Facts:

On April 4, 1989, Benito Macam, operating under the name Ben-Mac Enterprises, shipped 3,500 boxes of watermelons valued at $5,950 and 1,611 boxes of fresh mangoes valued at $14,273.46. These goods were loaded onto the vessel Nen Jiang, owned by China Ocean Shipping Co. and represented locally by Wallem Philippines Shipping, Inc. The shipments were covered by Bills of Lading No. HKG 99012 and No. HKG 99013, respectively, and were exported through Letters of Credit issued by the National Bank of Pakistan in Hong Kong. The Bills of Lading contained a stipulation that one of the Bills must be surrendered duly endorsed in exchange for the goods or delivery order. The shipments were destined for Hong Kong, with the National Bank of Pakistan as the consignee and Great Prospect Company (GPC) as the notify party.

On April 6, 1989, Macam submitted copies of the Bills of Lading and commercial invoices to his depository bank, Consolidated Banking Corporation (SOLIDBANK), which prepaid ...

Facts:

1. Shipment Details:

• On 4 April 1989, petitioner Benito Macam, operating as Ben-Mac Enterprises, shipped 3,500 boxes of watermelons valued at US$5,950.00 and 1,611 boxes of fresh mangoes valued at US$14,273.46 on board the vessel Nen Jiang, owned by respondent China Ocean Shipping Co. and operated by respondent Wallem Philippines Shipping, Inc. (WALLEM).
• The shipments were covered by Bills of Lading Nos. HKG 99012 and HKG 99013, respectively, and were bound for Hongkong. The consignee was National Bank of Pakistan (PAKISTAN BANK), and the notify party was Great Prospect Company (GPC).

2. Payment and Delivery:

• On 6 April 1989, petitioner’s depository bank, Consolidated Banking Corporation (SOLIDBANK), paid petitioner the total value of the shipment (US$20,223.46) in advance.
• Upon arrival in Hongkong, the shipment was delivered by WALLEM directly to GPC without the required surrender of the bills of lading or a bank guarantee. GPC subsequently failed to pay PAKISTAN BANK, which refused to pay petitioner through SOLIDBANK.

3. Legal Action:

• Petitioner demanded payment from WALLEM but was refused. He then filed a complaint before the Regional Trial Court (RTC) of Manila, seeking to recover the value of the shipment (US$20,223.46 or its equivalent in Philippine pesos) from respondents.

4. Respondents’ Defense:

• Respondents argued that the shipment was delivered to GPC without the bills of lading or bank guarantee based on petitioner’s request, as evidenced by a telex dated 5 April 1989. They claimed this was standard practice for perishable goods.
• They also contended that PAKISTAN BANK refused to pay due to SOLIDBANK’s failure to submit a Certificate of Quantity and Quality.

5. Trial Court Decision:

• The RTC ruled in favor of petitioner, holding that respondents breached the bill of lading by releasing the shipment without the required documents. The court ordered respondents to pay petitioner P546,033.42 plus legal interest, attorney’s fees, and costs.

6. Court of Appeals Decision:

• The Court of Appeals reversed the RTC’s decision, finding that the delivery to GPC without the bills of lading was consistent with previous transactions between the parties. It also noted that petitioner failed to substantiate his claim of reimbursing SOLIDBANK.

Issue:

• (Unlock)

Ruling:

• (Unlock)

Ratio:

1. Delivery to the Right Party: Under Article 1736 of the Civil Code, the carrier’s responsibility ends upon delivery to the consignee or the person with the right to receive the goods. GPC, as the buyer/importer, had the right to receive the shipment, and delivery to GPC was proper.
2. Validity of the Telex Instruction: The telex dated 5 April 1989, which instructed delivery to GPC without the bills of lading, was consistent with petitioner’s practice and the nature of perishable goods. The Court found no reason to doubt its validity.
3. Burden of Proof: Petitioner failed to provide sufficient evidence to support his claim of reimbursement to SOLIDBANK. The Court found his claim unsubstantiated and dismissed it.