FIREMAN’S FUND INSURANCE COMPANY, PLAINTIFF AND APPELLEE, VS. MANILA PORT SERVICE AND OR MANILA RAILROAD COMPANY, DEFENDANTS AND APPELLANTS.

Suit was commenced on October 25, 1960 in the Court of First
Instance of Manila by the Fireman’s Fund Insurance Company against the
Manila Port Service and the Manila Railroad Company to recover a sum of
money, plus interest thereon, and attorney’s fees.

By agreement of the parties through their respective counsel, and
without any evidence being adduced, the case was submitted for decision
on December 17, 1962 on the basis of a stipulation of facts, the
pertinent and material portions of which we hereunder quote:

“I. PLAINTIFF AND DEFENDANTS ADMIT:

“A.
The existence, genuineness and due execution of the Management Contract
entered into by and between defendant Manila Port Service and the
Bureau of Customs, Republic of the Philippines, on February 29, 1954
for the operation of the arrastre service in the Port of Manila, South
Harbor; but aver that neither plaintiff nor its predecessor-in-interest
are signatory parties to said Management Contract nor did they have any
participation whatsoever in its preparation, execution and
consummation, a copy of which is hereto attached as Annex A, and made
an integral part hereof.

“B. That the portion of Paragraph 15 of said Management Contract (Annex A-1), pertinent to this case among others, provides:

*
* *; in any event the CONTRACTOR shall be relieved and released of any
and all responsibility for loss, damage, misdelivery, and/or
nondelivery of goods, unless suit in the Court of proper jurisdiction
is brought within a period of one (1) year from the date of discharge
of the goods, or from the date when the claim for the value of such
goods have [has] 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. * *

** ** ** **

“II. PLAINTIFF ON ITS PART ADMITS:

“1.
That all its claims over the 46 items enumerated in paragraph III of
the complaint have been discharged shipside, some in bad order, some
completely delivered, some completely paid and some time-barred except
the following items;

Item No.		Valued at
3	……………………………………………………………………………………………………….	P2,453.20
7	……………………………………………………………………………………………………….	36.57
10	……………………………………………………………………………………………………….	131.16
11	……………………………………………………………………………………………………….	45.60
22	……………………………………………………………………………………………………….	573.94
24	……………………………………………………………………………………………………….	598.16
25	……………………………………………………………………………………………………….	68.89
31	……………………………………………………………………………………………………….	63.67
32	……………………………………………………………………………………………………….	1,396.61
35	……………………………………………………………………………………………………….	940.00

“2. That in effect plaintiff has reduced its 46
claims as enumerated in paragraph 3 of the complaint only to 10 claims
enumerated in the immediately preceding paragraph hereon.

“III. PLAINTIFF AND DEFENDANTS ADMIT:

“1.
That for all the items enumerated in subparagraph 11 of paragraph II
hereof, a provisional claim for each have been filed by the plaintiff
within fifteen (15) days from discharge of the last package from the
carrying vessels;

“2. That all the said provisional claims
covering said items were filed with the different shipping companies
that owned the carrying vessels, copies thereof were furnished the
defendants Manila Port Service;

“3. That said claims were
neither rejected nor approved by defendant Manila Port Service up to
the filing of the instant complaint, although it is admitted that this
complaint has been filed beyond one year from the date of discharge of
last package from the carrying vessels.

“IV. ISSUES INVOLVED:

“1. Whether the instant action is time-barred or has prescribed;

“2.
Whether the provisional claims filed by the plaintiff with the shipping
companies carrying said cargoes of which a copy thereof was furnished
the defendant Manila Port Service, may be considered a provisional
claim for all legal purposes pursuant to the pertinent provisions of
the Management Contract herein attached as Annex A.

“V. PLAINTIFF AND DEFENDANTS submit to the wise discretion of the Honorable Court the question of award of attorney’s fees.”

On March 30, 1963 the court a quo rendered judgment sentencing the
defendants to pay to the plaintiff the sum of P6,407.40, with interest
at the legal rate from the date of the filing of the complaint, P500 as
attorney’s fees, and costs.

From the said judgment, the defendants have appealed to this Court
upon two issues of law, namely, (1) whether the provisional claims
filed by the plaintiff with the shipping companies, copies of which
were furnished the defendants, may be considered as claims for all
legal purposes against the defendants within the purview of the
provisions of paragraph 15 of the management contract entered into
between the defendants and the Bureau of Customs; and (2) whether the
present suit is time-barred under the provisions of the same paragraph
15 of the management contract.

The pertinent provisions of paragraph 15 of the management contract read as follows:

“ * * * in any event the Contractor shall be
relieved and released of any and all responsibility or liability for
loss, damage, misdelivery, and/or nondelivery 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 [has] 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. * * *”

Upon the first issue, it is not controverted that the
plaintiff did not file any claim directly with the defendants, the
former limiting itself to furnishing the latter, within fifteen days
from the date of discharge of the goods from the carrying vessels, with
copies of the claims lodged by it with the shipping companies. The
court a quo considered this act of the plaintiff as “sufficient
compliance with the provisions of the management contract”. The
defendants contend in this appeal, however, that the provisional
claims, not having been filed with them, are not directed against them
as “Contractor”, and that the requirement that a claim must be “filed
with the Contractor” should be complied with strictly, substantial
compliance therewith not being sufficient in law. They further contend
that if it is true, as recited in the provisional claims filed with the
shipping companies, that the shipments were actually either
“short-landed or discharged in bad order”, then it is the shipping
companies as carriers, and not the defendants as arrastre contractor or
operator, that are liable.

