Submitted by: Nina Castillo
[G.R. No. 102316. June 30, 1997 !"#$N%&$#" '"R()**( "N( +N(&SR+"# S&--#, +NC., petitioner , vs. C*&R */ "--$"#S "N( S$!$N R*'$RS S'+--+NG C*R-*R"+*N,respondents.
*-+C: Cate -aties -"R+$S: Shipper: Valenzuela Shipper: Valenzuela Hardwood and Industrial Supply (plaintiff) Shipping Corporation: Seven Corporation: Seven Brothers (defendant) Insurance Company: South Company: South Sea Surety and Insurance Co., Inc. S&"R: Shipper demands damaes from shippin company due to the loss of its los caused !y the nelience of shippin company"s captain. However, However, there is a stipulation in the contract !etween the shipper and shippin company e#emptin the latter from lia!ility arisin from the captain"s nelience. $he trial court said that the stipulation was void for !ein contrary to %rt. &'. $he Court of %ppeals disareed sayin that the shippin company acted as a private carrier and that %rt. &' only applies to common carriers and not to private carriers, hence, a stipulation e#emptin the owner from lia!ility even for the nelience of its aent is valid if applied to a private carrier. $he Supreme Court upheld the Court of %ppeals rulin sayin that the shippin company acted as a private carrier.
/"CS: R+"# C*&R *n &+ anuary &-, plaintiff (Valenzuela (Valenzuela Hardwood and Industrial Supply, Inc. / the shipper) entered into an areement with the defendant Seven Brothers (the Shippin Corporation) where!y the latter undertoo0 to load on !oard its vessel 12V Seven %m!assador the former"s lauan round los num!erin -3 at the port of 1aconacon, Isa!ela for shipment to 1anila. 4laintiff (Valenzuela (Valenzuela Hardwood) insured the los aainst loss and2or damae with defendant South Sea Surety and Insurance Co., Inc. for 45,333,333.33 and the latter issued its 1arine Caro Insurance 4olicy for 45,333,333.33. $he said vessel 12V Seven %m!assador san0 on 5 anuary &- resultin in the loss of the plaintiffs insured los. % chec0 chec0 for 4,+5.33 4,+5.33 to cover payment payment of the premium and documentary stamps stamps due on the policy was tendered tendered due to the insurer (South Sea Surety) !ut was not accepted. Instead, the South Sea Surety and Insurance Co., Inc. cancelled the insurance policy. 4laintiff demanded from South Sea Surety and Insurance Co., Inc. the payment of the proceeds of the policy !ut the latter denied lia!ility. 4laintiff li0ewise li0ewise filed a formal claim with defendant Seven Brothers Shippin Corporation for the value of the lost los !ut the latter denied the claim. $he trial court rendered 6udment in favor of plaintiff Valenzuela Hardwood and aainst defendants Seven Brothers and South Sea Surety. Both Both defendants appealed. C*&R */ "--$"#S
$he issue resolved !y the Court of appeals was whether defendants shippin corporation and the surety company are lia!le to the plaintiff for the latter"s lost los. $he Court of %ppeals affirmed the 7$C 6udment aainst South Sea Surety and Insurance Company !y sayin that said insurance company is still lia!le to the plaintiff Valenzuela Hardwood. It however modified the 7$C rulin aainst Seven Brothers Shippin Corporation sayin that it was not lia!le for the lost caro. %ccordin to the Court of %ppeals, it appears that there is a stipulation in the charter party that the ship owner would !e e#empted from lia!ility in case of loss. It further held that the trial court erred in applyin the provisions of the Civil Code (specifically %rt. &') on common carriers to esta!lish the lia!ility of the shippin corporation. $he provisions on common carriers should not !e applied where the carrier is not actin as such !ut as a private carrier. 8nder %merican 6urisprudence, a common carrier underta0in to carry a special caro or chartered to a special person only, !ecomes a private carrier. %s a private carrier, a stipulation e#emptin the owner from lia!ility even for the nelience of its aent is valid (Home Insurance Company, Inc. vs. %merican Steamship %encies, Inc., 59 SC7% 5). $he shippin corporation should not therefore !e held lia!le for the loss of the los. 4laintiff Valenzuela Hardwood is assailin the Court of %ppeals" 6udment !efore the Supreme Court with the followin issue. +SS&$: :hether or not a stipulation in the charter party e#emptin the shippin corporation (Seven Brothers) from lia!ility for the loss of the shipper"s (Valenzuela Hardwood) los arisin from the nelience of said Shippin Corporation"s captain is valid. R+NG: ;es, it is valid. Valenzuela Hardwood"s petition is <*$ meritorious. $he charter party !etween the Valenzuela Hardwood (shipper) and Seven Brothers (shippin company) stipulated that the owners shall not !e responsi!le for loss, split, short=landin, !rea0aes and any 0ind of damaes to the caro. It should !e noted at the outset that the pro#imate cause of the sin0in of M/V Seven Ambassadors resultin in the loss of its caro was the snappin of the iron chains and the su!se>uent rollin of the los to the portside due to the nelience of the captain in stowin and securin the los and not due to fortuitous event. ?i0ewise undisputed is the status of 4rivate 7espondent Seven Brothers as a private carrier when it contracted to transport the caro of 4etitioner Valenzuela. $he trial court deemed the charter party stipulation void for !ein contrary to pu!lic policy, citin %rticle &' of the Civil Code which provides@ %rt. &'. %ny of the followin or similar stipulations shall !e considered unreasona!le, un6ust and contrary to pu!lic policy@ (&) $hat the oods are transported at the ris0 of the o wner or shipperA (5) $hat the common carrier will not !e lia!le for an y loss, destruction, or deterioration of the oodsA
