COMMERCIAL UNION ASSURANCE CO., LTD., PLAINTIFF AND APPELLEE, VS. MANILA PORT SERVICE, ET AL., DEFENDANTS AND APPELLANTS.

Upon stipulation of facts, the Court of First Instance of Manila,
rendered judgment “sentencing the defendants to pay the plaintiffs the
sum of P745.95 plus 15% per cent thereof as and for attorney’s fees and
costs.” Plaintiff appealed from the decision, in so far as it failed to
award interest at the legal rate upon the principal sum of P745.95,
from the date of the filing of the complaint; attorney’s fees in the
sum of P300.00 and liquidated damages and costs in an amount equal to
15% per cent of said P745.95. The defendants likewise appealed on a
question of law.

P. J. Rhodes & Co., as shipper, placed on board ‘M.S. Tosima’,
at New Orleans, a shipment of 4,000 bags of soybeans meal, consigned to
the same company for which the owner of the shipping company issued a
bill of lading No. 5, which was endorsed by the consignee to San Miguel
Brewery, Manila, on May 7, 1956. Of the 4,000 bags, defendant Manila
Port Service, a subsidiary of the defendant Manila Railroad Co., Inc.,
failed to deliver to San Miguel Brewery 26 bags. Upon demand by San
Miguel Brewery, the herein plaintiff, Commercial Union Assurance
Company, Ltd., as insurer of the goods, paid the former the sum of
P745.95, and thereafter the plaintiff became subrogated to all the
rights of the insured. This action was brought by the insurer to
collect from the arrastre operators (defendants) the value of the 26
bags which were lost.

In the answer presented by the defendant, as well as in the
stipulation of facts, the main defense is that the plaintiff’s claim
was not filed within the fifteen day period from the date of the
discharge of the last package at the port of Manila, in violation of
section 15 of the management contract between the Manila Port Service
and the Bureau of Customs dated February 29, 1956, which, according to
the defendants, is binding upon the plaintiff. The plaintiff contends
otherwise.

From the stipulation of facts, it appears that ‘the last bag of the shipment was discharged from the carrying vessel on May 9, 1956, whereas the provisional claim was filed on May 25, 1956′ or one day late.

In its appeal, the plaintiff alleged that the trial court erred in
failing to award it legal interest on the principal sum of P745.95,
from February 19, 1959, the date of judicial demand and in failing to
award attorney’s fees in full P300.00. In their appeal, the defendants
averred that the lower court erred in not holding the management
contract binding upon the plaintiff-appellee; in including in the
decision the sum of P308.16, representing the marked-up value of the 26
bags of soybean meal, when the same had not been admitted by
defendants-appellants in the stipulation of facts and in ordering them
to pay damages.

The pertinent portion of section 15 of the management contract under consideration provides:—

“* * * in any event the contractor shall be relieved
and released of any and all responsibility or liability for loss,
damage, mis-delivery, and/or non delivery of goods unless suit in the
court of proper jurisdiction is brought within a period of one (1) year
from the date of the discharge of the goods, or from the date when the
claim for the value of such goods have been rejected or denied by the
contractor, provided that such claim shall have been filed with the
contractor within fifteen (15) days from the date of discharge of the
last package from the carrying vessel”.

At the time the goods were discharged, the above quoted section 15
was stamped on the delivery permit and on the gate pass; the consignee
signed the delivery permit and the corresponding gate pass, which
signified acceptance of the said provision of the management contract.
Of course, the trial court, and with it the plaintiff-appellant
contended that said acts did not constitute acceptance of or
acquiescence to the provisions of the management contract, but they
merely showed that the consignee had taken delivery of the goods
shipped; that the consignee, not being a party to the management
contract, the latter cannot reach or affect it; and that Article 1311
of the Civil Code is not applicable, because the management contract
does not contain provisions which are in the nature of stipulation
“pour autrui”.

