Can the carrier release
cargo without requiring surrender of the B/L?
(April 19, 2004)
YES. And this is the story.
On 24 February 1980, the Nabo Corporation of
Japan shipped a cargo via the S/S Adventure for
Manila. The bill of lading was consigned to "Shipper's
Order", with "Address Arrival Notice to Cubi Mines,
Inc. (CMI) 777 Ayala Avenue, Makati, Metro Manila".
The cargo arrived in Manila. On the basis of
an Undertaking for Delivery of Cargo executed
by CMI but without surrendering the original bill
of lading, the carrier released the shipment to
CMI.
About five months later, the carrier received
from Rica Bank a letter informing the former that
it is holding the full set of the original bill
of lading and inquiring as to the status of the
subject cargo. This was followed by another letter
from the counsel of Rica Bank contemplating legal
action against the carrier.
Then, Rica Bank received a letter from CMI admitting
that they received the shipment in question due
to a "guarantee" it executed and that any legal
action be held in abeyance for at least 30 days
in order to settle its account with the said bank.
However, CMI failed to fulfill its promise. Thus,
Rica Bank filed a complaint before the Court of
First Instance (now RTC) of Rizal against the
carrier for the value of the cargo covered by
the bill of lading plus damages.
Later on, the carrier filed a third-party complaint
against CMI seeking reimbursement for whatever
pecuniary obligations it may be held liable to
Rica Bank. After trial on the merits, the trial
court rendered a decision finding the carrier
liable to Rica Bank with a right of reimbursement
from CMI.
The trial court denied the motion for reconsideration
of the carrier. And the carrier appealed to the
Court of Appeals.
But the Court of Appeals sustained the decision
of the trial court. And the carrier had to appeal
to the Supreme Court.
The Supreme Court ruled in the following tenor:
x x x
At the outset, the Bill of Lading which was
issued by the carrier but contained articles furnished
by the Shipper, shows on its face that the Shipment
is consigned "TO SHIPPER'S ORDER" with "ADDRESS
ARRIVAL NOTICE TO CUBI MINES INC. 777 AYALA AVE.
MAKATI, METRO MANILA, PHILIPPINES" (Annex A of
Complaint, p. 7, Original Records).
Nowhere did the Bill of Lading refer to respondent
(Rica Bank) as the consignee or the one to be
notified. The foregoing information, without more,
in effect makes CMI for all practical intents
and purposes the party named and ordered to receive
the goods.
The petitioner-carrier, not being privy to
any transaction between Rica Bank and CMI, cannot
be expected to look beyond what is contained on
the face of the bill of lading in question and
guess which of the many banks in Metro Manila
or some unrevealed corporation could possibly
the consignee.
To consider otherwise would not be sound
business practice as petitioner-carrier would
be forced to wait for the real owner of the goods
to show up, perhaps in vain.
x x x
But assuming that CMI may not be considered as
the consignee, the petitioner-carrier cannot be
faulted for releasing the goods to CMI under the
circumstances, due to its lack of knowledge as
to who was the real consignee in view of CMI's
strong representations and letter of undertaking
wherein it stated that the bill of lading would
be presented later.
This is precisely the situation covered by the
last paragraph of Art. 353 of the Code of Commerce
to wit: If in case the consignee cannot return,
upon receiving the merchandise, the bill of lading
subscribed by the carrier, due to its loss or
for any other cause, he must give the said carrier
a receipt for the goods delivered, this receipt
producing the same effects as the return of the
bill of lading.
Thus, let us always remember that under exceptional
circumstances, the carrier may release the goods
without requiring the consignee to surrender the
bill of lading. But it is always better to secure
the written consent of the shipper before releasing
the cargo to the consignee without the bill of
lading.
For questions or comments, email the author
at jtb@pac-atlantic.com.
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Passenger
Rights in Times of Vessel Delay (May 31, 2004)
Atty. Renato Alano bought a ticket from Asia
Shipping, Inc. for the voyage of the MV Asia to
Cagayan De Oro from Cebu City on 12 November 1991.
At around 5:30 in the evening of the same day
when Atty. Alano boarded the vessel, he noticed
that some repairs were being done on the engines.
The vessel departed at about 11:00 p.m. with only
one engine running.
After an hour of slow voyage, the vessel stopped
and dropped its anchor. After half an hour, some
passengers demanded that they be allowed to return
to Cebu City for they were no longer willing to
proceed to Cagayan De Oro City.
Thus, the vessel headed back to Cebu City. In
Cebu City, Atty. Alano and the other passengers
of the MV Asia were allowed to disembark.
Thereafter, the vessel proceeded to Cagayan De
Oro City. On the following day, Atty. Alano boarded
another vessel owned and operated by Asia Shipping.
