DELGADO BROTHERS, INC., AND DELGADO BROKERAGE CORPORATION, PLAINTIFFS AND APPELLEES, VS. MANILA PORT SERVICE AND MANILA RAILROAD COMPANY, DEFENDANTS AND APPELLANTS.

This is an appeal from a
decision of the Manila Court of First Instance holding the appellants
liable to the appellees for the sum of P243.96.

The facts are
undisputed. A shipment consigned to the Catholic Relief Services,
National Catholic Welfare Conference, consisting of 256 units of
miscellaneous relief supplies, arrived in the port of Manila on July 4,
1959. All the packages in consignment were unloaded from the carrying
vessel the last of which was on July 6, 1959.

As early as
July 8, 1959, or only two days after the discharge of the last package,
provisional claim on the goods was filed with the arrastre contractor,
the Manila Port Service. Again on November 22, 1960, formal claim was
presented and receipt of this was acknowledged by the Manila Fort
Service* In said acknowledgment, it was stated that the “claim is under
careful consideration and we shall let you know of our action in due
time.”

On December 25, I960, the Delgado Brokerage
Corporation, as broker for the consignee, made a follow-up letter of
their claim. It was only on March 17, 1961 that the arrastre contractor
sent notice to the broker advising that the “claim has prescribed
inasmuch as you did not commence suit against us within one (1) year
from July 6, 1959, the date of the discharge of the last package from
the carrying vessel.

It appears that the shipment suffered a
loss by way of shortage in weight before the Manila Port Service
delivered the same to the broker and that the latter paid to the
consignee the amount of P243.96 (as amended on account of the damage),
for which reason the said broker was subrogated unto the consignee is
rights and interests in the loss.

On May 6, 1961, the Delgado
Brothers, Inc. and the Delgado Brokerage Corporation filed with the
municipal court of Manila a complaint against the Manila Port Service
and the then Manila Railroad Company, alleging that they had demanded
from the defendants payment of the amount representing the loss but the
latter, acting with gross and evident bad faith, failed and refused to
pay the claim. The municipal court found the defendants liable for the
sum of P243.96. The case was soon elevated by the defendants to the
Court of First Instance but that court, after trial, likewise decided
in favor of the plaintiffs, holding defendants liable, jointly and
severally, for the same amount with legal rate of interest from the
filing of the complaint.

The defendants have appealed.

The only issue here is whether or not the complaint of May 6, 1961 was
filed within the period contemplated in paragraph 15 of the Management
Contract under which the defendants operate the arrastre service in the
port of Manila. The said paragraph reads, in part:

“***
in any event the CONTRACTOR shall be relieved and released of any and
all responsibility or liability for loss, damage, misdelivery and/or
non-dalivery of goods, unless suit is filed in the Court of proper
jurisdiction within a period of one (1) year from the date of the
arrival of the goods, or from the date when the claim for the value of
such goods has been rejected or denied by the CONTRACTOR, provided
that such claim shall have been filed with the CONTRACTOR within
fifteen days from the date of the arrival of the goods.***” (Italics
ours)

Both periods mentioned in the quoted
provision of the management contract have been recognized and made
effective by this Court in earlier cases (infra). The first period
refers to a case when the claimant takes action without waiting for the
ruling of the contractor in which case the action should be filed
within one year from the date of discharge of the goods; and the second
when the claimant prefers to wait for such ruling in which case the
action should be filed within one year from the date of rejection.
(Consunji, et al. vs. The Manila Port Service, et al., 110 Phil., 231.)

The defendants-appellants insist that while there are two
periods provided for in the contract, in any event the suit must be
filed within one year from the date of arrival of the goods. To uphold
this contention would make it unfair to the consignee, for all that the
arrastre contractor would need to do to bar the claimant from suing in
court would be to assure the latter that his claim is under
consideration and that he would be informed of its decision in due
time; wait for one year; and then send notice that the claim has
prescribed.

As already stated, provisional claim for the
shipment in this case was made as early as July 8, 1959, or two days
after the discharge of the last shipment. The arrastre contractor,
however, communicated with plaintiffs only on December 2, 1960 when,
for the first time, it made acknowledgment of plaintiff’s claim. And
again, the said contractor did not give any information of its decision
upon the claim until March 17, 1961 when it finally expressed rejection
thereof for the reason that the consignee or its broker did not
commence suit against it within one year from July 6, 1959, the
discharge of the last cargo from the carrying vessel.

We held in the case of Continental Insurance Co. vs. Manila Port Service, et al.,
G. R. No. L-22208, March 30, 1966, that when the arrastre contractor
fails to act on the claim within the period of one year from the date
of discharge of the goods, the claim must be deemed rejected as of the
expiration of one year from the date of discharge of the last package
or cargo, in which case the action should be filed within one year from
said rejection. Applying this solution to the case at bar, where July
6, 1959 was the date of the discharge of the last cargo from the
vessel, the date when the claim is deemed to have been rejected would
be after one year, or July 6, 1960. Since the complaint was filed on
May 6, 1961, less than one year from July 6, 1960, this suit was filed
well within the period required under the management contract.

IN VIEW HEREOF, the decision appealed from is hereby affirmed, with costs against the appellants.

Concepcion, C.J., Reyes, J.B.L., Barrera, Makalintal, Bengzon, J.P., Zaldivar and Sanchez, JJ., concur.