EASTERN SHIPPING LINES INC.

, Petitioner, Verily, it is settled in maritime law jurisprudence that cargoes while being unloaded generally remain
under the custody of the carrier. As hereinbefore found by the RTC and affirmed by the CA based on the evidence
vs. presented, the goods were damaged even before they were turned over to ATI. Such damage was even
compounded by the negligent acts of petitioner and ATI which both mishandled the goods during the discharging
BPI/MS INSURANCE CORP. and MITSUI SUM TOMO INSURANCE CO. LTD., Respondents. operations. Thus, it bears stressing unto petitioner that 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 transported
G.R. No. 193986 January 15, 2014 by them.

Subject to certain exceptions enumerated under Article 1734 of the Civil Code, common carriers are
responsible for the loss, destruction, or deterioration of the goods. The extraordinary responsibility of the common
PONENTE: Villarama Jr., J. 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
TOPIC: Negligence person who has a right to receive them.

FACTS:
Sumitomo Corporation shipped through vessels of Eastern Shipping Lines various steel sheets in coil in
favor of the consignee Calamba Steel. In each of the three shipments, several coils were observed to be in bad
condition as evidenced by the Turn Over Survey of Bad Order Cargo. The cargoes were then turned over to Asian
Terminals, Inc. (ATI) for stevedoring, storage and safekeeping pending Calamba Steels withdrawal of the goods.
When ATI delivered the cargo to Calamba Steel, the latter rejected its damaged portion for being unfit for its
intended purpose.
Owing to this high degree of diligence required of them, common carriers, as a general rule, are
presumed to have been at fault or negligent if the goods they transported deteriorated or got lost or destroyed.
That is, unless they prove that they exercised extraordinary diligence in transporting the goods. In order to avoid
responsibility for any loss or damage, therefore, they have the burden of proving that they observed such high
level of diligence. In this case, petitioner failed to hurdle such burden.

Calamba Steel filed an insurance claim with Mitsui through the latters settling agent, respondent
BPI/MS Insurance Corporation (BPI/MS), and the former was paid the sums of US$7,677.12, US$14,782.05 and
US$7,751.15 for the damage suffered by all three shipments. Correlatively, on August 31, 2004, as insurer and
subrogee of Calamba Steel, Mitsui and BPI/MS filed a Complaint for Damages against petitioner and ATI.

ISSUE:

Whether or not Eastern Shipping was solidarily liable with ATI on account of the damage incurred by the
goods.

HELD:

YES. The Court held that both Eastern Shipping and ATI were negligent in handling and transporting
the goods.

