Case Digest: Santiago Lighterage vs. Court of Appeals, G.R. No. 139629

 

Santiago Lighterage vs. Court of Appeals, G.R. No. 139629, June 21, 2004 

Subject: Transportation Law

FACTS

Square filed a complaint against Pelaez, claiming damages for a failed voyage to South Korea on MV Christine Gay. Pelaez, in turn, filed a third-party complaint against petitioner, alleging damages and attaching a preliminary writ. The trial court summarized the case, stating that Pelaez offered MV Christine Gay to C-Square, representing it as seaworthy. A Voyage Charter Agreement was signed, with a provision for rescission if the vessel was unfit. Pelaez, having signed a Bareboat Charter Agreement with petitioner, received the vessel in Manila but encountered engine issues on the way to Zambales. Repairs proved inadequate, and the vessel, loaded with chromite ores, had to return to Manila due to seaworthiness concerns. The plaintiff rescinded the Charter Agreement, citing damages. Pelaez sought payment from third parties, and MARINA later declared MV Christine Gay "dead." Consequently, plaintiff had to contract with other companies to transport its chromite ores to South Korea and this entailed additional expenses. The trial court held that MV Christine Gay was not seaworthy, which was thereby affirmed by the appellate courts. Hence this instant petition.

ISSUE

Whether or not MV Christine Gay is seaworthy.

RULING

No, MV Christine Gay is not seaworthy.

According to Maritime Law, to be seaworthy, a vessel “must have that degree of fitness which an ordinary, careful and prudent owner would require his vessel to have at the commencement of her voyage, having regard to all the probable circumstances of it.” Thus, the degree of seaworthiness varies in relation to the contemplated voyage.

In this case, petitioner asserts that MV Christine Gay is “sufficient in materials, construction, equipment and outfit” as shown by the documents the Philippine Coast Guard (“Coast Guard”) and the Maritime Industry Authority (“MARINA”) issued to petitioners. However, the trial court relied on the testimonies of Engineer Panaguiton and Captain Sorongon, who found numerous defects during a survey of the hull and superstructures. The petitioner's claim of seaworthiness is challenged, especially considering that the voyage across the Atlantic requires stronger equipment than sailing across the Visayan Sea. The obligation of seaworthiness is absolute, and even if the shipowner takes precautions, failure to ensure actual seaworthiness is not excusable. MV Christine Gay was deemed unseaworthy for the intended purpose in the bare-boat charter agreement, and the charterer's right to inspect the vessel before loading doesn't absolve the shipowner of the obligation to provide a cargoworthy ship.