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

This case is before
us on appeal by the defendants Manila Port Service and Manila Railroad Company
from the decision of the Court of First Instance of Manila (Branch XIV)
affirming that of the City Court, and holding the appellants liable to the
plaintiff-appellee in the sum of P500.00 with legal
interest from October 22, 1964 until fully paid, plus the sum of P110.00 by way
of attorney’s fees, and costs.

On or about May 10, 1960
the vessel “SS BAYERSTEIN” took on board at Hamburg,
Germany, for shipment to Manila
eight (8) cases of auto parts,
consigned to Leelin & Co., Manila.  The
“SS BAYERSTEIN” arrived in Manila on June 23, 1960 and on the same date completely discharged
the aforesaid cargo into the custody of the Manila Port Service, an agent of
the Manila Railroad Company, the arrastre
operator.  Of the eight cases, the
defendant delivered to the consignee’s
broker five (5) cases on August
17, 1960 and two (2)
cases on August 22, 1960, or a
total of seven (7) cases.

On October
19, 1960 the consignee sent a formal
claim to the Manila Port Service for the value of the undelivered
shipment.  Similarly worded claim letters
were likewise sent to C.F. Sharp & Co., the Agent of the carrying vessel, and to the insurance department of Ed. A.
Keller & Co., Ltd., the agent here of the cargo’s insurer.  In said formal claim the
consignee invited the arrastre operator’s attention to a provisional claim
(No. 9-4334) filed by the former against the latter as early as July 22, 1960.  In view of the refusal of the Manila
Port Service to pay the value of the undelivered goods, the Insurance
Company of North America, as insurer, paid the consignee the sum of P774.08.

On June 23, 1961 the Insurance Company of North
America, as consignee’s, subrogee, commenced
the present action in the City Court
of Manila against the Manila Port Service and the Manila Railroad Company. 
As one of their defenses, the defendants alleged the plaintiff’s action was already barred
since no claim for the value of the
missing goods had been filed with them within the period fixed in paragraph 15 of the Management
Contract.^[1] Judgment
was rendered for the plaintiff, and the defendants appealed to the Court of First Instance of
Manila, where the parties
submitted the case for decision on the sole legal issue of “whether or not
the provisional claim was filed within the fifteen (15) day period prescribed
in the Management Contract.”

In its decision of March 8,
1966, the Court of
First Instance found that the filing of the provisional claim on July 22,
1960 was in full compliance
with the terms of the Management Contract. 
Thus:

“x x x.  This
Management Contract provides that a claim must be filed with­in 15 days from
the date of last discharge, and there is no doubt that this claim was filed
beyond the 15-day period.  However, our
Supreme Court has modified the severity of this Contract by counting the 15-day
period, not from date of last discharge, but from date of actual delivery to
the consignee (Chiok Ho v. Cia
Maritima G. R. No. L-20553; April 30, 1965). 
The very exhibits of
Defendant particularly Exhibit 4 (permit to deliver goods) and the Gate Passes
(Exhibits 5 and 6) show that the broker of the Importer first had knowledge
of the short delivery on the date of the permit to deliver goods (Exhibit 4) – this Exhibit is dated July 22,
1960 and on that same date the broker filed the Provisional claim.  This is full compliance with the terms of
the Management Contract.  x x x.”

Consequently, judgment was rendered in favor of the plaintiff as set forth in the first part
of this deci­sion.  Unable to obtain a reconsideration, the defendants appealed
directly to this Court.

The appellants insist
that no cause of action accrued against them since the requirement that a claim
must be filed within the 15-day period prescribed in Section 15 of the
Management Contract had not been com­plied with.  They contend that the filing of the
provisional claim on July 22, 1960 was beyond the 15-day period counted from
the discharge of the goods from the carrying vessel on June 23, 1960, and prior
to the time the consignee first had knowledge of the short delivery, which was
on August 22, 1960, when the last delivery to the consignee’s broker was
effected.  As to the date July 22, 1960
appearing at the upper and left portions of the Delivery Permit (Exhibit 4),
the appellants explain that it refers to the date when the Import Entry was
filed with the Bureau of Customs pur­suant to Section 1301 of Republic Act No.
1937 and
not to the time when the
consignee’s broker first had knowledge of the short delivery, no part of the
goods having yet been delivered as of that date.

