GR 131621; (September, 1999) (Digest)
G.R. No. 131621 September 28, 1999
LOADSTAR SHIPPING CO., INC., petitioner, vs. COURT OF APPEALS and THE MANILA INSURANCE CO., INC., respondents.
FACTS
On 19 November 1984, petitioner Loadstar Shipping Co., Inc. (LOADSTAR) received on board its M/V “Cherokee” various goods (705 bales of lawanit hardwood, 27 boxes and crates of tilewood assemblies, and 49 bundles of mouldings) valued at P6,067,178 for shipment. The goods were insured for the same amount with private respondent Manila Insurance Co., Inc. (MIC) against various risks including “TOTAL LOSS BY TOTAL LOSS OF THE VESSEL.” On 20 November 1984, while en route to Manila from Nasipit, Agusan del Norte, the vessel sank off Limasawa Island, resulting in the total loss of the cargo. The consignee’s claim against LOADSTAR was ignored. MIC paid the insured P6,075,000 in full settlement and obtained a subrogation receipt. MIC filed a complaint against LOADSTAR and its insurer, Prudential Guarantee & Assurance, Inc. (PGAI), alleging the sinking was due to LOADSTAR’s fault and negligence. LOADSTAR denied liability, claiming the sinking was due to force majeure. The Regional Trial Court ruled in favor of MIC, a decision affirmed by the Court of Appeals. LOADSTAR elevated the case via petition for review on certiorari.
ISSUE
1. Whether the M/V “Cherokee” was a private carrier or a common carrier.
2. Whether LOADSTAR observed due and/or ordinary diligence.
RULING
1. The M/V “Cherokee” was a common carrier. The Court held that LOADSTAR is a common carrier. It is not necessary for a carrier to be issued a certificate of public convenience to be considered a common carrier. The public character is not altered by the fact that the vessel carried the cargo of only one shipper on its last voyage or that it was not equipped to carry passengers. The vessel was a general cargo carrier, and the bills of lading contained no mention of a charter party. The singular fact of carrying a particular cargo for one shipper is insufficient to convert the vessel into a private carrier.
2. LOADSTAR did not observe due diligence and was liable for the loss. As a common carrier, LOADSTAR is bound to observe extraordinary diligence. The vessel was not seaworthy as it was undermanned on the day of the voyage. The sinking was not due to force majeure but to the vessel’s unseaworthiness. The defense of force majeure was not duly proven. The “limited liability” rule was inapplicable due to the finding of negligence. The provisions of the Bill of Lading, including any stipulation that the cargo was shipped at “owner’s risk,” bound only the shipper/consignee and the carrier. MIC, as subrogee, was not bound by such stipulations. LOADSTAR’s defense of prescription (that the suit was filed beyond the 60-day period in the bills of lading) was deemed waived for not being raised in the court below. The Court of Appeals’ decision was affirmed.