THIRD DIVISION
G.R. No. 184513, March 09, 2016
DESIGNER BASKETS, INC., Petitioner, v. AIR SEA TRANSPORT, INC. AND ASIA CARGO CONTAINER LINES, INC., Respondents.
D E C I S I O N
JARDELEZA, J.:
This is a Petition for Review on Certiorari1 of the August 16, 2007 Decision2 and September 2, 2008 Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 79790, absolving respondents Air Sea Transport, Inc. (ASTI) and Asia Cargo Container Lines, Inc. (ACCLI) from liability in the complaint for sum of money and damages filed by petitioner Designer Baskets, Inc. (DBI).
The trial court declared that the liability of Ambiente is "very clear." As the buyer, it has an obligation to pay for the value of the shipment. The trial court noted that "[the case] is a simple sale transaction which had been perfected especially since delivery had already been effected and with only the payment for the shipment remaining left to be done."36
- US$12,590.87, or the equivalent of [P]333,658.00 at the time of the shipment, plus 12% interest per annum from 07 January 1996 until the same is fully paid;
- [P]50,000.00 in exemplary damages;
- [P]47,000.00 as and for attorney's fees; and,
- [P]10,000.00 as cost of suit.35
There is nothing in the applicable laws that require the surrender of bills of lading before the goods may be released to the buyer/consignee. In fact, Article 353 of the Code of Commerce suggests a contrary conclusion, viz —The CA stressed that DBI failed to present evidence to prove its assertion that the surrender of the bill of lading upon delivery of the goods is a common mercantile practice.47 Further, even assuming that such practice exists, it cannot prevail over law and jurisprudence.48"Art. 353. After the contract has been complied with, the bill of lading which the carrier has issued shall be returned to him, and by virtue of the exchange of this title with the thing transported, the respective obligations shall be considered canceled xxx In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the carrier because of its loss or of 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."The clear import of the above article is that the surrender of the bill of lading is not an absolute and mandatory requirement for the release of the goods to the consignee. The fact that the carrier is given the alternative option to simply require a receipt for the goods delivered suggests that the surrender of the bill of lading may be dispensed with when it cannot be produced by the consignee for whatever cause.46 (Emphasis supplied.)
WHEREFORE, in view of the foregoing, the Decision dated July 25, 2003 of Branch 255 of the Regional Trial court of Las [Piñas] City in Civil Case No. LP-96-0235 is hereby AFFIRMED with the following MODIFICATIONS:Hence, this petition for review, which raises the sole issue of whether ASTI and ACCLI may be held solidarily liable to DBI for the value of the shipment.SO ORDERED.52ChanRoblesVirtualawlibrary
- Defendants-appellants Air Sea Transport, Inc. and Asia Cargo Container Lines, Inc. are hereby ABSOLVED from all liabilities;
- The actual damages to be paid by defendant Ambiente shall be in the amount of US$12,590.87. Defendant Ambiente's liability may be paid in Philippine currency, computed at the exchange rate prevailing at the time of payment;51 and
- The rate of interest to be imposed on the total amount of US$12,590.87 shall be 6% per annum computed from the filing of the complaint on October 7, 1996 until the finality of this decision. After this decision becomes final and executory, the applicable rate shall be 12% per annum until its full satisfaction.
Received by the Carrier in apparent good order and condition unless otherwise indicated hereon, the Container(s) and/or goods hereinafter mentioned to be transported and/or otherwise forwarded from the Place of Receipt to the intended Place of Delivery upon and [subject] to all the terms and conditions appearing on the face and back of this Bill of Lading. If required by the Carrier this Bill of Lading duly endorsed must be surrendered in exchange for the Goods of delivery order.57 (Emphasis supplied.)There is no obligation, therefore, on the part of ASTI and ACCLI to release the goods only upon the surrender of the original bill of lading.
Article 353. The legal evidence of the contract between the shipper and the carrier shall be the bills of lading, by the contents of which the disputes which may arise regarding their execution and performance shall be decided, no exceptions being admissible other than those of falsity and material error in the drafting.The general rule is that upon receipt of the goods, the consignee surrenders the bill of lading to the carrier and their respective obligations are considered canceled. The law, however, provides two exceptions where the goods may be released without the surrender of the bill of lading because the consignee can no longer return it. These exceptions are when the bill of lading gets lost or for other cause. In either case, the consignee must issue a receipt to the carrier upon the release of the goods. Such receipt shall produce the same effect as the surrender of the bill of lading.
