1. MAERSK LINE VS COURT OF APPEALS FACTS: Maersk Line is engaged in the transportation of goods by sea, doing business in the Philippines through its general agent Compania General de Tabacos de Filipinas. Private respondent Efren Castillo is the proprietor of Ethegal Laboratories, a firm engaged in the manufacture of pharmaceutical products. On November 12, 1976, private respondent ordered from Eli Lilly. Inc. of Puerto Rico through its agent in the Philippines, Elanco Products, 600,000 empty gelatin capsules for the manufacture of his pharmaceutical products. The capsules were placed in six (6) drums of 100,000 capsules each valued at US $1,668.71. The 600,000 empty gelatin capsules in six drums were already shipped on board MV "Anders Maerskline" for shipment to the Philippines via Oakland, California. Shipper Eli Lilly, Inc. specified the date of arrival to be April 3, 1977. Said cargo of capsules were mishipped and diverted to Richmond, Virginia, USA and then transported back Oakland, Califorilia. The goods finally arrived in the Philippines on June 10, 1977 or after two (2) months from the date specified in the memorandum. As a consequence, private respondent as consignee refused to take delivery of the goods on account of its failure to arrive on time. Private respondent alleging gross negligence and undue delay in the delivery of the goods, filed an action before the trial for rescission of contract with damages against petitioner and Eli Lilly, Inc. as defendants. Denying that it committed breach of contract, petitioner alleged in its that answer that the subject shipment was transported in accordance with the provisions of the covering bill of lading and that its liability under the law on transportation of good attaches only in case of loss, destruction or deterioration of the goods as provided for in Article 1734 of Civil Code. Defendant Eli Lilly, Inc., alleged that the delay in the arrival of the the subject merchandise was due solely to the gross negligence of petitioner Maersk Line. The trial court ruled in favor of private respondent. The Court of Appeals affirmed it with modifications. (Note: The bill of lading covering the subject shipment among others, reads: 6. GENERAL (1) The Carrier does not undertake that the goods shall arive at the port of discharge or the place of delivery at any particular time or to meet any particular market or use and save as is provided in clause 4 the Carrier shall in no circumstances be liable for any direct, indirect or consequential loss or damage caused by delay. If the Carrier should nevertheless be held legally liable for any such direct or indirect or consequential loss or damage caused by delay, such liability shall in no event exceed the freight paid for the transport covered by this Bill of Lading. (Exh. "1-A"; AC-G.R. CV No. 10340, Folder of Exhibits, p. 41)) ISSUE: Whether or not respondent Castillo is entitled to damages resulting from delay in the delivery of the shipment in the absence in the bill of lading of a stipulation on the period of delivery. HELD: Yes. It is not disputed that the aforequoted provision at the back of the bill of lading, in fine print, is a contract of adhesion. Generally, contracts of adhesion are considered void since almost all the provisions of these types of contracts are prepared and drafted only by one party, usually the carrier. The only participation left of the other party in such a contract is the affixing of his signature thereto, hence the term "Adhesion". Nonetheless, settled is the rule that bills of lading are contracts not entirely prohibited. One who adheres to the contract is in reality free to reject it in its entirety; if he adheres, he gives his consent. However, the aforequoted ruling applies only if such contracts will not create an absurd situation as in the case at bar. The questioned provision in the subject bill of lading has the effect of practically leaving the date of arrival of the subject shipment on the sole determination and will of the carrier. While it is true that common carriers are not obligated by law to carry and to deliver merchandise, and persons are not vested with the right to prompt delivery, unless such common carriers previously assume the obligation to deliver at a given date or time, delivery of shipment or cargo should at least be made within a reasonable time. An examination of the subject bill of lading shows that the subject shipment was estimated to arrive in Manila on April 3, 1977. While there was no special contract entered into by the parties indicating the date of arrival of the subject shipment, petitioner nevertheless, was very well aware of the specific date when the goods were expected to arrive as indicated in the bill of lading itself. In this regard, there arises no need to execute another contract for the purpose as it would be a mere superfluity. In the case before us, we find that a delay in the delivery of the goods spanning a period of two (2) months and seven (7) days falls was beyond the realm of reasonableness. Described as gelatin capsules for use in pharmaceutical products, subject shipment was delivered to, and left in, the possession and custody of petitioner-carrier for transport to Manila via Oakland, California. But through petitioner's negligence was mishipped to Richmond, Virginia. Petitioner's insitence that it cannot be held liable for the delay finds no merit. 