Case Digest (G.R. No. 168433)
Facts:
UCPB General Insurance Co., Inc. v. Aboitiz Shipping Corp., Eagle Express Lines, Damco Intermodal Services, Inc., and Pimentel Customs Brokerage Co., G.R. No. 168433, February 10, 2009, Supreme Court Second Division, Tinga, J., writing for the Court.On June 18, 1991, San Miguel Corporation (SMC) purchased three units of a waste water treatment plant from Super Max Engineering Enterprises, Co., Ltd. The goods arrived in Manila aboard MV Scandutch Star and were subsequently transshipped to Cebu aboard MV Aboitiz Supercon II. After customs clearance the shipment was delivered to SMC’s plant on August 2, 1991, when SMC discovered that one electrical motor (DBS Drive Unit Model DE-30-7) was damaged.
Under an insurance policy, UCPB General Insurance Co., Inc. (UCPB) paid SMC P1,703,381.40 for the damaged unit and received a subrogation form from SMC dated March 31, 1992. As subrogee, UCPB filed a complaint on July 21, 1992 against several parties allegedly responsible for the damage: Damco Intermodal Services, Inc. (DAMCO), Aboitiz Shipping Corporation (Aboitiz), Eagle Express Lines (Eagle Express), and Pimentel Customs Brokerage Co. (Pimentel Customs). East Asiatic Co., Ltd. (East Asiatic) was later impleaded as the alleged general agent of DAMCO; DAMCO was declared in default by the trial court on January 6, 1995.
East Asiatic moved for a preliminary hearing on prescription; the trial court denied this motion on September 1, 1995, but East Asiatic elevated the denial via petition for certiorari, and this Court, in a February 14, 1996 decision, set aside the trial court order and dismissed the complaint against East Asiatic; that dismissal became final by entry of judgment on December 5, 1996. The trial on the remaining defendants proceeded, and on November 29, 1999 the Regional Trial Court (RTC) of Makati, Branch 146, rendered judgment declaring DAMCO, Eagle Express and Aboitiz solidarily liable to UCPB for P1,703,381.40.
Eagle Express and Aboitiz appealed to the Court of Appeals (CA). The CA, in a Decision dated October 29, 2004, reversed the RTC, holding that UCPB’s right of action against the carriers did not accrue because no formal notice of claim was filed within 24 hours from receipt of the damaged merchandise as required by Article 366 of the Code of Commerce; the CA treated the 24-hour notice as a condition precedent to suit. UCPB filed a Petition for Review on Certiorari under Rule 45 with this Court challenging the CA decision; the CA’s resolution denying reconsideration was dated June 14, 2005.
In its pleadings before this Court UCPB argued that the damage was discovered at the time the cargo was opened at the International Container Terminal Services, Inc. (ICTSI) in Manila in the presence of a carrier’s representative (identified by UCPB as an Eagle Express representative) and that the joint inspection/turnover surveys rendered formal notice unnecessary under the Carriage of Goods by S...(Subscriber-Only)
Issues:
- Was the applicability of Article 366 of the Code of Commerce (24-hour formal notice) raised before the trial court such that the Court of Appeals could properly consider it on appeal?
- Does failure to give formal notice of claim within 24 hours under Article 366 bar UCPB’s cause of action (i.e., is the notice requirement a condition precedent to accrual)?
- Did the joint inspection at ICTSI in the presence of an Eagle Express representative dispense with the Article 366 written-notice requirement under COGSA Sec. 3(6)?
- May Pim...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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