On account of the failure of MV Asia to transport
him to Cagayan De Oro City on 12 November 1991,
Atty. Alano filed a complaint for damages against
Asia Shipping.
After trial on the merits, the trial court dismissed
the complaint on the ground that Asia Shipping
did not exclude Atty. Alano from the trip of the
MV Asia. If he was left behind, it was because
of his fault or negligence.
Unsatisfied, Atty. Alano appealed to the Court
of Appeals. The Court of Appeals reversed the
trial court's decision but did not allow the grant
of damages for the delay in the performance of
the obligation of Asia Shipping.
Asia Shipping elevated the case to the Supreme
Court. And the Supreme Court ruled:
x x x
as found by the respondent Court (Court of
Appeals), there was in fact no delay in the commencement
of the contracted voyage. If any delay was incurred,
it was after the commencement of such voyage,
more specifically, when the voyage was subsequently
interrupted when the vessel had to stop after
the only remaining engine conked out.
x x x
Article 698 (Code of Commerce) must then
be read together with Articles 2199, 2200, 2201
and 2208 in relation to Article 21 of the Civil
Code. So read, it means that the petitioner (Asia
Shipping) is liable for any pecuniary loss or
loss of profits which the private respondent (Atty.
Alano) may have suffered by reason thereof.
x x x
This however assumes that he stayed on the
vessel and was with it when it thereafter resumed
its voyage; but he did not. As he and some other
passengers resolved not to complete the voyage,
the vessel had to return to its port of origin
and allow them to disembark.
x x x
Let us bear in mind that for delays after the
commencement of the voyage - more specifically,
when the voyage is subsequently interrupted due
to unseaworthiness - the vessel is liable for
any pecuniary loss or loss of profits which the
passengers may suffer pursuant to Article 698
of the Code of Commerce.
For comments, email the author at jtb@pac-atlantic.com.ph.
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Can
the courts compel the BoC to seize and forfeit
imports?
NO. And this is the story.
On 5 April 1989, JJ Corporation imported four
containers of matches from Indonesia. The shipment
was released without any question by the Bureau
of Customs (BOC).
On 25 April 1989, Provident Farms, Inc. (PFI),
a domestic corporation engaged in industrial tree
planting, secured a certification from the Secretary
of the Department of Natural Resources and Environment
that "there are enough available softwood supply
in the Philippines for the match industry at reasonable
price". PFI supplies wood to local match manufacturers
for the production of matches.
PFI subsequently filed with the Regional Trial
Court of Manila a complaint for injunction and
damages with a prayer for a temporary restraining
order against the BOC Commissioner and JJ Corporation
to enjoin them from further importing matches
and "wood derivated" products.
JJ Corporation moved to dismiss the complaint,
alleging that "the Commissioner of Customs has
exclusive jurisdiction to determine the legality
of an importation or ascertain whether the conditions
prescribed by law for an importation have been
complied with".
PFI opposed the motion to dismiss. The trial
court denied the motion to dismiss. However, on
motion for reconsideration by JJ Corporation,
the trial court reconsidered its previous order
and dismissed the case on the ground that it had
"no jurisdiction to determine what are legal or
illegal importations".
PFI elevated the case to the Supreme Court. It
interposed the argument that what was brought
before the trial court was a civil case for injunction.
And it was meant to restrain the entry of safety
matches into the country and for the purpose of
securing compliance with the provisions of the
Revised Forestry Code.
But the Supreme Court ruled in the following
manner:
"The enforcement of the import ban under Sec.
36, par. (1), of the Revised Forestry Code is
within the exclusive realm of the Bureau of Customs,
and direct recourse of petitioner (PFI) to the
Regional Trial Court to compel the Commissioner
of Customs to enforce the ban is devoid of any
legal basis. To allow the regular court to direct
the Commissioner to impound the imported matches,
as petitioner would, is clearly an interference
with the exclusive jurisdiction of the Bureau
of Customs over seizure and forfeiture cases.
An order of a judge to impound, seize or forfeit
must inevitably be based on his determination
and declaration of the invalidity of the importation,
hence, a usurpation of the prerogative and an
encroachment on the jurisdiction of the Bureau
of Customs. In other words, the reliefs directed
against the Bureau of Customs as well as the prayer
for injunction against importation of matches
may not be granted without the court arrogating
upon itself the exclusive jurisdiction of the
Bureau of Customs."
Thus, let us always remember that the courts
cannot compel the Bureau of Customs to seize and
forfeit importations. But this does not preclude
recourse to the courts by way of the extraordinary
relief of certiorari under Rule 65 of the
Rules of Court if the BOC should gravely abuse
the exercise of its jurisdiction.
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For comments or inquiries, contact the author
at jtb@pac-atlantic.com.ph.
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