Riva v. Lizarraga Hermanos
REITERATIONFacts
The Antecedents: Teodoro Carranza constructed two boats in Atimonan, Tayabas, based on the oral order of Antonio de la Riva. The payment was to be settled through Gutierrez Hermanos in Manila, with whom both parties had standing accounts. Gutierrez Hermanos advanced moneys to Carranza during construction, but no accounts were settled between the parties until the business concluded. Procedural History: After the boats were finished and shipped to Manila under a bill of lading naming Carranza as shipper and Behn, Meyer & Co. as consignees, the plaintiff sought to take possession. However, the plaintiff discovered the boats were held by the sheriff under an attachment in favor of the defendants, Lizarraga Hermanos, et al. The plaintiff's action to recover the boats failed in the Court of First Instance. The Appeal: The defendants appealed the decision of the Court of First Instance. The core of the dispute revolved around whether title to the boats had legally passed to the plaintiff, Antonio de la Riva, prior to the attachment. The plaintiff contended he had acquired ownership, while the defendants, through the sheriff's attachment, asserted a claim against the property.
Issue(s)
Whether title to the boats passed to the plaintiff, Antonio de la Riva, prior to the attachment by the sheriff. Whether the indorsement of the bill of lading by the consignees (Behn, Meyer & Co.) to the plaintiff was sufficient to transfer ownership of the boats.
Ruling
The judgment of the Court of First Instance is reversed. The plaintiff failed to establish his title to the boats as against the sheriff under the attachment and must therefore fail in his action.
Ratio Decidendi
On Issue 1: The Court held that title to the boats did not pass to the plaintiff, Antonio de la Riva, because Teodoro Carranza built the boats on his own account and retained ownership until legal transfer. This ownership was not affected by the payments advanced by Gutierrez Hermanos, as the accounts between the parties remained unsettled. Furthermore, the shipment of the boats and the remittance of the bill of lading to Behn, Meyer & Co., who were merely the consignees and represented the builder, did not effect a transfer of title to the plaintiff. The bill of lading was not made out to the plaintiff's order, nor was it payable to bearer, which are conditions necessary for title to pass through such means. On Issue 2: The Court clarified that the indorsement of the bill of lading by the consignees, Behn, Meyer & Co., to the plaintiff was insufficient to transfer ownership. According to Article 708 of the Code of Commerce, for title to pass by indorsement, the bill of lading must be made out to the order of the consignees or to bearer. In this case, the freight was deliverable to the consignees by name, and their interest could only be transferred by a document that specifically purported to convey the property. Since the bill of lading did not meet these requirements, the indorsement did not vest ownership in the plaintiff, leaving the boats subject to attachment.
Main Doctrine
The ownership of goods shipped under a bill of lading only passes to the buyer under specific conditions outlined in commercial law. If the bill of lading is deliverable to named consignees who are not the buyers, title does not pass by mere indorsement unless the document itself purports to convey the property. This principle is crucial in determining the rightful possessor of goods, especially in cases involving attachments and claims of ownership.