(PERFECTION) DANGWA TRANSPORTATION vs. COURT OF APPEALS

FACTS:

Private respondents filed a complaint for damages against petitioners for the death of Pedrito Cudiamat as a result of a vehicular accident which occurred on March 25, 1985 at Marivic, Sapid, Mankayan, Benguet. Petitioner Theodore M. Lardizabal was driving a passenger bus belonging to petitioner corporation in a reckless and imprudent manner and without due regard to traffic rules and regulations and safety to persons and property, it ran over its passenger, Pedrito Cudiamat. Petitioners alleged that they had observed and continued to observe the extraordinary diligence and that it was the victim's own carelessness and negligence which gave rise to the subject incident.

RTC pronounced that Pedrito Cudiamat was negligent, which negligence was the proximate cause of his death. However, Court of Appeals set aside the decision of the lower court, and ordered petitioners to pay private respondents damages due to negligence.

ISSUE:

WON the CA erred in reversing the decision of the trial court and in finding petitioners negligent and liable for the damages claimed.

HELD: CA Decision AFFIRMED

The testimonies of the witnesses show that that the bus was at full stop when the victim boarded the same. They further confirm the conclusion that the victim fell from the platform of the bus when it suddenly accelerated forward and was run over by the rear right tires of the vehicle. Under such circumstances, it cannot be said that the deceased was guilty of negligence.

It is not negligence per se, or as a matter of law, for one attempt to board a train or streetcar which is moving slowly. An ordinarily prudent person would have made the attempt board the moving conveyance under the same or similar circumstances. The fact that passengers board and alight from slowly moving vehicle is a matter of common experience both the driver and conductor in this case could not have been unaware of such an ordinary practice.

Common carriers, from the nature of their business and reasons of public policy, are bound to observe extraordinary diligence for the safety of the passengers transported by the according to all the circumstances of each case. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence very cautious persons, with a due regard for all the circumstances.

It has also been repeatedly held that in an action based on a contract of carriage, the court need not make an express finding of fault or negligence on the part of the carrier in order to hold it responsible to pay the damages sought by the passenger. By contract of carriage, the carrier assumes the express obligation to transport the passenger to his destination safely and observe extraordinary diligence with a due regard for all the circumstances, and any injury that might be suffered by the passenger is right away attributable to the fault or negligence of the carrier. This is an exception to the general rule that negligence must be proved, and it is therefore incumbent upon the carrier to prove that it has exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code.

(DETERMINING FACTOR - KABIT)

Baliwag Transit, Inc., vs. CAG.R. No. 80447

January 31, 1989FACTS:On April 10, 1985, a Complaint for damages arising from breach of contract of carriage was filed by private respondents, the Spouses Sotero Cailipan, Jr. and Zenaida Lopez, and their son George, of legal age, against Baliwag Transit. The Complaint alleged that George, who was a paying passenger on a Baliwag bus on December 17, 1984, suffered multiple serious physical injuries when he was thrown off said bus driven in a careless & negligent manner by Leonardo Cruz, the authorized bus driver. As a result, he was confined in the hospital for treatment, incurring medical expenses, which were borne by his parents in the sum of about P200,000.00 plus other incidental expenses of about P10,000.00.

On February 5, 1986, Baliwag filed a Motion to Admit Amended Answer, which was granted by the RTC. The Amended Answer incorporated the affirmative defense that on May 16 1985, George bad been paid all his claims for damages arising from the incident subject matter of the complaint when he signed the following “Release of Claims”, witnessed by his brother Benjamin L. Cailipan, a licensed engineer:

For and in consideration of the payment to me/us of the sum of EIGHT THOUSAND TWENTY and 50/100 PESOS ONLY (P8,020.50), the receipt of which is hereby acknowledged, I/we, being of lawful age, do hereby release, acquit and forever discharge Fortune Insurance and/or Baliwag transit, Inc. his/her heirs, executors and assigns, from any and all liability now accrued or hereafter to accrue on account of any and all claims or causes of action which I/we now or may here after have for personal injuries, damage to property, loss of services, medical expenses, losses or damages of any and every kind or nature whatsoever, now known or what may hereafter develop by me/us sustained or received on or about 17th day of December, 1984 through Reckless Imprudence Resulting to Physical Injuries, and I/we hereby declare that I/we fully understand the terms of this settlement and voluntarily accept said sum for the purpose of making a full and final compromise adjustment and settlement of the injuries and damages, expenses and inconvenience above mentioned. (Rollo, p. 11)

