Cua v. Wallem Philippines Shipping
REITERATIONFacts
The Antecedents: Petitioner Benjamin Cua filed a civil action for damages against respondents Wallem Philippines Shipping, Inc. (Wallem) and Advance Shipping Corporation (Advance Shipping) for alleged damage to and shortage of a shipment of Brazilian Soyabean. Cua claimed the loss was due to the respondents' failure to exercise extraordinary diligence in carrying the cargo. Procedural History: Advance Shipping moved to dismiss, arguing that Cua's claim should have been brought to arbitration as per the Charter Party Agreement. The Regional Trial Court (RTC) initially deferred the ruling but later held that Cua, as a consignee, was not bound by the arbitration clause. Wallem moved to dismiss on the ground of prescription, citing Section 3(6) of the Carriage of Goods by Sea Act (COGSA), which requires suits to be brought within one year after delivery of the goods. Cua opposed, alleging a telex message from UK P&I Club indicated an agreement to extend the commencement of suit for 90 days. Wallem later withdrew its motion to dismiss but reserved its defense of prescription. After trial, the RTC found the respondents jointly and severally liable for damages. The Court of Appeals (CA) reversed the RTC decision, finding the claim barred by prescription as the telex message was not presented as evidence. Cua's motion for reconsideration was denied. The Petition: Cua filed a petition for review on certiorari, arguing that the extension of the period to file the complaint was an admitted fact due to the respondents' failure to specifically deny it, and that Wallem's withdrawal of its motion to dismiss constituted an admission. He prayed for the reinstatement of the RTC decision.
Issue(s)
Whether the Court of Appeals erred in dismissing Cua's complaint on the ground of prescription, considering the alleged agreement to extend the prescriptive period under COGSA. Whether the respondents' pleadings and subsequent statements constituted an admission of the existence of an agreement extending the period to file the claim, thereby precluding the defense of prescription.
Ruling
The petition is granted. The decision of the Court of Appeals is set aside, and the decision of the Regional Trial Court is reinstated.
Ratio Decidendi
On the issue of prescription and admitted facts regarding the extension agreement: The Court held that while prescription is a valid ground for dismissal and can be considered motu proprio, the Court of Appeals erred in finding that Cua's claim had prescribed. The applicable law is COGSA, which provides a one-year prescriptive period. However, agreements extending this period are valid. Cua alleged an extension to November 12, 1990. On the issue of admission by the respondents: Under the Rules of Court, a material averment not specifically denied is deemed admitted. The Court found that the respondents failed to specifically deny the extension in their pleadings. Wallem's motion to dismiss did not deny the extension, and Advance Shipping's motion focused on arbitration. Their joint answer denied the allegation without providing a factual basis. The respondents' subsequent arguments regarding prescription under the Code of Commerce were not a refutation of the COGSA claim or the alleged extension. The agreement to extend the period was deemed admitted, further strengthened by an express statement in the respondents' Memorandum filed with the RTC, stating that the case was filed "within the extended period agreed upon by the parties to file suit." Given this admission, it was unnecessary for Cua to formally present the telex message. Consequently, Cua's claim was timely filed, and the Court of Appeals erred in dismissing the complaint.
Main Doctrine
The failure of respondents to specifically deny the allegation of an agreement extending the period to file a claim, as required by Section 11, Rule 8 of the Rules of Court, results in the admission of such an agreement. This admission, further bolstered by an express statement in their memorandum, negates the defense of prescription, even if the evidence supporting the extension was not formally presented during trial.