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[TAN LIAO v. AMERICAN PRESIDENT LINES](https://lawyerly.ph/juris/view/c2c64?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09)
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[ GR No. L-7280, Jan 20, 1956 ]

TAN LIAO v. AMERICAN PRESIDENT LINES +

DECISION

98 Phil. 203

[ G.R. No. L-7280, January 20, 1956 ]

TAN LIAO, PLAINTIFF AND APPELLANT, VS. AMERICAN PRESIDENT LINES, LTD., DEFENDANT AND APPELLEE.

D E C I S I O N

REYES, J.B.L., J.:

This is an action filed by plaintiff-appellant Tan Liao against the  defendant-appellee  American President Lines, Ltd., for the recovery of P92,755, with interest from  the time of the  filing of the complaint, for damages allegedly suffered by plaintiff due to the  wrongful and unauthorized delay, transshipment, and careless handling in the transportation, of a cargo of eggs undertaken by defendant for plaintiff from the port of New  York, U. S. A., to the port of Manila.

The following facts are not  disputed:

On July 30, 1946, plaintiff entered into a contract with the Kent Sales Co., Inc., of New York City,  through the latter's  agents  in  Manila,  the  People's Trading,  for  the importation of  2,000 cases  of fresh hen eggs, for a total price of  $45,520  (P91,040  in Philippine currency), to be shipped on the S.S. "Marine Leopard", sailing from New York on August 7, 1946  (Exhibit B).  Upon notification and receipt of the payment,  made by letter of  credit of the Philippine Trust  Co. of Manila, the Kent Sales Co., Inc. issued on August  6,  1946 Invoice No. 5070 (Exhibit A) in favor of plaintiff, and on the same day contracted with the defendant shipping company to have the eggs shipped to Manila on the vessel S.S. "Marine Leopard" as refrigerated cargo, in accordance with B/L  No.  5297 issued on August 6,1946.  Also on the same day  (August 6), the defendant, through ship captain Frank J.  Wood, received at the port of New York the  2,000 cases  of eggs and  loaded them on the S.S. "Marine Leopard" in a refrigerated space for delivery to plaintiff in Manila.

Upon arrival in, San Francisco,  California, on August 30, 1946, the defendant unloaded the 2,000 cases of eggs from the S.S. "Marine Leopard", which resumed  its voyage, arriving in Singapore in September,  1946.  The eggs were later shipped on another of defendant's ships, the S.S. "General Meigs", on November 27, 1946, which arrived in Manila on December 26,  1946.

It is claimed by plaintiff that the discharge of his cargo at the port of San Francisco, was wrongful and unjustified, and a  violation  of the bill  of  lading  Exhibit B which provided that the eggs would be shipped to Manila on the S.S. "Marine Leopard"; that when they were, discharged in San Francisco, the eggs were exposed to the hot summer weather without having been placed in refrigeration from August SO to September 12, 1946, when they were transferred  to the storage plants of the National Ice and Cold Storage; that the eggs could have been transhipped on August 81, 1946, on the  S.S. "Clovis  Victory", also one of defendant's ships, that  arrived in Manila on September 20, 1946; that because of the delay  in the shipment and the careless and  repeated handling of  the  case3 of eggs by mechanical devices, a substantial number of them arrived broken and damaged; that upon  arrival  in  Manila, plaintiff employed the services of marine surveyors C. B. Nelson & Co., who reported  (Exhibit I) that  587 of the cases  were broken,  with  the1 eggs contained  therein in leaking condition, while the rest of the eggs in the  1,413 . cases were in a  state of deterioration; that upon recommendation of the surveyors,  plaintiff  immediately disposed of the eggs, realizing from the sale the amount of P27,300; that had the  cargo arrived in Manila without  any delay, plaintiff would have been able to sell each case of eggs for P60, or the entire shipment for the total sum of P120(000, thereby realizing a profit of P92,755 on his total investment; and that plaintiff having sold the eggs for only C27,300, he suffered a loss of P92,700, plus the sum of  P55 which he paid the marine  surveyors who inspected the cargo.

