G.R. Nos. L-14948 and L-14972; October 31, 1961
COMMERCIAL UNION ASSURANCE CO., LTD., plaintiff-appellee, vs. MANILA PORT SERVICE, ET AL., defendants-appellants.

FACTS

The case involves a claim for the value of 26 missing bags of soybean meal from a shipment consigned to San Miguel Brewery. The shipment, insured by plaintiff Commercial Union Assurance Co., Ltd., was discharged at the Port of Manila on May 9, 1956. The arrastre operator, defendant Manila Port Service, failed to deliver the 26 bags. The insurer paid the consignee and, being subrogated to its rights, filed suit to recover the amount from the arrastre operators. The defendants’ primary defense was that the consignee’s provisional claim was filed on May 25, 1956, which was one day beyond the 15-day period prescribed in Section 15 of the management contract between Manila Port Service and the Bureau of Customs. The plaintiff contended it was not bound by this contract. The trial court ruled for the plaintiff but did not award certain claimed interests and fees, prompting both parties to appeal.

ISSUE

The principal issue is whether the consignee, and by subrogation its insurer, is bound by the 15-day claim filing period stipulated in the management contract to which it was not a signatory.

RULING

The Supreme Court reversed the trial court and dismissed the complaint. The legal logic is anchored on established jurisprudence that a consignee who avails itself of the services of an arrastre operator under the terms of a management contract, with knowledge of its provisions, becomes bound by its stipulations. The Court cited a line of cases, including Northern Motors, Inc. vs. Prince Line, which held that a consignee legally becomes a party to the management contract when it obtains and uses the delivery permit and gate pass—documents that made reference to and reproduced the contract’s conditions, such as the claim period. Here, the consignee signed the delivery permit and gate pass containing the provision, signifying acceptance. The Court rejected the plaintiff’s argument that the 15-day period should run from the date the consignee received the last bag. The contract explicitly states the period runs “from the date of the discharge of the last package from the carrying vessel.” The stipulation of facts confirmed the last bag was discharged on May 9, 1956, and the claim was filed on May 25, 1956, which was one day late. Consequently, the failure to comply with the contractual condition barred the claim. The Court deemed it unnecessary to resolve the ancillary issues on interest and attorney’s fees raised in the appeals.