Myline Cordial

Loadstar Shipping Co., Inc vs Pioneer Asia Insurance Corp
G.R. NO. 157481, January 24, 2006
515 Phil. 615

FACTS: Petitioner Loadstar Shipping Co., Inc. is the registered owner and operator of the vessel M/V Weasel. It entered into a voyage-charter with Northern Mindanao Transport Company, Inc. for the carriage of 65,000 bags of cement from Iligan City to Manila. The shipper was Iligan Cement Corporation, while the consignee in Manila was Market Developers, Inc.

The cement were loaded on board M/V Weasel and stowed in the cargo holds for delivery to the consignee. Prior to the voyage, the consignee insured the shipment of cement with respondent Pioneer Asia Insurance Corporation.

The weather was good when they left but the following morning the captain ordered the vessel to be forced aground and the entire shipment of cement was exposed to sea water. Petitioner thus failed to deliver the goods to the consignee in Manila.

The consignee demanded from petitioner full reimbursement of the cost of the lost shipment. Petitioner, however, refused to reimburse the consignee despite repeated demands.

Respondent insurance company paid the consigneefor the value of the lost shipment of cement. In return, the consignee executed a Loss and Subrogation Receipt in favor of respondent concerning the latter’s subrogation rights against petitioner.

ISSUE:
Had the voyage-charter entered into by Loadstar with the Northern Mindanao Transport Company, Inc. converted the former into a private carrier?

RULING:
No.The voyage-charter agreement between petitioner and Northern Mindanao Transport Company, Inc. did not in any way convert the common carrier into a private carrier since the said charter is limited to the ship only and does not involve both the vessel and its crew.

As a common carrier, petitioner is required to observe extraordinary diligence in the vigilance over the goods it transports. When the goods placed in its care are lost, petitioner is presumed to have been at fault or to have acted negligently. Petitioner therefore has the burden of proving that it observed extraordinary diligence in order to avoid responsibility for the lost cargo. However, petitioner failed to substantiate its claim that the loss of the goods was due to a fortuitous event. Records show that the sea and weather conditions in the vicinity of Negros Occidental were calm.

NOTES:

Planters Products, Inc. v. Court of Appeals  : It is therefore imperative that a public carrier shall remain as such, notwithstanding the charter of the whole or portion of a vessel by one or more persons, provided the charter is limited to the ship only, as in the case of a time-charter or voyage-charter. It is only when the charter includes both the vessel and its crew, as in a bareboat or demise that a common carrier becomes private, at least insofar as the particular voyage covering the charter-party is concerned. Indubitably, a shipowner in a time or voyage charter retains possession and control of the ship, although her holds may, for the moment, be the property of the charterer.

Loadstar Shipping Co., Inc vs Pioneer Asia Insurance Corp G.R. NO. 157481, January 24, 2006