CRESCENT PETROLEUM, LTD., Petitioner, vs. M/V "LOK MAHESHWARI," THE SHIPPING CORPORATION
OF INDIA, and PORTSERV LIMITED
G.R. No. 155014 November 11, 2005
FACTS:
Respondent M/V "Lok Maheshwari" (Vessel) is an oceangoing vessel of Indian registry that is owned by
respondent Shipping Corporation of India (SCI), a corporation organized and existing under the laws of India and
principally owned by the Government of India. It was time-chartered by respondent SCI to Halla Merchant Marine
Co. Ltd. (Halla), a South Korean company. Halla, in turn, sub-chartered the Vessel through a time charter to
Transmar Shipping, Inc. (Transmar). Transmar further sub-chartered the Vessel to Portserv Limited (Portserv).
Both Transmar and Portserv are corporations organized and existing under the laws of Canada.
On or about November 1, 1995, Portserv requested petitioner Crescent Petroleum, Ltd. (Crescent), a
corporation organized and existing under the laws of Canada that is engaged in the business of selling petroleum
and oil products for the use and operation of oceangoing vessels, to deliver marine fuel oils (bunker fuels) to the
Vessel. Petitioner Crescent granted and confirmed the request through an advice via facsimile dated November 2,
1995. As security for the payment of the bunker fuels and related services, petitioner Crescent received two (2)
checks in the amounts of US$100,000.00 and US$200,000.00. Thus, petitioner Crescent contracted with its
supplier, Marine Petrobulk Limited (Marine Petrobulk), another Canadian corporation, for the physical delivery of
the bunker fuels to the Vessel.
On or about November 4, 1995, Marine Petrobulk delivered the bunker fuels amounting to US$103,544
inclusive of barging and demurrage charges to the Vessel at the port of Pioneer Grain, Vancouver, Canada. The
Chief Engineer Officer of the Vessel duly acknowledged and received the delivery receipt. Marine Petrobulk
issued an invoice to petitioner Crescent for the US$101,400.00 worth of the bunker fuels. Petitioner Crescent
issued a check for the same amount in favor of Marine Petrobulk, which check was duly encashed.
Having paid Marine Petrobulk, petitioner Crescent issued a revised invoice dated November 21, 1995 to
"Portserv Limited, and/or the Master, and/or Owners, and/or Operators, and/or Charterers of M/V Lok
Maheshwari" in the amount of US$103,544.00 with instruction to remit the amount on or before December 1,
1995. The period lapsed and several demands were made but no payment was received. Also, the checks issued
to petitioner Crescent as security for the payment of the bunker fuels were dishonored for insufficiency of funds.
As a consequence, petitioner Crescent incurred additional expenses of US$8,572.61 for interest, tracking fees,
and legal fees.
On May 2, 1996, while the Vessel was docked at the port of Cebu City, petitioner Crescent instituted
before the RTC of Cebu City an action "for a sum of money with prayer for temporary restraining order and writ of
preliminary attachment" against respondents Vessel and SCI, Portserv and/or Transmar.
On May 3, 1996, the trial court issued a writ of attachment against the Vessel with bond
at P2,710,000.00. Petitioner Crescent withdrew its prayer for a temporary restraining order and posted the
required bond.
On May 18, 1996, summonses were served to respondents Vessel and SCI, and Portserv and/or
Transmar through the Master of the Vessel. On May 28, 1996, respondents Vessel and SCI, through Pioneer
Insurance and Surety Corporation (Pioneer), filed an urgent ex-parte motion to approve Pioneers letter of
undertaking, to consider it as counter-bond and to discharge the attachment. On May 29, 1996, the trial court
granted the motion; thus, the letter of undertaking was approved as counter-bond to discharge the attachment.
ISSUE:
Whether the Philippine court has or will exercise jurisdiction and entitled to maritime lien under our laws on foreign
vessel docked on Philippine port and supplies furnished to a vessel in a foreign port?
RULING:
In a suit to establish and enforce a maritime lien for supplies furnished to a vessel in a foreign port,
whether such lien exists, or whether the court has or will exercise jurisdiction, depends on the law of the country
where the supplies were furnished, which must be pleaded and proved.
The Lauritzen-Romero-Rhoditis trilogy of cases, which replaced such single-factor methodologies as the
law of the place of supply. The multiple-contact test to determine, in the absence of a specific Congressional
directive as to the statutes reach, which jurisdictions law should be applied. The following factors were
considered: (1) place of the wrongful act; (2) law of the flag; (3) allegiance or domicile of the injured; (4) allegiance
of the defendant shipowner; (5) place of contract; (6) inaccessibility of foreign forum; and (7) law of the forum. This
is applicable not only to personal injury claims arising under the Jones Act but to all matters arising under maritime
law in general
The Court cannot sustain petitioner Crescents insistence on the application of P.D. No. 1521 or the Ship
Mortgage Decree of 1978 and hold that a maritime lien exists. Out of the seven basic factors listed in the case of
Lauritzen, Philippine law only falls under one the law of the forum. All other elements are foreign Canada is the
place of the wrongful act, of the allegiance or domicile of the injured and the place of contract; India is the law of
the flag and the allegiance of the defendant shipowner. Applying P.D. No. 1521,a maritime lien exists would not
promote the public policy behind the enactment of the law to develop the domestic shipping industry. Opening up
our courts to foreign suppliers by granting them a maritime lien under our laws even if they are not entitled to a
maritime lien under their laws will encourage forum shopping. In light of the interests of the various foreign
elements involved, it is clear that Canada has the most significant interest in this dispute. The injured party is a
Canadian corporation, the sub-charterer which placed the orders for the supplies is also Canadian, the entity
which physically delivered the bunker fuels is in Canada, the place of contracting and negotiation is in Canada,
and the supplies were delivered in Canada.

