INSURANCE COMPANY OF NORTH AMERICA, PLAINTIFF-APPELLEE, VS. MANILA PORT SERVICE AND/OR MANILA RAILROAD COMPANY, DEFENDANTS-APPELLANTS.

The plaintiff, as
insurer-subrogee, brought this action to recover the sum of
P4,305.55, representing the value of partially damaged shipment of 351 cartons
of medicine consigned to the Philex Mining Corporation, against the
Manila Port Service and the Manila Railroad Company.

After a trial,
the Court of First Instance of Manila sentenced the defendants, jointly and
severally, to pay to the plaintiff the sum of P4,305.55, plus attorney’s fees
of P500.00, and the costs.

The defendants interposed this appeal.

Upon the facts set forth in the stipulation of facts submitted by
the parties, it appears that the Philex Mining
Corporation of Manila was the consignee of 351 cartons of medicine shipped on
board the SS “Japan Bear”.  The
merchandise were contained in four
cargo vans owned by the carrier. 
The shipment, which was insured with the Insurance Company of North
America against all risks of loss and damage, arrived at Manila
on June 23, 1961, and the
cargo vans containing the merchandise were discharged in good order
unto the custody of the Manila Port Service on June 28, 1961.^[1]
The padlock and key to the cargo vans containing the shipment were left with
the operators of the vessel.^[2]

On July 19, 1961, the consignee requested the agent of the
shipping company to open the cargo vans,
and it was found that 50 cartons of the shipment of medicine were
wet.  Upon request of the consignee, the
50 cartons were examined and findings of
said examination are contained in “Bad Order Examination Report No.
2023” dated July 19, 1961. 
With the exception of the damaged cartons adverted to, the whole
shipment was delivered in good order and acknowledged as such by the consignee thereof.

Provisional claim for damage and/or loss was filed by the consignee against the defendants on June 27, 1961, one day before the discharge of the goods from the
carrying vessel.  Formal claim was,
however, filed on July 31, 1961, specifically for the value of the 50 cartons which were damaged, in the amount of
P4,305.55.  The arrastre
contractor denied the claim.  The
Insurance Company of North America, as insurer,
paid the consignee the amount of P4,700.86.

Upon the facts agreed upon by the parties, the lower court
rendered decision against the defendants holding that at the time the goods
were damaged, they were no longer on board the carrier but inside the premises
of the Manila Port Service, under the care and custody of the latter.

In this appeal, the defendants-appellants first contend that the
mere receipt by the arrastre contractor of the four
cargo vans in question did not make it responsible and liable for the damages
to the contents thereof, arguing that the arrastre
contractor, although charged with the duty and function of receiving, handling,
caring for, and delivering the merchandise, does not warrant, insure, or
guarantee the contents of packages, cases or boxes of cargo received by it from the carrying vessel.

The
defendants-appellants’ theory cannot be sustained.  It is not denied that the arrastre
contractor had received and had taken custody of the cargo vans containing the goods in question upon their discharge
from the carrier on June 23, 1967 in good
order.  The lower court has found
as a fact, that on the delivery of the cargo vans to the piers, the exterior
portion of the vans were not even wet, otherwise, a notation would have been
made on the tally sheet of such defect. 
Having taken custody of the cargo vans from the time of their discharge
from the carrier until their delivery to the consignee, the
defendants-appellants, in disclaiming responsibility for any damage to the
goods contained therein, is bound to establish by evidence that either the 50 cartons of
the shipment were already damaged when they were unloaded from the vessel, or
that the damage was not in any way imputable to it.^[3] Without proof to
support either alternative, the conclusion is inevitable that the damaged
condition of the goods was due to a cause for which the arrastre
contractor is answerable.  Untenable is
the proposition that the vessel owner should be held liable because the
operators thereof had the keys to the cargo vans containing the shipment before
it was examined.  There is no showing,
and neither is it claimed, that the cause of the damage was the nondelivery of the keys or that the damage could have been
avoided were the keys entrusted to the arrastre contractor.  The decisive factor in the determination of
who should be responsible for the damage is not possession of the keys but custody of the
goods at the time the damage was incurred.

The second question posed
is whether or not the claim for
the value of the damaged goods was filed within the fifteen-day period required
in the management contract.  We are in
accord with the defendants-appellants
that the lower court committed error in holding that the provisional claim
filed by the consignee on June 27, 1961, one day before the discharge of
the goods from the carrying vessel, complies with the provisions of the
contract.  In a number of cases,^[4] this
Court has nullified such claims as being premature and speculative, for
they do not serve the purpose for which they are intended – to afford the arrastre operator a “reasonable opportunity to check the validity of the claim, while
the facts are still fresh in the minds of the person who took part in the
transaction and while the pertinent documents are still available.”^[5]

Appellants
contend further that the claim
for loss or damage was filed beyond the 15-day, period provided in the
management contract, because from June 28, 1961, when the four vans were
discharged from the vassal, until July 31, of the same year, when a formal claim for loss was filed, more than
fifteen days had elapsed.

