GR L 25047; (March, 1967) (Digest)
G.R. No. L-25047 and L-25050, March 18, 1967
Domingo Ang, plaintiff-appellant, vs. American Steamship Agencies, Inc., defendant-appellee.
FACTS
Yau Yue Commercial Bank, Ltd. of Hongkong agreed to sell goods to Davao Merchandising Corp. and Herminio Teves under terms requiring payment via bank draft in exchange for the bill of lading. The goods were shipped via carriers represented in the Philippines by American Steamship Agencies, Inc. The bills of lading were consigned “to order” and endorsed to Yau Yue. Upon arrival in Manila (March 2, 1961 for Teves; June 10, 1961 for Davao), the notify parties (Teves and Davao Merchandising) did not pay the drafts. The bank returned the bills of lading to Yau Yue, which endorsed them to Domingo Ang. However, Teves and Davao Merchandising obtained bank guaranties from American Steamship Agencies, and on that basis, secured delivery of the goods from the Bureau of Customs without presenting the original bills of lading. Domingo Ang, as endorsee of the bills of lading, filed complaints against American Steamship Agencies for wrongful delivery/conversion. The defendant moved to dismiss, arguing prescription under the Carriage of Goods by Sea Act (one-year period from delivery or date delivery should have occurred). The lower courts dismissed both cases on grounds of prescription. Plaintiff appealed.
ISSUE
Did plaintiff-appellant’s causes of action prescribe under Section 3(6), paragraph 4 of the Carriage of Goods by Sea Act?
RULING
No. The Supreme Court reversed the orders of dismissal. The one-year prescriptive period under the Carriage of Goods by Sea Act applies only to “loss or damage” as defined under the law. Citing a prior case involving the same parties, the Court held that “loss” refers to situations where goods perish, go out of commerce, or disappear, not to misdelivery or conversion. Here, the goods were delivered, albeit to the wrong parties (misdelivery), and no damage was claimed by the recipients. Therefore, the Carriage of Goods by Sea Act’s prescriptive period does not apply. The applicable prescriptive periods are under the Civil Code: ten years for breach of written contract or four years for quasi-delict. Since the complaints were filed within two years and eight months from the shipments’ arrival, the causes of action had not prescribed. The cases were remanded to the lower courts for further proceedings.