COMMONWEALTH ACT No. 65 An Act Relating to the Carriage of Goods by Sea.
IN ACT TO DECLARE THAT PUBLIC ACT NUMBERED FIVE HUNDRED
AND TWENTY-ONE, KNOWN AS "CARRIAGE OF GOODS BY SEA
ACT," ENACTED BY THE SEVENTY-FOURTH CONGRESS OF THE
UNITED STATES, BE ACCEPTED, AS IT IS HEREBY ACCEPTED BY
THE NATIONAL ASSEMBLY
WHEREAS, the Seventy-fourth Congress of the United States enacted
Public Act Numbered Five hundred and twenty-one, entitled:
"Carriage of Goods by Sea Act";
WHEREAS, the primordial purpose of the said Acts is to bring about
uniformity in ocean bills of lading and to give effect to the Brussels Treaty,
signed by the United States with other powers;
WHEREAS, the Government of the United States has left it to the Philippine
Government to decide whether or not the said Act shall apply to carriage of
goods by sea in foreign trade to and from Philippine ports;
WHEREAS, the said Act of Congress contains advanced legislation, which is
in consonance with modern maritime rules and the practices of the great
shipping countries of the world;
WHEREAS, shipping companies, shippers, and marine insurance
companies, and various chambers of commerce, which are directly affected
by such legislation, have expressed their desire that said Congressional Act
be made applicable and extended to the Philippines; therefore,
Be it enacted by the National Assembly of the Philippines:
Section 1. That the provisions of Public Act Numbered Five hundred and
twenty-one of the Seventy-fourth Congress of the United States, approved
on April sixteenth, nineteen hundred and thirty-six, be accepted, as it is
hereby accepted to be made applicable to all contracts for the carriage of
goods by sea to and from Philippine ports in foreign trade: Provided, That
nothing in the Act shall be construed as repealing any existing provision of
the Code of Commerce which is now in force, or as limiting its application.
Section 2. This Act shall take effect upon its approval.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That every bill of landing or
similar document of title which is evidence of a contract for the carriage of
goods by sea to or from ports of the United States, in foreign trade, shall
have effect subject to the provisions of the Act.
TITLE I
Section 1. When used in this Act —
(a) The term "carrier" includes the owner or the charterer who enters into a
contract of carriage with a shipper.
(b) The term "contract of carriage" applies only to contracts of carriage
covered by a bill of lading or any similar document of title, insofar as such
document relates to the carriage of goods by sea, including any bill of lading
or any similar document as aforesaid issued under or pursuant to a charter
party from the moment at which such bill of lading or similar document of title
regulates the relations between a carrier and a holder of the same.
(c) The term "goods" includes goods, wares, merchandise, and articles of
every kind whatsoever, except live animals and cargo which by the contract
of carriage is stated as being carried on deck and is so carried.
(d) The term "ship" means any vessel used for the carriage of goods by sea.
(e) The term "carriage of goods" covers the period from the time when the
goods are loaded on to the time when they are discharged from the ship.
RISKS
Section 2. Subject to the provisions of section 6, under every contract of
carriage of goods by sea, the carrier in relation to the loading handling,
stowage, carriage, custody, care, and discharge of such goods, shall be
subject to the responsibilities and liabilities and entitled to the rights and
immunities hereinafter set forth.
RESPONSIBILITIES AND LIABILITIES
Section 3. (1) The carrier shall be bound, before and at the beginning of the
voyage, to exercise due diligence to —
(a) Make the ship seaworthy;
(b) Properly man, equip, and supply the ship;
(c) Make the holds, refrigerating and cooling chambers, and all other parts of
the ship in which goods are carried, fit and safe for their reception carriage
and preservation.
(2) The carrier shall properly and carefully load, handle, stow, carry, keep,
care for, and discharge the goods carried.
(3) After receiving the goods into his charge the carrier, or the master or
agent of the carrier, shall, on demand of the shipper, issue to the shipper a
bill of lading showing among other things —
(a) The leading marks necessary for identification of the goods as the same
are furnished in writing by the shipper before the loading of such goods
starts, provided such marks are stamped or otherwise shown clearly upon
the goods if uncovered, or on the cases or coverings in which such goods
are contained, in such a manner as should ordinarily remain legible until the
end of the voyage.
(b) Either the number of packages or pieces, or the quantity or weight, as the
case may be, as furnished in writing by the shipper.
(c) The apparent order and condition of the goods: Provided, That no carrier,
master, or agent of the carrier, shall be bound to state or show in the bill of
lading any marks, number, quantity, or weight which he has reasonable
ground for suspecting not accurately to represent the goods actually
received, or which he has had no reasonable means of checking.
(4) Such a bill of lading shall be prima facie evidence of the receipt by the
carrier of the goods as therein described in accordance with paragraphs (3)
(a), (b), and (c) of this section: Provided, That nothing in this Act shall be
construed as repealing or limiting the application of any part of the Act, as
amended, entitled "An Act relating to bills of lading in interstate and foreign
commerce," approved August 29, 1916 (U. S. C. title 49, secs. 81-124),
commonly known as the "Pomerene Bills of Lading Act."
