Effect of Charter Party | Common Carrier vs.

Private Carrier
Planters Product Inc. vs. CA shortage due to contamination with dirt and pollution with sand and
GR No 101503 | September 5, 1993 rust.

Facts: PPI sent a claim letter to the resident agent of KKKK for the cost of
the alleged shortage in the goods shipped and the diminution in the
value of that portion said to be contaminated with dirt. The said agent
denied such request for they had nothing to do with the discharge of
the shipment. Consequently, PPI filed an action for damages with the
M/V “Sun Plum” CFI.
(owned by KKKK)
KKKK argued that the strict public policy governing common carriers
Planters Products, Inc. (PPI), purchased from MITSUBISHI
do not apply to them because they have become private carriers by
9,329.7069 metric tons of Urea 46% fertilizer. Mitsubishi shipped in
reason of the provisions of the charter party.
bulk the fertilizer aboard the cargo vessel M/V “Sun Plum” owned by
Kyosei Kisen Kabushiki Kaisha (KKKK).
The CFI ruled in favor or PPI however on appeal to the CA, it
absolved KKKK from liability. According to the CA, KKKK was private
Prior to its voyage, Mitsubishi as shipper/charterer and KKKK as ship
carrier and not a common carrier by reason of the time-charter party.
owner entered into a time-charter party. Before loading the fertilizer
aboard the vessel, 4 of her(case refers to the vessel as her) holds
Issue/s:
(noun. cargo deck of ship) were all presumably inspected by
1. W/N a common carrier becomes a private carrier by reason of a
Mitsubishi’s representative and found it fit to take a load of urea in
charter party - NO
bulk.(pursuant to the charter-party)
2. W/N KKKK was able to prove that he had exercised that degree of
diligence required of him under the law - YES
After loading the Urea fertilizer in bulk, the steel hatches (door of the
vessel) were closed. The hatches remained closed and tightly sealed
Ruling:
throughout the entire voyage. Upon arrival of the vessel at her port of
1. No. In a time or voyage charter, the ship remains as a common
call, the steel pontoon hatches were opened. PPI unloaded the cargo
or public carrier. It is only when the charter includes both the
from the holds into its steel bodied dump truck. (againt pursuant to
vessel and its crew, as in a bareboat or demise that a common
the conditions under the charter-party).
carrier becomes private. A ship owner in a time or voyage charter
retains possession and control of the ship, although her holds
Each filled up dump truck was covered with tarpaulin before
may, for a moment, be the property of the charterer.
transporting it to PPI’s warehouse. Midway to the warehouse, the
trucks pass through a weighing scale. The port area was windy,
A “charter-party” is defined as a contract by which an entire ship, or
certain portions of the route were sandy and the weather was
some principal part thereof, is let by the owner to another person for
variable, raining occasionally while discharge was in progress. The
a specified time or use; a contract of affreightment by which the
hatches remained open throughout the duration of the discharge that
owner of a ship or other vessel lets the whole or a part of her to a
took 11 days.
merchant or other person for the conveyance of goods, on a
particular voyage, in consideration of the payment of freight;
PPI hired a private marine and cargo surveyor to determine the
“outturn” of the cargo shipped. A report was submitted revealing a
Effect of Charter Party | Common Carrier vs. Private Carrier
Charter parties are of two types: Clearly, KKKK sufficiently proved the inherent character of the goods
(a)contract of affreightment which involves the use of shipping space which makes it highly vulnerable to deterioration; as well as the
on vessels leased by the owner in part or as a whole, to carry goods inadequacy of its packaging which further contributed to the loss. On
for others; and, the other hand, no proof was adduced by the petitioner showing that
(b)charter by demise or bareboat charter, by the terms of which the the carrier was remiss in the exercise of due diligence in order
whole vessel is let to the charterer with a transfer to him of its entire tominimize the loss or damage to the goods it carried.
command and possession and consequent control over its navigation,
including the master and the crew, who are his servants.

Contract of affreightment may either be a time charter, wherein the

vessel is leased to the charterer for a fixed period of time, or voyage
charter, wherein the ship is leased for a single voyage. In both cases,
the charter-party provides for the hire of the vessel only, either for a
determinate period of time or for a single or consecutive voyage, the
shipowner to supply the ship’s stores, pay for the wages of the
master and the crew, and defray the expenses for the maintenance of
the ship.

A “common or public carrier” is defined in Art. 1732 of the Civil Code.

The definition extends to carriers either by land, air or water which
hold themselves out as ready to engage in carrying goods or
transporting passengers or both for compensation as a public
employment and not as a casual occupation. The distinction between
a “common or public carrier” and a “private or special carrier” lies in
the character of the business, such that if the undertaking is a single
transaction, not a part of the general business or occupation,
although involving the carriage of goods for a fee, the person or
corporation offering such service is a private carrier.

2. Yes. KKKK has sufficiently overcome by clear and convincing

proof, the prima facie presumption of negligence.

The Court agrees with KKKK that bulk shipment of highly soluble
goods like fertilizer carries with it the risk of loss or damage. More so,
with a variable weather condition prevalent during its unloading, as
was the case at bar. This is a risk the shipper or the owner of the
goods has to face.