HOME INSURANCE COMPANY vs. AMERICAN STEAMSHIP AGENCIES, INC. and LUZON STEVEDORING CORPORATION

HOME INSURANCE COMPANY vs. AMERICAN STEAMSHIP AGENCIES, INC. and LUZON STEVEDORING CORPORATIONG.R. No. L-25599April 4, 1968FACTS:Consorcio Pesquero del Peru of South America shipped freight pre-paid at Peru, jute bags of Peruvian fish meal through SS Crowborough, covered by clean bills of lading. The cargo, consigned to San Miguel Brewery, Inc., now San Miguel Corporation, and insured by Home Insurance Company arrived in Manila and was discharged into the lighters of Luzon Stevedoring Company. When the cargo was delivered to consignee San Miguel Brewery Inc., there were shortages causing the latter to lay claims against Luzon Stevedoring Corporation, Home Insurance Company and the American Steamship Agencies (shipowner), owner and operator of SS Crowborough.Because the others denied liability, Home Insurance Company paid SMBI the insurance value of the loss, as full settlement of the claim. Having been refused reimbursement by both the Luzon Stevedoring Corporation and American Steamship Agencies, Home Insurance Company, as subrogee to the consignee, filed against them before the CFI of Manila a complaint for recovery of the payment paid with legal interest, plus attorneys fees.In answer, Luzon Stevedoring Corporation alleged that it delivered with due diligence the goods in the same quantity and quality that it had received the same from the carrier.The CFI, after trial, absolved Luzon Stevedoring Corporation, having found the latter to have merely delivered what it received from the carrier in the same condition and quality, and ordered American Steamship Agencies to pay Home Insurance Company the amount demanded with legal interest plus attorneys fees.Disagreeing with such judgment, American Steamship Agencies appealed directly to Us.ISSUE: Is the stipulation in the charter party of the owners non-liability valid so as to absolve the American Steamship Agencies from liability for loss?HELD: The judgment appealed from is herebyreversedand appellant is absolved from liability to plaintiff.YESThe bills of lading, covering the shipment of Peruvian fish meal provide at the back thereof that the bills of lading shall be governed by and subject to the terms and conditions of the charter party, if any, otherwise, the bills of lading prevail over all the agreements. On the bills are stamped Freight prepaid as per charter party. Subject to all terms, conditions and exceptions of charter party dated London, Dec. 13, 1962.Section 2, paragraph 2 of the charter party, provides that the owner is liable for loss or damage to the goods caused bypersonal want of due diligenceon its part or its manager to make the vessel in all respects seaworthy and to secure that she be properly manned, equipped and supplied or by thepersonal act or default of the owner or its manager. Said paragraph, however,exemptsthe owner of the vessel from any loss or damage or delay arising from any other source, even from the neglect orfault of the captain or crew or some other personemployed by the owner on board, for whose acts the owner would ordinarily be liable except for said paragraph..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 orchartered 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.Such doctrine We find reasonable. 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.And furthermore, in a charter of the entire vessel, the bill of lading issued by the master to the charterer, as shipper, is in fact and legal contemplation merely a receipt and a document of title not a contract, for the contract is the charter party. The consignee may not claim ignorance of said charter party because the bills of lading expressly referred to the same. Accordingly, the consignees under the bills of lading must likewise abide by the terms of the charter party. And as stated, recovery cannot be had thereunder, for loss or damage to the cargo, against the shipowners, unless the same is due to personal acts or negligence of said owner or its manager, as distinguished from its other agents or employees. In this case, no such personal act or negligence has been proved.

Epitacio San Pablo v. Pantranco South Express, Inc.

G.R. No. L-61461 August 21, 1987

FACTS:

Pantranco engaged in the land transportation business with PUB service for passengersand freight and various certificates for public conveniences to operate passenger busesfrom Metro Manila to Bicol Region and Eastern Samar; through its counsel, it wrote toMaritime Industry Authority (MARINA) requesting authority to lease/purchase a vesselnamed M/V Black Double to be used for its project to operate a ferryboat service fromMatnog, Sorsogon and Allen, Samar that will provide service to company buses and freighttrucks that have to cross San Bernardo Strait; request was denied by MARINA

It nevertheless acquired the vessel MV Black Double; it wrote the Chairman of the Boardof Transportation that it proposes to operate a ferry service to carry its passenger busesand freight trucks between Allen and Matnog in connection with its trips to Tacloban Cityfor the purpose of continuing the highway, which is interrupted by a small body of water,the said proposed ferry operation being merely a necessary and incidental service to itsmain service and obligation of transporting its passengers; that being so, it believed thatthere was no need for it to obtain a separate certificate for public convenience to operatea ferry service Matnog to cater exclusively to its passenger buses and freight trucks. BOTgranted the request. Cardinal Shipping Corporation and the heirs of San Pablo filedseparate motions for reconsideration.

