Insurance company MITSUI VS.
CA, 287 SCRA 366
MENDOZA, J.:
Facts:
Petitioner Mitsui O.S.K. Lines Ltd. is a foreign corporation represented in the
Philippines by its agent, Magsaysay Agencies. It entered into a contract of carriage
through Meister Transport, Inc., an international freight forwarder, with private
respondent Lavine Loungewear Manufacturing Corporation to transport goods of the
latter from Manila to Le Havre, France. Petitioner undertook to deliver the goods to
France 28 days from initial loading. On July 24, 1991, petitioner's vessel loaded
private respondent's container van for carriage at the said port of origin.
However, in Kaoshiung, Taiwan the goods were not transshipped immediately, with
the result that the shipment arrived in Le Havre only on November 14, 1991. The
consignee allegedly paid only half the value of the said goods on the ground that
they did not arrive in France until the "off season" in that country. The remaining
half was allegedly charged to the account of private respondent which in turn
demanded payment from petitioner through its agent.
Issue:
Whether or not private respondent's action is for "loss or damage" to goods
shipped, within the meaning of the Carriage of Goods by Sea Act (COGSA).
Ruling:
No. The suit is not for "loss or damage" to goods contemplated in §3(6), the
question of prescription of action is governed not by the COGSA but by Art. 1144 of
the Civil Code which provides for a prescriptive period of ten years. As defined in
the Civil Code and as applied to Section 3(6), paragraph 4 of the Carriage of Goods
by Sea Act, "loss" contemplates merely a situation where no delivery at all was
made by the shipper of the goods because the same had perished, gone out of
commerce, or disappeared in such a way that their existence is unknown or they
cannot be recovered.
There would be some merit in appellant's insistence that the damages suffered by
him as a result of the delay in the shipment of his cargo are not covered by the
prescriptive provision of the Carriage of Goods by Sea Act above referred to, if such
damages were due, not to the deterioration and decay of the goods while in transit,
but to other causes independent of the condition of the cargo upon arrival, like a
drop in their market value.
Filipino Merchants Insurance Company,
Inc. vs Judge Jose Alejandro
145 SCRA 42 – Mercantile Law – Insurance Law – The Policy – Prescription of Filing
of Insurance Cases
In 1976, Choa Tiek Seng contracted Frota Oceanica Brasiliera for the latter to
deliver goods. Choa Tiek Seng insured the goods with Filipino Merchants Insurnace
Company. The goods left the port of Manila on December 13, 1976 and reached its
point of destination on December 17, 1976. The goods were however damaged.
Choa Tiek Seng then filed an insurance claim. Filipino Merchants refused to pay so
in August 1977, it was sued by Choa Tiek Seng. In January 1978, Filipino Merchants
filed a third party complaint against the carrier Frota Oceanica Brasiliera as it
alleged that it is the carrier who is liable to pay damages to Choa Tiek Seng. Judge
Jose Alejandro of the trial court ruled against Filipino Merchants. The Court of
Appeals affirmed the ruling of the judge. The lower courts ruled that Filipino
Merchants is already barred from filing a claim because under the Carriage of Goods
by Sea Act, the suit against the carrier must be filed “within one year after delivery
of the goods or the date when the goods should have been delivered” or one year
from December 17, 1976. The insurance company is already barred for it filed its
third party complaint only in January 1978.
ISSUE: Whether or not Filipino Merchants is precluded by the said time-bar rule.
HELD: Yes. The pertinent provision of the Carriage of Goods by Sea Act does not
only apply to the shipper but also applies to the insurer. The coverage of the
Carriage of Goods by Sea Act includes the insurer of the goods. Otherwise, what
the Act intends to prohibit after the lapse of the one year prescriptive period can be
done indirectly by the shipper or owner of the goods by simply filing a claim against
the insurer even after the lapse of one year. This would be the result if the insurer
can, at any time, proceed against the carrier and the ship since it is not bound by
the time-bar provision. In this situation, the one year limitation will be practically
useless. This could not have been the intention of the law which has also for its
purpose the protection of the carrier and the ship from fraudulent claims by having
“matters affecting transportation of goods by sea be decided in as short a time as
possible” and by avoiding incidents which would “unnecessarily extend the period
and permit delays in the settlement of questions affecting the transportation.”
