JOSE BERNABE & CO., INC., PLAINTIFF AND APPELLANT, VS. DELGADO BROTHERS, INC., DEFENDANT AND APPELLEE.

CONCEPCION, J.:

This is an action for the recovery of P2,251.60, representing the
alleged value of a flywheel consigned to and belonging to plaintiff,
Jose Bernabe & Co., Inc., and allegedly damaged in the possession
of defendant Delgado Brothers, Inc., the arrastre contractor for the
Port of Manila, in charge of receiving cargo unloaded from vessels unto
the piers and of delivering said cargo to the consignee thereof, or his
duly authorized representative, pursuant to and subject to a Management
Contract entered into between the Bureau of Customs and said defendant
on October 21, 1950. The case was submitted upon an stipulation of
facts, whereupon the Court of First Instance of Manila rendered
judgment dismissing the case, without pronouncement as to costs. Hence,
this appeal by the plaintiff in which only questions of law are raised.

It appears that on January 11, 1956, the S.S. Phyrrus
arrived at the Port of Manila, with, among other things, a shipment of
machine spare parts, including a flywheel, consigned to and belonged to
plaintiff; that the shipment was unloaded from the S.S. Phyrrus
and received by the defendant, in the course of its arrastre
operations, during the night of January 11, 1956, “uncrated or unpacked
and in an apparent good order condition;” that when plaintiff’s
representative proceeded to take delivery of its aforementioned
shipment, he requested a Bad Order Examination of said flywheel; that
the inspection was conducted by a representative of the defendant, in
the presence of plaintiff’s representative; that upon said inspection,
the flywheel appeared to be cracked in several parts thereof; and that,
consequently, plaintiff’s representative filed the corresponding claim
for indemnity, which was denied by the defendant.

The first issue in this appeal refers to the burden of proving the
cause of the damage above referred to. Defendant maintains that it is
upon the plaintiff, and that the same having failed to prove how the
damage was caused, the case was properly dismissed. Upon the other
hand, plaintiff contends that the flywheel having been unloaded from
the vessel and received by the defendant “uncrated or unpacked and in
an apparent good order condition”, it was incumbent upon the defendant
to show that the damage it had, when plaintiff’s representative sought
to take delivery was not due to its (defendant’s) fault or negligence,
and that, having failed to do so, it (defendant) is liable therefor.

The theory of the defense is untenable and the lower court erred in
adhering thereto and in not sustaining that of the plaintiff. As
custodian of the flywheel, which it received “in an apparent good order
condition,” it was incumbent upon the defendant to establish, either
that said object was already damaged when it was unloaded from the S.S. Phyrrus,
despite its appearance to the contrary, or that the damage was not
imputable to said defendant. Having failed to introduce any evidence in
support of either alternative, the conclusion must necessarily be that
the flywheel was in as “good order condition” as it appeared to be at
the time of its unloading, and that the damaged condition it had when
plaintiff’s representative proceeded to take delivery thereof was due
to a cause for which the defendant, is answerable and liable.

It is urged, however, that, under its management contract with the
Bureau of Customs, the defendant “shall not be held responsible for (a)
failing to report damage which cannot be easily detected during
discharge, such as hook holes, chafage, stains, dents and old and
second hand cases, or cargo with inadequate packing, and (b) failing to
report damage to packages received at night.” The latter ground for
exemption is inapplicable to the flywheel in question for, although
unloaded at night, it was uncrated and unpacked. Neither may the
defendant avail of the first ground, it not having even tried to prove
that the damage to the flywheel was such that it could not “easily be
detected during discharge.” On the contrary, the stipulation to the
effect that it was “in an apparent good order condition” when delivered
to the defendant, with nothing to indicate that such appearance was
deceiving, establishes a prima facie case in favor of plaintiff’s claim.

The next question is whether the defendant may be held liable for
the full value of the flywheel. In this connection, it has been
stipulated by the parties that when plaintiff’s representative took
delivery of the shipment in question, it signed and presented a “permit
to deliver imported goods,” bearing the following notice in rubber
stamp:

“IMPORTANT NOTICE”

“This
Permit is presented subject to all the terms and conditions of the
Management Contract between the Bureau of Customs and Delgado Brothers,
Inc., dated October 21, 1950, and amendments thereof, particularly but
not limited to Paragraph 15 thereof limiting the Company liability to
P500.00 per package, unless the value of the goods is otherwise
specified, declared or manifested and the corresponding arrastre
charges have been paid; providing exemptions or restrictions from
liability; and releasing the Company from liability unless suit is
brought within one (1) year from the date of the arrival of the goods,
or from the date when the claim for the Value of the goods has been
rejected, provided such claim is filed with the Company within 15 days
from the date of arrival of goods”.

and that, upon presentation of this permit to the defendant, the
latter issued Gate Pass No. H-91408, on which the following words are
printed:

“The undersigned, duly authorized to respectively
represent the Bureau of Customs, the above named, consignee and the
Arrastre Service Operator hereby certify to the correctness of the
above description, of the goods covered by this Gate Pass. Issuance of
this Gate Pass constitutes delivery to and receipt by CONSIGNEE of the
goods as described herein, subject to all the terms and conditions
contained in the Management Contract between the Bureau of Customs and
Delgado Brothers, Inc., dated October 21, 1950, and all amendments
thereto or alterations thereof, particularly but not limited to
Paragraph 15 thereof limiting the company liability to P500.00 per
package, unless the value of the goods is otherwise specified or
manifested; providing exemptions from liability unless suit is brought
within one (1) year from the date of the arrival of the goods, or from
date when the claim for the value of the goods has been rejected,
provided such claim is filed with the Company within 15 days, from the
date of the arrival of the goods.”

