G.R. No. 140613 October 15, 2004
Seven Brothers Shipping Corporation, petitioner, vs. Oriental Assurance Corporation, respondent.

FACTS

On December 20, 1988, a charter party was executed between C. Alcantara & Sons, Inc. and petitioner Seven Brothers Shipping Corporation, owner of the vessel M/V “Diamond Bear,” to ship lauan logs. Respondent Oriental Assurance Corporation insured the cargo for P8,000,000.00. On March 9, 1989, the entire cargo was lost when the vessel sank. Oriental Assurance paid the consignee the insured value and, as subrogee, filed a complaint against Seven Brothers for recovery of the amount paid. The Regional Trial Court (RTC) dismissed the complaint. The Court of Appeals reversed the RTC, holding Seven Brothers liable for the loss due to its failure to exercise extraordinary diligence as a common carrier, and ordered it to pay P8,000,000.00 plus interest. Seven Brothers’ petition for review to the Supreme Court (G.R. No. 128982) was dismissed for lack of a certification of non-forum shopping, and the dismissal became final and executory on October 31, 1997. Upon Oriental Assurance’s motion, the RTC issued a writ of execution. The sheriff levied on vessels M/V “Diamond Deer” and M/V “Diamond Rabbit.” Seven Brothers filed a motion to quash the writ and lift the levy, which the RTC granted. Oriental Assurance filed a petition for certiorari with the Court of Appeals, which reversed the RTC orders and reinstated the writ of execution and the levy. Seven Brothers filed the present petition.

ISSUE

1. Whether the Court of Appeals erred in not applying the Limited Liability Rule in maritime law.
2. Whether the Court of Appeals erred in reinstating the levy on the vessel M/V “Diamond Deer,” allegedly owned by H. Superservice Shipping Corporation and not by Seven Brothers.
3. Whether the Court of Appeals erred in not ruling that the Sheriff violated the Rules of Court in levying upon the vessels.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Decision of the Court of Appeals.
1. The Court held that Seven Brothers could no longer raise the issue of the Limited Liability Rule or any matter relating to its liability, as the Court of Appeals’ decision in CA-G.R. CV No. 42890, which found it liable for the loss, had already become final and executory. The doctrine of immutability of final judgments applies; a final judgment can no longer be altered.
2. On the levy of M/V “Diamond Deer,” the Court found that Seven Brothers failed to substantiate its claim of ownership by H. Superservice during the hearing on the motion to quash. The vessel’s documents presented were not authenticated, and the lone witness presented had no personal knowledge of the vessel’s ownership. The sheriff’s levy, being based on the vessel’s registration under Seven Brothers’ name, was proper.
3. On the alleged violation of the Rules of Court regarding the levy, the Court held that while Rule 39, Section 9 requires a demand for payment in cash before levy on personal property, the sheriff’s immediate levy was justified under the circumstances. Seven Brothers was operating at a loss and had insufficient assets to cover the judgment award. Furthermore, the vessels could sail beyond the jurisdiction of Philippine courts. Procedural rules should be interpreted liberally to promote substantial justice, and technicalities should not frustrate the enforcement of a final judgment.