Mayer Steel Pipe Corporation vs Court of
Appeals
274 SCRA 432 – Mercantile Law – Insurance Law – The Policy – Prescription of
Filing of Insurance Cases
In 1983, Hongkong Government Supplies Department (HGSD) contracted Mayer
Steel Pipe Corporation for the latter to manufacture and deliver various steel pipes
and fittings. Before Mayer Steel shipped the said pipes, it insured them with two
insurance companies namely, South Sea Surety and Insurance Co., Inc. and
Charter Insurance Corporation – each insurer covering different portions of the
shipment. The insurance policies cover “all risks” which include all causes of
conceivable loss or damage.
When the pipes reached Hongkong, the pipes were discovered to have been
damaged. The insurance companies refused to make payment. On April 17 1986,
Mayer Steel sued the insurance companies. The case reached the Court of Appeals.
The CA ruled that the case filed by Mayer Steel should be dismissed. It held that
the action is barred under Section 3(6) of the Carriage of Goods by Sea Act since it
was filed only on April 17, 1986, more than two years from the time the goods were
unloaded from the vessel. Section 3(6) of the Carriage of Goods by Sea Act
provides that “the carrier and the ship shall be discharged from all liability in
respect of loss or damage unless suit is brought within one year after delivery of
the goods or the date when the goods should have been delivered.” The CA ruled
that this provision applies not only to the carrier but also to the insurer, citing the
case of Filipino Merchants Insurance Co., Inc. vs Alejandro.
ISSUE: Whether or not the Court of Appeals is correct.
HELD: No. Section 3(6) of the Carriage of Goods by Sea Act states that the carrier
and the ship shall be discharged from all liability for loss or damage to the goods if
no suit is filed within one year after delivery of the goods or the date when they
should have been delivered. Under this provision, only the carrier’s liability is
extinguished if no suit is brought within one year. But the liability of the insurer is
not extinguished because the insurer’s liability is based not on the contract of
carriage but on the contract of insurance. A close reading of the law reveals that
the Carriage of Goods by Sea Act governs the relationship between the carrier on
the one hand and the shipper, the consignee and/or the insurer on the other hand.
It defines the obligations of the carrier under the contract of carriage. It does not,
however, affect the relationship between the shipper and the insurer. The latter
case is governed by the Insurance Code.
The Filipino Merchants case is different from the case at bar. In Filipino Merchants,
it was the insurer which filed a claim against the carrier for reimbursement of the
amount it paid to the shipper. In the case at bar, it was the shipper which filed a
claim against the insurer. The basis of the shipper’s claim is the “all risks” insurance
policies issued by the insurers to Mayer Steel.
The ruling in Filipino Merchants should apply only to suits against the carrier filed
either by the shipper, the consignee or the insurer.
Case No 23
INSURANCE COMPANY OF NORTH AMERICA VS. ASIAN TERMINALS INC.
G.R. No. 180784 February 15, 2012
Doctrine: The term “carriage of goods” in the Carriage of Goods by Sea Act (COGSA) covers the period
from the time the goods are loaded to the vessel to the time they are discharged therefrom.
The carrier and the ship may put up the defense of prescription if the action for damages is not
brought within one year after the delivery of the goods or the date when the goods should have been
delivered. It has been held that not only the shipper, but also the consignee or legal holder of the bill may
invoke the prescriptive period. However, the COGSA does not mention that an arrastre operator may
invoke the prescriptive period of one year; hence, it does not cover the arrastre operator.
Facts:
The trial court dismissed petitioner’s complaint for actual damages on the ground of prescription under
the Carriage of Goods by Sea Act. Thus, an action was instituted to review the RTC’s decision.
On November 2002, Macro-Lite Corporation shipped to San Miguel Corporation (SMC), through M/V
DIMI P vessel, 185 packages (or 231,000 sheets) of electrolytic tin free steel, complete and in good order
condition and covered by Bill of Lading. The shipment had a declared value of US $169,850.35 and was
insured with petitioner against all risks under its marine policy.
The carrying vessel arrived at the port of Manila and when the shipment was discharged therefrom, it
was noted than 7 packages were damaged and in bad order. The shipment was then turned over to the
custody of respondent (as arrastre operator) for storage and safekeeping pending its withdrawal by the
consignee’s authorized customs broker, which was later withdrawn by the customs broker from custody
of the respondent.