The pertinent part of paragraph 15 of the Management Contract,
referred to in the notice stamped on the aforementioned “permit to
deliver imported goods” reads:

“It is further understood and strictly agreed that
the CONTRACTOR shall at its own expense handle all merchandise upon or
over said piers, wharves and other designated places, and at its own
expense perform all work undertaken by it hereunder diligently and in a
skillful workmanlike and efficient manner; and 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, including all damages that may be
suffered on account of logy, destruction, or damage of any merchandise
while in the custody or under the control of the contractor upon any
pier, wharf or other designated place under the supervision of the
BUREAU, * * *.”

Defendant maintains that, pursuant to this paragraph, its liability
in favor of plaintiff herein cannot exceed P500.00, inasmuch as the
value of the flywheel had not been otherwise “specified, declared or
manifested.” However, plaintiff, asserts that, not being a party to
said Management Contract, it is not bound by the provisions thereof,
pursuant to Article 1311 of the Civil Code of the Philippines. This
argument has already been rejected by this Court in Jose Bernabe &
Co., Inc. vs. Delgado Brothers, Inc., supra, p. 287, in which, under conditions substantially identical to those obtaining in the case at bar, we held:

“Appellant argues, that In the light of the
above-quoted article, contracts are binding and enforceable only
between the parties, their assigns and heirs, the only exception being
a third person not a party thereto, in whose favor a benefit is clearly
and deliberately conferred. Although appellant admits that the
aforementioned Management Contract contains provisions ”benefitting
persons not parties thereto for said contract pertains to serving the
public (sic)’, and that ‘anyone desiring to avail of such services has
the right to demand it despite the fact that he was not a party to the
Management Contract’, it claims, nevertheless, that/such third parties
can not be bound by stipulation’ and conditions thereunder which are
onerous or prejudicial to them.

“Appellant’s argument does
not accord with and is not justified by the spirit (if not the letter)
of the law. When a third person accepts the benefits of a contract, he
is also bound to accept the concomitant obligations corresponding
thereto. As the lower court correctly observed: ‘Plaintiff should not
take advantage of the management contract when it suits him to do so,
and reject its provisions when it thinks otherwise.’

“Appellant,
further, contends that the contractual obligation in the aforequoted
Paragraph 15 of the Management Contract limiting appellee’s liability
is arbitrary, unjust, and unreasonable being practically forced upon
it, since there was absolutely no way for it to receive the imported
cargo except by engaging appellee’s services as sole operator of the
arrastre service in the Port of Manila. Its consent, it is claimed, was
not voluntary, and hence, not valid.

“In answer, it may be
stated that appellant could adequately protect itself, by simply
specifying or manifesting the actual value of the imported cargo in the
various documents required of it under the law (Import entry [Sec.
1267, Rev. Adm. Code]; written declaration [Sec. 1268-6, in connection
with Secs. 1269 and 1271, Rev. Adm. Code]), and paying the
corresponding arrastre charges of the same,’ pursuant to the provisions
of said Paragraph 15, and of thy ‘Important Notice’ contained in the
Delivery Permit and Gate Pass which its representative or broker
accepts, signs, and utilizes, upon taking delivery of the imported
cargo from appellee arrastre operator, in “which event, the latter
expressly binds itself and undertakes to reimburse appellant the actual
value of the cargo, in case of its damage, destruction, or loss while
under its custody. If appellant failed to so state the value of its
merchandise in any of these documents required by law before he cleared
its goods, and paid only the arrastre charge based on a lesser value,
it can not in justice now demand the full undeclared value.”

To the same effect are the decisions of this Court in Northern Motors, Inc. vs. Prince Line et al., (supra, p. 253), Mendoza vs. Phil. Air Lines, Inc., (90 Phil., 836), and Freixas & Co. vs. Pacific Mail Steamship Co. (42 Phil., 199).

Wherefore, the decision appealed from is hereby reversed and another
one shall be entered, sentencing; defendant Delgado Brothers, Inc. to
indemnify plaintiff, Jose Bernabe & Co., Inc. in the sum of Five
Hundred Pesos (P500.00), with interest thereon at the legal rate, from
December 13, 1955 date of the filing of the complaint, with costs
against said defendant. It is so ordered.

Paras, C. J., Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador, Reyes, J.B.L., Endencia, and Barrera, JJ., concur.