Magellan Mfg. Marketing Corp. vs.

CA
G.R. No. 95529; August 22, 1991
BILL OF LADING
FACTS:
Choju Co., Ltd purchased from MMMC 136,000 anahaw fans for
$23,220. MMMC contracted with F.E. Zuellig, a shipping agent of
(OOCL) specifying that he needed an on-board bill of lading and that
transhipment is not allowed under the letter of credit. MMMC paid
Zuellig the freight charges and secured a copy of the bill of lading
which was presented to Allied Bank. The bank then credited the
amount of US$23,220 covered by the letter of credit to MMMC. When
MMMC's President went back to the bank later, he was informed that
the payment was refused by the buyer for lack of on board bill of
lading and there was a transhipment of goods. The anahaw fans were
shipped back to Manila through OOCL. MMMC abandoned the whole
cargo and asked OOCL for damages.
ISSUE:
Whether the bill of lading which reflected the transhipment against the
letter of credit is consented by MMMC
RULING:
In sum, petitioner had full knowledge that the bill issued to it contained
terms and conditions clearly violative of the requirements of the letter
of credit. Nonetheless, perhaps in its eagerness to conclude the
transaction with its Japanese buyer and in a race to beat the expiry
date of the letter of credit, petitioner took the risk of accepting the bill
of lading even if it did not conform with the indicated specifications,
possibly entertaining a glimmer of hope and imbued with a touch of
daring that such violations may be overlooked, if not disregarded, so
long as the cargo is delivered on time. Unfortunately, the risk did not
pull through as hoped for. Any violation of the terms and conditions of
the letter of credit as would defeat its right to collect the proceeds
thereof was, therefore, entirely of the petitioner's making for which it
must bear the consequences. As finally averred by private
respondents, and with which we agree, "... the questions of whether
or not there was a violation of the terms and conditions of the letter of
credit, or whether or not such violation was the cause or motive for the
rejection by petitioner's Japanese buyer should not affect private
respondents therein since they were not privies to the terms and
conditions of petitioner's letter of credit and cannot therefore be held

liable for any violation thereof by any of the parties thereto." The
terms of the contract as embodied in the bill of lading are clear and
thus obviates the need for any interpretation. The intention of the
parties which is the carriage of the cargo under the terms specified
thereunder and the wordings of the bill of lading do not contradict
each other. The terms of the contract being conclusive upon the
parties and judging from the contemporaneous and subsequent
actuations of petitioner, to wit, personally receiving and signing the bill
of lading and paying the freight charges, there is no doubt that
petitioner must necessarily be charged with full knowledge and
unqualified acceptance of the terms of the bill of lading and that it
intended to be bound thereby.

G. evidenced by the clean bills of lading it issued. 2004 FACTS: Petitioner Lorenzo Shipping Corporation (Lorenzo Shipping. Petitioner Lorenzo Shipping denied liability. a domestic corporation engaged in coastwise shipping. ISSUE: Whether petitioner Lorenzo Shipping is negligent in carrying the subject cargo. Petitioner Lorenzo Shipping issued a clean bill of lading designated as Bill of Lading No. moisture and other marine elements. from Manila to Davao City. Inc. aside from being a contract and a receipt. was the carrier of 581 bundles of black steel pipes. . RULING: The steel pipes. insured the goods with respondent Chubb and Sons. USA. A bill of lading which has no notation of any defect or damage in the goods is called a “clean bill of lading. Sumitomo Corporation of San Francisco.. Due to its heavily rusted condition. GEARBULK. subject of this case. alleging. The case law teaches us that mere proof of delivery of goods in good order to a carrier and the subsequent arrival in damaged condition at the place of destination raises a prima facie case against the carrier. Respondent then filed a collection of sum of money against Lorenzo Shipping. No. In the case at bar. 1987.It discovered seawater in the hatch of M/V Lorcon IV. When the cargo was unloaded from petitioner Lorenzo Shipping’s vessel at the Sasa Wharf in Davao City. were in good condition when they were loaded at the port of origin (Manila) on board petitioner Lorenzo Shipping’s M/V Lorcon IV en route to Davao City. INC. vs. the subject shipment. among others: (a) that rust easily forms on steel by mere exposure to air. and found the steel pipes submerged in it. Gearbulk and Transmarine. Ltd. for short). Petitioner Lorenzo Shipping issued clean bills of lading covering the subject shipment. evidenced by Delivery Cargo Receipt No. the steel pipes were rusted all over. (b) that it made a disclaimer in the bill of lading. Respondent Transmarine Carriers received the subject shipment which was discharged on December 4.” A clean bill of lading constitutes prima facie evidence of the receipt by the carrier of the goods as therein described. June 8. California. 147724. Inc. CHUBB and SONS.R. A bill of lading. T-3for the account of the consignee. which in turn.LORENZO SHIPPING CORP. and PHILIPPINE TRANSMARINE CARRIERS. 115090. the consignee Sumitomo rejected the damaged steel pipes and declared them unfit for the purpose they were intended. is also a symbol of the goods covered by it. M/V Lorcon IV of petitioner Lorenzo Shipping received the steel pipes in good order and condition. (c) that the goods were improperly packed.

