PHILIPPINE EDUCATION CO., INC., PLAINTIFF-APPELLEE, VS. MANILA PORT SERVICE, DEFENDANTS-APPELLANTS.

This is an appeal from the judgment dated February 15, 1966 in civil case 48964 of the
Court of First Instance of Manila.

On or about October 25,
1960, the Philippine Education Co. shipped on board the “SS
PRESIDENT TAFT,” in New York,
726 packages of books, magazines; globes and other merchandise, consigned to
itself for discharge at Manila.  The vessel arrived in Manila
on December 9, 1960 and
discharged the shipment to the then arrastre
operator, the Manila Port Service, with 9 packages short-landed and 40 packages
in bad-order condition.  An examination
of the bad-order cargo revealed that only 28 packages suffered loss of 9 copies
of magazines.  Of the total number of 717
packages received by the arrastre operator from the
carrying vessel, only 603 packages were delivered to the consignee, resulting
in short-delivery of 114 packages.  A package
of “Playboy” magazines discharged under a good-order tally sheet was
found short of 47 copies upon delivery to the consignee.

Claims filed by the consignee with the arrastre
operator having been denied, suit for damages was filed by the Philippine
Education Co. against the Manila Port Service and the Manila Railroad Co.

In lieu of trial, the parties submitted a stipulation of facts,
and on February 15, 1966 the court rendered judgment “in favor of the
plaintiff and ordering the defendants jointly and severally to pay the
plaintiff the sum of P3,989.19 [representing the CIF value of the 114
short-delivered packages and the 47 copies of “Playboy” magazines]
with interest thereon at the legal rate from the date of the filing of the
Complaint until fully paid plus the sum of P500.00 as attorney ‘s fees, and to
pay the costs.”

On appeal to this Court, the defendants-appellants pray for the
reversal of the judgment a quo, contending that the lower court
(1) had no jurisdiction over the subject-matter of the action; (2) erred in not
holding that the claim in regard to bill of lading no. 84 was time barred; (3)
erred in not limiting the liability of the appellants to the invoice value of
the claim pursuant to par. 15 of the management contract between the Bureau of
Customs and the Manila Port Service; and (4) erred in awarding attorney’s fees.

We shall take up the arguments of the appellants in seriatim.

1.  The appellants contend
that his ordinary civil action being for the collection of a sum of money in
the amount of P4,451.90 exclusive of interests and costs, jurisdiction properly
pertains to the municipal court.

We agree that this is an ordinary action for the collection of a
sum of money.  The total amount of the
claim is, however, not merely P4,451.90. 
A perusal of the complaint reveals that the claim of the plaintiff-appellee is for the total sum of P5,451.90, consisting of
P4,451.90 representing the principal and P1,000 representing attorney’s
fees.  Under the then existing law^[1]
courts of first instance had original jurisdiction in all cases in which the
demand, exclusive of interests, amounted to more than five thousand pesos.  In the determination of the jurisdictional
amount, only interests and costs are excluded. 
The amount of attorney’s fees claimed is included in the determination
of the jurisdiction of the court.^[2]
In the case at bar, the total amount of the claim inclusive of attorney’s fees
is P5,451.90.  The court of first
instance clearly had jurisdiction over the case when the complaint was filed on
December 7, 1961.

2.  In the stipulation of
facts submitted by the parties, two dates appear with reference to the
provisional claim under bill of lading no. 84, namely, the original typewritten
date “September 4, 1961,”
and the uninitialled handwritten date “December 15, 1960.” The
appellants assign as error the finding of the court a quo that
the provisional claim was filed on December
15, 1960.

