Asia Lighterage vs.

Court of Appeals
409 SCRA 340 (2003)

Asia Lighterage & Shipping, Inc. vs CA &

Prudential Guarantee and Assurance, Inc.
Posted on November 24, 2012

G.R. No. 147246

August 19, 2003
On appeal is the CAs May 11, 2000 Decision in CA-G.R. CV No. 49195 and
February 21, 2001 Resolution affirming with modification the April 6,1994
Decision of the RTC of Manilawhich found petitioner liable to pay private
respondent the amount of indemnity and attorneys fees.
FACTS:
Asia Lighterage and Shipping, Inc was contracted as carrier to deliver 3,150
metric tons of Better Western White Wheat in bulk, (US$423,192.35) to
the consignees (General Milling Corporation) warehouse at Bo. Ugong, Pasig
City. The cargo was transferred to its custody on July 25, 1990. The shipment
was insured by Prudential Guarantee and Assurance, Inc. against loss/damage
for P14,621,771.75.
On August 15, 1990, 900 metric tons of the shipment was loaded on barge PSTSI
III for delivery to consignee. However, the cargo did not reach its destination.
It appears that on August 17, 1990, the transport of said cargo was suspended
due to a warning of an incoming typhoon. 5 days later, the petitioner proceeded
to pull the barge to Engineering Island off Baseco to seek shelter from the
approaching typhoon. PSTSI III was tied down to other barges which arrived
ahead of it while weathering out the storm that night. A few days after, the
barge developed a list because of a hole it sustained after hitting an unseen
protuberance underneath the water. It filed a Marine Protest on August 28, 1990
and also secured the services of Gaspar Salvaging Corporation to refloat the
barge. The hole was then patched with clay and cement.
The barge was then towed to ISLOFF terminal before it finally headed towards
the consignees wharf on September 5, 1990. Upon reaching the Sta.
Mesa spillways, the barge again ran aground due to strong current. To avoid the

complete sinking of the barge, a portion of the goods was transferred to 3 other
barges.
The next day, the towing bits of the barge broke. It sank completely, resulting in
the total loss of the remaining cargo. A 2nd Marine Protest was filed on
September 7, 1990.
7 days later, a bidding was conducted to dispose of the damaged wheat
retrieved & loaded on the 3 other barges. The total proceeds from the sale of
the salvaged cargo was P201,379.75.
On the same date, consignee sent a claim letter to the petitioner, and another
letter dated September 18, 1990 to the private respondent for the value of the
lost cargo. On January 30, 1991, the private respondent indemnified the
consignee in the amount of P4,104,654.22. Thereafter, as subrogee, it sought
recovery of said amount from the petitioner, but to no avail.
ISSUES:
1. Whether petitioner is a common carrier.
2. Assuming petitioner is a common carrier, whether it exercised extraordinary
care and diligence in its care and custody of the consignees cargo.
HELD:
1. Petitioner is a common carrier.
Article 1732 of the Civil Code defines common carriers as persons,
corporations, firms or associations engaged in the business of carrying
or transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public.
In De Guzman vs. CA (G.R. No. L-47822, 22 December 1988) it was held
that the definition of common carriers in Article 1732 of the Civil Code
makes no distinction between one whose principal business activity is
the carrying of persons or goods or both, and one who does such
carrying only as an ancillary activity. There is alsono distinction between
a person or enterprise offering transportation service on a
regular/scheduled basis and one offering such service on an

