G.R. No.

150403 25, 2007

January

CEBU SALVAGE CORPORATION vs. PHILIPPINE HOME ASSURANCE CORPORATION FACTS: Petitioner and Maria Cristina Chemicals Industries entered into a voyage charter wherein petitioner agreed to load 1,100 metric tons of silica quartz and transport it to Misamis Oriental. Petitioner did not own the ship to be used. The shipment never reached its destination for the ship sank which resulted to the total loss of the cargo. MCCI filed a claim for the loss of the shipment with its insurer (respondent), and in turn the latter sued petitioner for reimbursement of the amount it paid to MCCI plus interest and costs. Petitioner opposed to such claim by respondent and made several arguments: first is that what petitioner and MCCI entered was a voyage charter wherein MCCI is leasing the ship for a single voyage only hence it should be the one responsible for the loss; second is that since the ship is really owned by ALS Timber Enterprises and not petitioner, then it could not be held liable. ISSUE: -WON petitioner is considered a common carrier, and should be held liable as such. -WON petitioner should be held liable considering the fact that it is not the owner of the ship. HELD: On the first issue, the SC held in a positive. The argument of petitioner that what it entered is a voyage charter is of no moment. Based on the agreement signed by the parties and the testimonies of petitioners

operation manager, it is clear that it was a contract of carriage. It actively negotiated and solicited MCCIIs account, offered its services to ship the silica quartz and proposed to utilize a ship for the shipment. As to the issue whether petitioner is a common carrier, the SC held that There is no dispute that petitioner was a common carrier. At the time of the loss of the cargo, it was engaged in the business of carrying and transporting goods by water, for compensation, and offered its services to the public. From the nature of their business and for reasons of public policy, common carriers are bound to observe extraordinary diligence over the goods they transport according to the circumstances of each case. In the event of loss of the goods, common carriers are responsible, unless they can prove that this was brought about by the causes specified in Article 1734 of the Civil Code. In all other cases, common carriers are presumed to be at fault or to have acted negligently, unless they prove that they observed extraordinary diligence. As to the second issue, the SC held in an affirmative. Petitioner was the one which contracted with MCCII for the transport of the cargo. It had control over what vessel it would use. All throughout its dealings with MCCII, it represented itself as a common carrier. The fact that it did not own the vessel it decided to use to consummate the contract of carriage did not negate its character and duties as a common carrier. The MCCII (respondents subrogor) could not be reasonably expected to inquire about the ownership of the vessels which petitioner carrier offered to utilize. As a practical matter, it is very difficult and often impossible for the general public to enforce its rights of action under a contract of carriage if it should

be required to know who the actual owner of the vessel is. In fact, in the voyage charter, petitioner denominated itself as the owner/operator of the ship. To summarize, a contract of carriage of goods was shown to exist; the cargo was loaded on board the vessel; loss or non-delivery of the cargo was proven; and petitioner failed to prove that it exercised extraordinary diligence to prevent such loss or that it was due to some casualty or force majeure. The voyage charter here being a contract of affreightment, the carrier was answerable for the loss of the goods received for transportation. G.R. No. L-25599 April 4, 1968 HOME INSURANCE COMPANY vs. AMERICAN STEAMSHIP AGENCIES, INC. and LUZON STEVEDORING CORPORATION, AMERICAN STEAMSHIP AGENCIES, INC. FACTS: A cargo coming from Chimbate, Peru of 21,740 jute bags of Peruvian fish meal through SS Crowborough arrived in Manila and was discharged into the lighters of Luzon Stevedoring Company. When the cargo was delivered to the consignee San Miguel Corporation, there was a shortage causing SMC to lay claims against LSC, HIC, ASA, owners and operators of SS Crowborough. Because of the denial by others of their liability, HIC paid the consignee the insurance value of the loss. Having been denied reimbursement from LSC, ASA, and SS Crowborough, HIC filed before the CFI of Manila a complaint for recovery of the amount it paid to SMC with legal interest, plus attorneys fees. CFI of Manila rendered its decision making ASA as the only one liable to HIC reasoning that the non-liability

claim of ASA in the charter party contact is invalid for it runs counter Art. 587 of the Code of Commerce which makes the ship agent also civilly liable for damages in favor of third persons due to the conduct of the captain of the carrier. And the stipulation exempting the owner from liability is against public policy. ISSUE: -WON American Steamship Agencies, Inc. Is considered a common carrier and be held liable for loss or damage of the cargo. -WON the stipulation in the charter party contract regarding the nonliability claim of ASA invalid as against public policy. HELD: On the first issue, the SC held it in the negative. The provisions of our Civil Code on common carriers were taken from Anglo-American law. Under American jurisprudence, a common carrier undertaking to carry a special cargo or chartered to a special person only, becomes a private carrier. As a private carrier, a stipulation exempting the owner from liability for the negligence of its agent is not against public policy, and is deemed valid. The Civil Code provisions on common carriers should not be applied where the carrier is not acting as such but as a private carrier. The stipulation in the charter party absolving the owner from liability for loss due to the negligence of its agent would be void only if the strict public policy governing common carriers is applied. Such policy has no force where the public at large is not involved, as in the case of a ship totally chartered for the use of a single party.