A stipulation of facts is a judicial admission of all the facts
stated therein.  When counsel for the
appellants affixed his signa­ture thereto, he admitted, in behalf of his
clients, all the facts therein stated, including all changes made thereon,
unless the admission was made through palpable mistake.  Counsel for the appellants knew of the
alterations made in the stipulation of facts before its submission to the
court.  If he had any objection to the
alterations, he should have insisted that only the initialled
alterations be considered, and should have objected to the submission of the
case on the basis of the stipulation of facts as altered.  This was not done, and the appellants cannot
pose this objection for the first time on appeal.

Parenthetically, it must be noted that in the ordinary course of
events, a provisional claim precedes the formal
claim.  The appellants admit that the formal
claim in respect to bill of lading no. 84 was made on May 27, 1961, yet they maintain that the provisional
claim was filed only on September 4,
1961.  In effect they would
have this Court believe that the reverse had happened here, which is, that the formal
claim was made by the consignee a little less than four months prior to the
filing of the provisional claim. 
This is the import of the appellants’ argument; this we cannot accept
because it is patently absurd. 
Furthermore, a perusal of the admitted facts reveals that the 726
packages were loaded on board the same vessel, discharged therefrom
on the same date, and presumably received by the consignee at almost the same
time.  Such being the case, it would be
more in consonance with reason for the consignee to file its provisional claim
under bill of lading no. 84 on December 15, 1960, together with the other
provisional claims arising from the shipment which were all filed in the same month
of December, 1960.

3.  It is next contended by the appellants
that their liability should be limited to P2,516.69 which is the invoice value
of the claim as admitted by the parties and not P3,989.19 representing the CIF
value of the short-delivery for which they were adjudged liable to the appellee.  They
invoke par. 15 of the Management contract which pertinently recites:

“x x x 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 and manifested, and the corresponding arrastre charges had been paid, including all damages that
may be suffered on account of loss, destruction or damage of any merchandise
while in the custody or under the control of the contractor x x x.”^[3]

Indeed it may be that the consignee cannot demand the full value
of the lost cargo for failure to declare the same, and arras­tre
charges were admittedly paid not on the basis thereof but on the basis of the
weight and measurement of the shipment.^[4]
It would be unjust to require the arrastre operator
to pay the full undeclared value of the lost or damaged cargo, where, as in the
instant case, the appellee, instead of declaring the
full value of the goods and paying the corresponding charges thereon, chose to
pay charges based on a lesser value.  The
preceding principles notwithstanding, the provision of par. 15 of the
management contract whereby the arrastre operator
bound itself to answer not only for the invoice value of the claim – subject to
the limitation of P500 per package – but also for “all damages that may be
suffered on account of loss, destruction or damage of any merchandise”
while in its custody and control, stands out in bold relief and its import
cannot be ignored.  In a number of cases
we have interpreted this provision in the management contract as embracing not
only the actual amount of costs, insurance and freight^[5]
but even marginal fees^[6]
which had been paid in connection with the shipment.  Freight and insurance charges were paid in
addition to costs of the ship­ment, and the shortages suffered by the shipment
resulted in their loss.  These are actual
damages suffered on account of the short-delivery, and, in accordance with par.
15 of the management con­tract, the arrastre operator
must answer for them.

4.  The award of attorney’s
fees in the sum of P500 is, to our mind, justified by the environmental
circumstances and under the authority of par. 11 of article 2208 of the new
Civil Code.

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

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Fernando, Capistrano, Teehankee, and Barredo, JJ., concur.

^[1]
Section 44, par. c, RA 296, as amended by RA 2613.

^[2]
Gregorio Carlos v. P.J. Kiener Constructions,
Ltd., 52 O.G. 6554.

^[3]
Exh.
“1”.

^[4]
Liverpool Insurance Co., Inc. v. Manila
Port Service, L-23338, November 18, 1967.

^[5]
Jose Bernabe & Co., Inc. v. Delgado
Brothers, L-14360, February 20, 1960; Phil. Education Co. v. Manila Port
Service, L-23811, October 30, 1967.

^[6]
Caltex (Phil.) Inc. v. Manila
Port Service, L-21055, August 31, 1966.