Michelle C.

Arias
1 October 2010

Background of the
COGSA
TIMELINE:
April 16, 1936
Public Act No. 521 aka COGSA was approved by the 74th US Congress

October 22, 1936

COGSA was made applicable to the Philippines upon the election and
approval of Commonwealth Act No. 55 by the National Assembly of the
Commonwealth Government

1936-1950
COGSA governed contracts of carriage of goods by sea from the US to
Philippine ports.

August 30, 1950

the New Civil Code of 1949 (RA 386) came into effect

Purpose of the COGSA

governs the rights and responsibilities

between shippers of cargo and ship-owners

regarding ocean shipments
defines the terms used in shipping
prescribes the maximum amount for the

limitation of the ship-owners liability

stipulates the period for prescription

Applicability of the
COGSA
REQUISITES
1.There must be a contract of carriage

between the ship-owner or its agent and the

shipper;
2.The contract must be for the carriage of
goods;
3.For transportation by sea; and
4.in foreign trade, UNLESS expressly agreed
upon by the parties to apply in domestic
shipping.

Applicability of the
COGSA
GOVERNING LAW
1. Private Carrier coming to the Philippines
First:
COGSA
Second: Code of Commerce
Third:
Civil Code as to provisions
for damages, torts, and contracts

Applicability of the
COGSA
GOVERNING LAW
2. Common Carrier coming to the Philippines
First:
Civil Code provisions
on common carriers
Second: COGSA
Third:
Code of Commerce

Applicability of the
COGSA
GOVERNING LAW
3. Private or Common Carrier going to a
foreign country
General Rule: Law of the country of
destination as provided by Art. 1753 of the
Civil Code
Exception: Expressly agreed upon by the
parties

DEFINITION OF TERMS
(Sec.1)

(a) "carrier" includes the owner or the charterer who enters into a contract of
carriage with a shipper.
(b) "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) "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) "ship" means any vessel used for the carriage of goods by sea.
(e) "carriage of goods" covers the period from the time when the goods
definitiare loaded on to the time when they are discharged from the ship.

RISKS (Sec. 2)
General Rule is that
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 in Section 3
and entitled to the rights and immunities in
Section 4.

SPECIAL CONDITIONS
(Sec.
6)
Exception is
that
a carrier, master or agent of the carrier and a
shipper may enter into any agreement in any terms
as to:
1.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
2.his obligation as to seaworthiness in so far as not
contrary to public policy; or
3.the care or diligence of his servants or agents in
regard to the loading, handling, stowage, carriage,
custody, care and discharge of goods carried by sea.

SPECIAL CONDITIONS
(Sec.
HOWEVER,6)
the foregoing shall apply only where 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.

Such agreement shall have full legal effect. However, it

will 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 circumstance, terms and
condition under which the carriage is to be performed are
such as reasonably to justify a special agreement.

SEAWORTHY
RESPONSIBILITIES & LIABILITIES (Sec. 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.

SEAWORTHY
RESPONSIBILITIES & LIABILITIES (Sec. 3)

When is a vessel SEAWORTHY?

- if it is reasonably fit
- to encounter the ordinary perils to be
expected during her voyage,
- to receive and discharge cargo, and
- to carry safely the particular cargo on the
voyage undertaken.

SEAWORTHY
RESPONSIBILITIES & LIABILITIES (Sec. 3)

Absolute perfection is not required in the

vessel, it being sufficient that she have that
degree of fitness which an ordinarily careful
and prudent owner would require his vessel to
have at the commencement of her voyage
having regard to all the probable
circumstances of it.
(The Silvia, 68 Fed. 230)

SEAWORTHY
RESPONSIBILITIES & LIABILITIES (Sec. 3)

A vessel must also be provided with a crew

adequate in number and competent for their
duty with reference to all the exigencies of the
intended route, and with a competent and
skillful master, of sound judgment and
discretion, and with sufficient knowledge of the
route and experience in navigation to be able to
perform in a proper manner all the ordinary
duties required of him as master of the vessel.
(Germania Insurance Co. vs. The Lady Pike, 21 US 1,
22 L. ed., 499)

SEAWORTHY
RESPONSIBILITIES & LIABILITIES (Sec. 3)

