Carriage of Goods by Sea Act (COGSA)

ELSER INC v. CA
(G.R. No. L-6517 | 29 November 1954)
FACTS
Petitioner: E.E. Elser, Inc.; Atlantic Mutual Insurance Company
Respondent: CA; International Harvester Company of the Philippines; Isthmian Steamship Company

Goods were shipped on S.S. Sea Hydra of respondent Isthmian (agent: petitioner International Harvester) from New York to Manila, and were received
by consignee Udharam Bazar and Co., except one case of vanishing cream. The goods were insured against damage or loss by petitioner Atlantic.
Consignee denied having received the goods for custody, and private respondents answered that the goods were landed and delivered to the Customs
authorities. Udharam claimed for indemnity from petitioner Atlantic, and was paid by its agent, Elser. CA held that petitioners have already lost their
right to press their claim against respondent because of their failure to serve notice thereof upon the carrier within 30 days after receipt of notice of loss
or damage, as required by clause 18 of the bill of lading.

Petitioner argues that COGSA (1 year instead of 30 days), and not the bill of lading, is applicable in this case. Respondents contend that while the
United States Carriage of Goods by Sea Act of 1936 was accepted and adopted by our government by virtue of Commonwealth Act No. 65, however,
said Act does not have any application to the present case because the shipment in question was made in December, 1945, and arrived in Manila in
February, 1946 and at that time the Philippines was still a territory or possession of the United States and, therefore it may be said that the trade then
between the Philippines and the United States was not a "foreign trade". In other words, it is contended that the Carriage of Goods by Sea Act as
adopted by our government is only applicable "to all contracts for the carriage of goods by sea to and from Philippine ports in foreign trade," and,
therefore, it does not apply to the shipment in question.
ISSUE
W/N COGSA is applicable in this case – YES
RULING
The Carriage of Goods by Sea Act of 1936 was accepted and adopted by our government by the enactment of Commonwealth Act No. 65 making said
Act applicable to all contracts for the carriage in foreign trade.

“Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier of his agent at the port of discharge
or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, such removal shall
be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading. If the loss or damage is not apparent, the notice
must be given within three days of the delivery xxx 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.”

That clause 18 must of necessity yields to the provisions of the Carriage of Goods by Sea Act in view of the proviso contained in the same Act which
says: "any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection
with the goods . . . or lessening such liability otherwise than as provided in this Act, shall be null and void and of no effect."

Granting arguendo that the Philippines was a territory or possession of the United States for the purposes of said Act and that the trade between the
Philippines and the United States before the advent of independence was not foreign trade or can only be considered in a domestic sense, still we are
of the opinion that the Carriage of Goods by Sea Act of 1936 may have application to the present case it appearing that the parties have expressly
agreed to make and incorporate the provisions of said Act as integral part of their contract of carriage. This is an exception to the rule regarding the
applicability of said Act. This is expressly recognized by section 13 of said Act which contains the following proviso: “Nothing in this Act shall be held
to apply to contracts for carriage of gods by sea between any port of the United States or its possessions, and any other port of the United States or its
possessions: Provided, however, That any bill of lading or similar document of title which evidence of a contract for the carriage of goods by sea
between such ports, containing an express statement that it shall be subject to the provisions of this Act, shall be subjected hereto as fully as if subject
hereto by the express provisions of this Act.”
DOCTRINE
Any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection with
the goods or lessening such liability otherwise than as provided in this Act (COGSA), shall be null and void and of no effect

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Carriage of Goods by Sea Act (COGSA)

ANG v. COMPANIA MARITIMA
(G.R. No. L-30805 | 26 December 1984)
FACTS
Petitioner: Domingo Ang
Respondent: Compania Maritima; Maritime Company of the Philippines; C.L. Diokno