2. MAGELLAN MANUFACTURING MARKETING CORPORATIONvs.COURT OF APPEALS, ORIENT OVERSEAS CONTAINER LINES and F.E. ZUELLIG, INC G.R. No. 95529 August 22, 1991 FACTS: On May 20, 1980, Magellan Manufacturers Marketing Corp. (MMMC) entered into a contract with Choju Co. of Yokohama, Japan to export 136,000 anahaw fans for and in consideration of $23,220.00. As payment thereof, a letter of credit was issued to plaintiff MMMC by the buyer. Through its president, James Cu, MMMC then contracted F.E. Zuellig, a shipping agent, through its solicitor, one Mr. King, to ship the anahaw fans through the other appellee, Orient Overseas Container Lines, Inc., (OOCL) specifying that he needed an on-board bill of lading and that transhipment is not allowed under the letter of credit (Exh. B-1). On June 30, 1980, appellant MMMC paid F.E. Zuellig the freight charges and secured a copy of the bill of lading which was presented to Allied Bank. The bank then credited the amount of US$23,220.00 covered by the letter of credit to appellant's account. However, when appellant's president James Cu, went back to the bank later, he was informed that the payment was refused by the buyer allegedly because there was no on-board bill of lading, and there was a transhipment of goods. As a result of the refusal of the buyer to accept, upon appellant's request, the anahaw fans were shipped back to Manila by appellees, for which the latter demanded from appellant payment of P246,043.43. Appellant abandoned the whole cargo and asked appellees for damages. In their Partial Stipulation of Facts, the parties admitted that a shipment of 1,047 cartons of 136,000 pieces of Anahaw Fans contained in 1 x 40 and 1 x 20 containers was loaded at Manila on board the MV 'Pacific Despatcher' freight prepaid, and duly covered by Bill of Lading No. MNYK201T dated June 27, 1980 issued by OOCL; that the shipment was delivered at the port of discharge on July 19, 1980, but was subsequently returned to Manila after the consignee refused to accept/pay the same. TC: MMMMC cannot seek damages as it agreed to a transshipment of the goods and is liable for demurrages amounting to P298k incurred in Japan and Manila. CA: MMMMC cannot seek damages as it agreed to a transshipment of the goods and is liable for demurrages amounting to P52k incurred in Japan. While the goods arrived in Manila in October 1980, appellant was notified of said arrival only in March 1981. No explanation was given for the delay in notifying appellant. ISSUE: WON MMMMC should be liable for P52k when it exercised its option of Abandonment. HELD: No. Private respondents belatedly informed petitioner of the arrival of its goods in Manila and that if it wished to take delivery of the cargo it would have to pay P52k, but with the last paragraph thereof stating as follows: “Please can you advise within 15 days of receipt of this letter whether you intend to take delivery of this shipment, as alternatively we will have to take legal proceedings in order to have the cargo auctioned to recover the costs involved, as well as free the container which are (sic) urgently required for export cargoes.“ Clearly, therefore, private respondents unequivocally offered petitioner the option of paying the shipping and demurrage charges in order to take delivery of the goods or of abandoning the same so that private respondents could sell them at public auction and thereafter apply the proceeds in payment of the shipping and other charges. Responding thereto, in a letter dated April 3, 1981, petitioner seasonably communicated its decision to abandon to the goods in favor of private respondents with the specific instruction that any excess of the proceeds over the legal costs and charges be turned over to petitioner. Receipt of said letter was acknowledged by private respondents, as revealed by the testimony of Edwin Mabazza, a claim officer of F.E. Zuellig, Inc., on cross-examination. 42 Despite petitioner's exercise of the option to abandon the cargo, however, private respondents sent a demand letter on June 22, 1981 43 insisting that petitioner should pay the entire amount of P298,150.93 and, in another letter dated Apiril 30, 1981, 44 they stated that they win not accept the abandonment of the goods and demanded that the outstanding account be settled.