Defendant, upon the other hand, alleged in defense that under the terms of the Bill of Lading  Exhibit B, it was at liberty to tranship the  cargo  in question on any other vessel; that when the eggs were discharged in  San Francisco, they were immediately brought to the storage plant of the National Ice and  Cold Storage Co. so that if they arrived  in  Manila  in  deteriorated condition, it  was because of  the inherent nature or defect of the  eggs; that the delay in the transshipment of the cargo was due to the strike of the union  of longshoremen in the western coast of the United States from September  to  November, 1947, although when  the goods  were  unloaded  in San Francisco, there was yet no threat of  a  strike; and that immediately after  the. strike, the  cargo  was loaded and transported on the S.S.  "General  Meigs."  As a special defense, defendant  claimed that while  plaintiff  received the goods in  question  on  December  26,  1946,  he filed  a claim with  defendant for damages only on July 25,  1947 (denied on  February 16, 1948), and brought suit on May 25, 1948, more than a year from the  receipt of the goods, and so  plaintiff's action  had  prescribed  under section 3, ' paragraph 6 of the Carriage of Goods by Sea Act.

After trial,  the  Court below found  that plaintiff had suffered a  loss of  P25,896.81 by reason  of the delayed arrival  of his cargo of eggs, which defendant could have transshipped on the S.S.. "Clovis Victory" which left San Francisco before the  strike  of  the longshoremen in  the west coast  of the  United States.  The  Court, however, found defendant's defense of prescription meritorious, and so dismissed the case.  From the judgment of dismissal, plaintiff Tan Liao appealed to this Court.

The main argument of the appellant is that the present case does not fall  within the following prescriptive  provision of the Carriage, of  Goods by  Sea Act (section 3, paragraph 6):
"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."
In  support of his contention that  the  above provision does  not apply,  plaintiff-appellant argues that  the suit or action referred  to therein is one for "loss or damage, either apparent or concealed" to the goods,  and not one for a breach of  the contract of carriage on the  part  of the carrier where,  as in this case, it  is guilty of delay in the shipment of the goods, causing losses  and damages to the consignee.  The  distinction drawn is  more apparent than real.  Actually, any and all injury or damages suffered by the  goods, while in transit  and in the custody of the carrier, amounts to a breach of the contract of carriage, unless due to fortuitous event; for the carrier is bound to transport the goods safely and  so breaches its contract if it neglects such duty.

Appellant  also makes a distinction between damage to the goods and damages to the, shipper or consignee, and claims that while the former falls within  the prescriptive period .in question,  the latter is  governed by the provisions of the Code of Civil Procedure  (now the New Civil Code) on limitation of actions.  We  see  no difference between the two.  Whatever damage or injury is suffered by the goods while  in transit  would result in loss or damage to either the shipper  or  the consignee.  As long  as  it  is claimed, therefore, as it  is done here, that  the losses  or damages suffered by the shipper or consignee were due to the arrival of the  goods jn damaged  or deteriorated condition, the action is still basically one for damage to the goods, and must be filed  within the period of one  year from delivery or receipt, under  the  above-quoted provision of the Carriage of Goods  by Sea Act.

