HOME INSURANCE COMPANY vs.

AMERICAN STEAMSHIP AGENCIES,

INC. and LUZON STEVEDORING
CORPORATION

In answer, Luzon Stevedoring Corporation

alleged that it delivered with due diligence the
goods in the same quantity and quality that it
had received the same from the carrier.

G.R. No. L-25599

The CFI, after trial, absolved Luzon

Stevedoring Corporation, having found the
latter to have merely delivered what it
received from the carrier in the same condition
and quality, and ordered American Steamship
Agencies to pay Home Insurance Company
the amount demanded with legal interest plus
attorneys fees.

April 4, 1968
FACTS: Consorcio Pesquero del Peru of
South America shipped freight pre-paid at
Peru, jute bags of Peruvian fish meal through
SS Crowborough, covered by clean bills of
lading. The cargo, consigned to San Miguel
Brewery, Inc., now San Miguel Corporation,
and insured by Home Insurance Company
arrived in Manila and was discharged into the
lighters of Luzon Stevedoring Company.
When the cargo was delivered to consignee
San Miguel Brewery Inc., there were
shortages causing the latter to lay claims
against Luzon Stevedoring Corporation, Home
Insurance Company and the American
Steamship Agencies (shipowner), owner and
operator of SS Crowborough.
Because the others denied liability, Home
Insurance Company paid SMBI the insurance
value of the loss, as full settlement of the
claim. Having been refused reimbursement by
both the Luzon Stevedoring Corporation and
American Steamship Agencies, Home
Insurance Company, as subrogee to the
consignee, filed against them before the CFI
of Manila a complaint for recovery of the
payment paid with legal interest, plus
attorneys fees.

Disagreeing with such judgment, American

Steamship Agencies appealed directly to Us.
ISSUE: Is the stipulation in the charter party
of the owners non-liability valid so as to
absolve the American Steamship Agencies
from liability for loss?
HELD: The judgment appealed from is
hereby reversed and appellant is absolved
from liability to plaintiff.

YES
The bills of lading, covering the shipment of
Peruvian fish meal provide at the back thereof
that the bills of lading shall be governed by
and subject to the terms and conditions of the
charter party, if any, otherwise, the bills of
lading prevail over all the agreements. On the
bills are stamped Freight prepaid as per

charter party. Subject to all terms, conditions

and exceptions of charter party dated London,
Dec. 13, 1962.
Section 2, paragraph 2 of the charter party,
provides that the owner is liable for loss or
damage to the goods caused by personal want
of due diligence on its part or its manager to
make the vessel in all respects seaworthy and
to secure that she be properly manned,
equipped and supplied or by thepersonal act
or default of the owner or its manager. Said
paragraph, however,exempts the owner of the
vessel from any loss or damage or delay
arising from any other source, even from the
neglect or fault of the captain or crew or
some other person employed by the owner on
board, for whose acts the owner would
ordinarily be liable except for said paragraph..
The provisions of our Civil Code on common
carriers were taken from Anglo-American law.
Under American jurisprudence, a common
carrier undertaking to carry a special cargo
or chartered
to
a
special
person
only,becomes a private carrier. As a private
carrier, a stipulation exempting the owner
from liability for the negligence of its agent is
not against public policy, and is deemed valid.
Such doctrine We find reasonable. The Civil
Code provisions on common carriers should
not be applied where the carrier is not acting
as such but as a private carrier. The stipulation
in the charter party absolving the owner from
liability for loss due to the negligence of its
agent would be void only if the strict public
policy governing common carriers is applied.

Such policy has no force where the public at

large is not involved, as in the case of a ship
totally chartered for the use of a single party.
And furthermore, in a charter of the entire
vessel, the bill of lading issued by the master
to the charterer, as shipper, is in fact and legal
contemplation merely a receipt and a
document of title not a contract, for the
contract is the charter party. The consignee
may not claim ignorance of said charter party
because the bills of lading expressly referred
to the same. Accordingly, the consignees
under the bills of lading must likewise abide
by the terms of the charter party. And as
stated, recovery cannot be had thereunder, for
loss or damage to the cargo, against the
shipowners, unless the same is due to personal
acts or negligence of said owner or its
manager, as distinguished from its other
agents or employees. In this case, no such
personal act or negligence has been proved.

