PLANTERS PRODUCTS, INC., PETITIONER, VS. COURT OF APPEALS, SORIAMONT STEAMSHIP AGENCIES AND KYOSEI KISEN KABUSHIKI KAISHA, RESPONDENTS.

Does a
charter-party^[1] between a shipowner and a charterer
transform a common carrier into a private one as to negate the civil law
presumption of negligence in case of loss or damage to its cargo?

Planters
Products, Inc. (PPI), purchased from Mitsubishi International Corporation
(MITSUBISHI) of New York, U.S.A., 9,329.7069 metric tons (M/T) of Urea 46%
fertilizer which the latter shipped in bulk on 16 June 1974 aboard the cargo
vessel M/V “Sun Plum” owned by private respondent Kyosei Kisen
Kabushiki Kaisha (KKKK) from Kenai, Alaska, U.S.A., to Poro Point, San
Fernando, La Union, Philippines, as evidenced by Bill of Lading No. KP-1 signed
by the master of the vessel and issued on the date of departure.

On 17 May 1974, or prior to its voyage, a time charter-party on
the vessel M/V “Sun Plum” pursuant to the Uniform General Charter^[2]
was entered into between Mitsubishi as shipper/charterer and KKKK as shipowner,
in Tokyo, Japan.^[3]
Riders to the aforesaid charter-party starting from par. 16 to 40 were attached
to the pre-printed agreement. Addenda
Nos. 1, 2, 3 and 4 to the charter-party were also subsequently entered into on
the 18th, 20th, 21st and 27th of May 1974, respectively.

Before loading the fertilizer aboard the vessel, four (4) of her
holds^[4]
were all presumably inspected by the charterer’s representative and found fit
to take a load of urea in bulk pursuant to par. 16 of the charter-party which
reads:

“16. x x x x At loading port, notice of readiness
to be accomplished by certificate from National Cargo Bureau inspector or substitute
appointed by charterers for his account certifying the vessel’s readiness to
receive cargo spaces. The vessel’s
hold to be properly swept, cleaned
and dried at the vessel’s
expenses and the vessel to be presented clean for use in bulk
to the satisfaction of
the inspector before daytime commences” (underscoring
supplied).

After the Urea fertilizer was loaded in bulk by stevedores hired
by and under the supervision of the shipper, the steel hatches were closed with
heavy iron lids, covered with three (3) layers of tarpaulin, then tied with
steel bonds. The hatches remained
closed and tightly sealed throughout the entire voyage.^[5]

Upon arrival of the vessel at her port of call on 3 July 1974,
the steel pontoon hatches were opened with the use of the vessel’s boom. Petitioner unloaded the cargo from the holds
into its steel-bodied dump trucks which were parked alongside the berth, using
metal scoops attached to the ship,
pursuant to the terms and conditions of the charter-party (which provided for
an F.I.O.S. clause).^[6] The
hatches remained open throughout the duration of the discharge.^[7]

Each time a dump truck was filled up, its load of Urea was
covered with tarpaulin before it was transported to the consignee’s warehouse
located some fifty (50) meters from the wharf. Midway to the warehouse, the trucks were made to pass through a weighing
scale where they were individually weighed for the purpose of ascertaining the
net weight of the
cargo. The port area was windy, certain
portions of the route to the warehouse were sandy and the weather was variable,
raining occasionally while the discharge was in progress.^[8] The
petitioner’s warehouse was made of corrugated galvanized iron (GI) sheets, with
an opening at the front where the dump trucks entered and unloaded the
fertilizer on the warehouse floor. Tarpaulins and GI sheets were placed in-between and alongside the trucks
to contain spillages of the fertilizer.^[9]

It took eleven (11) days for PPI to unload the cargo, from 5 July
to 18 July 1974 (except July 12th, 14th and 18th).^[10] A
private marine and cargo surveyor, Cargo Superintendents Company Inc. (CSCI),
was hired by PPI to determine the “outturn” of the cargo shipped, by
taking draft readings of the
vessel prior to and after discharge.^[11] The survey report submitted
by CSCI to the consignee (PPI) dated 19 July 1974 revealed a shortage in the
cargo of 106.726 M/T and that a portion of the Urea fertilizer approximating 18
M/T was contaminated with dirt. The
same results were contained in a Certificate of Shortage/Damaged Cargo dated 18
July 1974 prepared by PPI which showed that the cargo delivered was indeed
short of 94.839 M/T and about 23 M/T were rendered unfit for commerce, having
been polluted with sand, rust and dirt.^[12]