Opposing to petitioner’s affirmative defense, Sotero Cailipan, Jr. testified that be is the father of George, who at the time of the incident was a student, living with his parents & totally dependent on them for their support; that they (the parents) shouldered the expenses for his hospitalization; and that they had not signed the “Release of Claims.”

In an Order dated 29 August 1986, the RTC of Bulacan, Branch 20, ruled that since the contract of carriage is between Baliwag and George L. Cailipan, the latter, who is of legal age, had the exclusive right to execute the Release of Claims despite the fact that he is still a student & dependent on his parents for support. Consequently, the execution by George of the Release of Claims discharges Baliwag and Fortune Insurance.

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The Spouses appealed to the CA. The CA rendered a Decision on October 22, 1987 setting aside the appealed Order and holding that the “Release of Claims” cannot operate as a valid ground for the dismissal of the case because it does not have the conformity of all the parties, particularly George’s parents, who have a substantial interest in the case as they stand to be prejudiced by the judgment because they spent a sizeable amount for the medical bills of their son; that the Release of Claims was secured by Fortune Insurance for the consideration of P8,020.50 as the full and final settlement of its liability under the insurance policy and not for the purpose of releasing Baliwag from its liability as a carrier in this suit for breach of contract. The Appellate Court also ordered the remand of the case to the lower Court for trial on the merits and for George to return the amount of P8,020.50 to Fortune Insurance.

ISSUES:What is the legal effect of the Release of Claims executed by George during the pendency of this case?

HELD:Since the suit is one for breach of contract of carriage, the Release of Claims executed by him, as the injured party, discharging Fortune Insurance and Baliwag from any and all liability is valid. He was then of legal age, a graduating student of Agricultural Engineering, and had the capacity to do acts with legal effect (Article 37 in relation to Article 402, Civil Code). Thus, he could sue and be sued even without the assistance of his parents.

The contract of carriage was actually between George, as the paying passenger, and Baliwag, as the common carrier. As such carrier, Baliwag was bound to carry its passengers safely as far as human care and foresight could provide, and is liable for injuries to them through the negligence or wilful acts of its employees (Articles 1755 and 1759, Civil Code). Thus, George had the right to be safely brought to his destination and Baliwag had the correlative obligation to do so. Since a contract may be violated only by the parties thereto, as against each other, in an action upon that contract, the real parties in interest, either as plaintiff or as defendant, must be parties to said contract (Marimperio Compania Naviera, S.A. vs. CA, No. L-40234, December 14, 1987, 156 SCRA 368).

A real party-in-interest-plaintiff is one who has a legal right while a real party-in-interest-defendant is one who has a correlative legal obligation whose act/omission violates the legal right of the former (Lee vs. Romillo, Jr., G.R. No. 60973, May 28, 1988). In the absence of any contract of carriage between Baliwag and George’s parents, the latter are not real parties-in-interest in an action for breach of that contract.The general rule of the common law is that every action must be brought in the name of the party whose legal right has been invaded or infringed. 15 Enc. P1. & Pr. p. 484. “For the immediate wrong and damage the person injured is the only one who can maintain the action.” Id. p. 578. The person who sustains an injury is the person to bring an action for the injury against the wrongdoer.” Dicey parties to Actions, 347. (Cited in Green v. Shoemaker, 73 A 688, 23 L.R.A., N.S. 667).

There is no question regarding the genuineness & due execution of the Release of Claims. It is a duly notarized public document. If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control (Article 1370, Civil Code). The phraseology “any and all claims or causes of action” is broad enough to include all damages that may accrue to the injured party arising from the unfortunate accident.

