GR L 21412; (September, 1966) (Digest)
G.R. No. L-21412 September 28, 1966
FIREMAN’S FUND INSURANCE CO., plaintiff-appellee, vs. MANILA PORT SERVICE and MANILA RAILROAD COMPANY, defendants-appellants.
FACTS
Fireman’s Fund Insurance Company filed a complaint against Manila Port Service and Manila Railroad Company to recover the value of one box of telephone switchboard parts short-delivered to the consignee, Philippine Long Distance Telephone Company. The plaintiff, as insurer, had settled the consignee’s claim and was subrogated to its rights. The carrying vessel “SS President Grant” arrived on April 27, 1959, and completed discharge of the cargo into the custody of Manila Port Service on April 28, 1959. Out of 48 boxes, only 47 were delivered. The consignee filed a provisional claim on May 4, 1959, and a formal claim on October 15, 1959, which was acknowledged by Manila Port Service on October 16, 1959. On April 4, 1961, Manila Port Service sent a letter advising the claimant that the claim had prescribed for failure to commence suit within one year from April 28, 1959. The plaintiff filed the present suit on June 21, 1961. The parties stipulated that the sole issue for resolution was whether the claim had prescribed under paragraph 15 of the Management Contract.
ISSUE
Whether under paragraph 15 of the Management Contract the action of the plaintiff has prescribed.
RULING
Yes, the action has prescribed. The Supreme Court reversed the judgment of the lower court and dismissed the complaint. Applying the ruling in Continental Insurance Company vs. Manila Port Service, et al., L-22208 (March 30, 1966), and reiterated in Delgado Brothers, et al. vs. Manila Port Service, et al., L-21781 (June 30, 1966), when the arrastre contractor fails to act on a claim within the period of one year from the complete discharge of the goods from the carrying vessel, the claim is deemed rejected as of the expiry date of that period. The action must then be filed within one year from such deemed rejection. The cargo was completely discharged on April 28, 1959. The one-year period from this date lapsed on April 28, 1960. Since the defendants took no action on the claim within that period, the claim was deemed rejected on April 28, 1960. The plaintiff then had until April 28, 1961, to file suit. The complaint filed on June 21, 1961, was beyond this period, hence the action had prescribed.