Consequently,
PPI sent a claim letter dated 18 December 1974 to Soriamont Steamship
Agencies (SSA), the resident agent of the carrier, KKKK, for P245,969.31
representing the cost of the alleged shortage in the goods shipped and the diminution in value of that portion said to have been contaminated
with dirt.^[13]

Respondent SSA explained that they were not able to respond to
the consignee’s claim for payment because, according to them, what they
received was just a request for shortlanded certificate and not a formal claim,
and that this
“request” was denied by them because they “had nothing to do
with the discharge of the shipment.^[14] Hence, on
18 July 1975, PPI filed an action for damages with the Court of First Instance
of Manila. The defendant carrier argued
that the strict public policy governing common carriers does not apply to them
because they have become private carriers by reason of the provisions of the
charter-party. The court a quo however
sustained the claim of the plaintiff against the defendant carrier for the
value of the goods lost or damaged when it ruled thus:^[15]

“x x x x Prescinding from the provision of the law that a common
carrier is presumed negligent in case of loss or damage of the goods it
contracts to transport, all that a
shipper has to do in a suit
to recover for loss or damage is to show receipt
by the carrier of the goods
and delivery by it of less than it received. After that, the
burden of proving that the loss
or damage was due to any of the causes which exempt him from liability is shifted to the
carrier, common or private he
may be. Even if the provisions of the
charter-party aforequoted are deemed valid, and the defendants considered
private carriers, it was still incumbent upon them to prove that the shortage or contamination
sustained by the cargo is attributable
to the fault or negligence on the part
of the shipper or consignee in the loading, stowing, trimming and discharge of the cargo. This they
failed to do. By this omission, coupled
with their failure to destroy the presumption of negligence against them, the
defendants are liable” (underscoring supplied).

On appeal, respondent Court of Appeals reversed the lower court
and absolved the carrier from liability for the value of the cargo that was lost or damaged.^[16] Relying on the 1968 case of Home
Insurance Co. v. American Steamship Agencies, Inc.,^[17] the appellate court ruled that the cargo
vessel M/V “Sun Plum” owned by private respondent KKKK was a private
carrier and not a common carrier by reason of the time charter-party. Accordingly, the Civil Code provisions on
common carriers which set forth a presumption of negligence do not find application in the case at bar. Thus –

“x x x x In the absence of such presumption, it was incumbent
upon the plaintiff-appellee to adduce
sufficient evidence to prove
the negligence of the
defendant carrier as alleged in its complaint. It is an old and well settled rule that if
the plaintiff, upon whom rests the burden of proving his cause of action, fails
to show in a satisfactory manner the facts upon which he bases his claim, the
defendant is under no obligation to prove his exception or defense (Moran, Commentaries on the Rule of Court, Volume 6, p. 2, citing Belen v.
Belen, 13 Phil. 202).

“But, the record shows that the plaintiff-appellee dismally failed to
prove the basis of its cause of action, i.e., the alleged negligence of defendant carrier. It
appears that the plaintiff was under the impression that it did not have to
establish defendant’s negligence. Be
that as it may, contrary to the trial court’s finding, the record of the
instant case discloses ample evidence showing that defendant carrier was not
negligent in performing its obligations x x x x”^[18]
(underscoring supplied).

Petitioner PPI appeals to us by way of a petition for review
assailing the decision of the Court of Appeals. Petitioner theorizes that the Home Insurance case has no
bearing on the present controversy because the issue raised therein is the
validity of a stipulation in the charter?party delimiting the liability of
the shipowner for loss or damage to
goods
caused by want of due deligence on its part or that of its manager to make the vessel seaworthy in all
respects, and not whether the presumption of negligence provided under the
Civil Code applies only to common carriers and not to private carriers.^[19]
Petitioner further argues that since the possession and control of the vessel
remain with the shipowner,
absent any stipulation to the contrary, such shipowner should be made liable for the negligence of the
captain and crew. In fine, PPI faults
the appellate court in not applying the presumption of negligence against
respondent carrier, and instead shifting the onus probandi on the shipper to show want of due
deligence on the part of the carrier, when he was not even at hand to witness
what transpired during the entire voyage.