(5) The shipper shall be deemed to have guaranteed to the carrier the
accuracy at the time of shipment of the marks, number, quantity, and weight,
as furnished by him; and the shipper shall indemnify the carrier against all
loss damages, and expenses arising or resulting from inaccuracies in such
particulars. The right of the carrier to such indemnity shall in no way limit his
responsibility and liability under the contract of carriage or to any person
other than the shipper.
(6) Unless notice of loss or damage and the general nature of such loss or
damage be given in writing to the carrier or his agent at the port of discharge
before 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.
Said notice of loss or damage maybe endorsed upon the receipt for the
goods given by the person taking delivery thereof.
The notice in writing need not be given if the state of the goods has at the
time of their receipt been the subject of joint survey or inspection.
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
In the case of any actual or apprehended loss or damage the carrier and the
receiver shall give all reasonable facilities to each other for inspecting and
tallying the goods.
(7) After the goods are loaded the bill of lading to be issued by the carrier,
master, or agent of the carrier to the shipper shall, if the shipper so
demands, be a "shipped" bill of lading Provided, That if the shipper shall
have previously taken up any document of title to such goods, he shall
surrender the same as against the issue of the "shipped" bill of lading, but at
the option of the carrier such document of title may be noted at the port of
shipment by the carrier, master, or agent with name or name the names of
the ship or ships upon which the goods have been shipped and the date or
dates of shipment, and when so noted the same shall for the purpose of this
section be deemed to constitute a "shipped" bill of lading.
(8) 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, arising from negligence, fault, or failure in the duties and
obligations provided in this section, or lessening such liability otherwise than
as provided in this Act, shall be null and void and of no effect. A benefit of
insurance in favor of the carrier, or similar clause, shall be deemed to be a
clause relieving the carrier from liability.
RIGHTS AND IMMUNITIES
Section 4. (1) Neither the carrier nor the ship shall be liable for loss or
damage arising or resulting from unseaworthiness unless caused by want of
due diligence on the part of the carrier to make the ship seaworthy, and to
secure that the ship is properly manned, equipped, and supplied, and to
make to the holds, refrigerating and cool chambers, and all other parts of the
ship in which goods are carried fit and safe for their reception, carriage, and
preservation in accordance with the provisions of paragraph (1) of section 3.
Whenever loss or damage has resulted from unseaworthiness, the burden of
proving the exercise of due diligence shall be on the carrier or other persons
claiming exemption under the section.
(2) Neither the carrier nor the ship shall be responsible for loss or damage
arising or resulting from —
(a) Act, neglect, or default of the master, mariner, pilot, or the servants of the
carrier in the navigation or in the management of the ship;
(b) Fire, unless caused by the actual fault or privity of the carrier;
(c) Perils, dangers, and accidents of the sea or other navigable waters;
(d) Act of God;
(e) Act of war,
(f) Act of public enemies;
(g) Arrest or restraint of princes, rulers, or people, or seizure under legal
process;
(h) Quarantine restrictions;
(i) Act or omission of the shipper or owner of the goods, his agent or
representative;
(j) Strikes or lockouts or stoppage or restraint of labor from whatever cause,
whether partial or general; Provided, That nothing herein contained shall be
construed to relieve a carrier from responsibility for the carrier's own acts;
(k) Riots and civil commotions
(l) Saving or attempting to save life or property at sea;
(m) Wastage in bulk or weight or any other loss or damage arising from
inherent defect, quality, or vice of the goods;
(n) Insufficiency of packing;
(o) Insufficiency of inadequacy of marks;
(p) Latent defects not discoverable by due diligence; and
(q) Any other cause arising without the actual fault and privity of the carrier
and without the fault or neglect of the agents or servants of the carrier, but
the burden of proof shall be on the person claiming the benefit of this
exception to show that neither the actual fault or privity of the carrier nor the
fault or neglect of the agents or servants of the carrier contributed to the loss
or damage.
(3) The shipper shall not be responsible for loss or damage sustained by the
carrier or the ship arising from any cause without the act, fault, or neglect of
the shipper, his agents, or servants.
(4) Any deviation in saving or attempting to save life or property at sea, or
any reasonable deviation shall not be deemed to be an infringement or
breach of this Act or of the contract of carriage, and the carrier shall not be
liable for any loss or damage resulting therefrom: Provided, however, That if
the deviation is for the purpose of loading cargo or unloading cargo or
passengers it shall, prima facie, be regarded as unreasonable.
(5) 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 $600 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.
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.
Neither the carrier nor the ship shall be responsible in any event for loss or
damage to or in connection with the transportation of the goods if the nature
or value thereof has been knowingly and fraudulently misstated by the
shipper in the bill of lading.
(6) Goods of an inflammable, explosive, or dangerous nature to the shipment
whereof the carrier, master or agent of the carrier, has not consented with
knowledge of their nature and character, may at any time before discharge
be landed at any place or destroyed or rendered innocuous by the carrier
without compensation, and the shipper of such goods shall be liable for all
damages and expenses directly or indirectly arising out of or resulting from
such shipment. If any such goods shipped with such knowledge and consent
shall become a danger to the ship or cargo, they may in like manner be
landed at any place, or destroyed or rendered innocuous by the carrier
without liability on the part of the carrier except to general average, if any
. of goods prior to the loading on and subsequent to the discharge from the
SURRENDER OF RIGHTS AND IMMUNITIES AND INCREASE OF
RESPONSIBILITIES AND LIABILITIES
Section 5. A carrier shall be at liberty to surrender in whole or in part all or
any of his rights and immunities or to increase any of his responsibilities and
liabilities under this Act, provided such surrender or increase shall be
embodied in the bill of lading issued to the shipper.