The carrier is under obligation to properly stow

cargo. A vessel, in herself seaworthy, may be
rendered unseaworthy by improper loading of
cargo.
(The City of Lincoln vs. Smith, [1904] A.C. 250)

Bad storage. Which endangers the safety of the

ship and cannot readily be cured on the
voyages, is unseaworthiness.
(Ingram & Royle, Ltd. vs. Services Martimes du Treport, 1
K.B. 541)

SEAWORTHY
RESPONSIBILITIES & LIABILITIES (Sec. 3)

When Seaworthiness Must Exist:

at

the beginning of the voyage, or

at the time she sails, or
when she breaks ground. (58 CJ
450)

BILL OF LADING
RESPONSIBILITIES & LIABILITIES (Sec. 3)
(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.

BILL OF LADING
RESPONSIBILITIES & LIABILITIES (Sec. 3)

(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.
(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.

BILL OF LADING
RESPONSIBILITIES & LIABILITIES (Sec. 3)
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.

BILL OF LADING
RESPONSIBILITIES & LIABILITIES (Sec. 3)
What is a Bill of Lading?
It is a document issued by a carrier to a shipper,
acknowledging that specified goods have been received on
board as cargo for conveyance to a named place for delivery
to the consignee who is usually identified. (Wikipedia)

A document signed by a carrier (a transporter of goods) or the

carrier's representative and issued to a consignor (the shipper of
goods) that evidences the receipt of goods for shipment to a
specified designation and person. (The Legal Dictionary)

1. evidence of a valid contract of carriage, or a chartering

contract,
2. receipt signed by the carrier confirming whether goods
matching the contract description have been received in good
condition; and
3. a document of transfer

BILL OF LADING
RESPONSIBILITIES & LIABILITIES (Sec. 3)
What does a Bill of Lading contain?
(a) The leading marks necessary for identification of the
goods
(b) Either the number of packages or pieces, or the quantity
or weight,
(c) The apparent order and condition of the goods [Sec.3 (3)]

Other information contained in a bill of lading:

Name of the shipping company
Flag of nationality
Shippers name
Order and notify party

BILL OF LADING
RESPONSIBILITIES & LIABILITIES (Sec. 3)

Who issues a Bill of Lading?

The carrier, or the master or agent of the carrier

When is a Bill of Lading issued?

After receipt by the carrier of the goods for
shipping
To whom is a Bill of Lading issued?
To the shipper, upon his demand

BILL OF LADING
RESPONSIBILITIES & LIABILITIES (Sec. 3)

What is the purpose of a Bill of Lading?

- It is the prima facie evidence of the receipt by
the carrier of the goods as therein described. [Sec.
3 (4)]
- It guarantees the accuracy of the mark, number,
quantity and weight of the goods as furnished by
the shipper. [Sec. 3 (5)]
- Effect of Inaccuracy: shipper becomes liable
for indemnity to the carrier. [Sec. 3 (5)]

LIMITATION OF LIABILITY
RIGHT AND IMMUNITIES (Sec. 4)
Art. 1749 Civil Code - expressly permits a stipulation

limiting the liability of a common carrier to the value of

the goods appearing in the bill of lading.

COGSA [Sec.4 (5)] suppletory to the Civil Code, limits

the carriers liability to $600 per package in the absence

of a declaration of a higher value of the goods by the
shipper in the bill of lading

The provisions of the Carriage of Goods by Sea Act

on limited liability are as much a part of a bill of

lading as though physically in it and as much a part
thereof as though placed therein by agreement of
the parties.
(Eastern Shipping Lines, Inc. v. IAC, 150 SCRA 463)

LIMITATION OF LIABILITY
RIGHT AND IMMUNITIES (Sec. 4)

Since there is no stipulation in the respective

bills of lading, limiting the carriers liability for

the loss or destruction of the goods, nor is there
a declaration of a higher value of the goods,
then the provisions of the Civil Code (Arts. 1739
& 1750) do not apply. Hence, the carriers
liability will be under the COGSA, as suppletory
law, and will not exceed US$500 per package or
its peso equivalent, at the time of payment of
the value of goods lost, but in no case more
than the amount of damage actually sustained.

