Lintojua Shipping Company Inc VS National Seaman Board and Gregorio P.

Candongo
G.R. No. L-51910 August 10, 1989
FACTS:
Petitioner is the duly appointed local crewing managing office of the Fairwind Shipping Corporation.
On September 11, 1976 M/V Dufton Bay an ocean-going vessel of foreign registry owned by the R.D. Mullion ship broking agency
under charter by Fairwind, while in the port of Cebu contracted the services (among others) of Gregorio Candongo as Third Engineer
for 12 months with a monthly wage of US$500.00. The agreement was executed before the Cebu Area Manning Unit of the NSB, after
which respondent boarded the vessel.
On December 28, 1976 before the expiration of contract, respondent was required to disembark at Port Kilang, Malaysia. Describe in
his seamans handbook is the reason by owners arrange.
Condongo filed a complaint against Mullion (Shipping company) for violation of contract and against Litonjua as agent of shipowner.
On February 1977, NSB rendered a judgment by default for failure of petitioners to appear during the initial hearing, rendering the
same to pay Candongo because there was no sufficient or valid cause for the respondents to terminate the service of the complainant.
Litonjuas defense:
Contends that the shipowner, nor the charterer, was the employer of private respondent; and that liability for damages cannot be
imposed upon petitioner which was a mere agent of the charterer.
ISSUE:
Whether or not Litonjua may be held liable to the private respondent on the contract of employment?
HELD:
YES.
The first basis is the charter party which existed between Mullion, the shipowner, and Fairwind, the charterer.
It is well settled that in a demise or bare boat charter, the charterer is treated as owner pro hac vice of the vessel, the charterer
assuming in large measure the customary rights and liabilities of the shipowner in relation to third persons who have dealt with him or
with the vessel. In such case, the Master of the vessel is the agent of the charterer and not of the shipowner. The charterer or owner pro
hac vice, and not the general owner of the vessel, is held liable for the expenses of the voyage including the wages of the seamen
Treating Fairwind as owner pro hac vice, petitioner Litonjua having failed to show that it was not such, we believe and so hold that
petitioner Litonjua, as Philippine agent of the charterer, may be held liable on the contract of employment between the ship captain
and the private respondent.
There is a second and ethically more compelling basis for holding petitioner Litonjua liable on the contract of employment of private
respondent. The charterer of the vessel, Fairwind, clearly benefitted from the employment of private respondent as Third Engineer of
the Dufton Bay, along with the ten (10) other Filipino crewmembers recruited by Captain Ho in Cebu at the same occasion.
In so doing, petitioner Litonjua certainly in effect represented that it was taking care of the crewing and other requirements of a vessel
chartered by its principal, Fairwind.
Last, but certainly not least, there is the circumstance that extreme hardship would result for the private respondent if petitioner
Litonjua, as Philippine agent of the charterer, is not held liable to private respondent upon the contract of employment.

NATIONAL FOOD AUTHORITY vs. CA G.R. No. 96453, August 4, 1999

Facts: National Food Authority (NFA), thru its officers, entered into a Letter of Agreement for Vessel/Barge Hire with Hongfil for
the shipment of 200,000 bags of corn grains from Cagayan de Oro City to Manila.
The loading of bags of corn grains in the vessel commenced but it took a longer period of 21 days, 15 hours, and 18 minutes to finish
than as was certified by the arrastre firm as there was a strike staged by the arrastre workers in view of the refusal of the striking
stevedores to attend to their work. The vessel was allowed to depart for the port of Manila and arrived there, but unfortunately, it took
a longer period of 20 days, 14 hours and 33 minutes to finish the unloading than the discharging rate certified by the Port of Manila,
due to the unavailability of a berthing space for the vesselM/V CHARLIE/DIANE. Only 166,798 bags were unloaded at the Port of
Manila.
After the discharging was completed, NFA paid Hongfil the amount of P1,006,972.11 covering the shipment of corn grains.
Thereafter, Hongfil sent its billing to NFA claiming payment for freight covering the shut-out load or deadfreight as well as
demurrage, allegedly sustained during the loading and unloading of subject shipment of corn grains. When NFA refused to pay the
amount reflected in the billing, Hongfil brought the present action against NFA.
Issues:
1) Can petitioners be held liable for deadfreight?
2) Can petitioners be held liable for demurrage?
Held: 1) Yes. It bears stressing that subject Letter of Agreement is considered a Charter Party. A charter party is classified into (1)
bareboat or demise charter and (2) contract of affreightment. Subject contract is one of affreightment, whereby the owner of the
vessel leases part or all of its space to haul goods for others. It is a contract for special service to be rendered by the owner of the
vessel. Under such contract, the ship retains possession, command, and navigation of the ship, the charterer or freightermerely having
use of the space in the vessel in return for his payment of the charter hire.
Under the law, the cargo not loaded is considered a deadfreight. It is the amount paid by or recoverable from a charterer of a ship for
the portion of the ships capacity the latter contracted for but failed to occupy. Explicit andsuccinct is the law that the liability for
deadfreight is on the charterer. (Article 680 of the Code of Commerce).
2) No. Demurrage is the sum fixed in a charter party as a remuneration to the owner of the ships for the detention of his vessel beyond
the number of days allowed by the charter party for loading or unloading or for sailing.Liability for demurrage, using the word in its
technical sense, exists only when expressly stipulated in the contract.
Shipper or charterer is liable for the payment of demurrage claims when he exceeds the period for loading and unloading as agreed
upon or the agreed laydays. The period for such may or may not be stipulated in the contract. A charter party may either provide for
a fixed laydays or contain general or indefinite words such as customary quick dispatch or as fast as thestreamer can load. In the
case at bar, the charter party provides merely for a general or indefinite words of customary quick dispatch. Suchstipulation implies
that loading and unloading of the cargo should be within a reasonable time.
The charterer NFA could not be held liable for demurrage for it appears that cause of delay was not imputable to either of the parties.
The cause of delay during the loading was the strike staged by the crew of the arrastre operator, and the unavailability of a berthing
space for the vessel during the unloading. Here, the Court holds that the delay sued upon was still within the reasonable time
embraced in the stipulation of Customary Quick Dispatch.
Furthermore, considering the subject contract of affreightment contains an express provision Demurrage/Dispatch: NONE, the same
left the parties with no recourse but to apply the literal meaning of such stipulation.

