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.

LORENZO SHIPPING CORP. vs. CHUBB and SONS, Inc.,

GEARBULK, Ltd. and PHILIPPINE TRANSMARINE CARRIERS, INC.
G.R. No. 147724.
June 8, 2004
FACTS: Petitioner Lorenzo Shipping Corporation (Lorenzo Shipping,
for short), a domestic corporation engaged in coastwise shipping, was
the carrier of 581 bundles of black steel pipes, the subject shipment,
from Manila to Davao City.
Petitioner Lorenzo Shipping issued a clean bill of lading designated as
Bill of Lading No. T-3for the account of the consignee, Sumitomo
Corporation of San Francisco, California, USA, which in turn, insured
the goods with respondent Chubb and Sons, Inc.
Respondent Transmarine Carriers received the subject shipment
which was discharged on December 4, 1987, evidenced by Delivery
Cargo Receipt No. 115090.It discovered seawater in the hatch of M/V
Lorcon IV, and found the steel pipes submerged in it.
Due to its heavily rusted condition, the consignee Sumitomo rejected
the damaged steel pipes and declared them unfit for the purpose they
were intended. Respondent then filed a collection of sum of money
against Lorenzo Shipping, Gearbulk and Transmarine.
Petitioner Lorenzo Shipping denied liability, alleging, among others:
(a) that rust easily forms on steel by mere exposure to air, moisture
and other marine elements; (b) that it made a disclaimer in the bill of
lading; (c) that the goods were improperly packed;
ISSUE: Whether petitioner Lorenzo Shipping is negligent in carrying
the subject cargo.
RULING: The steel pipes, subject of this case, were in good condition
when they were loaded at the port of origin (Manila) on board
petitioner Lorenzo Shippings M/V Lorcon IV en route to Davao
City. Petitioner Lorenzo Shipping issued clean bills of lading covering
the subject shipment. A bill of lading, aside from being a contract and
a receipt, is also a symbol of the goods covered by it. A bill of lading
which has no notation of any defect or damage in the goods is called
a clean bill of lading. A clean bill of lading constitutes prima facie

evidence of the receipt by the carrier of the goods as therein

described.
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. In the case at bar, M/V Lorcon IV of petitioner Lorenzo
Shipping received the steel pipes in good order and condition,
evidenced by the clean bills of lading it issued. When the cargo was
unloaded from petitioner Lorenzo Shippings vessel at the Sasa Wharf
in Davao City, the steel pipes were rusted all over.

MOF Company Inc v Shin Yang Brokerage Corp

GR No 172822
December 18, 2009
Topic: Bill of Lading
Facts:
Halla Trading Co., a company based in Korea, shipped to
Manila secondhand cars and other articles on board the vessel Hanjin
Busan. The bill of lading covering the shipment which was prepared
by the carrier Hanjin Shipping Co., Ltd. (Hanjin), named respondent
Shin Yang Brokerage Corp. (Shin Yang) as the consignee and
indicated that payment was on a Freight Collect basis. The shipment
arrived in Manila. Thereafter, petitioner MOF Company, Inc. (MOF),
Hanjins exclusive general agent in the Philippines, repeatedly
demanded the payment of ocean freight, documentation fee and
terminal handling charges from Shin Yang. The latter, however, failed
and refused to pay contending that it did not cause the importation of
the goods, that it is only the Consolidator of the said shipment, 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.
Thus MOF filed a case for sum of money. MOF alleged that Shin
Yang, a regular client, 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. Yet, after Hanjin's
compliance, Shin Yang unjustly breached its obligation to pay. MOF
argued that Shin Yang, as the named consignee in the bill of lading,
entered itself as a party to the contract and bound itself to the Freight
Collect
arrangement.
Claiming
that
it
is
merely
a
consolidator/forwarder and that Bill of Lading was not endorsed to it
by the ultimate consignee, Shin Yang denied any involvement in
shipping the goods or in promising to shoulder the freightage.
Issue: Whether or not a consignee, who is not a signatory to the bill of
lading, 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. However, 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. In Keng Hua Paper Products Co., Inc. v. CA, we held that
once the bill of lading is received by the consignee who does not
object to any terms or stipulations contained therein, it constitutes as
an acceptance of the contract and of all of its terms and conditions, of
which the acceptor has actual or constructive notice. In sum, a
consignee, although not a signatory to the contract of carriage
between the shipper and the carrier, becomes a party to the contract
by reason of either a) the relationship of agency between the
consignee and the shipper/ consignor; b) the unequivocal acceptance
of the bill of lading delivered to the consignee, with full knowledge of
its contents or c) availment of the stipulation pour autrui, i.e., when the
consignee, a third person, demands before the carrier the fulfillment of
the stipulation made by the consignor/shipper in the consignees favor,
specifically the delivery of the goods/cargoes shipped.
In the instant case, Shin Yang consistently denied in all of its
pleadings that it authorized Halla Trading, Co. to ship the goods on its
behalf; or that it got hold of the bill of lading covering the shipment or
that it demanded the release of the cargo. Basic is the rule in
evidence that the burden of proof lies upon him who asserts it, not
upon him who denies, since, by the nature of things, he who denies a
fact cannot produce any proof of it. Thus, MOF has the burden to
controvert all these denials, it being insistent that Shin Yang asserted
itself as the consignee and the one that caused the shipment of the
goods to the Philippines.