The provisions of this Act shall not be applicable to charter parties; but if bills
of lading are issued in the case of a ship under charter party, they shall
comply with the terms of this Act. Nothing in this Act shall be held to prevent
the insertion in a bill of lading of any lawful provision regarding general
average.
SPECIAL CONDITIONS
Section 6. Notwithstanding the provisions of the preceding sections, a
carrier, master or agent of the carrier, and a shipper shall, in regard to any
particular goods be at liberty to enter into any agreement in any terms as to
the responsibility and liability of the carrier for such goods, and as to the
rights and immunities of the carrier in respect of such goods, or his obligation
as to seaworthiness (so far as the stipulation regarding seaworthiness is not
contrary to public policy), or the care or diligence of his servants or agents in
regard to the loading, handling stowage, carriage, custody, care, and
discharge of the goods carried by sea: Provided, That in this case no bill of
lading has been or shall be issued and that the terms agreed shall be
embodied in a receipt which shall be a non-negotiable document and shall
be marked as such.
Any agreement so entered into shall have full legal effect: Provided, That this
section shall not apply to ordinary commercial shipments made in the
ordinary course of trade but only to other shipments where the character or
condition of the property to be carried or the circumstances, terms, and
conditions under which the carriage is to be performed are such as
reasonably to justify a special agreement.
Section 7. Nothing contained in this Act shall prevent a carrier or a shipper
from entering into any agreement, stipulation, condition, reservation, or
exemption as to the responsibility and liability of the carrier or the ship for the
loss or damage to or in connection with the custody and care and handling
ship on which the goods are carried by sea.
Section 8. The provisions of this Act shall not affect the rights and
obligations of the carrier under the provisions of the Shipping Act, 1916, or
under the provisions of section 4281 to 4289, inclusive, of the Revised
Statutes of the United States, or of any amendments thereto; or under the
provisions of any other enactment for the time being in force relating to the
limitation of the liability of the owners of seagoing vessels.
 TITLE II
Section 9. Nothing contained in this Act shall be construed as permitting a
common carrier by water to discriminate between competing shippers
similarly place in time and circumstances, either (a) with respect to the right
to demand and receive bills of lading subject to the provisions of this Act; or
(b) when issuing such bills of lading, either in the surrender of any of the
carrier's rights and immunities or in the increase of any of the carrier's
responsibilities and liabilities pursuant to section 6, title I, of this Act or (c) in
any other way prohibited by the Shipping Act, 1916, s amended.
Section 10. Section 25 of the Interstate Commerce Act is hereby amended
by adding the following proviso at the end of paragraph 4 thereof: "Provided,
however, That insofar as any bill of lading authorized hereunder relates to
the carriage of goods by sea, such bill of lading shall be subject to the
provisions of the Carriage of Goods by Sea Act."
Section 11. Where under the customs of any trade the weight of any bulk
cargo inserted in the bill of lading is a weight ascertained or accepted by a
third party other than the carrier or the shipper, and the fact that the weight is
so ascertained or accepted is stated in the bill of lading, then,
notwithstanding any thing in this Act, the bill of lading shall not be deemed to
be prima facie evidence against the carrier of the receipt of goods of the
weight so inserted in the bill of lading, and the accuracy thereof at the time of
shipment shall not be deemed to have been guaranteed by the shipper.
Section 12. Nothing in this Act shall be construed as superseding any part
of the Act entitled "An act relating to navigation of vessels, bills of lading, and
to certain obligations, duties, and rights in connection with the carriage of
property," approved February 13,1893, or of any other law which would be
applicable in the absence of this Act, insofar as they relate to the duties,
responsibilities, and liabilities of the ship or carrier prior to the time when the
goods are loaded on or after the time they are discharged from the ship.
Section 13. This Act shall apply to all contracts for carriage of goods by sea
to or from ports of the United States in foreign trade. As used in this Act the
term "United States" includes its districts, territories, and possessions:
Provided, however, That the Philippine legislature may by law exclude its
application to transportation to or from ports of the Philippine Islands. The
term "foreign trade" means the transportation of goods between the ports of
the United States and ports of foreign countries. Nothing in this Act shall be
held to apply to contracts for carriage of goods by sea between any port of
the United States or its possessions, and any other port of the United States
or its possession: Provided, however, That any bill of lading or similar
document of title which is 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 as fully as if subject hereto by the express provisions of this
Act: Provided, further, That every bill of lading or similar document of title
which is evidence of a contract for the carriage of goods by sea from ports of
the United States, in foreign trade, shall contain a statement that it shall have
effect subject to the provisions of this Act.
Section 14. Upon the certification of the Secretary of Commerce that the
foreign commerce of the United States in its competition with that of foreign
nations is prejudiced the provisions, or any of them, of Title I of this Act, or
by the laws of any foreign country or countries relating to the carriage of
goods by sea, the President of the United States, may, from time to time, by
proclamation, suspend any or all provisions of Title I of this Act for such
periods of time or indefinitely as may be designated in the proclamation. The
President may at any time rescind such suspension of Title I hereof, and any
provisions thereof which may have been suspended shall thereby be
reinstated and again apply to contracts thereafter made for the carriage of
goods by sea. Any proclamation of suspension or rescission of any such
suspension shall take effect on a date named therein, which date shall be
not less than ten days from the issue of the proclamation.
