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SUPREME COURT REPORTS ANNOTATED

Dole Philippines, Inc. vs. Maritime Co. of the Phils.

No. L-61352. February 27,1987.*

DOLE PHILIPPINES, INC., plaintiff-appellant, vs. MARITIME COMPANY OF THE PHILIPPINES, defendant-
appellee.

Mercantile Law; Carriage of Goods by Sea Act; Prescription; Written extrajudicial demand by the creditor
does not toll the running of the one year prescriptive period under the Act.—These arguments might
merit weightier consideration were it not for the fact that the question has already received a definitive
answer, adverse to the position taken by Dole, in The Yek Tong Lin Fire & Marine Insurance Co., Ltd. vs.
American President Lines, Inc. There, in a parallel factual situation, where suit to recover for damage to
cargo shipped by vessel from Tokyo to Manila was filed more than two years after the consignee's
receipt of the cargo, this Court rejected the contention that an extrajudicial demand tolled the
prescriptive period provided for in the Carriage of Goods by Sea Act.

Same; Same; Same; Same; Period to file an action even under a new period having already lapsed
without filing the action, the right of action had prescribed.—Moreover, no different result would obtain

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* FIRST DIVISION.

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Dole Philippines, Inc. vs. Maritime Co. of the Phils.

even if the Court were to accept the proposition that a written extrajudicial demand does toll
prescription under the Carriage of Goods by Sea Act. The demand in this instance would be the claim for
damage filed by Dole with Maritime on May 4, 1972. The effect of that demand would have been to
renew the one-year prescriptive period from the date of its making. Stated otherwise, under Dole's
theory, when its claim was received by Maritime, the one-year prescriptive period was interrupted
—"tolled" would be the more precise term—and began to run anew from May 4, 1972, affording Dole
another period of one (1) year counted from that date within which to institute action on its claim for
damage. Unfortunately, Dole let the new period lapse without filing action. It instituted Civil Case No.
91043 only on June 11, 1973, more than one month after that period had expired and its right of action
had prescribed.

Same; Same; Same; Same; Same; Tolling of the prescriptive period cannot be equated with indefinite
suspension; Case at bar.—Dole's contention that the prescriptive period "*** remained tolled as of May
4, 1972 *** (and that) in legal contemplation *** (the) case (Civil Case No. 96353) was filed on January
6,1975 *** well within the one-year prescriptive period in Sec. 3(6) of the Carriage of Goods by Sea Act,"
equates tolling with indefinite suspension. It is clearly fallacious and merits no consideration.

APPEAL from the order of the Court of First Instance of Manila, Br. 16.

The f acts are stated in the opinion of the Court.

     Domingo E. de Lara & Associates for plaintiff-appellant.

     Bito, Misa and Lozada Law Office for defendant-appellee.

NARVASA, J.:

This appeal, which was certif ied to the Court by the Court of Appeals as involving only questions of
law,1 relates to a claim for loss and/or damage to a shipment of machine parts sought to be enforced by
the consignee, appellant Dole Philippines, Inc. (hereinafter called Dole) against the carrier, Maritime
Company of the Philippines (hereinafter called Maritime),

_______________

1 Rollo, pp. 32-34.

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SUPREME COURT REPORTS ANNOTATED

Dole Philippines, Inc. vs. Maritime Co. of the Phils.

under the provisions of the Carriage of Goods by Sea Act.2

The basic facts are succinctly stated in the order of the Trial Court3 dated March 16, 1977, the relevant
portion of which reads:

"* * *

Before the plaintiff started presenting evidence at today's trial, at the instance of the Court the lawyers
entered into the following stipulation of facts:

1.The cargo subject of the instant case was discharged in Dadiangas unto the custody of the consignee
on December 18,1971;

2.The corresponding claim for the damages sustained by the cargo was filed by the plaintiff with the
defendant vessel on May 4, 1972;

3.On June 11,1973 the plaintiff filed a complaint in the Court of First Instance of Manila, docketed
therein as Civil Case No. 91043, embodying three (3) causes of action involving three (3) separate and
different shipments. The third cause of action therein involved the cargo now subject of this present
litigation;

4.On December 11, 1974, Judge Serafin Cuevas issued an Order in Civil Case No. 91043 dismissing the
first two causes of action in the aforesaid case with prejudice and without pronouncement as to costs
because the parties had settled or compromised the claims involved therein. The third cause of action
which covered the cargo subject of this case now was likewise dismissed but without prejudice as it was
not covered by the settlement. The dismissal of that complaint containing the three causes of action was
upon a joint motion to dismiss filed by the parties;

5.Because of the dismissal of the (complaint in Civil Case No. 91043 with respect to the third cause of
action without prejudice, plaintiff instituted this present complaint on January 6,1975.