AGUSTINO B. ONG YIU vs. CA

Bill of Lading

FACTS:
On august 26, 1967 petitioner was a fare paying passenger of
respondent PAL, on board from Mactan Cebu, bound for Butuan City.
He was scheduled to attend the trial of in the CFI Branch II, thereat,
set for hearing on August 28-31, 1967. As a passenger, he checked in
one piece of luggage, a blue "maleta" for which he was issued a
Claim Check. Upon arrival, petitioner claimed his luggage but it could
not be found. According to petitioner, it was only after reacting
indignantly to the loss that the matter was attended to by the porter
clerk Maximo. Petitioner was worried about the missing luggage
because it contained vital documents needed for trial the next day.
Petitioner wired PAL Cebu demanding the delivery of his baggage
before noon the next day, otherwise, he would hold PAL liable for
damages. Early in the morning of August 27 the missing luggage
arrived at Bancasi airport but petitioner did not wait for it. A certain
Dagorro who also used to drive for petitioner, volunteered to take the
luggage to petitioner. As Gomez knew Dagorro to be the same driver
used by petitioner whenever the latter was in Butuan City, Gomez
took the luggage and placed it on the counter. Dagorro examined the
lock, pressed it, and it opened. After calling the attention of Gomez,
the "maleta" was opened, Gomez took a look at its contents, but did
not touch them. Dagorro then delivered the "maleta" to petitioner, with
the information that the lock was open. Upon inspection, petitioner
found that a folder containing certain exhibits, transcripts and private
documents needed for the case were missing, aside from two gift
items for his parents-in-law. Petitioner refused to accept the luggage.
Dagorro returned it to the porter clerk, Gomez, who sealed it and
forwarded the same to PAL Cebu. Petitioner asked for postponement

of the hearing due to loss of his documents, which was granted by the
Court. Petitioner demanded that his luggage be produced intact, and
that he be compensated in the sum of P250K for actual and moral
damages within five days from receipt of the letter, otherwise, he
would be left with no alternative but to file suit. Messrs. de Leon,
Navarsi, and Agustin, all of PAL Cebu, went to petitioner's office to
deliver the "maleta". In the presence of Mr.Yap and Atty.Maranga the
contents were listed and receipted for by petitioner. Petitioner filed a
Complaint against PAL for damages for breach of contract of
transportation with the CFI of Cebu. Lower Court found PAL to have
acted in bad faith and with malice and declared petitioner entitled to
moral damages. CA found PAL was guilty only of simple negligence,
reversed the judgment of the trial Court granting petitioner moral and
exemplary damages, but ordered PAL to pay plaintiff the sum of
P100.00, the baggage liability assumed by it under the condition of
carriage printed at the back of the ticket.

ISSUE: WON the CA was correct in limiting PALs carriage liability?

RULING:
YES. As a general proposition, the plaintiff's maleta having been
pilfered while in the custody of the defendant, it is presumed that the
defendant had been negligent. The liability, however, of PAL for the
loss, in accordance with the stipulation written on the back of the
ticket, is limited to P100.00 per baggage, plaintiff not having declared
a greater value, and not having called the attention of the defendant
on its true value and paid the tariff therefor. The validity of this
stipulation is not questioned by the plaintiff. They are printed in
reasonably and fairly big letters, and are easily readable. Moreover,
plaintiff had been a frequent passenger of PAL from Cebu to Butuan
City and back, and he, being a lawyer and businessman, must be fully
aware of these conditions.