The position taken by the defendants is, in our view, unassailable.
The clear intendment of paragraph 15 of the management contract is that
to render the arrastre contractor liable in damages, the claim must be
filed directly with and against the contractor in such unequivocal
terms as to place the contractor on notice that the claimant intends to
hold it liable for loss or damage. The provisional claims in this case
were directed against the shipping companies and not against the
defendants. Moreover these claims were in fact notices sent to the
shipping companies, advising them that the shipments mentioned in the
said claims were either “short-landed or discharged in bad order”,
which conditions attendant upon the goods discharged are not the
responsibility of the contractor. For this reason, the defendants
rightfully disregarded the copies of these claims as not constituting
claims for value filed with and against them.

Upon the second issue, the court a quo took the view that
because the defendants never rejected nor denied the provisional claims
in question the plaintiff could still file suit in court even after the
lapse of one year from the date of the discharge of the goods from the
carrying vessels. We reject this view. Before the plaintiff could avail
of the 2nd period provided in paragraph 15 of the management contract,
to wit, “one year from the date when the claim for the value of such
goods have [has] been rejected or denied by the Contractor”, two
requisites must be present. First, there must be a claim for the value
of the goods; second, there must be a rejection or denial of such
claim. These two requisites have not been met in this case: there was
no claim filed, so there could be no rejection or denial thereof.

In Tomas Grocery vs. Delgado Brothers, Inc., L-11154, April 29,
1959, this Court held that a claim for loss should be “filed with the
contractor” within the fifteen-day period before action may be brought
in court for the recovery of the value of the loss. In Consunji, et al
vs. Manila Port Service and Manila Railroad Company, L-15551, November
29, 1960, this Court in effect ruled that if no claim has been filed
with the contractor within the fifteen-day period, the action by the
consignee or claimant, even if filed within one year after the
discharge of the goods from the carrying vessel, cannot prosper. Said
this Court in the latter case:

“There is no denying that plaintiffs presented no
claim to Manila Port Service within 15 days ‘from the date of discharge
of the last package from the carrying vessel.’ But they maintain, and
the lower court agreed with them, that the fifteen-day period was
immaterial, because their action was filed ‘within one year from the
date of the discharge of the goods.’ Appellees – and said court – would
interpret the herein-above-quoted provision of the Management Contract
to mean that ‘the arrastre contractor shall be relieved from liability
for loss of goods unless:

‘1. 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

2. Suit in
the Court of proper jurisdiction is brought within a period of one (1)
year 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.’

We do not think this interpretation may be sustained. Carriers or
depositaries sometimes require presentation of claims within a short
time after delivery as a condition precedent to their liability for
losses. Such requirement is not empty formalism. It has a definite
purpose, i.e. to afford the carrier or depositary a reasonable
opportunity and facilities to check the validity of the claims while
the facts are still fresh in the minds of the persons who took part in
the transaction and the documents are still available. ^[1]
Now, we see no reason why Manila Port Service – for whose benefit the
provision was evidently inserted – should require prompt presentation
of claim in one instance, while waiving it in the other. Bearing this
in mind, we hold that the proviso about presentation of claim was
intended to apply both to the case where suit is brought within one
year from the date of discharge of the goods, and to the case where
suit is brought within one year from the date when such claim is
rejected. It is clear that the paragraph, while imposing a condition
precedent to the filing of any suit for losses, at the same time gave
the demandant (who has filed the claim) the option either to bring his
action (in one year) without waiting for the contractor’s resolution on
his claim, or to wait for such resolution and then sue if it is
unfavorable (in one year).”

Obviously of no application to the present case is the modified
doctrine reiterated by this Court in GSIS, et al vs. Manila Railroad
Company, et al, L-20342, November 29, 1965 (which decision cites three
precedent-making cases ^[2],
to the effect that “the period of fifteen (15) days within which a
claim should be filed with the Manila Port Service should commence, not
from the date of discharge of the goods from the carrying vessel, but
from the date the consignee or claimant learns of the loss, damage or
misdelivery for which the claim is made, since obviously he is in no
position to allege such loss, damage or misdelivery before he comes to
know about it, considering that the goods are in the care and custody
of the arrastre contractor.”

In resume, we hold that (1) no claim for value was filed by the
plaintiff with the defendants, the provisional claims being in fact and
in law not claims against the arrastre con tractor because they were
actually directed against the shipping companies; and (2) even if it
has been commenced within one year from the date of the complete
discharge of the goods from the carrying vessels, the present action
cannot prosper because no previous claim was filed with and against the
defendants within the intendment of paragraph 15 of the management
contract.

ACCORDINGLY, the judgment a quo is reversed, and the complaint is hereby dismissed, at plaintiff-appellee’s cost.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Makalintal, Bengzon, J.P., Zaldivar, and Sanchez, JJ., concur.
Regala, J., no part.

---

^[1] Roldan vs. Lim Ponzo & Co. 37 Phil. 285.

^[2] Yu Kimting
Construction vs. Manila Railroad Company, L-17027, November 29,1965;
Chiok Ho vs. Compañia Maritima, et al, L-20553, April 30, 1965;
Republic vs. Manila Port Service, L-19115, March 31, 1964.