G.R. No. L-22491 - Ang vs. American Steamship Agencies, Inc.

Yau Yue Commercial Bank Ltd. (Hongkong) agreed to sell 140 packages of galvanized steel durzinc sheets to Herminio G. Teves for the sum of US$32,458.26.
The contract was subject to specific terms and arrangements, namely:

Payment by means of a bank draft exchanged for the corresponding bill of lading, to be deposited with the Hongkong & Shanghai Bank of Manila.
Upon the arrival of the articles in Manila, Teves would be notified and obliged to pay the amount reflected in the demand draft, after which the bill of lading would be delivered.
The delivered bill of lading was required to be presented to the American Steamship Agencies, Inc., the carrier’s agent, to obtain the necessary “Permit To Deliver Imported Articles” for customs clearance.

Yau Yue, via Tokyo Boeki, Ltd. of Tokyo, Japan, shipped the articles from Yawata, Japan, on April 30, 1961, aboard the S.S. TENSAI MARU.
The shipment was effected under a shipping agreement, as evidenced by Bill of Lading No. WM-2 dated April 50, 1961, which was originally consigned “to order of the shipper,” with Herminio G. Teves designated as the notify party.
The bill of lading was indorsed to and subsequently delivered to Yau Yue by the shipper, who then used it to draw a demand draft against Teves through the Hongkong & Shanghai Bank.

Upon arrival of the goods in Manila on or about May 9, 1961, Teves was notified by the bank to effect payment of the demand draft.
Teves failed to pay, which led the bank to protest and return both the demand draft and the bill of lading to Yau Yue.
Yau Yue subsequently indorsed the bill of lading to Domingo Ang, who later became the plaintiff in the action.

Despite Teves' non-payment, he obtained a bank guaranty in favor of American Steamship Agencies, Inc. guaranteeing that he would surrender the original bill of lading duly indorsed by Yau Yue.
Based on this guaranty, Teves secured a “Permit To Deliver Imported Articles” from the carrier’s agent, which he then presented to the Bureau of Customs to have the articles released.

Domingo Ang, asserting his right as the holder in due course of the bill of lading, claimed that the goods were wrongfully delivered and/or converted by American Steamship Agencies, Inc.
On October 30, 1963, Ang filed a complaint in the Court of First Instance of Manila against the carrier for misdelivery and conversion of the goods.
The defendant moved to dismiss the case on the ground that the cause of action had prescribed under Section 3(6), paragraph 4 of the Carriage of Goods by Sea Act, which mandates a one-year period for filing suit after delivery (or the time when delivery should have been effected).
The lower court dismissed the action on December 21, 1963, and denied Ang’s motion for reconsideration, leading to Ang’s appeal to the Supreme Court on the prescription issue.

Whether the plaintiff’s cause of action is time-barred under the one-year prescriptive period provided by Section 3(6), paragraph 4 of the Carriage of Goods by Sea Act.

Determining if the alleged misdelivery falls under “loss or damage” as contemplated by the Act.

Whether the situation at bar constitutes nondelivery (implying loss) or misdelivery (implying erroneous delivery).

Analysis of whether delivery to Herminio G. Teves, even under questionable circumstances, amounts to “loss” for purposes of the statutory prescription.

Whether the applicable prescriptive period should be that prescribed by the Carriage of Goods by Sea Act or, alternatively, the longer periods provided under the Civil Code for breach of contract or quasi-delict.

Balancing the maritime hazard concerns of the Act versus the general rules on prescription regarding misdelivery and conversion.