FEARNLEY & EGER AND MACONDRAY & CO., INC., PLAINTIFFS AND APPELLEES, VS. MANILA RAILROAD COMPANY AND/OR MANILA PORT SERVICE, DEFENDANTS AND APPELLANTS.

Fearnley & Eger, a foreign shipping company with principal place of
business in Oslo, Norway, and Macondray & Company, Inc., its agent in the
Philippines, brought an action in the Court of First Instance of Manila against
the Manila Railroad Company and/or Manila Port Service for recovery of various
sums of money based on four causes of action, to wit: (1) P1,708.23, the total
CIF value of two bales of cotton piece goods, missing and undelivered to the
owner; (2) P244.96, the total value of 4 drums x 55 AG Shell Spirax 140 (22 AG)
and 1 carton (6 x 1 AG) Shell Dentax 140 (6 AG), missing and undelivered to the
owner; (3) P111.89; the balance due and unpaid of the value of 30 cartons of
lubricating oil that were lost; and (4) P500 as attorney’s fees and expenses of
litigation (civil No. 36719). The defendants answered the complaint denying
liability for the sums claimed by the plaintiffs under the first and last causes
of action but admitting liability for the sums claimed under the second and
third causes of action. Their main and special defense is that “under the
provisions of the Management Contract entered into in pursuance of law, by and
between the Bureau of Customs and defendant Manila Port Service on February 29,
1956, the liability on cargoes lost or damaged, if any, of herein defendant
Manila Port Service as arrastre operator for the Port of Manila is limited only
to the invoice value of the cargo which, in no case shall be more than P500.00
each package.”

On 13 August and 11 September 1958 the parties entered into a stipulation and
supplemental stipulation of facts which they submitted to the Court. The amount
of P111.99 claimed by the plaintiffs under the third cause of action of their
complaint had been paid to them by the defendants and the parties agreed not to
proceed any further on the matter.

On 29 December 1958 the Court rendered judgment ordering the defendants to
pay to the plaintiffs the sum of P1,708.23, with interest thereon at the rate of
6% per annum from the date of the filing of the complaint until fully paid;
P244.96, with interest thereon at the same rate and duration of time; P400 as
attorney’s fees; and the costs of the suit. The defendants have appealed. The
errors they have assigned in their brief are only of law.

The amount of P244.96, claimed by the appellees in their second cause of
action and ordered paid to them by the trial court already had been paid by the
appellants. Hence this appeal concerns only those parts of the judgment awarding
to the appellees the sum of P1,708.23, the total CIF value of the two bales of
cotton piece goods, interest thereon, and P400 as attorney’s fees.

The pertinent facts, as gathered from the stipulations of facts submitted by
the parties, are: On 25 March 1957, Getz Bros. & Company of San Francisco,
California, U.S.A., shipped on board the MS “Mandeville,” operated by the
appellee Fearnley & Eger, five bales of cotton piece goods consigned to the
order of the Philippine Bank of Communications, Cebu branch, with arrival notice
addressed to Go Tao & Company, Cebu City, as evidence by bill of lading No.
4, dated 25 March 1957 in San Francisco (Annex A). Go Tao & Company paid for
and became the owner of the said cargo. On 15 May 1957 the vessel arrived in
Manila and the bales of cotton were discharged into the possession and custody
of the Manila Port Service, complete and in good order and condition, for
delivery to the owner in Cebú City. However, two bales of the shipment in
question with a total CIF value of P1,708.23 were not actually delivered to the
owner and the appellees paid to the owner the total value thereof. Thus the
appellees were subrogated to the rights of the owner. Despite demand, the
appellants refused and failed to pay to the appellees the value of the missing
cargo that they had paid to the owner.

The question raised in this appeal is the same as that raised in Northern
Motors, Inc. vs. Prince Line, 107 Phil., 253; Delgado Bros., Inc.
vs. Li Yao & Company, 107 Phil., 939; and Smith, Bell & Co., Ltd.
vs. Manila Port Service, 111 Phil., 611, where this Court has held that
section 15 of the management contract entered into by and between the appellants
and the Bureau of Customs on 29 February 1956 pursuant to the provisions of Act
No. 3002,. as amended by Act No. 3851, Commonwealth Act No. 285 and Republic Act
No. 140, limiting the liability of the herein appellants for loss, destruction
or damage to any cargo while under their custody or control to P500 for each
package, unless the value be otherwise specified or manifested and the
corresponding arrastre charges have been paid, is valid and binding upon the
herein appellees who were not parties thereto or signatories thereof. In the
bill of lading, Annex A, the value of the two bales of cotton piece goods is not
specified or manifested. Hence, the liability of the appellants for loss is
limited only to P500 for each bale, or a total of P1,000 for the two bales. For
that reason, the appellants are not liable for attorney’s fees and the sum of
P400 for attorney’s fees ordered by the Court to be paid by the appellants to
the appellees should be stricken from the judgment appealed from.

The judgment appealed from is modified by ordering the appellants to pay to
the appellees the sum of P1,000, without pronouncement as to
costs.

Bengzon, C.J., Bautista Angelo, Labrador, Concepcion, Reyes,
J.B.L., Paredes, Dizon, De Leon, and Natividad, JJ., concur.