. not upon him who denies. Thus. b) the unequivocal acceptance of the bill of lading delivered to the consignee. demands before the carrier the fulfillment of the stipulation made by the consignor/shipper in the consignees favor. entered itself as a party to the contract and bound itself to the Freight Collect arrangement. with full knowledge of its contents or c) availment of the stipulation pour autrui.. (Hanjin). when the consignee.. since. The latter. Thus MOF filed a case for sum of money. (MOF). MOF alleged that Shin Yang. (Shin Yang) as the consignee and indicated that payment was on a Freight Collect basis. the latter can be bound by the stipulations of the bill of lading when a) there is a relation of agency between the shipper or consignor and the consignee or b) when the consignee demands fulfillment of the stipulation of the bill of lading which was drawn up in its favor. specifically the delivery of the goods/cargoes shipped. The shipment arrived in Manila. of which the acceptor has actual or constructive notice. Thereafter. In Keng Hua Paper Products Co. a third person. CA. by the nature of things. Hanjins exclusive general agent in the Philippines. In sum. petitioner MOF Company. In the instant case. Basic is the rule in evidence that the burden of proof lies upon him who asserts it. The bill of lading covering the shipment which was prepared by the carrier Hanjin Shipping Co.e. . 2009 Topic: Bill of Lading Facts: Halla Trading Co. after Hanjin's compliance. to ship the goods on its behalf. Shin Yang unjustly breached its obligation to pay. MOF has the burden to controvert all these denials. who is not a signatory to the bill of lading. shipped to Manila secondhand cars and other articles on board the vessel Hanjin Busan. failed and refused to pay contending that it did not cause the importation of the goods. although not a signatory to the contract of carriage between the shipper and the carrier. is bound by the stipulations thereof Ruling: The bill of lading is oftentimes drawn up by the shipper/consignor and the carrier without the intervention of the consignee. repeatedly demanded the payment of ocean freight. caused the importation and shipment of the goods and assured it that ocean freight and other charges would be paid upon arrival of the goods in Manila. a regular client. i. he who denies a fact cannot produce any proof of it. that it is only the Consolidator of the said shipment. or that it got hold of the bill of lading covering the shipment or that it demanded the release of the cargo.MOF Company Inc v Shin Yang Brokerage Corp GR No 172822 December 18. it constitutes as an acceptance of the contract and of all of its terms and conditions. Shin Yang denied any involvement in shipping the goods or in promising to shoulder the freightage. named respondent Shin Yang Brokerage Corp. documentation fee and terminal handling charges from Shin Yang. that the ultimate consignee did not endorse in its favor the original bill of lading and that the bill of lading was prepared without its consent. Inc. we held that once the bill of lading is received by the consignee who does not object to any terms or stipulations contained therein. Yet. Shin Yang consistently denied in all of its pleadings that it authorized Halla Trading. However. it being insistent that Shin Yang asserted itself as the consignee and the one that caused the shipment of the goods to the Philippines. Inc.. Co. v. becomes a party to the contract by reason of either a) the relationship of agency between the consignee and the shipper/ consignor. a company based in Korea. Claiming that it is merely a consolidator/forwarder and that Bill of Lading was not endorsed to it by the ultimate consignee. as the named consignee in the bill of lading. Ltd. MOF argued that Shin Yang. however. a consignee. Issue: Whether or not a consignee.