Petitioner, as the assignee of a bill of lading held by Yau Yue Commercial Bank of Hongkong, sued respondents, alleging that Yau Yue agreed to sell
to one Herminio Teves 559 packages of galvanized steel. The merchandise was loaded in MS Luzon (owned by defendants) to be transported from
Japan to Manila. He alleged that defendants authorized the delivery of the cargo to Teves who obtained delivery from the Bureau of Customs without
the surrender of the bill of lading and in violation of the terms thereof. Defendants filed a motion to dismiss on the ground of lack of cause of action.
Trial court dismissed the complaint on grounds of lack of cause of action and prescription, since the action was filed beyond the 1-year period provided
in COGSA.
ISSUE
W/N COGSA is applicable in this case – NO
ROSALES, M.K. (2-S 2019-2020)
 RULING
In the American Steamship Agencies cases, it was held that the action of Ang is based on misdelivery of the cargo which should be distinguished
from loss thereof. The one-year period provided for in section 3 (6) of the Carriage of Goods by Sea Act refers to loss of the cargo. What is applicable
is the four-year period of prescription for quasi-delicts prescribed in article 1146 (2) of the Civil Code or ten years for violation of a written contract as
provided for in article 1144 (1) of the same Code. As Ang filed the action less than three years from the date of the alleged misdelivery of the cargo, it
has not yet prescribed. Ang, as indorsee of the bill of lading, is a real party in interest with a cause of action for damages.
DOCTRINE
The one-year period provided for in section 3 (6) of the Carriage of Goods by Sea Act refers to loss of the cargo, not misdelivery.

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Carriage of Goods by Sea Act (COGSA)

DOLE PHILIPPINES v. MARITIME CO
(G.R. No. 61352 | 27 February 1987)
FACTS
Petitioner: DOLE Philippines, Inc.
Respondent: Maritime Company of the Philippines

On December 18, 1971, cargo subject (machine parts) was discharged in Dadiangas unto the custody of the consignee, DOLE PH, which filed a claim
for damages sustained by the cargo against defendant vessel on May 4, 1972. Respondent filed an answer pleading the affirmative defense of
prescription under the provisions of COGSA. Trial court ruled in favor of respondent. Dole concedes that its action is subject to the one-year period of
limitation prescribe in the above-cited provision. The substance of its argument is that since the provisions of the Civil Code are, by express mandate
of said Code, suppletory of deficiencies in the Code of Commerce and special laws in matters governed by the latter, and there being "a patent
deficiency with respect to the tolling of the prescriptive period" provided for in the COGSA, prescription under said Act is subject to the provisions of
Article 1155 of the Civil Code on tolling and because Dole's claim for loss or damage made on May 4, 1972 amounted to a written extrajudicial demand
which would toll or interrupt prescription under Article 1155, it operated to toll prescription also in actions under the COGSA.
ISSUE
W/N Article 1155 of the Civil Code providing that the prescription of actions is interrupted by the making of an extrajudicial written demand by the
creditor is applicable to actions brought under COGSA – NO
RULING
We now hold that in such a case the general provisions of the new Civil Code (Art. 1155) cannot be made to apply, as such application would have the
effect of extending the one-year period of prescription fixed in the law. It is desirable that matters affecting transportation of goods by sea be decided
in as short a time as possible; the application of the provisions of Article 1155 of the new Civil Code would unnecessarily extend the period and permit
delays in the settlement of questions affecting transportation, contrary to the clear intent and purpose of the law.

Moreover, no different result would obtain even if the Court were to accept the proposition that a written extrajudicial demand does toll prescription
under the Carriage of Goods by Sea Act. The demand in this instance would be the claim for damage-filed by Dole with Maritime on May 4, 1972. The
effect of that demand would have been to renew the one- year prescriptive period from the date of its making. Stated otherwise, under Dole's theory,
when its claim was received by Maritime, the one-year prescriptive period was interrupted — "tolled" would be the more precise term — and began to
run anew from May 4, 1972, affording Dole another period of one (1) year counted from that date within which to institute action on its claim for damage.
Unfortunately, Dole let the new period lapse without filing action. It instituted Civil Case No. 91043 only on June 11, 1973, more than one month after
that period has expired and its right of action had prescribed.

Dole's contention that the prescriptive period “remained tolled as of May 4, 1972 (and that) in legal contemplation the case was filed on January 6,
1975 well within the one-year prescriptive period in Sec. 3(6) of the Carriage of Goods by Sea Act." equates tolling with indefinite suspension. It is
clearly fallacious and merits no consideration.
DOCTRINE
In a case governed by the Carriage of Goods by Sea Act, the general provisions of the Code of Civil Procedure on prescription should not be made to
apply.

