025 CARGOLIFT SHIPPING, INC. v. L.

ACUARIO MARKETING CORP and

SKYLAND BROKERAGE, INC.
G.R. No. 146426; June 27, 2006
TOPIC: Distinction between common carriers and
other types of contracts Distinguished from
Towage
PONENTE: YNARES-SANTIAGO, J .
AUTHOR: JANNA || SC affirmed CA decision finding
CARGOLIFT liable as third party defendant for actual damages in
the sum of P97,021.20. Although CARGOLIFT is not privy the
charter contract between ACUARIO and SKYLAND, it is liable
through its contract of towage with the latter, wherein due diligence
of a good father of a family is required. The exercise of ordinary
prudence required from CARGOLIFT meant ensuring that its
tugboat was free of mechanical problems.

FACTS:
1.March 1993: ACUARIO and SKYLAND entered into a time charter agreement, wherein SKYLAND leased L.
ACUARIO II (Acuarios barge) in transporting electrical posts from Manila to Limay, Bataan.
3. SKYLAND also entered into a separate contract with CARGOLIFT, for the latters tugboats to tow the barge.
4. April 1, 1993: CARGOLIFTs tugboat, M/T Beejay, left the Manila South Harbo with ACUARIOs barge in tow.
5. April 3, 1993: M/T Beejay reached the port of Limay, Bataan, whereupon M/T Beejay disengaged and once again set
sail for Manila. CARGOLIFTs other tugboat, the M/T Count, remained in Bataan to secure the barge for unloading.
6. Off-loading operations went on until April 7, 1993, but were interrupted for two days after, in observance of Lent.
7. Unloading of the cargo was concluded on April 12, 1993, by which time M/T Beejay had gone back to Bataan for the
return trip. The M/T Beejay and the barge returned to the port of Manila on April 13, 1993.
8. ACUARIOs barge was brought to its shipyard on the same day, but it was discovered by ACUARIOs dry-docking
officer, GUILLERMO NACU, JR. that the barge was listing due to a leak in its hull.
9. NACU said he was informed by the skipper of the tugboat that the damage was sustained in Bataan.
10. April 14, 1993: To confirm the same, Nacu ordered an underwater survey of the barge and prepared a damage report.
11.No SKYLAND representative was present during the inspection, but it was furnished with a copy of the said report.
12. April 16-26, 1993: ACUARIOs barge was consequently dry-docked for repairs at the Western Shipyard, and
ACUARIO spent the total sum of P97,021.20 for the repairs.
13. ACUARIO wrote to SKYLAND, seeking reimbursement of its repair costs, pursuant to its contract with the latter,
which provided that: (a)ny damage or loss on the barge due to the fault or negligence of charterers shall be the
responsibility of the (c)harterer or his representative. SKYLAND failed to reimburse ACUARIO, so the latter filed a
complaint for damages at the RTC of Caloocan City ( Civil Case No. C-16120) and raffled to Branch 121.
15. In turn, SKYLAND filed a third-party complaint against CARGOLIFT, alleging the latter was respthat it was
responsible for the damage sustained by ACUARIOs barge.
16. ACUARIO says: (1) Weather in Bataan drastically shifted at dawn (4/7/93) while the barge was docked at the Limay
port, 8meters away from the stone wall. (2)Strong winds and large waves caused the barge repeatedly hit its hull on the
wall, thus prompting the barge patron to alert the tugboat captain of the M/T Count to tow the barge farther out to
sea. **(3)The tugboat failed to pull the barge to a safer distance due to engine malfunction, causing the barge to sustain
a hole in its hull.** Fortunately, no part of the cargo was lost even if only half of it had been unloaded at that time.
17. CARGOLIFT and SKYLAND says: (a) Barge was in good condition and was not damaged when it was turned over
to ACUARIO on 4/13/93. (b) Salvador D. Ocampo (witnesses) claimed that he was involved in all aspects of the operation
and that no accident of any sort was brought to his knowledge. (c) Ocampo alleged that the barge patron and tug master
made no mention of any maritime casualty during the clearing of the vessels at the Phil. Ports Authority in Bataan.
18. RTC: (a) SKYLAND to pay ACUARIO costs of repairs, attorneys fees, and costs of suit, and to seek reimbursement
from CARGOLIFT. (b) RTC gave credence to ACUARIOs witnesses, that the barge sustained damage while it was being
chartered by Skyland. (c) Positive testimonies of Acuarios witnesses, documentary evidence detailing the nature and
extent of the damage, plus repairs done on the barge, prevail over the bare denials of SKYLAND and CARGOLIFT.
(d) Latters three witnesses were not in Limay, Bataan when the incident happened.
19. RTC further held that SKYLAND was liable under its time charter agreement with Acuario pursuant to Article
1159 of the Civil Code: contracts have the force of law between the contracting parties. ACUARIO had no control in
the selection of tugboats used by SKYLAND, so the latter must bear the consequences of the tugboats incapacity to
respond to the barges request for assistance. But since the ultimate fault lies with CARGOLIFT, justice demands
that the latter reimburse SKYLAND for whatever it may be adjudged to pay ACUARIO,
20. CA: SKYLAND and CARGOLIFT elevated the matter to CA, but the latter affirmed (7/6/00) RTC decision, but
deleted the award of attorneys fees. MR was denied, hence this petition for review on certiorari.
CARGOLIFTs contention: (1) It could not be held liable for the damage sustained by ACUARIOs barge, because
ACUARIO sought recovery upon its contract with SKYLAND, to which CARGOLIFT is not a party; (2)SKYLAND
contractually assumed the risk that the tugboat might encounter engine trouble it acknowledged that CARGOLIFTs
vessels are in a seaworthy condition; (3) CARGOLIFT was neither negligent nor the proximate cause of the damage.
ISSUE: (1) Whether CARGOLIFT may be held liable for the damages sustained by ACUARIOs barge.