Messrs. he would be left with no alternative but to file suit.00. and are easily readable. all of PAL Cebu. reversed the judgment of the trial Court granting petitioner moral and exemplary damages. aside from two gift items for his parents-in-law. . The validity of this stipulation is not questioned by the plaintiff. Gomez. plaintiff not having declared a greater value. Moreover. bound for Butuan City. and that he be compensated in the sum of P250K for actual and moral damages within five days from receipt of the letter. it is presumed that the defendant had been negligent. otherwise. being a lawyer and businessman. 1967. and not having called the attention of the defendant on its true value and paid the tariff therefor. petitioner found that a folder containing certain exhibits. ISSUE: WON the CA was correct in limiting PAL’s carriage liability? RULING: YES.Maranga the contents were listed and receipted for by petitioner. petitioner claimed his luggage but it could not be found. set for hearing on August 28-31. thereat. Early in the morning of August 27 the missing luggage arrived at Bancasi airport but petitioner did not wait for it. which was granted by the Court. After calling the attention of Gomez. a blue "maleta" for which he was issued a Claim Check. As Gomez knew Dagorro to be the same driver used by petitioner whenever the latter was in Butuan City. in accordance with the stipulation written on the back of the ticket. In the presence of Mr. Dagorro examined the lock. of PAL for the loss. Upon arrival. plaintiff had been a frequent passenger of PAL from Cebu to Butuan City and back. They are printed in reasonably and fairly big letters. but ordered PAL to pay plaintiff the sum of P100. on board from Mactan Cebu. de Leon. As a general proposition. A certain Dagorro who also used to drive for petitioner. he would hold PAL liable for damages. ONG YIU vs. Dagorro then delivered the "maleta" to petitioner. pressed it. CA Bill of Lading FACTS: On august 26.AGUSTINO B.00 per baggage. Petitioner demanded that his luggage be produced intact. must be fully aware of these conditions. As a passenger. Navarsi. is limited to P100. and he. Petitioner was worried about the missing luggage because it contained vital documents needed for trial the next day. the baggage liability assumed by it under the condition of carriage printed at the back of the ticket. and Agustin. and it opened. otherwise. Dagorro returned it to the porter clerk. it was only after reacting indignantly to the loss that the matter was attended to by the porter clerk Maximo. with the information that the lock was open.Yap and Atty. Petitioner wired PAL Cebu demanding the delivery of his baggage before noon the next day. Petitioner filed a Complaint against PAL for damages for breach of contract of transportation with the CFI of Cebu. Petitioner asked for postponement of the hearing due to loss of his documents. Petitioner refused to accept the luggage. 1967 petitioner was a fare paying passenger of respondent PAL. Upon inspection. CA found PAL was guilty only of simple negligence. volunteered to take the luggage to petitioner. Gomez took a look at its contents. transcripts and private documents needed for the case were missing. went to petitioner's office to deliver the "maleta". who sealed it and forwarded the same to PAL Cebu. He was scheduled to attend the trial of in the CFI Branch II. the plaintiff's maleta having been pilfered while in the custody of the defendant. but did not touch them. Gomez took the luggage and placed it on the counter. the "maleta" was opened. Lower Court found PAL to have acted in bad faith and with malice and declared petitioner entitled to moral damages. According to petitioner. however. The liability. he checked in one piece of luggage.

