G.R. No. 161745 – LEA MER INDUSTRIES, INC., petitioners, vs. MALAYAN INSURANCE CO., INC.,* respondent.
PANGANIBAN, J.
Rule Synopsis
In a charter contract of affreightment, the owner of the vessel retains control over the same. He is thus considered a common carrier.
Facts
Lea Mer Industries, Inc. leased a barge to transport the goods of Ilian Silica Mining. During the voyage, the vessel sank, resulting in the loss of the cargo; there was a typhoon then. Malayan Insurance Co. (insurer), as the insurer paid the consignee, then demanded reimbursement from Lea Mer. The latter refused to pay arguing that it is not liable since the cause of the loss was a fortuitous event.
Issue
Should Lea Mer Industries be held liable?
Ruling and Discussion
Yes. Lea Mer Industries should be held liable.
The Supreme Court held Lea Mer liable. It found that the latter is a common carrier being engaged in the business of transporting goods through its vessels and that it failed to exercise the extraordinary diligence required of common carriers. In finding Lea Mer to be a common carrier, it ruled that the charter contract between Lea Mer and the consignee was one for affreightment, not bareboat or demise. The SC distinguished the two types of charter thus: in a demise charter: a) the owner of the vessel relinquishes its possession, command, and navigation to the charterer; b) it is private, and c) what governs is the stipulation of the parties; it is beyond the ambit of the law on common carriers. Whereas, in an affreightment charter, as in the case at hand: a) the owner of the vessel maintains the manning and control over the boat, b) the owner is considered a common carrier, and c) pertinent laws governing common carriers were applicable. As such, Lea Mer had the burden of showing that it exercised extraordinary diligence to prevent the loss or damage. In this case, the Court found Lea Mer’s rebuttal evidence to be “sorely insufficient.”
Dispositive
Petition denied. Decision and resolution affirmed.