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Carriage of Goods by Sea Act (COGSA)

SEA LAND SERVICES INC. v. IAC
(G.R. No. 75118 | 31 August 1987)
FACTS
Petitioner: Sea-Land Service, Inc.
Respondent: IAC; Paulino Cue (business name: Sen Hiap Hing”)

Petitioner received from Seaborne Trading Company in Oakland, California a shipment consigned to Sen Hiap Hing. The shipper not having declared
the value of the shipment, no value was indicated in the BOL. Based on volume measurements, petitioner charged the shipper US$298.28. The
shipment was loaded on board the MS Patriot (owned by petitioner) for discharge at the port of Cebu. The shipment arrived in Manila. While awaiting
trans-shipment to Cebu, it was stolen by pilferers and has never been recovered. Cue made a formal claim upon Sea-Land amounting to P179,643.48,
and Sea-Land offered to settle for P30,600, asserting that it represented its maximum liability for the loss of the shipment under the package limitation
clause in the covering BOL. Cue rejected the offer and brought suit before CFI, which rendered judgment in favor of Cue. Sea-Land appealed, but CA
affirmed the decision.
ISSUE
ROSALES, M.K. (2-S 2019-2020)
 W/N the consignee of seaborne freight is bound by stipulations in the covering bill of lading limiting to a fixed amount the liability of the carrier for loss
or damage to the cargo where its value is not declared in the bill – YES
RULING
Sec. 4(5) of said Act in part reads: Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection
with the transportation of goods in an amount exceeding $500 per package lawful money of the United States, or in case of goods not shipped in
packages, per customary freight unit, or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared
by the shipper before shipment and inserted in the bill of lading. This declaration, if embodied in the bill of lading, shall be prima facie evidence, but
shall not be conclusive on the carrier xxx By agreement between the carrier, master, or agent of the carrier, and the shipper another maximum amount
than that mentioned in this paragraph may be fixed: Provided, That such maximum shall not be less than the figure above named. In no event shall the
carrier be liable for more than the amount of damage actually sustained.

Since, as already pointed out, Article 1766 of the Civil Code expressly subjects the rights and obligations of common carriers to the provisions of the
Code of Commerce and of special laws in matters not regulated by said (Civil) Code, the Court fails to fathom the reason or justification for the Appellate
Court's pronouncement in its appealed Decision that the Carriage of Goods by Sea Act " ... has no application whatsoever in this case. Not only is there
nothing in the Civil Code which absolutely prohibits agreements between shipper and carrier limiting the latter's liability for loss of or damage to cargo
shipped under contracts of carriage; it is also quite clear that said Code in fact has agreements of such character in contemplation in providing, in its
Articles 1749 and 1750, that:

ART. 1749 A stipulation that the common carrier's liability is limited to the value of the goods appearing in the bill of lading, unless the shipper or owner
declares a greater value, is binding.
ART. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or deterioration of the goods is valid, if it
is reasonable and just under the circumstances, and has been fairly and freely agreed upon.

Nothing contained in section 4(5) of the Carriage of Goods by Sea Act already quoted is repugnant to or inconsistent with any of the just-cited provisions
of the Civil Code. Said section merely gives more flesh and greater specificity to the rather general terms of Article 1749 (without doing any violence to
the plain intent thereof) and of Article 1750, to give effect to just agreements limiting carriers' liability for loss or damage which are freely and fairly
entered into.

It seems clear that even if said section 4(5) of the Carriage of Goods by Sea Act did not exist, the validity and binding effect of the liability limitation
clause in the bill of lading here are nevertheless fully sustainable on the basis alone of the cited Civil Code provisions. That said stipulation is just and
reasonable is arguable from the fact that it echoes Art. 1750 itself in providing a limit to liability only if a greater value is not declared for the shipment
in the bill of lading. To hold otherwise would amount to questioning the justice and fairness of that law itself, and this the private respondent does not
pretend to do. But over and above that consideration, the lust and reasonable character of such stipulation is implicit in it giving the shipper or owner
the option of avoiding acrrual of liability limitation by the simple and surely far from onerous expedient of declaring the nature and value of the shipment
in the bill of lading. And since the shipper here has not been heard to complaint of having been "rushed," imposed upon or deceived in any significant
way into agreeing to ship the cargo under a bill of lading carrying such a stipulation — in fact, it does not appear that said party has been heard from
at all insofar as this dispute is concerned — there is simply no ground for assuming that its agreement thereto was not as the law would require, freely
and fairly sought and given.

