LEXAL PURE DRUG LABORATORIES, PLAINTIFF AND APPELLEE, VS. MANILA RAILROAD COMPANY AND MANILA PORT SERVICE, DEFENDANTS AND APPELLANTS.

From the decision of the Court of First Instance of Manila (in Civil
Case No. 46269), ordering it to pay to the Lexal Drug Laboratories, the
value of the undelivered articles belonging to the latter, the Manila
Port Service filed the present appeal, mainly on the issue of whether
or not the appellee-consignee of the undelivered goods is bound by
Section 15 of the Management Contract between the appellant and the
Bureau of Customs, fixing a prescriptive period of 15 days for the
filing of claims in case of loss, damage, misdelivery or non-delivery
of goods, and limiting appellant’s liability to P500.00 in case of
undeclared value of the merchandise.

The case was originally Instituted by the Lexal Drug Laboratories in
the Municipal Court of Manila, for recovery of the sum of P1,818.6l,
the value of 100 kilos of Methyl Cellulose of special grade type
MC-6,000, discharged to the defendant Manila Port Service on November
11, 1959, but which goods were never located. Upon a favorable decision
to the plaintiff, defendant appealed to the Court of First Instance of
Manila. Here the stipulation of facts submitted in the municipal court
was reproduced, later supplemented by an additional stipulation of
facts which, together, establish the basis of each party’s respective
contention, admitting for the plaintiff, the fact of discharge and
receipt of the goods in Manila, their value at P1,818.61, and their
non-delivery to the plaintiff; and for the defendant, the existence and
due execution of the Management Contract between the defendant Manila
Port Service and the Bureau of Customs for the operation of the
arrastre service in the Port of Manila in the execution of which,
plaintiff did not participate; the fact that claim for the value of the
goods was filed more than 15 days from the date of discharge of the
last cargo from the carrying vessel. An attempt was made to include in
the additional stipulation of fact a statement that the provision of
paragraph 15 of the Management Contract enjoining the presentation of
claims within 15 days from the discharge of the last package from the
carrying vessel, was stamped at the dorsal portion of the original of
the Delivery Permit issued in the name of plaintiffs broker, but
plaintiff objected contending it or its broker had no knowledge of such
a fact. In view of this opposition, paragraph 3 of the additional
stipulation was ordered deleted, but the defendant was authorized to
present evidence in support of its contention.

The pertinent provisions of the questioned paragraph 15 of the Management Contract read as follows:

“x x x and the Contractor shall be solely
responsible as an independent contractor for, and promptly pay to the
steamship company, consignee, consignor, or other interested party or
parties the invoice value of each package but which in no case shall be
more than five hundred pesos (P500.00) for each package unless the
value is otherwise specified or manifested, and the corresponding
arrastre charges had been paid, including all damages that map be
suffered on account of loss, destruction, or damage of any merchandise
while in the custody or under the control of the contractor upon any
pier, wharf or other designated place under the supervision of the
Bureau, x x x. In any event the Contractor shall be relieved and
released of any and all responsibility or liability for loss, damage,
misdelivery, 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 from the carrying
vessel. x x x.”

After due hearing, the court rendered the decision now on appeal,
holding that plaintiff is not bound by the aforequoted Section 15 of
the Management Contract, and ordering the defendants to pay to the
plaintiff-importer the value of the undelivered goods in the sum of
P1,818.61, with legal interest thereon from the filing of the
complaint, plus the sum of P1,000.00, as attorney’s fees.

There is no controversy as to the fact that the goods discharged
from the vessel to the custody of the appellant were never located.
There can also be no question as to the validity of Section 15 of the
Management Contract between the Bureau of Customs and the arrastre
contractor, the Manila Port Service. It has been consistently ruled by
this Court that the provision limiting the liability of the arrastre
contractor to claims filed within 15 days from the discharge unto its
custody of the goods lost, destroyed or misdelivered, and for an amount
not exceeding P500.00 unless the actual value thereof is given and the
corresponding charges thereon paid, is binding upon consignees or third
persons who are not signatories thereto, as long as the latter have
knowledge of that limitation of liability.^[1]
Thus, we have held that the management contract is binding upon the
consignee who is not a party thereto, but who has taken delivery of the
goods upon presentation of a gate pass and delivery permit wherein the
provision of Section 15 was stamped and constituted as one of the
conditions for the issuance thereof.^[2]
In other words, knowledge and acceptance, even tacit, by the importer
or his agent, of the provisions of paragraph 15 oft-cited, is essential
to bind the importer. This is as it should be because, firstly the
contract, contrary to ordinary rule, is sought to bind a party who did
not participate in its execution, and secondly, it is intended to limit
the liability of one of the contracting parties, the arrastre
contractor. To successfully invoke its protective provisions, the
beneficiary, (the arrastre contractor) must discharge its duty to prove
such knowledge on the part of the importer.

In the case at bar, not only does the plaintiff vehemently disclaim
knowledge of this limitation, but also the record discloses
circumstances that indicate the plaintiff had no occasion to have in
its possession any document containing the provision in question. It is
true that the delivery permit presented by plaintiff’s broker to the
defendant now contains stamped on its dorsal portion, the provision in
question. However, plaintiff’s broker insists that when it secured the
official form^[3] from the Bureau
of Customs for presentation to the Manila Port Service, no such stamped
provision appeared thereon. This is corroborated by the testimony of
witness Vicente Borres of the Manila Port Service to the effect that
the stamping of the questioned provision on the delivery permit was
done at the office of the defendant after the same has been presented
by the consignee for processing.^[4]
Since this delivery permit has never been returned to the plaintiff
because the goods were never located, (in fact the same was produced
and presented as evidence by the defendant), it can not be said that
plaintiff learned about the incorporation of the notice of limitation
of liability. Nor has there been any gate pass (usually containing the
same provision) given to the plaintiff for the reason that the goods
were never delivered to the plaintiff.

Since the plaintiff-consignee is not bound by Section 15 of the
Management Contract, the filing of its provisional claim 20 days after
the release of the articles was not barred by any period of limitation.
Considering further that the value of the articles lost was admitted to
be P1,818.61, and as the limitation on the arrastre operator’s
liability to only P500.00 is not binding on the herein consignee, the
appellant must be held liable to the full value of the amount being
claimed by appellee.

Wherefore, the decision appealed from is hereby affirmed, with costs against the appellants. So ordered.

Bengzon, C.J., Concepcion, Reyes, J.B.L., Dizon, Regala, Makalintal, and Bengzon, J.P., JJ., concur.

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^[1] Insurance Company of North America vs. Manila Port Service, 113 Phil. 553, and cases cited therein.

^[2] Insurance Company of North America vs. United States Lines, Co., 119 Phil. 783.

^[3] The printed official form
is in the nature of a communication addressed to the Manila Port
Service from the Bureau of Customs authorizing the delivery of the
goods upon payment of arrastre charges (see Exh. 3).

^[4] pp. 28-30, t.s.n. Regala.