Any contract for the carriage of goods by sea, subject to the provisions of
this Act, effective during any period when title I hereof, or any part thereof, is
suspended, shall be subject to all provisions of law now or hereafter
applicable to that part of Title I which may have thus been suspended.
Section 15. This Act shall take effect ninety days after the date of its
approval; but nothing in this Act shall apply during a period not to exceed
one year following its approval to any contract for the carriage of goods by
sea, made before the date on which this Act is approved, nor to any bill of
lading or similar document of title issued, whether before or after such date
of approval in pursuance of any such contract as aforesaid.
Section 16. This Act may be cited as the "Carriage of Goods by Sea Act."
Approved, April 16, 1936.
CASES:
1. Dole Philippines, Inc. vs. Maritime Co. of the Phils., 148 SCRA 118,
No. L-61352 February 27, 1987
Mercantile Law; Carriage of Goods by Sea Act; Prescription; Written
extrajudicial demand by the creditor does not toll the running of the one year
prescriptive period under the Act.—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 The Yek Tong Lin
Fire & Marine Insurance Co., Ltd. vs. American President Lines, Inc. There,
in a parallel factual situation, where 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.
Period to file an action even under a new period having already lapsed
without filing the action, the right of action had prescribed.—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 had
expired and its right of action had prescribed.
Same; Tolling of the prescriptive period cannot be equated with indefinite
suspension; Case at bar.—Dole's contention that the prescriptive period "***
remained tolled as of May 4, 1972 *** (and that) in legal contemplation ***
(the) case (Civil Case No. 96353) 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.
2. Asian Terminals, Inc. vs. Philam Insurance Co., Inc., 702 SCRA 88,
G.R. No. 181163 July 24, 2013
Mercantile Law; Carriage of Goods by Sea Act (COGSA); The Carriage of
Goods by Sea Act (COGSA) or Public Act No. 521 of the 74th US Congress,
was accepted to be made applicable to all contracts for the carriage of goods
by sea to and from Philippine ports in foreign trade by virtue of
Commonwealth Act (C.A.) No. 65.—The Carriage of Goods by Sea Act
(COGSA) or Public Act No. 521 of the 74th US Congress, was accepted to
be made applicable to all contracts for the carriage of goods by sea to and
from Philippine ports in foreign trade by virtue of Commonwealth Act (C.A.)
No. 65. Section 1 of C.A. No. 65 states: Section 1. That the provisions of
Public Act Numbered Five hundred and twenty-one of the Seventy-fourth
Congress of the United States, approved on April sixteenth, nineteen
hundred and thirty-six, be accepted, as it is hereby accepted to be made
applicable to all contracts for the carriage of goods by sea to and from
Philippine ports in foreign trade: Provided, That nothing in the Act shall be
construed as repealing any existing provision of the Code of Commerce
which is now in force, or as limiting its application.
Same; Letter of Credit; Words and Phrases; A letter of credit is a financial
device developed by merchants as a convenient and relatively safe mode of
dealing with sales of goods to satisfy the seemingly irreconcilable interests of
a seller, who refuses to part with his goods before he is paid, and a buyer,
who wants to have control of his goods before paying.—A letter of credit is a
financial device developed by merchants as a convenient and relatively safe
mode of dealing with sales of goods to satisfy the seemingly irreconcilable
interests of a seller, who refuses to part with his goods before he is paid, and
a buyer, who wants to have control of his goods before paying. However,
letters of credit are employed by the parties desiring to enter into commercial
transactions, not for the benefit of the issuing bank but mainly for the benefit
of the parties to the original transaction, in these cases, Nichimen
Corporation as the seller and Universal Motors as the buyer. Hence, the
latter, as the buyer of the Nissan CKD parts, should be regarded as the
person entitled to delivery of the goods. Accordingly, for purposes of
reckoning when notice of loss or damage should be given to the carrier or its
agent, the date of delivery to Universal Motors is controlling.
Under Section 3(6) of the Carriage of Goods by Sea Act (COGSA), notice of
loss or damages must be filled within three days of delivery; A failure to file a
notice of claim within three days will not bar recovery of a suit is nonetheless
filed within one year from delivery of the goods or from the date when the
goods should have been delivered.
Moreover, paragraph (6), Section 3 of the COGSA clearly states that failure
to comply with the notice requirement shall not affect or prejudice the right of
the shipper to bring suit within one year after delivery of the goods. Petitioner
Philam, as subrogee of Universal Motors, filed the Complaint for damages
on January 18, 1996, just eight months after all the packages were delivered
to its possession on May 17, 1995. Evidently, petitioner Philam’s action
against petitioners Westwind and ATI was seasonably filed.
3. Universal Shipping Lines, Inc. vs. Intermediate Appellate Court
Commercial Law; Carriage of Goods by Sea Act; Jurisdiction; It is not the
lack of the prescribed license (to do business in the Philippines) but doing
business without such license which bars a foreign corporation from access
to our courts.—On the issue of jurisdiction, we uphold the appellate court's
ruling that the private respondent may sue in Philippine courts upon the
marine insurance policies issued by it abroad to cover international-bound
cargoes shipped by a Philippine carrier, even if it has no license to do
business in this country, for it is not the lack of the prescribed license (to do
business in the Philippines) but doing business without such license, which
bars a foreign corporation from access to our courts.
