CEBU
SALVAGE CORPORATION, G.R. No. 150403
Petitioner,
Present:
PUNO, C.J., Chairperson,
SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA,
AZCUNA
and
GARCIA, JJ.
PHILIPPINE
HOME ASSURANCE
CORPORATION,
Respondent. Promulgated:
January 25, 2007
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D E C I S I O N
CORONA, J.:
May a carrier be held liable for the loss of cargo resulting
from the sinking of a ship it does not own?
This
is the issue presented for the Court’s resolution in this petition for review
on certiorari[1]
assailing the March 16, 2001 decision[2] and
September 17, 2001 resolution[3] of the
Court of Appeals (CA) in CA-G.R. CV No. 40473 which in turn affirmed the
December 27, 1989 decision[4] of the
Regional Trial Court (RTC), Branch 145, Makati, Metro Manila.[5]
The pertinent facts follow.
On November 12, 1984, petitioner Cebu Salvage Corporation (as carrier) and Maria Cristina
Chemicals Industries, Inc. [MCCII] (as charterer)
entered into a voyage charter[6] wherein
petitioner was to load 800 to 1,100 metric tons of silica quartz on board the M/T
Espiritu Santo[7] at Ayungon, Negros Occidental for
transport to and discharge at Tagoloan, Misamis Oriental to consignee Ferrochrome Phils., Inc.[8]
Pursuant to the contract, on December
23, 1984, petitioner received and loaded 1,100 metric tons of silica quartz on
board the M/T Espiritu Santo which left Ayungon for Tagoloan the next
day.[9] The shipment never reached its destination,
however, because the M/T Espiritu Santo sank in the
afternoon of December 24, 1984 off the beach of Opol,
Misamis Oriental, resulting in the total loss of the
cargo.[10]
MCCII
filed a claim for the loss of the shipment with its insurer, respondent
Philippine Home Assurance Corporation.[11] Respondent paid the claim in the amount of P211,500 and was subrogated to the rights of MCCII.[12] Thereafter, it filed a case in the RTC[13] against
petitioner for reimbursement of the amount it paid MCCII.
After trial, the RTC rendered
judgment in favor of respondent. It ordered petitioner to pay respondent P211,500 plus legal interest, attorney’s fees equivalent to 25%
of the award and costs of suit.
On
appeal, the CA affirmed the decision of the RTC. Hence, this petition.
Petitioner
and MCCII entered into a “voyage charter,” also known as a contract of affreightment wherein the ship was leased for a single
voyage for the conveyance of goods, in consideration of the payment of freight.[14] Under a voyage charter, the shipowner retains the possession, command and navigation of
the ship, the charterer or freighter merely having
use of the space in the vessel in return for his payment of freight.[15] An owner who retains possession of the ship
remains liable as carrier and must answer for loss or non-delivery of the goods
received for transportation.[16]
Petitioner
argues that the CA erred when it affirmed the RTC finding that the voyage
charter it entered into with MCCII was a contract of carriage.[17] It insists that the agreement was merely a
contract of hire wherein MCCII hired the vessel from its owner, ALS Timber
Enterprises (ALS).[18] Not being the owner of the M/T Espiritu Santo, petitioner did not have control and
supervision over the vessel, its master and crew.[19] Thus, it could not be held liable for the
loss of the shipment caused by the sinking of a ship it did not own.
We disagree.
Based
on the agreement signed by the parties and the testimony of petitioner’s
operations manager, it is clear that it was a contract of carriage petitioner
signed with MCCII. It actively
negotiated and solicited MCCII’s account, offered its
services to ship the silica quartz and proposed to utilize the M/T Espiritu Santo in lieu of the M/T Seebees
or the M/T Shirley (as previously agreed upon in the voyage charter) since
these vessels had broken down.[20]
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.[21]
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.[22] 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.[23] 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.[24]
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 (respondent’s 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.[25] In fact, in this case, the voyage
charter itself denominated petitioner as the “owner/operator” of the
vessel.[26]
Petitioner next contends that if
there was a contract of carriage, then it was between MCCII and ALS as
evidenced by the bill of lading ALS issued.[27]
Again,
we disagree.
The bill of lading was merely a
receipt issued by ALS to evidence the fact that the goods had been received for
transportation. It was not signed by
MCCII, as in fact it was simply signed by the supercargo of ALS.[28] This is consistent with the fact that MCCII
did not contract directly with ALS. While it is true that a bill of lading may
serve as the contract of carriage between the parties,[29] it
cannot prevail over the express provision of the voyage charter that MCCII and
petitioner executed:
[I]n
cases where a Bill of Lading has been issued by a carrier covering goods
shipped aboard a vessel under a charter party, and the charterer
is also the holder of the bill of lading, “the bill of lading operates as the
receipt for the goods, and as document of title passing the property of the
goods, but not as varying the contract between the charterer
and the shipowner.” The Bill of Lading becomes,
therefore, only a receipt and not the contract of carriage in a charter of the
entire vessel, for the contract is the Charter Party, and is the law between
the parties who are bound by its terms and condition provided that these are
not contrary to law, morals, good customs, public order and public policy. [30]
Finally, petitioner asserts that
MCCII should be held liable for its own loss since the voyage charter
stipulated that cargo insurance was for the charterer’s
account.[31] This deserves scant consideration. This simply meant that the charterer would take care of having the goods insured. It could not exculpate the carrier from
liability for the breach of its contract of carriage. The law, in fact, prohibits it and condemns
it as unjust and contrary to public policy.[32]
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.[33]
The idea proposed by petitioner is
not only preposterous, it is also dangerous.