As earlier stated, the primordial issue here is whether a common carrier becomes a private
carrier by reason of a charter-party; in the negative, whether the shipowner in
the instant case was able to prove that he had exercised that degree of
diligence required of him under the law.

It is said that etymology is the basis of reliable judicial
decisions in commercial cases. This
being so, we find it fitting to first define important terms which are relevant
to our discussion.

A
“charter-party” is defined as a contract by which an entire
ship, or some principal part thereof, is
let by the owner to another person for a specified time or use;^[20]
a contract of affreightment by which the owner of a ship or other vessel lets
the whole or a part of her to a merchant or other person for the conveyance of
goods, on a particular voyage,
in consideration of the payment of freight;^[21] Charter parties are of two
types: (a) contract of affreightment
which involves the use of shipping space on vessels leased by the owner in part
or as a whole, to carry goods for others; and, (b) charter by demise or
bareboat charter, by the terms of which the whole vessel is let to the
charterer with a transfer to him of its entire command and possession and
consequent control over its navigation, including the master and the crew, who
are his servants. Contract of
affreightment may either be time charter, wherein the vessel is leased to the
charterer for a fixed period of time, or voyage charter, wherein the ship is
leased for a single voyage.^[22] In both cases, the charter?party
provides for the hire of the vessel only, either for a determinate period of
time or for a single or consecutive voyage, the shipowner to supply the ship‘s stores, pay for the wages of the master and the
crew, and defray the expenses for the maintenance of the ship.

Upon the other
hand, the term “common or public carrier” is defined in
Art. 1732 of the Civil Code.^[23] The
definition extends to carriers either by land, air or water which hold
themselves out as ready to engage in carrying goods or transporting passengers
or both for compensation
as a
public employment and not as a casual
occupation. The distinction between a
“common or public carrier” and a “private or special
carrier” lies in the character of the business, such that if the
undertaking is a single transaction, not a part of the general business or occupation, although involving
the carriage of goods for a fee,
the person or corporation offering such service is a private carrier.^[24]

Article 1733 of the New Civil Code mandates that common carriers,
by reason of the nature of their business, should observe extraordinary
diligence in the vigilance over the goods they carry.^[25] In
the case of private carriers, however, the exercise of ordinary diligence in
the carriage of goods will suffice. Moreover, in case of loss, destruction or deterioration of the goods,
common carriers are presumed to have been at fault or to have acted
negligently, and the burden of proving otherwise rests on them.^[26] On the contrary, no such
presumption applies to private carriers, for whosoever alleges damage to
or deterioration of the goods carried has the onus of proving that the cause
was the negligence of the carrier.

It is not
disputed that respondent carrier, in the ordinary course of business, operates as a common
carrier, transporting goods indiscriminately for all persons. When petitioner chartered the vessel M/V
“Sun Plum”, the ship captain, its officers and compliment were under
the employ of the shipowner and therefore continued to be under its direct
supervision and control. Hardly then
can we charge the
charterer, a stranger to the crew and to the ship, with the duty of caring for
his cargo when the charterer did not have any control of the means in doing so. This is evident in the
present case considering that the steering of the ship, the manning of
the decks, the determination of the course of the voyage and other technical
incidents of maritime navigation were all consigned to the officers and crew
who were screened, chosen and hired by the shipowner.^[27]

It is therefore imperative that a public carrier shall remain as
such, notwithstanding the charter of the whole or portion of a vessel by one or
more persons, provided the charter is limited
to the ship only, as in the case of a time-charter or voyage-charter. It is
only when the charter includes both the vessel and its crew, as in a
bareboat or demise that a common carrier becomes private, at least insofar as
the particular voyage covering the charter-party is concerned. Indubitably, a shipowner in a time or voyage
charter retains possession and control of the ship, although her holds may, for
the moment, be the property of the charterer.^[28]