Same; Same; Prescription; Section 3. (6) Title he of the Carriage of Goods
by Sea Act admits of an exception.—Anent the issue of prescription of the
action under Section 3(6), Title I, of the Carriage of Goods by Sea Act
(Commonwealth Act No. 65) which provides that: "x ws x 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. x x x." This provision of the law
admits of an exception: if the oneyear period is suspended by express
agreement of the parties for in such a case, their agreement becomes the
law for them.
4. Cua vs. Wallem Philippines Shipping, Inc., 676 SCRA 143, G.R. No.
171337 July 11, 2012
Civil Law; Common Carriers; Carriage of Goods by Sea Act (COGSA); The
Carriage of Goods by Sea Act (COGSA) is the applicable law for all
contracts for carriage of goods by sea to and from Philippine ports in foreign
trade.—The COGSA is the applicable law for all contracts for carriage of
goods by sea to and from Philippine ports in foreign trade; it is thus the law
that the Court shall consider in the present case since the cargo was
transported from Brazil to the Philippines.
Same; Under Section 3(6) of the Carriage of Goods by Sea Act (COGSA),
the carrier is discharged from liability for loss or damage to the cargo unless
the suit is brought within one year after delivery of the goods or the date
when the goods should have been delivered.—Under Section 3(6) of the
COGSA, the carrier is discharged from liability for loss or damage to the
cargo “unless the suit is brought within one year after delivery of the goods
or the date when the goods should have been delivered.” Jurisprudence,
however, recognized the validity of an agreement between the carrier and
the shipper/consignee extending the one-year period to file a claim.
Civil Law; Common Carriers; Code of Commerce; Article 366 of the Code of
Commerce requires that a claim be made with the carrier within 24 hours
from the delivery of the cargo.—We cannot consider the respondents’
discussion on prescription in their Memorandum filed with the RTC, since
their arguments were based on Cua’s supposed failure to comply with Article
366 of the Code of Commerce, not Section 3(6) of the COGSA—the relevant
and material provision in this case. Article 366 of the Code of Commerce
requires that a claim be made with the carrier within 24 hours from the
delivery of the cargo; the respondents alleged that they were informed of the
damage and shortage only on September 13, 1989, months after the
vessel’s arrival in Manila.
5. Filipino Merchants Insurance Co., Inc. vs. Alejandro, 145 SCRA 42,
No. L-54140, No. L-62001 October 14, 1986
Mercantile Law; Admiralty; Carriage of Goods by Sea Act; Prescription;
Coverage of one-year prescriptive period under the Carriage of Goods by
Sea Act includes the insurer of the goods.—Clearly, the coverage of the Act
includes the insurer of the goods. Otherwise, what the Act intends to prohibit
after the lapse of the one-year prescriptive period can be done indirectly by
the shipper or owner of the goods by simpiy filing a ciaim against the insurer
even after the lapse of one year. This would be the result if we follow the
petitioner’s argument that the insurer can, at any time, proceed against the
carrier and the ship since it is not bound by the time-bar provision. In this
situation, the one-year limitation wiU be practically useless. This could not
have been the intention of the law which has also for its purpose the
protection of the carrier and the ship from fraudulent claims by having
“matters affecting transportation of goods by sea be decided in as short a
time as possible” and by avoiding incidents which would “unnecessarily
extend the period and permit delays in the settlement of questions affecting
the transportation.”
Same; Same; Whether the insurer files a third-party complaint or maintains
an independent action against the carrier and the ship is of no moment, as
insurer failed to take appropriate action within the reglementary period.—In
the case ai bar, the petitioner’s action has prescribed under the provisions of
the Carriage of Goods by Sea Act. Hence, whether it files a third-party
complaint or chooses to maintain an independent action against herein
respondents is of no moment. Had the plainiiffs in the civil cases beiow filed
an action against the petitioner after the one-year prescriptive period, then
the iatter could have successfully denied liability on the ground that by their
own doing, the plaintiffs had prevented the petitioner from being subrogated
to their respective rights against the herein respondents by filing a suit after
the one year prescriptive period. The situation, however, does not obtain in
the present case. The plaintiffs in the civil cases below gave extrajudicial
notice to their respective carriers and filed suit against the petitioner well
within one year from their receipt of the goods. The petitioner had plenty of
time within which to act. In Civil Case No. 109911, the petitioner had more
than four months to file a third-party complaint while in Civil Case No.
110061, it had more than five months to do so. In both instances, however,
the petitioner failed to file the appropriate action.
6. Mayer Steel Pipe Corporation vs. Court of Appeals, 274 SCRA 432,
G.R. No. 124050 June 19, 1997
Insurance; Carriage of Goods by Sea Act; Prescription; Under Section 3(6)
of the Carriage of Goods by Sea Act, only the carrier’s liability is
extinguished if no suit is brought within one year.—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.
Same; Ruling in Filipino Merchants should apply only to suits against the
carrier filed either by the shipper, the consignee or the insurer.—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.
