Case Digest: Load Star Shipping vs. Court of Appeals, 315 SCRA 339, G.R. No. 131621

 

Load Star Shipping vs. Court of Appeals, 315 SCRA 339, G.R. No. 131621, September 28, 1999

Subject: Transportation Law

FACTS

On 19 November 1984, Loadstar received on board its M/V "Cherokee" (hereafter, the vessel) the following goods for shipment a) 705 bales of lawanit hardwood b) 27 boxes and crates of tilewood assemblies and the others and c) 49 bundles of mouldings R & W (3) Apitong Bolidenized.

The goods, amounting to P6,067,178, were insured for the same amount with MIC against various risks including "TOTAL LOSS BY TOTAL OF THE LOSS THE VESSEL." The vessel, in turn, was insured by Prudential Guarantee & Assurance, Inc. (hereafter PGAI) for P4 million. On 20 November 1984, on its way to Manila from the port of Nasipit, Agusan del Norte, the vessel, along with its cargo, sank off Limasawa Island. As a result of the total loss of its shipment, the consignee made a claim with Loadstar which, however, ignored the same. As the insurer, MIC paid P6,075,000 to the insured in full settlement of its claim, and the latter executed a subrogation receipt therefor.

On 4 February 1985, MIC filed a complaint against Loadstar and PGAI, alleging that the sinking of the vessel was due to the fault and negligence of Loadstar and its employees. It also prayed that PGAI be ordered to pay the insurance proceeds from the loss the vessel directly to MIC, said amount to be deducted from MIC's claim from Loadstar.

In its answer, Loadstar denied any liability for the loss of the shipper's goods and claimed that sinking of its vessel was due to force majeure. PGAI, on the other hand, averred that MIC had no cause of action against it, Loadstar being the party insured. In any event, PGAI was later dropped as a party defendant after it paid the insurance proceeds to Loadstar.

ISSUE

Whether or not claim and suit has already prescribed.

RULING

No, the claim and suit have  not prescribed.

Under the law the Civil Code nor the Code of Commerce states a specific prescriptive period on the matter, the Carriage of Goods by Sea Act (COGSA) — which provides for a one-year period of limitation on claims for loss of, or damage to, cargoes sustained during transit

In this case, one-year prescriptive period also applies to the insurer of the goods. In this case, the period for filing the action for recovery has not yet elapsed. Moreover, a stipulation reducing the one-year period is null and void; it must, accordingly, be struck down.