METRO PORT SERVICE, INC. (FORMERLY E. RAZON, INC.), PETITIONER, VS. HON. INTERMEDIATE APPELLATE COURT AND THE HOME INSURANCE COMPANY, RESPONDENTS.

This is a petition for review on certiorari seeking the
review of the decision dated October 25, 1983 of the respondent Intermediate
Appellate Court and which affirmed the decision of the lower court adjudging
petitioner liable, to pay private respondent the sum of P16,381.97 with
interest at the legal rate, the sum of P1,000.00 as attorney’s fees and its
proportionate share of the costs, as well as said court’s Resolution dated
January 12, 1984 which denied petitioner’s motion for reconsideration.

The facts of the case are simple enough.

As insurer-subrogee, private respondent instituted Civil Case No.
90186 before the Court of First Instance of Manila, entitled “The Home
Insurance Co. versus Marchessini Lines, Citadel Lines, Inc., and/or E. Razon,
Inc. and/or Ajax Customs Brokerage.”

The action was to recover from the defendants the amount that
private respondent paid American Wire and Cable Co., Inc. (consignee) under its
policy for losses and damages to an insured shipment, the transportation of
which was handled by defendants,
one after the other.

The shipment, which was transported from New York to Manila on
board the S/S “BURYBATES”, consisted of synthetic resins, insulating
materials, machinery and copper wire, contained in several packages. It arrived in Manila on March 18, 1972 and
was discharged dockside unto the
care and custody of petitioner, the arrastre operator in the Port of Manila.

At the time of the discharge of the shipment from the carrying
vessel, it was noted that said cargo had already sustained shortages and that
some packages were in bad order and damaged condition. So when the shipment was turned over to the
petitioner, turn-over surveys were jointly prepared and accomplished by
checkers of both the vessel and the arrastre operator.^[1]

From March 29 to June 1, 1972, deliveries of the shipment were
male by petitioner to the consignee’s broker, the defendant Ajax Customs
Brokerage. At this stage of the cargo
handling, the shipment had already sustained a shortage of 11 pallets and 28 of
the packages delivered to the broker were already in bad order and damaged
condition.

The shortage of 11 pallets was covered by a certificate of delivery^[2]
issued by petitioner and the 28 bad order packages were covered by bad
order certificates^[3]
also issued by petitioner.

In the meantime, on March 24, 1972, the consignee presented to
petitioner a “provisional” claim for the full value of the shipment.

On September 16, 1972, the consignee submitted to petitioner a
“formal” claim for the actual value of the loss sustained by the shipment.

In the course of the proceedings before the trial court,
defendants Marchessini Lines and Citadel Lines settled the claim for the loss
attributed to the vessel. The case,
therefore proceeded only against remaining defendants E. Razon, Inc. (now
petitioner) and Ajax Brokerage Corp. who were adjudged liable to plaintiff, now
private respondent.

On appeal to the Intermediate Appellate Court, the decision
appealed from was affirmed.

Petitioner E. Razon, Inc. manifested before the Court a quo on
November 8, 1975 that its liability, if any, should be P16,381.97 — per
private respondent’s computations — instead of P19,931.15 as per its own
computations.^[4]

This was taken into consideration in the Court a quo’s decision,
thus:

“With the view thus taken the next in point of inquiry is the extent of E. Razon’s liability in the
premises. On this score, it is
noteworthy that said defendant does not seriously dispute that the cargo
sustained spillages and short-delivery while it was in its custody. In fact, by its own computation – and, on
the basis of the invoice value which it correctly claims to be the reckoning
point for its liability – it would fix its liability, if found to be so liable,
at P19,930.15. This, significantly, is
even much more, than the mere P16,381.97 that plaintiff is claiming from
it. Evidently, therefore, the liability
of defendant E. Razon, Inc. for shortages and spillages imputable to it should
be pegged at the latter amount.”^[5]

At any rate, petitioner disclaims any liability due to the fact
that private respondent did not file a “formal claim” within 30 days
from the filing of entry on March 20, 1972^[6] as
the “formal” claim was filed on September 16, 1972. Petitioner disregarded the filing of a “provisional” claim on March
24, 1972 on the ground that it is not the claim demanded by the Revised
Management Contract,^[7] which E. Razon, Inc. as Arrastre Contractor,
entered into with the Bureau of Customs on the 27th day of January, 1967.

Private respondent, on the other hand, claims that despite the
change introduced in the matter of filing claims, i.e., “formal”
claims have to be filed, the purpose is still the same — to afford the
arrastre operator the opportunity to check the validity of the claims.

We find the petition unmeritorious.

The only legal issue to be resolved by this Court is whether
under the Revised Management Contract, the words “formal claim”
exclude any “provisional claim”.

The Revised Management Contract was the contract applicable as
the shipment arrived on March 18, 1967.

