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
Caltex [Philippines], Inc. vs. Sulpicio Lines, Inc.

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 ship-owner 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.