INTERNATIONAL
TRADERS,
INC.,
Petitioner, Present:
CARPIO, J., Chairperson,
- versus - NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.
DANZAS
INTERCONTINENTAL,
INC., Promulgated:
Respondent.
January 26, 2011
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ABAD, J.:
This
case involves the liability of the consignee for electric charges, demurrage, and storage fees based on
a contract for lease of services that it entered into with a cargo handler.
The Facts and the Case
In March 1997 petitioner International
Freeport Traders, Inc. (IFTI) ordered a shipment of Toblerone chocolates and
assorted confectioneries from Jacobs Suchard Tobler Ltd. of
To ship the goods, Jacobs dealt with Danmar
Lines of Switzerland (Danmar) which issued to Jacobs negotiable house bills of
lading[1]
signed by its agent, respondent Danzas Intercontinental, Inc. (Danzas). The bills of lading stated that the terms were
“F.O.B.” and “freight payable at destination,” with Jacobs as the shipper,
China Banking Corporation as the consignee, and IFTI as the party to be
notified of the shipment. The shipment
was to be delivered at the Clark Special Economic Zone with
Since Danmar did not have its own vessel, it contracted Orient Overseas
Container Line (OOCL) to ship the goods from
The goods were loaded on board the OOCL vessel on April 20, 1997 and
arrived at the
But IFTI did not provide Danzas a bank guarantee, claiming that letters
of credit already covered the shipment. IFTI
insisted that Danzas should already endorse the import permit and bills of
lading to OOCL since the latter had been paid an arbitrary fee. But Danzas did not do this.
Because IFTI did not provide Danzas with the original bills of lading and
the bank guarantee, the latter withheld the processing of the release of the
goods. Danzas reiterated to IFTI that it
could secure the release of the goods only if IFTI submitted a bank guarantee. Ultimately, IFTI yielded to the request and
applied for a bank guarantee which was approved on May 23, 1997. It claimed to have advised Danzas on even date
of its availability for pick up but Danzas secured it only on June 6, 1997.
In a letter dated June 6, 1997, Danzas told IFTI that the issuance of a
promissory note would assure the delivery of the goods to
Minutes later, IFTI faxed another letter reiterating its request that the
goods be released pending payment of whatever charges Danzas had incurred for
the release and delivery of the goods to
On June 13, 1997 Danzas secured the release of the goods and delivered
the same to IFTI at P56,000.00 (or roughly
US$2,210.00) from the original billing of about US$7,000.00. In turn, IFTI agreed to give Danzas another
opportunity to service its account and requested it to disregard IFTI’s June
10, 1997 fax letter where it said that it would no longer employ Danzas for its
future shipments for Subic and
On January 19, 1998, however, Danzas wrote IFTI, demanding payment of P181,809.45
for its handling of the shipment. IFTI
ignored the demand. On March 26, 1998 Danzas filed separate complaints for sum
of money against IFTI and OOCL before the Metropolitan Trial Court (MeTC) of
In the main, Danzas claimed that IFTI engaged its services for P181,809.45
to process the release of the goods from the port and deliver it to IFTI at
IFTI countered that it had no liability to Danzas since IFTI was not
privy to the hiring of Danzas. Following
normal procedure, IFTI coursed the import permit to Danzas since it was the party
that issued the house bills of lading. IFTI
added that under arbitrary shipments, imported goods are allowed to stay free
of charge in the port for three working days and in the storage for five to six
calendar days. Storage fees, electricity
charges, and demurrage become due only after such period. In this case, IFTI
informed Danzas on May 20, 1997 to pick up the import permit but Danzas picked
it up only on May 26, 1997. And instead of
endorsing it with the bills of lading to OOCL, Danzas itself processed the
release of the goods. Since Danzas failed to process the release or transshipment
of the goods within the three-day period, then it should shoulder all the charges
from May 20, 1997 to June 13, 1999.
On January 2, 2002,[3]
the MeTC rendered a decision in favor of
Danzas and ordered IFTI to pay (1) P181,809.45 plus legal interest to be
computed from March 26, 1998 until fully paid; (2) P25,000.00 as
attorney’s fees; and (3) the costs of suit. On appeal, however, the Regional Trial Court
(RTC)[4]
of
Danzas elevated the case to the Court of Appeals (CA)[5] which
reversed the RTC decision. The CA ruled
that IFTI’s fax letters dated June 10, 1997 showed the parties engaged in negotiation
stage. When IFTI heeded Danzas’ request
for a bank guarantee, its action brought about a perfected contract of lease of
service. The bank guarantee, procured by
IFTI, contained all the requisites of a perfected contract. The cause of the contract was the release of
the goods from the port and its delivery at
The Issues Presented
Two
issues are presented:
1. Whether
or not a contract of lease of service exists between IFTI and Danzas; and
2. Whether
or not IFTI is liable to Danzas for the costs of the delay in the release of
the goods from the port.
