G.R. No.

119197 May 16, 1997 Villanueva, master of the vessel, reiterated that the barge was inspected prior to the actual
loading and was found adequate and seaworthy. In addition, they were issued a permit to
TABACALERA INSURANCE and NEW ZEALAND INSURANCE CO., sail by the Coast Guard. The tarpaulins were doubled and brand new and the hatches were
vs. properly sealed. They did not encounter big waves hence it was not possible for water to
NORTH FRONT SHIPPING SERVICES, INC., and COURT OF APPEALS,  seep in. He further averred that the corn grains were farm wet and not properly dried when
loaded.

 20,234 sacks of corn grains were shipped on board North Front 777, a vessel owned by
North Front Shipping Services, Inc. RTC RULING
 The cargo was consigned to Republic Flour Mills Corporation in Manila under Bill of Lading
No. 001 and insured with the herein mentioned insurance companies. The court below dismissed the complaint and ruled that the contract entered into between North
 The vessel was inspected prior to actual loading by representatives of the shipper and was Front Shipping Services, Inc., and Republic Flour Mills Corporation was a charter-party agreement.
found fit to carry the merchandise. The cargo was covered with tarpaulins and wooden As such, only ordinary diligence in the care of goods was required of North Front Shipping
boards. The hatches were sealed and could only be opened by representatives of Republic Services, Inc. The inspection of the barge by the shipper and the representatives of the shipping
Flour Mills Corporation. company before actual loading, coupled with the Permit to Sail issued by the Coast Guard, sufficed
 The vessel left Cagayan de Oro City and arrived at Manila. Republic Flour Mills Corporation to meet the degree of diligence required of the carrier.
was advised of its arrival but it did not immediately commence the unloading operations.
 There were days when unloading had to be stopped due to variable weather conditions and CA RULING
sometimes for no apparent reason at all. When the cargo was eventually unloaded there
was a shortage of 26.333 metric tons. On the other hand, the Court of Appeals ruled that as a common carrier required to observe a
 The remaining merchandise was already moldy, rancid and deteriorating. The unloading higher degree of diligence North Front 777 satisfactorily complied with all the requirements
operations were completed (20) days after the arrival of the barge at the wharf of Republic hence was issued a Permit to Sail after proper inspection. Consequently, the complaint was
Flour Mills Corporation in Pasig City. dismissed and the motion for reconsideration rejected.
 Precision Analytical Services, Inc. was hired to examine the corn grains and determine the
cause of deterioration. A Certificate of Analysis was issued indicating that the corn grains
had 18.56% moisture content and the wetting was due to contact with salt water. The mold ISSUE
growth was only incipient and not sufficient to make the corn grains toxic and unfit for
consumption. In fact the mold growth could still be arrested by drying. W/N North Front is a common carrier required to observe a higher degree of diligence.
 Republic Flour Mills Corporation rejected the entire cargo and formally demanded from
North Front Shipping Services, Inc., payment for the damages suffered by it. The demands RULING
however were unheeded. The insurance companies were perforce obliged to pay Republic
Flour Mills Corporation.
YES. The charter-party agreement between North Front Shipping Services, Inc., and Republic Flour
 By virtue of the payment made by the insurance companies they were subrogated to the
Mills Corporation did not in any way convert the common carrier into a private carrier. We have
rights of Republic Flour Mills Corporation.
already resolved this issue with finality in Planters Products, Inc.  v. Court of Appeals -

TABACALERA CONTENTION:
It is therefore imperative that a public carrier shall remain as such, notwithstanding
the charter of the whole or portion of a vessel by one or more persons, provided
 Thusly, they lodged a complaint for damages against North Front Shipping Services, Inc., the charter is limited to the ship only, as in the case of a time-charter or voyage-
claiming that the loss was exclusively attributable to the fault and negligence of the carrier. charter (emphasis  supplied).
The Marine Cargo Adjusters hired by the insurance companies conducted a survey and
found cracks in the bodega of the barge and heavy concentration of molds on the tarpaulins
North Front Shipping Services, Inc., is a corporation engaged in the business of transporting cargo
and wooden boards. They did not notice any seals in the hatches. The tarpaulins were not and offers its services indiscriminately to the public. It is without doubt a common carrier. As such
brand new as there were patches on them, contrary to the claim of North Front Shipping
it is required to observe extraordinary diligence in its vigilance over the goods it transports.  When
Services, Inc., thus making it possible for water to seep in. They also discovered that the goods placed in its care are lost or damaged, the carrier is presumed to have been at fault or to have
bulkhead of the barge was rusty.
acted negligently. North Front Shipping Services, Inc., therefore has the burden of proving that it
observed extraordinary diligence in order to avoid responsibility for the lost cargo.
NORTH FRONT CONTENTION:
In Compania Maritima v. Court of Appeals  we ruled —
 North Front Shipping Services, Inc., averred in refutation that it could not be made culpable
for the loss and deterioration of the cargo as it was never negligent. Captain Solomon
 . . . Mere proof of delivery of the goods in good order to a common carrier, and of
their arrival at the place of destination in bad order, makes out prima facie case
against the common carrier, so that if no explanation is given as to how the loss,
deterioration or destruction of the goods occurred, the common carrier must be
held responsible. Otherwise stated, it is incumbent upon the common carrier to
prove that the loss, deterioration or destruction was due to accident or some other
circumstances inconsistent with its liability . . .

The extraordinary diligence in the vigilance over the goods tendered for shipment
requires the common carrier to know and to follow the required precaution for
avoiding damage to, or destruction of the goods entrusted to it for safe carriage
and delivery. It requires common carriers to render service with the greatest skill
and foresight and "to use all reasonable means to ascertain the nature and
characteristics of goods tendered for shipment, and to exercise due care in the
handling and stowage, including such methods as their nature requires" (emphasis
supplied).

In fine, we find that the carrier failed to observe the required extraordinary diligence in the vigilance
over the goods placed in its care. The proofs presented by North Front Shipping Services, Inc.,
were insufficient to rebut the  prima facie presumption of private respondent's negligence,
more so if we consider the evidence adduced by petitioners. It was shown during the trial that
the vessel had rusty bulkheads and the wooden boards and tarpaulins bore heavy concentration of
molds. The tarpaulins used were not new, contrary to the claim of North Front Shipping Services,
Inc., as there were already several patches on them, hence, making it highly probable for water to
enter.

Laboratory analysis revealed that the corn grains were contaminated with salt water. North Front
Shipping Services, Inc., failed to rebut all these arguments. It did not even endeavor to establish
that the loss, destruction or deterioration of the goods was due to the following: (a) flood, storm,
earthquake, lightning, or other natural disaster or calamity; (b) act of the public enemy in war,
whether international or civil; (c) act or omission of the shipper or owner of the goods; (d) the
character of the goods or defects in the packing or in the containers; (e) order or act of competent
public authority.   This is a closed list. If the cause of destruction, loss or deterioration is other than
6

the enumerated circumstances, then the carrier is rightly liable therefor.

However, we cannot attribute the destruction, loss or deterioration of the cargo solely to the carrier.
We find the consignee Republic Flour Mills Corporation guilty of contributory negligence. It
was seasonably notified of the arrival of the barge but did not immediately start the unloading
operations. No explanation was proffered by the consignee as to why there was a delay of six (6)
days. Had the unloading been commenced immediately the loss could have been completely
avoided or at least minimized. As testified to by the chemist who analyzed the corn samples, the
mold growth was only at its incipient stage and could still be arrested by drying. The corn grains were
not yet toxic or unfit for consumption. For its contributory negligence, Republic Flour Mills
Corporation should share at least 40% of the loss.  7