35 metric tons at the port of origin when it was loaded on the M/V Gao Yang.R. Suarez’s testimony regarding the contents of the documents is thus hearsay. as the plane ticket in the case at bar. Considering. the true and exact weight of the shipment when it was loaded unto the vessel. In the absence of clear. it cannot be determined whether there was a shortage of the shipment upon its arrival in Batangas. convincing. therefore. much less did he pay any additional transportation charge.. Having no way by which a shortage could be determined. . 2003 Bill of Lading Facts: Respondent Prudential Guarantee & Assurance Inc (Prudential) brought an action for damages against petitioner Wallem Philippines Shipping (Wallem) and Seacost Maritime Corporation (Seacoast) filed with the RTC of Makati for the recovery of the amount it aid to its insured General Milling Corporation (GMC) for alleged shortage incurred in shipment of “Indian toasted soyabean extraction meal. The CA erred in finding that shortage had taken place. "Such provisions have been held to be a part of the contract of carriage. 152158 February 7. It is what is known as a contract of "adhesion". While it may be true that petitioner had not signed the plane ticket he is nevertheless bound by the provisions thereof. Issue: Whether there was shortage in the shipment and whether Wallem could be held liable for the shortage Ruling: No. and Court of Appeals G. and passengers are advised not to place valuable items inside their baggage but “to avail of our V-cargo service”. he cannot be permitted a recovery in excess of P100. in regards which it has been said that contracts of adhesion wherein one party imposes a ready made form of contract on the other. Wallem Philippines Shipping Inc. the CA reversed the RTC’s decision. It is likewise to be noted that there is nothing in the evidence to show the actual value of the goods allegedly lost by petitioner. and Seacoast Maritime Corporation v Prudential Guarantee & Assurance Inc. are contracts not entirely prohibited. The contents of the bill of lading can be controverted by evidence to the contrary as the said bill of lading indicated that the contract of carriage was under a “said to weigh” clause. and valid and binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation". On appeal. convincing and competent evidence that there was shortage in the shipment when it failed to establish by competent evidence the genuineness and due execution of the bill of lading and. yellow”. Ms. The Prudential claims processor had no personal knowledge of the contents of the documents as she had no participation in the preparation of the documents upon which it based its cause of action against Wallem.00. based as it is on the knowledge of another person not presented on the witness stand. that petitioner had failed to declare a higher value for his baggage. then it is not entitled for damages. and competent evidence to prove that the shipment indeed weighed 4.No. he gives his consent. There is no dispute that petitioner did not declare any higher value for his luggage.Besides. The one who adheres to the contract is in reality free to reject it entirely. The RTC ruled that Prudential failed to prove by clear.415. if he adheres.23 Nor has the genuineness and due execution of these documents been established. therefore.

Kee Yeh. while 30% will be shouldered by Cardia and its agent. and stipulates the rights and obligations assumed by the parties. However in CA. and agreeing or directing that the freight to be delivered to the order or assigns of a specified person at a specified place. SM-1. their assigns and heirs. Heindrich Trading Corp. describing the freight so as to identify it. Hence. On the other hand. As a receipt. Inc. it names the contracting parties. which further chartered it to Regency. A bill of lading is defined as "an instrument in writing. The subject vessel is owned by Pakarti. it was found upon inspection that some portions were in bad order or condition. identification marks and condition. and Pioneer Insurance & Surety Corp. signed by a carrier or his agent. As such. respondents maintained further that Ace Navigation was a ship agent. Furthermore. describes the goods as to quantity. Petitioner argued that it cannot be held liable since it was not a party to the bill of lading. and its principal Cardia was not impleaded as party-defendant and thus no liability attaches to the agent. Issue: (1) Did petitioner Ace Navigation become a party to the bill of lading? (2) Is petitioner Ace Navigation a ship agent or a mere agent of Cardia? Ace Navigation Co. G. quality. and Sky were held solidarily liable for 70% of the claim. fixes the route. the terms of the contract for carriage. It was Regency that directly dealt with the consignee Heindrich.. it recites the date and place of shipment. FGU Insurance Corp. and freight rates or charges. 171591 June 25. Among all the petitions concerning such CA decision. 2012 Topics: Bill of Lading Facts: Cardia Limited shipped tons of cement aboard a vessel from Shanghai Port. Ruling: (1) Yes. only the petition of Ace Navigation remained. destination. and value. which chartered the ship to Shinwa. which include the consignee. defendants Pakarti.When the shipment arrived. Shinwa. but were dismissed by the RTC. Ace Navigation remarked that there was death of evidence linking it to the supposed defective packing of the shipment. The subject shipment was insured with respondents. an agent of Kee Yeh. Respondents co-insurers paid the consignee Heindrich and became subrogees therein.R. which in turn chartered it to Sky. FGU Insurance Corp." It operates both as a receipt and as a contract. vs. China to Manila Port to its consignee. it shall only be binding upon the parties who make them. petitioner Ace Navigation. dimensions. No. stating the name of the consignor. . As a contract. and accordingly issued Clean Bill of Lading No. weight. the respondents brought suit against several defendants.

