GR L 29338; (August, 1970) (Digest)
G.R. No. L-29338. August 15, 1970.
Firemen’s Fund Insurance Company, Plaintiff-Appellee, v. Cia. General de Tabacos de Filipinas, et al., Defendants, Manila Port Service and/or Manila Railroad Company, Defendants-Appellants.
FACTS
Firemen’s Fund Insurance Company (Insurer) insured a shipment of 15 cartons. The consignee, General Electric Co. (PI), Inc., received only 14 cartons from the Manila Port Service, the arrastre operator, with one carton (case No. 6652) missing and part of the contents of another (case No. 218) also missing. The consignee filed a claim for the undelivered carton, valued at P1,898.66. The Insurer, as subrogee of the consignee after paying the claim, sued the carrier, Manila Railroad Company, and Manila Port Service. The trial court initially dismissed the action against the arrastre operators for lack of jurisdiction over claims below P5,000 but held the carrier liable for a smaller amount. On appeal, the Supreme Court reversed the dismissal and ordered further proceedings against the arrastre operators. Upon retrial, the lower court rendered a supplemental decision holding Manila Port Service and Manila Railroad Company liable for P1,898.66. They appealed, arguing their liability should be limited to P500 per package under Section 15 of the Management Contract.
ISSUE
Whether the liability of the arrastre operators (Manila Port Service and Manila Railroad Company) is limited to P500 per package pursuant to the Management Contract.
RULING
No. The decision of the lower court is affirmed. The arrastre operators are liable for the full invoice value of P1,898.66. The limitation of liability to P500 per package under the Management Contract is not binding on the Insurer because the consignee’s delivery permit (Exhibit “E”) did not incorporate or make any reference to that contractual provision. The Insurer, not being a party to the Management Contract and not having availed itself of any document containing the limitation, is not bound by it. The ruling in Domestic Insurance Company of the Philippines v. Manila Port Service, which enforced the limitation, is inapplicable as it was premised on the consignee having taken delivery under a permit that incorporated the limiting provision, a circumstance absent in this case.