* * * "4

To the complaint in the subsequent action Maritime filed an

_______________

2 U.S. Public Act No. 521 which was made applicable to all contracts for the carriage of goods by sea to
and from Philippine ports in foreign trade by Commonwealth Act No. 65 approved October 22, 1936.

3 In Civil Case No. 96353, CFI of Manila.

4 Record on Appeal, pp. 22-23.

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Dole Philippines, Inc. vs. Maritime Co. of the Phils.

answer pleading inter alia the affirmative defense of prescription under the provisions of the Carriage of
Goods by Sea Act,5 and following pre-trial, moved for a preliminary hearing on said defense.6 The Trial
Court granted the motion, scheduling the preliminary hearing on April 27, 1977.7 The record before the
Court does not show whether or not that hearing was held, but under date of May 6,1977, Maritime
filed a formal motion to dismiss invoking once more the ground of prescription.8 The motion was
opposed by Dole9 and the Trial Court, after due consideration, resolved the matter in favor of Maritime
and dismissed the complaint.10 Dole sought a reconsideration, which was denied,11 and thereafter took
the present appeal from the order of dismissal.

The pivotal issue is whether or not Article 1155 of the Civil Code providing that the prescription of
actions is interrupted by the making of an extrajudicial written demand by the creditor is applicable to
actions brought under the Carriage of Goods by Sea Act which, in its Section 3, paragraph 6, provides
that:

"*** the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit
is brought within one year after delivery of the goods or the date when the goods should have been
delivered; Provided, That, if a notice of loss or damage, either apparent or conceded, is not given as
provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring suit
within one year after the delivery of the goods or the date when the goods should have been delivered.

***"

Dole concedes that its action is subject to the one-year period of limitation prescribed in the above-cited
provision.12

_______________

5 Id., pp. 14-16.

6 Id., pp. 24-25.

7 Id., pp. 25-26.

8 Id., pp. 29-33.

9 Id., pp. 34-39.

10 Id., pp. 39-44.

11 Id., pp. 65-66.

12 Appellant's Brief, p. 11.

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SUPREME COURT REPORTS ANNOTATED

Dole Philippines, Inc. vs. Maritime Co. of the Phils.

The substance of its argument is that since the provisions of the Civil Code are, by express mandate of
said Code, suppletory of deficiencies in the Code of Commerce and special laws in matters governed by
the latter,13 and there being "*** a patent deficiency *** with respect to the tolling of the prescriptive
period ***" provided for in the Carriage of Goods by Sea Act,14 prescription under said Act is subject to
the provisions of Article 1155 of the Civil Code on tolling; and because Dole's claim for loss or damage
made on May 4, 1972 amounted to a written extrajudicial demand which would toll or interrupt
prescription under Article 1155, it operated to toll prescription also in actions under the Carriage of
Goods by Sea Act. To much the same effect is the further argument based on Article 1176 of the Civil
Code which provides that the rights and obligations of common carriers shall be governed by the Code
of Commerce and by special laws in all matters not regulated by the Civil Code.

These arguments might merit weightier consideration were it not for the fact that the question has
already received a definitive answer, adverse to the position taken by Dole, in The Yek Tong Lin Fire &
Marine Insurance Co., Ltd. vs. American President Lines, Inc.15 There, in a parallel factual situation,
where suit to recover for damage to cargo shipped by vessel from Tokyo to Manila was filed more than
two years after the consignee's receipt of the cargo, this Court rejected the contention that an
extrajudicial demand tolled the prescriptive period provided for in the Carriage of Goods by Sea Act, viz:
"In the second assignment of error plaintiff-appellant argues that it was error for the court a quo not to
have considered the action of plaintiff-appellant suspended by the extrajudicial demand which took
place, according to defendant's own motion to dismiss, on August 22, 1952. We notice that while
plaintiff avoids stating any date when the goods arrived in Manila, it relies upon the allegation made in
the motion to dismiss that a protest was filed on August 22, 1952—which goes to show that plaintiff-
appellant's counsel has not

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13 Art. 18, Civil Code.

