GOVERNMENT SERVICE INSURANCE SYSTEM (AS ADMINISTRATOR OF THE PROPERTY INSURANCE FUND UNDER R. A. NO. 656.), PLAINTIFF AND APPELLANT, VS. MANILA RAILROAD COMPANY AND MANILA PORT …

Appeal from an amended decision of the Court of First Instance of
Manila dismissing this case, without costs. The facts are set forth in
said amended decision, from which we quote:

“*
* * On April 16, 1956, the INDUSTRIA AMERICANA & COMPANY shipped at
Long Beach, California, U.S.A. on board the SS ‘STEEL ARCHITECT’ of the
Isthmian Lines, Inc. one (1) box and forty (40) pieces of tractor parts
(Exh. A) consigned to the National Marketing Corporation (NAMARCO),
thru the Philippine National Bank, for which the shipping company
issued its Bill of Lading No. 12 (Exh. B). The SS ‘STEEL ARCHITECT’
arrived at the Port of Manila and the consignment of 1 box and 40
pieces of tractor parts were discharged by the vessel into the
possession of the Manila Port Service on May 22, 1956. The consignee
NAMARCO, thru its customs broker, J. D. Vera Brokerage, received from
the Manila Port Service on June 12, 1956, the consignment short of 11
pieces of tractor parts with a value of P2,046.50. On July 12, 1956,
the consignee NAMARCO, thru its customs broker, J. de Vera Brokerage,
filed a formal claim, for the value of the short-delivered 11 pieces of
tractor parts against the defendant Manila Port Service (Exh. F.) The
consignment in question consisting 1 box and 40 pieces of tractor parts
consigned to the NAMARCO was insured with the plaintiff GSIS, and due
to the short-delivery of 11 pieces of tractor parts, the said plaintiff
GSI& paid to NAMARCO the value of the 11 pieces of tractor parts
short-delivery the sum of P2,046.50 (Exh. H).

“The
defendants Manila Railroad Company1 and Manila Port Service put up the
defense to the effect that since no claim whatsoever was filed against
them for the alleged short-delivery of 11 pieces of tractor parts
either by the plaintiff, the consignee or its representative within the
15-day period from date of discharge of the last package at the Port of
Manila, defendant Manila Port Service, as Arrastre Operator for the
Port of Manila, is completely relieved and released of any and all
liability for shortage or loss under the law and in accordance with the
Management Contract (Exh. 1) with the Bureau of Customs covering the
operation of arrastre service for the Port of Manila.

“The
issue now to be resolved in this case is whether or not the Management
Contract, Exhibit 1, executed by and between the Manila Port Service
and the Bureau of Customs, covering the operation of arrastre service
for the Port of Manila, is binding on the plaintiff who is not a formal
party thereto.”

In its original decision,
promulgated on September 20, 1957, said court held that the provisions
of the Management Contract in question were not binding upon plaintiff,
the Government Service Insurance System, and accordingly, rendered
judgment against defendants Manila Railroad Company and Manila Port
Service for the sum of P1,898.93, plus costs. On motion for
reconsideration filed by the aforementioned defendants, said original
decision was set aside by the lower court, which rendered, on October
15, 1957, an amended decision, reversing its former stand upon the
following: grounds:

“Upon careful analysis
of the Management Contract, the Court finds that it is not an ordinary
contract in the sense that it is intended to bind only the privies
thereto. The Management Contract covering the operation of the arrastre
service was executed not only for the benefit of the parties thereto
but also for importers and consignees who wish to take advantage of the
services of the arrastre operator in the importation and exportation of
commodities coming in and out of the Port of Manila.

“The
Management Contract also contains provisions for the charges and fees
which importors, customs brokers and consignees have to pay to effect
the release of their cargo from the arrastre operator; and similarly,
it contains provisions definding the extent and limitations of the
responsibility of the contractor in connection with its functions as
operator of the arrastre.

“It is true that as a general
rule contracts are binding only upon the immediate parties thereof; but
where favors to third parties are clearly and deliberately conferred
therein, said contract is also binding upon the third parties for whom
said conferment Of favor is intended. This is the ruling of the Supreme
Court in the cases of Mendoza vs. PAL (90 Phil., 836) and Kauffman vs. PNS (42 Phil., 182).

