G.R. No. L-21055; August 31, 1966
CALTEX (PHILIPPINES), INC., plaintiff-appellee, vs. MANILA PORT SERVICE, ET AL., defendants-appellants.

FACTS

Plaintiff Caltex (Philippines), Inc. was the consignee of several shipments (lubricating grease, paraffin wax, acidless tallow, etc.) carried by the vessel “SS Ferndale” and discharged into the custody of defendant Manila Port Service on March 22 and 23, 1960. Among these goods, 30 drums of acidless tallow oil compound, 1 crate of paraffin wax, and 2 pails of lubricating oil were lost and could not be delivered. Caltex filed a provisional claim with the arrastre operator on March 25, 1960, followed by formal demands. As no action was taken, Caltex filed a case in the Court of First Instance of Manila, demanding payment for the alleged value of the missing goods (P6,422.88) plus the 25% marginal fee paid on that amount. The defendants denied liability. The lower court ruled in favor of Caltex, ordering defendants to pay P8,028.60. Defendants appealed.

ISSUE

1. Whether the liability of the arrastre operator (Manila Port Service) should be limited to P500.00 per package pursuant to Section 15 of its Management Contract with the Bureau of Customs.
2. Whether the lower court correctly held defendants liable for P8,028.60, specifically concerning the valuation of the lost goods and the inclusion of the 25% marginal fee.

RULING

1. No, the liability is not limited to P500.00 per package in this instance. The Court interpreted Section 15 of the Management Contract, which makes the contractor liable for the “invoice value of each package” but not more than P500.00 per package “unless the value is otherwise specified or manifested.” The lost goods were contained in 33 separate containers (drums, pails, crate). If the P500.00 per package limit were applied, the defendants’ liability would exceed the P8,028.60 being claimed. Since the plaintiff’s claim (based on invoice value) is less than the potential maximum liability under the per-package limit, the limit does not apply to reduce liability below the actual invoice value claimed.
2. The lower court’s award was modified. The Supreme Court recalculated the actual damages:
The total cost of the lost goods in US dollars was $1,773.63.
The proper conversion rate as of the relevant date (April 18, 1960) was P2.015 to $1, not the various rates used by Caltex in its claim. Thus, the peso value was P3,568.86, not P6,422.88.
* The 25% marginal fee paid on the foreign exchange used for the importation is recoverable as part of “all damages that may be suffered on account of loss” under Section 15 of the Management Contract. This fee (25% of P3,568.86 = P892.22) was lost due to the loss of the goods.
* Therefore, the total recoverable amount is P3,568.86 (goods value) + P892.22 (marginal fee) = P4,461.08, with legal interest from April 1960.
The appealed decision was modified accordingly.