PHILIPPINE AMERICAN GENERAL INSURANCE CO., INC. AND TAGUM PLASTICS, INC. VS.

SWEET
LINES, INC., DAVAO VETERANS ARRASTRE AND PORT SERVICES, INC. AND
HON. COURT OF APPEALS.
G.R. No. 87434 | August 05, 1992 | REGALADO, J.:

TOPIC: Pleadings>Answer>Alleging Defenses

SUMMARY: A suit for recovery between Philamgen/TPI and SLI/DVAPSI was dismissed on the ground of
prescription. The bills of lading contained a paragraph providing for shortened periods to file claims, BUT they
were never presented in evidence. Prescription was raised as an affirmative defense by SLI, but Philamgen/TPI
failed to specifically deny the existence, much less the genuineness and due execution, of the written instruments
in question. This amounts to an admission. JUDICIAL ADMISSIONS, verbal or written, made by the parties in the
pleadings or in the course of the trial or other proceedings in the same case, are conclusive. Instrument need not
be presented formally because it is considered an admitted fact. While Petitioners objected to the validity of the
agreement in the bills of lading, the existence of such were impliedly admitted.

FACTS:
 Petitioners Philamgen and TPI filed a maritime suit against SLI and DVAPSI for the recovery of the cost of
lost or damaged shipment only 5820 bags from 2 consignments consisting of around 7000 bags of Low
 Density Polyethylene arrived in good condition.
 Before trial, a compromise agreement was entered and the trial court granted a motion to dismiss on the
ground of the said amicable settlement.
 On appeal, CA reversed on the ground of prescription.
 Petitioners filed a petition for review on certiorari, faulting CA for the following: 1) upholding the existence of a
prescriptive period; 2) granting that it exists, in not finding it null and voidl 3) assuming arguendo it is valid and
legal, in failing to conclude that petitioners substantially complied.

WON it was error for the CA to reverse the appealed decision on the ground of prescription when SLI
failed to offer the bills of lading in evidence –NO

*The bills of lading were said to contain shortened periods for filing a claim and instituting a court action against
the carrier. The claims must have been made at the time of delivery to consignee or agent, if container shows
exterior signs of damage or shortage.

-CA: although the bills of lading were not offered in evidence, the litigation obviously revolves on such bills of
lading which are practically the documents or contracts sued upon, hence, they are inevitably involved and their
provisions cannot be disregarded in the determination of the relative rights of the parties thereto. -SC:

 Prescription as an affirmative defense was seasonably raised EXCEPT the bills of lading were not formally
offered in evidence. The issue now is whether or not prescription can be maintained as such a defense and
 constantly upheld on the strength of mere references thereto.
 Because petitioners are suing upon SLI’s contractual obligation under the contract of carriage, the bills of
lading can be categorized as ACTIONABLE DOCUMENTS. Under the rules, they must be properly pleaded
either as causes of action or defenses, and the genuineness and due execution of which are deemed
 admitted unless specifically denied under oath by the adverse party.
 Petitioner failed to specifically deny the existence, much less the genuineness and due execution, of the
written instruments in question. This amounts to an admission. JUDICIAL ADMISSIONS, verbal or written,
made by the parties in the pleadings or in the course of the trial or other proceedings in the same case, are
conclusive. Instrument need not be presented formally because it is considered an admitted fact.

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 Petitioners failed to touch on the matter of the non-presentation of the bills of lading in their brief and earlier
on in the appellate proceedings in this case, hence it is too late in the day to now allow the litigation to be
 overturned on that score, for to do so would mean an over indulgence in technicalities.
 The non-inclusion of the controverted bills of lading in the formal offer of evidence cannot, under the facts of
this particular case, be considered a fatal procedural lapse as would bar respondent carrier from raising the
 defense of prescription.
 The carriage of the cargo involved was effected pursuant to an "Application for Delivery of Cargoes without
Original Bill of Lading" issued on May 20, 1977 in Davao City with the notation therein that said application
corresponds to and is subject to the terms of bills of lading. It would be a safe assessment to interpret this to
mean that, sight unseen, petitioners acknowledged the existence of said bills of lading. By having the cargo
shipped on respondent carrier’s vessel and later making a claim for loss on the basis of the bills of lading,
petitioners for all intents and purposes accepted said bills. Having done so they are bound by all stipulations
contained therein. As petitioners are suing for recovery on the contract, and in fact even went as far as
assailing its validity by categorizing it as a contract of adhesion, then they necessarily admit that there is such
a contract, their knowledge of the existence of which with its attendant stipulations they cannot now be
 allowed to deny.
 While Petitioners objected to the validity of the agreement in the bills of lading, the existence of such were
impliedly admitted.