HELD: YES; Although CARGOLIFT is liable not under the charter agreement with Acuario, it is liable
under contractual obligation with Skyland. While Acuario could hold Skyland liable under its charter
agreement, Skyland in turn could enforce liability on petitioner based on the latters obligation to Skyland. In
other words, petitioner is being held liable by Skyland and not by Acuario.
RATIO:
1. It was not Acuario that seeks to hold CARGOLIFT liable for the damage to the barge. ACUARIO in fact sued
only Skyland pursuant to their charter agreement. It was Skyland that impleaded petitioner CARGOLIFT as third-
party defendant considering that Skyland was being held accountable for the damage attributable to petitioner.

2. In other words, petitioner was not sued under Skylands charter agreement with Acuario, but pursuant to its separate
undertaking with Skyland. Strictly speaking, therefore, petitioner CARGOLIFT is not being held liable under any
charter agreement with Acuario. The assertion that ACUARIO could not recover from CARGOLIFT for damages,
due to lack of privity is incorrect, since it is not ACUARIO that is seeking damages from CARGOLIFT, but
SKYLAND, with whom it undoubtedly had a juridical tie.
3. In the performance of its contractual obligation to Skyland, petitioner CARGOLIFT was required to observe
the due diligence of a good father of the family.
As held in Baer Senior & Co.s Successors v. La Compania Maritima: Court explained that a tug and its
owners must observe ordinary diligence in the performance of its obligation under a contract of
towage. The negligence of the obligor in the performance of the obligation renders him liable for damages
for the resulting loss suffered by the obligee. Fault or negligence of the obligor consists in his failure to exercise
due care and prudence in the performance of the obligation as the nature of the obligation so demands
4. Exercise of ordinary prudence by CARGOLI FT means ensuring that its tugboat is free of mechanical problems.
o While adverse weather has always been a real threat to maritime commerce, the least that CARGOLIFT could
have done was to ensure that the M/T Count or any of its other tugboats would be able to secure the barge
at all times during the engagement.
o This is especially true considering the fact that Acuarios barge was wholly dependent upon petitioners
tugboat for propulsion. The barge was not equipped with any engine and needed a tugboat for maneuvering.

5. If petitioner only subjected the M/T Count to a more rigid check-up or inspection, the engine malfunction could
have been discovered or avoided.
o The M/T Count was exclusively controlled by CARGOLIFT, so it had the duty to see to it that the tugboat was
in good running condition. CARGOLIFTs contention that SKYLAND contractually assumed the risk of any
engine trouble that the tugboat may encounter has no basis, because SKYLAND merely procured CARGOLIFTs
towing service but in no way assumed any such risk.

6. Undoubtedly, CARGOLIFTs negligence was the proximate cause of the damage.
o Had its tugboat been serviceable, the barge could have been moved away from the stone wall with facility. It
is too late in the day for petitioner to insist that the proximate cause of the damage was the barge patrons
negligence in not objecting to the position of the barge by the stone wall. Aside from the fact that the position of
the barge is quite understandable since off-loading operations were then still underway, the alleged negligence of
the barge patron is a matter that is also being raised for the first time before this Court.

7. Damage to the barge could have been avoided had it not been for the tugboats inability to tow it away from the
stone wall. Considering that a barge has no power of its own and is totally defenseless against the ravages of the
sea, it was incumbent upon petitioner CARGOLIFT to see to it that it could secure the barge by providing a
seaworthy tugboat. CARGOLIFTs failure to provide a seaworthy tugboat not only increased the risk that
might have been reasonably anticipated during the shipside operation but also the proximate cause of the damage.

8. CARGOLIFT and SKYLANDs witnesses failure to unequivocally declare that it was still the M/T Count that secured
the barge during the resumption of off-loading operations casts suspicion on their credibility. As aptly observed by the
trial court, such hesitation on the part of its witnesses is indicative of uncertainty, if not a propensity to withhold
information that could be unfavorable to their cause. Trial court concluded that petitioners M/T Count indeed
encountered mechanical trouble, as asserted by Acuario. The fact that CARGOLIFT did not categorically deny
the allegation of mechanical trouble only serves to strengthen the trial courts conclusion.