National Steel Corporation,

petitioner
v.
Court of Appeals and Vlasons Shipping, Inc.,
respondents

Topic: Common Carrier vs. Private Carrier

Facts:
1. The petitioner, National Steel Corporation (NSC), and the private respondent,
Vlasons Shipping, Inc., entered into a Contract of Voyage Charter for Hire.

2. The contract provided that the petitioner would load its steel products to the vessel
of the respondent in Iligan City, in order for the latter to make one voyage, and
deliver the said products to the stevedores of the petitioner in North Harbor, Manila.
The contract provided that the handling of said steel products would be under a
F.I.O.S.T., wherein the handling, loading and stowing of said cargo would fall under
the responsibility of the petitioner, and that the respondent would be free from risk
from any damages that may occur as a result of such mishandlings.

3. Upon arrival of said delivery the steel products were discovered to be in a wet and
rustic state whereby, upon the conduct of a survey initiated by the petitioner, it was
established that such was a result of seawater exposure sustained while on board
the vessel.

4. As a result, the petitioner filed a claim for damages against the private respondent.
Contending the following violations of the Contract of Voyage Charter for Hire:
a) The damages to the steel products were a result of the neglect and default
of the master and crew in the management of the vessel;
 b) The absence of due diligence to make the vessel seaworthy;
c) The other parts of the vessel in which the cargo was carried was not fit and
safe;

5. The respondent answered by denying liability based on the following contentions:

a) The vessel was seaworthy;
b) The vessel was NOT a common courier considering the same was
under a voyage charter contract with the plaintiff;
c) The vessel had encountered very rough seas, strong winds and adverse
weather conditions resulting in seawater to overflow on its deck and hatch
covers;
d) That pursuant to the contract, private respondent is made liable only when
there exists negligence in the performance of its duties, the same is lacking
in this case;
e) The steel products rusting was a result of its inherent nature;
f) The petitioner’s stevedores exercised negligence in their handling of the
steel product exposing the same to the elements as well as carelessly
handling the same resulting to its current deterioration.

6. The respondent initiated a counterclaim on the following issues:

a) The lack of payment received from the agreed upon contract in the amount
of 75,000 pesos;
b) The period in which the cargo remained on board the vessel awaiting pick
up from the petitioner’s agents amounting to 88,000 pesos;
c) For the unfounded suits against the private respondent resulting in litigation
expenses and attorney’s fees.

7. The Regional Trial Court promulgated the following:

a) The steel products having inherently sweat on its own, in accordance with
the unrebutted testimony, and as a result deteriorated on its own, the
respondent cannot be held liable for the same pursuant to Article 1734 of
the Civil Code;
b) The stevedores were proven negligent by using the improper procedure in
transferring the steel products from the vessel and pursuant to the contract
the petitioner is held liable for said actions;
c) The vessel had undergone rough waves and adverse weather which cannot
be faulted on behalf of the respondent, the same is in the nature of a force
majeure;
d) Thus, given the foregoing the petitioner is liable to pay the respondent the
amount agreed upon in the contract in addition to attorney’s fees,
demurrage amounting to 88,000 pesos as a result of storing the subject
steel products in the vessel.
 8. The Court of Appeals MODIFIED the decision of the RTC reducing the demurrage
from 88,000 pesos to 44,000 pesos and, deleting the attorney’s fees and litigation
expenses.

Issues:

1) Whether or not the vessel is deemed a common carrier or a private carrier.

2) Whether or not the respondent is liable for the damages sustained.

Held: Petition is DENIED

The Supreme Court ruled the following:
1) The vessel is a private courier considering it did not offer its services to the
general public, which is an essential feature of a common courier pursuant to
Article 1732 of the Civil Code, but rather, the voyage was governed by a special
contract between the petitioner and respondent. Moreover, it is clear based on the
findings of the RTC that, the respondent does not offer its services to the general
public, but rather, to selected persons under a special agreement to the same. As
such, the respondent cannot be classified as a common courier.

2) The respondent is NOT liable for the damages sustained pursuant to the agreed
upon stipulation of the contract, that absent any negligence on the part of the
respondent, no liability may arise from the damages sustained on the goods. The
burden of proof to establish negligence lies on the petitioner considering the
vessel in question is a private carrier in accordance with the Code of
Commerce as opposed to a common carrier, the petitioner has failed to meet
the same, and the factual findings of the lower courts indicating that such damages
was sustained during the unloading process must be respected.