The clause in the
management contract providing that the claim shall be filed within fifteen days
from the date of discharge of the last package from the carrying vessel, is in
the nature of a period of
limitation for bringing an action.  It is
a defense within the privilege of the defendant to avail of, or to waive it,
such a defense
being personal to the defendant.  To
serve as a legal
ground to bar or defeat an
action, it must be pleaded and proved. 
Hence, the burden of proof rests on the defendant.

Generally, the claim of the consignee or its subrogee
for loss, damage, misdelivery and/or nondelivery of
goods, must be presented to the arrastre contractor
within fifteen days from the date of discharge of the last package from the
carrying vessel, as provided in the management contract.  This rule applies where, ordinarily, the
consignee or claimant has knowledge
of the loss, damage, misdelivery and/or nondelivery of the goods before the expiration of the said
15-day period.  However, when the consignee or claimant comes to learn of the
loss, damage, etc. after the 15-day period from the discharge of the goods, the period to file a claim should
commence not from the said date of discharge but from such date when the
consignee or claimant is informed of the loss, damage, etc. of the merchandise,
or from the date on which, with the
exercise of reasonable diligence, such information could have been secured.  For the purpose of determining whether the
consignee incurred in laches or unreasonable delay in
filing the claim, the fact to be considered is: when did the consignee acquire knowledge of the discharge of the
goods from the vessel, or with the exercise of reasonable diligence, such knowledge could have been secured?

In the case at bar, the stipulation of facts show that while the goods were discharged from
the vessel on June 26, 1961, there is no showing that the consignee had knowledge of the discharge of the
merchandise on that date or soon thereafter. 
What the record shows is that on July 19, 1961, the consignee requested the agent of the
shipping company to open the cargo vans
because the keys of the vans were still in the possession of the agent of the carrier; and although the stipulation
of facts further show that the goods were discharged from the vessel on
June 28, 1961, and the arrastre contractor received
them and had kept them into its custody; however, there is no showing that before
July 19, 1961, the consignee had knowledge that the merchandise were already in
the possession of the arrastre contractor.  It was incumbent upon the defendants to show that the consignee had
knowledge of the discharge of the merchandise on or before July 19, 1961.  As a matter of fact, in the brief of the
appellants, We find no specific reference to any bit of evidence showing that
the consignee had knowledge of the discharge of the goods immediately or a short time after June 28, 1961.  Accordingly, therefore, We hold that the formal claim for the value of
the goods lost or damaged filed on July 31, 1961, was filed within the 15-day
provided in the management contract.

The next error assigned,
which relates to the amount for which
defendants-appellants should be held liable, needs no discussion as the
plaintiff-appellee, in its brief, concedes that only
the invoice value of the damaged goods, as stipulated, may be recovered from
the defendants-appellants.

As to
the award of attorney’s fees in the amount of P500.00, which
defendants-appellants claim to be improper for the reason that it was not stipulated
by the parties, Article 2208 of the New Civil Code enumerates some exceptions to the rule prohibiting the award of
attorney’s fees in the absence of stipulation, and one such exception is –

“(11) In any other case when the court deems it just and
equitable that attorney’s fees and
expenses of litigation should be recovered.”

We are not in a position to re-examine the
basis for the lower court’s award of attorney’s fees for this would involve a
review of the facts, inappropriate at this instance, and it would also be in
disregard of the tradition that discretion, when well exercised, should not be disturbed.  At any rate, in cases of similar nature^[6] the award of
attorney’s fees was considered to be proper and reasonable.

PREMISES CONSIDERED, with the only modification that the sum of
P4,305.55 is reduced to P3,989.70, the
invoice value of the damaged goods, the judgment holding the defendants-appellants liable to
plaintiff-appellee is affirmed.  On equitable considerations, no costs.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez,
Castro, and Fernando, JJ., concur.

Concepcion, C.J., and Bengzon, J., on official
leave.

^[1]
Par. 4, Stipulation of Facts.

^[2]
Par. 5, Idem.

^[3]
See Jose Bernabe & Company, Inc. vs.
Delgado Bros. Inc., G.R. No. L-12058,
April 27, 1960.

^[4]
Shell Company of the Philippines, Ltd. vs.
Cia General de Tabacos de
Filipinas, L-20230, July 30, 1965; Fireman’s Fund Insurance Co. vs. Manila
Port Service, et al., L-22454, April
29, 1966; New Hampshire Fire Insurance Co. vs. Manila Port
Service, et al., L-20938, August 9, 1966; Rizal Surety & Insurance Company, Inc. vs. MRC, L-22409,
April 27, 1967; Philippine Educa­tion Company, Inc. vs. MPS, et al.,
L-24091, September 20, 1967

^[5]
Philippine Education Co. Inc. vs. Manila Port Service, supra, citing Consunji vs. Manila
Port Service, L-15551, November 29, 1960.

^[6]
Yu Kimteng Construction Corp. vs. Manila Railroad
Company, et al. L-17027, Nov. 29, 1965; State Bonding Ins. Co., Inc. vs. Manila
Port Service, L-22395, Dec, 17, 1966; Phil. Education Co. vs. Manila Port
Service, et al., L-24091, September 20, 1967.