The Release of Claims had the effect of a compromise agreement since it was entered into for the purpose of making a full and final compromise adjustment & settlement of the cause of action involved. A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced(Article 2028, Civil Code).

(EXEMPTION)

Bascos v. CA

Facts:

Rodolfo Cipriano, representing CIPTRADE, entered into a hauling contract with Jibfair Shipping Agency Corporation whereby the former bound itself to haul the latter’s 2000m/tons of soya bean meal from Manila to Calamba. CIPTRADE subcontracted with petitioner Estrellita Bascos to transport and deliver the 400 sacks of soya beans. Petitioner failed to deliver the cargo, and as a consequence, Cipriano paid Jibfair the amount of goods lost in accordance with their contract. Cipriano demanded reimbursement from petitioner but the latter refused to pay. Cipriano filed a complaint for breach of contract of carriage. Petitioner denied that there was no contract of carriage since CIPTRADE leased her cargo truck, and that the hijacking was a force majeure. The trial court ruled against petitioner.

Issues:

(1) Was petitioner a common carrier?

(2) Was the hijacking referred to a force majeure?

Held:

(1) Article 1732 of the Civil Code defines a common carrier as "(a) person, corporation or firm, or association engaged in the business of carrying or transporting passengers or goods or both, by land, water or air, for compensation, offering their services to the public." The test to determine a common carrier is "whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business transacted." In this case, petitioner herself has made the admission that she was in the trucking business, offering her trucks to those with cargo to move. Judicial admissions are conclusive and no evidence is required to prove the same.

(2) Common carriers are obliged to observe extraordinary diligence in the vigilance over the goods transported by them. Accordingly, they are presumed to have been at fault or to have acted negligently if the goods are lost, destroyed or deteriorated. There are very few instances when the presumption of negligence does not attach and these instances are enumerated in Article 1734. In those cases where the presumption is applied, the common carrier must prove that it exercised extraordinary diligence in order to overcome the presumption. The presumption of negligence was raised against petitioner. It was petitioner's burden to overcome it. Thus, contrary to her assertion, private respondent need not introduce any evidence to prove her negligence. Her own failure to adduce sufficient proof of extraordinary diligence made the presumption conclusive against her.

(ART 1734)

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CALVO VS. UCPB GENERAL INSURANCE TERMINAL SERVICE, INC.

Facts:

A contract was entered into between Calvo and San Miguel Corporation (SMC) for the transfer of certain cargoes from the port area in Manila to the warehouse of SMC. The cargo was insured by UCPB General Insurance Co., Inc. When the shipment arrived and unloaded from the vessel, Calvo withdrew the cargo from the arrastre operator and delivered the same to SMC’s warehouse. When it was inspected, it was found out that some of the goods were torn. UCPB, being the insurer, paid for the amount of the damages and as subrogee thereafter, filed a suit against Calvo.Petitioner, on the other hand, contends that it is a private carrier not required to observe such extraordinary diligence in the vigilance over the goods.As customs broker, she does not indiscriminately hold her services out to the public but only to selected parties.

Issue:

Whether or not Calvo is a common carrier liable for the damages for failure to observe extraordinary diligence in the vigilance over the goods.

Held:

The contention has no merit. In De Guzman v. Court of Appeals, the Court dismissed a similar contention and held the party to be a common carrier, thus -The Civil Code defines "common carriers" in the following terms:"Article 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the public."

The law makes no distinction between a carrier offering its services to the general community or solicits business only from a narrow segment of the general population. Note that the transportation of goods holds an integral part of Calvo’s business, it cannot indeed be doubted that it is a common carrier.

(ORDER OF PUBLIC AUTHORITY)

Ganzon v. Court of Appeals161 SCRA 646

Facts:Ganzon, petitioner herein, was hired by Tumambing

to haul 305 tons of scrap iron. The contract was for the petitioner to transport the scrap iron to Manila from Bataan. Tumambing delivered the scrap iron to Niza, captain of the lighter LCT “Batman”, to board it on the same. The crew of the Batman started to load the iron, and when they were about halfway through, Mayor Advincula arrived and demanded P5,000 from Tumambing. The latter resisted and a heated argument started. Mayor Advincula drew his gun and fired at Tumambing. He was brought to the hospital for treatment, lucky for him the wound was not fatal.