Respondent carrier’s heavy reliance on the case of Home
Insurance Co. v. American Steamship Agencies, supra, is misplaced for the
reason that the meat of the
controversy therein was the validity of a stipulation in the charter?party
exempting the shipowner from liability for loss due to the negligence of its
agent, and not the effects of a special charter on common carriers. At any rate, the rule in the United States
that a ship chartered by a single shipper to carry special cargo is not a
common carrier,^[29]
does not find application in our jurisdiction, for we have observed that the
growing concern for safety in the transportation of passengers and/or carriage
of goods by sea requires a more exacting interpretation of admiralty laws, more
particularly, the rules governing common carriers.

We quote with approval the observations of Raoul Colinvaux, the
learned barrister-at-law^[30] –

“As a matter of principle, it is difficult to find a valid
distinction between cases in which a ship is used to convey the goods of one
and of several persons. Where the ship
herself is let to a charterer, so that he takes over the charge and control of
her, the case is different; the shipowner is
not then a carrier. But where
her services only are let, the same grounds for imposing a strict
responsibility exist, whether he is employed by one or many. The master and the crew are in each case his
servants, the freighter in each case is
usually without any representative on board the ship; the same
opportunities for fraud or collussion occur; and the same difficulty in
discovering the truth as to what has taken place arises x x x x”

In an action for recovery of damages against a common carrier on
the goods shipped, the shipper or consignee should first prove the fact of
shipment and its consequent loss or damage while the same was in the possession, actual or
constructive, of the carrier. Thereafter, the burden of proof shifts to respondent to prove that he
has exercised extraordinary diligence required by law or that the loss, damage
or deterioration of the cargo was due to fortuitous event, or some other
circumstances inconsistent with its liability.^[31]

To our mind, respondent carrier has sufficiently overcome, by
clear and convincing proof, the prima facie presumption of negligence.

The master of the carrying vessel, Captain Lee Tae Bo, in his
deposition taken on 19 April 1977 before the Philippine Consul and Legal
Attache in the Philippine Embassy in Tokyo, Japan, testified that before the
fertilizer was loaded, the four (4) hatches of the vessel were cleaned, dried
and fumigated. After completing the
loading of the cargo in bulk in the ship’s holds, the steel pontoon hatches were
closed and sealed with iron lids, then covered with three (3) layers of
serviceable tarpaulins which were tied with steel bonds. The hatches remained close and tightly
sealed while the ship was in transit as the weight of the steel covers made it
impossible for a person to open without the use of the ship’s boom.^[32]

It was also shown during the trial that the hull of the vessel
was in good condition, foreclosing the possibility of spillage of the cargo
into the sea or seepage of water inside the hull of the vessel.^[33]
When
M/V “Sun Plum” docked at its berthing place, representatives of the
consignee boarded, and in the presence of a representative of the shipowner,
the foreman, the stevedores, and a cargo surveyor representing CSCI, opened the
hatches and inspected the condition of the hull of the vessel. The stevedores unloaded the cargo under the
watchful eyes of the shipmates who were overseeing the whole operation on
rotation basis.^[34]

Verily, the presumption of negligence on the part of respondent
carrier has been efficaciously overcome by the showing of extraordinary zeal
and assiduity exercised by the carrier in the care of the cargo. This was confirmed by respondent appellate
court thus –

“x x x x Be that as it may, contrary to the trial court’s
finding, the record of the instant
case discloses ample evidence showing that defendant carrier was not
negligent in performing its obligations. Particularly, the following testimonies of plaintiff-appellee’s own
witnesses clearly show absence of negligence by the defendant carrier; that the
hull of the vessel at the time of the discharge of the cargo was sealed and
nobody could open the same except in the presence of the owner of the cargo and
the representatives of the vessel (TSN, 20 July 1977, p. 14); that the cover of
the hatches was made of steel and it was overlaid with tarpaulins, three layers
of tarpaulins and therefore their contents were protected from the weather
(TSN, 5 April 1978, p. 24); and, that to open these hatches, the seals would
have to be broken, all the seals were found to be intact (TSN, 20 July 1977,
pp. 15-16)” (underscoring Supplied).