7. Wallem Philippines Shipping, Inc. vs. S.R. Farms, Inc., 624 SCRA
329, G.R. No. 161849, July 7, 2010
Carriage of Goods by Sea Act; Damages; Under Section 3(6) of the Carriage
of Goods by Sea Act (COGSA), notice of loss or damages must be filled
within three days of delivery; A failure to file a notice of claim within three
days will not bar recovery of a suit is nonetheless filed within one year from
delivery of the goods or from the date when the goods should have been
delivered.—Under Section 3 (6) of the COGSA, notice of loss or damages
must be filed within three days of delivery. Admittedly, respondent did not
comply with this provision. Under the same provision, however, a failure to
file a notice of claim within three days will not bar recovery if a suit is
nonetheless filed within one year from delivery of the goods or from the date
when the goods should have been delivered.
Remedial Law; Pleadings and Practice; Amendment of Pleadings; The
settled rule is that the filing of an amended pleading does not retroact to the
date of the filing of the original; The statute of limitation runs until the
submission of the amendment; Court has held that an amendment which
merely supplements and amplifies facts originally alleged in the complaint
relates back to the date of the commencement of the action and is not
barred by the statute of limitation which expired after the service of the
original complaint.—The settled rule is that the filing of an amended pleading
does not retroact to the date of the filing of the original; hence, the statute of
limitation runs until the submission of the amendment. It is true that, as an
exception, this Court has held that an amendment which merely
supplements and amplifies facts originally alleged in the complaint relates
back to the date of the commencement of the action and is not barred by the
statute of limitations which expired after the service of the original complaint.
The exception, however, would not apply to the party impleaded for the first
time in the amended complaint.
8. New World International Development (Phils.), Inc. vs. NYK-
FilJapan Shipping Corp., 656 SCRA 129, G.R. No. 171468 August
24, 2011
Civil Law; Common Carriers; That the loss was occasioned by a typhoon, an
exempting cause under Article 1734 of the Civil Code, does not
automatically relieve the common carrier of liability.—That the loss was
occasioned by a typhoon, an exempting cause under Article 1734 of the Civil
Code, does not automatically relieve the common carrier of liability. The
latter had the burden of proving that the typhoon was the proximate and only
cause of loss and that it exercised due diligence to prevent or minimize such
loss before, during, and after the disastrous typhoon.
Insurance Law; Under Section 243 of the Insurance Code, the insurer has 30
days after proof of loss is received and ascertainment of the loss or damage
within which to pay the claim. If such ascertainment is not had within 60 days
from receipt of evidence of loss, the insurer has 90 days to pay or settle the
claim.—Under Section 243, the insurer has 30 days after proof of loss is
received and ascertainment of the loss or damage within which to pay the
claim. If such ascertainment is not had within 60 days from receipt of
evidence of loss, the insurer has 90 days to pay or settle the claim. And, in
case the insurer refuses or fails to pay within the prescribed time, the insured
shall be entitled to interest on the proceeds of the policy for the duration of
delay at the rate of twice the ceiling prescribed by the Monetary Board.
Same; Section 244 of the Insurance Code also provides for an award of
attorney’s fees and other expenses incurred by the assured due to the
unreasonable withholding of payment of his claim.—The term “ceiling
prescribed by the Monetary Board” means the legal rate of interest of 12%
per annum provided in Central Bank Circular 416, pursuant to Presidential
Decree 116. Section 244 of the Insurance Code also provides for an award
of attorney’s fees and other expenses incurred by the assured due to the
unreasonable withholding of payment of his claim.
9. Insurance Company of North America vs. Asian Terminals, Inc.,
666 SCRA 226, G.R. No. 180784 February 15, 2012
Same; Same; 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.—The prescriptive period for filing an action for the loss or damage
of the goods under the COGSA is found in paragraph (6), Section 3, thus: 6)
Unless notice of loss or damage and the general nature of such loss or
damage be given in writing to the carrier or his agent at the port of discharge
before 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. Said notice of loss
or damage maybe endorsed upon the receipt for the goods given by the
person taking delivery thereof. The notice in writing need not be given if the
state of the goods has at the time of their receipt been the subject of joint
survey or inspection. 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. From the provision above, the carrier
and the ship may put up the defense of prescription if the action for damages
is not brought within one year after the delivery of the goods or the date
when the goods should have been delivered. It has been held that not only
the shipper, but also the consignee or legal holder of the bill may invoke the
prescriptive period. However, the COGSA does not mention that an arrastre
operator may invoke the prescriptive period of one year; hence, it does not
cover the arrastre operator.
10. Ang vs. Compania Maritima, 133 SCRA 600, No. L-30805 December
26, 1984
Prescription; Common Carriers; Damages; Action for damages for
misdelivery of cargo by an ocean-going vessel is not one-year, but 10 years
from date cause of action accrued, as distinguished from loss of cargo.—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.
11. Mitsui O.S.K. Lines Ltd. vs. Court of Appeals, 287 SCRA 366, G.R.
No. 119571 March 11, 1998
Carriage of Goods by Sea Act; Actions; Prescription; “Loss” refers to the
deterioration or disappearance of goods.—In Ang v. American Steamship
Agencies, Inc., the question was whether an action for the value of goods
which had been delivered to a party other than the consignee is for “loss or
damage” within the meaning of §3(6) of the COGSA. It was held that there
was no loss because the goods had simply been misdelivered. “Loss” refers
to the deterioration or disappearance of goods. 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.
