G.R. No. 88602 - Vda. de Jacob vs. Court of Appeals

An early morning collision occurred at exactly 03:50 hours on 3 May 1970 on the approaches to the port of Manila near Caballo Island.
The collision involved M/V “Don Carlos,” an inter-island vessel owned and operated by private respondent Carlos A. Go Thong and Company (“Go Thong”), and M/S “Yotai Maru,” a merchant vessel of Japanese registry.
“Don Carlos” sailed southbound leaving the port of Manila for Cebu, while “Yotai Maru” approached the port of Manila coming in from Kobe, Japan.
The bow of “Don Carlos” rammed the portside (left side) of “Yotai Maru,” inflicting a three (3) cm. gaping hole on her portside near Hatch No. 3.
Seawater rushed in, flooded that hatch and her bottom tanks, and damaged all cargo stowed therein.

The consignees of the damaged cargo got paid by their insurance companies.
The insurance companies were subrogated to the interests of the consignees and commenced actions against Go Thong for damages sustained by the various shipments.

Civil Case No. 82567: filed on 13 March 1971 by petitioner Smith Bell and Company (Philippines), Inc. and petitioner Sumitomo Marine and Fire Insurance Company Ltd. against private respondent Go Thong in Branch 3, presided over by Judge Bernardo P. Fernandez.
Civil Case No. 82556: filed on 15 March 1971 by petitioners Smith Bell and Company (Philippines), Inc. and petitioner Tokyo Marine and Fire Insurance Company, Inc. against private respondent Go Thong in Branch 4, presided over by Judge Serafin R. Cuevas.

The cases were tried under the same issues and evidence because the parties agreed that the evidence on the collision presented in one case would be adopted in the other.
The Court of First Instance held in both cases that the officers and crew of “Don Carlos” had been negligent, that such negligence was the proximate cause of the collision, and that Go Thong was liable for damages.
Respective awards:

Judge Fernandez (Civil Case No. 82567) awarded the insurance companies P19,889.79 with legal interest plus P3,000.00 as attorney’s fees.
Judge Cuevas (Civil Case No. 82556) awarded the plaintiff insurance companies, on two (2) claims, US$68,640.00 or its equivalent in Philippine currency plus P30,000.00 attorney’s fees, and P19,163.02 plus P5,000.00 as attorney’s fees.

Both sets of appeals involved substantially identical assignments of errors.
In C.A.-G.R. No. 61320-R, the Court of Appeals (through Reyes, L.B., J.) rendered a Decision on 8 August 1978 affirming Judge Fernandez.
Go Thong’s motion for reconsideration was denied.
Go Thong elevated C.A.-G.R. No. 61320-R to the Supreme Court via Petition for Review docketed as G.R. No. L-48839 (“Carlos A. Go Thong and Company v. Smith Bell and Company [Philippines], Inc., et al.”).
In a Resolution dated 6 December 1978, the Supreme Court denied the Petition for lack of merit after considering “the allegations, issues and arguments adduced” and respondent’s comment.
Go Thong’s motion for reconsideration was denied on 24 January 1979.
In C.A.-G.R. No. 61206-R, the Court of Appeals (through Sison, P.V., J.) reversed the Cuevas Decision on 26 November 1980, dismissed the insurance companies’ complaint, and held the officers of “Yotai Maru” at fault in the collision with “Don Carlos.”

The insurance companies filed a Petition for Review on Certiorari assailing the 26 November 1980 Decision in C.A.-G.R. No. 61206-R.
Petitioners’ principal contentions were:

Res judicata was disregarded.
Sison, P.V., J. committed serious and reversible error in accepting Go Thong’s defense that fault on the part of “Yotai Maru” had been settled by a compromise agreement between the owner of “Yotai Maru” and Go Thong as owner of “Don Carlos.”
Sison, P.V., J. committed serious and reversible error in holding that “Yotai Maru” had been negligent and at fault in the collision.

Administrative proceedings before the Board of Marine Inquiry and the Philippine Coast Guard

The collision spawned administrative proceedings before the Board of Marine Inquiry (“BMI”), in BMI Case No. 228.
On 12 July 1971, BMI through Commodore Leovegildo L. Gantioki found both vessels negligent in the collision.
Both parties moved for reconsideration.
The motions for reconsideration were resolved by the Philippine Coast Guard (“PCG”) nine (9) years later, through an order dated 19 May 1980 by PCG Commandant Commodore Simeon M. Alejandro.
The PCG decision dispositive portion absolved the officers of “Yotai Maru” from responsibility and left the penalties imposed upon the officers of “Don Carlos.”
Go Thong filed a second motion for reconsideration, which was denied by the PCG in an order in September 1980.
Go Thong sought appeal to the then Ministry of National Defense by filing w...(Subscriber-Only)

Whether the Court of Appeals in C.A.-G.R. No. 61206-R disregarded the rule of res judicata by not following the prior final decision in C.A.-G.R. No. 61320-R, which had been affirmed by the Supreme Court in G.R. No. L-48839

Petitioners argued that the Supreme Court’s minute Resolution denying Go Thong’s Petition for Review in G.R. No. L-48839 effectively settled the issue of liability.
Private respondent argued that the minute Resolution merely denied the Petition for Review for lack of merit and did not affirm the Court of Appeals in toto, and therefore res judicata should not bind the subsequent case.
Private respondent further argued that res judicata should not apply due to alleged lack of identity of parties and identity of cause of action between C.A.-G.R. No. 61206-R and C.A.-G.R. No. 61320-R.

Whether the Court of Appeals committed reversible error by accepting Go Thong’s defense that fault of “Yotai Maru” had been settled by a compromise agreement between the owner of “Yotai Maru” and Go Thong as owner of “Don Carlos”