Case Digest (G.R. No. L-26901)
Facts:
South Sea Surety and Insurance Co., Inc. and Sun Insurance Office, Ltd. v. Manila Port Service and/or Manila Railroad Company and the Honorable Court of Appeals, G.R. No. L-26901, May 29, 1970, the Supreme Court En Banc, Concepcion, C.J., writing for the Court.The dispute arose from a shipment of 5,000 Simonds High Speed Steel saw bits consigned to Marinduque Iron Mines, Inc., carried aboard the vessel Pioneer Minx from New York and discharged at the Port of Manila on July 10, 1961. The cargo was placed in the custody of Manila Port Service (an arrastre operator and subsidiary of Manila Railroad Company) pursuant to a management agreement with the Bureau of Customs. The case containing the saw bits was opened and found empty; the port operator has not shown any evidence escaping liability for the loss.
The consignee engaged a customs broker, who processed the delivery papers. Because neither the bill of lading nor the manifest indicated the value, the arrastre operator charged and collected P2.85 as its fee before releasing the shipment. The consignee filed a provisional claim with Manila Port Service within the 15-day period prescribed in paragraph (Section) 15 of the management contract. After discovery of the loss the consignee demanded payment of the cargo’s value, but Manila Port Service refused, invoking Section 15, which limits liability to P500 per package unless the value is otherwise specified or manifested and corresponding arrastre charges had been paid.
The cargo had been insured in New York by Sun Insurance Office, Ltd. for $2,750 and also insured in Manila by South Sea Surety and Insurance Co., Inc. for P10,075. The insurers paid pro rata to the assignee of the insured and obtained subrogation agreements transferring the insured’s rights of recovery; they then sued Manila Port Service for P10,532.31 plus attorney’s fees, litigation expenses and costs.
The Court of First Instance of Manila ruled for the plaintiffs (the insurers), holding Section 15 inapplicable and awarding P10,532.31 with legal interest and costs. On appeal, the Court of Appeals modified the judgment and reduced recovery to P500 (with interest) and denied costs, reason...(Subscriber-Only)
Issues:
- Is paragraph (Section) 15 of the management contract between the Bureau of Customs and the arrastre contractors (Manila Port Service) binding so as to limit liability to P500 per package under the facts of...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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