Can the freight forwarder be held liable to the unpaid seller (exporter) of the goods?
No. And this is the story.
Sometime in the early part of April 1980, DBI – a domestic corporation engaged in the export of handicrafts sold assorted wooden items worth USD12,000.00 to AMBIENT – a US-based company.
DBI delivered to ACC – a freight forwarder based in Manila, for sea transport from Manila and delivery to AMBIENT. ACC as agent of ASTI – a US-based freight forwarder, issued triplicate copies of ASTI bills of lading. But DBI retained possession of the originals of the B/Ls pending the payment of the goods by AMBIENT.
Then, AMBIENT and ASTI entered into an indemnity agreement which will allow ASTI to deliver the shipment “without the surrender of the relevant bill(s) of lading due to the non-arrival of loss thereof”. In exchange, AMBIENT undertook to indemnify and hold ASTI and its agent (ACC) from any liability as a result of the release of the shipment. Thereafter, ASTI released the shipment to AMBIENT without the knowledge of DBI and without being paid.
DBI then made several demands to AMBIENT for the payment of the shipment but to no avail. Thus, DBI filed a complaint with the RTC against AMBIENT, ASTI and ACC for the payment of the value shipment. It claimed that under the B/L, ASTI and/or ACC is “to release and deliver the cargo/shipment to the consignee, x x x, only after the original copy or copies of the [the] Bill of lading is or are surrendered to them; otherwise, they become liable to the shipper for the value of the shipment.”
The trial court found AMBIENT, ASTI and ACC solidarily liable to DBI for the value of the shipment. It declared that AMBIENT as the buyer, has an obligation to pay the value of the shipment. The trial court held that ASTI was remiss in its duty when it allowed the unwarranted release of the shipment to AMBIENT.
The CA affirmed the ruling of the trial court finding AMBIENT liable to DBI but absolved ASTI and ACC from liability. The CA ruled that the law does not require that the B/L be surrendered by the buyer/consignee before the carrier can release the goods.
But the SC ruled in the following tenor:
“A common carrier may release the goods to the consignee even without the surrender of the bill of lading.
x x x
Here, ACC, as agent of ASTI, issued Bill of Lading No. ________. This bill of lading governs the rights, obligations and liabilities of DBI and ASTI. x x x . Quite tellingly, however, DBI does not point or refer to any specific clause or provision on the bill of lading supporting this claim.
Further, a carrier is allowed by law to release the goods to the consignee even without the latter’s surrender of the bill of lading. The third paragraph of Article 353 of the Code of Commerce is enlightening:
x x x
In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the carrier, because of its loss or any other cause, he must give the latter a receipt for the goods delivered, this receipt producing the same effects as the return of the bill of lading.”
Here, AMBIENT could not produce the bill of lading covering the shipment not because it was lost, but for another cause: the bill of lading was retained by DBI pending AMBIENTs full payment of the shipment. The execution of the indemnity agreement and the undisputed fact that the shipment was released to AMBIENT pursuant to it, to our mind, operates as a receipt in substantial compliance with the last paragraph of Article 353 of the Code of Commerce.
x x x
The contract between DBI and ASTI is a contract of carriage of goods; hence, ASTIs liability should be pursuant to that contract and the law on transportation of goods. Not being a party to the contract of sale between DBI and AMBIENT, ASTI cannot be held liable for the payment of the value of the goods sold. We sustain the finding of the CA that only AMBIENT, as the buyer of the goods, has the obligation to pay for the value of the shipment. x x x.”
In sum, I wish to point out that a freight forwarder may be held liable for value of the shipment if the B/L contains a provision stating that it may release and/deliver the cargo/shipment to the consignee only after the original copy or copies of the b/ls are surrendered.
Next story please. And stay safe.
For questions or comments, email the writer at atty.joeytbanday@gmail.com.
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