Ang v. American Steamship Agencies, Inc.
REITERATIONFacts
1. The Antecedents: Yau Yue Commercial Bank Ltd. agreed to sell 140 packages of galvanized steel durzinc sheets to Herminio G. Teves for $32,458.26, with payment to be covered by a bank draft exchanged for the bill of lading, which Teves would then present to American Steamship Agencies, Inc. (ASA) for a release permit. Yau Yue shipped the goods via S.S. TENSAI MARU, with ASA as the Philippine agent, and the bill of lading was consigned 'to order of the shipper' with Teves as the party to be notified. Yau Yue drew a demand draft against Teves, but upon arrival, Teves failed to pay, leading to the protest and return of the bill of lading and draft to Yau Yue, who then indorsed it to Domingo Ang. Despite non-payment, Teves obtained a bank guaranty in favor of ASA, allowing him to secure a 'Permit To Deliver Imported Articles,' which he presented to the Bureau of Customs, resulting in the release of the articles to him. Domingo Ang subsequently claimed the articles from ASA with the indorsed bill of lading but was informed they had already been delivered to Teves. 2. Procedural History: Domingo Ang filed a complaint against ASA for wrongful delivery and/or conversion of the goods. ASA filed a motion to dismiss, arguing that the action had prescribed under Section 3(6) of the Carriage of Goods by Sea Act, which provides a one-year period for suits concerning loss or damage after delivery or when delivery should have been made. The lower court dismissed the action, and Ang appealed. 3. The Petition: The plaintiff-appellant questions whether his cause of action has prescribed under Section 3(6), paragraph 4 of the Carriage of Goods by Sea Act.
Issue(s)
Whether the one-year prescriptive period under Section 3(6) of the Carriage of Goods by Sea Act applies to an action for misdelivery or conversion. Whether the plaintiff-appellant's cause of action has prescribed.
Ruling
The Supreme Court reversed and set aside the dismissal order, remanding the case to the court a quo for further proceedings. The Court ruled that the plaintiff-appellant's cause of action has not prescribed.
Ratio Decidendi
On Whether the one-year prescriptive period under Section 3(6) of the Carriage of Goods by Sea Act applies to an action for misdelivery or conversion: The Court clarified that the provision of the Carriage of Goods by Sea Act regarding the one-year prescriptive period specifically pertains to "loss or damage" to goods. It was emphasized that "loss" under this Act, when supplemented by the Civil Code, contemplates situations where the goods perish, go out of commerce, disappear, or cannot be recovered. The present case, however, involves allegations of misdelivery or conversion, not loss or damage. The goods were delivered to Herminio G. Teves, meaning there was actual delivery, albeit potentially to the wrong person. The Court distinguished this from non-delivery, where the goods are lost entirely. Therefore, the one-year prescriptive period, designed for maritime hazards and the exigencies of maritime commerce, is not applicable to a situation of alleged misdelivery or conversion. The Court cited its ruling in Tan Pho vs. Hassamal Dalamal to underscore that delivery to the wrong person constitutes misdelivery and not non-delivery, as the goods were indeed delivered. On Whether the plaintiff-appellant's cause of action has prescribed: Given that the one-year prescriptive period under the Carriage of Goods by Sea Act does not apply to actions for misdelivery or conversion, the applicable rules on prescription are those found in the Civil Code. The Court stated that an action for misdelivery or conversion could be based on a breach of a written contract, which prescribes in ten years under Article 1144(1) of the Civil Code, or on a quasi-delict, which prescribes in four years under Article 1146 of the Civil Code. The plaintiff filed his complaint on October 30, 1963. The ship arrived in Manila on May 9, 1961. Even if the cause of action accrued on the date of arrival, the filing of the suit was well within the ten-year period for breach of contract and the four-year period for quasi-delict. Therefore, the plaintiff's cause of action had not yet prescribed.
Main Doctrine
The one-year prescriptive period under Section 3(6) of the Carriage of Goods by Sea Act applies only to cases of loss or damage to goods, not to actions for misdelivery or conversion, for which the prescriptive periods under the Civil Code (ten years for breach of written contract or four years for quasi-delict) are applicable.