An examination report was written and showed that an additional 5 packages were found to be
damaged and in bad order.
Consignee, SMC, filed separate claims against respondent and petitioner for the damage of 11,200
sheets of electrolytic tin free steel. Petitioner, as insurer of the cargo, paid the consignee the amount of
Php 431,592.14 for the damage caused to the shipment. Thereafter, petitioner formally demanded
reparation against respondent and as respondent failed to satisfy its demand, petitioner filed an action
for damages with the RTC.
The trial court dismissed the complaint because it was already barred by the statute of limitations. It
held that COGSA, embodied in CA 65, applies to this case since the goods were shipped from a foreign
port to the Philippines. Under the said law, particularly paragraph 4, Section 3(6), the shipper has the
right to bring a suit within one year after the delivery of the goods or the date when the goods should
have been delivered.
Petitioner’s motion for recon was denied by the trial court. It submits that the trial court’s dismissal of
the complaint on the ground of prescription under the COGSA is legally erroneous. It contends that the
one-year limitation period for bringing a suit in court under the COGSA is not applicable to this case.
Petitioner asserts that since the complaint was filed against respondent arrastre operator only, without
impleading the carrier, the prescriptive period under the COGSA is not applicable to this case.
Moreover, petitioner contends that the term carriage of goods in the COGSA covers the period from the
time the goods are loaded to the vessel to the time they are discharged therefrom. It points out that it
sued respondent only for the additional five (5) packages of the subject shipment that were found
damaged while in respondents custody, long after the shipment was discharged from the vessel.
Issues:
(1) WON the one-year prescriptive period for filing a suit under the COGSA applies to this action for
damages against respondent arrastre operator;
(2) WON petitioner is entitled to recover actual damages in the amount of P431,592.14 from
respondent.
Ruling:
(1) NO. The COGSA was accepted to be made applicable to all contracts for the carriage of goods by
sea to and from the Philippine ports in foreign trade by virtue of CA 65. The term “carriage of
goods” covers the period from the time when the goods are loaded to the time when they are
discharged from the ship; thus, it can be inferred that the period of time when the goods have
been discharged from the ship and given to the custody of the arrastre operator is not covered
by the COGSA.
The prescriptive period for filing an action for the loss or damage of the goods under the COGSA is found
in paragraph 6, Section 3. It states that “in any event, the carrier and the ship shall be discharged from
all liability in respect of loss or damage unless suit is brought within one year after delivery of the
goods or the date when the goods should have been delivered. Provided, that if a notice of loss or
damage, either apparent or concealed, is not given as provided for in this section, that fact shall not
affect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods
or the date when the goods should have been delivered.”
However, the COGSA does not mention that an arrastre operator may invoke the prescriptive period of
1 year; hence, it does not cover the arrastre operator.
In fact, respondent arrastre operator’s responsibility and liability for losses and damages are set forth in
Section 7.01 of the Contract for Cargo Handling Services executed between the Philippine Ports
Authority and Marina Ports Services, Inc. (now Asian Terminals, Inc.), which explicitly provides that the
consignee has a period of thirty (30) days from the date of delivery of the package to the consignee
within which to request a certificate of loss from the arrastre operator. From the date of the request for
a certificate of loss, the arrastre operator has a period of fifteen (15) days within which to issue a
certificate of non-delivery/loss either actually or constructively. Moreover, from the date of issuance of
a certificate of non-delivery/loss, the consignee has fifteen (15) days within which to file a formal claim
covering the loss, injury, damage or non-delivery of such goods with all accompanying documentation
against the arrastre operator.
Here, the verification and ascertainment of liability by respondent ATI had been accomplished within
thirty (30) days from the date of delivery of the package to the consignee and within fifteen (15) days
from the date of issuance by the Contractor (respondent ATI) of the examination report on the
request for bad order survey. Although the formal claim was filed beyond the 15-day period from the
issuance of the examination report on the request for bad order survey, the purpose of the time
limitations for the filing of claims had already been fully satisfied by the request of the consignees
broker for a bad order survey and by the examination report of the arrastre operator on the result
thereof, as the arrastre operator had become aware of and had verified the facts giving rise to its
liability. Hence, the arrastre operator suffered no prejudice by the lack of strict compliance with the 15-
day limitation to file the formal complaint.
