Loadstar Shipping v. Pioneer Asia Insurance
REITERATIONFacts
The Antecedents: Loadstar Shipping Co., Inc. (Loadstar), owner and operator of M/V Weasel, entered into a voyage-charter with Northern Mindanao Transport Company, Inc. for the carriage of 65,000 bags of cement from Iligan City to Manila. The shipper was Iligan Cement Corporation, and the consignee was Market Developers, Inc. The shipment was insured by Pioneer Asia Insurance Corporation (Pioneer) for P1,400,000. On June 24, 1984, M/V Weasel departed Iligan City. On June 25, 1984, the captain ordered the vessel to be forced aground, resulting in the loss of the entire cement shipment due to exposure to seawater. Loadstar refused to reimburse the consignee. Procedural History: Pioneer paid the consignee P1,400,000 plus P500,000 for the lost shipment and was subrogated to the consignee's rights. Pioneer filed a complaint against Loadstar, alleging unseaworthiness, negligence, and that the weather conditions were usual for the season. Loadstar claimed it exercised due diligence and that the loss was due to force majeure. The RTC ruled in favor of Pioneer, ordering Loadstar to pay P1,900,000 plus attorney's fees. The Court of Appeals affirmed the RTC decision with modification on attorney's fees. Loadstar's motion for reconsideration was denied. The Petition: Loadstar filed a petition for review on certiorari, questioning its classification as a common carrier, the finding that the loss was not due to a fortuitous event but due to its failure to exercise extraordinary diligence, and the award of attorney's fees.
Issue(s)
Whether Loadstar Shipping Co., Inc. is a common carrier despite the voyage-charter. Whether the loss of the cargo was due to a fortuitous event or the failure of Loadstar to exercise extraordinary diligence. Whether the award of attorney's fees and litigation expenses is proper.
Ruling
The petition is DENIED. The assailed Decision and Resolution of the Court of Appeals are AFFIRMED.
Ratio Decidendi
On whether Loadstar is a common carrier: The Court held that Loadstar remained a common carrier despite the voyage-charter. Citing Article 1732 of the Civil Code, a common carrier is defined as a person or entity engaged in transporting passengers or goods for compensation, offering services to the public. The voyage-charter, being limited to the ship only and not involving the crew, did not convert Loadstar into a private carrier. This is consistent with jurisprudence established in Planters Products, Inc. v. Court of Appeals, which clarified that only a bareboat or demise charter, involving both the vessel and its crew, can convert a common carrier into a private carrier. On whether the loss was due to fortuitous event or negligence: The Court affirmed the findings of the lower courts that the loss was due to the gross negligence of Loadstar, not a fortuitous event. Loadstar failed to discharge its burden of proving extraordinary diligence. The RTC found that the sea and weather conditions were calm, and the loss was attributed to Loadstar's decision to take a shortcut route, which exposed the voyage to unexpected hazards. The defense of force majeure was found to be bereft of factual basis, as indicated by the PAG-ASA report that tropical storm "Asiang" had moved away from the Philippines. On the award of attorney's fees and litigation expenses: The Court found the award of attorney's fees and expenses of litigation equivalent to ten percent (10%) of the total claim to be consistent with law and jurisprudence. The contract between the parties contained a stipulation limiting such fees to ten percent (10%) of the total monetary award in case of suit. Given the circumstances, the Court deemed this amount just and equitable.
Main Doctrine
A voyage-charter does not convert a common carrier into a private carrier if the charter is limited to the ship only, and the shipowner retains possession and control of the vessel. In such cases, the common carrier remains bound to observe extraordinary diligence in the vigilance over the goods transported.