Transportation Case Digest: Caltex V. Sulpicio Lines (1999)

Facts:
On December 20, 1987, motor tanker MV Vector, carrying petroleum products of Caltex, collided in the open sea with passenger ship
MV Doa Paz, causing the death of all but 25 of the latters passengers. Among those who died were Sebastian Canezal and his
daughter Corazon Canezal. On March 22, 1988, the board of marine inquiry found that Vector Shipping Corporation was at fault. On
February 13, 1989, Teresita Caezal and Sotera E. Caezal, Sebastian Caezals wife and mother respectively, filed with the Regional
Trial Court of Manila a complaint for damages arising from breach of contract of carriage against Sulpicio Lines. Sulpicio filed a
third-party complaint against Vector and Caltex. The trial court dismissed the complaint against Caltex, but the Court of Appeals
included the same in the liability. Hence, Caltex filed this petition.
Issue:
Is the charterer of a sea vessel liable for damages resulting from a collision between the chartered vessel and a passenger ship?
Held:
First: The charterer has no liability for damages under Philippine Maritime laws.
Petitioner and Vector entered into a contract of affreightment, also known as a voyage charter.
A charter party is a contract by which an entire ship, or some principal part thereof, is let by the owner to another person for a
specified time or use; a contract of affreightment is one by which the owner of a ship or other vessel lets the whole or part of her to a
merchant or other person for the conveyance of goods, on a particular voyage, in consideration of the payment of freight. A contract of
affreightment may be either time charter, wherein the leased 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 ship owner to supply the ships store, pay for the wages of
the master of the crew, and defray the expenses for the maintenance of the ship. If the charter is a contract of affreightment, which
leaves the general owner in possession of the ship as owner for the voyage, the rights and the responsibilities of ownership rest on the
owner. The charterer is free from liability to third persons in respect of the ship.
Second: MT Vector is a common carrier
The charter party agreement did not convert the common carrier into a private carrier. The parties entered into a voyage charter, which
retains the character of the vessel as a common carrier. It is 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 the charter is limited to the ship only, as in the case of a
time-charter or voyage charter. It is only when the charter includes both the vessel and its crew, as in a bareboat or demise that a
common carrier becomes private, at least insofar as the particular voyage covering the charter-party is concerned. Indubitably, a shipowner in a time or voyage charter retains possession and control of the ship, although her holds may, for the moment, be the property
of the charterer. A common carrier is a person or corporation whose regular business is to carry passengers or property for all persons
who may choose to employ and to remunerate him. 16 MT Vector fits the definition of a common carrier under Article 1732 of the
Civil Code.
The public must of necessity rely on the care and skill of common carriers in the vigilance over the goods and safety of the passengers,
especially because with the modern development of science and invention, transportation has become more rapid, more complicated
and somehow more hazardous. For these reasons, a passenger or a shipper of goods is under no obligation to conduct an inspection of
the ship and its crew, the carrier being obliged by law to impliedly warrant its seaworthiness.
Third: Is Caltex liable for damages under the Civil Code?
The charterer of a vessel has no obligation before transporting its cargo to ensure that the vessel it chartered complied with all legal
requirements. The duty rests upon the common carrier simply for being engaged in "public service." The relationship between the
parties in this case is governed by special laws. Because of the implied warranty of seaworthiness, shippers of goods, when transacting
with common carriers, are not expected to inquire into the vessels seaworthiness, genuineness of its licenses and compliance with all
maritime laws. To demand more from shippers and hold them liable in case of failure exhibits nothing but the futility of our maritime
laws insofar as the protection of the public in general is concerned. Such a practice would be an absurdity in a business where time is
always of the essence. Considering the nature of transportation business, passengers and shippers alike customarily presume that
common carriers possess all the legal requisites in its operation.