G.R. No. L-27758 - People vs. Nabual

On 4 April 1989, petitioner Benito Macam, doing business under the name Ben‑Mac Enterprises, shipped two types of perishable goods:

3,500 boxes of watermelons valued at US$5,950.00, covered by Bill of Lading No. HKG 99012 and exported through Letter of Credit No. HK 1031/30 issued by National Bank of Pakistan, Hongkong (PAKISTAN BANK).
1,611 boxes of fresh mangoes valued at US$14,273.46, covered by Bill of Lading No. HKG 99013 and exported through Letter of Credit No. HK 1032/30 also issued by PAKISTAN BANK.

The shipment was destined for Hongkong with PAKISTAN BANK designated as the consignee and Great Prospect Company of Kowloon, Hongkong (GPC) as the notify party.

The Bills of Lading contained a pertinent provision stating that “One of the Bills of Lading must be surrendered duly endorsed in exchange for the goods or delivery order.”
This requirement was integral to the documentary credit arrangement, ensuring that delivery of the goods was conditioned upon compliance with these terms.

On 6 April 1989, in compliance with the Letter of Credit requirements, copies of the bills of lading and commercial invoices were submitted to petitioner’s depository bank (SOLIDBANK), which in turn advanced the full shipment value of US$20,223.46 to petitioner.
Upon the shipment’s arrival in Hongkong, respondent WALLEM (Wallem Philippines Shipping, Inc.) released the cargoes directly to GPC rather than delivering them to PAKISTAN BANK and without presentation of the required bill of lading or the bank guarantee.
PAKISTAN BANK, still in possession of the original bills of lading, refused to pay petitioner through SOLIDBANK, prompting petitioner to reimburse SOLIDBANK the pre‑paid amount.

On 25 September 1991, petitioner initiated legal proceedings before the Regional Trial Court of Manila seeking collection of the shipment value (US$20,223.46 or its Philippine peso equivalent).
The trial court found that respondents had breached the bill-of-lading provision by releasing the shipment without the necessary documentary compliance (i.e., without presentation of the bills of lading and bank guarantee).
The trial court ordered respondents to pay the shipment amount plus interest, attorney’s fees, and costs, and it dismissed the respondents’ counterclaims for lack of merit.

Respondents contended that release of the shipment to GPC was executed in accordance with petitioner’s instructions due to the perishable nature of the goods.
A telex dated 5 April 1989 was submitted, which instructed the immediate delivery of the shipment “to respective consignees” without the presentation of the original bills of lading or bank guarantee, purportedly to facilitate prompt delivery.
Respondents further supported their position by referencing a two‑year business relationship with petitioner, wherein similar shipments were routinely released to GPC without the traditional documentary requirements.

The Court of Appeals re-evaluated the evidence and prior commercial practices, noting that GPC was in fact the real importer/buyer as reflected in the export invoices.
It held that the telex instruction effectively superseded the usual procedure mandating the surrender of the bills of lading and bank guarantee.
The appellate court set aside the trial court’s decision, dismissed petitioner’s complaint, and rejected the respondents’ counterclaims, thereby affirming the proper delivery to GPC under the circumstances.

Whether respondents (Wallem Philippines Shipping, Inc. and China Ocean Shipping Co.) are liable for releasing the perishable cargoes to GPC without the presentation of the original bills of lading and bank guarantee stipulated in the documents.

Did the failure to receive the required documents constitute a breach that would render the delivery to GPC a “misdelivery” on the part of the respondents?
How does the petitioner’s prior practice and subsequent instructions, as evidenced by telegraphic communications, impact the strict interpretation of the bill‑of‑lading terms?

Whether the telegraphic instructions, allegedly given by petitioner for the immediate release of goods due to their perishable nature, effectively modified the standard requirement of presenting the original documents.

Can customary maritime practice and the exigencies of perishable goods supply modify or waive formal documentary requirements in such transactions?
Is the evidence of repeated transactions sufficient to establish a course of dealing that alters the strict interpretation of the terms contained in the bills of lading?

Whether petitioner’s allegation regarding the reimbursement to SOLIDBANK bears any weight in establishing the liability of respondents for the shipment value.