45. Ang vs.

American Steamship Agencies of Hiranos Automatic Cop Change for Cotton Loom for
Calico at Nagoya, aboard the “S.S. CELEBES MARU",
VOL. 19, MARCH 18, 1967 631 for Manila, with the Kansai Steamship Co., Ltd. of
Ang vs. American Steamship Agencies, Inc. Osaka, Japan, as carrier, of which the American
No. L-25047. March 18, 1967. Steamship Agencies, Inc. is the agent in the Philippines,
DOMINGO ANG, plaintiff-appellant, vs. AMERICAN under a shipping agreement, Bill of Lading No. NM-1,
STEAMSHIP AGENCIES, INC., defendant-appellee. dated February 17, 1961, consigned “to order of the
No. L-25050. March 18, 1967. shipper”, with Herminio G. Teves as the party to be
DOMINGO ANG, plaintiff-appellant, vs. AMERICAN notified of the arrival of said articles.
STEAMSHIP AGENCIES, INC., defendant-appellee. Similarly, on June 3, 1961, the United States
Carriage of Goods by Sea Act;  Prescription;  In Contracting Officer, on behalf of Nippon Trading Shokai
case of misdelivery. Civil Code applies.—For suits not for Nishi-
predicated upon loss or damage but on alleged 633
misdelivery or conversion of the goods, the applicable VOL. 19, MARCH 18, 1967 633
rule on prescription is that found in the New Civil Code, Ang vs. American Steamship Agencies, Inc.
i.e., either ten years for breach of a written contract or man Kaihatsu Co., Ltd. shipped the boat containing U.S.
four years for quasi-delict (Arts. 1144, 1146, Civil Code), Military Surplus at Yokohama, Japan, aboard the
and not the rule on prescription in the Carriage of Goods “KYOJU MARU", with Sankyo Kiun Kabushiki Kaisha of
by Sea Act. Japan as carrier, of which the American Steamship
APPEAL from two orders of dismissal rendered by the Agencies, Inc. is the agent in the Philippines, under a
Court of First Instance of Manila. Santos, G. and Morfe, shipping agreement, Bill of Lading No. YM-3, dated June
JJ. 3, 1961, consigned “to the order of Yau Yue Commercial
The facts are stated in the opinion of the Court. Bank, Ltd. of Hongkong”, with Davao Merchandising
     Juan T. David for plaintiff-appellant. Corporation as the party to be notified of the arrival of
     Ross, Selph & Carrascoso for defendant- said boat.
appellee. The bills of lading were indorsed to the order of Yau
632 Yue and delivered to it by the respective shippers. Upon
63 SUPREME COURT REPORTS receipt thereof, Yan Yue drew demand drafts together
2 ANNOTATED with the bills of lading against Teves and Davao
Ang vs. American Steamship Agencies, Inc. Merchandising Corp., through the Hongkong & Shanghai
BENGZON, J.P., J.: Bank.
These are two cases separately appealed to the Court of The shipment for Teves arrived in Manila on March 2,
Appeals and certified to Us by said Court. Since both 1961; that of Davao Merchandising Corp., arrived on
appeals involve the same parties and issue, they are June 10, 1961. Accordingly, Hongkong & Shanghai Bank
decided together herein. notified Teves and the Davao Merchandising
Yau Yue Commercial Bank, Ltd. of Hongkong, also Corporation, the “notify parties” under the bills of lading,
referred to hereafter as Yau Yue, agreed to sell one boat of the arrival of the goods and requested payment of the
(50 feet, 30 tons) containing used U.S. Military Surplus demand drafts representing the purchase prices of the
to one Davao Merchandising Corp. for the sum of articles. The Davao Merchandising Corp. and Teves,
$8,820.27 (US), and 42 cases (62 sets and 494 pieces) however, did not pay the respective drafts, prompting the
of Hiranos Automatic Cop Change f or Cotton Loom f or bank in both cases to make the corresponding protests.
Calico to one Herminio Teves for the sum of $18,246.65 The bank likewise returned the bills of lading and
(US), respectively. demand drafts to Yau Yue which indorsed both bills of
Said agreements were both subject to the following lading to Domingo Ang.
terms and arrangements: (a) the purchase price should Teves and Davao Merchandising Corporation,
be covered by a bank draft for the corresponding amount however, were able to obtain bank guaranties in favor of
which should be paid by the purchaser in exchange for the American Steamship Agencies, Inc,, as carriers’
the delivery of the corresponding bill of lading to be agent, to the effect that they would surrender the original
deposited with a local bank, the Hongkong & Shanghai and negotiable bills of lading duly indorsed by Yau Yue.