When the original briefs of the parties in this case were submitted;
there was really much room for indulging in legal disquisitions on the
dominant question involved herein. Since then, however, this tribunal
had blazed the trail to pursue. Thus, in the case of the Domestic
Insurance Co. of the Philippines vs. Manila Port Service, et al.,
L-15060, Aug. 31, 1960, We said:—

“In previous cases * * * already decided by this
Court, we held that where the third party is duly notified, and acts
with knowledge of the provisions of the Management Contract, such party
would be bound by the Contract. In the case of Tomas Grocery vs.
Delgado Brothers, Inc., 105 Phil., 549; 56 Off. Gaz., (27) 4422, we
likewise held that under the fact therein found, the 15-day period
provision was binding. In other words, it cannot be said that the
Management Contract is, or not binding on third parties, without regard
to the facts of each particular case. And since the appealed decision
now before us, does not contain enough findings of fact upon which to
resolve with justice the rights of the parties hereto, we decide to
give them further opportunity to fully prove their respective
contentions.

In the case of Villanueva vs. Barber-Wilhelmsen Line, et al., 110 Phil., 34, We stated:—

“* * * The question whether the above-quoted
paragraph of the management contract is binding to a consignee, who,
though not a party thereto, has taken delivery of the goods upon
presentation of a pass and a delivery permit making reference to said
paragraph and reproducing substantially the provisions thereof, as one
of the conditions of said pass and delivery permit, has already been
settled in several decisions of this Court. In Northern Motors, Inc. vs. Prince Line, 107 Phil., 253, we said:

‘Even
therefore, if appellant was not a signatory to said management
contract, it legally became a party thereto when through its broker,
the Luzon Brokerage Co., Inc. obtained the delivery permit and gate
pass in the above manner prescribed by law and, making use of them,
demanded from appellee the delivery of the 33 cases, pursuant to
appellee’s undertaking in virtue of the very same Management Contract.
Again, it became bound when it brought court action against appellee,
also by virtue of the letter’s obligations as the arrastre contractor
under the same Management Contract, for the purpose of recovering the
reasonable value of the missing case of auto spare parts and
accessories’.

This view was reiterated in Tomas Grocery vs. Delgado Brothers, 105 Phil., 549; 56 Off. Gaz., [27] 4422, Bernabe vs. Delgado Brothers, 107 Phil., 287; Bernabe vs. Delgado Brothers, 107 Phil., 679, Delgado Brothers vs. Li Yao & Co., 107 Phil., 839; Sun Brothers vs. Manila Port Service 107 Phil., 988; and Juan Ismael & Co., Inc. vs. United States Lines Co., L-14394, April 30, 1960″.

Being a settled issue, that a management contract has a binding
effect on the consignee who takes advantage thereof, even though he is
not a party thereto, the next question posed is whether or not the
management contract under consideration has been complied with.
Plaintiff-appellant explained in its reply memorandum that although the
cargo was discharged on May 9, 1956, from the carrying vessel, it was
only on May 25, 1956 that defendants delivered them to the consignee;
so that, according to said plaintiff-appellant, the corresponding claim
for the missing bags could not have been made before May 25, 1956,
inasmuch as the consignee could not have known how many bags of the
shipment in question were actually missing until after the delivery of
the last bag had been made. But the management contract in question
provided: “Within fifteen (15) days from the date of the discharge
of the last package from the carrying vessel”, and not 15 days from the
receipt of the last bag by the consignee, and the stipulation of facts
stated that “the last bag of the shipment in question was discharged
from the carrying vessel at the Port of Manila on May 9, 1956, whereas
provisional claim was filed by the consignee on May 25, 1956, which is
beyond the 15-day period”—one day late.

In view of the above conclusion, we deem it necessary to pass upon
the other issues raised by both parties. The decision appealed from,
therefore, is reversed and another entered dismissing the complaint,
with costs against the plaintiff-appellant.

Bengzon, C. J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., and De Leon, JJ., concur