Title
Ang vs. American Steamship Agencies, Inc.
Case
G.R. No. L-25047
Decision Date
Mar 18, 1967
Domingo Ang sued American Steamship Agencies for wrongful delivery of goods. Court ruled misdelivery claims not subject to one-year maritime prescriptive period; Civil Code’s longer periods apply. Case remanded.
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Case Digest (G.R. No. L-25047)

Facts:

Parties Involved

  • Plaintiff-Appellant: Domingo Ang
  • Defendant-Appellee: American Steamship Agencies, Inc.

Background of the Case

  1. Yau Yue Commercial Bank Ltd. of Hongkong (Yau Yue) agreed to sell:

    • A boat (50 feet, 30 tons) containing used U.S. Military Surplus to Davao Merchandising Corp. for $8,820.27 (US).
    • 42 cases (62 sets and 494 pieces) of Hiranos Automatic Cop Change for Cotton Loom for Calico to Herminio Teves for $18,246.65 (US).
  2. Terms of the Agreements:

    • The purchase price was to be covered by a bank draft.
    • Upon arrival of the goods in Manila, the purchaser would pay the amount in the demand draft, and the bill of lading would be delivered to them.
    • The purchaser would present the bill of lading to the carrier's agent (American Steamship Agencies, Inc.) to obtain a "Permit To Deliver Imported Articles" from the Bureau of Customs.

Shipment Details

  1. Teves Shipment:

    • Shipped by Hirahira & Co., Ltd. on February 17, 1961, aboard the "S.S. CELEBES MARU" from Nagoya to Manila.
    • Bill of Lading No. NM-1, consigned "to order of the shipper," with Herminio G. Teves as the notify party.
    • Arrived in Manila on March 2, 1961.
  2. Davao Merchandising Corp. Shipment:

    • Shipped by the United States Contracting Officer on June 3, 1961, aboard the "KYOJU MARU" from Yokohama to Manila.
    • Bill of Lading No. YM-3, consigned "to the order of Yau Yue Commercial Bank, Ltd. of Hongkong," with Davao Merchandising Corp. as the notify party.
    • Arrived in Manila on June 10, 1961.

Key Events

  • Yau Yue drew demand drafts against Teves and Davao Merchandising Corp. through the Hongkong & Shanghai Bank.
  • Teves and Davao Merchandising Corp. failed to pay the drafts, leading the bank to return the bills of lading and demand drafts to Yau Yue.
  • Yau Yue endorsed the bills of lading to Domingo Ang.
  • Teves and Davao Merchandising Corp. obtained bank guaranties in favor of American Steamship Agencies, Inc., allowing them to secure "Permit To Deliver Imported Articles" and release the goods from the Bureau of Customs.
  • Domingo Ang filed claims with American Steamship Agencies, Inc. for the cost of the articles, interests, and damages, but the claims were refused.

Legal Proceedings

  • Domingo Ang filed separate complaints in the Court of First Instance of Manila against American Steamship Agencies, Inc. for wrongful delivery/conversion of goods.
  • The defendant filed motions to dismiss, arguing that the causes of action had prescribed under the Carriage of Goods by Sea Act (one-year prescriptive period).
  • The lower court dismissed the actions on the ground of prescription, prompting Domingo Ang to appeal to the Court of Appeals.

Issue:

  1. Did Domingo Ang's causes of action prescribe under Section 3(6), paragraph 4 of the Carriage of Goods by Sea Act?

Ruling:

The Supreme Court ruled that the one-year prescriptive period under Section 3(6), paragraph 4 of the Carriage of Goods by Sea Act does not apply to cases of misdelivery or conversion. The applicable prescriptive period is found in the Civil Code: ten years for breach of a written contract or four years for quasi-delict. Since the complaints were filed within these periods, the causes of action had not prescribed.

Ratio:

  1. Definition of "Loss" under the Carriage of Goods by Sea Act:

    • The Act does not define "loss." The Civil Code defines "loss" as situations where goods perish, go out of commerce, or disappear in such a way that their existence is unknown or they cannot be recovered.
    • Misdelivery (delivery to the wrong person) does not constitute "loss" under the Act.
  2. Applicability of the One-Year Prescriptive Period:

    • The one-year period applies only to cases involving loss or damage caused by maritime perils.
    • In cases of misdelivery or conversion, the Civil Code's prescriptive periods (10 years for breach of contract or 4 years for quasi-delict) apply.
  3. No Loss or Damage in the Case:

    • The goods were delivered to the notify parties (Teves and Davao Merchandising Corp.) without proper bills of lading, constituting misdelivery.
    • Since there was no loss or damage, the Carriage of Goods by Sea Act's one-year prescriptive period does not apply.
  4. Timeliness of the Complaints:

    • The complaints were filed within the applicable Civil Code prescriptive periods (2 years and 5 months for Davao Merchandising Corp. shipment; 2 years and 8 months for Teves shipment).
    • Therefore, the causes of action had not prescribed.

Conclusion:

The Supreme Court reversed the lower court's dismissal of Domingo Ang's complaints and remanded the cases for further proceedings.


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