.
There is no dispute that petitioner did not declare any higher value for
his luggage, much less did he pay any additional transportation
charge. While it may be true that petitioner had not signed the plane
ticket he is nevertheless bound by the provisions thereof. "Such
provisions have been held to be a part of the contract of carriage, and
valid and binding upon the passenger regardless of the latter's lack of
knowledge or assent to the regulation". It is what is known as a
contract of "adhesion", in regards which it has been said that
contracts of adhesion wherein one party imposes a ready made form
of contract on the other, as the plane ticket in the case at bar, are
contracts not entirely prohibited. The one who adheres to the contract
is in reality free to reject it entirely; if he adheres, he gives his
consent. Considering, therefore, that petitioner had failed to declare a
higher value for his baggage, he cannot be permitted a recovery in
excess of P100.00.Besides, and passengers are advised not to place
valuable items inside their baggage but to avail of our V-cargo
service. 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.

Wallem Philippines Shipping Inc. and Seacoast Maritime Corporation

v Prudential Guarantee & Assurance Inc. and Court of Appeals
G.R.No. 152158
February 7, 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,
yellow. The RTC ruled that Prudential failed to prove by clear,
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, therefore, the
true and exact weight of the shipment when it was loaded unto the
vessel. Having no way by which a shortage could be determined, then
it is not entitled for damages. On appeal, the CA reversed the RTCs
decision.
Issue:
Whether there was shortage in the shipment and whether Wallem
could be held liable for the shortage
Ruling:
No. The CA erred in finding that shortage had taken place. 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. Ms. Suarezs testimony regarding the contents of the
documents is thus hearsay, based as it is on the knowledge of
another person not presented on the witness stand.23
Nor has the genuineness and due execution of these documents been
established. In the absence of clear, convincing, and competent
evidence to prove that the shipment indeed weighed 4,415.35 metric
tons at the port of origin when it was loaded on the M/V Gao Yang, it
cannot be determined whether there was a shortage of the shipment
upon its arrival in Batangas.
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.

When the shipment arrived, it was found upon inspection that some
portions were in bad order or condition. Respondents co-insurers paid
the consignee Heindrich and became subrogees therein. Hence, the
respondents brought suit against several defendants, but were
dismissed by the RTC. However in CA, defendants Pakarti, Shinwa,
Kee Yeh, and Sky were held solidarily liable for 70% of the claim,
while 30% will be shouldered by Cardia and its agent, petitioner Ace
Navigation.
Among all the petitions concerning such CA decision, only the petition
of Ace Navigation remained. 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. Furthermore, Ace Navigation remarked that
there was death of evidence linking it to the supposed defective
packing of the shipment. On the other hand, respondents maintained
further that Ace Navigation was a ship 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., Inc. vs. FGU Insurance Corp.
G.R. No. 171591
June 25, 2012
Topics: Bill of Lading
Facts:
Cardia Limited shipped tons of cement aboard a vessel from
Shanghai Port, China to Manila Port to its consignee, Heindrich
Trading Corp. The subject shipment was insured with respondents,
FGU Insurance Corp. and Pioneer Insurance & Surety Corp. The
subject vessel is owned by Pakarti, which chartered the ship to
Shinwa, which in turn chartered it to Sky, an agent of Kee Yeh, which
further chartered it to Regency. It was Regency that directly dealt with
the consignee Heindrich, and accordingly issued Clean Bill of Lading
No. SM-1.

Ruling:
(1) Yes. A bill of lading is defined as "an instrument in writing, signed
by a carrier or his agent, describing the freight so as to identify it,
stating the name of the consignor, the terms of the contract for
carriage, and agreeing or directing that the freight to be delivered to
the order or assigns of a specified person at a specified place." It
operates both as a receipt and as a contract. As a receipt, it recites
the date and place of shipment, describes the goods as to quantity,
weight, dimensions, identification marks and condition, quality, and
value. As a contract, it names the contracting parties, which include
the consignee, fixes the route, destination, and freight rates or
charges, and stipulates the rights and obligations assumed by the
parties. As such, it shall only be binding upon the parties who make
them, their assigns and heirs.

In this case, the original parties to the bill of lading are: (a) the shipper
Cardia; (b) the carrier Pakarti; and (c) the consignee Heindrich.
However, by virtue of their relationship with Pakarti under separate
charter arrangements, Shinwa, Kee Yeh and its agent Sky likewise
became parties to the bill of lading. In the same vein, Ace Navigation,
as admitted agent of Cardia, also became a party to the said contract
of carriage.
(2) Ace Navigation is not a ship agent. Under Article 586, Code of
Commerce, ship agent is understood to be the person entrusted with
the provisioning of a vessel, or who represents her in the port in which
she may be found.
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. No
evidence was offered to establish that Ace Navigation had a hand in
the provisioning of the vessel or that it represented the carrier, its
charterers, or the vessel at any time during the unloading of the
goods. Clearly, petitioner's participation was simply to assume
responsibility over the cargo when they were unloaded from the
vessel. Hence, Ace Navigation was not a ship agent, but a mere agent
of Cardia, the shipper.