.000 metric tons of U. Simon has filed an action for damages against the unknown owner of the vessels M/V Sea Dream and M/V Tern. The carrier issued its clean Berth Term Grain Bill of Lading.In this case. And on ATI’s RTC ruling. Contiquincybunge made a shipment of 6. Under Article 586. 177116 February 27. petitioner's participation was simply to assume responsibility over the cargo when they were unloaded from the vessel. also became a party to the said contract of carriage. On the other hand. its charterers. through M/V Tern. or the vessel at any time during the unloading of the goods. The RTC has ruled that the defendants be solidarily liable for the damages incurred by Simon. The shipment was received by ATI again for delivery to Simon. or who represents her in the port in which she may be found. Inc. Ace Navigation was not a ship agent. Ruling: . the shipper. However.144 metric tons of U. Soybean Meal in Bulk for delivery to Simon at the Port of Manila. Hence. it was assailed as well on the basis that the stevedore of the M/V Tern has witnessed that during the dischargement of the cargo. committed serious and reversible error in holding ATI solidarily liable with co-defendant appellant Inter-Asia Marine Transport. and (c) the consignee Heindrich.863 metric tons. the court-a-quo. when it reached its receiver Simon. U. (b) the carrier Pakarti. by virtue of their relationship with Pakarti under separate charter arrangements. (2) Ace Navigation is not a ship agent. The CA ruled that the RTC ruling be assailed with some modifications on the basis that M/V Tern and InterAsia Marine Transport. Inc. the petitioner ATI has also appealed to CA on the issue that the RTC. No evidence was offered to establish that Ace Navigation had a hand in the provisioning of the vessel or that it represented the carrier. For the first shipment. Inc. For the second shipment. However. Code of Commerce. Louisiana.. there has been spillage done by the stevedores of ATI which is an evidence that ATI has been negligible in handling the goods. and petitioner ATI’s case remaining. In the same vein. However. its local agent Inter-Asia Marine Transport. Contiquincybunge made shipment.” Records show that the obligation of Ace Navigation was limited to informing the consignee Heindrich of the arrival of the vessel in order for the latter to immediately take possession of the goods.300. contrary to the evidence presented. of 3. appealed to CA on the issue whether RTC has erred in finding that they did not exercise extraordinary diligence in the handling of the goods. Inc. Inc. Ace Navigation. (Simon) has entered into contract with Contiquincybunge Export Company (Contiquincybunge) as its consignee of the shipped Soybean Meal. as admitted agent of Cardia. Kee Yeh and its agent Sky likewise became parties to the bill of lading. 2013 BILL OF LADING Facts: Simon Enterprise Inc. leaving M/V Tern. Contiquincybunge has made a shipment through M/V Sea Dream and M/V Tern respectively at the Port of Darrow.S. Clearly. the shipped cargos were found lacking 199. Issue: Whether or not the appellate court erred in affirming the decision of the trial court holding petitioner ATI solidarily liable with its co-defendants for the shortage incurred in the shipment of the goods to respondent. The case of the unknown owner of the vessel M/V Sea Dream has been settled in release and quitclaim and therefore has been stricken out of the case. the original parties to the bill of lading are: (a) the shipper Cardia. Unsatisfied with the RTC ruling. have failed to establish that they exercised extraordinary diligence in transporting the goods or exercised due diligence to forestall or lessen the loss as provided in Article 1742 of the Civil Code. (ATI).825. its local agent Inter-Asia Marine Transport. and InterAsia Marine Transport.556 metric tons. it was already short by 18. “ship agent is understood to be the person entrusted with the provisioning of a vessel.A. Inc.S. No. Shinwa. and petitioner ATI alleging that it suffered the losses through the fault or negligence of the said defendants. but a mere agent of Cardia. Soybean Meal which when the M/V Sea Dream arrived at the Port of Manila the bulk of soybean meal was received by the Asian Terminals. for shipment to Simon. the owner of the M/V Tern. ASIAN TERMINALS VS SIMON ENTERPRISES Gr.S.

