F. H. Stevens & Co., Inc. vs. Norddeuscher Lloyd

The filing of an action within the original prescriptive period, which is later dismissed without trial on the merits for lack of jurisdiction, suspends the running of prescription and entitles the plaintiff to a new one-year period under Section 49 of Act No. 190 within which to re-file the same action, provided the initial suit was commenced in due time and the dismissal was not due to desistance or voluntary abandonment.

On May 21, 1959, defendant carrier notified plaintiff, through its broker, of the delivery of a shipment of thermometers that had arrived in Manila aboard defendant’s vessel. A substantial quantity was found missing or destroyed. The Carriage of Goods by Sea Act, enacted through Commonwealth Act No. 65, fixes a one-year prescriptive period for suits against a carrier for loss or damage arising from a contract of carriage of goods by sea. More than a year after the notice, plaintiff filed a second action in the Court of First Instance, prompting the carrier to seek dismissal on prescription grounds.

• Nature of the Action: Suit for recovery of the value of goods lost or damaged during carriage by sea, together with unrealized profits and attorney’s fees.
• Shipment and Loss: On March 28, 1959, plaintiff shipped from Hamburg to Manila, aboard defendant’s vessel “MS SCHWABENSTEIN,” 2,000 prismatical thermometers valued at USD 650. The vessel arrived at Manila on May 15, 1959. The master notified plaintiff, through its broker, of the delivery of the goods on May 21, 1959. Upon examination, 1,154 thermometers valued at USD 342.74 were missing or destroyed. Plaintiff immediately filed a notice of loss and later a formal claim. Despite several demands, defendant refused to pay.
• The First Action: Plaintiff filed suit in the Municipal Court of Manila on April 27, 1960 — within the one-year period from May 21, 1959 — to recover the lost value, P1,000 attorney’s fees, and P664.70 unrealized profits. The Municipal Court dismissed the case on June 13, 1960, without any trial on the merits, solely on the ground of lack of jurisdiction over the subject-matter, as the case involved admiralty and maritime jurisdiction.
• The Second (Present) Action: On June 24, 1960, eleven days after the dismissal, plaintiff filed the present complaint in the Court of First Instance of Manila, reiterating the same claims. Defendant moved to dismiss, contending that the cause of action had prescribed because the complaint was filed more than one year from May 21, 1959. The trial court sustained the motion and dismissed the case.

• Prescription Suspended under Article 1155 of the Civil Code: Petitioner maintained that the one-year prescriptive period under the Carriage of Goods by Sea Act was interrupted by the filing of the first action in the Municipal Court on April 27, 1960, resumed only upon its dismissal on June 13, 1960, and that, excluding the intervening 47 days, less than one year had elapsed when the present action was filed on June 24, 1960.
• Applicability of Section 49, Act No. 190: Petitioner argued that Section 49 of Act No. 190 granted a fresh one-year period from the date of dismissal to commence a new action, because the first action had been commenced in due time and was dismissed otherwise than upon the merits.

• Expiration of Prescriptive Period: Respondent countered that the action was barred by prescription, as the complaint in the Court of First Instance was filed on June 24, 1960 — more than one year after May 21, 1959 — and that the prior Municipal Court action, having been dismissed for lack of jurisdiction, did not suspend or renew the prescriptive period.

• Prescription/Interruption: Whether the one-year prescriptive period under the Carriage of Goods by Sea Act was interrupted or suspended by the timely filing of an action in the Municipal Court that was later dismissed for lack of jurisdiction without trial on the merits.
• Applicability of Section 49, Act No. 190: Whether Section 49 of Act No. 190 conferred a new one-year period to re-file following the dismissal of the first action, rendering the present complaint timely.

