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

On June 21, 1961 the Fireman’s Fund Insurance Company filed a
complaint in the municipal court of Manila against the Manila Port
Service and the Manila Railroad Company to recover the value of one box
of telephone switchboard parts short-delivered to the consignee, the
Philippine Long Distance Telephone Company. The latter’s claim had
previously been settled by the plaintiff, as insurer, which was thereby
subrogated to the rights of the consignee.

From the decision rendered by the said court in favor of the
plaintiff ordering the defendants to pay “jointly and severally, the
sum of P230. 81, with legal interest therefrom from the date of the
filing of the action, June 21, 1961, to pay also the sum of P50 as and
for attorney’s fees, plus costs”, the defendants appealed to the Court
of First Instance of Manila.

At the trial in the latter court, and without adducing evidence, the
parties adopted the partial stipulation of facts submitted by them to
the municipal court. The material portions of the stipulation read:

“3. That the carrying vessel ‘SS President Grant’
arrived in the Port of Manila on April 27, 1959, and made it last cargo
discharge on April 28, 1959, among which were the 48 boxes of telephone
parts discharged and received into the custody of the Manila Port
Service. That out of the 48 boxes, Manila Port Service was able to
deliver 47 boxes to the consignee by virtue of a duly authorized
delivery permit and various gate passes.

“4. That provisional
claim was filed by the consignee through its customs broker on May 4,
1959, or within 15 days from date of last discharge, followed by a
formal claim filed on October 15, 1959, and which was acknowledged by
Manila Port Service by means of a letter dated October 16, 1959 (copy
attached as Exhibit A-Plaintiff).

“5. That on April 4, 1961
the Manila Port Service sent a letter to the claimant advising the
latter that ‘your claim has prescribed inasmuch as you did not commence
suit against us within one (1) year from April 28, 1959, the date of
discharge of the last package from the carrying vessel in accordance
with the pertinent provisions of our Management Contract’ (copy of said
letter attached as Exhibit B-Plaintiff & Exhibit 2-MPS).

“6.
That the only issue tendered here for resolution of this Honorable
Court is whether or not under the pertinent provisions of paragraph 15
of the Management Contract, the claim of the plaintiff has prescribed,
and consequently, defendants are relieved and released from any and all
liability or responsibility therefor; For the convenience of this
Honorable Court, we quote the applicable clauses of paragraph 15 as
follows:

’15. …. in any event the CONTRACTOR shall be
relieved and released of any and all responsibility or liability for
the loss, damage, misdelivery and/or non-delivery of goods, unless suit
in the court of proper jurisdiction is brought within a period of one
year from the date of discharge 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 …’”

On March 23, 1963 the lower court rendered judgment “for plaintiff
Fireman’s Fund Insurance Company and orders defendants to pay said
plaintiff the amount of P239.81, as well as the sum of P100.00 as
attorney’s fees, and the costs.”

The defendants have appealed to this Court, contending that the court a quo
erred (1) in holding that the action was filed within the prescriptive
period of one year provided under section 15 of the management
contract; (2) in adjudging the defendants liable to the plaintiff in
the sum of P239.81, the amount of P100 as attorney’s fees, and costs;
and (3) in not dismissing the complaint on the ground that the action
has prescribed.

The sole issue of law tendered in this appeal for resolution is,
whether under paragraph 15 of the management contract the action of the
plaintiff has prescribed.

It is not disputed that the carrying vessel which arrived in Manila
on April 27, 1959 discharged the last cargo on April 28, 1959 into the
custody of the Manila Port Service; that the consignee filed a
provisional claim, through its customs broker, on May 4, 1959, this
followed by a formal claim on October 15, 1959; that this claim was
acknowledged by the Manila Port Service in its letter of October 16,
1959 which stated in part that “Your claim is under careful
consideration and we shall let you know of our action thereon in due
time”; that on April 4, 1961 the Manila Port Service sent a letter to
the plaintiff advising it that “your claim has prescribed inasmuch as
you did not commence suit against us within one (1) year from April 28,
1959, the date of discharge of the last package from the carrying
vessel in accordance with the pertinent provisions of our Management
Contract;” and that on June 21, 1961 the present suit was filed.

The court a quo, upon cogent reasons, held that the action
has not yet prescribed, because the one-year prescriptive period
provided in paragraph 15 of the management contract may be counted
either from the date of discharge of the goods, or from the date when
the claim for the value of such goods is denied or rejected by the
contractor; that the defendants’ letter of April 4, 1961 advising the
claimant that the latter’s “claim” had prescribed “is an indirect, but
nevertheless, an unequivocal rejection, at least in effect, of the
claim”; and that “the period of one year from said date of rejection of
denial had not yet expired when the present action was filed on June
21, 1961, which is even less than three months thereafter.”

In our view, the resolution of the issue herein tendered depends on
the inter-relation of the prescriptive periods provided in paragraph 15
of the management contract and the proper application thereof to the
undisputed facts.

In their briefs the parties have somewhat belabored the issue of
whether the defendants’ letter of April 4, 1961 amounts to a rejection
or denial of the claim of the plaintiff. Perhaps in a totally different
setting and under more auspicious circumstances, the issue could prove
to be of some consequence, and might elicit the extended attention of
this Court. But in the light of the uncontroverted facts obtaining, the
issue need not give us pause, because we can derive a direct and
authoritative solution from a formula laid down by this Court only six
months ago.

In Continental Insurance Company vs. Manila Port Service, et al,
L-22208, promulgated March 30, 1966, this Court held that when the
arrastre contractor fails to act on a claim within the period of one
year from the complete discharge of the goods from the carrying vessel,
the claim must be deemed rejected as of the expiry date of the said
period, and the action must be filed within one year from such expiry
date. This ruling was reiterated in Delgado Brothers, et al vs. Manila
Port Service, et al, L-21781, promulgated June 30, 1966. ^[1]

We have, in this case before us, the requisite facts for the
application of the formula. The cargo was completely discharged from
the carrying vessel on April 28, 1959. One year from this date lapsed
on April 28, 1960. Within this period of one year, although a claim had
been duly filed by the plaintiff with the defendants, the latter took
no action thereon beyond a perfunctory acknowledgment of receipt
thereof. One year from April 28, 1960 would bring us to April 28, 1961,
the end of the road for whatever right or rights the plaintiff could
assert against the defendants. Suit was commenced only on June 21,
1961. Applying the formula, we reach this simple but stark conclusion:
the action of the plaintiff has prescribed.

ACCORDINGLY, the judgment a quo is reversed, and the complaint is dismissed. No pronouncement as to costs.

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

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^[1] Obviously the learned
judge a quo, Hon. Manuel Barcelona, when he rendered judgment on March
23, 1963, did not and could not have any foreknowledge of the ruling
enunciated in the two decisions cited which were promulgated three
years later.