The provisions of the Carriage of Goods by Sea Act on package limitation [sec 4(5) of the Act hereinabove referred to] are as much a part of a bill of
lading as though actually placed therein by agreement of the parties.
DOCTRINE
There can, therefore, be no doubt or equivocation about the validity and enforceability of freely-agreed-upon stipulations in a contract of carriage or bill
of lading limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and inserts it into said contract or bill. This
pro position, moreover, rests upon an almost uniform weight of authority

the Carriage of Goods by Sea Act is applicable up to the final port of destination and that the fact that transshipment was made on an interisland vessel
did not remove the contract of carriage of goods from the operation of said Act.

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Carriage of Goods by Sea Act (COGSA)

MARITIME AGENCIES v. CA
(G.R. No. | )
FACTS
Transcontinental Fertilizer Company (TFC) chartered from Hongkong Island Shipping Company (HISC) the motor vessel Hongkong Island for the
shipment of bagged urea from USSR to the Philippines. Atlas Fertilizer Company was the consignee. The goods were insured by consignee with the
Union Insurance Society of Canton. Maritime Agencies and Services, Inc. was appointed as the charterer’s agent and Macondray Company, Inc. as
the owner’s agent. The vessel arrived in Manila and unloaded the goods, then proceeded to Cebu to discharge the rest. Consignee filed a formal claim
against Maritime for the shorthanded bags. Consignee filed another formal claim against Viva Customs Brokerage for the value of bags of net
unrecovered spillage. The claims were rejected. Consignee then went to Union, which paid the indemnity. Union filed for reimbursement. Trial court
rendered judgment holding Maritime, HISC, and Macondray liable.
ISSUE
W/N the period for filing the claim has already prescribed – YES, as to Macondray
RULING
A voyage charter being a private carriage, the parties may freely contract respecting liability for damage to the goods and other matters. The basic
principle is that "the responsibility for cargo loss falls on the one who agreed to perform the duty involved" in accordance with the terms of most voyage
charters. This is true in the present cases where the charterer was responsible for loading, stowage and discharging at the ports visited, while the
owner was responsible for the care of the cargo during the voyage. In the cases at bar, the trial court found that 1,383 bags were shortlanded, which
could only mean that they were damaged or lost on board the vessel before unloading of the shipment. It is not denied that the entire cargo shipped by
ROSALES, M.K. (2-S 2019-2020)
 the charterer in Odessa was covered by a clean bill of lading. As the bags were in good order when received in the vessel, the presumption is that they
were damaged or lost during the voyage as a result of their negligent improper stowage. For this the ship owner should be held liable.

But we do agree that the period for filing the claim is one year, in accordance with the Carriage of Goods by Sea Act. This was adopted and embodied
by our legislature in Com. Act No. 65 which, as a special law, prevails over the general provisions of the Civil Code on prescription of actions.

The one-year period in the cases at bar should commence on October 20, 1979, when the last item was delivered to the consignee. Union's complaint
was filed against Hongkong on September 19, 1980, but tardily against Macondray on April 20, 1981. The consequence is that the action is considered
prescribed as far as Macondray is concerned but not against its principal, which is what matters anyway. As regards the goods damaged or lost during
unloading, the charterer is liable therefor, having assumed this activity under the charter party "free of expense to the vessel." The difficulty is that
Transcontinental has not been impleaded in these cases and so is beyond our jurisdiction. The liability imposable upon it cannot be borne by Maritime
which, as a mere agent, is not answerable for injury caused by its principal. It is a well-settled principle that the agent shall be liable for the act or
omission of the principal only if the latter is undisclosed. We affirm the factual findings but must modify the legal conclusions. As previously discussed,
the liability of Macondray can no longer be enforced because the claim against it has prescribed; and as for Maritime, it cannot be held liable for the
acts of its known principal resulting in injury to Union.
DOCTRINE
The period for filing the claim is one year, in accordance with the Carriage of Goods by Sea Act. This was adopted and embodied by our legislature in
Com. Act No. 65 which, as a special law, prevails over the general provisions of the Civil Code on prescription of actions

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Carriage of Goods by Sea Act (COGSA)