A few days after this incident, the loading of the scrap metal was resumed. However, the acting Mayor this time went to the port where the Batman was docked. He was accompanied by 3 policemen and he ordered Captain Niza to dump the scrap iron where the lighter was docked. What was left or the iron was confiscated by the Acting Mayor and brought to NASSCO. A receipt was issued showing that the municipality had taken custody of the scraps or iron.

Tumambing filed a case in order to recover damages for the loss that he sustained. The lower court rendered a decision in favor of Ganzon. However, on appeal the Court of

Appeals reversed the decision ordering Ganzon to pay Tumambing P5,895 as actual damages, P5,000 for exemplary damages and attorney’s fees as well. Hence this petition by Ganzon.

Issue:Whether or not Ganzon is liable for the loss that

Tumambing sustained.

Held:The Court held that Ganzon is liable for the loss of

Tumambing. The defense that the scraps of iron were not unconditionally placed in his custody and control is untenable. Petitioner herein admits that the scraps of iron were delivered to Captain Niza by Tumambing in order to load the same on the lighter Batman. The employees of Ganzon received the scraps of iron on his behalf, therefore the scraps of metal were placed in his custody and control. Upon the receipt of the scraps by the carrier in order transport the same, the contract of carriage was perfected. Upon perfection of the contract, the exercise of extraordinary diligence in caring for the goods shall also commence to begin.

Article 1738 of the NCC provides that the exercise of extraordinary diligence shall cease only upon delivery to the consignee or to the person who has the right to receive the same. In this case, there was no delivery made to the consignee, therefore the carrier should have exercised extraordinary diligence in taking care of the scraps of iron. It is irrelevant that the scraps of iron were only partially loaded on the lighter. The scraps of iron were already under the custody and control of the carrier, therefore he shall be liable for its loss.

(LIMITING LIABILITY)

EDGAR COKALIONG SHIPPING LINE V. UCPB

(REASONABLE TIME)

Aboitiz Shipping Corporation vs. Court of Appeals188 SCRA 387

Facts: Anacleto Viana was a passenger of M/V Antonia bound

for Manila which was owned by defendant Aboitiz. After the said vessel has landed, the Pioneer Stevedoring Corp., as the arrastre operator, took over the exclusive control of the cargoes loaded on it. One hour after the passengers had disembarked, Pioneer Stevedoring started operation by unloading the cargoes using its crane. Viana who had already disembarked remembered that some of his cargoes were still inside the vessel. While pointing to the crew of the vessel the place where his cargoes were, the crane hit him, pinning him between the side of the vessel and the crane which resulted to his death. Viana’s wife filed a complaint for damages against Aboitiz for breach of contract f carriage. Aboitiz, however filed a third party complaint against Pioneer since it had control completely over the vessel during the incident. Furthermore, petitioner contends that one hour has already elapsed from the time Viana disembarked, thus he has already ceased to be a passenger.

Issue:Whether or not Aboitiz is liable for the death of Viana.

Held:The Supreme Court held that the failure of Aboitiz to

exercise extraordinary diligence for the safety of its passengers makes Aboitiz liable. It has been recognized as a rule that the relation of the carrier and passenger does not cease the moment the passenger alights from the carrier’s vehicle, but continues until the passenger has had a reasonable time or a reasonable opportunity to leave the carrier’s premises. A reasonable time or a reasonable delay

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within this rule is to be determined from all the circumstances. The primary factor to be considered is the existence of a reasonable cause as will justify the presence of the victim on or near the petitioner’s vessel. In the case at bar, such justifiable cause exists because he had to come back for his cargo. Aboitiz has failed to safeguard its passenger with extraordinary diligence in requiring or seeing to it that precautionary measures were strictly and actually enforced to subserve their purpose of preventing entry into a forbidden area.