The period during which private respondent was to observe the
degree of diligence required of it as a public carrier began from the time the
cargo was unconditionally placed in its charge after the vessel’s holds were
duly inspected and passed scrutiny by the shipper, up to and until the vessel
reached its destination and its hull was re-examined by the consignee, but
prior to unloading. This is clear from the
limitation clause agreed upon by the parties in the Addendum to the standard
“GENCON” time charter-party which provided for an F.I.O.S., meaning,
that the loading, stowing, trimming and discharge of the cargo was to be done
by the charterer, free from all risk and expense to the carrier.^[35]
Moreover,
a shipowner is liable for damage to the cargo resulting from improper stowage
only when the stowing is done by stevedores employed by him, and therefore
under his control and supervision, not when the same is done by the consignee or stevedores
under the employ of the latter.^[36]

Article 1734 of the New Civil Code provides that common carriers
are not responsible for the loss, destruction or deterioration of the goods if
caused by the character of the goods or defects in the packaging or in the
containers. The Code of Commerce also
provides that all losses and deteriorations which the goods may suffer during
the transportation by reason of fortuitous event, force majeure, or the
inherent defect of the goods, shall be for the account and risk of the shipper,
and that proof of these accidents is incumbent upon the carrier.^[37]
The
carrier, nonetheless, shall be liable for the loss and damage resulting
from the preceding causes if it is
proved, as against him, that they arose through his negligence or by reason of
his having failed to take the precautions which usage has established among
careful persons.^[38]

Respondent carrier presented a witness who testified on the
characteristics of the fertilizer shipped and the expected risks of bulk
shipping. Mr. Estanislao Chupungco, a
chemical engineer working with Atlas Fertilizer, described Urea as a chemical
compound consisting mostly of ammonia and carbon monoxide compounds which are
used as fertilizer. Urea also contains
46% nitrogen and is highly soluble in water. However, during storage, nitrogen and ammonia do not normally evaporate
even on a long voyage, provided that the temperature inside the hull does not
exceed eighty (80) degrees centigrade. Mr. Chupungco further added that in unloading fertilizer in bulk with
the use of a clamped shell, losses due to spillage during such operation
amounting to one percent (1%) against the bill of lading is deemed
“normal” or “tolerable.” The primary cause of these
spillages is the clamped shell which does not seal very tightly. Also, the wind tends to blow away some of
the materials during the unloading process.

The dissipation of quantities of fertilizer, or its deterioration
in value, is caused either by an extremely high temperature in its place of
storage, or when it comes in contact
with water. When Urea is drenched in
water, either fresh or saline, some of its particles dissolve. But the salvaged portion which is in liquid
form still remains potent and usable although no longer saleable in its
original market value.

The probability of the cargo being damaged or getting mixed or
contaminated with foreign particles was made greater by the fact that the
fertilizer was transported in “bulk,” thereby exposing it to the
inimical effects of the elements and the grimy condition of the various pieces
of equipment used in transporting and hauling it.

The evidence of respondent carrier also showed that it was highly
improbable for sea water to seep into the vessel’s holds during the voyage
since the hull of the vessel was in
good condition and her hatches were tightly closed and firmly sealed, making
the M/V “Sun Plum” in all respects seaworthy to carry the cargo she
was chartered for. If there was loss or
contamination of the cargo, it was more likely to have occurred while the same
was being transported from the ship to the dump trucks and finally to he
consignee’s warehouse. This may be
gleaned from the testimony of the marine and cargo surveyor of CSCI who
supervised the unloading. He explained
that the 18 M/T of alleged “bad order cargo” as contained in their
report to PPI was just an approximation or estimate made by them after
the fertilizer was discharged from the vessel and segregated from the rest of
the cargo.

The Court notes that it was in the month of July when the vessel
arrived port and unloaded her cargo. It
rained from time to time at the harbor area while the cargo was being
discharged according to the supply officer of PPI, who also testified that it
was windy at the waterfront and along the shoreline where the dump trucks
passed enroute to the consignee’s warehouse.

