ATLANTIC MUTUAL INSURANCE COMPANY, PLAINTIFF AND APPELLEE, VS. MANILA PORT SERVICE AND/OR MANILA RAILROAD COMPANY, DEFENDANTS AND APPELLANTS.

On 14 February 1958 in New York, United States of America, the
Pfizer Corporation shipped on board the SS “Pioneer Mist” of the United
States Lines Company on consignment to Pfizer Laboratories (Phil.)
Inc., Manila, Philippines, two cartons of bonamine tablets and five
cartons of combiotic potassium, for which bills of lading Nos. 76 and
77, respectively, were issued. The seven cartons were insured with the
Atlantic Mutual Insurance Company, a foreign company existing under the
laws of the United States of America with principal place of business
at 49 Wall street, New York 5, U.S.A. On 19 March 1958 the SS “Pioneer
Mist” arrived in Manila and on the next day, 20 March, the shipment was
unloaded from the vessel and delivered to the Manila Port Service, a
subsidiary of the Manila Railroad Company, that kept the cargo until 10
April 1958 when it was delivered to the consignee Pfizer Laboratories
(Phil.), Inc. However, the cargo was not delivered as when it was
shipped: one carton of the bonamine tablets worth $283.18 was missing
and five cartons of combiotic 1/4 gram (potassium) were damaged in the
sum of $48.80; the total loss and damage amounting to $331.98 or, at
the rate of $201.50 per $100, to P688.93. The Pfizer Corporation and/or
its consignee, the Pfizer Laboratories (Phil.), Inc., claimed recovery
of the said loss and damage and the Atlantic Mutual Insurance Company
paid to the consignee the sum of P668.93.

On 3 March 1959, the Atlantic Mutual Insurance Company brought an
action in the Court of First Instance of Manila to recover from the
defendants Manila Port Service and/or Manila Railroad Company, jointly
and severally, the sum of P668.93 which it had paid the shipper and/or
consignee, lawful interest from the date of the filing of the
complaint, and costs. On 16 March 1959 the defendants answered alleging
that as no claim was made by the consignee, its representative or
broker, within fifteen days from the date of discharge of the shipment
from the vessel, the defendants were relieved or released from any
liability for loss, damage or shortage of the cargo as provided for in
the management contract entered into by and between the Bureau of
Customs and the defendants Manila Port Service as arrastre operator in
the port of Manila, and praying that the complaint be dismissed. On 30
September 1959 the parties entered into a stipulation of facts, as
follows:

A. On its part, plaintiff—

(1) Admits the
existence of a Management Contract by and between defendant Manila Port
Service and the Bureau of Customs, Republic of the Philippines, on
February 29, 1956 for the operation of the arrastre service in the
Manila South Harbor; also, that neither plaintiff nor its predecessors
in interest are signatory parties to said Management Contract;

(2) Admits that Paragraph 15 of said Management Contract, among1 other things, provides:

*
* * 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
(500.00) pesos for each package unless the value is otherwise specified
or manifested, and the corresponding arrastre charges had been paid * *
*

* * * 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 arrival of the goods; or from the date when the claim for
the value of such goods 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 * * *.

(3) Admits that no claim was
filed with defendant Manila Port Service, as arrastre operator for the
Port of Manila, for the missing shipment and damages in question within
the 15-day period from the date of discharge of the last package from
the carrying vessel as provided in Paragraph 15 of the Management
Contract, hereto attached as Exhibit “A”, but maintains, as appears
from the records, that a suit was filed in court within the period of
one year from the date of arrival of the goods;

(4) Admits
that the pertinent portion of Paragraph 15 of the Management Contract
is, in substance, reproduced in the gate passes, Exhibits B, B-1 and
B-2, by means of annotations appearing therein, in which the signatures
of the consignee’s broker, the representative of the Manila Port
Service and the representative of the Bureau of Customs, showing actual
delivery of the shipment covered by the said gate passes, that without
the said gate passes, the cargo of plaintiff’s predecessors in interest
would not have been allowed to be withdrawn from defendant Manila Port
Service’s premises; that likewise, the pertinent portion of Paragraph
15 of the Management Contract appears at the dorsal part of the
delivery permit, Exhibit “C” covering the shipment in question.

