Case Digest: Macondray vs. Provident, 445 SCRA 644, G.R. No. 154305

 

Macondray vs. Provident, 445 SCRA 644, G.R. No. 154305, December 09, 2004

Subject: Transportation Law

FACTS

On February 16, 1991, at Vancouver, B.C. Canada, CANPOTEX SHIPPING SERVICES LIMITED INC., of Saskatoon, Saskatchewan, (hereinafter the SHIPPER), shipped and loaded on board the vessel M/V 'Trade Carrier', 5000 metric tons of Standard Grade Muriate of Potash in bulk for transportation to and delivery at the port of Sangi, Toledo City, Cebu, in favor of ATLAS FERTILIZER CORPORATION, consignee.

When the shipment arrived, it was found to have sustained losses/shortage of 476.140 metric tons. Provident paid losses. Formal claims were then filed with Trade & Transport and Macondray but the same refused and failed to settle the same.

Summons was UNSERVED to defendant TRADE AND TRANSPORT at the given address for reason that TRADE AND TRANSPORT is no longer connected with Macondray & Co. Inc. and is not holding office at said address as alleged by Ms. Guadalupe Tan. For failure to effect service of summons the case against TRADE & TRANSPORT was considered dismissed without prejudice.

Defendant MACONDRAY filed ANSWER, denying liability over the losses alleging that it have NO absolute relation with defendant TRADE AND TRANSPORT.

The trial court ruled in favor of the petitioner. On appeal, the CA affirmed the trial court's finding that petitioner was not the agent of Trade and Transport. The appellate court ruled, however, that petitioner is liable for the shortages of the shipment, because the latter was the ship agent of Canpotex Shipping Services Ltd. - - the shipper and charterer of the vessel M/V Trade Carrier.

ISSUE

Whether or not Macondray is liable for loss which was allegedly sustained by the plaintiff.

RULING

Yes, it is liable as the ship’s agent.

Article 586 of the Code of Commerce states that a ship agent is "the person entrusted with provisioning or representing the vessel in the port in which it may be found." Article 587 of the Code of Commerce states that the ship agent shall also be civilly liable for the indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods which he loaded on the vessel, but he may exempt himself therefrom by abandoning the vessel with all her equipment and the freight it may have earned during the voyage.

In this case, petitioner "was appointed as local agent of the vessel, which duty includes arrangement for the entrance and clearance of the vessel." Hence, pursuant to Article 586 of the Code of Commerce, whether acting as agent of the owner of the vessel or as agent of the charterer, petitioner will be considered as the ship agent, it is liable as such, as long as the latter is the one that provisions or represents the vessel.