Indeed, we agree with respondent carrier that bulk shipment of
highly soluble goods like fertilizer carries with it the risk of loss or
damage. More so, with a variable
weather condition prevalent during its unloading, as was the case at bar. This is a risk the shipper or the owner of
the goods has to face. Clearly,
respondent carrier has sufficiently proved the inherent character of the goods
which makes it highly vulnerable to deterioration; as well as the inadequacy of
its packaging which further contributed to the loss. On the other hand, no proof was adduced by the petitioner showing
that the carrier was remiss in the exercise of due diligence in order to
minimize the loss or damage to the goods it carried.

WHEREFORE, the petition is DISMISSED. The assailed decision of the Court of
Appeals, which reversed the trial court, is AFFIRMED. Consequently, Civil Case No. 98623 of
the then Court of the First Instance, now Regional Trial Court, of Manila
should be, as it is hereby, DISMISSED.

Costs against petitioner.

SO ORDERED.

Davide, Jr., and
Quiason, JJ., concur.

Cruz, J., (Chairman), no part.

Griño-Aquino, J., on official
leave.

^[1]
A charter-party is a contract by which an entire ship or some principal part
thereof, is let by the owner to another person for a specified time or use (70
Am Jur 2d, p. 580, citing Ward v. Thompson, 63 US 330, 16 L Ed 249; a
contract in which the owner of a vessel lets for consideration the whole
or part thereof for the conveyance of goods and/or passengers on a
particular voyage to one or more places or until the expiration of a specified time and surrenders unto
the lessee or charterer the control, by vesting upon the latter the right to
appoint the captain, officers and members of the crew, of the vessel leased or
chartered during the duration of the contract (R.A. 913).

^[2]
The Baltic and International Maritime Uniform General Charter (As Revised 1922
and 1976), Including “F.I.O.S.” Alternative, etc., Code Name: “GENCON” Adopted by the
Documentary Committee of the General Council of British Shipping, London, and
the Documentary Committee of the Japan Shipping Exchange, Inc., Tokyo.

^[3]
Rollo, pp. 105, 128.

^[4]
Although par. 40 of the Rider
(Description of “Sun Plum”) states that the vessel has 3 holds/3 hatches,
Hatch No. 4 which usually was not used for cargo, was converted for such
purpose. The time sheet for 12 July 1974 shows that
Hatch No. 4 was first to be discharged of cargo. This was also testified to by the master of the vessel,
Captain Lee Tae Bo.

^[5]
Id., p. 129.

^[6]
Under the terms and conditions of the charter-party, F.I.O.S. (Free In and Out Shipping/Stevedoring)
means that the shipper takes care of the loading, while the unloading is the
sole responsibility of the consignee (Rollo, pp. 128, 184).

^[7]
TSN, 20 July 1977, p. 17.

^[8]
TSN, 20 July 1977, p. 18.

^[9]
Rollo, p. 130.

^[10]
Id., p. 129; ADDENDUM NO. 4 dated
17 May 1974 provides: “The cargo to be discharged at the average rate of 1,000 metric tons per day of 24 hours weather
working days, Sundays, Holidays excluded unless used, assuming four (4)
sets of vessel’s gear simultaneously workable at vessel’s bearthing side.”

^[11]
TSN, 5 April 1978, pp. 7-8. “Drop
survey” is the drop of the vessel showing certain meters or centimeters of
the vessel. In the ship there is a
draft from one meter upward. When the vessel
arrives, (CSCI) conducted initial draft survey before discharging, together
with the ship’s representative by getting the draft forward and aft. They divided it by 2 to get the mean draft
and the average draft. After getting
the mean draft, they got the displacement scale of the vessel to show certain
tons of the ship, then deducted the non-cargo weight, like the fuel oil, the
fresh water. Finally, the total load of
the ship is taken. After discharging,
CSCI went over same procedure to get the weight of the vessel. These figures were then subtracted from the
total load of the ships to get the weight of the cargo.

^[12]
Id., p. 106.

^[13]
Id., pp. 49, 68.

^[14]
TSN, 28 Aug. 1979, pp. 9-10.