National Steel Corporation v. Court of AppealsG.R. Nos. 112287/112350

Facts:Herein petitioner of G.R. No. 112350, Vlasons

Shipping entered into a contract of afreightment on contract of vogage4 charter line with the petitioner of the other consolidated case, National Steel Corporation (NSC), whereby the latter hired Vlason’s vessel, the M/V Vlasons I to make a voyage to load steel products from Ilagan City to Manila. Under the agreement, the loading and unloading of the cargoes are the responsibility of the charter and the owner shall no be liable of the loss or damage of the cargo arising from the unseaworthiness unless counsel by want of diligence on the part of the owners to make the vessel seaworthy and to secure that it is properly manned, equipped and supplied.

Upon arrival on August 12, 1974, it was found that nearly all the tin plates and hot rolled sheets were wet and rusty. The cargo was unloaded by the charterer Hence the petitioner filed for a claim of damages amounting to P941,145.58, alleging the negligence of the master and crew of the ship.

Issue:Whether or not Vlasons Shipping is made liable notwithstanding the Charter Party stipulations.

Held:The courts rule the negative. At bottom, this appeal

really hinges on a factual issue as to then, how, and who caused the damages to the cargo. Ranged against NSC are two formidable truhs. First, it was found that such damage was brought about during the unloading process when the rain seeped into the cargo due to the negligence of the stevedores employed by it.

Second and more importantly, the agreement between the parties “The Contact of Voyage Charter Party for Hire” placed the burden of proof of such loss or damage upon the shipper, not upon the ship owner. Such stipulation, while disadvantageous to the NSC, is valid because the parties entered into a contract of private charter, not one of common carriage.

Basic too is the doctrine that courts cannot relieve a party from the effects of a private contract fully entered into, on the ground that it is allegedly one-sided or unfair to the plaintiff. It has been held that the true test of a common carrier of passengers/goods is the carriage of the same, provided it has space, for all who opt to avail for its transportation service for a fee.

(COMMON CARRIER)

First Philippine Industrial Corporation vs . Court of Appeals

G.R. No. 125948 December 29, 1998

Facts:

Petitioner, First Phil. Industrial Corporation (FirstPhil for brevity) is a grantee of a pipeline concession under Republic Act No. 387, as amended, to contract, install and operate oil pipelines. FirstPhil applied for a mayor's permit, but before the mayor's permit could be issued, the respondent City Treasurer required petitioner to pay a local tax pursuant to the Local

Government Code. Petitioner filed a letter-protest addressed to the respondent City Treasurer, but the latter denied the same contending that petitioner cannot be considered engaged in transportation business, thus it cannot claim exemption under Section 133 (j) of the Local Government Code.

FirstPhil filed with the RTC Batangas a complaint for tax refund with prayer for writ of preliminary injunction against respondents, contending that the imposition of tax upon them violates Sec 133 of the Local Government Code. On the other hand, respondents assert that pipelines are not included in the term "common carrier" which refers solely to ordinary carriers such as trucks, trains, ships and the like. Respondents further posit that the term "common carrier" under the said code pertains to the mode or manner by which a product is delivered to its destination.RTC dismissed the complaint, ruling that exemption granted under Sec. 133 (j) encompasses only "common carriers" so as not to overburden the riding public or commuters with taxes. And that petitioner is not a common carrier, but a special carrier extending its services and facilities to a single specific or "special customer" under a "special contract."

The case was elevated by the petitioner to the CA, but CA affirmed the decision of the RTC. Hence this petition.

Issue:

WON the petitioner is a "common carrier" and, therefore, exempt from the business taxc

Held: Petition was granted. CA decision was REVERSED and SET ASIDE.

SC ruled in this case that petitioner is a common carrier and thus, exempt from business tax.