It says that a carrier that enters into a contract of carriage is not
liable to the charterer or shipper if it does not own
the vessel it chooses to use. MCCII never dealt with ALS and yet petitioner
insists that MCCII should sue ALS for reimbursement for its loss. Certainly, to
permit a common carrier to escape its responsibility for the goods it agreed to
transport (by the expedient of alleging non-ownership of the vessel it employed)
would radically derogate from the carrier's duty of extraordinary diligence. It
would also open the door to collusion between the carrier and the supposed
owner and to the possible shifting of liability from the carrier to one without
any financial capability to answer for the resulting damages.[34]
WHEREFORE, the petition is hereby DENIED.
Costs against
petitioner.
SO ORDERED.
WE CONCUR:
Chairperson
ANGELINA
SANDOVAL-GUTIERREZ
Associate Justice
|
ADOLFO S. AZCUNA
Associate Justice
|
CANCIO C. GARCIA
Pursuant to Section 13, Article VIII of the
Constitution, I certify that the conclusions in the above decision had been
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
REYNATO S. PUNO
[1] Under Rule 45 of the Rules of Court.
[2] Penned by Associate Justice Ramon A. Barcelona (retired) and concurred in by Associate Justices Rodrigo V. Cosico and Alicia L. Santos (retired) of the Seventh Division of the Court of Appeals; rollo, pp. 34-46.
[3] Id., pp. 32-33.
[4] RTC records, pp. 414-419.
[5] Now, Makati City.
[6] MCCII was represented by its marketing manager Tessie Cu while petitioner was represented by its operations manager Eduardo Y. Romeo; rollo, p. 24.
[7] Originally, the vessels named were M/T Seebees IV and M/T Shirley but these were erased (a line put over the words) and replaced with M/T Espiritu Santo; RTC records, p. 5.
[8] Id., pp. 5-6; rollo, p. 24 and records, pp. 70-71, 414.
[9] Rollo, pp. 24-25.
[10] Records, p. 2; rollo, p. 25.
[11] Under marine risk note no. FD-14331; id.
[12] Id.
[13] Docketed as Civil Case No. 11915. Judge Job B. Madayag, Branch 145, RTC of Makati.
[14] Caltex (Philippines), Inc. v. Sulpicio Lines, Inc., 374 Phil. 325, 333 (1999). Citations omitted.
[15] Puromines, Inc. v. Court of Appeals, G.R. No. 91228, 22 March 1993, 220 SCRA 281, 288, citing US v. Shea, 152 US 178, 38 Led 403, 14 S ct 579.
[16] Id., p. 289.
[17] Rollo, pp. 16-17. A contract of carriage is a contract by which the carrier assumes the express obligation to transport the passenger or goods to his/her/its destination. A voyage charter is a type of contract of carriage of goods wherein the owner of the ship leases the whole or part of the ship to another for the conveyance of goods, on a particular voyage, in consideration of the payment of freight.
[18] Id.
[19] Id.
[20] Id., p. 26.
[21] Civil Code, Article 1732.
[22] Id., Article 1733.
[23] Article 1734. Common carriers are responsible for the loss,
destruction, or deterioration of the goods, unless the same is due to any of
the following causes only:
(1) Flood,
storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act
of the public enemy in war, whether international or civil;
(3) Act
or omission of the shipper or owner of the goods;
(4) The
character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.
[24] Article 1735, Civil Code.
[25] See Benedicto v. Intermediate Appellate Court, G.R. No. 70876, 19 July 1990, 187 SCRA 547, 553, citations omitted.
[26] RTC records, p. 5.
[27] Rollo, p. 17.
[28] RTC records, p. 70.
[29] Keng Hua Paper Products Co., Inc. v. CA, 349 Phil. 925, 932-933 (1998).
[30] National Union Fire Insurance Company Of Pittsburg v. Stolt-Nielsen Philippines, Inc., G.R. No. 87958, 26 April 1990, 184 SCRA 682, 688-689, citations omitted.
[31] Rollo, pp. 17-18; RTC records, p. 5.
[32] Article 1745 of the Civil Code states:
Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy:
(1) That the goods are transported at the risk of the owner or shipper;
(2) That the common carrier will not be liable for any loss, destruction, or deterioration of the goods;
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[33] Supra note 15, at 288-289.
[34] Supra note 25, at 554.