G.R. No. L-5554; May 27, 1953
Benito Chua Kuy, petitioner, vs. Everett Steamship Corporation, respondent.

FACTS

Prior to January 6, 1947, petitioner Benito Chua Kuy ordered 500 cases of evaporated milk of 96 babies through an indentor. The goods were purchased from the Columbia Pacific Distributing Company of Portland, Oregon, and shipped on January 6, 1947, aboard the S/S H.H. Raymond, consigned to the order of the China Banking Corporation and Min Sheng Trading, Manila, under a bill of lading describing the cargo as “500 Cases evaporated milk 96 babies.” The ship arrived in Manila on February 21, 1947, and the cargo was discharged to the Manila Terminal Company, which delivered it to Min Sheng Trading on February 26, 1947. Upon unpacking, the petitioner discovered the cargo consisted of 500 cases of 48 babies of evaporated milk, not 96 babies as ordered. The petitioner immediately notified the respondent, the local agent of the ship owner, of the shortage and later filed a formal claim for P3,911.06. Negotiations for amicable settlement failed, and the petitioner filed an action on May 7, 1948.

ISSUE

1. Whether the Carriage of Goods by Sea Act is applicable to the contract of carriage.
2. Whether the petitioner’s action has prescribed.
3. Whether the respondent is liable for the indemnity claimed.

RULING

1. Yes, the Carriage of Goods by Sea Act is applicable. The Act, enacted by the U.S. Congress on April 16, 1936, applies to contracts for the carriage of goods by sea to or from ports of the United States in foreign trade. The Philippines, through Commonwealth Act No. 65, accepted its application to all contracts for the carriage of goods by sea to and from Philippine ports in foreign trade. Although the Philippines was a U.S. territory when the Act was made applicable, upon gaining independence on July 4, 1946, trade with the U.S. became foreign trade, squarely placing the transaction within the Act’s purview. The Court of Appeals correctly held the Act applicable.
2. Yes, the action has prescribed. Section 3(6) of the Carriage of Goods by Sea Act requires that suit be brought within one year after delivery of the goods. The cargo was delivered on February 26, 1947, and the action was filed on May 7, 1948, more than one year later. The petitioner’s contention that the prescriptive period under the Code of Civil Procedure should apply is untenable, as the Carriage of Goods by Sea Act is a special law governing the case. The petitioner’s argument that the one-year prescriptive period applies only to the shipper and not to other parties like the consignee is also without merit. A reading of the Act shows the notice of loss or damage can be given by the consignee or endorsee, and the one-year period applies to all parties entitled to sue. Furthermore, negotiations for amicable settlement did not suspend the running of the prescriptive period in the absence of an express agreement to that effect.
3. The issue of indemnity was not reached. Having ruled that the action was barred by prescription, the Court did not address the merits of the claim for indemnity.
The decision of the Court of Appeals affirming the dismissal of the action by the Court of First Instance of Manila was affirmed.