The Court’s Rulings
One. The facts show the existence of several contracts:
one between IFTI and Jacobs, another between Jacobs and Danmar, and still
another between Danmar and OOCL. IFTI bought
chocolates and confectioneries from Jacobs; Jacobs got Danmar to deliver the
goods to its destination; Danmar got OOCL to carry the goods for it by ship to
In short, the combined services of different carriers were used for the
delivery of the goods: Danmar, as the initial carrier, assumed the
responsibility of conveyance when it received the goods for transportation; OOCL,
as the forwarding carrier, had the duty to deliver the goods to Danzas which
was designated as the consignee in the master bill of lading; and Danzas, being
the agent of Danmar, assumed the responsibility for delivering the goods from
Manila to IFTI at Clark.[6]
Evidently, although Danmar intended the arbitrary
fee that it paid OOCL to cover the latter’s delivery of the goods all the way to
Danzas, the latter had no notion of and was not a party to such arrangement. Since the last leg of the delivery of the
goods to IFTI at Clark devolved on Danzas, the latter insisted that it was
entitled to collect a separate fee following the terms of the sale (F.O.B.
Ex-Works) and the house bills of lading (F.O.B. and freight payable at
destination).
At first, IFTI did not want to pay more but when Danzas would not move
the goods until it was assured that it would be paid, IFTI eventually negotiated
with Danzas for its services. IFTI
prepared the import permit and advised Danzas to pick up the document. But Danzas told IFTI that it also needed the
house bills of lading and the bank guarantee. If IFTI believed that it was OOCL’s responsibility
to deliver the goods at its doorsteps, then it should not have asked Danzas to
pick up the import permit and submit to it the bank guarantee and promissory
note that it required. IFTI should have
instead addressed its demand to OOCL for the delivery of the goods.
What is clear to the Court is that, by acceding to all the documentary
requirements that Danzas imposed on it, IFTI voluntarily accepted its services.
The bank guarantee IFTI gave Danzas
assured the latter that it would eventually be paid all freight and other
charges arising from the release and delivery of the goods to it.
Another indication that IFTI recognized its contract with Danzas is when IFTI
requested Danzas to have the goods released pending payment of whatever expenses
the latter would incur in obtaining the release and delivery of the goods at P56,000.00. Certainly, this concession indicated that their
earlier agreement did not push through.
Every contract has the elements of (1) consent of the contracting
parties; (2) object certain which is the subject matter of the contract; and (3)
cause of the obligation which is established. A contract is perfected by mere
consent, which is manifested by the meeting of the offer and the acceptance
upon the thing and the cause which are to constitute the contract.[7]
Generally, contracts undergo three distinct stages: (1) preparation or
negotiation; (2) perfection; and (3) consummation. Negotiation begins from the time the
prospective contracting parties manifest their interest in the contract and
ends at the moment of agreement of the parties. The perfection or birth of the contract takes
place when the parties agree upon the essential elements of the contract. The last stage is the consummation of the
contract where the parties fulfill or perform the terms they agreed on,
culminating in its extinguishment.[8] Here, there is no other conclusion than that
the parties entered into a contract
of lease of service for
the clearing and delivery of the imported goods.
Two. There is no dispute that under arbitrary
shipments, imported goods are allowed to stay, free of charge, in the port for
three working days, and in the storage for five to six calendar days. Beyond this period, storage fees, electric
charges, and the demurrage are due.
Since the goods arrived at the
Since the delay in the processing of the release of the goods was due to
IFTI’s fault, the CA rightly adjudged it liable for electric charges, demurrage,
and storage fees of P122,191.75 from May 20, 1997 to June 13, 1999.
WHEREFORE, the Court DENIES
the petition and AFFIRMS the decision
dated October 25, 2007 of the Court of Appeals in CA-G.R. SP 79597.
SO ORDERED.
ROBERTO A. ABAD
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
ANTONIO EDUARDO B.
NACHURA DIOSDADO M. PERALTA
Associate
Justice Associate Justice
JOSE CATRAL
Associate Justice
ATTESTATION
I
attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
CERTIFICATION
Pursuant
to Section 13, Article VIII of the Constitution and the Division Chairperson’s
Attestation, I certify that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
RENATO
C. CORONA
Chief Justice
[1] CA rollo, pp. 109-110.
[2]
[3] CA rollo, pp. 34-39.
[4]
[5] Rollo, pp. 46-62. Penned by Associate Justice Japar B. Dimaampao and concurred in by Associate Justices Martin S. Villarama, Jr. and Edgardo F. Sundiam.
[6] Transportation Laws and Public Service Act, Hernando B. Perez, 2001 Edition, pp. 86-87.
[7] Swedish Match, AB v. Court of Appeals, 483 Phil. 735, 750 (2004).
[8] XYST Corporation v. DMC Urban Properties Development, Inc., G.R. No. 171968, July 31, 2009, 594 SCRA 598, 604-605.