I.

LOADSTAR SHIPPING CO INC VS COURT OF APPEALS

II. Loadstar Shipping Co., inc., versus Court of Appeals, G.R. No. 131621,
September 28, 1999, Davide, Jr., C.j.

III. Requirement of Absence of Negligence

IV. Statement of Facts

On November 19,1984, LOADSTAR received on board its vessel M/V

Cherokee the following goods for shipment 705 bales of lawanit hardwood, 27
boxes and crates of tilewood assemblies and 49 bundles of mouldings R and W (3)
Apitong Bolidenized. The goods, amounting to 6,067, 178 were insured for the
same amount with Manila Insurance company against various risks including “Total
loss by Total loss of the Vessel”. The vessel, was insured by PGAI for 14 million.

On November 20, 1984, on its way to Manila from the port of Nasipit, Agusan
Del Norte, the vessel, along with its cargo, sank off Limasawa Island. As a result of
the total loss of the shipment, the consignee made a claim with Loadstar which
however ignored the same. As the insurer, MIC paid 6,075 to the insured in full
settlement of its claim and the latter executed a subrogation receipt. On February 4,
1985, MIC filed a complaint against LOADSTAR and PGAI, alleging that the
sinking ship of the vessel was due to the fault and negligence of LOADSTAR and
its employees. It also prayed that PGAI be ordered to pay the insurance proceeds
from the loss of the vessel directly to MIC, said amount to be deducted from MICS
claim from LOADSTAR.

In its answer LOADSTAR denied any liability for the loss of the shipper goods
and claimed that the sinking of its vessels was due to force majeure. PGAI
contended that MIC had no cause of action against it, LOADTSTAR being the
party insured. In any event PGAI was dropped as a party defendant after it paid the
insurance proceeds to LOADSTAR. The court a quo rendered judgement in
favour of MIC, prompting LOADSTAR to elevate the matter to the CA, which,
however, agreed with the trial court and affirmed its decision in toto.

V. Statement of the Case

The MIC filed a complaint against LOADSTAR before the Regional Trial
Court of Manila in Civil Case No. 85-29110 alleging that the sinking vessel was due
to the fault and negligence of LOADSTAR and its employees. LOADSTAR denied
any liability and the PGAI was dropped as a party defendant. After trial, the court a
quo rendered judgement, ordering LOADSTAR to pay private respondent MIC
the amount of P6,067,178, with legal interest from filing of the complaint until fully
paid, P8,000 as attorneys fees, and the cost of the suit. The Court of Appeals
agreed with the trial court and affirmed the decision in toto. Hence, the petitioner
filed a petition for review on certiorari seeks to reverse the decision of the CA and
its resolution denying LOADSTARs motion for reconsideration of said decision.

VI. Issues:

(1) Whether or not the M/V Cherokee a private or a common carrier

(2)Whether or not LOADSTAR observe due and/or ordinary diligence in these

premises

V. Rulings:

(1) Loadstar is a common carrier. It is not necessary that the carrier be issued a
certificate of public convenience, and this public character is not altered by the fact
that the carriage of the goods in question was periodic, occasional, episodic or
unscheduled. Furthermore, the vessel was carrying a particular type of cargo for
one shipper, which it appears to be purely coincidental, is not reason to convert the
vessel from a common to a private carrier and also it was shown that the vessel was
carrying passengers.

(2) No. Loadstar was not seaworthy when it embarked on its voyage on November
19, 1984. The vessel was not even sufficiently manned at the time. “For a vessel to
be seaworthy, it must be adequately equipped for the voyage and manned with a
sufficient number of competent officers and crew. The failure of a common carrier
to maintain in seaworthy condition its vessel involved in a contract of carriage is a
clear breach of its duty prescribed in Article 1755 of the Civil Code. LOADSTAR
was at fault or negligent in not maintaining a seaworthy vessel and in having allowed
its vessel to sail despite knowledge of an approaching typhoon. In any event, it did
not sink because of force majeure, inasmuch as the wind condition in the area was
determined to be moderate. LOADSTAR cannot hide behind the limited liability
theory to escape responsibility for the loss of the vessel and its cargo.

VI. Dispositive Portion

WHEREFORE, the instant petition DENIED and the challenged decision of Court
of Appeals is AFFIRMED.