SMITH BELL & CO., (PHIL.), INC., PETITIONER, VS. HON. PEDRO M. GIMENEZ, AS AUDITOR GENERAL, RESPONDENT.

This is a petition filed by petitioner Smith, Bell & Co.
(Phils.), to review; the decision of respondent Pedro M. Gimenez (as
Auditor General) absolving the municipality of Paniqui, Tariac, from
liability from the cost (P820.00) of a lost typewriter it purchased
from petitioner.

The records disclose that upon requisition by the Municipal
Treasurer of Paniqui, Tarlac, the Bureau of Supply Coordination sent
Order No. A-236113 to petitioner for 1 Underwood Typewriter, Model SX
161, 15″ carriage, elite type, at a price of P820.00 taxes included
(Exh. B-l). By express agreement of the parties, the terms of the sale
were F.O.B. Manila.

Government Bill of Lading No. 49226 dated August 26, 1958, signed by
Eutiquio Flores, Principal Storekeeper of Supply Coordination
authorized the Phil-American Freight Forwarding Services, Inc. to
receive, carry, and deliver the typewriter, to the Municipal Treasurer
of Paniqui (Exh. B-2). An agent of the carrier signed for the receipt
of the typewriter, on August 28, 1958 in apparent good order, but
“contents and condition of contents of sealed packages unknown”. (Exh.
B-2).

By Commercial Way Bill No. 1114 of the Phil-American Freight
Forwarding Services, Inc. the carrier acknowledged on August 28, 1958
sending one carton Underwood Typewriter, Model Brand Now from consignor
Smith Bell at Manila to the consignee the Municipal Treasurer of
Paniqui. (Exh. A). The blank spaces opposite the printed word
“Consignee” and “Date Received” are filled with handwritten square
letters reading, respectively: “Pat. H. S. Musni” and “Aug. 30, 1958”.

On September 9, 1958, at dawn, the Municipal building of Paniqui was totally razed by fire.

Shortly after the delivery of the typewriter as certified by the
carrier, petitioner Smith Bell & Co. sent a bill for P820.00
covering its cost. On October 25, 1958, the municipal Council of
Paniqui adopted Resolution No. III in effect requesting petitioner to
condone the payment of the said typewriter, it having been burned 10-
days after it was bought with all the office equipment when the
municipal building was totally razed by tire on September 9, 1958.
Petitioner declined the request.

Thereafter or on May 25,1959, the Municipal Treasurer of Paniqui
submitted to the Provincial Treasurer of Tarlac a voucher covering the
payment of the typewriter. The matter was referred to the
administrative deputy for investigation. This official, in his report
dated January 29, 1960, (pp. 32-34, GAO record) found that there was
actual delivery of the typewriter and that the municipality was liable
for the payment thereof. The Provincial Treasurer, in view of this
report, indorsed the papers to the Provincial Auditor, with the
statement that payment of the typewriter be effected as soon as
possible.

The Provincial Auditor, instead, forwarded the papers to the Auditor
General for final decision, which latter official disapproved the claim
and held that the Municipality of Paniqui is not liable for the amount
of P820.00 representing the cost of the typewriter. In refusing to pass
the claim in audit, respondent held that there was no delivery, and
that the article in question was never presented for inspection and
verification as agreed upon and consequently, the ownership of the
typewriter did not pass to the consignee, and the risk of loss remained
with the seller.

This is an appeal from said decision.

