G.R. No. 172822 - MOF Co., Inc. vs. Shin Yang Brokerage Corp.

On October 25, 2001, Halla Trading Co. of Korea shipped secondhand cars and other articles to Manila aboard the vessel *Hanjin Busan 0238W*.
The bill of lading (Bill of Lading No. HJSCPUSI14168303), prepared by the carrier Hanjin Shipping Co., Ltd. (Hanjin), named Shin Yang Brokerage Corporation (Shin Yang) as the consignee.
The bill was marked "Freight Collect," indicating the consignee was to pay freight and other charges amounting to ₱57,646.00.
Shipment arrived in Manila on October 29, 2001.

Petitioner MOF Company, Inc. (MOF), the exclusive general agent of Hanjin in the Philippines, repeatedly demanded payment of freight, documentation, and handling fees from Shin Yang.
Shin Yang refused payment, asserting it did not cause the importation, was only a consolidator of the shipment, did not receive endorsement of the original bill of lading from the ultimate consignee, and was named in the bill of lading without its consent.

MOF filed a sum of money case on March 19, 2003 before the Metropolitan Trial Court (MeTC) of Pasay City, Branch 48, docketed as Civil Case No. 206-03.
MOF alleged that Shin Yang, as named consignee, was bound by the "Freight Collect" contract and assured payment upon arrival.
Shin Yang denied any liability, arguing no authorization, no endorsement of the bill of lading, and lack of any contractual relationship with MOF or Halla Trading Co.

On June 16, 2004, MeTC ruled in favor of MOF, holding Shin Yang liable based on implied agreement and conduct, and ordering payment of freight charges with interest, attorney's fees, and costs.
The court relied on correspondence indicating business dealings and the inclusion of Shin Yang as consignee in the bill of lading as evidence of agreement.

The RTC of Pasay City, Branch 108 affirmed MeTC ruling, holding that a contract of affreightment may be oral or based on the bill of lading.
Referenced Articles 652 and 653 of the Code of Commerce and previous Supreme Court rulings recognizing oral contracts and contracts evidenced by bills of lading.
Ordered Shin Yang to pay the freight charges, interest, attorney’s fees, and costs.

The CA disagreed and dismissed MOF’s complaint on March 22, 2006.
Held that MOF failed to prove Shin Yang’s consent or participation in the contract or that the bill of lading bound Shin Yang as consignee.
Found the lower courts’ conclusions speculative and lacking competent evidence beyond the bill of lading.
Stated that a bill of lading becomes binding only when accepted by the consignee; Shin Yang repudiated and disclaimed involvement and authorization.
Denied damages and attorney’s fees.

Whether a consignee who is not a signatory to the bill of lading is bound by the stipulations of the contract of affreightment contained therein.
Whether respondent Shin Yang, who denied agency status and did not demand fulfillment of the bill of lading stipulations, is liable to pay the freight and handling charges.