Case Digest (G.R. No. 193572) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Tsuneishi Heavy Industries (Cebu), Inc. v. MIS Maritime Corporation, the respondent MIS Maritime contracted petitioner Tsuneishi on March 22, 2006 to dry dock and repair the vessel M/T MIS-1 at Tsuneishi’s Cebu shipyard. The vessel was dry docked on March 23, and an engine test a month later revealed smoke emission caused by a burnt crank journal and cracked crankpin, which both parties attributed to lubrication failure. Tsuneishi replaced the crankshaft, crankpin, and bearings as an act of goodwill and billed MIS US$318,571.50 for services rendered. MIS refused payment, counter-claiming US$471,462.60 for six months of lost income and insisting on set-off, leaving US$152,891.10 allegedly due from Tsuneishi. Despite delivering M/T MIS-1 in September 2006 and MIS’s signing of a Final Price Agreement on November 6, 2006, MIS still withheld payment. On April 10, 2008, Tsuneishi invoked admiralty jurisdiction and filed an in rem complaint under Section 21 of the Ship Mortgage Decr Case Digest (G.R. No. 193572) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Contract and Performance
- MIS Maritime Corporation and Tsuneishi Heavy Industries (Cebu), Inc. executed an Agreement dated March 22, 2006 for the dry docking and repair of M/T MIS-1. The vessel dry-docked on March 23, 2006.
- During sea trials, the engine emitted smoke due to a burnt crank journal and hairline cracks from defective lubrication. As a goodwill gesture, Tsuneishi paid for a new crankshaft, crankpin, and main bearings.
- Billing and Dispute
- Tsuneishi billed MIS US$318,571.50 for the services rendered. MIS refused payment and counter-claimed US$471,462.60 for six months’ lost income, seeking set-off and an additional US$152,891.10.
- Tsuneishi rejected these demands, delivered the vessel in September 2006, and MIS later signed an Agreement for Final Price in November 2006 but still did not pay.
- RTC Proceedings on Writ of Preliminary Attachment
- On April 10, 2008, Tsuneishi filed a complaint in the Regional Trial Court (RTC), invoking admiralty jurisdiction and a maritime lien under Section 21 of the Ship Mortgage Decree, and prayed for an arrest order or writ of preliminary attachment. It alleged fraud in MIS’s refusal to pay and lack of adequate security, supported by the Bitera Affidavit.
- The RTC issued the writ on April 15, 2008, attaching MIS’s condominium units, bank deposits, receivables, and the vessel. MIS’s motions to discharge and for reconsideration were denied on July 7 and December 11, 2008.
- Court of Appeals Proceedings
- MIS filed a Rule 65 petition in the Court of Appeals (CA) assailing the three RTC orders.
- On October 7, 2009 (Resolution August 26, 2010), the CA reversed and set aside the RTC orders, holding that:
- The Bitera Affidavit failed to allege that MIS had no sufficient security;
- The fraud allegations were general and lacked particularity;
- The writ was thus fatally defective and issued with grave abuse of discretion.
- Supreme Court Petition
- Tsuneishi filed a Rule 45 petition, arguing a novel question of law that enforcement of a maritime lien under Section 21 should be governed by Rule 57 preliminary attachment procedures, and invoking a contract clause appointing it attorney-in-fact to take possession on default.
- MIS’s comment countered that the remedy for a maritime lien is arrest of vessel in rem, not preliminary attachment, and that Tsuneishi failed to establish fraud or lack of security and that a hearing was warranted.
Issues:
- Whether a maritime lien under Section 21 of the Ship Mortgage Decree may be enforced through a writ of preliminary attachment under Rule 57 of the Rules of Court.
- Whether Tsuneishi complied with the requisites for issuing a writ of preliminary attachment—specifically, (a) particularized allegations of fraud, and (b) averment that MIS had no sufficient other security.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)