G.R. No. 179789 - Pinewood Marine , Inc. vs. EMCO Plywood Corp.

EMCO Plywood Corporation (EMCO), a plywood manufacturer, contracted with Ever Commercial Co., Ltd. (Ever) for the loading, transporting, and unloading of 2,638 pieces of PNG round logs valued at US$691,898.62.
EMCO paid Ever the full freight amount of US$241,223.04.
Ever, acting as charterer, secured the vessel MV Tao Hua Ling by chartering it from Kanetomi (HK) Ltd., which in turn chartered the vessel from Shenzhen Guangda Shipping Co. (Shenzhen).
Pinewood Marine (Phils.), Inc. (Pinewood) functioned as the local ship agent for Shenzhen in the Philippines.

Shortly after the cargo was loaded on board, EMCO received a letter (dated December 5, 1995) from a law office representing Shenzhen, informing EMCO that Shenzhen was exercising its lien over the cargo for claims of unpaid demurrage, detention, and deviation charges.
The letter indicated that both the vessel’s master and Pinewood had been instructed to enforce the shipowner’s lien, and a similar notice was sent to the Collector of Customs.
The Bureau of Customs, following the instructions, issued a memorandum to withhold the delivery of the cargo, prompting EMCO to object and eventually file an action.

On December 11, 1995, EMCO filed a Complaint for replevin, attachment, and damages against multiple defendants including Shenzhen, Pinewood, Ever (as charterer), Dalian Ocean Shipping Co., and others.
On the day following the complaint, the RTC issued a writ of replevin which resulted in the prompt release and delivery of the cargo to EMCO.
The RTC fully heard the case and rendered a decision on May 14, 1997:

Ever was ordered to pay EMCO damages amounting to P16,686,048.46 (covering operational losses, deterioration, labor costs, attorney’s fees, and other expenses) with six percent (6%) interest from the filing of the complaint until full payment.
In its cross‑claim, Ever was granted relief against Shenzhen, Dalian, and Pinewood, ordering them jointly and severally liable to reimburse and indemnify Ever, pay additional damages of P2,000,000.00, and cover attorney’s fees of P173,600.00.

Testimonies by EMCO’s officials detailed the significant operational losses incurred due to the delay—the logs were vital as raw materials.
Evidence showed daily losses (operational, depreciation, additional labor costs, legal expenses) that substantiated the monetary awards in the RTC decision.
The RTC noted that the defendants, except Ever, were declared in default for failing to file answers to EMCO’s complaint and Ever’s cross‑claim.

After the RTC ruling, appeals were filed on behalf of Shenzhen, Pinewood, and Dalian.
The Court of Appeals (CA) later dismissed the appeals of Shenzhen and Pinewood on grounds such as abandonment (non‑payment of docket fees, non‑filing of briefs) or being declared in default, with Dalian’s appeal also affirmed in light of its default status.
Pinewood subsequently filed a Motion for Reconsideration, contending that its appeal was abandoned without its knowledge, alleging misconduct and negligence on the part of its counsel (Attys. Del Rosario and Kato) and disputing certain evidentiary and procedural issues regarding its liability and the cross‑claim by Ever.

Pinewood contested the lack of its impleading in Ever’s cross‑claim and questioned the validity of the default order related to EMCO’s amended complaint.
It raised issues on the award of unliquidated damages and claimed that filing fees on Ever’s cross‑claim had not been paid, arguing this undermined the RTC’s jurisdiction.
Pinewood further argued that its counsel’s alleged treachery and negligence deprived it of the opportunity to effectively pursue its appeal.

Whether the Court of Appeals erred in not referring the disbarment complaint against Attys. Del Rosario and Kato to the Integrated Bar of the Philippines or the Supreme Court.

Whether the CA’s denial of Pinewood’s Motion for Reconsideration—arguing that Pinewood’s attorney abandoned its appeal—constituted an error.
Whether Pinewood should have been allowed to reinstate its appeal given its allegations against its former counsel and its non‑impleading in the cross‑claim.

Whether Ever’s non‑payment of filing fees for its cross‑claim affects the jurisdiction of the RTC over such claim.
Whether the award of unliquidated damages exceeds what is permitted under Section 3(d), Rule 9 of the Rules of Court and Article 2213 of the New Civil Code.
Whether Pinewood’s liability as a mere ship agent has been proven with sufficient evidence considering it was not originally impleaded in Ever’s cross‑claim.

Whether the RTC decision, having become final and executory, precludes any further modification or reopening of issues by the CA and the Supreme Court.