After the contract has been complied with, the bill of lading which the carrier has issued shall be returned to him, and by virtue of the exchange of this title with the thing transported, the respective obligations and actions shall be considered cancelled, unless in the same act the claim which the parties may wish to reserve be reduced to writing, with the exception of that provided for in Article 366.
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. (Emphasis supplied.)
"One of the Bills of Lading must be surrendered duly endorsed in exchange for the goods or delivery order."61 (Citations omitted.)In clearing the carrier from liability, we took into consideration that the shipper sent a telex to the carrier after the goods were shipped. The telex instructed the carrier to deliver the goods without need of presenting the bill of lading and bank guarantee per the shipper's request since "for prepaid shipt ofrt charges already fully paid our end x x x."62 We also noted the usual practice of the shipper to request the shipping lines to immediately release perishable cargoes through telephone calls.
But assuming that CMI may not be considered consignee, the petitioner 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:Clearly, law and jurisprudence is settled that the surrender of the original bill of lading is not absolute; that in case of loss or any other cause, a common carrier may release the goods to the consignee even without it.
chanRoblesvirtualLawlibrary"If in case of loss or for any other reason whatsoever, the consignee cannot return upon receiving the merchandise the bill of lading subscribed by the carrier, he shall give said carrier a receipt of the goods delivered this receipt producing the same effects as the return of the bill of lading."65ChanRoblesVirtualawlibrary
Article 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.Articles 1733, 1734, and 1735 speak of the common carrier's responsibility over the goods. They refer to the general liability of common carriers in case of loss, destruction or deterioration of goods and the presumption of negligence against them. This responsibility or duty of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation, until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them.67 It is, in fact, undisputed that the goods were timely delivered to the proper consignee or to the one who was authorized to receive them. DBFs only cause of action against ASTI and ACCLI is the release of the goods to Ambiente without the surrender of the bill of lading, purportedly in violation of the terms of the bill of lading. We have already found that Bill of Lading No. AC/MLLA601317 does not contain such express prohibition. Without any prohibition, therefore, the carrier had no obligation to withhold release of the goods. Articles 1733, 1734, and 1735 do not give ASTI any such obligation.
Such extraordinary diligence in vigilance over the goods is further expressed in Articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in Articles 1755 and 1756.
Article 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any of the following causes only:
chanRoblesvirtualLawlibrary(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;Article 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in Article 1733.
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.
Article 1523. Where, in pursuance of a contract of sale, the seller is authorized or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer is deemed to be a delivery of the goods to the buyer, except in the cases provided for in Articles 1503, first, second and third paragraphs, or unless a contrary intent appears.Article 1503, on the other hand, provides:
Unless otherwise authorized by the buyer, the seller must make such contract with the carrier on behalf of the buyer as may be reasonable, having regard to the nature of the goods and the other circumstances of the case. If the seller omit so to do, and the goods are lost or damaged in the course of transit, the buyer may decline to treat the delivery to the carrier as a delivery to himself, or may hold the seller responsible in damages.
Unless otherwise agreed, where goods are sent by the seller to the buyer under circumstances in which the seller knows or ought to know that it is usual to insure, the seller must give such notice to the buyer as may enable him to insure them during their transit, and, if the seller fails to do so, the goods shall be deemed to be at his risk during such transit. (Emphasis supplied.)
Article 1503. When there is a contract of sale of specific goods, the seller may, by the terms of the contract, reserve the right of possession or ownership in the goods until certain conditions have been fulfilled. The right of possession or ownership may be thus reserved notwithstanding the delivery of the goods to the buyer or to a carrier or other bailee for the purpose of transmission to the buyer.Articles 1523 and 1503, therefore, refer to a contract of sale between a seller and a buyer. In particular, they refer to who between the seller and the buyer has the right of possession or ownership over the goods subject of the sale. Articles 1523 and 1503 do not apply to a contract of carriage between the shipper and the common carrier. The third paragraph of Article 1503, upon which DBI relies, does not oblige the common carrier to withhold delivery of the goods in the event that the bill of lading is retained by the seller. Rather, it only gives the seller a better right to the possession of the goods as against the mere inchoate right of the buyer. Thus, Articles 1523 and 1503 find no application here. The case before us does not involve an action where the seller asserts ownership over the goods as against the buyer. Instead, we are confronted with a complaint for sum of money and damages filed by the seller against the buyer and the common carrier due to the non-payment of the goods by the buyer, and the release of the goods by the carrier despite non-surrender of the bill of lading. A contract of sale is separate and distinct from a contract of carriage. They involve different parties, different rights, different obligations and liabilities. Thus, we quote with approval the ruling of the CA, to wit:
Where goods are shipped, and by the bill of lading the goods are deliverable to the seller or his agent, or to the order of the seller or of his agent, the seller thereby reserves the ownership in the goods. But, if except for the form of the bill of lading, the ownership would have passed to the buyer on shipment of the goods, the seller's property in the goods shall be deemed to be only for the purpose of securing performance by the buyer of his obligations under the contract.