• Prescription/Interruption: The prescriptive period was effectively renewed. The first action had been commenced within the one-year original period (April 27, 1960) and was dismissed on June 13, 1960 — a date already beyond the original prescriptive deadline. The dismissal was for lack of jurisdiction, a ground that does not involve a trial on the merits or a voluntary abandonment by plaintiff. Under Section 49 of Act No. 190, a plaintiff who commences an action in due time and thereafter fails otherwise than upon the merits, after the original prescriptive period has run, is given one year from the date of dismissal to commence a new action. The fresh period began on June 14, 1960; the complaint in the Court of First Instance, filed on June 24, 1960, fell well within that time. The cases of Oriental Commercial Co. vs. Jureidini and Conspecto vs. Fruto, which denied the benefit of a savings statute, were distinguished because the earlier dismissals in those cases resulted from the plaintiff’s own desistance or voluntary abandonment, not from a jurisdictional ground beyond the plaintiff’s control.
• Applicability of Section 49, Act No. 190: Section 49 of Act No. 190 explicitly applied, the dismissal for lack of jurisdiction being a failure otherwise than upon the merits. To the extent that Chua Kuy vs. Everett Steamship Corp. and Yek Tong Lin Fire & Marine Insurance Co. vs. American President Lines, Inc. suggested a different rule, they were modified. Article 1155 of the Civil Code likewise supported the conclusion that the filing of the first action interrupted the prescriptive period.

• Section 49, Act No. 190 savings clause (refiling after a non-merits dismissal) — If an action is commenced within the prescriptive period and a judgment for the plaintiff is reversed, or if the plaintiff fails otherwise than upon the merits, and the original prescriptive period has already expired at the time of reversal or failure, the plaintiff may commence a new action within one year after that date. A dismissal for lack of jurisdiction, without any trial on the merits and not attributable to the plaintiff’s desistance or voluntary abandonment, constitutes a failure otherwise than upon the merits that triggers the one-year grace period. The doctrine applies to maritime claims governed by the Carriage of Goods by Sea Act.
• Distinction between involuntary dismissal and voluntary abandonment — The benefit of the savings statute does not attach when the prior dismissal results from the plaintiff’s own desistance, voluntary abandonment, or lack of diligence, as opposed to a dismissal grounded on a legal defect such as lack of jurisdiction.

• “If, in an action commenced, in due time, a judgment for the plaintiff be reversed, or if the plaintiff fail otherwise than upon the merits, and the time limited for the commencement of such action has, at the date of such reversal or failure, expired, the plaintiff, or, if he die and the cause of action survive, his representatives may commence a new action within one year after such date, and this provision shall apply to any claim asserted in any pleading by a defendant.” — Full text of Section 49 of Act No. 190, which the Court applied as the controlling legal basis.
• “…the dismissal of the herein plaintiff’s complaint in the municipal court was not due to its desistance or voluntary abandonment.” — The critical factual distinction that took the case outside the rulings in Oriental Commercial and Conspecto vs. Fruto.

• Oriental Commercial Co. vs. Jureidini, 71 Phil. 25 — Distinguished. The dismissal there was based on desistance or abandonment, not lack of jurisdiction.
• Conspecto vs. Fruto, 31 Phil. 144 — Distinguished on the same ground of voluntary abandonment.
• Chua Kuy vs. Everett Steamship Corp., L-5534 (May 27, 1953) — Modified insofar as inconsistent with the application of Section 49 of Act No. 190 to maritime claims.
• Yek Tong Lin Fire & Marine Insurance Co. vs. American President Lines, Inc., L-11081 (April 30, 1958) — Modified on the same basis.
• Tolentino vs. Vitug, 39 Phil. 126 and Smith vs. McNeal, 100 U.S. 426 — Relied upon as authority for the principle that the one-year savings period runs from the date of dismissal.

• Commonwealth Act No. 65 (Carriage of Goods by Sea Act) — Established the one-year prescriptive period for suits against the carrier for loss or damage. The original action was brought within this period; the refiling was allowed under the savings statute.
• Article 1155, Civil Code of the Philippines — Prescription of actions is interrupted by their filing before the court. The provision supported the conclusion that the initial filing suspended the running of prescription.
• Section 49, Act No. 190 (The Code of Civil Procedure) — The savings clause that granted plaintiff a fresh one-year period to refile after a timely filed action failed otherwise than upon the merits.

Bengzon, C.J., Padilla, Bautista Angelo, Barrera, Paredes, Dizon, Regala, and Makalintal, JJ., concurred. Labrador, J., concurred in the result. Reyes, J.B.L., took no part.