Bank of Manila; (b) upon arrival of the articles in Manila And on the strength of said guaranties, Davao
the purchaser would be notif ied and would have to pay Merchandising Corp. and Teves each succeeded in
the amount called for in the corresponding demand draft, securing a “Permit To Deliver Imported Articles” from the
after which the bill of lading would be delivered to said carriers’ agent, which they presented to the Bureau of
purchaser; and (c) the purchaser would present said bill Customs. In turn the latter released to them the articles
of lading to the carrier’s agent, American Steamship covered by the bills of lading.
Agencies, Inc., which would then issue the After being informed by the American Steamship
corresponding “Permit To Deliver Imported Articles” to Agencies that the articles covered by the respective bills
be presented to the Bureau of Customs to obtain the of lading were already delivered by them to the Davao
release of the articles. Merchandising Corp. and to Teves, Domingo Ang filed
Pursuant thereto, on February 17, 1961, Hirahira & claims
Co., Ltd, shipped the 42 cases (62 sets and 494 pieces) 634

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63 SUPREME COURT REPORTS submitted their memoranda of authorities and counter-
4 ANNOTATED authorities, respectively, the lower court by an order
Ang vs. American Steamship Agencies, Inc. dated February 20, 1964, reconsidered its prior order of
with the carriers’ agent for the cost of said articles, January 6, 1964 and dismissed plaintiff’s action also on
interests and damages. The American Steamship the ground of prescription. From this order, defendant
Agencies, Inc., however, refused payment. appealed to the Court of Appeals. This is now L-25047
Domingo Ang thereafter filed separate complaints in and refers to the Davao Merchandising Corp. shipment.
the Court of First Instance of Manila against the At issue is a question purely of law, namely: Did
American Steamship Agencies, Inc., for having allegedly plaintiff-appellant’s causes of action prescribe under
wrongfully delivered and/or converted the goods covered Section 3(6), paragraph 4 of the Carriage of Goods by
by the bills of lading belonging to plaintiff Ang, to the Sea Act?
damage and prejudice of the latter. The suit as to the The point has already been resolved by this Court in
Teves shipment was filed on October 30, 1963; that a case involving the same parties and parallel facts to
referring to the Davao Merchandising Corp’s shipment those herein involved. In Domingo Ang vs. American
was filed on November 14, 1963. Steamship Agencies, Inc., L-22491, January 27, 1967,
Subsequently, defendant filed motions to dismiss We held that the one-year prescriptive period under
upon the ground that plaintiff’s causes of action have Section 3(6), paragraph 4 of the Carriage of Goods by
prescribed under the Carriage of Goods by Sea Act Sea Act does not apply to cases of misdelivery or
(Commonwealth Act No. 65), more particularly section conversion. For convenience, We quote the ruling
3(6), paragraph 4, which provides: therein:
“In any event, the carrier and the ship shall be “The provision of law involved in this case speaks of
discharged from all liability in respect to loss or ‘loss or damage’. That there was no damage caused to
damage unless suit is brought within one year after the goods which were delivered intact to Herminio G.
delivery of the goods or the date when the goods should Teves who did not file any notice of damage, is admitted
have been delivered.” by both parties in this case. What is to be resolved—in
It argued that the cargoes should have been delivered to order to determine the applicability of the prescriptive
the person entitled to the delivery thereof, i.e., plaintiff, period of one year to the case at bar—is whether or not
on March 2, 1961 (Teves shipment) and June 10, 1961 there was ‘Ioss’ of the goods subject matter of the
(Davao Merchandising Corp. shipment), the respective complaint.
dates of the vessels’ arrival in Manila, and that even “Nowhere is ‘loss’ defined in the Carriage of Goos by
allowing a reasonable time (even one month) after such Sea Act. Therefore, recourse must be had to the Civil
arrivals within which to make delivery, still, the actions Code which provides in Article 18 thereof that, ‘ln
commenced on October 30, 1963 and November 14, matters which
1963, respectively, were filed beyond the prescribed 636
period of one year. 63 SUPREME COURT REPORTS
By order dated February 21, 1964, copy of which was 6 ANNOTATED
received by plaintiff on February 28, 1964, the lower Ang vs. American Steamship Agencies, Inc.