MAYER STEEL PIPE v. CA
(G.R. No. 124050 | 19 June 1997)
FACTS
Petitioner: Mayer Steel Pipe Corporation (Mayer); Hongkong Government Supplies Department (HGSD)
Respondent: CA; South Sea Surety and Insurance Co., Inc. (SSSICI); Charter Insurance Corporation (CIC)

HGSD contracted Mayer to manufacture and supply various steel pipes and fittings. From August to October 1983, Mayer shipped the pipes and fittings
to HGSD. Prior to shipping, Mayer insured the pipes and fittings against all risks with SSICI and CIC. Industrial Inspection certified all the pipes and
fittings to be in good order condition before they were loaded in the vessel. When the goods reached HGSD, it was discovered that a substantial portion
thereof was damaged. Petitioners filed a claim against respondents for indemnity. Respondents averred that they have no obligation to pay the amount
because the damage is due to factory defects which are not covered by the insurance policies. Trial court ruled in favor of petitions. CA affirmed, but
set aside the decision and dismissed the complaint on the ground of prescription.
ISSUE
W/N COGSA was properly applied in this case – NO
RULING
Respondent court erred in applying Section 3(6) of the Carriage of Goods by Sea Act. Section 3(6) of the Carriage of Goods by Sea Act states that the
carrier and the ship shall be discharged from all liability for loss or damage to the goods if no suit is filed within one year after delivery of the goods or
the date when they should have been delivered. Under this provision, only the carrier's liability is extinguished if no suit is brought within one year. But
the liability of the insurer is not extinguished because the insurer's liability is based not on the contract of carriage but on the contract of insurance. A
close reading of the law reveals that the Carriage of Goods by Sea Act governs the relationship between the carrier on the one hand and the shipper,
the consignee and/or the insurer on the other hand. It defines the obligations of the carrier under the contract of carriage. It does not, however, affect
the relationship between the shipper and the insurer. The latter case is governed by the Insurance Code.

Our ruling in Filipino Merchants Insurance Co., Inc. v. Alejandro and the other cases cited therein does not support respondent court's view that the
insurer's liability prescribes after one year if no action for indemnity is filed against the carrier or the insurer. In that case, the shipper filed a complaint
against the insurer for recovery of a sum of money as indemnity for the loss and damage sustained by the insured goods. The insurer, in turn, filed a
third-party complaint against the carrier for reimbursement of the amount it paid to the shipper. The insurer filed the third-party complaint on January
9, 1978, more than one year after delivery of the goods on December 17, 1977. The court held that the Insurer was already barred from filing a claim
against the carrier because under the Carriage of Goods by Sea Act, the suit against the carrier must be filed within one year after delivery of the goods
or the date when the goods should have been delivered. The court said that "the coverage of the Act includes the insurer of the goods."

The Filipino Merchants case is different from the case at bar. In Filipino Merchants, it was the insurer which filed a claim against the carrier for
reimbursement of the amount it paid to the shipper. In the case at bar, it was the shipper which filed a claim against the insurer. The basis of the
shipper's claim is the "all risks" insurance policies issued by private respondents to petitioner Mayer. The ruling in Filipino Merchants should apply only
to suits against the carrier filed either by the shipper, the consignee or the insurer. When the court said in Filipino Merchants that Section 3(6) of the
Carriage of Goods by Sea Act applies to the insurer, it meant that the insurer, like the shipper, may no longer file a claim against the carrier beyond the
one-year period provided in the law. But it does not mean that the shipper may no longer file a claim against the insurer because the basis of the
insurer's liability is the insurance contract. An insurance contract is a contract whereby one party, for a consideration known as the premium, agrees to
indemnify another for loss or damage which he may suffer from a specified peril. An "all risks" insurance policy covers all kinds of loss other than those
due to willful and fraudulent act of the insured.12 Thus, when private respondents issued the "all risks" policies to petitioner Mayer, they bound
themselves to indemnify the latter in case of loss or damage to the goods insured. Such obligation prescribes in ten years, in accordance with Article
1144 of the New Civil Code.
DOCTRINE
The Carriage of Goods by Sea Act governs the relationship between the carrier on the one hand and the shipper, the consignee and/or the insurer on
the other hand. It defines the obligations of the carrier under the contract of carriage. It does not, however, affect the relationship between the shipper
and the insurer.

ROSALES, M.K. (2-S 2019-2020)