14 Appellant's Brief, p. 12.

15 No. L-11081, April 30,1958; 103 Phil. 1125 (unrep.).

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Dole Philippines, Inc. vs. Maritime Co. of the Phils.

been laying the facts squarely- before the court for the consideration of the merits of the case. We have
already decided that in a case governed by the Carriage of Goods by Sea Act, the general provisions of
the Code of Civil Procedure on prescription should not be made to apply, (Chua Kuy vs. Everett
Steamship Corp., G.R. No, L5554, May 27, 1953.) Similarly, we now hold that in such a case the general
provisions of the new Civil Code (Art 1155) cannot be made to apply, as such application would have the
effect of extending the one-year period of prescription fixed in the law. It is desirable that matters
affecting transportation of goods by sea be decided in as short a time as possible; the application of the
provisions of Article 1155 of the new Civil Code would unnecessarily extend the period and permit
delays in the settlement of questions affecting transportation, contrary to the clear intent and purpose
of the law. ***"
Moreover, no different result would obtain even if the Court were to accept the proposition that a
written extrajudicial demand does toll prescription under the Carriage of Goods by Sea Act. The demand
in this instance would be the claim for damage filed by Dole with Maritime on May 4,1972. The effect of
that demand would have been to renew the one-year prescriptive period from the date of its making,
Stated otherwise, under Dole's theory, when its claim was received by Maritime, the one-year
prescriptive period was interrupted—"tolled" would be the more precise term—and began to run anew
from May 4, 1972, affording Dole another period of one (1) year counted from that date within which to
institute action on its claim for damage. Unfortunately, Dole let the new period lapse without filing
action. It instituted Civil Case No. 91043 only on June 11, 1973, more than one month after that period
has expired and its right of action had prescribed.

Dole's contention that the prescriptive period "*** remained tolled as of May 4, 1972 *** (and that) in
legal contemplation *** (the) case (Civil Case No. 96353) was filed on January 6, 1975 *** well within
the one-year prescriptive period in Sec. 3(6) of the Carriage of Goods by Sea Act,"16 equates tolling with
indefinite suspension. It is clearly fallacious and merits no consideration.

_______________

16 Appellant's Brief, p. 18.

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SUPREME COURT REPORTS ANNOTATED

Dole Philippines, Inc. vs. Maritime Co. of the Phils.

WHEREFORE, the order of dismissal appealed from is affirmed, with costs against the appellant, Dole
Philippines, Inc.

SO ORDERED.
     Yap (Chairman), Melencio-Herrera, Cruz, Feliciano, Gancayco and Sarmiento, JJ., concur.

Order affirmed.

Notes.—Appellant having received the questioned cargoes in good order when unloaded from the ship,
the inference is obvious that the damage happened in its possession and should be liable therefor,
because by law, loss or damage while in possession of an obligor is presumed due to its fault in the
absence of contrary proof. (Atlantic Mutual Insurance Co. vs. Macondray & Co., Inc., 2 SCRA 603.)

If an action is dismissed for lack of jurisdiction after the one-year period of prescription within which an
action may be brought pursuant to Commonwealth Act No. 65, in relation to the Carriage of Goods by
Sea Act, the period for filing a new action is renewed for another year under section 49 of Act No. 190.
(F.H. Stevens & Co., Inc. v. Norddeuscher Lloyd, 6 SCRA 180.)

The one-year prescriptive period under Section 3(6) of paragraph 4 of the Carriage of Goods by Sea Act
is not applicable in cases of misdelivery or conversion. (Ang vs. American Steamship Agencies, Inc., 19
SCRA 123.)

The prescriptive period for suits predicated not upon lost or damage but on alleged misdelivery or
conversion of goods is that found in the New Civil Code, that is, either ten years for breach of a written
contract or four years for quasi-delict. (Id.)

——o0o——

125

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the Phils., 148 SCRA 118, No. L-61352 February 27, 1987