ISSUES:

1. WON a ferry service is an extension of the highway and thus is a part of theauthority originally granted PANTRANCO; 2. WON a land transportation company can beauthorized to operate a ferry service or coastwise or interisland shipping service along itsauthorized route as an incident to its franchise without the need of filing a separateapplication for the same

HELD:

No.

ferry

- continuation by means of boats, barges, or rafts, of a highway or the connection of highways located on the opposite banks of a stream or other body of water. The termnecessarily implies transportation for a short distance, almost invariably between twopoints, which is unrelated to other transportation

ferry service- service either by barges or rafts, even by motor or steam vessels, betweenthe banks of a river or stream to continue the highway which is interrupted by the body of water, or in some cases to connect two points on opposite shores of an arm of the seasuch as bay or lake which does not involve too great a distance or too long a time tonavigate

Coastwise Or interisland service- service which involves crossing the open sea

motorship,steamboat or motorboat service

(engaged in the coastwise trade) service between the different islands, involving more or less great distance and over moreor less turbulent and dangerous waters of the open sea, to be coastwise or inter-islandservice; considered coastwise or inter-island service

conveyance of passengers, trucks and cargo from Matnog to Allen is certainly not a ferryboat service but a coastwise or interisland shipping service. Under no circumstance canthe sea between Matnog and Allen be considered a continuation of the highway. While aferry boat service has been considered as a continuation of the highway when crossingrivers or even lakes, which are small body of waters - separating the land, however, whenas in this case the two terminals, Matnog and Allen are separated by an open sea it cannot be considered as a continuation of the highway. PANTRANCO should secure a separateCPC for the operation of an interisland or coastwise shipping. Its CPC as a bustransportation cannot be merely amended to include this water service under the guisethat it is a mere private ferry service.

NATIONAL STEEL CORPORATION v. COURT OF APPEALS

G.R. No. 112287 December 12, 1997

Doctrine:

The stringent provisions of the Civil Code on common carriers protecting the general public cannot justifiably be applied to a private carrier.

Facts:

Plaintiff National Steel Corporation (NSC) as Charterer and defendant Vlasons Shipping, Inc. (VSI) as Owner, entered into a Contract of Voyage Charter Hire whereby NSC hired VSIs vessel, the MV Vlasons I to make one voyage to load steel products at Iligan City and discharge them at North Harbor, Manila. The handling, loading and unloading of the cargoes were the responsibility of the Charterer.

The skids of tinplates and hot rolled sheets shipped were allegedly found to be wet and rusty. Plaintiff, alleging negligence, filed a claim for damages against the defendant who denied liability claiming that the MV Vlasons I was seaworthy in all respects for the carriage of plaintiffs cargo; that said vessel was not a common carrier inasmuch as she was under voyage charter contract with the plaintiff as charterer under the charter party; that in the course its voyage, the vessel encountered very rough seas.

Issue:

Whether or not the provisions of the Civil Code on common carriers pursuant to which there exists a presumption of negligence against the common carrier in case of loss or damage to the cargo are applicable to a private carrier.

Held:

No. In a contract of private carriage, the parties may freely stipulate their duties and obligations which perforce would be binding on them. Unlike in a contract involving a common carrier, private carriage does not involve the general public. Hence, the stringent provisions of the Civil Code on common carriers protecting the general public cannot justifiably be applied to a ship transporting commercial goods as a private carrier.

It has been held that the true test of a common carrier is the carriage of passengers or goods, provided it has space, for all who opt to avail themselves of its transportation service for a fee [Mendoza vs. Philippine Airlines, Inc., 90 Phil. 836, 842-843 (1952)]. A carrier which does not qualify under the above test is deemed a private carrier. Generally, private carriage is undertaken by special agreement and the carrier does not hold himself out to carry goods for the general public.

Because the MV Vlasons I was a private carrier, the ship owners obligations are governed by the foregoing provisions of the Code of Commerce and not by the Civil Code which, as a general rule, places the prima facie presumption of negligence on a common carrier.

G.R. No. L-25266January 15, 1975

AETNA INSURANCE COMPANY, plaintiff-appellant, vs .BARBER STEAMSHIP LINES, INC., and/or LUZON STEVEDORING CORPORATION and/or LUZON BROKERAGE CORPORATION, defendants-appellees.

AQUINO, J.:

Aetna Insurance Company appealed on a legal question from the order of the Court of First Instance of Manila, dismissing its amended complaint against Barber Line Far East Service on the ground of prescription.

