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Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 161849               July 9, 2010

WALLEM PHILIPPINES SHIPPING, INC., Petitioner,
vs.
S.R. FARMS, INC., Respondent.

D E C I S I O N

PERALTA, J.:

Assailed in the present petition for review on certiorari are the Decision¹ and Resolution² of the Court of Appeals (CA) dated June 2, 2003 and January 15, 2004, respectively, in CA-G.R. CV No. 65857. The CA Decision reversed and set aside the Decision³ dated October 8, 1999 of the Regional Trial Court (RTC) of Manila, Branch 11, in Civil Case No. 93-65021, while the CA Resolution denied petitioners’ Motion for Reconsideration.

The facts of the case, as found by the RTC and affirmed by the CA, are as follows:

x x x On March 25, 1992, Continental Enterprises, Ltd. loaded on board the vessel M/V "Hui Yang," at Bedi Bunder, India, a shipment of Indian Soya Bean Meal, for transportation and delivery to Manila, with plaintiff [herein respondent] as consignee/notify party. The said shipment is said to weigh 1,100 metric tons and covered by Bill of Lading No. BEDI 4 dated March 25, 1992 (Exhibit A; also Exhibit I). The vessel is owned and operated by defendant Conti-Feed, with defendant [herein petitioner] Wallem as its ship agent.

The subject cargo is part of the entire shipment of Indian Soya Bean Meal/India Rapeseed Meal loaded in bulk on board the said vessel for delivery to several consignees. Among the consignees were San Miguel Corporation and Vitarich Corporation, including the herein plaintiff (Exhibit A; Exhibits 1 to 6; TSN, p. 13, June 28, 1996).

On April 11, 1992, the said vessel, M/V "Hui Yang" arrived at the port of Manila, Pier 7 South Harbor. Thereafter, the shipment was discharged and transferred into the custody of the receiving barges, the NorthFront-333 and NorthFront-444. The offloading of the shipment went on until April 15, 1992 and was handled by [Ocean Terminal Services, Inc.] OTSI using its own manpower and equipment and without the participation of the crew members of the vessel. All throughout the entire period of unloading operation, good and fair weather condition prevailed.

At the instance of the plaintiff, a cargo check of the subject shipment was made by one Lorenzo Bituin of Erne Maritime and Allied Services, Co. Inc., who noted a shortage in the shipment which was placed at 80.467 metric tons based on draft survey made on the NorthFront-33 and NorthFront-444 showing that the quantity of cargo unloaded from the vessel was only 1019.53 metric tons. Thus, per the bill of lading, there was an estimated shortage of 80.467.

Upon discovery thereof, the vessel chief officer was immediately notified of the said short shipment by the cargo surveyor, who accordingly issued the corresponding Certificate of Discharge dated April 15, 1992 (Exhibit D). The survey conducted and the resultant findings thereon are embodied in the Report of Superintendence dated April 21, 1992 (Exhibits C to C-2) and in the Barge Survey Report both submitted by Lorenzo Bituin (Exhibits C-3 and C-4). As testified to by Lorenzo Bituin, this alleged shortage of 80.467 metric tons was arrived at using the draft survey method which calls for the measurement of the light and loaded condition of the barge in relation to the weight of the water supposedly displaced.⁴

Petitioner then filed a Complaint for damages against Conti-Feed & Maritime Pvt. Ltd., a foreign corporation doing business in the Philippines and the owner of M/V "Hui Yang"; RCS Shipping Agencies, Inc., the ship agent of Conti-Feed; Ocean Terminal Services, Inc. (OTSI), the arrastre operator at Anchorage No. 7, South Harbor, Manila; and Cargo Trade, the customs broker.⁵

On June 7, 1993, respondent filed an Amended Complaint impleading herein petitioner as defendant alleging that the latter, and not RCS, was the one which, in fact, acted as Conti-Feed’s ship agent.⁶

On June 22, 1993, the complaint against Cargo Trade was dismissed at the instance of respondent on the ground that it has no cause of action against the former.⁷

Subsequently, upon motion of RCS, the case against it was likewise dismissed for lack of cause of action.⁸

Meanwhile, defendant OTSI filed its Answer with Counterclaim and Crossclaim⁹ denying the material allegations of the Complaint and alleging that it exercised due care and diligence in the handling of the shipment from the carrying vessel unto the lighters; no damage or loss whatsoever was sustained by the cargo in question while being discharged by OTSI; petitioner’s claim had been waived, abandoned or barred by laches or estoppels; liability, if any, is attributable to its co-defendants.

For its part, petitioner denied the allegations of respondent claiming, among others, that it is not accountable nor responsible for any alleged shortage sustained by the shipment while in the possession of its co-defendants; the alleged shortage was due to negligent or faulty loading or unloading of the cargo by the stevedores/shipper/consignee; the shortage, if any, was due to pre-shipment damage, inherent nature, vice or defect of the cargo for which herein petitioner is not liable; respondent’s claim is already barred by laches and/or prescription.¹⁰

Conti-Feed did not file an Answer.

