G.R. No. 14711. April 22, 1961
SMITH, BELL & CO., LTD. PLAINTIFF AND APPELLEE VS. MANILA PORT SERVICE & MANILA RAILROAD CO., INC., DEFENDANTS. MANILA PORT SERVICE, DEFENDANT AND APPELLANT.
PADILLA, J.:
of Manila against the Manila Port Service and/or Manila Railroad Company, Inc.,
jointly and or alternatively, to recover P2,063.18, lawful interests thereon
from the date of the first demand until paid, P500 for litigation expenses and
attorney’s fees and costs and to secure any just and eqtiitable relief (civil
No. 36034). In support thereof, it alleges that on or about S July 1957 it
purchased from Smith, Bell & Co., Ltd. (London) a “Crossley” diesel engine
with a total value of $7,380 (C & F) for importation into the Philippines;
that the said diesel engine wag shipped on board the “SS Patroclus,” marked
“SB-169-Manila,” under bill of lading No. 99, consigned to order, and arrived in
Manila on or about 25 July 1957 and discharged into the custody of the
defendants; that the shipping documents were indorsed and sent to the plaintiff
who paid for the value they represented and cleared the documents with the
agents of the vessel and the Bureau of Customs; that while the said engine was
being unloaded, because of the “negligent act” of their employees and/or “the
use of inadequate or defective machinery in the delivery of” the engine, a
flywheel of the machine was broken beyond repair and became a total loss,
causing damage to the plaintiff in the total sum of P2,063.18;[1] that the plaintiff made a demand upon the
defendants to pay the last stated amount but the latter have failed and refused
to pay it; and that in view of the defendant’s refusal to pay the plaintiff’s
claim, it had to institute this action thereby incurring expenses for litigation
and attorney’s fee in no less than P500.
The defendants answered the complaint denying that their employees had been
negligent and that they had used inadequate or defective equipment in
discharging into their custody the flywheel that was broken, the truth being
that the mishap had been the result of ordinary handling and, as special
defense, claiming that under the provisions of the management contract entered
into by and between the Bureau of Customs and the defendant subsidiary on 29
February 1956, their liability for cargoes lost or damaged is limited only to
the invoice value of the cargo but in no case to exceed P500 for each package;
and that all parties taking delivery of cargoes from it are bound by the
provisions of the said management contract not only pursuant to law but by
virtue of its acceptance of the applicability thereof by presenting and signing
the pertinent documents covering the release of the cargoes.
After hearing, the parties presenting their respective evidence and
submitting their respective memoranda, the Court rendered judgment holding that
the flywheel in question was broken as a result of a fall from the forklift
operated by one of the employees of the defendants because the forklift used was
not strong enough to lift it; that it was broken beyond repair; that the value
of the damage incurred by the plaintiff as a result thereof was P2,027.88; that
the defendants are liable to the plaintiff for the damage incurred by it; that
section 15 of the management contract limiting the liability of the defendants
for cargoes lost or damaged only to the invoice value of the cargo which in no
case shall exceed P500 for each package, and of which the plaintiff was not a
signatory or party, is not binding upon it; and that the defendants are not
liable for the cost of survey of the damage amounting to P35.30, and expenses of
litigation and attorney’s fee; and ordering the defendant Manila Port Service to
pay to the plaintiff the sum of P2,027.88, with legal interest thereon from the
date of the filing of the complaint until fully paid and the costs of the suit.
The Court dismissed the case as against the defendant Manila Railroad Company
for lack of evidence.
The defendant Manila Port Service has appealed to this Court. The Court of
Appeals, to which the record on appeal was forwarded, on motion of the
appellant, in turn forwarded it to this Court. The appeal raised questions of
law only.
The facts, as found by the trial court, are:
On July 3, 1957 Smith, Bell & Co. Ltd. by virtue of Smith, Bell & Co.
Ltd., London, received 9 packages as component parts for one “Crossley” Diesel
Engine among with (which) was one Flywheel, for the sum of US $7,380.00 to be
imported into the Philippines; it was shipped on the SS PATROCLUS under bill of
lading, Exh, B; the vessel arrived in due time in Manila and the machinery was
discharged into the custody of the Manila Port Service; but in the discharge of
the cargo, according to witness Benito Nuguid of plaintiff, one Flywheel fell
when it was being lifted by the forklift operated by the Manila Port Service;
this flywheel was not crated because it was not possible to crate it and it
weighed about 600 lbs. with a diameter of 8 to 10 feet, and a thickness from 12
to 14 inches, according to witness Antonio Esteban; because of the damage,
according to witness Eustaqujo Partolo, the same was rendered useless and could
no longer be repaired; therefore, he filed a claim for damages amounting to its
value of P2,027.88, plus the sum of P35.30 paid by plaintiff for the survey of
the damage or a total of P2,063.18, but this was rejected by defendant Manila
Port Service, according to the letters of their Attorney dated November 2, 1957
and February 21, 1958, Exhs. N and N-1, respectively; the said letters were to
the effect that the Manila Port Service was agreeable to pay only P500.00 on the
basis of the management contract, Exh. 1, which was the contract entered into on
February 29, 1956, between the Bureau of Customs and the Manila Port Service, *
* *. The claim not haying been paid in full, plaintiff instituted this action on
the 23rd day of April, 1958, against both Manila Port Service and the Manila
Railroad Company.