A "common carrier" may be defined, broadly, as one who holds himself out to the public as engaged in the business of transporting persons or property from place to place, for compensation, offering his services to the public generally. Art. 1732 of the Civil Code defines a "common carrier" as "any person, corporation, firm or association engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public." The test for determining whether a party is a common carrier of goods is:1. He must be engaged in the business of carrying goods for others as a public employment, and must hold himself out as ready to engage in the transportation of goods for person generally as a business and not as a casual occupation;2. He must undertake to carry goods of the kind to which his business is confined;3. He must undertake to carry by the method by which his business is conducted and over his established roads; and4. The transportation must be for hire.

Based on the above definitions and requirements, there is no doubt that petitioner is a common carrier. It is engaged in the business of transporting or carrying goods, i.e. petroleum products, for hire as a public employment. It undertakes to carry for all persons indifferently, that is, to all persons who choose to employ its services, and transports the goods by land and for compensation. The fact that petitioner has a limited clientele does not exclude it from the definition of a common carrier.

The definition of "common carriers" in the Civil Code makes no distinction as to the means of transporting, as long as it is by land, water or air. It does not provide that the transportation of the passengers or goods should be by motor vehicle. In fact, in the United States, oil pipe line operators are considered common carriers.

Under the Petroleum Act of the Philippines (Republic Act 387), petitioner is considered a "common carrier.", and at the same

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time, said act also regards petroleum operation as a public utility. BIR likewise considers the petitioner a "common carrier." In so ruling, it held that, since petitioner is a pipeline concessionaire that is engaged only in transporting petroleum products, it is considered a common carrier under Republic Act No. 387. Such being the case, it is not subject to withholding tax prescribed by Revenue Regulations No. 13-78, as amended.

Section 133 (j), of the Local Government Code, provides:Sec. 133. Common Limitations on the Taxing Powers of Local Government Units. — Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following:(j) Taxes on the gross receipts of transportation contractors and persons engaged in the transportation of passengers or freight by hire and common carriers by air, land or water, except as provided in this Code.

SC held that the legislative intent in excluding from the taxing power of the local government unit the imposition of business tax against common carriers is to prevent a duplication of the so-called "common carrier's tax."

(ART 1759)

De Gillaco v. Manila Railroad Co.G.R. No. L-8034

Facts:Lt. Tomas Gillaco, husband of Cornelia A. de Gillaco,

was a passenger in the early morning train of the Manila Railroad Company (MRC) from Calamba, Laguna to Manila. When the train reached the Paco Railroad station, Emilio Devesa, a train guard of MRC assigned in the Manila-San Fernando, La Union Line, happened to be in said station waiting for the same train which would take him to Tutuban Station, where he was going to report for duty. Devesa had a long standing personal grudge against Tomas Gillaco dating back during the Japanese occupation. And because of this personal grudge, Devesa shot Gillaco upon seeing him inside the train. The carbine furnished by the MRC for his use as train guard. Tomas Gillaco died as a result of the wound sustained from the shot. Devesa was convicted of homicide by final judgment of the Court of Appeals.

Wife of deceased petitioner, filed an action against the MRC at CFI Laguna. The trial court sentenced the respondents to pay P4,000 damages to the petitioners. Thus this appeal.

Issue: Whether or not the carrier should be held liable

Held:While the passenger is entitled to protection from

personal violence by the carrier or its agents or employees, the responsibility of the carrier extends to those acts that the carrier could foresee or avoid through the exercise of the degree of care or diligence required of it. The Old Civil Code did not impose upon the carrier absolute liability for assaults of their employees upon the passenger. In the present case, the act of Devesa is shooting the passenger was entirely unforeseeable by MRC. They had no means to ascertain or anticipate that the two would meet, or could it reasonably foresee every personal career that might exist between each of its may employee and any one of the thousands of passengers riding in its train. The shooting was therefore, a caso fortuito, both being unforeseeable and inevitable, under the circumstances. The resulting breach of Manila Railroad’s contract of safe carriage with the late Tomas Gillaco was excused thereby. Furthermore, when the crime took place, the guard Devesa had no duties to discharge in connection with the transportation of the deceased from Calamba to Manila.

The stipulation of facts is clear that when Devesa shot and killed Gillaco, Devesa was assigned to guard the Manila-San Fernando (La Union) trains, and he was at Paco Station awaiting transportation to Tutuban.

