G.R. No. 172822 . March 15, 2010
MOF COMPANY, INC., Petitioner, vs. SHIN YANG BROKERAGE CORPORATION, Respondent.

FACTS

On October 25, 2001, Halla Trading Co. shipped goods from Korea to Manila via Hanjin Shipping Co., Ltd. The bill of lading named respondent Shin Yang Brokerage Corp. as the consignee and indicated payment on a “Freight Collect” basis, meaning the consignee was to pay the freight and charges totaling ₱57,646.00. Petitioner MOF Company, Inc., Hanjin’s exclusive general agent in the Philippines, demanded payment from Shin Yang after the shipment’s arrival. Shin Yang refused, claiming it did not cause the importation, was merely a consolidator, did not receive the endorsed original bill of lading, and its name was included without its consent. MOF filed a collection case before the Metropolitan Trial Court (MeTC) of Pasay City, arguing Shin Yang, as the named consignee, was bound by the bill of lading’s terms. The MeTC ruled in favor of MOF, citing Shin Yang’s prior business transactions with MOF (evidenced by letters requesting refunds of container deposits) as indicative of a mutual understanding. The Regional Trial Court (RTC) affirmed, holding a contract of affreightment existed and could be oral, with the bill of lading serving as evidence. The Court of Appeals (CA) reversed, dismissing MOF’s complaint. The CA found that, aside from the bill of lading prepared by Hanjin (MOF’s principal), MOF presented no other evidence to prove Shin Yang consented to be a consignee or participated in the shipment. The CA held that a bill of lading constitutes a contract only if accepted, and Shin Yang had disowned the shipment. MOF’s petition for review assails the CA’s decision.

ISSUE

Whether the Court of Appeals erred in dismissing MOF’s complaint for sum of money, specifically in finding that MOF failed to prove by preponderance of evidence that Shin Yang, as the named consignee in the bill of lading, is liable to pay the freight and other charges.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals’ Decision. The Court held that MOF failed to discharge its burden of proof.
1. Burden of Proof and Insufficiency of Evidence: The necessity of proving lies with the person who alleges. MOF, as plaintiff, had the burden to prove by preponderance of evidence that Shin Yang was a party to the contract of affreightment and bound to pay. The Court agreed with the CA that MOF relied solely on the bill of lading, which was prepared by Hanjin (the carrier), not by Shin Yang. MOF did not present any witness or documentary evidence to substantiate its claim that Shin Yang supplied the details in the bill of lading, consented to be named consignee, or assured payment. Shin Yang’s bare denial therefore remained uncontroverted.
2. Bill of Lading as a Contract: A bill of lading serves as a contract of carriage only upon its acceptance by the consignee. Citing jurisprudence, the Court reiterated that a delivered and accepted bill constitutes the contract even if unsigned. In this case, Shin Yang did not accept the bill of lading; it expressly disowned the shipment and denied authorizing Halla Trading Co. to ship the goods or include its name. Without acceptance, the bill of lading did not become a binding contract between the carrier and Shin Yang as consignee.
3. Consignee’s Liability for Freight: The general rule is that the consignee is liable for freight charges if it is also the shipper or owner of the goods, or if it accepts delivery. The Court cited the case of Sea-Land Service, Inc. v. Court of Appeals, which held that a consignee who is not the shipper and does not accept the goods is not liable for freight. Here, MOF failed to prove that Shin Yang was the shipper, owner, or acceptor of the goods.
4. Stipulation in Favor of a Third Person: The “Freight Collect” stipulation is a stipulation pour autrui (in favor of a third party—the carrier). Under Article 1311 of the Civil Code, a third party may demand fulfillment provided it communicates acceptance before revocation. Shin Yang never communicated acceptance of this stipulation in its favor; instead, it repudiated it.
5. Findings of Fact of the CA: The Court deferred to the CA’s factual findings, which are generally conclusive. The CA correctly found that the lower courts’ inferences of a prior agreement from Shin Yang’s letters requesting refunds for other transactions were speculative and conjectural, lacking a basis in the evidence for the specific shipment in question.
WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals are AFFIRMED.