The facts are as follows:

On February 22, 1965 Aetna Insurance Company, as insurer, filed a complaint against Barber Steamship Lines, Inc., Luzon Stevedoring Corporation and Luzon Brokerage Corporation.

It sought to recover from the defendants the sum of P12,100.06 as the amount of the damages which were caused to a cargo of truck parts shipped on the SS Turandot. The insurer paid the damages to Manila Trading & Supply Company, the consignee.

In a manifestation dated March 31, 1965, Barber Steamship Lines, Inc., without submitting to the court's jurisdiction, alleged that it was a foreign corporation not licensed to do business in the Philippines, that it was not engaged in business here, that it had no Philippine agent and that it did not own nor operate the SS Turandot.

On April 5, 1965 Barber Steamship Lines, Inc., again with the caveat that it was not submitting to the court's jurisdiction, filed a motion to dismiss on the grounds of (a) lack of jurisdiction over the person and (b) that it was not the real party in interest.

Barber Steamship Lines, Inc. alleged that the service of summons was not effected upon it in accordance with section 14, Rule 14 of the Rules of Court. It clarified that the summons intended for it was served upon Macondray & Co., Inc. which was not its agent.

It asserted that it was not the real party in interest because according to the bill of lading annexed to the complaint the owner of the SS Turandot, the carrying vessel, was the Wilh, Wilhemsen Group. (Note, however, that the same bill of lading indicated that Barber Steamship Lines, Inc. was the vessel's agent).

Two days later, or on April 7, 1965 plaintiff Aetna Insurance Company filed a manifestation stating that the name of defendant Barber Steamship Lines, Inc. was incorrect and that the correct name was Barber Line Far East Service. Attached to the manifestation was an amended complaint containing the correction. Aetna Insurance Company manifested that copies of the amended complaint would be served on the parties by means of alias summons.

On April 20, 1965 Aetna Insurance Company filed a motion for the admission of its amended complaint. Barber Steamship Lines, Inc. opposed the motion. It contended that its pending motion to dismiss the original complaint should first be resolved before the amended complaint may be admitted.

Judge Ramon O. Nolasco in an order dated April 19, 1965 dismissed the complaint against Barber Steamship Lines, Inc. and directed that alias summonses be issued to the defendants named in the amended complaint.

On May 19, 1965 Barber Line Far East Service, supposedly without admitting to the court's jurisdiction, moved for the dismissal of the amended complaint on the grounds (1) that it is not a juridical person and, hence, it could not be sued; (2) that the court had no jurisdiction over its person; (3) that it was not the real party in interest and (4) that the action had prescribed according to the bill of lading and the Carriage of Goods by Sea Act. Aetna Insurance Company opposed the motion.

Judge Nolasco in his order of July 7, 1965 ruled that inasmuch as according to the complaint the shipment arrived in Manila on February 22, 1964 and the amended complaint, impleading Barber Line Far East Service, was filed on April 7, 1965, or beyond the one-year period fixed in the Carriage of Goods by Sea Act, the action had already prescribed. The case was dismissed as to Barber Line Far East Service.

The legal question under the above facts is whether the action of Aetna Insurance Company against Barber Line Far East Service, as ventilated in its amended complaint, which was filed on April 7, 1965, had prescribed.

As previously stated, the action was for the recovery of damages to a cargo of truck parts which was insured by Aetna Insurance Company and which arrived in Manila on the SS Turandot and were delivered in bad order to the consignee on February 25, 1968 (4 Record on Appeal).

The bill of lading covering the shipment provides:

19.In any event the Carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after the delivery of the goods or the dates when the goods should have been delivered. Suit shall not be deemed brought until jurisdiction shall have been obtained over the Carrier and/or the ship by service of process or by an agreement to appear.

On the other hand, the Carriage of Goods by Sea Act, Commonwealth Act No. 65 (Public Act No. 521 of the 74th Congress of the United States) provides:

RESPONSIBILITIES AND LIABILITIES

Section 3.xxxxxxxxx

(6)xxxxxxxxx

In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered: Provided, That, if a notice of loss or damage, either apparent or concealed, is not given as provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the date when the goods should have been delivered.

Aetna Insurance Company contends in this appeal that the trial court erred (1) in holding that the Barber Line Far East Service was substituted for Barber Steamship Lines, Inc. and (2) in dismissing the action on the ground of prescription.