G.R. No. 188118, November 23, 2015
FEDERAL PHOENIX ASSURANCE CO., LTD., Petitioner, v. FORTUNE SEA CARRIER, INC., Respondent.
DECISION
REYES, J.:
This is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assailing the Decision 2dated
February 10, 2009 and Resolution3 dated May 12, 2009 of the Court of Appeals (CA) in CA-G.R. CV No. 88607.
The assailed decision reversed and set aside the Decision 4 dated May 4, 2006 and the Order5 dated October 26,
2006 of the Regional Trial Court (RTC) of Makati City, Branch 143 finding respondent Fortune Sea Carrier, Inc.
(Fortune Sea) liable to pay P260,000.00 as actual damages, attorney's fees and cost of suit.
On March 9, 1994, Fortune Sea agreed to lease its vessel M/V Ricky Rey to Northern Mindanao Transport Co.,
Inc. (Northern Transport). The Time Charter Party agreement executed by the parties provides that the vessel
shall be leased to Northern Transport for 90 days to carry bags of cement to different ports of destination. Later
on, the parties extended the period of lease for another 90 days. 6
Sometime in June 1994, Northern Transport ordered 2,069 bales of abaca fibers to be shipped on board M/V
Ricky Rey by shipper Manila Hemp Trading Corporation, for delivery to consignee Newtech Pulp Inc. (Newtech) in
Iligan City. The shipment was covered by Bill of Lading No. 1 and was insured by petitioner Federal Phoenix
Assurance Co.,. Ltd. (Federal Phoenix). 7
Upon arrival of M/V Ricky Rey at the Iligan City port on June 16, 1994, the stevedores started to discharge the
abaca shipment the following clay. At about 3:00 p.m., however, on June 18, 1994, the stevedores noticed smoke
coming out of the cargo haul where the bales of abaca where located. Immediately, the lire was put off" by the
Iligan City Fire Department. Upon investigation, it was discovered that 60 bales of abaca were damaged. 8
As a result of the losses, Newtech filed an insurance claim for P260,000.00 with Federal Phoenix. After
evaluation, Federal Phoenix paid Newtech P162,419.25 for the losses it incurred due to the damaged and
undelivered bales of abaca. Upon payment. Federal Phoenix was subrogated to the rights of Newtech and
pursued its claim against Fortune Sea. Despite several demands to Fortune Sea, however. Federal Phoenix's
claims were not settled. As a result, Federal Phoenix filed a Complaint 9 for Sum of Money against Fortune Sea
before the RTC of Makati.10
For its defense, Fortune Sea insisted that it was acting as a private carrier at the time the incident occurred. It
alleged that the Time Charter Party agreement executed by the parties expressly provided that M/V Ricky Rey
shall be under the orders and complete control of Northern Transport. 11
Ruling of the RTC
On May 4, 2006, the RTC rendered a Decision in favor of Federal Phoenix and ordered Fortune Sea to pay the
amount of P260,000.00 as actual damages, attorney's fees and cost of suit. Fortune Sea filed a Motion for
Reconsideration12 but was denied in an Order dated October 26, 2006.
Aggrieved, Fortune Sea appealed to the CA.
Ruling of the CA
On February 10, 2009, the CA issued a Decision reversing and setting aside the Decision dated May 4, 2006 of
the RTC and ordered the dismissal of the complaint for sum of money filed by Federal Phoenix against Fortune
Sea for lack of merit. According to the CA, although the agreement between Fortune Sea and Northern Transport
was denominated as Time Charter Party, it found compelling reasons to hold that the contract was one of
bareboat or demise. Hence, Federal Phoenix filed this instant petition.
Ruling of the Court
The main issue in this case is whether or not the CA erred in declaring that Fortune Sea was converted into a
private carrier by virtue of the charter party agreement it entered into with Northern Transport. 13
Admittedly, Fortune Sea is a corporation engaged in the business of transporting cargo by water and for
compensation, offering its services to the public. As such, it is without a doubt, a common carrier.
Fortune Sea, however, entered into a time-charter with Northern Transport. Now, had the time-charter converted
Fortune Sea into a private carrier?
This Court rules in the affirmative.
