BILLS OF LADING

The term 'bill of lading' is frequently defined, especially by the older authorities as a writing signed by the master of a vessel acknowledging the receipts of goods on board to be transported to a certain port and there delivered to a designated person or on his order. This definition was formulated at a time when goods were principally transported by sea and, while adequate in view of the conditions existing at that early day, is too narrow to suit present conditions. As comprehending all methods of transportation, a bill of lading may be defined as a written acknowledgment of the receipt of goods and an agreement to transport and to deliver them at a specified place to a person named or on his order. Such instruments are sometimes called 'shipping receipts,' 'forwarders' receipts,' and 'receipts for transportation." The designation, however, is not material, and neither is the form of the instrument. If it contains an acknowledgment by the carrier of the receipt of goods for transportation, it is, in legal effect, a bill of lading." (9 Am. Jur. 662,) A bill of lading is not indispensable for the creation of a contract of carriage. a. Three Fold Character of a Bill of Lading A Bill of Lading operates both as: (1) A receipt for the goods shipped; (2) A Contract by which three parties namely the shipper, the carrier and the consignee undertake specific responsibilities and assume stipulated obligations; (3) A document of title which makes it a symbol of the goods. In case however of charter of the entire vessel, the bill of lading issued by the master to the charterer, as shipper, is in fact and in legal contemplation merely a receipt and a document of title, not a contract for the contract is the charter party. The bill of lading is the evidence of the contract between the parties since its contents shall decide all disputes which may arise in regard to their execution and fulfillment. (Art. 353 Code of Commerce) b. When effective A bill of lading becomes effective upon its delivery to and acceptance by the shipper. It is presumed that the stipulations of the bill are, in the absence of fraud, concealment or improper

conduct, known to the shipper, and he is generally bound by his acceptance whether he reads the bill or not. Acceptance of the bill of lading without dissent raises the presumption that all the terms therein were brought to the knowledge of the shipper and agreed to by him and, in the absence of fraud or mistake; he is stopped from thereafter denying that he assented to such terms. b. Parties The parties in a bill of lading are the shipper and the carrier. However, a consignee, although not a signatory to the contract of carriage becomes a party to the contract by reason of: (a) the relationship of agency between the consignee and the shipper; (b) the unequivocal acceptance of the bill of lading delivered to the consignee; or (c) availment of the stipulation pour au trui, i.e., when the consignee, a third person, demands before the carrier the fulfillment of a stipulation in the bill of lading in his favor. The consignee, although the instrument is oftentimes drawn up only by the consignor and carrier, becomes bound by all the stipulations contained therein by making a claim for loss on the basis of said bill of lading. The right of a party to recover for loss of shipment consigned to him under a bill of lading drawn up only by and between the shipper and the carrier, springs from either relation of agency between him and the shipper or his status as stranger in whose favor some stipulation is made in said contract (stipulation pour autrui), and who become a party thereto when he demands fulfillment of that stipulation. c. As a Contact of Adhesion Bills of lading, as well as tickets, constitute a class of contracts of adhesion. Hence, they are normally construed in favor of the passenger or shipper who adhered to such bill of lading or ticket. However, the parties cannot escape liability by adverting to the bill of lading as a contract of adhesion, if the bill of lading is clear on its face.

By the peculiar circumstances under which contracts of adhesion are entered into namely, that it is drafted only by one party, usually the corporation, and is sought to be accepted or adhered to by the other party, in this instance the passengers, private respondents, who cannot change the same and who are thus made to adhere thereto on the "take it or leave it" basis certain guidelines in the determination of their validity and/or enforceability have been formulated in order to that justice and fan play characterize the relationship of the contracting parties. Any ambiguity is construed against the carrier, the contract being one of adhesion. d. As Evidence A bill of lading is a contract and as such it expresses the terms and conditions of the agreement between the parties; it names the parties, which includes the consignee; fixes the route; destination; freight rates; and the rights and obligations assumed by the parties. The bill of lading is the best evidence of the contract and all matters indicated therein. The terms of the contract are deemed conclusive on the parties who are bound thereby, and parol evidence is not admissible to vary or contradict the complete and enforceable agreement embodied in the instrument. e. Kinds of Bill Lading: 1. On board issued when the goods have been actually placed aboard the ship with very reasonable expectation that the shipment is as good as on its way. 2. Received for shipment states that the goods have been received for shipment with or without specifying the vessel by which the goods are to be shipped. 3. Negotiable stated that the goods referred to therein will be delivered to the bearer or to the order of any person named therein. 4. Non-negotiable stated that the goods referred to therein will be delivered to a specified person. 5. Clean - does not indicate any defects in the goods received. 6. Foul- contained a notation thereon indicating that the goods covered by it are in bad condition.

7. Spent Covers goods that already have been delivered by the carrier without a surrender of a signed copy of the bill. 8. Through Issued by the carrier who is obliged to use the facilities of other carriers as well as his own facilities for the purpose of transporting the goods from the city of the seller to the city of the buyer, which bill of lading is honored by the second and other interested carriers who do not issue their own bills. 9. Custody One where the goods are already received by the carrier but the vessel indicated therein has not yet arrived in the port. 10. Port issued by the carrier to whom the goods have been delivered and the vessel indicated in the bill of lading by which the goods are to be shipped is already in the port where the goods are held for shipment.
Read: Magellan Mfg. Marketing Corp. v. Court of Appeals G.R. No. 95520, August 22, 1991. Compania Maritima vs. Insurance Company of North America, G.R. No. L-18965 October 30, 1964 Mendoza vs. PAL Inc. GR No. 3678 February 29, 1952 National Union Fire v. Stolt-Nielse Philippines G.R. No. 87958, April 26, 1990 Lorenzo Shipping Corp. v. Chubb and Sons, Inc. G.R. No. 147724, June 8, 2004 Keng Hua Paper Products Co., Inc. vs. Court of Appeals G.R. No. 116863 February 12, 1998 Philippine American Insurance Co. Inc. vs. Sweet Lines, Inc. et al., GR No. 87434 August 5, 1992