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National Steel Corporation vs CA and Vlasons Shipping, Inc.

GR 112287
December 12, 1997

Facts: MV Vlasons I is a vessel which renders tramping service and does not transport cargo or shipment
for the general public. On July 17, 1974, plaintiff and Charterer, National Steel Corporation (NSC), and,
defendant, Vlasons Shipping Inc, (VSI) entered into a special contract of charter party to ship loaded
steel products, tinplates, and hot rolled sheets. During the unloading of the cargo it was found that the
cargo was rusted and wet due to seawater. Filing for damages, NSC, claims that it sustained losses
equivalent to Php941,145.18 as a result of the act, neglect and default of the master and crew in the
management of the vessel as well as the want of due diligence on the part of the defendant to make the
vessel seaworthy and to make the holds and all other parts of the vessel fit and safe for the reception,
carriage, and preservation of the package, in violation of the undertaking under their Contract of Voyage
Charter Hire. VSI claims that the vessel was seaworthy in all respect for the carriage of the NSC's cargo,
that it is not a common carrier and that under the Contract of Voyage Charter Hire, they are not liable.
They aver that they exercised extraordinary due diligence and proper seamanship and were not
negligent. The charter also provides that loading and discharging of the cargo was on Freight In and Out
including Stevedoring and Trading (FIOST) as per standard provision in the NANYOZAI Charter, the vessel
and VSI are free of risk for damges occured during loading and discharge. They claim that the damage
may be caused due to the nature of the cargo, as well as the stevedores lack of due diligence during the
11 days of unloading, as it was exposed to rain and seawater spray during transit from pier to
warehouse.

Issue: W/N Vlason's Shipping, Inc. is a common carrier and thus liable for damages.

Held: No. Article 1732 of the New Civil Code defines common carriers as "persons, corporations, firms or
associations engaged in the business of carrying or transporting passengers or goods or both, by land,
water, or air, for compensation, offering their services to the public." The true test of a common carrier
is the carriage of passengers or goods, provided it has space, for all who opt to avail themselves of its
transportation service for a fee. While a private carriage is undertaken by a special agreement and the
carrier does not hold himself out to carry goods for the general public. The most typical, although not
the only form of private carriage, is the charter party, a maritime contract by which the charterer, a
party other than the shipowner, obtains the use and service of all or some part of a ship for a period of
time or a voyage or voyages.
VSI not having offered its service to the general public, and only carrying passengers or goods only for
those under special contract of a charter party is a private carrier, and thus the liability for damage of
the cargo are determined by the direct stipulations in their contract of private carriage or charter party.
MV Vlasons I being a private carrier, the shipowner's obligations are governed by the Code of Commerce
and not the Civil Code, which generally places the prima facie presumption of negligence on the
Common Carrier, thus the burden of proof lies with NSC.
With NSC unable to prove the negligence of VSI and all evidence showing that VSI and the Master and
crew of MV Vlasons I showing extraordinary diligence, and the Stevedores hired by NSC being negligent
during the inclement weather during the unloading and transport to the warehouses, no liability is
incurred by VSI.
CA decision is affirmed with modification.

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