There should be no question about the validity of the claim
as far as the amount of damages is concerned; this has not been overthrown by
any evidence of defendants; the Court will take it as the evidence proved that
the flywheel has been rendered useless by its fall, Exh. R, the photograph
graphically showing the damage, nor can there be any debate that its value is
P2,027.88; nor does the Court have any doubt that the defendant Manila Port
Service is to blame; there is evidence that the forklift used by it was not
strong enough to lift the weight of the flywheel. The main defense is one of law
and it is whether or not Exhibit 1 can sustain the claim of defendant that its
liability should be limited only to P500.00. Fortunately for plaintiff, it turns
out that the Court of Appeals has already ruled on a similar, case, Li Yao &
Company vs. Delgado Brothers, Inc., CA-G. R. No. 13632-R, promulgated on
August 28, 1957, * * *[1]
It is true
that according to Exhs. 2 and S there is apparently a notice to the effect that
the delivery receipt which is in the permit to deliver imported goods at the
back of Exh. 3 contains the stamped note which would appear to make reference to
the management contract; but the Court notes that this rubber stamp is
illegible; and more than that, the Court takes it to be correct, as plaintiff
contends, that the consignee was given no choice in the matter of taking
delivery; because if it did not sign Exh. 3, it would not receive or it could
not receive the cargo; such a condition amounted to duress or in the least, it
was an acceptance under a contract de adhesión. And for the reason that
arrastre charges are computed on the basis of quantity, weight or measurement of
the goods stored in the warehouse and not on their value, the court also
believes and concurs with the argument of plaintiff that for that reason, it was
irrelevant for the consignee.to declare the true value of the goods because such
value would not affect the warehouse charges; and then again, there is ground in
the argument of plaintiff that there is no showing that G. Manlapit, Inc. was
authorized to bind plaintiff in Exh. 3. The long short of it is that the Court
finds it to be established that by reason of the negligence of the Manila Port
Service through its employee who operated the forklift that was not strong
enough and was not fitted to carry and discharge the flywheel, said equipment
fell and became a total loss in the sum of P2,027.88. This should be paid by the
defendant Manila Port Service. But the Court will not make the Manila Port
Service liable for the survey of the damage (of) P35.30 because that was not
incurred for the benefit of defendant; or does the Court believe that this case
falls under Art. 2208 of the Civil Code so as to justify the granting of
attorney’s fees; it is apparent that defendant in good faith believed that its
liability was limited to P500.00 and was willing to pay that. (Pp. 9-18, rec. on
app.)
The question raised in this appeal is whether or not section 15 of the
management contract entered into by and between the appellant and the Bureau of
Customs on 29 February 1956 pursuant to the provisions of Act No. 3002, as
amended by Act No. 3851, Commonwealth Act No. 285 and Republic Act No. 140
(Exhibit 1), limiting the former’s liability for loss, destruction or damage to
any cargo while under its custody or control to P500 for each package, unless
the value be otherwise specified or manifested and the corresponding arrastre
chai’ges have been paid, is binding upon the appellee who was not a party
thereto or signatory thereof. Resolving a similar question in Northern Motors,
Inc. vs. Prince Line; 107 Phil., 253 and Delgado Bros., Inc. vs.
Li Yao & Company, 107 Phil., 939, this Court held:
Tested in the light of the above legal provision, Paragraph 15 of the
Management Contract in question, it is believed, contains provisions which are
in the nature of stipulations “pour autrui”, that is, for the benefit or in
favor of a third party, the appellant in the case at bar. By virtue thereof,
appellee is expected to render service, not to the Bureau of Customs, but
specifically and principally to the importers or consignees of the cargoes. Upon
the importer’s or consignee’s compliance with certain conditions, namely,
presentation of approved delivery permits, payment of arrastre fees, etc., he is
entitled to receive, and the appellee arrastre contractor is obliged to
discharge and deliver, the cargoes or merchandise corresponding to those
described in the delivery permit of said importer or consignee. There can
scarcely be any doubt that by said provision in the contract, appellee and the
Bureau of Customs deliberately and purposely conferred benefit upon appellant,
because it is to the latter that the merchandise was to be delivered in good
order and payment made, in the event of damage, destruction, or loss thereof
while in appellee’s control or custody.
In the bill of lading, Exhibit D, the value of the broken flywheel is not
specified or manifested. Hence its recoverable value should be limited to only
P500.
In their answer, the appellant and the Manila Railroad Company admit that the
former is a mere subsidiary of the latter, which is a domestic corporation. The
Manila Railroad Company, the parent corporation of the appellant, is equally
liable for the damage or loss suffered by the appellee. The case against it
should not have been dismissed. Nevertheless, the plaintiff not having appealed
from that part of the judgment dismissing the complaint as against the Manila
Railroad Company, the same is final and cannot be reviewed.
The judgment appealed from is modified by reducing the amount recoverable
from the appellant by the appellee to P500, without pronouncement as to
costs.
Bengzon, Acting C.J., Bautista Angelo, Labrador, Concepcion,
Reyes, J.B.L., Barrera, Paredes, and Dizon, JJ., concur.
[1] P1,974.70 as cost and freight of the
broken flywheel, P12.68 as proportionate insurance premium thereon, P40.50 as
arrastre service fee and P35.30 as cost of survey (see par. VI of the
plaintiff’s complaint, pp. 1, 3-4, rec. on app.).
[1] On appeal by certiorari under Rule
46 by Delgado Bros., Inc. on 29 April, 1960 this Court reduced the liability of
the petitioner to only P500 per package (G. R. No. L-12872).