LIMITATION OF LIABILITY
RIGHT AND IMMUNITIES (Sec. 4)
Section 4(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 $500 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.

BILL OF LADING
RESPONSIBILITIES & LIABILITIES (Sec. 3)

(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.

LIMITATION OF LIABILITY
RIGHT AND IMMUNITIES (Sec. 4)

What do you mean by Package?

Package refers to cartons or the individual
packaging of the goods and not to containers.

LIMITATION OF LIABILITY
RIGHT AND IMMUNITIES (Sec. 4)

CONDITIONS FOR LIMITATION OF LIABILITY:

1. Stipulation to limit liability, no higher value declared
for the goods
- apply the maximum liability in COGSA:
a) $500 per package, or
b) Per customary freight unit
Ex. Value of package:
No higher value declared
Limitation on Liability:
Recover: $500/package

$700
$500

LIMITATION OF LIABILITY
RIGHT AND IMMUNITIES (Sec. 4)

2. Stipulation to limit liability, shipper declared a higher

valuation and paid the proper adjustment fees
- the shipper may recover the value of the lost or
damaged goods at the time payment is to be made
Ex.

Declared value of the package:

$700
- with payment of corresponding charges
Value of package
at the time of payment:
$700
Recover:
$700
( or as provided in the carriers schedule of limited
liability)

LIMITATION OF LIABILITY
RIGHT AND IMMUNITIES (Sec. 4)

3. No stipulation to limit liability, No higher value declared

- apply the maximum liability in COGSA:
a) $500 per package, or
b) Per customary freight unit
- PROVIDED: not more than the amount of damage
actually sustained
Ex.

Value of the package: $800

Damage sustained:
$400 $800
Maximum Liability: $500
Recover: $400 $500

LIMITATION OF LIABILITY
RIGHT AND IMMUNITIES (Sec. 4)

4. Stipulation to limit liability, parties agree that the

carriers liability shall be more than
$500/package? VALID or NOT?
- apply the higher limit on liability as agreed upon
5. Stipulation to limit liability below $500/package
provided in COGSA? VALID or NOT?
- apply the lower limit on liability as agreed upon
by the parties in the Bill of Lading

LIMITATION OF LIABILITY
RIGHT AND IMMUNITIES (Sec. 4)

By providing that $500 per package is the

maximum liability, the law does not disallow an
agreement for liability at a lesser amount.
The second paragraph of Sec. 4 (5) of the COGSA
prescribing the maximum amount shall not be less
than $500 refers to a situation where there is
an agreement other than set forth in the Bill
of Lading providing for a maximum higher
than $500 per package.
(Eastern and Australian Steamship Co. Ltd.
vs. Great American Ins. Co., 108 SCRA 248)

LIMITATION OF LIABILITY
RIGHT AND IMMUNITIES (Sec. 4)

6. 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.
7. A stipulation 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, or lessening such
liability, shall be null and void and of no effect.
[Sec. 3 (8)]

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)

(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.

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)

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.

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)

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

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)

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.

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)

General Rule: The carrier and the agent shall

be discharged from liability in respect of loss or
damage to the goods carried by sea unless suit
is brought within one (1) year:
In case of damaged goods:

after delivery was made

In case of non-delivery of goods (i.e. lost)

after the date when the goods should have been

delivered (or the date when the ship left the port of
destination).

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)

WHY ONE (1) YEAR?

- to meet the exigencies of maritime

hazards;
- to provide the carrier an opportunity to
look for the lost goods;
- to discover who was at fault; and
- in case of transshipment, to determine,
when and where the damage occurred

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)

How to Compute:
Exclude the first day, include the last day.
Ex. The ship left the port on Sept. 30, 2010. The
prescriptive period commenced to run on Oct.
1, 2010 and expired on Sept. 30, 2011.