Pantranco engaged in the land transportation

business with PUB service for passengersand
freight and various certificates for public
conveniences to operate passenger busesfrom
Metro Manila to Bicol Region and Eastern
Samar; through its counsel, it wrote
toMaritime Industry Authority (MARINA)
requesting authority to lease/purchase a
vesselnamed M/V Black Double to be used
for its project to operate a ferryboat service
fromMatnog, Sorsogon and Allen, Samar that
will provide service to company buses and
freighttrucks that have to cross San Bernardo
Strait; request was denied by MARINA

G.R. No. L-61461 August 21, 1987

It nevertheless acquired the vessel MV Black

Double; it wrote the Chairman of the Boardof
Transportation that it proposes to operate a
ferry service to carry its passenger busesand
freight trucks between Allen and Matnog in
connection with its trips to Tacloban Cityfor
the purpose of continuing the highway, which
is interrupted by a small body of water,the said
proposed ferry operation being merely a
necessary and incidental service to itsmain
service and obligation of transporting its
passengers; that being so, it believed thatthere
was no need for it to obtain a separate
certificate for public convenience to operatea
ferry service Matnog to cater exclusively to its
passenger buses and freight trucks.
BOTgranted the request. Cardinal Shipping
Corporation and the heirs of San Pablo
filedseparate motions for reconsideration.

FACTS:

ISSUES:

Epitacio San Pablo v. Pantranco South

Express, Inc.

1. WON a ferry service is an extension of the

highway and thus is a part of theauthority
originally granted PANTRANCO; 2. WON a
land transportation company can beauthorized
to operate a ferry service or coastwise or
interisland
shipping
service
along
itsauthorized route as an incident to its
franchise without the need of filing a
separateapplication for the same
HELD:
1. No.
2. ferry
- continuation by means of boats, barges, or
rafts, of a highway or the connection of
highways located on the opposite banks of a
stream or other body of water. The
termnecessarily implies transportation for a
short distance, almost invariably between
twopoints, which is unrelated to other
transportation
ferry service- service either by barges or rafts,
even by motor or steam vessels, betweenthe
banks of a river or stream to continue the
highway which is interrupted by the body of
water, or in some cases to connect two points
on opposite shores of an arm of the seasuch as
bay or lake which does not involve too great a
distance or too long a time tonavigate
Coastwise Or interisland service- service
which involves crossing the open sea

motorship,steamboat or motorboat service

cannot justifiably be applied to a private

carrier.

(engaged in the coastwise trade) service

between the different islands, involving more
or less great distance and over moreor less
turbulent and dangerous waters of the open
sea, to be coastwise or inter-islandservice;
considered coastwise or inter-island service
conveyance of passengers, trucks and cargo
from Matnog to Allen is certainly not a
ferryboat service but a coastwise or interisland
shipping service. Under no circumstance
canthe sea between Matnog and Allen be
considered a continuation of the highway.
While aferry boat service has been considered
as a continuation of the highway when
crossingrivers or even lakes, which are small
body of waters - separating the land, however,
whenas in this case the two terminals, Matnog
and Allen are separated by an open sea it
cannot be considered as a continuation of the
highway. PANTRANCO should secure a
separateCPC for the operation of an
interisland or coastwise shipping. Its CPC as a
bustransportation cannot be merely amended
to include this water service under the
guisethat it is a mere private ferry service.
NATIONAL STEEL CORPORATION
COURT OF APPEALS

v.

G.R. No. 112287 December 12, 1997

Doctrine:
The stringent provisions of the Civil Code on
common carriers protecting the general public

Facts:
Plaintiff National Steel Corporation (NSC) as
Charterer and defendant Vlasons Shipping,
Inc. (VSI) as Owner, entered into a Contract of
Voyage Charter Hire whereby NSC hired
VSIs vessel, the MV Vlasons I to make one
voyage to load steel products at Iligan City
and discharge them at North Harbor, Manila.
The handling, loading and unloading of the
cargoes were the responsibility of the
Charterer.
The skids of tinplates and hot rolled sheets
shipped were allegedly found to be wet and
rusty. Plaintiff, alleging negligence, filed a
claim for damages against the defendant who
denied liability claiming that the MV Vlasons
I was seaworthy in all respects for the carriage
of plaintiffs cargo; that said vessel was not a
common carrier inasmuch as she was under
voyage charter contract with the plaintiff as
charterer under the charter party; that in the
course its voyage, the vessel encountered very
rough seas.
Issue:
Whether or not the provisions of the Civil
Code on common carriers pursuant to which
there exists a presumption of negligence
against the common carrier in case of loss or
damage to the cargo are applicable to a private
carrier.