occasional, episodic or unscheduled basis. Further, Article 1732

does not distinguish between a carrier offering its services to
the general public, and one who offers services or solicits business
only from a narrow segment of the general population.Private respondent
Ernesto Cendaa was considered to be a common carrier even if his principal
occupation was not the carriage of goods for others, but that of buying used
bottles and scrap metal in Pangasinan and selling these items in Manila.
To be sure, petitioner fits the test of a common carrier as laid down
in Bascos vs. CA(G.R. No. 101089, 07 April 1993, 221 SCRA 318). The test to
determine a common carrier is whether the given undertaking is a part of the
business engaged in by the carrier which he has held out to the general public
as his occupation rather than the quantity or extent of the business transacted.
In the case at bar, the petitioner admitted that it is engaged in the business of
shipping, lighterage and drayage, offering its barges to the public, despite its
limited clientele for carrying/transporting goods by water for compensation.
Petitioner is clearly a common carrier.
Therefore, petitioner is a common carrier whether its carrying of goods
is done on an irregular rather than scheduled manner, and with an only
limited clientele. Acommon carrier need not have fixed and publicly
known routes. Neither does it have to maintain terminals or issue
tickets.
2. The findings of the lower courts should be upheld. Petitioner failed to exercise
extraordinary diligence in its care and custody of the consignees goods.
Common carriers are bound to observe extraordinary diligence in the
vigilance over the goods transported by them. They are presumed to
have been at fault or to have acted negligently if the goods
are lost, destroyed or deteriorated. To overcome the presumption of
negligence in the case of loss, destruction or deterioration of the goods, the
common carrier must prove that it exercised extraordinary
diligence.There are, however, exceptions to this rule. Article 1734 of
the Civil Code enumerates the instances when the presumption of
negligence does not attach:

Art. 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/omission of the shipper/owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order/act of competent public authority.
In the case at bar, the barge completely sank after its towing bits broke,
resulting in the total loss of its cargo. Petitioner claims that this was caused by a
typhoon, hence, it should not be held liable for the loss of the cargo.
However, petitioner failed to prove that the typhoon is the proximate and only
cause of the loss of the goods, and that it has exercised due diligence before,
during and after the occurrence of the typhoon to prevent/minimize the loss.
The evidence show that, even before the towing bits of the barge broke, it had
already previously sustained damage when it hit a sunken object while docked
at the Engineering Island. It even suffered a hole. Clearly, this could not be
solely attributed to the typhoon. The partly-submerged vessel was refloated but
its hole was patched with only clay and cement. The patch work was merely a
provisional remedy, not enough for the barge to sail safely. Thus, when
petitioner persisted to proceed with the voyage, it recklessly exposed the cargo
to further damage.
Moreover, petitioner still headed to the consignees wharf despite knowledge of
an incoming typhoon. During the time that the barge was heading towards the
consignees wharf on September 5, 1990, typhoon Loleng has already entered
the Philippine area of responsibility.
Accordingly, the petitioner cannot invoke the occurrence of the typhoon as force
majeure to escape liability for the loss sustained by the private respondent.
Surely, meeting a typhoon head-on falls short of due diligence required from a
common carrier. More importantly, the officers/employees themselves of
petitioner admitted that when the towing bits of the vessel broke that caused its
sinking and the total loss of the cargo upon reaching the Pasig River, it was no
longer affected by the typhoon. The typhoon then is not the proximate

cause of the loss of the cargo; a human factor, i.e., negligence had
intervened.
Planters Products, Inc. v. CA, Soriamont Steamship Agencies and Kyosei
KisenKabushiki Kaisha
G.R. No. 101503 September 15, 1993
Bellossillo, J.
FACTS:

Planters Products - purchased from Mitsubishi Interl Corp. 9.3K metric tons of Urea(f
ertilizer), 46% of which the latter shipped in bulk aboard the cargo vessel M/V Sun
Plumowned by Kyosei Kisen Kabushiki Kaisha (KKKK)

time charter-party on the vessel M/V Sun Plum pursuant to the Uniform GeneralCh
arter

was entered into between Mitsubishi as shipper/charterer and KKKK as shipowner

before loading the fertilizer aboard the vessel they were

inspected by the charterersrepresentative and found fit

After the Urea fertilizer was loaded in bulk by stevedores (somebody whose job is to
loadand unload ships) hired by and under the supervision of the shipper, the steel
hatcheswere closed with heavy iron lids, covered with 3 layers of tarpaulin, then
tied with steelbonds. The hatches remained closed and tightly sealed throughout
the entire voyage.

port area was windy, certain portions of the route to the warehouse were sandy and
theweather was variable, raining occasionally while the discharge was in progress

survey report revealed a shortage in the cargo of 106.726 M/T and that a portion of
theUrea fertilizer approximating 18 M/T was contaminated with sand, rust and dirt

