Myline Cordial

Home Insurance Company vs. American Steamship Agencies, et. al.
G.R. No. L-25599, April 4, 1968

Parties
Shipper: Consorcio Pesquero del Peru of South America
Consignee – San Miguel Brewery, Inc., now San Miguel Corporation
Owner and operator of the ship – American Steamship Agencies
Insurer – Home Insurance Company

FACTS:
The shipper transported through SS Crowborough 21,740 jute bags of Peruvian fish meal from Chimbate, Peru to Manila. The shipment was covered by the bills of lading which provides 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 face of 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”.

The cargo arrived in Manila and it was discharged into the lighters of Luzon Stevedoring Company. When the cargo was delivered to consignee there were shortages causing the consignee to lay claims against Luzon Stevedoring Corporation, the insurer and the owner and operator of the ship. The insurer paid the consignee to settle the claim as the others denied liability. As subrogee to the consignee, the insurer filed a complaint for recovery against Luzon Stevedoring Corporation and American Steamship Agencies.

Luzon Stevedoring Corporation’s allegation in its Answer: – It delivered with due diligence.
– Plaintiff’s claim had prescribed under Article 366 of the Code of Commerce stating that the claim must be made within 24 hours from receipt of the cargo.

American Steamship Agencies’ allegation: under the provisions of the Charter party referred to in the bills of lading, the charterer, not the shipowner, was responsible for any loss or damage of the cargo.
– It claimed to have exercised due diligence in stowing the goods and that as a mere forwarding agent, it was not responsible for losses or damages to the cargo.

Trial Court’s decision: absolved Luzon Stevedoring Corporation but found American Steamship Agencies liable.

American Steamship Agencies filed a direct appeal to the SC.

ISSUE:
Whether or not the stipulation in the charter party of the owner’s non-liability valid so as to absolve the American Steamship Agencies from liability for loss.

RULING:
Yes, American Steamship Agencies is absolved from liability to plaintiff.
Upon perusal of the agreeement, the charter party contract shows that it is one of affreightment over the whole vessel rather than a demise. As such, the liability of the shipowner for acts or negligence of its captain and crew, would remain in the absence of stipulation. However, Section 2, paragraph 2 of the charter party, exempts the owner of the vessel from any loss or damage or delay arising from any other source, even from the neglect or fault of the captain or crew or some other person employed by the owner on board, for whose acts the owner would ordinarily be liable except for said paragraph.
The release from liability in this case is not against public policy and is valid. This 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.

NOTES:
Charter Party; Effect where contract is one of affreightment
Where the charter party contract shows that although possession and control of the ship were not entirely transferred to the charterer, the vessel was chartered to its full and complete capacity and the charterer had the option to go north or south or vice-versa, loading, stowing and discharging at its risk and expense, said contract is one of affreightment rather than a demise. As such, in the absence of stipulation, the liability of the shipowner for acts or negligence of its captain and crew would remain.

Stipulation absolving the owner from liability for loss due to the negligence of its agent is valid
The Civil Code provisions on common carriers, taken from Anglo-American law, should, following American jurisprudence on the matter, 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.

Full text: Home Insurance Company vs. American Steamship Agencies., et. al. G.R. No. L-25599 April 4, 1968