Pre-Trial Conference was conducted, after which trial ensued.

On October 8, 1999, the RTC rendered its Decision¹¹ dismissing respondent’s complaint, as well as the opposing parties’ counterclaims and crossclaims.

Aggrieved by the RTC Decision, respondent filed an appeal with the CA.

On June 2, 2003, the CA rendered its presently assailed Decision disposing as follows:

WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE and another one entered ordering defendants-appellees Conti-Feed and Maritime Pvt. Ltd. and Wallem Philippines Shipping, Inc., to pay the sum representing the value of the 80.467 metric tons of Indian Soya Beans shortdelivered, with legal interest from the time the judgment becomes final until full payment, plus attorney’s fees and expenses of litigation of ₱10,000.00, as well as the cost of suit.

SO ORDERED.¹²

Petitioner filed a Motion for Reconsideration.

On July 8, 2003, respondent filed a Motion for a More Definite Dispositive Portion¹³ praying that the value of the 80.467 metric tons of Indian Soya Beans, which petitioner and Conti-Feed were ordered to pay, be specified in the dispositive portion of the CA Decision.

Petitioner filed its Comment/Opposition¹⁴ to private respondent’s Motion.

On January 15, 2004, the CA issued a Resolution denying petitioner’s Motion for Reconsideration and modifying the dispositive portion of its Decision, thus:

WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE and another one entered ordering defendants-appellees Conti-Feed and Maritime Pvt. Ltd. and Wallem Shipping, Inc., to pay the sum of $19,070.06 representing the value of the 80.467 metric tons of Indian Soya Beans shortdelivered, with legal interest from the time the judgment becomes final until full payment, plus attorney’s fees and expenses of litigation of ₱10,000.00, as well as the costs of suit.

SO ORDERED.¹⁵

Hence, the instant petition based on the following Assignment of Errors:

I

THE COURT OF APPEALS ERRED IN APPLYING THE PRESUMPTION OF NEGLIGENCE UNDER ARTICLE 1735 OF THE CIVIL CODE. THIS PROVISION DOES NOT APPLY IN THIS CASE BECAUSE THERE WAS NO LOSS OR SHORTAGE OR SHORTDELIVERY.

II

THE COURT OF APPEALS ERRED IN GIVING DUE COURSE TO THE CASE CONSIDERING THAT:

A. THE CLAIM WAS ALREADY TIME-BARRED WHEN THE CASE WAS FILED AGAINST HEREIN PETITIONER ON 8 MAY 1993, AS PROVIDED IN SECTION 3 (6) OF THE COGSA. THE ONE-YEAR PRESCRIPTIVE PERIOD COMMENCED ON 15 APRIL 1992 WHEN THE SUBJECT SHIPMENT WAS DELIVERED TO PRIVATE RESPONDENT AND LAPSED ON 15 APRIL 1993; AND

B. [RESPONDENT] WAIVED ITS RIGHT OF ACTION WHEN IT DID NOT GIVE A WRITTEN NOTICE OF LOSS TO THE PETITIONER WITHIN THREE (3) DAYS FROM DISCHARGE OF THE SUBJECT SHIPMENT AS PROVIDED IN SECTION 3 (6) OF THE COGSA.

III

IN THE REMOTE POSSIBILITY OF LOSS OR SHORTAGE OR SHORTDELIVERY, THE COURT OF APPEALS ERRED IN IMPUTING NEGLIGENCE AGAINST THE PETITIONER WHICH WAS NOT RESPONSIBLE IN LOADING AND/OR DISCHARGING THE SUBJECT SHIPMENT.

IV

THE COURT OF APPEALS ERRED IN GRANTING [RESPONDENT’S] MOTION FOR A MORE DEFINITE DISPOSITIVE PORTION WITHOUT STATING IN THE DECISION, THE LEGAL BASES FOR DOING SO.

V

THE COURT OF APPEALS ERRED IN GRANTING THE MOTION FOR A MORE DEFINITE DISPOSITIVE PORTION BECAUSE [RESPONDENT] FILED SAID MOTION MORE THAN FIFTEEN (15) DAYS AFTER [RESPONDENT] RECEIVED THE DECISION OF THE COURT OF APPEALS. THE COURT OF APPEALS FURTHER ERRED IN INSERTING A DEFINITE MONETARY VALUE OF THE ALLEGED SHORTAGE BECAUSE THERE WAS NO FACTUAL FINDING, BOTH IN THE TRIAL COURT AND IN THE COURT OF APPEALS, AS TO THE SPECIFIC AMOUNT OF THE ALLEGED SHORTDELIVERED CARGO.¹⁶

The Court finds it proper to resolve first the question of whether the claim against petitioner was timely filed.

With respect to the prescriptive period involving claims arising from shortage, loss of or damage to cargoes sustained during transit, the law that governs the instant case is the Carriage of Goods by Sea Act¹⁷ (COGSA), Section 3 (6) of which provides:

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 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 delivery.

Said notice of loss or damage may be 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.

