Case Digest: National Steel Corp. v. CA, G.R. No. 112287

National Steel Corp. v. CA, G.R. No. 112287. Dec. 12, 1997; 347 Phil. 345

Subject: Transportation Law

 

FACTS

In July 1974, the National Steel Corporation (NSC) and Vlasons Shipping, Inc. (VSI) entered into a Contract of Voyage Charter Hire, hiring VSI's vessel MV "VLASONS I" for a voyage to transport steel products from Iligan City to North Harbor, Manila, under specific terms and conditions. The contract included provisions about cargo, freight, laydays, loading/discharge rates, insurance, and other terms. The contract also incorporated terms from the NANYOZAI Charter Party, which specified that the charterer (NSC) was responsible for loading, stowing, and discharging the cargo.

In August 1974, MV "VLASONS I" loaded the cargo as per the contract's terms in Iligan City. When the cargo was unloaded in Manila in August 1974, it was discovered that a significant portion of the cargo, particularly tinplates and hot rolled sheets, was wet and rusty. NSC filed a claim for damages against VSI, alleging that VSI's negligence and failure to ensure the vessel's seaworthiness had caused the damage to the cargo.

VSI denied liability, asserting that the vessel was seaworthy, and the damage to the cargo was due to the inherent characteristics of the goods, negligence of the stevedores during unloading, and adverse weather conditions encountered during the voyage. VSI also had counterclaims for unpaid charter hire and demurrage charges due to delays in unloading.

The trial court found that the vessel was seaworthy and properly equipped, the cargo damage was not VSI's fault, and the charterer (NSC) was responsible for loading and unloading, absolving VSI of liability. The court also ruled in favor of VSI's counterclaims for unpaid charter hire and reduced the demurrage charges.

The Court of Appeals modified the decision, reducing the demurrage charges further but eliminating the award of attorney's fees and expenses. NSC and VSI both filed petitions for review with this Court, leading to the consolidation of the cases.

ISSUE

Whether or not the vessel MV Vlasons I is a common carrier.

RULING

No, MV Vlasons I is a private carrier.

Under the law, a common carrier as "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." 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. 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. The most typical, although not the only form of private carriage, is the charter party, a maritime contract by which the charterer, a party other than the shipowner, obtains the use and service of all or some part of a ship for a period of time or a voyage or voyages."

In this case, it is undisputed that VSI did not offer its services to the general public. It carried passengers or goods only for those it chose under a "special contract of charter party." As correctly concluded by the Court of Appeals, the MV Vlasons I "was not a common but a private carrier." Consequently, the rights and obligations of VSI and NSC, including their respective liability for damage to the cargo, are determined primarily by stipulations in their contract of private carriage or charter party.