Coastwise Lighterage Corporation v. CA

Coastwise Lighterage Corporation v.
CA person whose navigational skills are questionable, at the helm of the vessel
which eventually met the fateful accident. It may also logically, follow that a
FACTS: person without license to navigate, lacks not just the skill to do so, but also
Pag-asa Sales Inc. entered into a contract to transport molasses from the the utmost familiarity with the usual and safe routes taken by seasoned and
province of Negros to Manila with Coastwise Lighterage Corporation legally authorized ones. Had the patron been licensed he could be presumed
(Coastwise for brevity), using the latter's dumb barges. The barges were to have both the skill and the knowledge that would have prevented the
towed in tandem by the tugboat MT Marica, which is likewise owned by vessel's hitting the sunken derelict ship that lay on their way to Pier 18. As a
Coastwise. Upon reaching Manila Bay, one of the barges, "Coastwise 9", common carrier, petitioner is liable for breach of the contract of carriage,
struck an unknown sunken object. The forward buoyancy compartment was having failed to overcome the presumption of negligence with the loss and
damaged, and water gushed in through a hole "two inches wide and twenty- destruction of goods it transported, by proof of its exercise of extraordinary
two inches long". As a consequence, the molasses at the cargo tanks were diligence.
contaminated. Pag-asa filed a claim against Philippine General Insurance
Company, the insurer of its cargo. Philgen paid P700,000 for the value of the The distinction between the two kinds of charter parties (i.e. bareboat or
molasses lost. demise and contract of affreightment) is more clearly set out in the case of
Puromines, Inc. vs. Court of Appeals:
Philgen then filed an action against Coastwise to recover the money it paid,
claiming to be subrogated to the claims which the consignee may have Under the demise or bareboat charter of the vessel, the charterer will
against the carrier. Both the trial court and the Court of Appeals ruled against generally be regarded as the owner for the voyage or service stipulated. The
Coastwise. charterer mans the vessel with his own people and becomes the owner pro
hac vice, subject to liability to others for damages caused by negligence. To
ISSUE: Whether Coastwise was transformed into a private carrier by virtue of create a demise, the owner of a vessel must completely and exclusively
the contract it entered into with Pag-asa, and whether it exercised the relinquish possession, command and navigation thereof to the charterer,
required degree of diligence? NO anything short of such a complete transfer is a contract of affreightment (time
or voyage charter party) or not a charter party at all. In this case, there was
HELD: no demise, and only a contract of affreightment. Hence, the carrier was not
Pag-asa Sales, Inc. only leased three of petitioner's vessels, in order to carry transformed into a private carrier.
cargo from one point to another, but the possession, command mid
navigation of the vessels remained with petitioner Coastwise Lighterage. On the other hand a contract of affreightment is one in which the owner of
Coastwise Lighterage, by the contract of affreightment, was not converted the vessel leases part or all of its space to haul goods for others. It is a contract
into a private carrier, but remained a common carrier and was still liable as for special service to be rendered by the owner of the vessel and under such
such. The law and jurisprudence on common carriers both hold that the mere contract the general owner retains the possession, command and navigation
proof of delivery of goods in good order to a carrier and the subsequent of the ship, the charterer or freighter merely having use of the space in the
arrival of the same goods at the place of destination in bad order makes for a vessel in return for his payment of the charter hire.
prima facie case against the carrier. It follows then that the presumption of
negligence that attaches to common carriers, once the goods it is sports are An owner who retains possession of the ship though the hold is the property
lost, destroyed or deteriorated, applies to the petitioner. This presumption, of the charterer, remains liable as carrier and must answer for any breach of
which is overcome only by proof of the exercise of extraordinary diligence, duty as to the care, loading and unloading of the cargo. Although a charter
remained unrebutted in this case. Jesus R. Constantino, the patron of the party may transform a common carrier into a private one, the same however
vessel "Coastwise 9" admitted that he was not licensed. Coastwise Lighterage is not true in a contract of affreightment on account of the aforementioned
cannot safely claim to have exercised extraordinary diligence, by placing a distinctions between the two. PETITION DENIED.

Coastwise Lighterage Corporation v. CA

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