There is no merit in the appeal. The trial court correctly held that the one-year statutory and contractual prescriptive period had already expired when appellant company filed on April 7, 1965 its action against Barber Line Far East Service. The one year period commenced on February 25, 1964 when the damaged cargo was delivered to the consignee. (See Chua Kuy vs. Everrett Steamship Corporation, 93 Phil. 207; Yek Tong Fire & Marine Insurance Co., Ltd. vs. American President Lines, Inc., 103 Phil. 1125).

Appellant company invokes the rule that where the original complaint states a cause of action but does it imperfectly, and afterwards an amended complaint is filed, correcting the defect, the plea of prescription will relate to the time of the filing of the original complaint (Pangasinan Transportation Co. vs. Phil. Farming Co., Ltd., 81 Phil. 273). It contends that inasmuch as the original complaint was filed within the one year period, the action had not prescribed.

That ruling would apply to defendants Luzon Stevedoring Corporation and Luzon Brokerage Corporation. But it would not apply to Barber Line Far East Service which was impleaded for the first time in the amended complaint.

It should be recalled that the original complaint was dismissed as to Barber Steamship Lines, Inc. in the lower court's order of April 19, 1965. New summons had to be issued to Barber Line Far East Service which had replaced Barber Steamship Lines, Inc. as a defendant.

The filing of the original complaint interrupted the prescriptive period as to Barber Steamship Lines, Inc. but not as to Barber Line Far East Service, an entity supposedly distinct from the former. Appellant's contention that there was merely a correction in the name of a party-defendant is untenable. *

In view of the foregoing considerations, the lower court's order of dismissal is affirmed. Costs against the plaintiff-appellant.

SO ORDERED.

Loadstar Shipping Co. v. CA

Facts:

On November 19, 1984, Loadstar received on board its vessel M/V Cherokee the following goods for shipment:

1. 705 bales of lawanit hardwood

2. 27 boxes and crates of tilewood assemblies and others

3. 49 bundles of mouldings R & W (3) Apitong Bolidenized

The goods, amounting to P6,067,178, were insured by Manila Insurance Co. The vessel is insured by Prudential Guarantee and Assurance, Inc. On November 20, 1984, on its way to Manila from Agusan, the vessel sank off Limasawa Island. MIC paid the consignee P6,075,000 for the value of the goods lost, and filed a complaint against Loadstar and PGAI, claiming subrogation into the rights of the consignee. When PGAI paid Loadstar, it was dropped from the complaint. The trial court ruled against Loadstar, and this was affirmed by the Court of Appeals.

Loadstar submits that the vessel was a private carrier because it was not issued a certificate of public convenience, it did not have a regular trip or schedule nor a fixed route, and there was only "one shipper, one consignee for a special cargo." In refutation, MIC argues that the issue as to the classification of the M/V "Cherokee" was not timely raised below; hence, it is barred by estoppel. While it is true that the vessel had on board only the cargo of wood products for delivery to one consignee, it was also carrying passengers as part of its regular business. Moreover, the bills of lading in this case made no mention of any charter party but only a statement that the vessel was a "general cargo carrier." Neither was there any "special arrangement" between LOADSTAR and the shipper regarding the shipment of the cargo. The singular fact that the vessel was carrying a particular type of cargo for one shipper is not sufficient to convert the vessel into a private carrier.

LOADSTAR argues that as a private carrier, it cannot be presumed to have been negligent, and the burden of proving otherwise devolved upon MIC. It also maintains that the vessel was seaworthy, and that the loss was due to force majeure. LOADSTAR goes on to argue that, being a private carrier, any agreement limiting its liability, such as what transpired in this case, is valid. Since the cargo was being shipped at "owners risk," LOADSTAR was not liable for any loss or damage to the same. Finally, LOADSTAR avers that MICs claim had already prescribed, the case having been instituted beyond the period stated in the bills of lading for instituting the same suits based upon claims arising from shortage, damage, or non-delivery of shipment shall be instituted within sixty days from the accrual of the right of action. MIC, on the other hand, claims that LOADSTAR was liable, notwithstanding that the loss of the cargo was due to force majeure, because the same concurred with LOADSTARs fault or negligence. Secondly, LOADSTAR did not raise the issue of prescription in the court below; hence, the same must be deemed waived. Thirdly, the "limited liability" theory is not applicable in the case at bar because LOADSTAR was at fault or negligent, and because it failed to maintain a seaworthy vessel. Authorizing the voyage notwithstanding its knowledge of a typhoon is tantamount to negligence.

Issues:

(1) Whether Loadstar was a common carrier or a private carrier

(2) Whether Loadstar exercised the degree of diligence required under the circumstances

(3) Whether the stipulation that the goods are at the owners risk is valid

(4) Whether the action has prescribed

Held:

(1) We hold that 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. 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.

(2) 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.

(3) 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.

(4) MICs 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.