Its paragraph XX states:

“x x x [B]ut said CONTRACTOR shall not be responsible for the
condition of the contents of any package received nor for the weight, nor for
any loss, injury or damage to the said cargo before or while the goods are
being received or remain on the piers or wharves if the loss, injury or damage
is caused by force majeure, or other causes beyond the CONTRACTOR’s control, or
capacity to prevent or remedy; PROVIDED, that a formal claim together with the
necessary copies of the bill of lading, invoice,
certified packing list, bank certificate showing the rate of exchange at
the time of purchase or opening of letter of credit, and the computation
arrived at covering the loss, damage, or non-delivery of such goods shall have
been filed with the CONTRACTOR within thirty (30) days from the date of filing of entry; PROVIDED FURTHER, that if the loss,
injury or damage is discovered within the last fifteen (15) days of said period
of thirty (30) days, then the formal claim shall be filed within fifteen (15)
days from the date of discovery of the loss, injury or damage.”^[8]
(Underscoring supplied for emphasis)

In the case at bar, the shipment in question arrived in Manila on
March 18, 1972.^[9]
The import entry was filed March 20, 1972.^[10] The
deliveries of this shipment started March 29, 1972^[11]
and ended on June 1, 1972.^[12]
Since the delivery of the last package was made on June 1, 1972 — 73 days
after the filing of the import entry — then a literal compliance under
paragraph XX of the Revised Management Contract would mean that American Wire
and Cable Co. (consignee insured by private respondent) had only until April
20, 1972 to file a “formal claim” for damaged goods. But said “formal claim” would cover only goods delivered as of
April 20, 1972 — the cost of goods delivered after said date (Exhs. 69-72, pp.
125-128, Folder of Exhibits) in a damaged condition or lost — would be for the
consignee’s own account.

The Court must stress that petitioner Metro Port Service, Inc. is
a public utility, discharging functions which are heavily invested with a
public interest. This provision
limiting the liability of said petitioner through the imposition of a
requirement that a “formal claim” must be made within thirty (30)
days from filing of entry must be carefully scrutinized and reasonably
construed so as to protect the legitimate interest of the public which the
public utility must serve.^[13] It
is the Court’s duty to tone down this harsh and unreasonable provision and give
it a reasonable interpretation.^[14]

The filing by the consignee of this “provisional claim”
on March 24, 1972^[15] — 4
days after the filing of the entry — is substantial compliance with the demand
for a “formal claim” because as of that date the arrastre operator
was given the reasonable opportunity to check the validity of the claim while
the facts were still fresh in the minds of the persons who took part in the
transaction and while the pertinent documents were still available.^[16]
It did not matter that the provisional claim was for the whole amount of the
invoice as a provisional claim — without the value of the goods stated therein
— is sufficient as long as the name of the carrying vessel, its date of
arrival and the corresponding bill of lading are attached.^[17]
Consignee’s “provisional claim” — aside from the entire value of the
invoice — had all three other requirements.^[18]

WHEREFORE, the petition is hereby DISMISSED. The questioned Decision and Resolution of
the appellate court are affirmed in
toto. Costs against the petitioner.

SO ORDERED.

Narvasa, C.J., (Chairman), Padilla, and Regalado, JJ., concur.

Melo, J., no part.

^[1]
Exhs. “2, 2-A to 2-F-Razon”.

^[2]
Exh. “H”.

^[3]
Exhs. “J” to “Q”.

^[4]
Page 54, Record on Appeal, p. 46, Rollo.

^[5]
Pp. 67-68, Record on Appeal; p. 46, Rollo.

^[6]
Page 30, Brief for Appellant E. Razon in the Court of Appeals, which Brief is
found on p. 45, Rollo.

^[7]
Exhibit “75-Razon”, p. 139, Folder of Exhibits.

^[8]
Pages 13 and 14, Exh. “75-Razon”, Folder of Exhibits.

^[9]
Exh. “T”, p. 24, Folder of Exhibits.

^[10]
Page 30, Brief for Appellant E. Razon, p. 45, Rollo.

^[11]
Exhibit “3-Razon”, p. 59, Folder of Exhibits.

^[12]
Exh. “72-Razon”, p. 128, Rolder of Exhibits.

^[13]
New Zealand Insurance Company Ltd. vs. Navarro, 178 SCRA 282, 298.

^[14]
Communication Insurance Co., Inc. vs. Manila Port Service, 39 SCRA 490,
493.

^[15]
Exhibit R. pp. 21-22, Folder of Exhibits.

^[16]
Esso Standard Eastern, Inc. vs. Manila Railroad Co., 93 SCRA 305, 309.

^[17]
Ibid., p. 310.

^[18]
Exh. “R”, p. 21, Folder of Exhibits.