THE YEK TONG LIN FIRE & MARINE INSURANCE CO., LTD., PLAINTIFF-APPELLANT, VS. MANILA PORT SERVICE AND/OR MANILA RAILROAD COMPANY, DEFENDANTS-APPELLEES.

Appeal from a decision of the Court of First Instance of Manila,
certified to the Supreme Court by the Court of Appeals, the only issue raised
in the appeal being one of law, namely, whether or not the present action has
been instituted within the period provided in Section 15 of the Manage­ment
Contract between the Manila Port Service and the Manila Railroad Company, the
applicabil­ity of which section to the case at bar is conceded for plaintiff
had admittedly used a permit and gate pass issued by the Manila Port Service
and bearing stamped thereon a statement to the effect that said documents are
subject to the provisions of the aforementioned section.  The same provides that:

“x x x in
any event the CONTRACTOR shall be relieved and released of any and all
responsibility and liability for loss, damage, mis-delivery,
and non-delivery of goods, unless suit in the court of proper jurisdiction is
brought within a period of one (1) year from 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.”

It appears that, sometime
in 1960, the Blue Bar Company – hereinafter referred to as the consignee –
imported from New York, U. S. A., five (5) cases of cutlery (cook knives and
butcher knives), worth $1,950.00, which were shipped to Manila on board the
“SS TROUBADOUR.” The importation was, on May 18, 1960, discharged unto the custody of the Manila Port Service – herein­after referred to
as the MPS – as agent of the Manila Railroad Company, the arrastre
operator.  When the consignee took
delivery, on July 14 and 20, 1960, the shipment was short of five (5) dozens
cook knives and one (1) dozen butcher knives, valued al­together at
P157.46.  Upon demand by the consignee,
the Yek Tong Lin Fire & Marine Insurance Co.,
Ltd. – hereinafter referred to as plaintiff – as insurer of the goods, paid
said sum of P157.46.  Then, as the
consignee’s subrogee, plaintiff seasonably filed,
with the MPS, a claim for the value of the non-delivered goods.  Soon later, or on July 13, 1961, plaintiff
commenced the present action, in the Municipal Court of Manila, against the MPS
and the Manila Railroad Company, hereinafter referred to collectively as defend­ants.  Said Court having rendered judgment for the
plaintiff, the defendants appealed to the Court of First Instance of Manila,
which, after appropriate proceedings, rendered judgment dismissing the
complaint, upon the ground that the same had been filed beyond the period
prescribed in above-quoted provision of the Management Contract.  Hence, this appeal by the
plaintiff.

Defendants maintain that
said period elapsed one (1) year from May 18, 1960, when the goods were discharged from the
carrying vessel, or on May 18, 1961, and, accordingly, before the filing of
plaintiff’s complaint on July 13, 1961.  Upon
the other hand, plaintiff argues that, in providing that the suit be
“brought within a period of one (1) year from the date of discharge of the
goods,” the contract is silent on the thing from which the dis­charge is
made, unlike the clause referring to the claim, which explicitly states that
the same shall be filed “within fifteen (15) days from the date of the discharge of the last package from
the carrying vessel,” and that, following the spirit of Tomas Grocery
vs. Delgado Brothers, Inc. and De la Rama Steamship
Co.^[1] said period of one (1) year should be computed from the delivery of the last package by the arrastre
operator to the consignee, which, in the case at bar, took place on July
20, 1960, so that, when the complaint therein was filed, on July 13, 1961, said
period had not as yet expired.

It should be noted,
however, that said Section 15 gives the consignee the option to avail of a
second alternative, which is to file suit “within a period of one (1) year
x x x from the date the
claim for the value of such goods have been rejected or denied by the
CONTRACTOR.” Defendants allege that plaintiff cannot avail of this
alternative, because they have neither denied nor rejected the consignee’s
claim.  It is obvious, however, that defendants cannot,
through their inaction or omission, deprive the consignee and its subrogee of a right vested in them under the Management
Contract.  Hence, it is well settled^[2] that, if the arrastre operator fails to deny or reject
the claim of a consignee or his subrogee, such claim
shall be deemed rejected or denied upon the expira­tion of one (1) year from
the date, at least, of discharge of the shipment in question from the carrying
vessel, which, in the case at bar, took place on May 18, 1960.  Consequently, plain­tiff herein had one (1)
year from May 18, 1961, or up to May 18, 1962, within which to file the present action.

The same having been
instituted on July 13, 1961, or well within the aforementioned period, the
decision appealed from must be, as it is hereby, reversed, and another one
rendered, sen­tencing the defendants, jointly and severally, to pay to
plaintiff the aforementioned sum of P157.60, with interest thereon, at the
legal rate, from July 13, 1961, until fully paid, as well as the costs.

IT IS SO ORDERED.

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

^[1]
156 O. G. 4422.

^[2]
The Continental Insurance Co. v. Manila Port
Service, et al., G.R. No. L-22208, March 30, 1966; Delgado Brothers, Inc., et al. v. Manila
Port Service, et al., G.R. No. L-21781,
June 30, 1966; Fireman’s
Fund Insurance Co. v. Manila Port
Service, et al., G.R. No. L-21412, September
28, 1966; and The American Insurance Co. v.
Manila Port
Service, et al., G.R. No. L-22780, February
18, 1967.