Time and again, this Court have ruled that "[i]n determining the nature of a contract, courts are not bound by the
title or name given by the parties. The decisive factor in evaluating an agreement is the intention of the parties, as
shown, not necessarily by the terminology used in the contract but by their conduct, words, actions and deeds
prior to, during and immediately alter executing the agreement." 14
As correctly observed by the CA, the Time Charter Party agreement executed by Fortune Sea and Northern
Transport clearly shows that the charter includes both the vessel and its crew thereby making Northern Transport
the owner pro hac vice of M/V Ricky Rey during the whole period of the voyage, to
wit:chanRoblesvirtualLawlibrary
A perspicacious scrutiny of the Time Charter Party disclosed the following provisions evincing that Northern
Transport became the owner pro hac vice of M/V Ricky Rey during the whole period of the voyage-
"VI. OTHER TERMS AND CONDITIONS:chanRoblesvirtualLawlibrary
F. Upon delivery of the vessel(s) and during the period of the charter, SECOND PARTY (Northern Transport) A Ma'am yes.
assumes operational control for the dispatch and direction of voyage of the vessel(s).
Q How about the written order?
H. The Master to prosecute all voyages with the utmost despatch and to render customary assistance with the
vessel(s) crew. The Master to be under the orders of the SECOND PARTY (Northern Transport) as regards A The radio operator received the order Ma'am and informed the super cargo through its representative
employment of the other arrangements. of the [Northern Transport] Ma'am.
xxxx
N. The SECOND PARTY (Northern Transport) to furnish MASTER with all instructions and sailing directions and
the Master and Engineer to keep full and correct logs accessible to the SECOND PARTY (Northern Transport) or Q After being ordered by [Northern Transport], what did you do?
their Supercargo.
To Our mind, the Time Charier Part[y] unequivocally established that appellant Fortune Sea had completely and A Sir, I told the super cargo that the abaca is a combustible cargo, sir.
exclusively relinquished possession, command and navigation of M/V Ricky Rey to Northern Transport. 15 (Citation Q So, what was its reaction to your statement?
omitted)cralawlawlibrary
A He told me just to follow orders. That was the order 'of their company, sir.
Conformably, M/V Ricky Rey was converted into a private carrier notwithstanding the existence of the Time
Q Mr. Witness, what do you think is the basis of the [Northern Transport] for giving you such an order?
Charter Party agreement with Northern Transport since the said agreement was not limited to the ship only but
extends even to the control of its crew. Despite the denomination as Time Charter by the parties, their agreement A I think sir, it was the chartered party sir.16
undoubtedly reflected that their intention was to enter into a Bareboat Charter Agreement.
xxxx
Moreover, the CA likewise correctly ruled that the testimony of Captain Alfredo Canon (Capt. Canon) of M/V Ricky
Q Mr. Witness, what happened next after the order was given to you?
Rey confirmed that when the whole vessel was leased to Northern Transport, the entire command and control
over its navigation was likewise transferred to it, to wit:chanRoblesvirtualLawlibrary A We proceeded to the Natu Port to load abaca fiber sir and bring it to the port of Iligan sir. Natu Port sir
is under the Camarines Sur province sir.
Q: Mr. Witness, you said awhile ago that as far as you know, the purpose is to transport cement, now, you Q Mr. Witness, upon reaching the port of Iligan as you mentioned, do you recall any unusual incident that
also mentioned that in two or three instances goods other than cement, abaca and fertilizer were happened?
transported during your watch. Now, you mentioned that this was [sic] happened sometime in 1994,
my question was [sic], why did you transport abaca? A Yes, [s]ir.
A I have [sic] received an order from [Northern Transport] through radio and through its representative Q What was this incident?
which [sic] was on board our super cargo boat to proceed to Natu to load abaca fiber and bring it to
the port of Iligan, sir. A A fire broke while unloading the cargo at the port of Iligan, sir.

