Loadstar Shipping Co. vs CA : 131621 : Synopsis/Syllabi

SYNOPSIS

When LOADSTAR’s M/V “Cherokee” sank off Limasawa Island, Manila Insurance, Co., Inc., as insurer of its wood shipment. paid the total loss thereof, then filed a complaint against LOADSTAR. The trial court ruled in favor of MIC, and the Court of Appeals affirmed the same. Hence, this appeal with the issue: whether M/V “Cherokee” is a public carrier and, whether LOADSTAR observed due diligence in the premises.

LOADSTAR is a common carrier under Art. 1732 of the Civil Code. It is not necessary that the carrier be issued a certificate of public convenience and that the carriage of the goods was periodic or unscheduled. Further, on that fateful day, the vessel was not chartered for a special cargo or to a special person only. It was carrying a particular type of cargo for one shipper, but that is no reason to convert the vessel from a common to a private carrier, especially as it was also carrying passengers. On the second issue, the Court found M/V “Cherokee” not seaworthy as it was not even sufficiently manned at the time. The Court affirmed the decision of the Court of Appeals.

SYLLABUS

1. CIVIL LAW; SPECIAL CONTRACTS; COMMON CARRIERS; ELUCIDATED.- LOADSTAR is a common carrier. It is not necessary that the carrier be issued a certificate of public convenience, and this public character is not altered by the fact that the carriage of the goods in question was periodic, occasional, episodic or unscheduled. In the case of De Guzman v. Court of Appeals, the Court juxtaposed the statutory definition of “common carriers” with the peculiar circumstances of that case, viz: The Civil Code defines “common carriers” in the following terms: “Article 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the public.” The above article makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity (in local idiom, as “a sideline.” Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the “general public,” i.e., the general community or population, and one who offers services or solicits business only from a narrow segment of the general population. We think that Article 1733 deliberately refrained from making such distinctions.

2. ID.; ID.; ID.; CASE OF HOME INSURANCE CO. V. AMERICAN STEAMSHIP AGENCIES, INC. [23 SCRA 24 (1968)]; NOT APPLICABLE IN ABSENCE OF EVIDENCE THAT VESSEL WAS SPECIALLY CHARTERED.- LOADSTAR relied on the 1968 case of Home Insurance Co. v. American Steamship Agencies, Inc., where this Court held that a common carrier transporting special cargo or chartering the vessel to a special person becomes a private carrier that is not subject to the provisions of the Civil Code. However, the records do not disclose that the M/V “Cherokee,” on the date in question, undertook to carry a special cargo or was chartered to a special person only. There was no charter party. The bills of lading failed to show any special arrangement, but only a general provision to the effect that the M/V “Cherokee” was a “general cargo carrier. “Further, the bare fact that the vessel was carrying a particular type of cargo for one shipper, which appears to be purely coincidental, is not reason enough to convert the vessel from a common to a private carrier, especially where, as in this case, it was shown that the vessel was also carrying passengers.

3. ID.; ID.; ID.; FAILURE TO KEEP VESSEL SEAWORTHY.- M/V “Cherokee” was not seaworthy when it embarked on its voyage on 19 November 1984. The vessel was not even sufficiently manned at the time. “For a vessel to be seaworthy, it must be adequately equipped for the voyage and manned with a sufficient number of competent officers and crew. The failure of a common carrier to maintain in seaworthy condition its vessel involved in a contract of carriage is a clear breach of its duty prescribed in Article 1755 of the Civil Code.”

4. ID.; ID.; ID.; DOCTRINE OF LIMITED LIABILITY; NOT APPLICABLE WHERE THERE WAS NEGLIGENCE ON PART OF THE VESSEL OWNER.- The doctrine of limited liability does not apply where there was negligence on the part of the vessel owner or agent. LOADSTAR was at fault or negligent in not maintaining a seaworthy vessel and in having allowed its vessel to sail despite knowledge of an approaching typhoon. In any event, it did not sink because of any storm that may be deemed as force majeure, inasmuch as the wind condition in the area where it sank was determined to be moderate. Since it was remiss in the performance of its duties, LOADSTAR cannot hide behind the “limited liability” doctrine to escape responsibility for the loss of the vessel and its cargo.

5. ID.; ID.; ID.; STIPULATION OF SHIPMENTS MADE AT OWNER’S RISK; VOID.- The stipulation in the case at bar effectively reduces the common carrier’s liability for the loss or destruction of the goods to a degree less than extraordinary [Articles 1744 and 1745), that is, the carrier is not liable for any loss or damage to shipments made at “owner’s risk.” Such stipulation is obviously null and void for being contrary to public policy. It has been said: Three kinds of stipulations have often been made in a bill of lading. The first is one exempting the carrier from any and all liability for loss or damage occasioned by its own negligence. The second is one providing for an unqualified limitation of such liability to an agreed valuation. And the third is one limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and pays a higher rate of freight. According to an almost uniform weight of authority, the first and second kinds of stipulations are invalid as being contrary to public policy, but the third is valid and enforceable. Since the stipulation in question is null and void, it follows that when MIC paid the shipper, it was subrogated to all the rights which the latter has against the common carrier, LOADSTAR.

6. ID.; ID.; ID.; PRESCRIPTION OF CLAIMS FOR LOSS.- MIC’s cause of action had not yet prescribed at the time it was concerned. Inasmuch as neither the Civil Code nor the Code of Commerce states a specific prescriptive period on the matter, the Carriage of Goods by Sea Act (COGSA) - which provides for a one-year period of limitation on claims for loss of, or damage to, cargoes sustained during transit - may be applied suppletorily to the case at bar. This one-year prescriptive period also applies to the insurer of the goods. In this case, the period for filing the action for recovery has not yet elapsed. Moreover, a stipulation reducing the one-year period is null and void; it must, accordingly, be struck down.

APPEARANCES OF COUNSEL

King Capuchino Tan & Associates for petitioner.

Zapa Law Office for private respondent.