WON the shortened periods in par 5 of the Bill of Lading (30 days for filing a claim with the carrier in case
of loss of or damage to the cargo and 60 days from accrual of the right of action for instituting an action
in court) is valid -YES

 The fundamental reason or purpose of such a stipulation is not to relieve the carrier from just liability, but
reasonably to inform it that the shipment has been damaged and that it is charged with liability therefor, and to
give it an opportunity to examine the nature and extent of the injury. This protects the carrier by affording it an
opportunity to make an investigation of a claim while the matter is fresh and easily investigated so as to
 safeguard itself from false and fraudulent claims.
 In the absence of any statutory limitation and subject only to the requirement on the reasonableness of the
stipulated limitation period, the parties to a contract of carriage may fix by agreement a shorter time for the
bringing of suit on a claim for the loss of or damage to the shipment than that provided by the statute of
limitations. Such limitation is not contrary to public policy for it does not in any way defeat the complete
vestiture of the right to recover, but merely requires the assertion of that right by action at an earlier period
 than would be necessary to defeat it through the operation of the ordinary statute of limitations.
 While petitioners may possibly have a cause of action, for failure to comply with the above condition
precedent they lost whatever right of action they may have in their favor or, taken in another sense, that
 remedial right or right to relief had prescribed.
 The shipment in question was discharged into the custody of the consignee on May 15, 1977, and it was from
this date that petitioners’ cause of action accrued, with thirty (30) days therefrom within which to file a claim
with the carrier for any loss or damage which may have been suffered by the cargo and thereby perfect their
right of action. The claim was filed with SLI only on April 28, 1978, way beyond the period provided in the bills
 of lading.
 TPI filed a provisional claim with DVAPSI as early as June 14, 1977 and, as found by the trial court, a survey
fixing the extent of loss of and/or damage to the cargo was conducted on July 8, 1977 at the instance of
petitioners. If petitioners had the opportunity and awareness to file such provisional claim and to cause a
survey to be conducted soon after the discharge of the cargo, then they could very easily have filed the
necessary formal, or even a provisional, claim with SLI itself within the stipulated period therefor, instead of
doing so only on April 28, 1978 despite the vessel's arrival at the port of destination on May 15, 1977.
Petitioners slept on their rights and they must now face the consequences of such inaction.

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 There is no constitutional or statutory prohibition infirming paragraph 5 of subject Bill of Lading. The stipulated
period of 60 days is reasonable enough for appellees to ascertain the facts and thereafter to sue, if need be,
and the 60-day period agreed upon by the parties which shortened the statutory period within which to bring
 action for breach of contract is valid and binding.
 The report on losses and damages is not the claim referred to and required by the bills of lading for it does not
fix responsibility for the loss or damage, but merely states the condition of the goods shipped. The claim
contemplated herein, in whatever form, must be something more than a notice that the goods have been lost
or damaged; it must contain a claim for compensation or indicate an intent to claim.

Liability of DVAPSI
 Unlike a common carrier, an arrastre operator does not labor under a presumption of negligence in case of
loss, destruction, or deterioration of goods discharged into its custody. In other words, to hold an arrastre
operator liable for loss of and/or damage to goods entrusted to it there must be preponderant evidence that it
 did not exercise due diligence in the handling and care of the goods.
 What can only be inferred from the factual findings of the trial court is that by the time the cargo was
discharged to DVAPSI, loss or damage had already occurred and that the same could not have possibly
occurred while the same was in the custody of DVAPSI, as demonstrated by the observations of the trial court
quoted at the start of this opinion.

HELD: DENIED.

JOSE, GISELLE