ALPHA INSURANCE & SURETY CO., PLAINTIFF-APPELLEE, VS. MANILA PORT SERVICE AND MANILA RAILROAD COMPANY, DEFENDANTS-APPELLANTS.

On May 28, 1961 the
defendants Manila Port Service and Manila Railroad Company received a shipment
of 58 packages of “coal tar dyestuffs” from the S/S “Buenos
Aires Maru“, consigned to the General Textiles,
Inc. in Manila.  On June 5, 1961 the consignee, which failed to receive one package, filed a provisional claim with the defendants
“for cargoes landed in bad order condition and short-landed”
under the provisions of par. 15
of the management contract^[1] which read:

” * * * 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, * * * In any event the
CONTRACTOR shall be relieved and released of any and all responsibility or
liability for loss, damage, mis-delivery, 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 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 of the last package from the carrying vessel.  * * *”

This was followed on
March 22, 1962 by a formal claim
stating the nature of the loss
and the value thereof in the amount of P600.

On June 27,
1962 the plaintiff
Alpha Insurance & Surety Co., Inc., as insurer subrogated to
the rights of the consignee, was advised in writing by the defendants that its claim, because of the insurer’s failure to bring suit
within one year from the date of discharge of the goods, has prescribed.

On June 29,
1962 the plaintiff
filed the present action in the municipal court of Manila to recover the
value of the missing cargo, plus legal interest thereon, P500 as attorney’s
fees and for expenses of litigation, and costs of suit.  On the basis of a written
stipulation of facts submitted by the parties, the municipal court rendered
judgment in favor of the plaintiff.

On appeal, the Court of First Instance of Manila, upon the same written stipulation of facts, rendered
judgment

“* * * sentencing the defendants to pay jointly and severally
to the plaintiff the sum of P500.00 with interest thereon at the legal rate
from the date of the filing of the complaint in the Municipal Court on June 29, 1962, until the whole amount shall
have been fully paid, plus ten percent of the total amount due as and for attorney’s fees, and the costs of
this action.”

Hence the present appeal.

1. The appellants’ first contention is that the provisional claim
filed on June 5, 1961 is not the
claim contemplated by paragraph 15 of the management contract, which requires
that the same be “one for value”; and that it is “not only
vague, but purely speculative in character” and is a mere “advice” of an anticipated
loss.  This contention is without merit.  Although the provisional claim did not indeed
indicate the value of the missing cargo, it nevertheless contained a description of the importation
involved, sufficient to place the
defendants on notice as to the amount and character thereof, and provide them
with ample basis for reasonable verification.  These
circumstances, we have already held, constitute substantial compliance with paragraph 15 of the management contract.  Thus,

“although without statement as to amount and without
accompanying documents, the provisional claims herein involved contained
descriptions of the importations concerned, sufficient to allow the Manila Port
Service reasonable verification.  It would not have been difficult for defendant
Manila Port Service to check on whether some or all of cargo therein described
were in fact missing or in bad order.  For it is supposed to have a complete and detailed recording or
checking of said cargo.  The particulars of the precise amount of indemnity claimed as well as the
supporting papers for said claim were properly reserved for the formal claim
thereafter filed, since the determination and preparation of the same by the consignee should be done carefully and without haste.  The provisional claims in question therefore
served the purpose of enabling the arrastre
operator to check the goods in
its possession, shortly after they had
been discharged from their carrier.”^[2]

Whatever deficiency there
was in the provisional claim was supplied by the subsequent formal claim of
March 22, 1962 which stated ”the nature of the loss and the value thereof in the amount of P660.00.”

2. The next contention of the appellants that the provisional claim
was not against them but against the
carrier, is refuted by those portions of the written stipulation of
facts that unequivocally state that the “shipment consisting of 58
packages of Coal Tar Dyestuffs was received by the defendants complete and all
in good order condition” and that the defendants “failed to deliver
to the consignee one (1) package.”

3. The appellants’ final contention that the court a quo
erred in not holding that the period of one year within which suit may be brought against them had already expired when
the complaint was filed on June 29, 1962, is likewise completely without merit.

Paragraph 15 of the
management contract provides two alternative periods in reference to an action
to be filed to enforce liability for loss or damage:  (1) one year from the date of last discharge
of the goods, or (2) one year from the date the claim is rejected or denied by
the arrastre operator, provided, however, that a
provisional claim shall have been previously filed with said operator within 15
days from the date of last discharge from the carrying
vessel.  The first period refers to a
case where the claimant files an action in court without awaiting the
contractor’s pleasure on the claim, in which event the action should be filed
within one year from the date of last discharge from the carrying vessel.  The second period applies where the claimant
prefers to wait for definitive action by the operator, in which event the
action should be filed within one year from the date of rejection.^[3] Where, however, the operator neither honors
nor rejects the claim within one year from the date of last discharge, the
claim is deemed rejected as of the expiry date of the said period,
and the action may be filed within one year from the said expiry date.^[4]

The plaintiff’s claim was
neither rejected nor denied orally or in writing by the defendants within one
year from the date of last discharge on May 28, 1961.  It was only on June 27, 1962 that the
plaintiff received a letter from the defendants informing it that its claim had
prescribed.  Under the circumstances, the
claim must be deemed to have been rejected only on March 28, 1962, in which case the acquisition should be filed within one year therefrom.^[5] The complaint which was filed on June 29,
1962, or less than
one year from March 28, 1962, is therefore not time-barred.

ACCORDINGLY, the judgment a quo is
affirmed in toto, at
defendants-appellants’ cost.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez,
Angeles, and Fernando, JJ., concur.

^[1] Entered into by and between
the Manila Port Service and the Bureau of Customs on February 29, 1956.

^[2] State Bonding & Insurance Co. vs. Manila Port Service, et al.,
L-21833, Feb. 28, 1966; American
Machinery & Parts Mfg. Co., Inc. vs. Manila Railroad Co., et al.,
L-21460, April 30, 1966.

^[3] Consunji v. Manila Port Service, L-15551, Nov.
29, 1960.

^[4] Continental Insurance Co. vs. Manila
Port Service, et al., L-22208, March 30, 1966; Delgado Brothers, et al. vs.
Manila Port Service, et al., L-21781, June 30, 1966; Fireman’s Fund
Insurance Co. vs. Manila Port Service, et al., L-21412, Sept. 28, 1966.

^[5] See note 4.