(9) $hat the common carrier need not o!serve any dilience in the custody of the oodsA () $hat the common carrier shall e#ercise a deree of dilience less than that of a ood father of a family, or of a man of ordinary prudence in the viilance over the mova!les transportedA () $hat the common carrier shall not !e responsi!le for the acts or omissions of his or its employeesA (+) $hat the common carriers lia!ility for acts committed !y thieves, or of ro!!ers who do not act with rave or irresisti!le threat, violence or force, is dispensed with or diminishedA (') $hat the common carrier is not responsi!le for the loss, destruction, or deterioration of oods on account of the defective condition of the car, vehicle, ship, airplane or other e>uipment used in the contract of carriae. %s adverted to earlier, it is undisputed that private respondent had acted as a private carrier in transportin petitioner"s lauan los. $hus, %rticle &' and other Civil Code provisions on common carriers which were cited !y petitioner may not !e applied unless e#pressly stipulated !y the parties in their charter party In a contract of private carriae, the parties may validly stipulate that responsi!ility for the caro rests solely on the charterer, e#emptin the shipowner from lia!ility for loss of or damae to the caro caused even !y the nelience of the ship captain. 4ursuant to %rticle &93+ of the Civil Code, such stipulation is valid !ecause it is freely entered into !y the parties and the same is not contrary to law, morals, ood customs, pu!lic order, or pu!lic policy. Indeed, their contract of private carriae is not even a contract of adhesion. :e stress that in a contract of private carriae, the parties may freely stipulate their duties and o!liations which perforce would !e !indin on them. 8nli0e in a contract involvin a common carrier, private carriae does not involve the eneral pu!lic. Hence, the strinent provisions of the Civil Code on common carriers protectin the eneral pu!lic cannot 6ustifia!ly !e applied to a ship transportin commercial oods as a private carrier. Conse>uently, the pu!lic policy em!odied therein is not contravened !y stipulations in a charter party that lessen or remove the protection iven !y law in contracts involvin common carriers. %s a private carrier, a stipulation e#emptin the owner from lia!ility for the nelience of its aent is not aainst pu!lic policy, and is deemed valid. Such doctrine :e find reasona!le. $he Civil Code provisions on common carriers should not !e applied where the carrier is not actin as such !ut as a private carrier. $he stipulation in the charter party a!solvin the owner from lia!ility for loss due to the nelience of its aent would !e void only if the strict pu!lic policy overnin common carriers is applied. Such policy has no force where the pu!lic at lare is not involved, as in this case of a ship totally chartered for the use of a sinle party. In fine, the respondent appellate court aptly stated that in the case of a private carrier, a stipulation e#emptin the owner from lia!ility even for the nelience of its aent is valid. $he eneral pu!lic enters into a contract of transportation with common carriers without a hand or a voice in the preparation thereof. $he ridin pu!lic merely adheres to the contractA even if the pu!lic wants to, it cannot su!mit its own stipulations for the approval of the common carrier. $hus, the law on common carriers e#tends its protective mantle aainst one=sided stipulations inserted in tic0ets, invoices or other documents over which the ridin pu!lic has no understandin or, worse, no choice. Compared to the eneral pu!lic, a charterer in a contract of private carriae is not similarly situated. It can == and in fact it usually does == enter into a free and voluntary areement. In practice, the parties in a contract of private carriae can stipulate the carriers o!liations and lia!ilities over the shipment which, in turn, determine the price or consideration of the charter. $hus, a charterer, in e#chane for convenience and economy, may opt to set aside the protection of the law on common carriers. :hen the charterer decides to e#ercise this option, he ta0es a normal !usiness ris0. 4etitioner Valenzuela insists that the charter party stipulation is contrary to %rticles + and ' of the Code of Commerce which confer on petitioner the riht to recover damaes from the shipowner and ship aent for the acts or conduct of the captain. :e are not persuaded. :hatever rihts petitioner may have under the aforementioned statutory provisions were waived when it entered into the charter party. %rticle + of the Civil Code provides that (r)ihts may !e waived, unless the waiver is contrary to law, pu!lic order, pu!lic policy, morals, or ood customs, or pre6udicial to a person with a riht reconized !y law.