G.R. No. L-6517. November 29, 1954
E.E. ELSER, INC. AND ATLANTIC MUTUAL INSURANCE COMPANY, PETITIONERS VS. COURT OF APPEALS, INTERNATIONAL HARVESTER CO. OF PHILIPPINES AND ISTHMIAN STEAMSHIP COMPANY, RESPONDENTS.
BAUTISTA ANGELO, J.:
which affirms that of the court of origin dismissing the complaint
without pronouncement as to costs.
The facts, as found by the Court of Appeals, are:
“It appears that in the month of December, 1945 the
goods specified in the Bill of Lading marked as Annex A, were shipped
on the ‘S.S. Sea Hydra1, of Isthmian Steamship Company, from New York
to Manila, and were received by the consignee ‘Udharam Bazar &
Co.’, except one case of vanishing cream valued at P159.78. The goods
were insured against damage or loss by the ‘Atlantic Mutual Insurance
Co.’ ‘Udharam Bazar and Co.’ successively filed claim for the loss with
the Manila Terminal Co. Inc., who denied having received the goods for
custody, and the ‘International Harvester Co. of the Philippines’, as
agent for the shipping company, who answered that the goods were landed
and delivered to the Customs authorities. Finally, ‘Udharam Bazar &
Co.’ claimed for indemnity of the loss from the insurer, ‘Atlantic
Mutual Insurance Co.’, arid was paid by the latter’s agent ‘E. E. Elser
Inc.’ the amount involved, that is, P159.78.”
As may be noted, the Court of Appeals held that petitioners have
|already lost their right to press their claim against respondents
because of their failure to serve notice thereof upon the carrier
within 30 days after receipt of the notice of loss or damage as
required by clause 18 of the bill of lading which was issued concerning
the shipment of the merchandise which had allegedly disappeared. In
this respect, the court said that, “appellants unwittingly admitted
that they were late in claiming the indemnity for the loss of the case
of the vanishing cream as their written claim was made on April 25,
1946, or more than 30 days after they had been fully aware of said
loss,” and because of this failure, the Court said, the action of
petitioners should, and must, fall. Petitioners now contend that this
finding is erroneous fin the light of the provisions of the Carriage of
Goods by Sea Act of 1936, which apply to this case, the same having
been made an integral part of the covenants agreed upon in the bill of
lading.
There is merit in this contention. If this case were to be governed
by clause 18 of the bill of lading regardless of the provisions of the
Carriage of Goods by Sea Act of 1936, the conclusion reached by the
Court of Appeals would indeed be correct, but in our opinion this Act
cannot be ignored or disregarded in determining the equities of the
parties it appearing that the same was made an integral part of the
bill of lading by express stipulation. It should be noted, in this
connection, that the Carriage of Goods by Sea Act of 1936 was accepted and adopted by our government
by the enactment of Commonwealth Act No. 65 malting said
Act:”applicable to all contracts for the carriage of goods by sea to
and from Philippine ports in foreign trade.” And the pertinent
provisions of the Carriage of Goods by Sea Act of 1936 are:
“6. Unless notice of loss or damage and the general
nature of such loss or damage be given in writing to the carrier or his
agent at the port of discharge or at the time of the removal of the
goods into the custody of the person Entitled to delivery thereof under
the contract of carriage, such removal shall be prima facie
evidence of the delivery by the carrier of the goods as described in
the bill of lading. If the loss or damage is not apparent, the notice
must be given within three the delivery“* * * * * * * * * * * * * * * * *
“In
any event 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 concealed? 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.” (Section 3; Italics supplied)
It would therefore appear from the above that a carrier can only be
discharged from liability in respect of loss or damage if the suit is
not brought within one year after the delivery of the goods or the date
when the goods should have been delivered, and that, even if a notice
of loss or damage is not given as required, “that fact shall not affect
or prejudice the right of the shipper to bring suit within one year
after the delivery of the goods.” In other words, regardless of whether
the notice of loss or damage has been given, the shipper can still
bring an action to recover said loss or damage within one year after
the delivery of the goods, and, as we have stated above, this is
contrary to the provisions of clause 18: of the bill of lading. The
question that now rises is: Which of these two provisions should
prevail? Is it that contained in clause 18 of the bill of lading, or
that appearing in the Carriage of Goods by Sea Act?
The answer is not difficult to surmise. That clause 18 must of
necessity yield to the provisions of the Carriage of Goods by Sea Act
in view of the proviso contained in the same Act which says: “Any
clause, covenant, or agreement in a contract of carriage relieving the
carrier or the ship from liability for loss or damage to or in
connection with the goods * * * * or lessening such liability otherwise
than as provided in this Act, shall be null and void and of no effect.”
(section 3) This means that a carrier cannot limit its liability in a
manner contrary to what is provided for in said Act, and so clause 18
of the bill of lading must of necessity be null and void. This
interpretation finds support in a number of cases recently decided by
the American courts. Thus, in Balfour, Guthrie & Co., Ltd., et
al. vs. American-West African Line, Inc. and American-West African Line, Inc. vs.