Held:
No. In a contract of private carriage, the
parties may freely stipulate their duties and
obligations which perforce would be binding
on them. Unlike in a contract involving a
common carrier, private carriage does not
involve the general public. Hence, the
stringent provisions of the Civil Code on
common carriers protecting the general public
cannot justifiably be applied to a ship
transporting commercial goods as a private
carrier.
It has been held that the true test of a common
carrier is the carriage of passengers or goods,
provided it has space, for all who opt to avail
themselves of its transportation service for a
fee [Mendoza vs. Philippine Airlines, Inc., 90
Phil. 836, 842-843 (1952)]. A carrier which
does not qualify under the above test is
deemed a private carrier. Generally, private
carriage is undertaken by special agreement
and the carrier does not hold himself out to
carry goods for the general public.
Because the MV Vlasons I was a private
carrier, the ship owners obligations are
governed by the foregoing provisions of the
Code of Commerce and not by the Civil Code
which, as a general rule, places the prima facie
presumption of negligence on a common
carrier.
G.R. No. L-25266

January 15, 1975

AETNA INSURANCE COMPANY, plaintiffappellant, vs .BARBER STEAMSHIP LINES,

INC., and/or LUZON STEVEDORING

CORPORATION
and/or
LUZON
BROKERAGE CORPORATION, defendantsappellees.
AQUINO, J.:
Aetna Insurance Company appealed on a legal
question from the order of the Court of First
Instance of Manila, dismissing its amended
complaint against Barber Line Far East
Service on the ground of prescription.
The facts are as follows:
On February 22, 1965 Aetna Insurance
Company, as insurer, filed a complaint against
Barber Steamship Lines, Inc., Luzon
Stevedoring
Corporation
and
Luzon
Brokerage Corporation.
It sought to recover from the defendants the
sum of P12,100.06 as the amount of the
damages which were caused to a cargo of
truck parts shipped on the SS Turandot. The
insurer paid the damages to Manila Trading &
Supply Company, the consignee.
In a manifestation dated March 31, 1965,
Barber Steamship Lines, Inc., without
submitting to the court's jurisdiction, alleged
that it was a foreign corporation not licensed
to do business in the Philippines, that it was
not engaged in business here, that it had no
Philippine agent and that it did not own nor
operate the SS Turandot.

On April 5, 1965 Barber Steamship Lines,

Inc., again with the caveat that it was not
submitting to the court's jurisdiction, filed a
motion to dismiss on the grounds of (a) lack of
jurisdiction over the person and (b) that it was
not the real party in interest.
Barber Steamship Lines, Inc. alleged that the
service of summons was not effected upon it
in accordance with section 14, Rule 14 of the
Rules of Court. It clarified that the summons
intended for it was served upon Macondray &
Co., Inc. which was not its agent.
It asserted that it was not the real party in
interest because according to the bill of lading
annexed to the complaint the owner of the SS
Turandot, the carrying vessel, was the Wilh,
Wilhemsen Group. (Note, however, that the
same bill of lading indicated that Barber
Steamship Lines, Inc. was the vessel's agent).
Two days later, or on April 7, 1965 plaintiff
Aetna
Insurance
Company
filed
a
manifestation stating that the name of
defendant Barber Steamship Lines, Inc. was
incorrect and that the correct name was Barber
Line Far East Service. Attached to the
manifestation was an amended complaint
containing the correction. Aetna Insurance
Company manifested that copies of the
amended complaint would be served on the
parties by means of alias summons.
On April 20, 1965 Aetna Insurance Company
filed a motion for the admission of its
amended complaint. Barber Steamship Lines,
Inc. opposed the motion. It contended that its

pending motion to dismiss the original

complaint should first be resolved before the
amended complaint may be admitted.
Judge Ramon O. Nolasco in an order dated
April 19, 1965 dismissed the complaint
against Barber Steamship Lines, Inc. and
directed that alias summonses be issued to the
defendants named in the amended complaint.
On May 19, 1965 Barber Line Far East
Service, supposedly without admitting to the
court's jurisdiction, moved for the dismissal of
the amended complaint on the grounds (1) that
it is not a juridical person and, hence, it could
not be sued; (2) that the court had no
jurisdiction over its person; (3) that it was not
the real party in interest and (4) that the action
had prescribed according to the bill of lading
and the Carriage of Goods by Sea Act. Aetna
Insurance Company opposed the motion.
Judge Nolasco in his order of July 7, 1965
ruled that inasmuch as according to the
complaint the shipment arrived in Manila on
February 22, 1964 and the amended
complaint, impleading Barber Line Far East
Service, was filed on April 7, 1965, or beyond
the one-year period fixed in the Carriage of
Goods by Sea Act, the action had already
prescribed. The case was dismissed as to
Barber Line Far East Service.
The legal question under the above facts is
whether the action of Aetna Insurance
Company against Barber Line Far East
Service, as ventilated in its amended

