G.R. No. L-19589; April 30, 1964
RELIANCE SURETY & INSURANCE COMPANY, plaintiff-appellee, vs. MANILA RAILROAD COMPANY and MANILA PORT SERVICE, defendants-appellants.

FACTS

Insular La Yebana Tobacco Corporation imported six boxes of automotive spare parts, which were discharged and received in good order by the Manila Port Service in December 1959. The cargo was never delivered to the consignee, resulting in a loss. The consignee’s insurer, Reliance Surety and Insurance Co., paid the claim and, as subrogee, demanded payment from the defendants. Upon refusal, Reliance filed a complaint in the Court of First Instance of Manila.
The defendants, Manila Port Service and Manila Railroad Company, raised the defense that the consignee failed to file a provisional claim within the 15-day period stipulated in the Management Contract, a condition printed on the back of the delivery permit, thus barring recovery. They also argued that liability was limited to P500. The plaintiff countered that it was not bound by the Management Contract, to which its subrogor was not a party. The lower court ruled in favor of the plaintiff.

ISSUE

Whether the plaintiff, as subrogee of the consignee, is bound by the 15-day claim filing provision in the Management Contract, thereby barring its action for recovery.

RULING

The Supreme Court affirmed the lower court’s decision, holding the plaintiff not bound by the Management Contract’s provision. The legal logic centers on the principle of contractual consent and notice. Previous jurisprudence had enforced such contractual stipulations against consignees where they signed, through their broker, a delivery permit or gate pass containing the terms, thereby signifying awareness and acceptance.
Crucially, the facts here are distinct. The consignee never withdrew the goods from the piers as they were lost while in the defendants’ custody. Consequently, no delivery permit was signed, and there was no positive finding that the consignee had any knowledge of the Management Contract’s conditions. The Court applied its ruling in Sun Bros. & Co. v. Manila Port Service, which established that a consignee cannot be bound by liability-limiting provisions of a contract when the goods are never withdrawn and the consignee had no notice or opportunity to assent to its terms. Since the consignee was not a party to the contract and did not act in a manner implying consent, the 15-day filing period cannot be invoked to bar the claim. The defendants’ liability is therefore not limited, and the award for the actual invoice value of the lost goods stands.