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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.

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Magellan Mfg. Marketing Corp. vs. CAG.R. No. 95529; August 22, 1991BI !" A#ING"AC$%&C'o(uCo., t) pur*'ase)fro+ MMMC1,-,...ana'a/fans for02,,22.. MMMC*ontra*te)/it' ".1. 2uellig, as'ippingagent of3!!C4 spe*if5ing t'at 'e nee)e) an on67oar) 7ill of la)ing an) t'attrans'ip+ent isnot allo/e)un)er t'eletter of *re)it. MMMCpai)2uelligt'efreig't *'argesan)se*ure)a*op5of t'e7ill of la)ing/'i*'/as presente)toAllie)Bank. $'e7ankt'en*re)ite)t'ea+ount of 8%02,,22. *overe) 75 t'e letter of *re)it to MMMC. 9'enMMMC:s ;resi)ent /ent 7a*k to t'e 7ank later, 'e /as infor+e) t'att'epa5+ent /asrefuse)75t'e7u5er for la*kof on7oar)7ill ofla)ing an) t'ere /as a trans'ip+ent of goo)s. $'e ana'a/ fans /eres'ippe) 7a*k to Manila t'roug' !!C. MMMC a7an)one) t'e /'ole*argo an) aske) !!C for )a+ages.I%%81& 9'et'er t'e 7ill of la)ing /'i*' refle*te) t'e trans'ip+ent against t'eletter of *re)it is *onsente) 75 MMMC R8ING&In su+, petitioner 'a) full kno/le)ge t'at t'e 7ill issue) to it *ontaine)ter+s an) *on)itions *learl5 violative of t'e repir5)ate of t'e letter of *re)it, petitioner took t'e risk of a**epting t'e 7illof la)ing even if it )i) not *onfor+ /it' t'e in)i*ate) spe*ifi*ations,possi7l5 entertaining a gli++er of 'ope an) i+7ue) /it' a tou*' of)aring t'at su*' violations +a5 7e overlooke), if not )isregar)e), solong as t'e *argo is )elivere) on ti+e. 8nfortunatel5, t'e risk )i) notpull t'roug' as 'ope) for. An5 violation of t'e ter+s an) *on)itions oft'eletter of *re)it as/oul))efeat itsrig't to*olle*t t'epro*ee)st'ereof /as, t'erefore, entirel5 of t'e petitioner:s +aking for /'i*' it+ust 7ear t'e *onseer*ise))ue)iligen*e to forestall or lessen t'e loss as provi)e) in Arti*le 1CB2 oft'e Civil Co)e. An) on A$IHs R$C ruling, it /as assaile) as /ell on t'e7asis t'at t'e steve)ore of t'e MFG $ern 'as /itnesse) t'at )uring t'e)is*'arge+ent of t'e*argo, t'ere'as7eenspillage)one75t'esteve)ores of A$I /'i*' is an evi)en*e t'at A$I 'as 7een negligi7le in'an)ling t'e goo)s.Issue&9'et'er or not t'e appellate *ourt erre) in affir+ing t'e)e*ision of t'e trial *ourt 'ol)ing petitioner A$I soli)aril5 lia7le /it' its*o6)efen)ants for t'e s'ortage in*urre) in t'e s'ip+ent of t'e goo)sto respon)ent.Ruling&Kes. $'e petition for revie/ on *ertiorari/as grante) to A$I.$'e%Cagree)toA$IHs*lai+t'at t'eCAerre)inaffir+ingt'e)e*ision of t'e trial *ourt 'ol)ing petitioner A$I soli)aril5 lia7le /it' its*o6)efen)ants for t'e s'ortage in*urre) in t'e s'ip+ent of t'e goo)storespon)ent. $'eCA+isappre'en)e)t'efollo/ingfa*ts& "irst,petitioner A$I is *orre*t in arguing t'at t'e respon)ent faile) to provet'at t'e su7(e*t s'ip+ent suffere) a*tuals'ortage, as t'ere /as no*o+petent evi)en*etoprovet'at it a*tuall5/eig'e),,,..+etri*tons at t'e port of origin. %e*on), as *orre*tl5 asserte) 75 petitionerA$I, t'e s'ortage, if an5, +a5 'ave 7een )ue to t'e in'erent nature oft'esu7(e*t s'ip+ent or itspa*kagingsin*et'esu7(e*t *argo/ass'ippe)in7ulkan)'a)a+oisture*ontent of 12.5N. $'ir), %Cagree)/it't'epetitioner A$I t'at respon)ent 'asnot provenan5negligen*e on t'e part of t'e for+er.$'e Bert' $er+ Grain Bill of a)ing, t'e ;rofor+a Invoi*e, an)t'e ;a*king ist 7eing use) 75 respon)ent to prove t'at t'e su7(e*ts'ip+ent /eig'e) ,,,.. +etri* tons, )o not, in fa*t, 'elp its *ause.$'e Bert' $er+ Grain Bill of a)ing states t'at t'e su7(e*t s'ip+ent/as *arrie) /it' t'e