Same; The deterioration of goods due to delay in their transportation
constitutes “loss” or “damage” within the meaning of §3(6), so that as suit
was not brought within one year the action was barred.—Conformably with
this concept of what constitutes “loss” or “damage,” this Court held in
another case that the deterioration of goods due to delay in their
transportation constitutes “loss” or “damage” within the meaning of §3(6), so
that as suit was not brought within one year the action was barred: Whatever
damage or injury is suffered by the goods while in transit would result in loss
or damage to either the shipper or the consignee. As long as it is claimed,
therefore, as it is done here, that the losses or damages suffered by the
shipper or consignee were due to the arrival of the goods in damaged or
deteriorated condition, the action is still basically one for damage to the
goods, and must be filed within the period of one year from delivery or
receipt, under the above-quoted provision of the Carriage of Goods by Sea
Act.
Same; In the case at bar, there is neither deterioration nor disappearance
nor destruction of goods caused by the carrier’s breach of contract.—In the
case at bar, there is neither deterioration nor disappearance nor destruction
of goods caused by the carrier’s breach of contract. Whatever reduction
there may have been in the value of the goods is not due to their
deterioration or disappearance because they had been damaged in transit.
Same; The question before the trial court is not the particular sense of
“damages” as it refers to the physical loss or damage of a shipper’s goods
but petitioner’s potential liability for the damages it has caused in the general
sense.—Indeed, what is in issue in this petition is not the liability of petitioner
for its handling of goods as provided by §3(6) of the COGSA, but its liability
under its contract of carriage with private respondent as covered by laws of
more general application. Precisely, the question before the trial court is not
the particular sense of “damages” as it refers to the physical loss or damage
of a shipper’s goods as specifically covered by §3(6) of COGSA but
petitioner’s potential liability for the damages it has caused in the general
sense and, as such, the matter is governed by the Civil Code, the Code of
Commerce and COGSA, for the breach of its contract of carriage with private
respondent.
12. International Container Terminal Services, Inc. vs. Prudential
Guarantee & Assurance Co., Inc., 320 SCRA 244, G.R. No. 134514
December 8, 1999
Commercial Law; Carriage of Goods by Sea Act; Arrastre; The legal
relationship between an arrastre operator and a consignee is akin to that
between a warehouseman and a depositor.—The legal relationship between
an arrastre operator and a consignee is akin to that between a
warehouseman and a depositor. As to both the nature of the functions and
the place of their performance, an arrastre operator’s services are clearly not
maritime in character.
Same; In a claim for loss filed by a consignee, the burden of proof to show
compliance with the obligation to deliver the goods to the appropriate party
devolves upon the arrastre operator.—In a claim for loss filed by a
consignee, the burden of proof to show compliance with the obligation to
deliver the goods to the appropriate party devolves upon the arrastre
operator. Since the safekeeping of the goods rests within its knowledge, it
must prove that the losses were not due to its negligence or that of its
employees.
Same; “Shipper’s Load and Count” means that the shipper was solely
responsible for the loading of the container, while the carrier was oblivious to
the contents of the shipment.—More important, the consigned goods were
shipped under “Shipper’s Load and Count.” This means that the shipper was
solely responsible for the loading of the container, while the carrier was
oblivious to the contents of the shipment. Protection against pilferage of the
shipment was the consignee’s lookout. The arrastre operator was, like any
ordinary depositary, duty-bound to take good care of the goods received
from the vessel and to turn the same over to the party entitled to their
possession, subject to such qualifications as may have validly been imposed
in the contract between the parties. The arrastre operator was not required
to verify the contents of the container received and to compare them with
those declared by the shipper because, as earlier stated, the cargo was at
the shipper’s load and count. The arrastre operator was expected to deliver
to the consignee only the container received from the carrier.
Same; The filing of the claim for loss within the 15-day period is in the nature
of a prescriptive period for bringing an action and is a condition precedent to
holding the arrastre operator liable.—In order to hold the arrastre operator
liable for lost or damaged goods, the claimant should file with the operator a
claim for the value of said goods “within fifteen (15) days from the date of
discharge of the last package from the carrying vessel x x x.” The filing of the
claim for loss within the 15-day period is in the nature of a prescriptive period
for bringing an action and is a condition precedent to holding the arrastre
operator liable. This requirement is a defense made available to the arrastre
operator, who may use or waive it as a matter of personal discretion.
Same; The 15-day period for filing claims should be counted from the date
the consignee learns of the loss, damage or misdelivery of goods.—We
should hasten to add that while a literal reading of the liability clause makes
the time limit run from the moment the shipment is discharged from the
carrying vessel, this Court has chosen to interpret this condition liberally in
an endeavor to promote fairness, equity and justness. A long line of cases
has held that the 15-day period for filing claims should be counted from the
date the consignee learns of the loss, damage or misdelivery of goods.
Same; Its failure to do so relieved the arrastre operator of any liability for the
nondelivery of the goods.—In any event, within 15 days from the time the
loss was discovered, the consignee could have filed a provisional claim,
which would have constituted substantial compliance with the rule. Its failure
to do so relieved the arrastre operator of any liability for the nondelivery of
the goods. More specifically, the failure to file a provisional claim bars a
subsequent action in court. The rationale behind the time limit is that, without
it, a consignee could too easily concoct or fabricate claims and deprive the
arrastre operator of the best opportunity to probe immediately their veracity.