complaint, which was filed on April 7, 1965,

had prescribed.
As previously stated, the action was for the
recovery of damages to a cargo of truck parts
which was insured by Aetna Insurance
Company and which arrived in Manila on the
SS Turandot and were delivered in bad order
to the consignee on February 25, 1968 (4
Record on Appeal).
The bill of lading covering the shipment
provides:
19. In any event the Carrier and the ship shall
be discharged from all liability in respect of
loss or damage unless suit is brought within
one year after the delivery of the goods or the
dates when the goods should have been
delivered. Suit shall not be deemed brought
until jurisdiction shall have been obtained over
the Carrier and/or the ship by service of
process or by an agreement to appear.
On the other hand, the Carriage of Goods by
Sea Act, Commonwealth Act No. 65 (Public
Act No. 521 of the 74th Congress of the
United States) provides:
RESPONSIBILITIES AND LIABILITIES
Section 3.

xxx xxx xxx

(6) xxx xxx xxx

In any event the carrier and the ship shall be
discharged from all liability in respect of loss

or damage unless suit is brought within one

year after delivery of the goods or the date
when the goods should have been delivered:
Provided, That, if a notice of loss or damage,
either apparent or concealed, is not given as
provided for in this section, that fact shall not
affect or prejudice the right of the shipper to
bring suit within one year after the delivery of
the goods or the date when the goods should
have been delivered.
Aetna Insurance Company contends in this
appeal that the trial court erred (1) in holding
that the Barber Line Far East Service was
substituted for Barber Steamship Lines, Inc.
and (2) in dismissing the action on the ground
of prescription.
There is no merit in the appeal. The trial court
correctly held that the one-year statutory and
contractual prescriptive period had already
expired when appellant company filed on
April 7, 1965 its action against Barber Line
Far East Service. The one year period
commenced on February 25, 1964 when the
damaged cargo was delivered to the
consignee. (See Chua Kuy vs. Everrett
Steamship Corporation, 93 Phil. 207; Yek
Tong Fire & Marine Insurance Co., Ltd. vs.
American President Lines, Inc., 103 Phil.
1125).
Appellant company invokes the rule that
where the original complaint states a cause of
action but does it imperfectly, and afterwards
an amended complaint is filed, correcting the
defect, the plea of prescription will relate to
the time of the filing of the original complaint

(Pangasinan Transportation Co. vs. Phil.

Farming Co., Ltd., 81 Phil. 273). It contends
that inasmuch as the original complaint was
filed within the one year period, the action had
not prescribed.
That ruling would apply to defendants Luzon
Stevedoring
Corporation
and
Luzon
Brokerage Corporation. But it would not apply
to Barber Line Far East Service which was
impleaded for the first time in the amended
complaint.
It should be recalled that the original
complaint was dismissed as to Barber
Steamship Lines, Inc. in the lower court's
order of April 19, 1965. New summons had to
be issued to Barber Line Far East Service
which had replaced Barber Steamship Lines,
Inc. as a defendant.
The filing of the original complaint interrupted
the prescriptive period as to Barber Steamship
Lines, Inc. but not as to Barber Line Far East
Service, an entity supposedly distinct from the
former. Appellant's contention that there was
merely a correction in the name of a partydefendant is untenable. *
In view of the foregoing considerations, the
lower court's order of dismissal is affirmed.
Costs against the plaintiff-appellant.
SO ORDERED.

consignee. When PGAI paid Loadstar, it was

dropped from the complaint. The trial court
ruled against Loadstar, and this was affirmed
by the Court of Appeals.

Loadstar Shipping Co. v. CA

Facts:
On November 19, 1984, Loadstar received on
board its vessel M/V Cherokee the following
goods for shipment:
1. 705 bales of lawanit hardwood
2. 27 boxes and crates of tilewood assemblies
and others
3. 49 bundles of mouldings R & W (3)
Apitong Bolidenized
The goods, amounting to P6,067,178, were
insured by Manila Insurance Co. The vessel is
insured by Prudential Guarantee and
Assurance, Inc. On November 20, 1984, on its
way to Manila from Agusan, the vessel sank
off Limasawa Island. MIC paid the consignee
P6,075,000 for the value of the goods lost, and
filed a complaint against Loadstar and PGAI,
claiming subrogation into the rights of the

