G.R. No. L-17730 - F. H. Stevens and Co., Inc. vs. Norddeutscher Lloyd

Plaintiff, F. H. Stevens & Co., Inc., initiated an action against defendant Norddeuscher Lloyd for the loss and/or short delivery of 2,000 pieces of prismatical thermometers shipped from Hamburg to Manila aboard the vessel “MS SCHWABENSTEIN.”
The shipment, valued at $650, departed on March 28, 1959, and arrived in Manila on May 15, 1959.
On May 21, 1959, the vessel’s master notified the plaintiff—through its broker—of the delivery of the goods, during which it was discovered that 1,154 pieces, valued at $342.74, were missing and/or destroyed.

Plaintiff promptly filed a notice and formal claim regarding the loss, accompanied by several demands for payment; however, defendant failed to render the sum of $342.74.
Additionally, plaintiff claimed damages consisting of P1,000 as attorney’s fees and P664.70 as unrealized profits.
An action was earlier instituted before the Municipal Court of Manila on April 27, 1960, aiming at recovering the value of the damaged goods and the corresponding damages.

The Municipal Court action was dismissed on June 13, 1960, without a trial on the merits, for lack of jurisdiction relating to the admiralty and maritime subject-matter.
Defendant moved to dismiss the complaint filed in the Court of First Instance on June 24, 1960, on the basis that the cause of action had prescribed.
Plaintiff’s position was that the filing of the earlier action interrupted the running of the one-year prescription period provided in Commonwealth Act No. 65 (Carriage of Goods by Sea Act), and that the period should have resumed only after the dismissal of the previous action.

Plaintiff asserted that Article 1155 of the Civil Code of the Philippines, which states that the prescription of actions is interrupted by filing before the court, applied to its case.
Further reliance was placed on Section 49 of Act No. 190, which renews the prescription period in certain circumstances, such as when a judgment in an action is reversed or when an action is dismissed without adjudicating the merits.
Plaintiff contended that, with the renewal of the prescription period effective from June 14, 1960, its case, filed on June 24, 1960, fell within the allowable time limit.

Whether the filing of the action in the Municipal Court on April 27, 1960, which was later dismissed, interrupted or renewed the running of the one-year prescription period provided under Commonwealth Act No. 65 in relation to the Carriage of Goods by Sea Act.
Whether the subsequent commencement of the case in the Court of First Instance on June 24, 1960, was within the prescribed period once the prescription period was interrupted by the prior action, pursuant to Article 1155 of the Civil Code of the Philippines and Section 49 of Act No. 190.
Whether the dismissal of the earlier municipal action, being a dismissal without any pronouncement on the merits, should allow for the renewal of the prescription period, thereby rendering plaintiff’s present filing timely.