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)
What do we mean by DELIVERY?
- delivery to the arrastre operator and NOT to the consignee.
Why? That delivery is evidenced by tally sheets which show whether
the goods were landed in good order or in bad order, a fact which the
consignee or shipper can easily ascertain through the customs broker.
To use as basis for computing the one-year period the delivery to the
consignee would be unrealistic and might generate confusion between
the loss or damage sustained by the goods while in the carriers
custody and the loss or damage caused to the goods while in the
arrastre operators possession. (Union Carbide Phils., Inc. vs. Manila
Railroad Co., 77 SCRA 359)
Carrier is liable over goods discharged by it in bad order condition,
and the arrastre operator for goods damaged under its
custody.(Metro Port service, Inc. vs. CA, 131 SCRA 365)

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)
When is there LOSS?
As defined in Article 1169 of the New Civil Code and as applied to
paragraph 4, Section 3(6) of the COGSA,
LOSS contemplates merely a situation where no delivery at all was
made by the shipper of the goods because the same
(1) had perished,
(2) gone out of commerce, or
(3) disappeared in such a way that their existence is unknown or
they cannot be recovered.
It does not include a situation where there was indeed delivery but
delivery was to the wrong person, or a misdelivery. Non-delivery
should be distinguished from misdelivery. (Ang vs American
Steamship Agencies, Inc., 19 SCRA 123)

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)
What is MISDELIVERY or CONVERSION of goods
- delivery to the wrong person
The one-year prescriptive period in Section 3(6) applies only when
there is loss or damage. In case of misdelivery or conversion,
the rules on prescription found in the Civil Code shall apply:

Breach of a Written Contract

Ten (10) years from the time

the right of action accrues (Art. 1144 NCC)

Quasi-Delict
Four (4) years from the time
the right of action accrues (Art. 1146 NCC)

COGSA may still apply to a

transshipment of cargo via
In the case of American
Insurance Co. vs. Compania
inter-island
vessel

Maritima (21 SCRA 998), a contract for carriage from

New York, USA with final destination in Cebu City,
Philippines was entered into. From US to Manila the
shipment was on board M/S TOREADOR; and from Manila
to Cebu the shipment was loaded on S/S SIQUIJOR. The
transshipment of the cargo from Manila to Cebu was not
a separate transaction from that originally entered into
by Macondray, as general agent for the M/S Toreador. It
was part of Macondrays obligation under the contract of
carriage and the fact that the transshipment as made
via an interisland vessel did not operate to remove the
transaction from the operation of the COGSA.

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)

1. Extrajudicial demand for loss or damage does NOT

interrupt the period of prescription. (Dole Phils., Inc.

vs. Maritime Co. of the Philippines, 148 SCRA 118)
2. Pendency of an extrajudicial claim for damages

(include arbitration, negotiations, amicable

settlement) filed with the carrier does NOT suspend
the running of the prescriptive period, unless there
is an express agreement to the contrary. (Chua Kuy
vs. Everett Steamship Corporation, G.R. No. L-5554,
May 27, 1953)

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)

3. Prescription of actions is interrupted when they

are filed before the court (Art. 1155 NCC). Also
Section 49 of Act No. 190 provides that if, in an
action commenced in due time, the plaintiff fails
otherwise than upon the merits, and the time
limited for the commencement of such action
has, at the date of such failure, expired, the
plaintiff may commence a new action within one
year after such date. (F.H. Stevens & Co., Inc. vs.
Norddeuscher Llyod, 6 SCRA 182-183)

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)

4. Persons who can give notice to, and bring suit against
the carrier: (a) the shipper, or (b) the consignee, or (c)
any legal holder of the bill of lading, like the indorsee
or the subrogee, (Chua Kuy vs. Everett Steamship
Corporation, G.R. No. L-5554, May 27, 1953) such as
an insurer whether it has or has not yet paid the
shipper or consignee. (Filipino Merchants Insurance
Co., vs. Alejandro, 145 SCRA 42)
5. Provisions in the bill of lading contrary to prescription
periods of the COGSA are null and void. (E.E. Elser,
Inc. vs. CA, et al., GR No. L-6517, Nov. 29, 1954).

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)

Note that the COGSA is only applicable in (1)

contracts of carriage of (2) goods (3) by sea in
(4) foreign trade. However, the parties to a
domestic maritime trade may, by express
stipulation, validly agree to incorporate the
provisions of the COGSA in their contract of
carriage, in which case said Act is applicable;
provided that a contractual clause in the bill of
lading limiting the liability of the Carrier in a
manner contrary to the provisions of the COGSA
shall be null and void.

