In the case of DOMINGO ANG vs.

AMERICAN STEAMSHIP AGENCIES,

INC.,(G.R. No. L-22491 January 27, 1967) it was ruled that, Nowhere is "loss"
defined in the Carriage of Goods by Sea Act. Therefore, recourse must be had to the Civil
Code which provides in Article 18 thereof that, "In matters which are governed by the
Code of Commerce and special laws, their deficiency shall be supplied by the provisions
of this Code."
Further, Article 1189 of the Civil Code defines the word "loss" in cases where
conditions have been imposed with the intention of suspending the efficacy of an
obligation to give. 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 that their existence is unknown or they cannot be
recovered. It does not include a situation where there was indeed delivery but delivery
to the wrong person, or a misdelivery, as alleged in the complaint in this case.
In the case of EASTERN AND AUSTRALIAN STEAMSHIP vs.GREAT
AMERICAN INSURANCE (G.R. No. L-37604 October 23, 1981), the Court
noted that Article 1749 of the New Civil Code expressly allow the limitation of the
carrier's liabilite, viz:
Art. 1749 A stipulation that the common carrier's liability is limited to the
value of the goods appearing in the bill of lading, unless the shipper or
owner declares a greater value, is binding.
Likewise, the Court is of the opinion that the right of the carrier to limit its liability has
been recognized not only in Our jurisdiction but also in American jurisprudence:
A stipulation in a contract of carriage that the carrier will not be liable
beyond a specified amount unless the shipper declares the goods to have a
greater value is generally deemed to be valid and will operate to limit the carrier's
liability, even if the loss or damage results from the carrier's negligence. Pursuant
to such provision, where the shipper is silent as to the value of his goods, the
carrier's liability for loss or damage thereto is limited to the amount specified in
the contract of carriage and where the shipper states the value of his goods, the
carrier's liability for loss or damage thereto is limited to that amount. Under a
stipulation such as this, it is the duty of the shipper to disclose, rather than the
carrier's to demand the true value of the goods and silence on the part of the
shipper will be sufficient to limit recovery in case of loss to the amount stated in
the contract of carriage. 7
In the case of MAYER STEEL PIPE CORPORATION vs. CA (G.R. No.
124050. June 19, 1997), the Court discussed the applicability of Section 3(6) of
COGSA to insurer. Thus,
Section 3(6) of the Carriage of Goods by Sea Act states that the carrier and the ship
shall be discharged from all liability for loss or damage to the goods if no suit is filed
within one year after delivery of the goods or the date when they should have been
delivered. Under this provision, only the carrier's liability is extinguished if no suit is
brought within one year. But the liability of the insurer is not extinguished because the
insurer's liability is based not on the contract of carriage but on the contract of
insurance. A close reading of the law reveals that the Carriage of Goods by Sea Act
governs the relationship between the carrier on the one hand and the shipper, the
consignee and/or the insurer on the other hand. It defines the obligations of the carrier
under the contract of carriage. It does not, however, affect the relationship between the
shipper and the insurer. The latter case is governed by the Insurance Code.

The ruling in Filipino Merchants vs CA G.R. No. 85141 November 28, 1989 should
apply only to suits against the carrier filed either by the shipper, the consignee or the
insurer. When the court said in Filipino Merchants that Section 3(6) of the Carriage of
Goods by Sea Act applies
to the insurer, it meant that the insurer, like the
shipper, may no longer file a claim against the carrier beyond the one-year period
provided in the law. But it does not mean that the shipper may no longer file a claim
against the insurer because the basis of the insurer's liability is the insurance
contract. An insurance contract is a contract whereby one party, for a consideration
known as the premium, agrees to indemnify another for loss or damage which he may
suffer from a specified peril. An "all risks" insurance policy covers all kinds of loss other
than those due to willful and fraudulent act of the insured. Thus, when private
respondents issued the "all risks" policies to petitioner Mayer, they bound themselves to
indemnify the latter in case of loss or damage to the goods insured. Such obligation
prescribes in ten years, in accordance with Article 1144 of the New Civil Code.

THE AMERICAN INSURANCE COMPANY vs COMPAIA MARITIMA, (G.R.

No. L-24515 November 18, 1967)

Carriage of Goods by Sea Act1 which provides in section 3 (6):

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 shall have been delivered: . . .