G.R. No. 195661 March 11, 2015
UNKNOWN OWNER OF THE VESSEL M/V CHINA JOY, SAMSUN SHIPPING LTD., and INTER-ASIA MARINE TRANSPORT, INC., Petitioners, vs. ASIAN TERMINALS, INC., Respondent.

FACTS

On January 25, 1997, the vessel M/V “China Joy” arrived at the Mariveles Grain Terminal Wharf operated by respondent Asian Terminals, Inc. (ATI), carrying soybean meal. On February 3, 1997, ATI used its Siwertell Unloader No. 2 to unload the cargo from the vessel’s Hold No. 2. The unloading operations were halted when the unloader hit a flat mild steel bar found in the middle of the mass of soybean meal, causing damage to the unloader’s vertical screws. ATI sent a Note of Protest to the vessel’s Master, who disclaimed responsibility, stating the metal piece came from the cargo. ATI sent a claim to petitioner Inter-Asia Marine Transport, Inc., which rejected it, stating it was not the Shipowner’s Agent and identifying its principal as petitioner Samsun Shipping Ltd. and the vessel owner as Trans-Pacific Shipping Co. ATI filed a Complaint for Damages against the Unknown Owner of the Vessel, Samsun, and Inter-Asia. Petitioners argued they were not liable, citing a Free-In-and-Out-Stowed-and-Trimmed (FIOST) Clause in the Charter Party Agreement, which they claimed meant the shipper/charterer loaded the cargo and the vessel had no participation, and that the metal bar was co-mingled with the cargo at loadport. The Regional Trial Court dismissed the complaint for insufficiency of evidence. The Court of Appeals reversed the RTC, applying the doctrine of res ipsa loquitur and finding petitioners jointly and severally liable.

ISSUE

Whether the petitioners are liable for the damages sustained by ATI’s unloading equipment.

RULING

Yes, the petitioners are liable. The Supreme Court affirmed with modification the Decision of the Court of Appeals. The doctrine of res ipsa loquitur applies. The accident—a metal bar found in bulk soybean meal damaging specialized unloading equipment—is not an ordinary occurrence in the careful management of cargo loading and unloading. The cargo was within the exclusive control of the shipowner during loading, as stipulated in Clause 22 of the Charter Party Agreement, which stated that loading, although arranged by charterers, was to be under the direction and control of the Master. The Charter Party was a contract of affreightment, where the rights and responsibilities of ownership rest on the shipowner. The FIOST clause pertains to the apportionment of expenses for loading and unloading, not liability for damages, and does not exculpate the shipowner from liability for negligence. Petitioners failed to rebut the presumption of negligence arising from res ipsa loquitur. The Supreme Court modified the award, ordering petitioners to pay ATI actual damages of US$30,300.00, with legal interest at 6% per annum from the finality of the resolution until full satisfaction.