This appeal related to a claim for loss and/or damage to a shipment of machine parts belonging to the consignee, Dole Philippines Inc (Dole) against the carrier, Maritime Co of the Philippines (MCP), under the provisions of the Carriage of Goods by Sea Act (COGSA). MCP raised the affirmative defence of prescription under s 3(6) of the Carriage of Goods by Sea Act. The trial Court and CA held in favour of MCP. Dole appealed to the Supreme Court.
Held: Appeal dismissed.
The pivotal issue is whether art 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 the Carriage of Goods by Sea Act (COGSA). Dole concedes that its action is subject to the one-year period of limitation prescribed in s 3(6) of COGSA. The substance of its argument is that since the provisions of the Civil Code are, by express mandate of that Code, suppletory of deficiencies in the Code of Commerce and special laws in matters governed by the latter, and there is 'a patent deficiency ... with respect to the tolling of the prescriptive period' provided for in COGSA, prescription under COGSA is subject to the provisions of art 1155 of the Civil Code on tolling, and because Dole's claim for loss or damage made on 4 May 1972 amounted to a written extrajudicial demand which would toll or interrupt prescription under art 1155, it operated to toll prescription also in actions under COGSA. To much the same effect is the further argument, based on art 1176 of the Civil Code, which provides that the rights and obligations of common carriers are governed by the Code of Commerce and by special laws in all matters not regulated by the Civil Code.
These arguments might merit weightier consideration, were it not for the fact that the question has already received a definitive answer, adverse to the position taken by Dole, in Yek Tong Lin Fire & Marine Insurance Co Ltd v American President Lines Inc, GR No L-11081, 30 April 1958, 103 Phil 1125. There, suit to recover for damage to cargo shipped by vessel from Tokyo to Manila was filed more than two years after the consignee's receipt of the cargo. This Court rejected the contention that an extrajudicial demand tolled the prescriptive period provided for in the Carriage of Goods by Sea Act:
In the second assignment of error plaintiff-appellant argues that it was error for the court a quo not to have considered the action of plaintiff-appellant suspended by the extrajudicial demand which took place, according to defendant's own motion to dismiss on August 22, 1952. We notice that while plaintiff avoids stating any date when the goods arrived in Manila, it relies upon the allegation made in the motion to dismiss that a protest was filed on August 22, 1952 - which goes to show that plaintiff-appellant's counsel has not been laying the facts squarely before the court for the consideration of the merits of the case. We have already decided that 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. (Chua Kuy vs. Everett Steamship Corp., G.R. No. L-5554, May 27, 1953.) Similarly, 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, it would make no difference here even if the Court were to accept the proposition that a written extrajudicial demand does toll prescription under COGSA. The demand in this instance was filed on 4 May 1972. The effect of that demand would have been to renew the one-year prescriptive period from that date. Dole instituted Civil Case No 91043 only on 11 June 1973, more than one month after that period had expired. Even on its own argument, its right of action had prescribed.