Balfour, Guthrie & Co., Ltd., et al., 136 F. 2d. 320, wherein the
bill of lading provided that the owner should not be liable for loss of
cargo unless written notice thereof was given within 30 days after the
goods should (have been delivered and unless written claim therefor was
given within six months after giving such written notice, the United
States Circuit Court of Appeals, Second Circuit, in a decision
promulgated on August 2, 1943 made the following ruling:
“But the Act Sec. 3(6), 46 U.S.CA. Sec. 1303 (6)
provides that failure to give ‘notice of loss or damage’ shall not
prejudice the right of the shipper to bring suit within one year after
the date when the goods should have been delivered. To enforce a bill
of lading provision conditioning a ship-owner’s liability upon the
filing of written claim of loss, which, in turn, requires and depends
upon the filing of a prior notice of loss, certainly would do violence
to Sec.3(6). But further, as a like provision was apparently quite
customary in bills of lading prior to the act, the reasonable
implication of Sec. 3(6) is that failure to file written claim of loss
in no event may prejudice right of suit within a year of the scheduled
date for cargo delivery. This is also to be concluded from Sec. 3(8) 46
U.S.C.A Sec. 1303(8), that any clause in a bill of lading lessening the
liability of the carrier otherwise than as provided in the Act shall be
null and void. A similar provision in the British Carriage of Goods by
Sea Act, 14 & 15 Geo. vs. c. 22, has been interpreted to
nullify any requirement of written claim as a condition to suit at any
time. CF. Australasian United Steam Navigation Co., Ltd. vs. Hunt, (1921) 2 A.C, 351; Convent Sheppard & Co. vs. Larrinaga S.S. Co., 73 L1.L. Rep. 256.”[1]
But respondents contend that while the United States Carriage of
Goods by Sea Let of 1936 was accepted and adopted by our government by
virtue of Commonwealth Act No. 65, however, said Act does not have any
application to the present case because the shipment in question was
made in December, 1945, and arrived in Manila in February, 1946 and at
that time the Philippines was still a territory or possession of the
United States and, therefore, it may be said that the trade then
between the Philippines and the United States was not a “foreign trade.”
In other words, it is contended that the Carriage of Goods by Sea Act
as adopted by our government is only applicable “to all contracts, for
the carriage of goods I by sea to and from Philippine ports in foreign trade,” and therefore, it does not apply to the shipment in question.
Granting arguendo that the Philippines was a territory or
possession of the United States for the purposes of said Act and that
the trade between the Philippines and the United States before the
advent of independence was not foreign trade or can only be
considered in a domestic sense, still we are of the opinion that the
Carriage of Goods by Sea Act of 1936 may have application to the
present case it appearing that the parties have expressly agreed to
made and incorporate the provisions of said Act as integral part of
their contract of carriage. This is an exception to the rule regarding
the applicability of said Act. This is expressly recognized by Section
13 of said Act which contains the following proviso:
“Nothing in this Act shall be held to apply to
contracts for carriage of goods by sea between any port of the United
States or its possessions, and any other port of the United States or
its possessions: Provided, however, that any bill of lading
or similar document of title which is evidence of a contract for the
carriage of goods by sea between such ports, containing an express
statement that it shall be subject to the provisions of this Act shall
be subjected hereto as fully as if subject hereto by the express
provisions of this Act;” (Italics supplied)
This is also recognized by the very authority cited by counsel for
respondents, who, on this matter, has made the following comment:
“The Philippine Act of 1936 like the U.S. Act of 1936, applies propio vigore only to foreign commerce to all contracts for the carriage of goods by sea to and from Philippine ports in foreign trade.
“Prior
to Philippine Independence on July 4, I965 trade between the
Philippines and other ports and places under the American Flag, was
not, by any ordinary definition, foreign commerce. Hence, the U.S. and
Philippine Acts did not apply to such trades, even though conducted
under foreign bottoms and under foreign flag, unless the carrier expressly exercised the option given by Section 13 of the U.S. Act to carry under the provisions of that Act.
The fact that the U.S. coast wise flag monopoly did not extend to the
Philippine trade did not alter the fact that the U.S. Trade with the
Islands is domestic.” (Knaught, Ocean Bills of Lading, 1947 Ed. p. 250)
(Italics supplied)
Having reached the foregoing conclusion, it would appear clear that
the action of petitioners has not yet lapsed or prescribed, as
erroneously held by the Court of Appeals, it appearing that the present
action was brought within one year after the delivery of the shipment
in question.
As regards the contention of respondents that petitioners have the
burden of showing that the loss complained of did not take place after
the goods left the possession or custody of the carrier because (they
failed to give notice of their loss or damage as required by law, which
failure gives rise to the presumption that the goods were delivered as
described in the bill of lading, suffice it to state that, according to
the Court of Appeals, the required notice was given by the petitioners
to the carrier or its agent on April 25, 1946. That notice is
sufficient to overcome the above presumption within the meaning of the
law.
Wherefore, the decision appealed from is reversed. Respondents,
other than the Court of Appeals, are hereby sentenced to pay to the
petitioners the sum of P159.78 with legal interest thereon from the
date of the filing of the complaint, plus the costs of action.
Paras, C.J., Pablo, Bengzon, Padilla, Montemayor, Reyes, A., Concepcion, and Reyes, J.B.L., JJ., concur.
Mr. Justice Labrador, (on leave)
[1] This ruling was reiterated in Mackay, et al. vs. United States, et al., 83 F. Supp. 14, Oct. 29, 1948 and Givaudan Delawanna vs. The Blijdendijk, 91 F. Supp. 663, June 8, 1950.