(2) YES. Petitioner is entitled to actual damages in the amount of P164,428.76 for the four (4) skids
damaged while in the custody of respondent.
It should be noted that the petitioner, who filed this action for damages for the five (5) skids that were
damaged while in the custody of respondent, was not forthright in its claim, as it knew that the damages
it sought in the amount of P431,592.14, which was based on the Evaluation Report of its
adjuster/surveyor covered nine (9) skids. Based on the same Evaluation Report, only four of the nine
skids were damaged in the custody of respondent. Petitioner should have been straightforward about
its exact claim, which is borne out by the evidence on record, as petitioner can be granted only the
amount of damages that is due to it.
WHEREFORE, the petition is GRANTED.
BENJAMIN CUA (CUA UlAN TEK),
Petitioner,
-versus-
W ALLEM PHILIPPINES SHIPPING,
INC. and ADVANCE SHIPPING
CORPORATION,
Respondents.
G.R. No. 171337
On November 12, 1990, Cua filed a civil action for damages against
Wallem and Advance Shipping before the RTC of Manila.5 Cua sought the
payment of P2,030,303.52 for damage to 218 tons and for a shortage of 50
tons of shipment of Brazilian Soyabean consigned to him, as evidenced by
Bill of Lading No. 10. He claimed that the loss was due to the respondents’
failure to observe extraordinary diligence in carrying the cargo.
Advance Shipping filed a motion to dismiss the complaint,6 assailing
the RTC’s jurisdiction over Cua’s claim; it argued that Cua’s claim should
have first been brought to arbitration. Cua opposed Advance Shipping’s
argument; he contended that he, as a consignee, was not bound by the
Charter Party Agreement, which was a contract between the ship owner
(Advance Shipping) and the charterers.7 The RTC initially deferred
resolving the question of jurisdiction until after trial on the merits,8 but upon
motion by Advance Shipping,9 the RTC ruled that Cua was not bound by the
arbitration clause in the Charter Party Agreement.10
In the meantime, Wallem filed its own motion to dismiss,11 raising the
sole ground of prescription. Section 3(6) of the Carriage of Goods by Sea Act (COGSA) provides
that “the carrier and the ship shall be discharged
from all liability in respect of loss or damage unless suit is brought within
one year after delivery of the goods.” Wallem alleged that the goods were
delivered to Cua on August 16, 1989, but the damages suit was instituted
only on November 12, 1990 – more than one year than the period allotted
under the COGSA. Since the action was filed beyond the one year
prescriptive period, Wallem argued that Cua’s action has been barred.
Cua filed an opposition to Wallem’s motion to dismiss, denying the
latter’s claim of prescription.12 Cua referred to the August 10, 1990 telex
message sent by Mr. A.R. Filder of Thomas Miller,13 manager of the UK
P&I Club,14 which stated that Advance Shipping agreed to extend the
commencement of suit for 90 days, from August 14, 1990 to November 12,
1990; the extension was made with the concurrence of the insurer of the
vessel, the UK P&I Club.
On February 11, 1992, Wallem filed an omnibus motion,15
withdrawing its motion to dismiss and adopting instead the arguments in
Advance Shipping’s motion to dismiss. It made an express reservation,
however, that it was not waiving “the defense of prescription and will allege
as one of its defenses, such defense of prescription and/or laches in its
Answer should this be required by the circumstances.
An order dated June 5, 1992,17 the RTC resolved that “the Court need not act
on the Motion to Dismiss filed by the defendant Wallem Philippines
Shipping, Inc.[,]”18 and required the defendants therein to file their Answer.
The respondents filed an appeal with the CA, insisting that Cua’s
claim is arbitrable and has been barred by prescription and/or laches.20 The
CA found the respondents’ claim of prescription meritorious after finding
that the August 10, 1990 telex message, extending the period to file an
action, was neither attached to Cua’s opposition to Wallem’s motion to
dismiss, nor presented during trial. The CA ruled that there was no basis for
the RTC to conclude that the prescriptive period was extended by the
parties’ agreement. Hence, it set aside the RTC decision and dismissed
Cua’s complaint.21
Cua filed a motion for reconsideration22 of the CA decision, which
was denied by the CA in a resolution dated January 31, 2006.23 Cua thus
filed the present petition to assail the CA rulings.
