Case Summary (G.R. No. 216569)
Factual Background
A Superlines bus crashed into the radio room of PNCC while traveling north and approaching the Alabarig northbound exit lane, causing damage to the radio room. The bus was turned over to the Alabang Traffic Bureau for investigation and, for lack of space, was towed at the request of traffic investigator Patrolman Cesar Lopera to PNCC’s compound for safekeeping. Superlines repeatedly sought the release of the bus, but PNCC’s head of traffic control and security, Pedro Balubal, refused and demanded the sum of P40,000.000 or collateral of equivalent value as the estimated reconstruction cost of the radio room.
Trial Court Proceedings and Early Appellate History
Superlines filed a complaint for replevin with damages against PNCC and Balubal. PNCC and Balubal counterclaimed for actual and exemplary damages, attorney’s fees, and litigation expenses. The RTC dismissed Superlines’ original complaint in a December 9, 1997 decision and awarded PNCC P40,320.00 for actual damages. The Court of Appeals held that custody of the bus remained with Lopera and that the action should properly have been brought against the police authorities. On appeal to this Court in G.R. No. 169596, the Court reversed, granted recovery of possession, and remanded to the RTC with direction that Lopera and other police officers be impleaded as indispensable parties should Superlines pursue damages.
Proceedings After Remand
Acting on the remand, Superlines filed an amended complaint adding Lopera as an additional defendant. Lopera answered. Execution on the judgment for recovery of possession was attempted but could not be effected because the bus’s whereabouts were unknown. In the remanded civil action, Lopera was later dropped as a party-defendant. In a May 12, 2010 decision, the RTC held PNCC and Balubal jointly and severally liable to Superlines and awarded P2,036,500.00 as the cost to acquire a similar bus with interest, P33,750,000.00 as lost or unearned income for 1991 to 2006 with interest, exemplary damages of P5,000,000.00, and attorney’s fees of P300,000.00. PNCC appealed.
Court of Appeals Disposition and Subsequent Petition
The Court of Appeals, in a May 30, 2014 decision, affirmed the RTC decision with modification only as to exemplary damages, reducing that award to P1,000,000.00. PNCC’s motion for reconsideration was denied in a January 13, 2015 resolution. PNCC then filed the present petition for review on certiorari before the Supreme Court, principally contesting that the dropping of Patrolman Lopera as defendant violated this Court’s directive in G.R. No. 169596.
Issue Presented
The dispositive legal question was whether the exclusion or dropping of Lopera as a defendant in the remanded proceeding contravened this Court’s prior ruling in G.R. No. 169596, which had described Lopera and other responsible police officers as indispensable parties with respect to Superlines’ claim for damages.
Ruling of the Supreme Court
The Supreme Court denied the petition. The Court affirmed the Court of Appeals decision with modifications: the award for lost or unearned income was deleted; exemplary damages were reduced to P100,000.00; attorney’s fees were reduced to P30,000.00; the exemplary damages award was ordered to earn interest at six percent per annum from the date of finality of the judgment until full satisfaction; and all other aspects of the lower decisions were sustained.
Legal Basis and Reasoning
The Court began with the law of the case principle as articulated in Vios v. Pantangco, observing that an appellate ruling on a question becomes controlling in subsequent proceedings on the same case and facts. The Court recognized that its prior pronouncement in G.R. No. 169596 established that Lopera and other responsible police officers were indispensable parties to any claim for damages because the police, through Lopera, had ordered the turnover of the bus to PNCC, thereby perfecting a contract of deposit and implicating the police in the alleged unconstitutional seizure. Joinder of indispensable parties, the Court reiterated, is mandatory because a judgment rendered without them cannot attain real finality. The Court, however, examined the record of the remanded proceedings and found that Lopera had been impleaded and had filed an answer, thereby vesting the trial court with jurisdiction over his person. The trial court thereafter, after hearing and receipt of evidence, determined that Lopera had no liability and excluded him from liability. The Supreme Court held that this exclusion did not amount to a defiance of the prior directive. The Court explained that failure to implead an indispensable party does not automatically require dismissal and that dismissal is reserved for a plaintiff’s refusal to comply with a court order to implead. Because Lopera had been made a party and had answered, the RTC had exercised judicial power over the controversy and had adjudicated Lopera’s lack of liability; the Supreme Court declined to fault the trial court’s factual and credibility determinations that were not assailed before it on appeal.
Assessment of Damages
The Court found the trial court’s award for lost or unearned
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Case Syllabus (G.R. No. 216569)
Parties and Procedural Posture
- Philippine National Construction Corporation was the petitioner before the Supreme Court and respondent in earlier proceedings.
- Superlines Transportation Co., Inc. was the private party asserting a claim for recovery of possession and damages.
- Pedro Balubal appeared as head of PNCC’s traffic control and security department and was a named defendant below.
- Patrolman Cesar Lopera was the police investigator who ordered custody of the bus and was impleaded as an additional defendant in the remanded proceedings.
- The present petition sought review of a Court of Appeals decision that affirmed with modification the Regional Trial Court, Branch 62, Gumaca, Quezon decision.
Key Factual Allegations
- One of Superlines’ buses crashed into PNCC’s radio room while traveling north near the Alabarig northbound exit lane and damaged the radio room.
- The bus was turned over to the Alabang Traffic Bureau for investigation and, at the request of Patrolman Cesar Lopera, was towed by a PNCC patrol and stored in the PNCC compound.
- PNCC refused to release the bus to Superlines and demanded P40,000.00 or collateral of equal value as estimated reconstruction cost for the radio room.
- Superlines filed a complaint for replevin with damages after PNCC denied release and custody of the bus remained contested.
Prior Proceedings
- The RTC initially dismissed Superlines’ complaint and awarded PNCC P40,320.00 on its counterclaim for damage to the radio room.
- The Court of Appeals held the storage of the bus was of the nature of a deposit and that custody remained with Lopera, concluding the suit should have been against the police authorities.
- In Superlines Transportation Company, Inc. v. Philippine National Construction Company, this Court reversed the CA, found the seizure and impounding at Lopera’s request violated constitutional protections against unreasonable seizure, granted recovery of possession, and remanded for possible impleader of Lopera and other police officers for the damages claim.
Remand Proceedings and RTC Ruling
- After remand, Superlines filed an amended complaint and impleaded Lopera who filed an answer and submitted to the court’s jurisdiction.
- The RTC, after hearing, dropped Lopera as party-defendant and later rendered judgment on May 12, 2010 directing PNCC and Pedro Balubal, jointly and severally, to pay P2,036,500.00 as the cost of a similar bus with interest, P33,750,000.00 as lost/unearned income with interest, P5,000,000.00 as exemplary damages, and P300,000.00 as attorney’s fees.
Court of Appeals Decision
- The CA affirmed the RTC decision with modification only as to exemplary damages and reduced that award to P1,000,000.00.
- The CA interpreted this Court’s prior use of the word “may” concerning impleading Lopera as directory and held the RTC could pro