Q You were ordered by [Northern Transport]? Q Which portion of the port did the fire occur?

A Yes, sir, through its representative which [sic] was on board super cargo to pick up abaca sir at Natu A At the cargo haul [sic] sir.
point [sic], Camarines Sur. Q Is that part of the ship?
Court: A Yes, sir.
Q Was the order done verbally or in writing? Q So, what happened when the lire broke out?
A Verbally, aside from that Ma'am, we received written through radio. A We tried our best sir to put out the fire. With the help of the Iligan City Firemen, we put out the fire in
Q Let us clarify that, was it done verbally or in writing? about twenty minutes sir.

A Two ways Ma'am, verbally and in writing Ma'am. Q During the twenty minutes, was [sic] there any damaged incurred by the ship or any to its contents?

Q And you received the verbal order yourself? A Only the abaca liber sir. Some abaca fibers were partially burned.
Q As far as you know Mr Witness, what was the caused [sic] of this fire?
 A The caused [sic] of the lire was the cigarette butts improperly dispatched by one of the stevedores
unloading the cargo sir.
Q Are these stevedores under your employment?
A No, sir.
[A] No, sir. It was under the stevedoring company, sir.
Q Not [Fortune Sea]?
A Yes, sir.17
The above-cited testimonies of Capt. Canon undoubtedly show that Northern Transport eflectively subjected not
only the ship but including its crew under its own exclusive control.
Moreover, although the master and crew of the vessel were those of the shipowner, records show that at the time
of the execution of the charter party, Fortune Sea had completely relinquished possession, command, and
navigation of M/V Ricky Rey to Northern Transport.
As such, the master and all the crew of the ship were all made subject to the direct control and supervision of the
charterer. In fact, the instructions on the voyage and other relative directions or orders were handed out by
Northern Transport. Thus, the CA correctly ruled that the nature of the vessel's charter is one of bareboat or
demise charter.
WHEREFORE, the Court hereby AFFIRMS the Decision of the Court of Appeals dated February 10, 2009 in CA-
G.R. CV No. 88607 finding the Time Charter Party agreement entered into by Fortune Sea Carrier, Inc. and
Northern Mindanao Transport Co., Inc. as in reality a Bareboat Charter which effectively converted the subject
M/V Ricky Rey as a private carrier. As such, this Court likewise AFFIRMS the decision of the CA in dismissing the
Complaint for Sum of Money filed by petitioner Federal Phoenix Assurance Co., Ltd. for lack of merit.
SO ORDERED.chanroblesvirtuallawlibrary
Velasco, Jr., (Chairperson), Peralta, Bersamin,*and Villarama, Jr., JJ., concur
What Is The Liability Of A Common Carrier On The Release Of The Goods To A Consignee Even Without
The Surrender Of The Bill Of Lading?
August 16th, 2016
The Supreme Courts decision in Designer Baskets, Inc. v. Air Sea Transport, Inc. and Asia Cargo Container Lines
(G.R. No. 184513, March 9, 2016) concerned a situation wherein the unpaid seller sued not only the buyer but
also the carrier and its agent for the payment of the value of the goods, and for the release of the goods without
the surrender of the bill of lading.
The carriers agent issued a bill of lading to the unpaid seller who retained the bills of lading pending the payment
of the goods by the buyer. The bill of lading does not contain a provision requiring the carrier to release or deliver
the shipment to the consignee only upon the surrender of the original bill of lading. The buyer and the carrier
entered into an Indemnity Agreement wherein the former obligated the latter to deliver the shipment without the
surrender of the bill of lading and in return the buyer agreed to indemnify the carrier free from any liability as a
result of the release of the shipment.
The Supreme Court ruled that the carrier has no liability for releasing the goods to the consignee without the
surrender of the bill of lading. Although the general rule is that upon receipt of the goods, the consignee
surrenders the bill of lading, Article 353 of the Code of Commerce provides for two exceptions: when the bill of
lading gets lost or for other cause. In either case, the consignee must provide a recept to the carrier for the goods
delivered.
The unpaid sellers retention of the bill of lading coupled with the Indemnity Agreement entered into by the buyer
and the carrier resulted in substantial compliance with Article 353 of the Code of Commerce.
The Supreme Court further held that Articles 1733, 1734 and 1735 of the New Civil Code, which speak of the
carriers liability for the loss, destruction, or deterioration of the goods and the presumption of neglience do not
apply. The responsibility of the carrier under these provisions lasts from the time the goods are unconditionally
placed in the possession of, and received by the carrier for transportation, until the goods are delivered by the
carrier to the consignee. In this case, it is undisputed that the goods were timely delivered to the proper
consignee.
Finally, the Supreme Court said that the carrier cannot be held liable for the unpaid value of the goods, as it is not
a party to the contract of sale. The carriers liability if any should be pursuant to the contract of carriage of goods,
and the law on the transportation of the goods, not on the contract of sale between the unpaid seller and buyer of
the goods.
TELENGTAN BROTHERS(LA SUERTE CIGAR) V. COURT OF APPEALS
FACTS: demurrage charges on the ground that the delay in the release of the cargo was not due to its fault but to the
breakdown of the equipment at the container yard.

