FACTS:

The private respondent, a shipping company, received a sealed container containing seventy-six bales of "unsorted waste paper" for shipment to the petitioner, Keng Hua Paper Products, Co. A bill of lading was issued to cover the shipment. However, the petitioner failed to discharge the shipment from the container within the grace period, resulting in the shipment remaining inside the container for a total of 481 days. Demurrage charges accrued during this period, amounting to P67,340. Numerous demands for payment were made on the petitioner, but it refused to settle its obligation. The private respondent then filed a civil action for collection and damages. The petitioner raised several defenses, including the alleged overshipment of the goods and the contention that the cause of action should be against the shipper and not the petitioner. The Regional Trial Court found the petitioner liable for demurrage charges, attorney's fees, and litigation expenses. The petitioner appealed to the Court of Appeals, which affirmed the lower court's decision. The petitioner then filed a petition for review before the Supreme Court. The main issue in the case is whether the petitioner was bound by the bill of lading.

ISSUES:

1. Whether the bill of lading was a valid and binding contract between the parties.

2. Whether petitioner can be bound by the terms and conditions of the bill of lading even if it did not give its consent thereto.

3. Whether petitioner's refusal to accept the shipment is a valid ground to reject the bill of lading.

4. Whether petitioner is bound by the terms and conditions stated in the bill of lading.

5. Whether petitioner's alleged violation of customs, tariff, and central bank laws excuses it from its contractual obligation to receive the shipment.

6. Whether the issue of whether petitioner accepted the bill of lading can be raised for the first time on appeal.

7. Whether petitioner is liable for demurrage charges.

8. Whether any discrepancy between the amount of the goods described in the commercial invoice and the amount allowed in the letter of credit affects the validity and enforceability of the contract of carriage as embodied in the bill of lading.

9. Whether the carrier can be held responsible for the overshipment of goods when the contract of carriage was under the arrangement known as "Shipper's Load and Count" and the carrier had no knowledge of the contents of the container.

10. Whether interest may be allowed to run from the date of private respondent's extrajudicial demands for payment, considering that there was no demand for interest.

RULING:

1. The bill of lading was held to be a valid and binding contract between the shipper, consignee, and carrier.

2. Petitioner can be bound by the terms and conditions of the bill of lading, even if it did not explicitly give its consent, because its acceptance of the bill of lading by physically receiving and not immediately objecting to it signifies its acceptance of the terms and conditions contained therein.

3. Petitioner's refusal to accept the shipment is not a valid ground to reject the bill of lading, as it only pertains to its inability to use the delivery permit and does not invalidate its acceptance of the bill of lading.

4. Petitioner is bound by the terms and conditions stated in the bill of lading. The acceptance of the bill of lading without objection raises the presumption that petitioner agreed to the entries and stipulations imposed therein. Petitioner's delay in notifying the respondent of the alleged 'wrong shipment' strengthens this presumption. Therefore, petitioner cannot now deny being bound by the terms in the bill of lading.

5. Petitioner's apprehension of violating customs, tariff, and central bank laws does not excuse it from its contractual obligation to receive the shipment. Mere apprehension, without clear demonstration that taking delivery of the shipment has become legally impossible, cannot defeat petitioner's liability under the bill of lading.

6. The issue of whether petitioner accepted the bill of lading cannot be raised for the first time on appeal. Petitioner only raised this issue in its memorandum before the court. It is well-settled that issues not raised timely in the lower court are barred by estoppel and cannot be raised for the first time on appeal.

7. Petitioner is liable for demurrage charges. Its prolonged failure to receive and discharge the cargo constitutes a violation of the terms of the bill of lading. Demurrage is a compensation for delay or detention of a vessel and is a measure of damages in cases of mere detention.

8. Any discrepancy between the amount of the goods described in the commercial invoice and the amount allowed in the letter of credit does not affect the validity and enforceability of the contract of carriage as embodied in the bill of lading.

9. The carrier cannot be held responsible for the overshipment of goods when the contract of carriage was under the arrangement known as "Shipper's Load and Count" and the carrier had no knowledge of the contents of the container.

10. Since the bill of lading did not specify the amount of demurrage and the sum claimed by the private respondent increased as the days went by, the total amount demanded cannot be deemed to have been established with reasonable certainty until the trial court rendered its judgment. Therefore, interest may not be allowed to run from the date of private respondent's extrajudicial demands for payment.

PRINCIPLES:

• A bill of lading serves two functions: (a) as a receipt for the goods shipped, and (b) as a contract by which the shipper, carrier, and consignee assume specific responsibilities and obligations.

• Acceptance of a bill of lading by the shipper and the consignee, with full knowledge of its contents, gives rise to the presumption that the same was a perfected and binding contract.

• Failure to immediately object to or dissent from any term or stipulation in a bill of lading implies acceptance of its terms and conditions.

• Refusal to accept a shipment does not necessarily invalidate acceptance of the bill of lading.

• The acceptance of a bill of lading without objection raises the presumption that the party agreed to the entries and stipulations imposed therein.

• Mere apprehension of violating laws does not excuse a party from its contractual obligations.

• Issues not raised timely in the lower court are barred by estoppel and cannot be raised for the first time on appeal.

• Demurrage is an allowance or compensation for the delay or detention of a vessel. It is a measure of damages in cases of mere detention.

• A transaction involving the purchase of goods may require a contract of transportation, which should be treated independently of the contract of sale and the contract for the issuance of a letter of credit.

• Discrepancies between the amount of goods indicated in the invoice and the amount in the bill of lading do not negate the carrier's obligation arising from the contract of transportation.

• The carrier under the arrangement of "Shipper's Load and Count" is not responsible for the contents of the shipment loaded by the shipper.

• Interest on an obligation not constituting a loan or forbearance of money may be imposed at the discretion of the court at a rate of 6% per annum. If the demand for payment is not established with reasonable certainty, interest shall begin to run only from the date the judgment of the court is made.