NATIONAL STEEL CORPORATION v.
CA  RTC ruled that the claim of NSC that VSI violated the contract of
G.R. No. 112287 | December 12, 1997 | Panganiban, J.
PETITIONER: National Steel Corporation
RESPONDENTS: CA and Vlasons Shipping, Inc.
VLASONS, INC. v. CA
G.R. No. 112350 | December 12, 1997 | Panganiban, J.
PETITIONER: Vlasons Shipping, Inc.
RESPONDENTS: CA and National Steel Corporation
Summary:. National Steel Corporation and Vlasons Shipping Inc.
entered into a Contract of Voyage Charter Hire to make a voyage to
load steel products. The steel products were wet and rusty when it
reached its destination due to contact with sea water. VSI denied
liability claimed by NSC stating that the vessel was not a common
carrier. SC held that it was not a common carrier but a private carriage.
Hence, the ship owner’s obligations are governed by the provisions of
the Code of Commerce and not by the Civil Code.
Doctrine: The true test of a common carrier is the carriage of
passengers or goods, provided it has space, for all who opt to avail
themselves of its transportation service for a fee.
FACTS:
 National Steel Corporation (NSC) as charterer and Vlasons Shipping,
Inc.(VSI) as owner, entered into a Contract of Voyage Charter Hire
whereby NSC hired VSI’s vessel, the MV Vlasons I, to make one voyage
to load steel products from Iligan City to Manila.
 The handling, loading, and unloading of the cargoes were the
responsibility of the charterer (Freight In and Out including Stevedoring
and Trading provision).
 When the vessel’s three hatches containing the shipment were opened
by NSC’s agents, nearly all the skids of tinplates and hot rolled sheets
were allegedly found to be wet and rusty.
 Manila Adjusters and Surveyors Company (MASCO) reported that the
rusting of the tinplates was caused by contact with sea water as a
consequence of the heavy weather and rough seas.
 NSC claimed that it sustained losses as a result of the act, neglect and
default of the master and crew in the management of the vessel.
 It also points the lack of due diligence on the part of VSI to make the
vessel seaworthy and to make the holds and all other parts of the vessel
in which the cargo was carried, fit and safe for its reception, carriage and
preservation.
 VSI denied liability for the alleged damage claiming that MV Vlasons I
was not a “common carrier” inasmuch as she was under voyage charter
contract with NSC as charterer under the charter party.
carriage is not supported by evidence. The provisions of the Civil Code
on common carriers pursuant to which there exists a presumption of
negligence in case of loss or damage to the cargo are not applicable.
 CA modified the RTC decision by reducing the demurrage and deleting
the award for attorney’s fees and litigation expenses. CA denied the
motions of both parties. Thus, both filed their respective petitions for
review.
ISSUES:
1. Whether VSI contracted with NSC as a common carrier – NO.
Article 1732 of the Civil Code defines a common carrier as “persons,
corporations, firms or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public.”
A carrier which does not qualify under the test of a common carrier is deemed a
private carrier. “Generally, private carriage is undertaken by special agreement
and the carrier does not hold himself out to carry goods for the general public.”
VSI did not offer its services to the general public. It carried passengers or goods
only for those it chose under a “special contract of charter party.” The MV
Vlasons I was not a common but a private carrier.
2. Whether the provisions of the Civil Code on common carriers pursuant
to which there exists a presumption of negligence against the common
carrier in case of loss or damage to the cargo are applicable to a private
carrier – NO.
In a contract of private carriage, the parties may freely stipulate their duties and
obligations which perforce would be binding on them. Unlike in a contract
involving a common carrier, private carriage does not involve the general public.
Hence, the stringent provisions of the Civil Code on common carriers protecting
the general public cannot justifiably be applied to a ship transporting commercial
goods as a private carrier.
Because the MV Vlasons I was a private carrier, the ship owner’s obligations are
governed by the foregoing provisions of the Code of Commerce and not by the
Civil Code which, as a general rule, places the prima facie presumption of
negligence on a common carrier.