Planters Products sent a claim letter to Soriamont Steamship Agencies, the resident
agentof the carrier, for damages

ISSUES:
1. WON a common carrier becomes a private carrier by reason of a charter-party;2.
in the negative, WON the shipowner was able to prove that he had exercised that
degreeof diligence required of him under the law
HELD:
1. Yes.

charter-party
contract by which an entire ship, or some principal part thereof, is let bythe owner
to another person for a specified time or use; contract of affreightment bywhich the
owner of a ship or other vessel lets the whole or a part of her to a merchant orother
person for the conveyance of goods, on a particular voyage, in consideration of
thepayment of freight

2 types of charter-party:

a. contract of affreightment involves the use of shipping space on vessels leased

by theowner in part or as a whole, to carry goods for others; may either be: i)
time charter
-vessel is leased to the charterer for a fixed period of time; or ii)
voyage charter
- ship isleased for a single voyage

b.
charter by demise
or
bareboat charter
whole vessel is let to the charterer with atransfer to him of its entire command
and possession and consequent control over itsnavigation, including the master and
the crew, who are his servants

In both types, the charter-party provides for the hire of vessel only, either for adeter
minate period of time or for a single or consecutive voyage, the shipowner to

supplythe ships stores, pay for the wages of the master and the crew, and defray
the expensesfor the maintenance of the ship.

common
or
public carrier
see Art. 1732; extends to carriers either by land, air or
waterwhich hold themselves out as ready to engage in carrying goods or transportin
gpassengers or both for
compensation as a public employment and not as a casualoccupation

distinction between a common or public carrier and a private or special carrier

lies inthe character of the business, such that if the undertaking is a single
transaction, not a

part of the general business or occupation, although involving the carriage of goods
for afee, the person or corporation offering such service is a private carrier

common carrier - should observe extraordinary diligence in the vigilance over the
goodsthey carry; in case of loss, destruction or deterioration of the goods, it is
presumed to be atfault or to have acted negligently, and the burden of proving
otherwise rests on it

private carrier - exercise of ordinary diligence in the carriage of goods will suffice;
no suchpresumption applies to private carriers

only when the charter includes both the vessel and its crew, as in a bareboat or
demisethat a common carrier becomes private, at least insofar as the particular
voyage coveringthe charter-party is concerned

when Planters Products chartered the vessel M/V Sun Plum, the ship captain, its
officersand compliment were under the employ of the shipowner and therefore
continued to beunder its direct supervision and control. As stranger to the crew and
to the ship, PlantersProducts did not have the duty of caring for its cargo as it did
not have control of themeans in doing so.
HELD:

2. Yes.

Before the fertilizer was loaded, the 4 hatches of the vessel were cleaned, dried
andfumigated. After completing the loading of the cargo in bulk in the ships holds,
the steelpontoon hatches were closed and sealed with iron lids, then covered with 3
layers of serviceable tarpaulins which were tied with steel bonds. The hatches
remained close andtightly sealed while the ship was in transit as the weight of the
steel covers made itimpossible for a person to open without the use of the ships
boom.

the hull of the vessel was in good condition, foreclosing the possibility of spillage of
thecargo into the sea or seepage of water inside the hull of the vessel

stevedores unloaded the cargo under the watchful eyes of the shipmates who wereo
verseeing the whole operation on rotation basis

Urea also contains 46% nitrogen and is highly soluble in water. However, during
storage,nitrogen and ammonia do not normally evaporate even on a long voyage,
provided thatthe temperature inside the hull does not exceed 80 degrees
centigrade.

dissipation of quantities of fertilizer, or its deterioration in value, is caused either by

anextremely high temperature in its place of storage, or when it comes in contact
with water

probability of the cargo being damaged or getting mixed or contaminated with

foreignparticles was made greater by the fact that the fertilizer was transported in
bulk,thereby exposing it to the inimical effects of the elements and the grimy
condition of thevarious pieces of equipment used in transporting and hauling it

risk the shipper or theowner of the goods has to face