G.R. No. 116863 - Keng Hua Paper Products Co., Inc. vs. Court of Appeals

Private respondent Sea-Land Service, Inc., a foreign shipping company licensed in the Philippines, received on June 29, 1982 at its Hong Kong terminal a sealed container (No. SEAU 67523) with seventy-six bales of unsorted waste paper consigned to petitioner Keng Hua Paper Products Co., Inc. in Manila. A bill of lading was issued to cover the shipment.
On July 9, 1982, the container arrived and was discharged at the Manila International Container Port. Notices of arrival were sent to petitioner, but it failed to unload the goods within the free time ending July 29, 1982. The container remained on demurrage from July 30, 1982 until November 22, 1983 (481 days), accruing charges amounting to ₱67,340.

Sea-Land made repeated extrajudicial demands for payment, which petitioner refused, alleging overshipment (20 metric tons delivered versus 10 metric tons purchased) and possible violation of customs, tariff, and Central Bank regulations. Petitioner pointed to its letter of January 24, 1983 notifying Sea-Land of the alleged wrong shipment.
Sea-Land filed Civil Case No. 85-33269 before the RTC of Manila, Branch 21, claiming demurrage and attorney’s fees. On September 28, 1990, the RTC awarded ₱67,340 plus legal interest from demand and 10% attorney’s fees. The Court of Appeals affirmed in toto on May 20, 1994. Petitioner elevated the case to the Supreme Court by petition for review.

Whether the bill of lading became a binding contract on petitioner despite its alleged non-acceptance.
Whether the award of ₱67,340 as demurrage charges was proper.
Whether petitioner’s refusal to receive goods on the ground of overshipment justified non-acceptance and liability avoidance.
Whether interest should run from the date of extrajudicial demand or from the date of judgment, and at what rate.