GR 101503; (September, 1993) (Digest)
G.R. No. 101503 September 15, 1993
PLANTERS PRODUCTS, INC., petitioner, vs. COURT OF APPEALS, SORIAMONT STEAMSHIP AGENCIES AND KYOSEI KISEN KABUSHIKI KAISHA, respondents.
FACTS
Planters Products, Inc. (PPI) purchased urea fertilizer from Mitsubishi International Corporation, which was shipped aboard the M/V “Sun Plum,” owned by respondent Kyosei Kisen Kabushiki Kaisha (KKKK). Prior to the voyage, a time charter-party was entered into between Mitsubishi (as charterer) and KKKK (as shipowner). The cargo was loaded in bulk, and the hatches were sealed for the voyage. Upon arrival at Poro Point, La Union, PPI unloaded the cargo into its trucks. A survey revealed a shortage of 106.726 metric tons and contamination of approximately 18 metric tons. PPI filed a claim against the carrier’s agent, which was denied. PPI then filed an action for damages. The trial court ruled in favor of PPI, applying the presumption of negligence against the carrier. The Court of Appeals reversed, holding that the charter-party transformed the common carrier into a private carrier, thus the presumption of negligence under the Civil Code did not apply, and PPI failed to prove the carrier’s negligence.
ISSUE
Whether a charter-party between a shipowner and a charterer transforms a common carrier into a private carrier, thereby negating the civil law presumption of negligence in case of loss or damage to its cargo.
RULING
No. The Supreme Court held that a charter-party does not automatically convert a common carrier into a private carrier. The test is whether the carrier retains control over the vessel. In a time charter, the shipowner retains possession, command, and navigation of the ship, thus the vessel remains a common carrier. The M/V “Sun Plum” was a common carrier as it was engaged in the business of transporting goods for compensation. Consequently, the presumption of negligence under Article 1735 of the Civil Code applies. The carrier failed to overcome this presumption by proving it exercised extraordinary diligence. The Court reinstated the trial court’s decision, holding the carrier liable for the loss and damage to the cargo.