INSURANCE COMPANY OF NORTH AMERICA VS. ASIAN TERMINALS INC.

G.R. No. 180784 February 15, 2012

Facts:
The trial court dismissed petitioner’s complaint for actual damages on the ground of prescription
under the Carriage of Goods by Sea Act. Thus, an action was instituted to review the RTC’s decision.
On November 2002, Macro-Lite Corporation shipped to San Miguel Corporation (SMC), through
M/V DIMI P vessel, 185 packages (or 231,000 sheets) of electrolytic tin free steel, complete and in good
order condition and covered by Bill of Lading. The shipment had a declared value of US $169,850.35
and was insured with petitioner against all risks under its marine policy.
The carrying vessel arrived at the port of Manila and when the shipment was discharged
therefrom, it was noted than 7 packages were damaged and in bad order. The shipment was then turned
over to the custody of respondent (as arrastre operator) for storage and safekeeping pending its
withdrawal by the consignee’s authorized customs broker, which was later withdrawn by the customs
broker from custody of the respondent.
An examination report was written and showed that an additional 5 packages were found to be
damaged and in bad order.
Consignee, SMC, filed separate claims against respondent and petitioner for the damage of
11,200 sheets of electrolytic tin free steel. Petitioner, as insurer of the cargo, paid the consignee the
amount of Php 431,592.14 for the damage caused to the shipment. Thereafter, petitioner formally
demanded reparation against respondent and as respondent failed to satisfy its demand, petitioner filed an
action for damages with the RTC.
The trial court dismissed the complaint because it was already barred by the statute of limitations.
It held that COGSA, embodied in CA 65, applies to this case since the goods were shipped from a foreign
port to the Philippines. Under the said law, particularly paragraph 4, Section 3(6), the shipper has the
right to bring a suit within one year after the delivery of the goods or the date when the goods should have
been delivered.
Petitioner’s motion for recon was denied by the trial court. It submits that the trial court’s
dismissal of the complaint on the ground of prescription under the COGSA is legally erroneous.  It
contends that the one-year limitation period for bringing a suit in court under the COGSA is not applicable
to this case. Petitioner asserts that since the complaint was filed against respondent arrastre operator only,
without impleading the carrier, the prescriptive period under the COGSA is not applicable to this case.
Moreover, petitioner contends that the term carriage of goods in the COGSA covers the period
from the time the goods are loaded to the vessel to the time they are discharged therefrom. It points out
that it sued respondent only for the additional five (5) packages of the subject shipment that were found
damaged while in respondents custody, long after the shipment was discharged from the vessel.
Issues:
WON petitioner is entitled to recover actual damages in the amount of P431,592.14 from
respondent.
Ruling:
YES. Petitioner is entitled to actual damages in the amount of P164,428.76 for the four (4) skids
damaged while in the custody of respondent.
It should be noted that the petitioner, who filed this action for damages for the five (5) skids that were
damaged while in the custody of respondent, was not forthright in its claim, as it knew that the damages it
sought in the amount of P431,592.14, which was based on the Evaluation Report of its adjuster/surveyor
covered nine (9) skids. Based on the same Evaluation Report, only four of the nine skids were damaged
in the custody of respondent. Petitioner should have been straightforward about its exact claim, which is
borne out by the evidence on record, as petitioner can be granted only the amount of damages that is due to
it.
 
MITSUI VS. CA, 287 SCRA 366 March 11, 1998
Facts:
Petitioner Mitsui O.S.K. Lines Ltd. is a foreign corporation represented in the Philippines by its
agent, Magsaysay Agencies. It entered into a contract of carriage through Meister Transport, Inc., an
international freight forwarder, with private respondent Lavine Loungewear Manufacturing Corporation
to transport goods of the latter from Manila to Le Havre, France. Petitioner undertook to deliver the goods
to France 28 days from initial loading. On July 24, 1991, petitioner's vessel loaded private respondent's
container van for carriage at the said port of origin.
However, in Kaoshiung, Taiwan the goods were not transshipped immediately, with the result
that the shipment arrived in Le Havre only on November 14, 1991. The consignee allegedly paid only half
the value of the said goods on the ground that they did not arrive in France until the "off season" in that
country. The remaining half was allegedly charged to the account of private respondent which in turn
demanded payment from petitioner through its agent.
Issue:
Whether or not private respondent's action is for "loss or damage" to goods shipped, within the
meaning of the Carriage of Goods by Sea Act (COGSA).
Ruling:
No. The suit is not for "loss or damage" to goods contemplated in §3(6), the question of
prescription of action is governed not by the COGSA but by Art. 1144 of the Civil Code which provides
for a prescriptive period of ten years. As defined in the Civil Code and as applied to Section 3(6),
paragraph 4 of the Carriage of Goods by Sea Act, "loss" contemplates merely a situation where no
delivery at all was made by the shipper of the goods because the same had perished, gone out of
commerce, or disappeared in such a way that their existence is unknown or they cannot be recovered.
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 damages 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.

BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V. and JARDINE DAVIES

TRANSPORT SERVICES, INC., petitioners vs PHILIPPINE FIRST INSURANCE CO., INC.,
respondents,
G.R. No. 143133, June 5, 2002
Facts:
On June 13, 1990, CMC Trading A.G. shipped on board the M/V 'Anangel Sky' at Hamburg,
Germany 242 coils of various Prime Cold Rolled Steel sheets for transportation to Manila consigned to
the Philippine Steel Trading Corporation. On July 28, 1990, M/V Anangel Sky arrived at the port of
Manila and, within the subsequent days, discharged the subject cargo. Four (4) coils were found to be in
bad order. Finding the four (4) coils in their damaged state to be unfit for the intended purpose, the
consignee Philippine Steel Trading Corporation declared the same as total loss.
Petitioners refused to submit to the consignee's claim. Consequently, respondent paid the
consignee and was subrogated to the latter's rights. Subsequently, respondent instituted this complaint for
recovery of the amount paid by them, to the consignee as insured.
Petitioners imputed that the damage and/or loss was due to pre-shipment damage. In addition
thereto, they argued that their liability, if there be any, should not exceed the limitations of liability
provided for in the bill of lading and other pertinent laws. Finally, they averred that, in any event, they
exercised due diligence and foresight required by law to prevent any damage/loss to said shipment.
RTC dismissed the Complaint because respondent had failed to prove its claims. In reversing the
trial court, the CA ruled that petitioners were liable for the loss or the damage of the goods shipped,
because they had failed to overcome the presumption of negligence imposed on common carriers.
Issue:
Whether or not the "PACKAGE LIMITATION" of liability under Section 4 (5) of COGSA is
applicable.
Held:
YES. In the case before us, there was no stipulation in the Bill of Lading limiting the carrier's
liability. Neither did the shipper declare a higher valuation of the goods to be shipped. This fact
notwithstanding, the insertion of the words "L/C No. 90/02447 cannot be the basis for petitioners'
liability.
A notation in the Bill of Lading which indicated the amount of the Letter of Credit obtained by
the shipper for the importation of steel sheets did not effect a declaration of the value of the goods as
required by the bill. In the light of the foregoing, petitioners' liability should be computed based on
US$500 per package and not on the per metric ton price declared in the Letter of Credit.

Philippine Charter Insurance v. Neptune Orient Line/Overseas Agency Service, Inc.

554 SCRA 335 (June 12, 2008)
FACTS:
L.T. Garments Manufacturing Corp. Ltd. shipped from Hong Kong 3 sets of warp yarn on
returnable beams aboard respondent Neptune Orient Lines' vessel, M/V Baltimar Orion, for transport and
delivery to Fukuyama Manufacturing Corporation (Fukuyama) in Manila.
The said cargoes were loaded in a container under a bill of lading. Fukuyama insured the
shipment against all risks with petitioner Philippine Charter Insurance Corporation (PCIC) under Marine
Cargo Policy. During the course of the voyage, the container with the cargoes fell overboard and was lost.
Thus, Fukuyama wrote a letter to respondent Overseas Agency Services, Inc, the agent of
Neptune Orient, and claimed for the value of the lost cargoes. However, Overseas Agency ignored the
claim. Hence, Fukuyama sought payment from its insurer, PCIC, for the insured value which claim was
fully satisfied by PCIC. PCIC then demanded from respondents reimbursement of the entire amount it
paid to Fukuyama, but respondents refused payment. Hence, PCIC filed a complaint for damages against
respondents.
Respondents denied liability and alleged that during the voyage, the vessel encountered strong
winds and heavy seas making the vessel pitch and roll, which caused the subject container with the
cargoes to fall overboard. They claim that the occurrence was a fortuitous event which exempted them
from any liability, and that their liability, if any, should not exceed US$500 or the limit of liability in the
bill of lading, whichever is lower.
The RTC held that respondents, as common carrier, failed to prove that they observed the
required extraordinary diligence to prevent loss of the subject cargoes and ordered them to pay the
plaintiff the amount claimed. The CA on the other hand found respondent’s liability to be only US$1,500
or US$500 per package under the limited liability provision of the Carriage of Goods by Sea Act
(COGSA). Hence, the instant appeal.
Petitioner’s Contention: The vessel committed a "quasi deviation" which is a breach of the
contract of carriage when it intentionally threw overboard the container for its own benefit. Such breach
of contract resulted in the abrogation of respondents' rights under the contract and COGSA including the
US$500 per package limitation.
ISSUE:
 W/N the liability of the respondents is only US$1,500 or US$500 per package as provided in the
COGSA?

RULING:
Yes. The facts as found by the RTC do not support the new allegation regarding the intentional
throwing overboard of the subject cargoes and quasi deviation. The Court notes that the petitioner's
Complaint and the survey report provide that the shipment “were lost/fell overboard”. The records show
that the subject cargoes fell overboard the ship and petitioner should not vary the facts of the case on
appeal.
Since the subject cargoes were lost while being transported by respondent common carrier from
Hong Kong to the RP - Philippine law applies pursuant to the Civil Code. The rights and obligations of
respondent common carrier are thus governed by the provisions of the Civil Code, and the COGSA,
which is a special law applying suppletorily.
The pertinent provisions of the Civil Code applicable to this case are as follows:
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.
In addition, Sec. 4, paragraph (5) of the COGSA, which is applicable to all contracts for the
carriage of goods by sea to and from Philippine ports in foreign trade, provides: 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 be conclusive on the carrier.
In this case, Bill of Lading stipulates: Neither the Carrier nor the vessel shall in any event become
liable for any loss of or damage to or in connection with the transportation of Goods in an amount
exceeding US$500 (which is the package or shipping unit limitation under U.S. COGSA) unless the
nature and value of such Goods have been declared by the Shipper before shipment and inserted in this
Bill of Lading and the Shipper has paid additional charges on such declared value. . . .
The bill of lading submitted in evidence by petitioner did not show that the shipper in Hong Kong
declared the actual value of the goods as insured by Fukuyama before shipment and that the said value
was inserted in the Bill of Lading, and so no additional charges were paid. Hence, the stipulation in the
bill of lading that the carrier's liability shall not exceed US$500 per package applies.
A stipulation in the bill of lading limiting the common carrier's liability for loss or destruction of
a cargo to a certain sum, unless the shipper or owner declares a greater value, is sanctioned and allowed
by law. 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.