Where goods are shipped, and by the bill of lading the goods are deliverable to order of the buyer or of his agent, but possession of the bill of lading is retained by the seller or his agent, the seller thereby reserves a right to the possession of the goods as against the buyer.
Where the seller of goods draws on the buyer for the price and transmits the bill of exchange and bill of lading together to the buyer to secure acceptance or payment of the bill of exchange, the buyer is bound to return the bill of lading if he does not honor the bill of exchange, and if he wrongfully retains the bill of lading he acquires no added right thereby. If, however, the bill of lading provides that the goods are deliverable to the buyer or to the order of the buyer, or is indorsed in blank, or to the buyer by the consignee named therein, one who purchases in good faith, for value, the bill of lading, or goods from the buyer will obtain the ownership in the goods, although the bill of exchange has not been honored, provided that such purchaser has received delivery of the bill of lading indorsed by the consignee named therein, or of the goods, without notice of the facts making the transfer wrongful. (Emphasis supplied.)
On the third assigned error, [w]e rule for the defendants-appellants [ASTI and ACCLI]. They are correct in arguing that the nature of their obligation with plaintiff [DBI] is separate and distinct from the transaction of the latter with defendant Ambiente. As carrier of the goods transported by plaintiff, its obligation is simply to ensure that such goods are delivered on time and in good condition. In the case [Macam v. Court of Appeals], the Supreme Court emphasized that "the extraordinary responsibility of the common carriers lasts until actual or constructive delivery of the cargoes to the consignee or to the person who has the right to receive them." x x xThe contract between DBI and ASTI is a contract of carriage of goods; hence, ASTI's 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 Ambiente, ASTI cannot be held liable for the payment of the value of the goods sold. In this regard, we cite Loadstar Shipping Company, Incorporated v. Malayan Insurance Company, Incorporated,71 thus:
It is therefore clear that the moment the carrier has delivered the subject goods, its responsibility ceases to exist and it is thereby freed from all the liabilities arising from the transaction. Any question regarding the payment of the buyer to the seller is no longer the concern of the carrier. This easily debunks plaintiffs theory of joint liability.70 x x x (Emphasis supplied; citations omitted.)
Malayan opposed the petitioners' invocation of the Philex-PASAR purchase agreement, stating that the contract involved in this case is a contract of affreightment between the petitioners and PASAR, not the agreement between Philex and PASAR, which was a contract for the sale of copper concentrates.In view of the foregoing, we hold that under Bill of Lading No. AC/MLLA601317 and the pertinent law and jurisprudence, ASTI and ACCLI are not liable to DBI. We sustain the finding of the CA that only Ambiente, as the buyer of the goods, has the obligation to pay for the value of the shipment. However, in view of our ruling in Nacar v. Gallery Frames,73 we modify the legal rate of interest imposed by the CA. Instead of 12% per annum from the finality of this judgment until its full satisfaction, the rate of interest shall only be 6% per annum.chanrobleslaw
On this score, the Court agrees with Malayan that contrary to the trial court's disquisition, the petitioners cannot validly invoke the penalty clause under the Philex-PASAR purchase agreement, where penalties are to be imposed by the buyer PASAR against the seller Philex if some elements exceeding the agreed limitations are found on the copper concentrates upon delivery. The petitioners are not privy to the contract of sale of the copper concentrates. The contract between PASAR and the petitioners is a contract of carriage of goods and not a contract of sale. Therefore, the petitioners and PASAR are bound by the laws on transportation of goods and their contract of affreightment. Since the Contract of Affreightment between the petitioners and PASAR is silent as regards the computation of damages, whereas the bill of lading presented before the trial court is undecipherable, the New Civil Code and the Code of Commerce shall govern the contract between the parties.72 (Emphasis supplied; citations omitted.)