Private respondent K-Line is a foreign shipping company doing biz in PH, its shipping agent is respondent Smith, La Suerte filed this suit in the RTC for specific performance to compel respondents to release 7 container vans
Bell & Co., Inc. It is a member of the Far East Conference, the body which fixes rates by agreement of its consigned to it free of charge.
member-shipowners. The conference is registered with the U.S. Federal Maritime Commission.
In their answer, private respondents claimed that they were not free to waive these charges because under the
Van Reekum Paper, Inc. entered into a contract of affreightment with the K-Line for the shipment of 468 rolls of United States Shipping Act of 1916 it was unlawful for any common carrier engaged in transportation involving the
container board liners from Georgia to Manila, consigned to herein petitioner La Suerte Cigar. The contract of foreign commerce to charge or collect a greater or lesser compensation that the rates and charges specified in its
affreightment was embodied in Bill of Lading issued by the carrier to the shipper. The expenses of loading and tariffs on file with the Federal Maritime Commission.
unloading were for the account of the consignee (La Suerte). The shipment was packed in 12 container vans. At
Tokyo, the cargo was transhipped on two vessels of the K-Line. Ten (10) container vans were loaded on the 1st RTC dismissed petitioner's complaint. It cited the bill of lading which provided:
vessel, while two (2) were loaded on another vessel.
23. The ocean carrier shall have a lien on the goods, which shall survive delivery, for all freight, dead freight,
On June 11, the first vessel arrived at the port of Manila. La Suerte was notified in writing of the ship's arrival, demurrage, damages, loss, charges, expenses and any other sums whatsoever payable or chargeable to or for
together with information that container demurrage would be charged unless the consignee took delivery of the the account of the Merchant under this bill of lading . . . . RTC likewise invoked clause 29 of the bill of lading which
cargo within ten (10) days. provided:

On June 21, the other vessel arrived and was discharged of its contents the next day. On the same day the 29. . . .The terms of the ocean carrier's applicable tariff, including tariffs covering intermodal transportation on file
shipping agent Smith, Bell & Co. released the Delivery Permit for twelve (12) containers to the broker upon with the Federal Maritime Commission and the Interstate Commission or any other regulatory body which governs
payment of freight charges on the bill of lading. On June 22, La Suertes broker presented the shipping documents a portion of the carriage of goods, are incorporated herein.
to the Bureau of Customs. But the latter refused to act on them because the manifest of the 1st vessel covered
only 10 containers, whereas the bill of lading covered 12 containers. 18. The RTC held that the bill of lading was the contract between the parties and, therefore, petitioner was liable
for demurrage charges. It rejected petitioner's claim of force majeure in such a way that the delay in the delivery of
The broker therefore sent back the manifest to Smith, Bell & Co with the request that the manifest be amended. the containers was caused by the breaking down of the equipment of the arrastre operator. The Court reasoned
Smith, Bell & Co. refused on the ground that an amendment would violate the Tariff and Customs Code relating to that still plaintiff has to pay the corresponding demurrage charges. The possibility that the equipment would break
unmanifested cargo. down was not only foreseeable, but actually, foreseen, and was not caso fortuito. CA affirmed.