“The
consignee, thru its broker, by taking delivery of the shipment in
question from the piers, by signing the corresponding releases, such as
the gate pass and delivery permit containing annotations making
reference to the pertinent provisions of the Management Contract,
Exhibit 1, and by paying the corresponding arrastre charges as fixed by
the said contract, by such acts, said consignee has manifestly made
itself a party to the said Management Contract for the reason that it
derived benefits and favors from said contract.

“Besides,
plaintiff having sued defendant Manila Port Service in its capacity as
operator of the arrastre service for the Port of Manila and on its
liability under the Management Contract, it cannot come to Court to
avail of the provisions of the said contract when favorable to it and
at the same time deny being bound by its provisions when adverse to its
interest.”

Hence, this appeal by the plaintiff, which maintains that:

“1.
The lower court erred in setting aside its original decision dated
September 20, 1957, and in rendering its amended decision dated October
15, 1957.”

“2. The lower court erred in holding that the Management Contract
(Exh. 1) is binding upon third persons, particularly the NAMARCO, the
assured of herein plaintiff; and

“3. The lower court erred in rendering its amended decision dated
October 15, 1867 because it violated Article 1183 and/or 1188 of the
Civil Code.”

Inasmuch as the first assignment of error is based, not upon the
absence of authority or jurisdiction of the lower court to render the
amended decision appealed from, but upon the merits thereof, which, in
turn, depends upon the issues raised in the second and third
assignments of error, we will proceed to the consideration of the
latter.

The question whether plaintiff is bound by the
stipulation in the Management Contract, Exhibit 1, requiring the filing
of a claim within 15 days from discharge of the goods, as a condition
precedent to the accrual of a cause of action against the defendants,
has already been settled in Northern Motors, Inc. vs. Prince Line et al., 107 Phil., 253, Mendoza vs. Phil. Air Lines, Inc., (90 Phil., 836), and Freixas & Co. vs.
Pacific Mail Steamship Co. (42 Phil., 199), adversely to plaintiff’s
pretense. We have repeatedly held that, by availing himself of the
services of the arrastre operator and taking delivery therefrom in
pursuance of a permit and a pass issued by the latter, which were
“subject to all the terms and conditions” of said management contract,
including, inter alia, the requirement thereof that “a claim is
filed with the Company within 15 days from the date of arrival of the
goods”, the consignee—and, hence, the insurer, or plaintiff herein, as
successor to the rights of the consignee—became bound by the provisions
of said contract. The second assignment of error is, therefore,
untenable.

As regards the third assignment of error,
plaintiff alleges that said provision of the management contract
constitutes an impossible condition, because the goods in question were
discharge on May 22, 1956 and delivery thereof to the consignee took
place 21 days later, or on June 12, 1956, so that is was physically
impossible for the consignee to file its claim for short delivery
within the period fixed in the aforementioned contract. The possibility
or impossibility of compliance with the aforementioned condition
depended, however, not upon the date on which the consignee had chosen
to take delivery of the goods, but upon the time of the notice, if
there was any, of the arrival of said goods, placing the same at its
disposal, and of its diligence thereafter in examining the goods before
the delivery thereof. In the case at bar it appears that as early as
June 2, 1966, the consignee had expressed it readiness to take delivery
of the goods, thus indicating that it knew of the arrival thereof prior
thereto, but the record does not show how it learned of said arrival,
or whether notice thereof was give to the consignee or its
representative by the arrastre operator and, in the affirmative case,
on what date. Thus it is necessary that evidence on these points be
taken with a view to ascertaining whether or not the consignee had had
reasonable opportunity to comply with the disputed condition of the
management contract, and, in the negative case, whether or not,
considering the date when it was notified of the arrival of the goods,
the consignee should be deemed to have acted with the diligence
required by the spirit and purpose of said disputed condition, in
filing its claim on June 16, 1956.

Wherefore, the case is
remanded to the lower court for further proceedings, without special
pronouncement as to costs. It is so ordered.

Bengzon, Acting C.J., Padilla, Bautista Angelo, Labrador, Reyes, J. B. L., Barrera, Paredes, and Dizon, JJ., concur.