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Case Digest: Mitsui Lines v. Court of Appeals, 287 SCRA 366, G.R. No. 119571

 

Mitsui Lines v. Court of Appeals, 287 SCRA 366, G.R. No. 119571, March 11, 1998

Subject: Transportation Law


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.

As petitioner denied private respondent's claim, the latter filed a case in the Regional Trial Court on April 14, 1992. In the original complaint, private respondent impleaded as defendants Meister Transport, Inc. and Magsaysay Agencies, Inc., the latter as agent of petitioner Mitsui O.S.K. Lines Ltd. On the other hand, petitioner filed a motion to dismiss alleging that the claim against it had prescribed under the Carriage of Goods by Sea Act.

RTC denied petitioner's motion as well as its subsequent motion for reconsideration. Also, CA affirmed the decision of RTC. Hence this petition.

ISSUE

Whether or not the private respondent's action is for "loss or damage" to goods shipped, within the meaning of Section 3 (6) of the Carriage of Goods by Sea Act (COGSA).

RULING

No, the action is not for “loss or damage” to goods shipped, within the meaning of Section 3(6) of COGSA.

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.

In this case, 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. The suit is not for "loss or damage" to goods contemplated in Section 3(6), the question of prescription of action is governed not by the COGSA but by Article 1144 of the Civil Code which provides for a prescriptive period of ten years.

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