13. Belgian Overseas Chartering and Shipping N.V. vs. Philippine First
Insurance Co., Inc., 383 SCRA 23, G.R. No. 143133 June 5, 2002
Same; Same; Bills of Lading; Bill of lading serves two functions as receipt for
the goods shipped, and as a contract by which three parties, namely, the
shipper, the carrier, and the consignee, undertake specific responsibilities
and assume stipulated obligations.—A bill of lading serves two functions.
First, it is a receipt for the goods shipped. Second, it is a contract by which
three parties—namely, the shipper, the carrier, and the consignee—
undertake specific responsibilities and assume stipulated obligations. In a
nutshell, the acceptance of the bill of lading by the shipper and the
consignee, with full knowledge of its contents, gives rise to the presumption
that it constituted a perfected and binding contract.
Same; Same; Same; A stipulation in the bill of lading limiting to a certain sum
the common carrier’s liability for loss or destruction of a cargo—unless the
shipper or owner declares a greater value is sanctioned by law.—Further, a
stipulation in the bill of lading limiting to a certain sum the common carrier’s
liability for loss or destruction of a cargo—unless the shipper or owner
declares a greater value—is sanctioned by law. There are, however, two
conditions to be satisfied: (1) the contract is reasonable and just under the
circumstances, and (2) it has been fairly and freely agreed upon by the
parties. The rationale for, this rule is to bind the shippers by their agreement
to the value (maximum valuation) of their goods.
Same; The COGSA, which is suppletory to the provisions of the Civil Code,
supplements the latter by establishing a statutory provision limiting the
carrier’s liability in the absence of a shipper’s declaration of a higher value in
the bill of lading—the provisions on limited liability are as much a part of the
bill of lading as though physically in it and as though placed there by
agreement of the parties.—It is to be noted, however, that the Civil Code
does not limit the liability of the common carrier to a fixed amount per
package. In all matters not regulated by the Civil Code, the right and the
obligations of common carriers shall be governed by the Code of Commerce
and special laws. Thus, the COGSA, which is suppletory to the provisions of
the Civil Code, supplements the latter by establishing a statutory provision
limiting the carrier’s liability in the absence of a shipper’s declaration of a
higher value in the bill of lading. The provisions on limited liability are as
much a part of the bill of lading as though physically in it and as though
placed there by agreement of the parties.
Same; A notation in the Bill of Lading which indicates the amount of the
Letter of Credit obtained by the shipper for the importation of the articles
does not effect a declaration of the value of the goods as required by the bill
—that notation is made only for the convenience of the shipper and the bank
processing the Letter of Credit.—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. First, 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. That notation was made only for the
convenience of the shipper and the bank processing the Letter of Credit.
Second, in Keng Hua Paper Products v. Court of Appeals, we held that a bill
of lading was separate from the Other Letter of Credit arrangements.
Same; Words and Phrases; “Package,” Explained; When what would
ordinarily be considered packages are shipped in a container supplied by the
carrier and the number of such units is disclosed in the shipping documents,
each of these units and not the container constitutes the “package” referred
to in the liability limitation provision of COGSA.— 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. In Eastern
Shipping Lines, Inc. v. Intermediate Appellate Court, we explained the
meaning of package: “When what would ordinarily be considered packages
are shipped in a container supplied by the carrier and the number of such
units is disclosed in the shipping documents, each of those units and not the
container constitutes the ‘package’ referred to in the liability limitation
provision of Carriage of Goods by Sea Act.”
COGSA. Everett Steamship Corporation v. Court of Appeals, 297 SCRA 496
(1998) held: 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 by law, particularly Articles
1749 and 1750 of the Civil Code.
NOTE:
QUESTION: What is the effect on the liability of the ship-owner and ship
agent in case of loss or damage to the goods on the basis of shipper’s load,
count shipment?
ANSWER: While the Civil Code contains provision magi it common carrier
liable for loss/damage to the goods transported, it failed to outline the
manner of determining the amount of such liability. Article 372 of the Code of
Commerce fills this gap, thus: Article 372. The value of the goods which the
carrier must pay in cases of loss or misplacement shall be determined in
accordance with that declared in the bill of lading, the shipper not being
allowed to present proof that among the goods declared therein there were
articles of greater value and money. (Philam Insurance Co, Inc. v Heung-A
Shipping Corporation and Wallem Philippines Shipping, Inc)
NOTE: Article 366 of the Code of Commerce requiring that a claim must be
made against the carrier within 24 hours from receipt of the merchandise
applies only interisland shipments within the Philippines.

14. Philippine Charter Insurance Corporation vs. Neptune Orient

Lines/Overseas Agency Services, Inc.,
Same; Same; Bill of Lading; Stipulation in the bill of lading limiting
respondent’s liability for the loss of the subject cargoes is allowed under
Article 1749 of the Civil Code, and Sec. 4, paragraph (5) of the Carriage of
Goods by Sea Act (COGSA).—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. Such stipulation in the bill of
lading limiting respondents’ liability for the loss of the subject cargoes is
allowed under Art. 1749 of the Civil Code, and Sec. 4, paragraph (5) of the