id. at 26.

[3][3] Id.

[4][4] Id. at 26-27.

[5][5] Annex A, Petition, id. at 47.

[6][6] Id. at 28.

[7][7] Id. at 96.

[8][8] Id. at 71-74.

[9][9] Lorenzo Shipping Corporation v. Chubb and Sons, Inc., G.R. No. 147724, June 8, 2004, 431 SCRA 266, 275, citing Black’s Law Dictionary (6th ed. 1990).

[10][10] National Steel Corporation v. Court of Appeals, 347 Phil. 345, 361 (1997).

[11][11] Lea Mer Industries, Inc. v. Malayan Insurance Co., Inc., 508 Phil. 656, 663 (2005), citing National Steel Corporation v. Court of Appeals, 347 Phil. 345, 362 (1997).

[12][12] Pre-Trial Order dated September 5, 2002, records, p. 136.

[13][13] Dated June 19, 2009, rollo, p. 178.

[14][14] 496 Phil. 437, 450 (2005), citing Calvo v. UCPB General Insurance Co., Inc., 429 Phil. 244 (2002).

[15][15] National Trucking and Forwarding Corporation v. Lorenzo Shipping Corporation, 491 Phil. 151, 156 (2005), citing Black’s Law Dictionary (5th ed. 1979) 411.

[16][16] Id. 

[17][17] Civil Code, Art. 1735.

[18][18] Civil Code, Art. 1736.

[19][19] G.R. No. 162467, May 8, 2009, 587 SCRA 429, 434, citing Air France v. Carrascoso, 124 Phil.722, 739 (1966); Singson  v. Bank of the Philippine Islands, 132 Phil. 597, 600 (1968); Mr. & Mrs. Fabre, Jr. v. Court of Appeals, 328 Phil. 775, 785 (1996); PSBA v. Court of Appeals, G.R. No. 84698, February 4, 1992, 205 SCRA 729, 734.

[20][20] Tan v. Jam Transit, Inc., G.R. No. 183198, November 25, 2009, 605 SCRA 659, 675, citing Delsan Transport Lines, Inc. v.    C & A  Construction, Inc., 459 Phil. 156 (2003).

[21][21] Id., citing Light Rail Transit Authority v. Navidad, 445 Phil. 31 (2003); Metro Manila Transit Corp. v. Court of Appeals, 435 Phil. 129 (2002).

[22][22] Eurotech Industrial Technologies, Inc. v. Cuizon, G.R. No. 167552, April 23, 2007, 521 SCRA 584, 593, citing Yu Eng Cho v. Pan American World Airways, Inc., 385 Phil. 453, 465 (2000).

[23][23] Yun Kwan Byung v. Philippine Amusement and Gaming Corporation, G.R. No. 163553, December 11, 2009, 608 SCRA 107, 130-131, citing Burdador v. Luz, 347 Phi. 654, 662 (1997); Eurotech Industrial Technologies, Inc. v. Cuizon, G.R. No. 167552, April 23, 2007, 521 SCRA 584, 593; Victorias Milling Co., Inc. v. Court of Appeals, 389 Phil. 184, 196 (2000).

[24][24] 357 Phil 703, 751-752 (1998).

[25][25] Section 2, Rule 9 of the 1997 Rules of Civil Procedure.

[26][26] Causapin v. Court of Appeals, G.R. No. 107432, July 4, 1994, 233 SCRA 615, 625.