Later however, it agreed to add a footnote reading "Two container vans carried by other vessel to complete the
shipment of twelve containers under the bill of lading." ISSUE: Whether or not La Suerte is liable for demurrage for delay in removing its cargo from the containers - YES
but only for the period July 3 - 13, 1979 with respect to ten containers and from July 10 - July 13, 1979, in respect
The manifest was approved for release only on July 3. On July 11, when the broker tried to secure the release of of two other containers
the cargo, it was informed by Smith, Belle, & Co. that the free time for removing the containers from the container
yard had expired on June 26 for the first vessel, and on July 9, in the case of the 2nd vessel, and that demurrage
charges had begun to run a day after the free time, respectively. HELD:

On July 13, La Suerte paid P47,680 representing the total demurrage charges on all the containers, but it was not
able to obtain its goods. It was able to obtain only a partial release of the cargo because of the breakdown of the Payment of demurrage
arrastre's equipment at the container yard. On July 16, La Suerte sent a letter to Smith, Bell & Co. requesting La Suerte's contention is that the bill of lading does not provide for the payment of container demurrage, as
reconsideration of the demurrage charges, but was refused. Subsequently, La Suerte refused to pay any more Clause 23 of the bill of lading only says "demurrage," i.e., damages for the detention of vessels. Here there is no
detention of vessels. It invokes a case where SC defined "demurrage" as follows: manifest issued by K-Line stated only 10 containers whereas the bill of lading also issued by the K-Line showed
there were 12 containers. For this reason, petitioner's broker had to see Smith, Bell & Co. on June 22, but the
Demurrage, in its strict sense, is the compensation provided for in the contract of affreightment for the detention of latter did not immediately do something to correct the manifest. Smith, Bell & Co. was asked to "amend" the
the vessel beyond the time agreed on for loading and unloading. Essentially, demurrage is the claim for damages manifest, but it refused to do so on the ground that this would violate the law. It was only on June 29 that it thought
for failure to accept delivery Whatever may be the merit of petitioner's contention, the fact is that clause 29(a) of adding instead a footnote, by which time the "free time" had already expired. Now June 29 was a Friday. Again
also of the bill of lading, in relation to Rule 21 of the Far East Conference Tariff , specifically provides for the it is probable the correct manifest was presented to the Bureau of Customs only on Monday, July 2, and therefore
payment by the consignee of demurrage for the detention of containers and other equipment after the so-called it was only on July 3 that it was approved.
"free time."
It was therefore only from July 3 that La Suerte could have claimed its cargo and charged for any delay With
A bill of lading is both a receipt and a contract. As a contract, its terms and conditions are conclusive on the respect to the other two containers, demurrage was properly considered to have accrued on July 10 since the
parties, including the consignee. The enforcement of the rules of the Far East Conference and the Federal "free time" expired on July 9. The period of delay, however, for all the 12 containers must be deemed to have
Maritime Commission is in accordance with R.A. 1407 which declares that the Philippines, in common with other stopped on July 13, because on this date petitioner paid P47,680.00. If it was not able to get its cargo from the
maritime nations, recognizes the international character of shipping in foreign trade and existing international container vans, it was because of the breakdown of the shifter or cranes of the arrastre service operation. It would
practices in maritime transportation and that it is be unjust to charge demurrage after July 13, since the delay in emptying the containers was not due to the fault of
part of the national policy to cooperate with other friendly nations in the maintenance and improvement of such La suerte In sum, we hold that petitioner can be held liable for demurrage only for the period July 3-13, 1979 and
practices. Period of Demurrage With respect to the period of La Suertes liability, La Suerte cannot be held liable that in accordance with the stipulation in its bill of lading.
for demurrage starting June 27 on the 10 containers because the delay in obtaining release of the goods was not
due to its fault.

The evidence shows that the Bureau of Customs refused to give an entry permit to petitioner because the