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)

6. If the goods are lost or damaged by reason of an

unjustified delay in transportation, the carrier is

liable therefor; and the action must be filed within
the prescriptive period provided by the COGSA. (Tan
Liao vs. American President Lines, Ltd., GR No. L7280, Jan. 20, 1956)
7. Suit against an arrastre operator is not within the
coverage of the COGSA, the ordinary periods of
prescription will apply. (Insurance Co. of North
America vs. Phil. Ports Terminal, Inc. GR No. L-6420,
July 18, 1955)

PERIOD OF PRESCRIPTION
RESPONSIBILITIES & LIABILITIES (Sec. 3)

8. When will the one-year prescriptive period not

apply to an insurer?
When the insurer seeks to recover from the
shipper the sum it had indemnified the owner of
the vessel for the value of copra which it is
claimed the defendant failed to load for
shipment to the consignees and the value of
which the carrier had paid to the consignees, the
plaintiffs cause of action is not yet barred by the
statute of limitations in the COGSA.

RIGHTS & IMMUNITIES (Sec. 4)

What constitutes due diligence in making vessel
seaworthy?
Due diligence requires such watchful caution and foresight
as the circumstance of the particular service demand. It
must be adequate to the occasion. It must be due diligence
in the work itself, and not merely in the selection of agents
to do the work; otherwise, shipowner might escape all
responsibility merely by selecting agents of good reputation
and would be relieved whether such agents exercised due
care or not to make their vessel seaworthy, and any
responsibility would be fritted away. (Nord-Deutscher Lloyd
vs. Insurance Co. of North America, 110 Fed. 421)

RIGHTS & IMMUNITIES (Sec. 4)

What does dangers of the sea mean?
The phrase dangers of the sea has been construed as
equivalent to perils of the sea. (Baxter vs. Leland, 2 F.
Cas. 1, 123) Dangers of the sea is somewhat of an equivocal
expression. It may, without any violation of its natural
import, be interpreted to mean dangers that arise upon the
sea, which would include every hazard and danger, from the
beginning to the end of the voyage, of whatever kind or with
equal propriety, it may mean only those which arise directly
and exclusively from the sea and of which it is the efficient
cause. Sometimes it is taken in one sense and sometimes in
the another. (Merril vs. Arey. 17 F. Cas. No. 9, 468)

RIGHTS & IMMUNITIES (Sec. 4)

What is the meaning of the term act of God?
The most comprehensive definition of the term is any
accident, due directly and exclusively to natural causes
without human intervention, which no amount of foresight,
pains or care, reasonably to have been expected, could have
prevented. (1 CJ 1174) There is an unanimous concurrence in
the authorities that an occurrence which is produced wholly
or partially by the intervention of human agencies is not an
act of God within the meaning of the law. (Kirby vs. Wylie,
108 Md. 501, 70 Atl. 213) All the cases agree in requiring the
entire exclusions of human agency form the cause of the
injury or loss. (Michaels vs. New York Cent. R. Co., 30 NY
564, 86 Am. D. 415)

CASES:
Ang v. American Steamship
FACTS:
Agencies
Yau Yue Commercial Bank of Hong Kong agreed to sell

galvanized sheets to Hermino Teves. It was their agreement

that the purchase price will be covered by a bank draft which
Teves would pay in exchange for the bill of lading to be
deposited in HSBC Manila. Teves would then present the bill of
lading to the carriers agent, American Steamship which would
issue a Permit to Deliver Imported Articles to be presented
to the Bureau of Customs for the release of the articles.

The articles were shipped from Japan to the Philippines

through Nissho Shipping Co., Ltd via the S.S. Tensai Maru, of
which American Steamship is its agent in the Philippines.

CASES:
Ang
v.
American
Steamship
When the articles arrived in Manila on May 9, 1961, Teves failed to
pay. The Bank returned the bill of lading and the draft to Yau Yue
Agencies
which indorsed the bill to Domingo Ang. Teves, however was able
to obtain a bank guarantee in favor of American Steamship. He
was then able to get the permits and have the articles released to
him.
When Ang claimed the articles , American Steamship said that

they have been delivered to Teves. On October 30, 1963, Ang

instituted a suit at the CFI of Manila against American Steamship
alleging that they have wrongfully delivered and/or converted the
goods covered by the bill of lading belonging to Ang. The trial court
dismissed the case on the ground of prescription, it having been
filed only on October 30, 1963, more than one year after the date
of the vessels arrival on May 9, 1961.