court presided over by the Hon, Judge Guillermo S. are governed by the Code of Commerce and special
Santos, dismissed the action (in re the 42 cases [62 sets laws, their deficiency shall be supplied by the provisions
and 494 pieces] of Hiranos Automatic Cop Change for of this Code/
Cotton Loom for Calico) on the ground of prescription. “Article 1189 of the Civil Code defines the word ‘loss’
His motion for reconsideration dated March 20, 1964 in Cases where conditions have been imposed with the
having been denied by the lower court in its order dated intention of suspending the efficacy of an obligation to
June 5, 1964, plaintiff appealed to the Court of Appeals. give. The contract of carriage under consideration
This is now L-25050 and refers to the Teves shipment. entered into by and between American Steamship
635 Agencies, Inc. and the Yau Yue (which later on endorsed
VOL. 19, MARCH 18, 1967 635 the bill of lading covering the shipment to plaintiff herein
Ang vs. American Steamship Agencies, Inc. Domingo Ang), is one involving an obligation to give or to
Upon the other hand, by order dated January 6, 1964, deliver the goods ‘to the order of shipper’ that is, upon
the lower court presided over by the Hon. Jesus P. the presentation and surrender of the bill of lading. This
Morfe (in re the boat [50 feet, 30 tons] containing used being so, said article can be applied to the present
U.S. Military Surplus) denied the motion to dismiss on controversy, more specifically paragraph 2 thereof which
the ground that there being no allegation in the complaint provides that, ‘x x x it is understood that a thing is lost
as to the date of arrival of the cargo or the date of which when it perishes, or goes out of commerce, or
it should have been delivered, the defendant was relying disappears in such a way that its existence is unknown
on facts which are not yet in evidence such as or it cannot be recovered.’
presuming that the cargo had arrived on the specific date “As defined in the Civil Code and as applied to
and that the same had been delivered on another Section 3(6), paragraph 4 of the Carriage of Goods by
specific date. Sea Act, ‘loss’ contemplates merely a situation where no
Upon a motion for reconsideration f iled by the delivery at all was made by the shipper of the goods
defendant on January 13, 1964 and after the parties because the same had perished, gone out of commerce,

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or disappeared in such a way that their existence is Concepcion, C.J., Reyes,
unknown or they cannot be recovered. It does not J.B.L., Dizon, Regala, Makalintal,  Zaldivar,  Sanchez an
include a situation where there was indeed delivery—but d Castro, JJ., concur.
delivery to the wrong person, or a misdelivery, as alleged Orders of dismissal set aside and cases remanded to
in the complaint in this case. lower court for further proceedings.
x      x      x      x      x _____________
“The point that matters here is that the situation is © Copyright 2021 Central Book Supply, Inc. All rights
either delivery or misdelivery, but not nondelivery. Thus, reserved.
the goods were either rightly delivered or misdelivered,
but they were not lost. There being no loss or damage to
the goods, the aforequoted provision of the Carriage of
Goods by Sea Act stating that ‘ln 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/ does not apply. The
reason is not dif f icult to see. Said one-year period of
limitation is designed to meet the exigencies of maritime
hazards. In a case where the goods shipped were
neither lost nor damaged in transit but were, on the
contrary, delivered in port to someone who claimed to be
entitled thereto, the situation is different, and the special
need for the short period of limitation in cases of loss or
damage caused by maritime perils does not obtain.
“It follows that for suits predicated not upon loss or
damage but on alleged misdelivery (or conversion) of the
goods, the applicable rule on prescription is that found in
the Civil Code, namely, either ten years for breach of a
written contract or four years for quasi-delict (Arts.
1144[1], 1146, Civil Code). x x x”
637
VOL. 19, MARCH 18, 1967 637
Santos, etc., et al. vs. Secretary of Public
Works and Communications
The goods covered by the two shipments subject matter
of these appealed cases were also delivered to the
notified parties, Davao Merchandising Corporation and
Herminio Teves, despite the latter’s inability to present
the proper bills of lading and without the knowledge and
consent of plaintiff-appellant Domingo Ang to whom
were endorsed said bills of lading. There is therefore
likewise misdelivery not nondelivery. Finally, the
recipients of said goods did not file any complaint with
defendant regarding any damage to the same. No loss
nor damage is therefore involved in these cases. And
thus the prescriptive period under Section 3(6),
paragraph 4 of the Carriage of Goods by Sea Act does
not apply. The applicable prescriptive period is that
found in the Civil Code, namely, either ten years for
breach of a written contract or four years for quasi-delict
(Arts. 1144 [1] and 1146). Since the complaints in these
appealed cases were -filed two years and five months
(as to Davao Merchandising Corp. shipment) and 2
years and 8 months (as to Teves shipment), from the
arrival of the two shipments, it is clear that the causes of
action have not yet prescribed.
Wherefore, the orders appealed from dismissing
plaintiffs complaints in these two cases on the ground of
prescription are hereby reversed and set aside; let said
cases be remanded to the respective court a quo for
further proceedings, So ordered.

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