Confronted with the above
explanation, the appellee has abandoned its original
stand in the lower court.+ Instead, it now claims that the consignee
first learned of the loss only on October 7, 1960, when the
appellant Manila Port Service issued a certification to the effect that out of
the eight (8) cases consigned to Leelin & Co.,
“only seven (7) cases appear (s) in our record to have been delivered as
of this date,” and contends that since the formal claim was filed an
October 19, 1960, which was within the 15-day period from October 7, 1960,
there was compliance with the terms of the Management Contract.

The appeal should be
sustained.  There is no question that the
filing of the provisional claim on July 22, 1960 was not within the 15-day period from June 23,
1960, when the goods
were discharged from the carrying vessel. 
Even under the ruling of this Court in several cases,^[2] namely, that the 15-day period may be
counted not from the discharge of the last package from the carrying vessel but
from the date the consignee learned or could have learned of the loss, damage, misdelivery and/or non-delivery, the provisional claim here
cannot be considered as filed on time. 
It is admitted that the consignee’s broker took delivery of five (5) cases on August 17, 1960 and two (2) cases on
August 22, 1960, or a total of seven (7) out of the manifested quantity of
eight (8) cases. 
Inasmuch as there had yet been no delivery on July 22,
1960, the
provisional claim filed on that date was premature and speculative.  It is difficult to see how the consignee
could have knowledge of the short-delivery of one case even before the delivery
was actually effected. 
Moreover, the appellee itself now claims that
the consignee first learned of the loss not on July 22, 1960 but on October 7, 1960, when the appellant Manila Port Service
issued the Certificate of Delivery.

This new stand of the appellee, however, is equally untenable.  In the first place, the consignee must have
had prior knowledge of the short-delivery even before the Certificate of
Delivery was issued on October 7, 1960.  It cannot be denied that when the last
delivery of two (2) cases was effected on August
22, 1960, the
consignee was already aware that there was a short-delivery of one case, since
eight (8) cases appeared on the face of the delivery permit while a total of only seven (7) cases were delivered. 
If anything, the Certificate of Delivery merely confirmed a fact already known to the consignee at the
time of taking the last delivery – that out of the eight cases only seven were
delivered.  Secondly, while the formal
claim is dated October 19, 1960, there is no evidence to show when it was
actually received by the appellant Manila Port Service so as to have a basis in
computing the 15-day period.  Worse, the
appellants deny having received said formal claim at all.  Finally, the new stand of the appellee involves a change of its theory pursued in the
lower court.

The provisional claim not
having been filed within the 15-day period prescribed in paragraph 15 of the
Management Contract, the appellants are relieved of any liability for the
non-delivery of the goods in question.

Wherefore, the appealed decision is hereby reversed,
without pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Dizon, Zaldivar, Castro,
Fernando, Teehankee, Barredo,
and Villamor, JJ., concur.

^[1]
The pertinent portion of
paragraph 15 of the management Contract
reads:

“x x x; 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 the 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 the discharge of the last package from the carrying vessel.x
x x.” (Emphasis supplied)

+ In its opposition to the
defendant’s motion for reconsideration of the lower court’s decision, the
plaintiff even manifested, Among other things, that:

“2.  There is no reason to disturb the Courts
ruling as to the sufficiency of compliance with the defendant’s requirement to
file a claim within fifteen days in relation to Supreme Court dicta in the case
of Chiok Ho vs. Cia Maritima (G. R. No.
L-20553, April 30, 1965). Exhibit 4 is dated July 22, 1960 and the provisional claim is dated July 22, 1960.”

^[2]
New Zealand Co., Ltd., vs. Manila Port
Service, G. R. No. L-22500, April 24, 1967; Yu Kimteng Construction Corp. vs.
Manila Railroad Company, G. R. No. L-17027, Nov. 29, 1965; Government Service Insurance System vs. Manila Railroad
Company, G. R. No. L-20342, Nov.
29, 1965.