Petitioner claims that pursuant to the above-cited provision, respondent should have filed its Notice of Loss within three days from delivery. It asserts that the cargo was fully discharged from the vessel on April 15, 1992, but that respondent failed to file any written notice of claim. Petitioner also avers that, pursuant to the same provision of the COGSA, respondent’s claim had already prescribed because the complaint for damages was filed more than one year after the shipment was discharged.

The Court agrees.

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.¹⁸

In Loadstar Shipping Co., Inc. v. Court of Appeals,¹⁹ the Court ruled that a claim is not barred by prescription as long as the one-year period has not lapsed. Thus, in the words of the ponente, Chief Justice Hilario G. Davide Jr.:

Inasmuch as neither 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 -- may be applied suppletorily to the case at bar.²⁰

In the instant case, the Court is not persuaded by respondent’s claim that the complaint against petitioner was timely filed. Respondent argues that the suit for damages was filed on March 11, 1993, which is within one year from the time the vessel carrying the subject cargo arrived at the Port of Manila on April 11, 1993, or from the time the shipment was completely discharged from the vessel on April 15, 1992.

There is no dispute that the vessel carrying the shipment arrived at the Port of Manila on April 11, 1992 and that the cargo was completely discharged therefrom on April 15, 1992. However, respondent erred in arguing that the complaint for damages, insofar as the petitioner is concerned, was filed on March 11, 1993.1awph!l

As the records would show, petitioner was not impleaded as a defendant in the original complaint filed on March 11, 1993.²¹ It was only on June 7, 1993 that the Amended Complaint, impleading petitioner as defendant, was filed.

Respondent cannot argue that the filing of the Amended Complaint against petitioner should retroact to the date of the filing 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.²² 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.²³ The exception, however, would not apply to the party impleaded for the first time in the amended complaint.²⁴

The rule on the non-applicability of the curative and retroactive effect of an amended complaint, insofar as newly impleaded defendants are concerned, has been established as early as in the case of Aetna Insurance Co. v. Luzon Stevedoring Corporation.²⁵ In the said case, the defendant Barber Lines Far East Service was impleaded for the first time in the amended complaint which was filed after the one-year period of prescription. The order of the lower court dismissing the amended complaint against the said defendant on ground of prescription was affirmed by this Court.

In the instant case, petitioner was only impleaded in the amended Complaint of June 7, 1993, or one (1) year, one (1) month and twenty-three (23) days from April 15, 1992, the date when the subject cargo was fully unloaded from the vessel. Hence, reckoned from April 15, 1992, the one-year prescriptive period had already lapsed.

Having ruled that the action against petitioner had already prescribed, the Court no longer finds it necessary to address the other issues raised in the present petition.

WHEREFORE, the petition is PARTLY GRANTED. The Decision of the Court of Appeals dated June 2, 2003 and its Resolution dated January 15, 2004 in CA-G.R. CV No. 65857 are MODIFIED by dismissing the complaint against petitioner. In all other respects, the challenged Decision and Resolution of the CA are AFFIRMED.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

ANTONIO EDUARDO B. NACHURA Associate Justice

ROBERTO A. ABAD Associate Justice

JOSE CATRAL MENDOZA
Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Second Division, Chairperson

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice

Footnotes

¹ Penned by Associate Justice Jose L. Sabio, Jr., with Associate Justices B.A. Adefuin-de la Cruz and Hakim S. Abdulwahid, concurring; rollo, pp. 110-123.

² Rollo, pp. 157-158.

³ Records, pp. 533-538.

⁴ Id. at 534-535.

⁵ Id. at 1.

⁶ Id. at 37.

⁷ Id. at 50.

⁸ Id. at 164.

⁹ Id. at 18-20.

¹⁰ Id. at 67-73.

¹¹ Rollo, pp. 66-71.

¹² Id. at 122.

¹³ CA rollo, pp. 185-194.

¹⁴ Id. at 217-223.

¹⁵ Id. at 231-232.

¹⁶ Rollo, pp. 13-14.

¹⁷ Loadstar Shipping Co., Inc. v. Court of Appeals, 373 Phil. 976, 989 (1999).

¹⁸ Belgian Overseas Chartering and Shipping N.V. v. Philippine First Insurance Co., Inc., 432 Phil. 567, 585 (2002).

¹⁹ Supra note 17.

²⁰ Id.

²¹ See Complaint, records, p. 1.

²² Republic v. Sandiganbayan, G.R. No. 119292, July 31, 1998, 293 SCRA 440, 466.

²³ Verzosa v. Court of Appeals, G.R. Nos. 119511-13, November 24, 1998, 299 SCRA 100, 111; Sunga v. Commission on Elections, G.R. No. 125629, March 25, 1998, 288 SCRA 76, 85.

²⁴ Seno v. Mangubat, G.R. No. L-44339, December 2, 1987, 156 SCRA 113, 122; Republic v. Sandiganbayan, G.R. Nos. 112708-09, March 29, 1996, 255 SCRA 438, 490.

²⁵ G.R. No. L-25266, January 15, 1975, 62 SCRA 11.

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