CASES:
Ang v. American Steamship
Agencies

ISSUE:
Whether or not the action against the ship owner has prescribed under Sec.
3(6) par. 4 of the COGSA?
HELD/RATIO:
NO. In order to determine the applicable period of prescription, the court
must determine whether there has been loss or damage. It was admitted
by both parties that no damage was made to the articles. Whether there
was loss as stated in COGSA must be read in relation to the Civil Code,
Article 1189.
As defined in Article 1169 of the New Civil Code and as applied to
paragraph 4, Section 3(6) of the COGSA, 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.
It does not include a situation where there was indeed delivery but delivery
but delivery to the wrong person, or a misdelivery.

CASES:
Ang v. American Steamship
In this case, there was delivery of the goods to Teves, such
that there can only be either delviery, if Teves was entitled to
Agencies
receive them, or misdelivery if he wasnt.

There being no loss or damage to the goods, the one-year

time bar in par.4, sec.3 (6) of the COGSA, which refers to
loss or damage, does NOT apply. Said one-year period of
limitation is designed to meet the exigencies of maritime
hazards. In a case where the goods shipped were neither lost
nor damaged in transit but were, on the contrary, delivered in
part to someone who claimed to be entitled thereto, the
situation is different, and the special need for the short period
of limitation in cases of loss or damage caused by maritime
perils does not obtain.

CASES:
Ang v. American Steamship
For suits not predicated upon loss or damaged but on
Agencies
alleged misdelivery or conversion of the goods, the
applicable rule on prescription is that found in the
New civil Code, i.e., either ten years for Breach of a
written contract or four years for quasi-delict (Arts.
1144, 1146, Civil Code), and not the rule on
prescription in the COGSA.
Angs right of action would have accrued at least on
May 9, 1961 when the ship arrived in Manila, and
since he filed the suit on October 30, 1963, he was
well within the period of limitation.

CASES:

F.H. Stevens v. Norddeuscher

FACTS:
Lloyd

Stevens shipped from Hamburg, Germany to Manila,

aboard the M/S Schwabenstein, a vessel of Lloyd, 2,000

pieces of prismatical thermometers valued at $650.
Upon examination of the case containing the goods, it
turned out that 1,154 pieces of said thermometers
valued at $342.74, were missing and/or destroyed.
May 21, 1959 notice of the delivery was given to
Stevens by the master of the vessel
April 27, 1960 Stevens instituted an action in the MTC
of Manila against the carrier , Lloyd to recover damages

CASES:

F.H. Stevens v. Norddeuscher

June 13, 1960 action in the MTC was dismissed on the
Lloyd
ground of lack of jurisdiction over the subject-matter, being
an admiralty case
June 24, 1960 action in the CFI of Manila was commenced
Lloyd moved to dismiss the case on the ground of
prescription, the action having been filed more than one
year from May 21, 1959 when goods were, or ought to be,
delivered.
Stevens contended that the period of prescription was
suspended by the commencement of the first action in the
MTC, the running of said period resumed or continued on
June 13, 1960, and that excluding the period from April 27
June 13, 1960 less than one (1) year has elapsed

CASES:

F.H. Stevens v. Norddeuscher

ISSUE: Whether or not the cause of action has prescribed?
Lloyd
HELD/RATIO: NO. Prescription of actions is interrupted when they are
filed before the court (Art. 1155 NCC). Also Section 49 of Act No. 190
provides that if, in an action commenced in due time, the plaintiff fails
otherwise than upon the merits, and the time limited for the
commencement of such action has, at the date of such failure, expired,
the plaintiff may commence a new action within one year after such date.

The action commenced by the plaintiff in the MTC of Manila, on April 27,

1960, was dismissed on June 13, 1960, or over twenty (20) days after the
expiration of the period of one (1) year, beginning from May 21, 1959,
within which plaintiffs action could be brought, pursuant to CA 65, in
relation to the COGSA. Under said section 49nof Act No. 190, the period
within which plaintiff could initiate the present case was renewed,
therefore, for another year, beginning from June 24, 1960.

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