Appellant  furthermore  urges  that  the  action  or suit referred to in the provision in question  refers  only  to loss or  damage, to the goods in relation to their "loading, handling, storage,  carriage,  custody, care,  and discharge" (section 2, supra), and does not cover or include loss  or damage due  to the wrongful and unreasonable delay  in their transportation.  The argument is equally untenable. The obligation of the carrier to carry the goods naturally includes  the duty not  to delay their  transportation,  so unjustified delay, the carrier is held liable  therefor.  Besides, the damages or losses  claimed to have been suffered by appellant, on account of  the unreasonable delay in the shipment of his  cargo, still  arose from the  arrival of the goods in decayed and damaged state, resulting in appellant's inability  to sell them at the  price he would  have obtained had they arrived in good condition.  This is shown by the averments of has amended complaint  that such wrongful and unauthorized delay was the
"reason  for which a great portion of the said cargo of eggs decayed and became broken and rotten before the same was actually  delivered to the plaintiff"  (First Cause of Action, paragraph  4, Ree. App., 15) (Italics  supplied.) and that because of "the almost rotten condition in which the cargo was found at  the time it reached Manila, the, sale thereof only produced  the sum of P27,300,or a difference of P92.700  which is the Amount of sure profits which the  plaintiff  should have realized on said 2,000 cases  of hen fresh eggs had they arrived on time  in the port of Manila  *   *  *" (Second Cause  of  Action, paragraph 7, Rec. App.,  pp.  18-19). (Italics  supplied.)
And  the  second cause  of  action of appellant's  complaint clearly alleges that the defendant shipping company
"has failed to comply with its duty  and contractual obligation with the plaintiff to  exercise  due  care in  the custody  and handling of the said cargo of eggs as required  and demanded by the delicate nature of the eggs and by the gross negligence and acts of omission on the part of the  defendant, the aforesaid  cargo  suffered  damages while the  same was still in its custody, control and possession, as conclusively established by the numerous broken boxes or containers of the eggs as well as the great  number of  broken eggs"  *  *  *; (paragraph 2, Rec. App., pp.  16-17.)  (Italics supplied.)
Needless to say, such alleged negligence of  the  defendant company in the custody and handling  of appellant's cargo falls squarely within the provisions of the Carriage  of Goods by Sea Act.

There would be some merit in appellant's insistence that the damages suffered by him as a result of the delay in the shipment of his cargo ,are not covered by the prescriptive provision of  the  Carriage of  Goods by Sea  Act above referred to, if such  damages1 were due, not to the deterioration and decay of the  goods while in transit, but  to other, causes  independent of the  condition.of the cargo upon arrival, like a drop in their  market value.  But the ultimate objective of appellant's  action  being  to recover damages suffered by reason of the decay  and deterioration of his goods  while  in transit, the same is  still governed by the prescriptive period of one  year under the  Carriage of Goods by Sea Act.

Coming now to appellant's second proposition  that the Carriage of Goods  by Sea Act does not repeal  the  provisions of the Code  of Civil Procedure on prescription  of actions,  the question  has already been  resolved  by  this Court in the case  of  Chua  Kuy vs.  Everett  Steamship Corp., 50 Off. Gaz. No. 1, p. 159, and the very recent  case of Go Chan & Co. vs. Aboitiz & Co., Supra, p. 179 promulgated December  29,  1955,  wherein, -we ruled  that the prescriptive period of one year established in the  Carriage of Goods by Sea Act modified pro tanto  the provisions  of Act No. 190 as to goods transported to  and from Philippine ports in foreign trade, the former being a special act while the latter is a law of general application.

Lastly, appellant  urges that, assuming that his action against the defendant company prescribes in one year, the same accrued, not upon his receipt of the goods, but upon denial of  his claim for damages by the  defendant on February 16, 1948.   The  claim Hs clearly without merit, for the law in question explicitly requires -that suit must be brought "within one year after delivery  of the goods or the date when the goods should have been  delivered". Neither could the pendency of the extra-judicial claim for damages filed with the defendant company toll or suspend the running of the period of limitation; for as already ruled in the case  of  Chua  Kuy vs. Everett Steamship  Corp., supra, neither the proposal for  arbitration for the fact that negotiations have been made  for  the  adjustment of a  controversy suspends  the running of the  period for prescription, unless there is an express agreement  to the contrary.  There "being no stipulation  between  appellant and  the  defendant company that the prescriptive  period for the filing of an action for  loss or damage to the goods would be suspended by  the filing  of  a claim  with the carrier for damages and  pending  action thereon appellant is required to bring  suit against the  latter  within one year from the receipt  of his goods, and  not having done so, his action had already prescribed.

Wherefore, the decision appealed from is affirmed. No pronouncement as to costs.  So ordered.

ParĂ¡s, C.  J.,  Padilla, Montemayor, Reyes, A., Bautista Angelo, Labrador, and Concepcion, JJ., concur.

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