GR L 5915; (March, 1955) (Digest)
G.R. No. L-5915; March 31, 1955
EAGLE STAR INSURANCE CO., LTD., KURR STEAMSHIP CO., INC., ROOSEVELT STEAMSHIP AGENCY, INC., and LEIF HOEGH & COMPANY, A/S., petitioners, vs. CHIA YU, respondent.
FACTS
On January 15, 1946, Atkin, Kroll & Co. shipped 14 bales of assorted underwear valued at P8,085.23, consigned to Chia Yu in Manila, aboard the S.S. Roeph Silverlight owned by Leif Hoegh & Co., A/S. The shipment was insured against all risks by Eagle Star Insurance Co. The vessel arrived in Manila on February 10, 1946, and discharge of cargo began on March 4 into the custody of Manila Terminal Co., Inc. Only 10 bales were delivered to Chia Yu; 4 were missing, and 3 of those delivered were 50% damaged. Chia Yu claimed indemnity from both the carrier and the insurer. Both claims were declined. Chia Yu filed an action against the carrier, the insurer, and their respective Philippine agents in the Court of First Instance of Manila on November 16, 1948, more than two years after the delivery of the damaged bales and the date the missing bales should have been delivered. The defendants raised the defense of prescription. The trial court ruled in favor of Chia Yu, a decision affirmed by the Court of Appeals. The case was elevated to the Supreme Court via certiorari.
ISSUE
The primary issue is whether Chia Yu’s action has prescribed against (1) the carrier and (2) the insurer.
RULING
1. As to the Carrier: The action against the carrier has prescribed. The bill of lading contained a stipulation, incorporated from the United States Carriage of Goods by Sea Act (made applicable by Commonwealth Act 65), discharging the carrier from all liability unless suit is brought within one year after delivery of the goods or the date they should have been delivered. Following prior jurisprudence, the Supreme Court gave force to this stipulation. Since the action was filed more than one year after the relevant dates, the carrier and its agents were discharged from liability.
2. As to the Insurer: The action against the insurer has not prescribed. The insurer relied on a policy clause requiring suit to be commenced within twelve months “next after the happening of the loss.” The Court held this clause void as applied in the Philippines. Section 61-A of the Insurance Act (inserted by Act 4101) voids any policy condition limiting the time for commencing an action to less than one year from the accrual of the cause of action. The policy clause was repugnant to this law because, by starting the period from the “happening of the loss” and requiring prior compliance with conditions (like filing a claim with the carrier), it effectively shortened the suit period to less than one year. Furthermore, the Court agreed with the lower court that the cause of action against the insurer accrued only upon the final rejection of the claim. The record showed the insurer finally rejected the claim on April 22, 1948. The suit, filed on November 16, 1948, was within twelve months from that date. The judgment was therefore reversed concerning the carrier and its agents but affirmed concerning the insurance company and its agents.