ISSUES:
whether or not Cua’s claim for payment of damages against the respondents has prescribed.
RULING:
After
considering the facts and the applicable law, the Court finds that Cua timely
filed his claim before the trial court.
Section 1, Rule 16 of the Rules of Court25 enumerates the grounds on
which a motion to dismiss a complaint may be based, and the prescription of
an action is included as one of the grounds under paragraph (f). The
defendant may either raise the grounds in a motion to dismiss or plead them
as an affirmative defense in his answer.26 The failure to raise or plead the
grounds generally amounts to a waiver, except if the ground pertains to (1)
lack of jurisdiction over the subject matter, (2) litis pendentia, (3) res judicata, or (4)
prescription.27 If the facts supporting any of these four listed
grounds are apparent from the pleadings or the evidence on record, the
courts may consider these grounds motu proprio and accordingly dismiss the
complaint.
The Court, therefore, need not
resolve the question of whether Wallem actually waived the defense of
prescription; an inquiry into this question is useless, as courts are
empowered to dismiss actions on the basis of prescription even if it is not
raised by the defendant so long as the facts supporting this ground are
evident from the records. In the present case, what is decisive is whether the
pleadings and the evidence support a finding that Cua’s claim has
prescribed, and it is on this point that we disagree with the CA’s findings.
We find that the CA failed to appreciate the admissions made by the
respondents in their pleadings that negate a finding of prescription of Cua’s
claim.
Respondents admitted the agreement extending
the period to file the claim
The COGSA is the applicable law for all contracts for carriage of
goods by sea to and from Philippine ports in foreign trade;28 it is thus the law
that the Court shall consider in the present case since the cargo was
transported from Brazil to the Philippines.
Under Section 3(6) of the COGSA, the carrier is discharged from
liability for loss or damage to the cargo “unless the suit is brought within
one year after delivery of the goods or the date when the goods should
have been delivered.”29 Jurisprudence, however, recognized the validity of
an agreement between the carrier and the shipper/consignee extending the
one-year period to file a claim.30
The vessel MV Argo Trader arrived in Manila on July 8, 1989; Cua’s
complaint for damages was filed before the RTC of Manila on November
12, 1990. Although the complaint was clearly filed beyond the one-year
period, Cua additionally alleged in his complaint (under paragraph 11) that
“[t]he defendants x x x agreed to extend the time for filing of the action
up to November 12, 1990.”31
The allegation of an agreement extending the period to file an action
in Cua’s complaint is a material averment that, under Section 11, Rule 8 of
the Rules of Court, must be specifically denied by the respondents;
otherwise, the allegation is deemed admitted.32
A specific denial is made by specifying each material allegation of
fact, the truth of which the defendant does not admit and, whenever
practicable, setting forth the substance of the matters upon which he relies to
support his denial.33 The purpose of requiring the defendant to make a
specific denial is to make him disclose the matters alleged in the complaint
which he succinctly intends to disprove at the trial, together with the matter
which he relied upon to support the denial.
A review of the pleadings submitted by the respondents discloses
that they failed to specifically deny Cua’s allegation of an agreement
extending the period to file an action to November 12, 1990. Wallem’s
motion to dismiss simply referred to the fact that Cua’s complaint was filed
more than one year from the arrival of the vessel, but it did not contain a
denial of the extension.35
Since the COGSA is the applicable law, the respondents’ discussion to
support their claim of prescription under Article 366 of the Code of
Commerce would, therefore, not constitute a refutation of Cua’s allegation
of extension. Given the respondents’ failure to specifically deny the
agreement on the extension of the period to file an action, the Court
considers the extension of the period as an admitted fact.
WHEREFORE, the decision dated May 16, 2005 and the resolution
dated January 31, 2006 of the Court of Appeals in CA-G.R. CV No. 53538
are SET ASIDE. The decision dated December 28, 1995 of the Regional
Trial Court of Manila, Branch 31, in Civil Case No. 90-55098 is
REINSTATED. Costs against the respondents.