SC reversed the judgment appealed from, and dismissed the complaint, without costs.

(DEMURRAGE LIABILITY)

Magellan Mfg. Marketing Corp. v. CA supra (1991)

G.R. No. 95529  

Lessons Applicable: Bill of Lading (Transportation)FACTS:

Choju Co., Ltd purchased from Magellan Manufacturers Marketing Corp. (MMMC) 136,000 anahaw fans for $23,220

MMMC contracted with F.E. Zuellig, a shipping agent of Orient Overseas Container Lines, Inc., (OOCL) specifying that he needed an on-board bill of lading and that transhipment is not allowed under the letter of credit 

MMMC paid F.E. 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 James Cu, went back to the bank later, he was informed that the payment was refused by the buying for lack of bill of lading and there was a transhipment of goods

The anahaw fans were shipped back to Manila through OOCL who are demanding from MMMC P246,043.43 (freight charges from Japan to Manila, demurrage incurred in Japan and Manila from October 22, 1980 up to May 20, 1981 and charges for stripping the container van of the Anahaw fans on May 20, 1981)

MMMC abandoned the whole cargo and asked OOCL for damages

o OOCL: bill of lading clearly shows that there will be a transhipment and that petitioner was well aware that MV (Pacific) Despatcher was only up to Hongkong where the subject cargo will be transferred to another vessel for Japan

RTC: favored OOCL:o consented because the bill of lading where it

is clearly indicated that there will be transhipment

o MMMC was the one who ordered the reshipment of the cargo from Japan to Manila

CA: Affirmed with modification of excluding demurrage in Manila

ISSUE: W/N the bill of lading which reflected the transhipment against the letter of credit is consented by MMMC 

HELD: YES. CA Affirmed with modification

Transhipmento act of taking cargo out of one ship and

loading it in anothero the transfer of goods from the vessel

stipulated in the contract of affreightment to

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another vessel before the place of destination named in the contract has been reached

o transfer for further transportation from one ship or conveyance to another

the fact of transhipment is not dependent upon the ownership of the transporting ships or conveyances or in the change of carriers, as the petitioner seems to suggest, but rather on the fact of actual physical transfer of cargo from one vessel to another

appears on the face of the bill of lading the entry "Hong Kong" in the blank space labeled "Transhipment," which can only mean that transhipment actually took place

bill of lading o operates both as a receipt and as a contract

receipt for the goods shipped contract to transport and deliver the

same as therein stipulated  names the parties, which

includes the consignee, fixes the route, destination, and freight rates or charges, and stipulates the rights and obligations assumed by the parties

law between the parties who are bound by its terms and conditions provided that these are not contrary to law, morals, good customs, public order and public policy

GR: acceptance of the bill without dissent raises the presumption that all the terms therein were brought to the knowledge of the shipper and agreed to by him and, in the absence of fraud or mistake, he is estopped from thereafter denying that he assented to such term

There clearly appears on the face of the bill of lading under column "PORT OF TRANSHIPMENT" an entry "HONGKONG'

On board bill of lading vs. received for shipment bill of lading:

o on board bill of lading stated that the goods have been

received on board the vessel which is to carry the goods

o received for shipment bill of lading  stated that the goods have been

received for shipment with or without specifying the vessel by which the goods are to be shipped

issued whenever conditions are not normal and there is insufficiency of shipping space

certification of F.E. Zuellig, Inc. cannot qualify the bill of lading, as originally issued, into an on board bill of lading as required by the terms of the letter of credit issued in favor of petitioner - it is a received for shipment bill of lading 

o issued only on July 19, 1980, way beyond the expiry date of June 30, 1980 specified in the letter of credit for the presentation of an on board bill of lading 

Demurrageo compensation provided for in the contract of

affreightment for the detention of the vessel beyond the time agreed on for loading and unloading

o claim for damages for failure to accept delivery

before it could be charged for demurrage charges it should have been notified of the arrival of the goods first

Since abandon option was communicated, the same is binding upon the parties on legal and equitable considerations of estoppel

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