ASIAN TERMINALS VS SIMON ENTERPRISES

Gr. No. 177116
February 27, 2013
BILL OF LADING
Facts:
Simon Enterprise Inc. (Simon) has entered into contract with
Contiquincybunge Export Company (Contiquincybunge) as its
consignee of the shipped Soybean Meal. Contiquincybunge has made
a shipment through M/V Sea Dream and M/V Tern respectively at the
Port of Darrow, Louisiana, U.S.A. For the first shipment,
Contiquincybunge made a shipment of 6,825.144 metric tons of U.S.
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,
Inc. (ATI), for shipment to Simon. However, when it reached its

receiver Simon, it was already short by 18.556 metric tons. For the
second shipment, Contiquincybunge made shipment, through M/V
Tern, of 3,300.000 metric tons of U.S. Soybean Meal in Bulk for
delivery to Simon at the Port of Manila. The carrier issued its clean
Berth Term Grain Bill of Lading. The shipment was received by ATI
again for delivery to Simon. However, the shipped cargos were found
lacking 199.863 metric tons.
Simon has filed an action for damages against the unknown owner of
the vessels M/V Sea Dream and M/V Tern, its local agent Inter-Asia
Marine Transport, Inc., and petitioner ATI alleging that it suffered the
losses through the fault or negligence of the said defendants. 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, leaving M/V Tern, its local agent Inter-Asia Marine
Transport, Inc., and petitioner ATIs case remaining. The RTC has
ruled that the defendants be solidarily liable for the damages incurred
by Simon.
Unsatisfied with the RTC ruling, the owner of the M/V Tern, and InterAsia Marine Transport, Inc. 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. On the other hand, the petitioner ATI has
also appealed to CA on the issue that the RTC, the court-a-quo,
committed serious and reversible error in holding ATI solidarily liable
with co-defendant appellant Inter-Asia Marine Transport, Inc. contrary
to the evidence presented. The CA ruled that the RTC ruling be
assailed with some modifications on the basis that M/V Tern and InterAsia Marine Transport, Inc. 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. And on ATIs RTC ruling, 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, there has been spillage done by the
stevedores of ATI which is an evidence that ATI has been negligible in
handling the goods.
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.
Ruling:

Yes. The petition for review on certiorari was granted to ATI.

The SC agreed to ATIs 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. The CA misapprehended the following facts: First,
petitioner ATI is correct in arguing that the respondent failed to prove
that the subject shipment suffered actual shortage, as there was no
competent evidence to prove that it actually weighed 3,300 metric
tons at the port of origin. Second, as correctly asserted by petitioner
ATI, the shortage, if any, 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 12.5%. Third, SC
agreed with the petitioner ATI that respondent has not proven any
negligence on the part of the former.
The Berth Term Grain Bill of Lading, the Proforma Invoice, and
the Packing List being used by respondent to prove that the subject
shipment weighed 3,300 metric tons, do not, in fact, help its cause.
The Berth Term Grain Bill of Lading states that the subject shipment
was carried with the qualification "Shippers weight, quantity and
quality unknown," meaning that it was transported with the carrier
having been oblivious of the weight, quantity, and quality of the cargo.
Supreme Court held that as the bill of lading indicated that the
contract of carriage was under a "said to weigh" clause, the shipper is
solely responsible for the loading while the carrier is oblivious of the
contents of the shipment. The meaning of clauses analogous to
"Shippers weight, quantity and quality unknown", means that the
shipper was solely responsible for the loading of the container, while
the carrier was oblivious to the contents of the shipment. The arrastre
operator was, like any ordinary depositary, 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, subject to such qualifications

as may have validly been imposed in the contract between the

parties. 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, as earlier stated, the cargo was at the shippers
load and count.
The recital of the bill of lading for goods thus transported [i.e.,
transported in sealed containers or "containerized"] ordinarily would
declare "Said to Contain", "Shippers Load and Count", "Full Container
Load", and the amount or quantity of goods in the container in a
particular package is only prima facie evidence of the amount or
quantity.
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.
Hence, as can be culled from the above-mentioned cases, the
weight of the shipment as indicated in the bill of lading is not
conclusive as to the actual weight of the goods. Consequently, 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. This, the respondent failed to do.
The presumption that the bill of lading, which petitioner relies
upon to support its claim for restitution, 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. The bill of lading carried an added
clause the shipments weight, measure, quantity, quality, condition,
contents and value unknown. Evidently, the weight of the cargo could
not be gauged from the bill of lading.