82. PHILAMGEN v.
SWEET LINES
G.R. No. 87434 / August 5, 1992 / Bills of Lading
PETITIONERS: Philippine American General Insurance Co. Inc. and Tagum
Plastics Inc.
RESPONDENTS: Sweet Lines Inc., Davao Veterans Arrastre and Port
Services Inc. and CA
SUMMARY. TAGUM, from Davao, imported polyethylene [basic plastic
material] from F. E. Zuellig in America. Co-petitioner PHILAMGEN is its
insurer. The shipment has to first arrive in Manila before it can be
interisland shipped to Davao. Respondent Sweet Lines was hired to ferry
said shipment to Davao. Upon arrival at Davao, it was found that some
of the imported plastics were undelivered or damaged. Petitioners filed
suit on the basis of the bills of lading. Unfortunately, said bills of lading
contain prescriptive periods of sixty (60) days to file for claims of
loss/damages. It also required notice to respondent carrier before
judicial claims may be had. The bills of lading, however, were not
formally presented as evidence during trial. The RTC ruled in favor
of importer-petitioner, but the CA reversed on the basis of prescription.
The SC upheld the CA, saying that even though the bills of lading were
not formally presented as evidence, the same were sufficiently referred
to in the pleadings of both parties. Hence, it was deemed judicially
admitted and no evidence was required to prove its existence.
DOCTRINE. In the absence of any statutory limitation and subject only
to the requirement on the reasonableness of the stipulated limitation
period, the parties to a contract of carriage may fix by agreement a
shorter time for the bringing of suit on a claim for the loss of or damage
to the shipment than that provided by the statute of limitations.
FACTS.
 Petitioners Philippine American General Insurance Co. Inc. (Philamgen)
and Tagum Plastics Inc. commenced an action against private
respondents Sweet Lines Inc. (SLI) and Davao Veterans Arrastre and
Port Services Inc. (DVAPSI), along with SCI Line and F.E. Zuellig Inc. as
co-defendants
.
 The vessel SS VISHVA YASH belonging to or operated by foreign
common carrier took on board at Baton Rouge, LA, two consignments
of cargoes for shipment to Manila and later for transshipment to
Davao. It consisted 600 bags Low Density Polyethylene 631 and
another 6,400 bags Low Density Polyethylene 647. The cargoes were
insured by the Tagum Plastics Inc. with Philamgen.
 The vessel arrived at Manila and discharged its cargoes in the Port of
Manila for transshipment to Davao City. For the transshipment, the
service of the vessel MV Sweet Love owned by Sweet Lines was used.
 Shipments were discharged from the interisland carrier into the
custody of the consignee. A survey was conducted, and it was found
that, of the cargo covered by Bill of Lading no. 25 and 26, supposed to
contain 6,400 bags of Low Density Polyethylene 647, but only 5, 413
bags were in good order and out of the 600 bags of Low Density
Polyethylene 631, only 507 bags were in good condition. Only a total of
5,820 bags were delivered to the consignee in good order, leaving a
balance of 1,080 bags.
 Tagum filed suit against respondent Sweet Lines and the Davao
Veterans Arrastre which handled the cargoes at the Davao port.
o The basis for such suit are the bills of lading, which serves as
the contract between parties that the goods indicated therein
are to be delivered complete in number and in the condition
specified.
o Militating against the petitioners, however, is the prescriptive
period included in the bills of lading. It states that any
action arising from shortage or damages must be
brought within sixty (60) days from accrual of right of
action.
o Also, notice of claims for loss or damages is required to be
given to the carrier before the institution of judicial claims.
• The bills of lading were not formally offered as evidence; hence it was
not shown that a contractual prescriptive period was indicated therein.
• The Trial Court ruled in favor of petitioners PHILAMGEN and TAGUM, but
the CA reversed on the basis of prescription. Hence, this petition for review
on certiorari.
ISSUES & RATIO.
1. WON the CA correctly ruled on the basis of prescription even
without formal evidence of its existence? – YES.
Existence of the provision in the bill of lading on prescription was
properly proven in the pleadings
The litigation obviously revolves on such bills of lading which are
practically the documents or contracts sued upon, hence, they are
inevitably involved and their provisions cannot be disregarded in the
determination of the relative rights of the parties thereto. Respondent
court correctly passed upon the matter of prescription, since that defense
was so considered and controverted by the parties.
Since petitioners are suing on the basis of contractual obligations indicated
in the bills of lading, such bills can be categorized as actionable documents
which under the Rules of Court must be properly pleaded either as causes
of action or defenses, and the genuineness and due execution of which are
deemed admitted unless specifically denied under oath by the adverse
party.
Failure to specifically deny the existence of the instruments in question
amounts to an admission. Judicial admissions, verbal or written, made by
the parties in the pleadings or in the course of the trial or other
proceedings in the same case are conclusive, no evidence being required
to prove the same, and cannot be contradicted unless shown to have been
made through palpable mistake or that no such admission was made.
In the case at bar, prescription as an affirmative defense was seasonably
raised by respondent Sweet Lines in its answer, except that the bills of
lading embodying the same were not formally offered in evidence.
Petitioner specifically replied to such defense in respondent’s answer, but it
failed to controvert the existence of the bills of lading. It is thus in the
nature of a negative pregnant. Consequently, they impliedly admitted the
same when they merely assailed the validity of subject stipulations.
Petitioners MUST SPECIFICALLY DENY THE EXISTENCE OR
PRESENTATION OF EVIDENCE. This is petitioners’ reply to respondent’s
answer:
“In connection with Pars. 14 and 15 of defendant Sweet Lines,
Inc.'s Answer, plaintiffs state that such agreements are what the Supreme
Court considers as contracts of adhesion and, consequently, the provisions
therein which are contrary to law and public policy cannot be availed of by
answering defendant as valid defenses.”
Contracts of adhesion, while frowned upon, are not absolutely
illegal.
Petitioners posit that the alleged shorter prescriptive period which is in the
nature of a limitation on petitioners' right of recovery is unreasonable and
that SLI has the burden of proving otherwise, citing the earlier case of
Southern Lines, Inc. vs. Court of Appeals, et al.
BUT the validity of a contractual limitation of time for filing the
suit has generally been upheld as such stipulation merely affects
the plaintiff's remedy and does not affect the liability of the
defendant.
In the absence of any statutory limitation and subject only to the
requirement on the reasonableness of the stipulated limitation period, the
parties to a contract of carriage may fix by agreement a shorter time for
the bringing of suit on a claim for the loss of or damage to the shipment
than that provided by the statute of limitations.
Such limitation is not contrary to public policy for it does not in any way
defeat the right to recover, but merely requires the assertion of that right
by action at an earlier period than would be necessary to defeat it through
the operation of the ordinary statute of limitations.
The fundamental reason or purpose of such a stipulation is not to relieve
the carrier from just liability, but reasonably to inform it that the shipment
has been damaged and that it is charged with liability therefor.
DECISION.
Petition denied by the SC.

Petitioners failed to touch on the matter of the non-presentation of the bills

of lading. Hence it is too late in the day to now allow the litigation to be
overturned on that score, for to do so would mean an over-indulgence in
technicalities. Petitioners' feigned ignorance of the provisions of the bills of
lading does not deserve serious attention.

2. WON he stipulation as to the prescriptive period was valid? –

YES.