^[15]
Id., p. 68; “Planters Products, Inc. v. Soriamont Steamship
Agencies, et al.,” Civil Case No. 98623, CFI of Manila, Br. 27, decision
penned by Judge E.L. Peralta, 24 March 1980.

^[16]
The Court of Appeals (Twelfth Division) rendered its decision on 13 August 1991
in CA-G.R. CV No. 02736 entitled “Planters Products, Inc. vs. Kyosei
Kisen Kabushiki Kaisha & Soriamont Steamship
Agencies.” Decision penned by Justice Alfredo L. Benipayo, concurred in by
Justices Manuel C. Herrera and Cancio C. Garcia, Rollo, pp. 13-24.

^[17]
No. L-25599, 4 April 1968, 23 SCRA 24.

^[18]
Rollo, p. 109.

^[19]
Rollo, pp. 8 & 9.

^[20]
Charter Parties; Charters of Demise and Contracts of Affreightment; 70 Am Jur 2d, p. 580; citing Ward v.
Thompson, 63 US 330, 16 L Ed 249; E.R. Harvey Ivamy, Carriage of Goods by Sea, 13th Ed., Chap. 2, pp. 5,
8-10. The term is also defined under
R.A. No. 913, known as “An Act
Defining ‘Lease’ or
‘Charter’ of Vessels” as to mean a “contract in which the owner of a vessel lets for
consideration the whole or principal part thereof for the conveyance of goods
and/or passengers on a particular voyage to one or more places or until the
expiration of a specified time and surrenders unto the lessee or charterer the
control, by vesting upon the latter the right to appoint the captain, officers
and members of the crew, of the vessel leased or chartered during the duration
of the contract.”

^[21]
Bouvier’s Law Dictionary, Third Rev., Vol. I, p. 470.

^[22]
Id. pp. 581-582.

^[23]
Art. 1732. Common
carriers are persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or both, by land,
water or air, for compensation, offering their services to the public.

^[24]
See De Guzman v. Court of Appeals, No. L-47822, 22 December 1988, 168 SCRA 612; U.S. v.
Quinajon, No. 8686, 30 July 1915.

^[25]
Art. 1733. Common carriers, from the
nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for the safety of
the passengers transported by them, according to all the circumstances of each
case.

Such extraordinary diligence in the
vigilance over the goods is further expressed in Arts. 1734, 1735 and 1745, Nos. 5, 6
and 7, while the extraordinary diligence for the safety of the passengers is
further set forth in Arts. 1755 and 1756.

^[26]
Art. 1735. In all cases other than
those mentioned in Nos. 1, 2, 3, 4 and 5 of the preceding article, if the goods
are lost, destroyed or deteriorated, common carriers are presumed to have been
at fault or to have acted negligently, unless they prove that they observed extraordinary
diligence as required in article 1733.

^[27]
E.R. Harvey Ivamy, pp. 8-10.

^[28]
70 Am Jur 2nd, p. 608 S 238, citing Grace v. Palmer, 21 US 605, 5 L Ed 696, and Kerry v. Pacific Marine Co., 12 CAL 564, 54, p.89.

^[29]
30 C.J.S., pp. 269-693.

^[30]
British Shipping Laws, Vol. 2, “Carver’s
Carriage by Sea,” By Raoul Colinvaux, Vol. 1, 12th Ed.,
Published by Stevens & Sons Limited of London, Printed in Great Britain,
1971.

^[31]
See Ynchausti Steamship Co. v.
Dexter, No. 15652, 41 Phil. 289, 14 Dec. 1920; Mirasol v. Robert Dollar,
Co., No. 29721, 53 Phil. 124, 27 March 1929.

^[32]
Deposition of Capt. Lee Tae Bo, Exh. “4”, pp. 22-23.

^[33]
TSN, 20 July 1977, p.14.

^[34]
TSN, 5 April 1978, pp. 24-25.

^[35]
See Note 6.

^[36]
70 Am Jur 2d, p. 603 S 230, citing
Oxford Paper Co. v. The Nidarholm, 282 US 681, 75L Ed 614, 51 S
Ct 266.

^[37]
Art. 361, par. 4, Code of Commerce.

^[38]
Art. 362, par. 1, id.