The first ground of objection raised by the Auditor General is not
supported by the facts as they appear in the records of this case. That
there was actual delivery of a typewriter to the municipality of
Paniqui is, to our mind, unquestionable. The records of the carrier
proves the testimony of the policeman on guard at the municipal
building of Paniqui at the time of its delivery in the afternoon of
Saturday, August 30, 1958 and who personally received the same
establishes it; and the testimony of the then municipal mayor who saw
the delivery and ordered the taking of the typewriter to his office,
undisputably corroborates it. A verification of the debris after the
fire conclusively shows that there was one additional typewriter burned
in the premises, more than those formerly present in the municipal
building before said fire. If these were not sufficient, the official
act of the municipal council in adopting the resolution of October 25,
1958, requesting the petitioner herein, in effect, to condone the
payment of the typewriter purchased by the municipality, shows beyond
doubt that the typewriter was actually delivered to, and received by
said municipality. The Auditor General, in his decision, depended more
on technicalities when he based his refusal to pass in audit the claim
of petitioner, on the mere fact that the delivery of the machine was
made not to the municipal treasurer personally (who was the consignee
named in the bill of lading), or to his duly authorized representative
as required in the bill of lading, but to a policeman of the same
municipality. But this circumstance has been explained both by the
municipal treasurer himself and the policeman and the mayor who took
delivery of the machine, to the effect that the delivery was made on a
Saturday afternoon when the municipal treasurer’s office was already
closed, and that the municipal treasurer went to Manila on official
business from September 2 to 6, returning to Paniqui only on the
following Saturday, September 7, when he went to his office late in the
afternoon just to fix his papers. In this connection, let it be noted
that the non-compliance of the condition in the bill of lading that
delivery must be made to the consignee or his representative, is
attributable to the carrier and not to the petitioner. And, since the
carrier was chosen and authorized to make the delivery by the Bureau of
Supply Coordination itself, certainly the petitioner cannot be held
responsible for such misdelivery, if at all it was one.

The fact that the typewriter purchased by the municipality was of a
15-inch carriage-type and that none of those found in the debris had
such make, is no sufficient reason to conclude that the typewriter
ordered was not delivered to the municipality, because as the inspector
who examined the remains of the fire himself stated there were certain
missing parts in some of the typewriters that could not be located. The
fact remains that there was one additional typewriter that was burned,
which under the circumstances could be none other than the one
delivered to the municipality 10 days before the fire.

With respect to the claim that the petitioner failed to call the
General Auditing Office for inspection and checking of the typewriter
before making delivery thereof, as contained in condition No. 2 in the
mimeographed contract-order Exhibit B-l, it appears undisputed that
this is a condition embodied in the old forms used before 1957.
However, as of January 22 of that year (1957), General Auditing Office
circular No. 45 was promulgated providing that “effective immediately,
employees of the General Auditing Office will no longer participate in
an agency’s inspection of supplies, materials and equipment upon
receipt, where the amount of the order is P2,000.06 or less”. This
circular was supplemented by GAO Provincial Auditor’s circular No. 35
of April 24, 1957 to the effect that “deliveries of supplies, materials
and equipment of P2,000.00 or lees per order need not be submitted to
the Auditor for inspection”. The only answer made to the contention of
the petitioner that in view of these circulars, condition No. 2
appearing in the printed or mimeographed form-contract became a dead
provision as of the dates of said circulars, is that since said
condition appeared in the purchase order in question and accepted by
the petitioner, the latter is bound thereby, pursuant to the legal
principle that the terms of the contract are the law between the
parties. While we agree with this as a general principle, yet upon the
facts obtaining in this case, we believe that injustice would be done
the petitioner if we apply said principle to the present claim.

Lastly, the fact that the municipal officials of Paniqui took
delivery of the typewriter in question and made use thereof for a
period of 10 days, constitutes proof that said typewriter was accepted
and the municipality thereby, as a buyer, became liable for the payment
of the price thereof.

“Art. 1585. The buyer is deemed to have accepted the
goods when he intimates to the seller that he has accepted them, or
when the goods have been delivered to him, and he does an act in
relation to them which is inconsistent with the ownership of the
seller, or when, after the lapse of a reasonable time, he retains the
goods without intimating to the seller that he has rejected them.”

For all the foregoing, we find that under the law and equity of the
case, the municipality of Paniqui is legally bound to pay for the price
of the typewriter involved herein and, therefore, the decision of the
Auditor General is hereby reversed. Without costs. So ordered.

Padilla, Bautista Angela, Concepcion, Reyes, J. B. L., Paredes, Dizon, Regala, and Makalintal, JJ. concur.