if any. The arrastre operator was.300 metric tons at the port of origin. This. A shipment under this arrangement is not inspected or inventoried by the carrier whose duty is only to transport and deliver the containers in the same condition as when the carrier received and accepted the containers for transport. help its cause. contents and value unknown." meaning that it was transported with the carrier having been oblivious of the weight. subject to such qualifications as may have validly been imposed in the contract between the parties. do not. in fact. the respondent must still prove the actual weight of the subject shipment at the time it was loaded at the port of origin so that a conclusion may be made as to whether there was indeed a shortage for which petitioner must be liable. and the amount or quantity of goods in the container in a particular package is only prima facie evidence of the amount or quantity. The arrastre operator was not required to verify the contents of the container received and to compare them with those declared by the shipper because. the shipper is solely responsible for the loading while the carrier is oblivious of the contents of the shipment. The petition for review on certiorari was granted to ATI. Evidently. which petitioner relies upon to support its claim for restitution. The CA misapprehended the following facts: First. and the Packing List being used by respondent to prove that the subject shipment weighed 3. may have been due to the inherent nature of the subject shipment or its packaging since the subject cargo was shipped in bulk and had a moisture content of 12. . Third. quality. quantity and quality unknown". Hence. Second. Supreme Court held that as the bill of lading indicated that the contract of carriage was under a "said to weigh" clause.. while the carrier was oblivious to the contents of the shipment. the weight of the cargo could not be gauged from the bill of lading. the cargo was at the shipper’s load and count. quantity. as earlier stated. as can be culled from the above-mentioned cases. The SC agreed to ATI’s claim that the CA erred in affirming the decision of the trial court holding petitioner ATI solidarily liable with its co-defendants for the shortage incurred in the shipment of the goods to respondent.e. petitioner ATI is correct in arguing that the respondent failed to prove that the subject shipment suffered actual shortage. the respondent failed to do. the shortage. "Full Container Load". condition. The Berth Term Grain Bill of Lading. The meaning of clauses analogous to "Shipper’s weight. means that the shipper was solely responsible for the loading of the container. The Berth Term Grain Bill of Lading states that the subject shipment was carried with the qualification "Shipper’s weight. quantity. duty-bound to take good care of the goods received from the vessel and to turn the same over to the party entitled to their possession. The recital of the bill of lading for goods thus transported [i. quantity and quality unknown. SC agreed with the petitioner ATI that respondent has not proven any negligence on the part of the former. as there was no competent evidence to prove that it actually weighed 3. as correctly asserted by petitioner ATI. "Shipper’s Load and Count".Yes. the weight of the shipment as indicated in the bill of lading is not conclusive as to the actual weight of the goods. measure. constitutes prima facie evidence of the goods therein described was correctly deemed by the appellate court to have been rebutted in light of abundant evidence casting doubts on its veracity. and quality of the cargo. The presumption that the bill of lading.5%. Consequently. the Proforma Invoice.300 metric tons. transported in sealed containers or "containerized"] ordinarily would declare "Said to Contain". The bill of lading carried an added clause – the shipment’s weight. like any ordinary depositary.