Loadstar submits that the vessel was a private

carrier because it was not issued a certificate
of public convenience, it did not have a
regular trip or schedule nor a fixed route, and
there was only "one shipper, one consignee for
a special cargo." In refutation, MIC argues that
the issue as to the classification of the M/V
"Cherokee" was not timely raised below;
hence, it is barred by estoppel. While it is true
that the vessel had on board only the cargo of
wood products for delivery to one consignee,
it was also carrying passengers as part of its
regular business. Moreover, the bills of lading
in this case made no mention of any charter
party but only a statement that the vessel was
a "general cargo carrier." Neither was there
any
"special
arrangement"
between
LOADSTAR and the shipper regarding the
shipment of the cargo. The singular fact that
the vessel was carrying a particular type of
cargo for one shipper is not sufficient to
convert the vessel into a private carrier.
LOADSTAR argues that as a private carrier, it
cannot be presumed to have been negligent,
and the burden of proving otherwise devolved
upon MIC. It also maintains that the vessel
was seaworthy, and that the loss was due to
force majeure. LOADSTAR goes on to argue
that, being a private carrier, any agreement
limiting its liability, such as what transpired in
this case, is valid. Since the cargo was being
shipped at "owners risk," LOADSTAR was

not liable for any loss or damage to the same.

Finally, LOADSTAR avers that MICs claim
had already prescribed, the case having been
instituted beyond the period stated in the bills
of lading for instituting the same suits
based upon claims arising from shortage,
damage, or non-delivery of shipment shall be
instituted within sixty days from the accrual of
the right of action. MIC, on the other hand,
claims that LOADSTAR was liable,
notwithstanding that the loss of the cargo was
due to force majeure, because the same
concurred with LOADSTARs fault or
negligence. Secondly, LOADSTAR did not
raise the issue of prescription in the court
below; hence, the same must be deemed
waived. Thirdly, the "limited liability" theory
is not applicable in the case at bar because
LOADSTAR was at fault or negligent, and
because it failed to maintain a seaworthy
vessel.
Authorizing
the
voyage
notwithstanding its knowledge of a typhoon is
tantamount to negligence.
Issues:
(1) Whether Loadstar was a common carrier or
a private carrier
(2) Whether Loadstar exercised the degree of
diligence required under the circumstances
(3) Whether the stipulation that the goods are
at the owners risk is valid
(4) Whether the action has prescribed
Held:

(1) We hold that LOADSTAR is a common

carrier. It is not necessary that the carrier be
issued a certificate of public convenience, and
this public character is not altered by the fact
that the carriage of the goods in question was
periodic, occasional, episodic or unscheduled.
There was no charter party. The bills of lading
failed to show any special arrangement, but
only a general provision to the effect that the
M/V "Cherokee" was a "general cargo carrier."
Further, the bare fact that the vessel was
carrying a particular type of cargo for one
shipper, which appears to be purely
coincidental, is not reason enough to convert
the vessel from a common to a private carrier,
especially where, as in this case, it was shown
that the vessel was also carrying passengers.
(2) The doctrine of limited liability does not
apply where there was negligence on the part
of the vessel owner or agent. LOADSTAR
was at fault or negligent in not maintaining a
seaworthy vessel and in having allowed its
vessel to sail despite knowledge of an
approaching typhoon. In any event, it did not
sink because of any storm that may be deemed
as force majeure, inasmuch as the wind
condition in the area where it sank was
determined to be moderate. Since it was
remiss in the performance of its duties,
LOADSTAR cannot hide behind the "limited
liability" doctrine to escape responsibility for
the loss of the vessel and its cargo.
(3) Three kinds of stipulations have often been
made in a bill of lading. The first is one
exempting the carrier from any and all liability
for loss or damage occasioned by its own

negligence. The second is one providing for an

unqualified limitation of such liability to an
agreed valuation. And the third is one limiting
the liability of the carrier to an agreed
valuation unless the shipper declares a higher
value and pays a higher rate of freight.
According to an almost uniform weight of
authority, the first and second kinds of
stipulations are invalid as being contrary to
public policy, but the third is valid and
enforceable. Since the stipulation in question
is null and void, it follows that when MIC paid
the shipper, it was subrogated to all the rights
which the latter has against the common
carrier, LOADSTAR.
(4) MICs cause of action had not yet
prescribed at the time it was concerned.
Inasmuch as neither the Civil Code nor the
Code of Commerce states a specific
prescriptive period on the matter, the Carriage
of Goods by Sea Act (COGSA) which
provides for a one-year period of limitation on
claims for loss of, or damage to, cargoes
sustained during transit may be applied
suppletorily to the case at bar. This one-year
prescriptive period also applies to the insurer
of the goods. In this case, the period for filing
the action for recovery has not yet elapsed.
Moreover, a stipulation reducing the one-year
period is null and void; it must, accordingly,
be struck down.