Endnotes:
1 Dated November 3, 2008 and filed under Rule 45 of the Rules of Court. Rollo, pp. 9-26.
2 Penned by Associate Justice Mariflor P. Punzalan Castillo with Associate Justices Marina L. Buzon and Rosmari D. Carandang, concurring. Id. at 27-45.
3Id. at 46-49.
4 Complaint, records, p. 1.
5 DBI received Import Purchase Order No. 23597A dated September 28, 1995 via fax from Ambiente, id. at 2.
6 Id.
7 Per Invoice Number 497 dated January 6, 1996, records, p. 11.
8 Records, pp. 1-2.
9 Id. at 46-48.
10 CA Decision, rollo, p. 28.
11Id. at 81.
12Id.
13Id.
14 CA Decision, rollo, pp. 28-29.
15 The incorporators-stockholders sued are the following: Marlon Gaya, Richard Sim Ng, Ng Tiam Tiong, Fortunata Sim Ng, Ng Uy Sim, Tina Orleans Ng and Analy R. Borbon. Original Complaint, records, p. 1.
16 Original Complaint, id. at 1-5.
17 Original Complaint, records, p. 3.
18 Records, pp. 3-4.
19Id. at 23-26.
20Id. at 23-25.
21Id. at 30-36.
22Id. at 65-68.
23Rollo, pp. 50-57.
24Id. at 53.cralawred
25Id. at 54.
26Id. at 58-65.cralawred
27Id. at 60-61.
28Id. at 61.
29Id. at 62.
30 Records, p. 92.
31Id. at 96; 107-108.
32Id. at 115.
33Id. at 168-169.
34 Penned by Judge, Raul Bautista Villanueva. Rollo, pp. 82-92.
35Id. at 92.
36Id. at 89.
37Id.
38Id.
39Id. at 90.cralawred
40Id. at 89.
41Id. at 90.
42Id.
43Id. at 92.
44 Brief for the Plaintiff-Appellant, rollo, pp. 137-147.
45Id. at 97-119.
46Id. at 34.
47Id. at 36-37.
48Id.
49Rollo, p. 36.
50Id. at 37.
51 The CA, citing C.F. Sharp & Co., Inc. v. Northwest Airlines, Inc., G.R. No. 133498, April 18, 2002, 381 SCRA 314, 319-320, stated that Republic Act No. 8183 allows the parties to agree upon payment in another currency other than the Philippine Peso. Hence, the obligation of Ambiente may be paid at the currency agreed upon byitie parties or its peso equivalent at the time of payment.
52Rollo, pp. 43-44.
53 Agbayani, COMMENTARIES AND JURISPRUDENCE ON THE COMMERCIAL LAWS OF THE PHILIPPINES, 1993 ed., Vol. IV, p. 133; citing Interprovincial Autobus Co., Inc. v. Collector of Internal Revenue, 98 Phil. 290, 293 (1956), citing 9 Am. Jur. 662.
54 Agbayani, COMMENTARIES AND JURISPRUDENCE ON THE COMMERCIAL LAWS OF THE PHILIPPINES, supra; citing Black's Law Dictionary.
55Provident Insurance Corp. v. Court of Appeals, G.R. No. 118030, January 15, 2004, 419 SCRA 480, 483.
56 Amended Complaint, rollo, p. 52.
57Id. at 70-72.
58 See Republic v. Lorenzo Shipping Corporation, G.R. No. 153563, February 7, 2005, 450 SCRA 550, 556; as cited by the CA, rollo, pp. 34-35.
59 G.R. No. 153563, February 7, 2005, 450 SCRA 550.
60 G.R. No. 125524, August 25, 1999, 313 SCRA 77.
61Id. at 78.
62Id. at 79.
63 G.R. No. 80936, October l7, 1990, 190 SCRA 512; as cited by the CA, rollo, pp. 35-36.
64Eastern Shipping Lines v. Court of Appeals, supra at 515.
65Id. at 522-523.
66 Opposition to Motion to Dismiss, records, pp. 31-32.
67 CIVIL CODE, Art. 173.
68Rollo, pp. 17-18.
69Id. at 17.
70 CA Decision, rollo pp. 39-40.
71 G.R. No. 185565, November 26, 2014, 742 SCRA 627.
72Id. at 637.
73 G.R. No. 189871, August 13, 2013, 703 SCRA 439.