* * * * * * *

Upon the above stipulation of facts, on 18 January 1960 the court rendered judgment holding that—

* * * the provision of the contract that “such claim
shall have been filed with the contractor within fifteen (15) days from
the date of discharge of the last package” refers only to the second
part which says “from the date when the claim for the value of such
goods has been rejected or denied by the contractor.”

The
complaint was docketed on March 3, 1959, and therefore the suit was
filed within the period of one year from the date of discharge of the
goods. Consequently it is not barred by the provisions of paragraph 15
of the management contract. The contractor, however, is not liable as
provided in said paragraph, for a sum greater than P500.00 for each
package, so that for non-delivery of a carton of bonamine tablets worth
$283.18 it is liable only in the sum of P500.00. The contractor is also
liable for the damage of P48.80 to the shipment of five cartons of
combiotic potassium or P97.73. P500 plus P97.73 equals P597.73, which
is the total liability of the defendants to the plaintiff,

and ordering that—

*
* * said defendants Manila Port Service and/or the Manila Railroad
Company jointly and severally to pay the plaintiff the sum of P597.73
and to pay the costs.

On 10 February 1960 the defendants filed a motion for
reconsideration of the judgment thus rendered, to which on 11 February
1960 the plaintiff objected. On 13 February 1960 the court denied the
motion for reconsideration.

Hence, this appeal on pure question of law.

The appellants contend that the filing of a claim with the appellant
Manila Port Service as operator of the arrastre service in the Manila
South Harbor within fifteen days from the date of discharge of the last
package from the vessel is a condition precedent to the bringing of an
action in court and that if such claim is not filed within the 15-day
period a court action is barred. The appellee maintains otherwise.

In Tomas Grocery vs. Delgado Brothers, Inc., 105 Phil., 549; 56 Off. Gaz. 4422, this Court held that—

* * * The provision, therefore, in the management
contract (Exhibit 7-A) that claims for losses should be filed with the
contractor within 15 days from date of arrival of the goods before an action may be brought against it in court
for recovery of the value of the losses, is in consonance with the
provisions of the enabling Act, intended undoubtedly to afford the
contractor the oppprtunity to check up the claims for losses which
verification would be difficult if a longer period of time be allowed
to pass. (Italics supplied)

The argument advanced by the appellee that the management contract does not contain stipulation pour autrui
and hence is not binding upon a consignee or anyone not a party thereto
and that to hold such contract binding on non-parties would be
violative of the constitutional prohibition on impairment of the
obligation of contracts already has been passed upon and held untenable
in the same case of Tomas Grocery vs. Delgado Brothers, Inc., supra.

The appellant contends that it was not a party to the management
contract entered into by the Bureau of Customs and the appellee and
that for that reason it could not be bound by such condition. It
appears that the 822 cases of milk were withdrawn from the appellee by
Protacio Villafuerte, a licensed customs broker (Exhibits 3, 4, 5 &
6-Delgado). The notice of claim for loss filed with the appellee was
signed by him for and in behalf of the appellant (Exhibits C &
2-Delgado). In the permit to deliver imported goods dated 4 February
1955 issued by the Collector of Customs, the name of the same customs
broker appears (Exhibit B). The gate passes issued by the appellee to
bring the cargo out of the pier was in the name of the said customs
broker (Exhibits 3, 4, 5 & 6-Delgado) . The appellant has not
repudiated its privity with the broker and has accepted the benefit of
delivery of the 822 cases of milk through him. Therefore, it is bound
by the notice appearing on the back of the permit to deliver imported
goods (Exhibit B) and on the gate passes (Exhibits 3, 4, 5 &
6-Delgado) that claims for losses must be “filed with the CONTRACTOR
within fifteen (15) days from the date of arrival of the goods” before
the appellant could sue the appellee in court for recovery of the value
of the losses. * * *

The judgment appealed from is reversed and the complaint dismissed, with costs against the appellee.

Bengzon, C. J., Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.