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Transportation Case Digest: National Steel Corp. v. CA (1997)

G.R. No. 112287 December 12, 1997
Lessons Applicable: Charter Party Qualified by (Transportation)

  • August 6, 7 and 8, 1974: MV Vlasons I, a private carrier, entered into a contract of affreightment or contract of voyage charter hire with National Steel Corporation to make 1 voyage to load 1,677 skids of tinplates and 92 packages of hot rolled sheets or a total of 1,769 packages with a total weight of about 2,481.19 metric tons at Iligan City and discharge them at North Harbor, Manila.  The shipment was placed in 3 hatches of the ship
    • terms "F.I.O.S.T." which stands for "Freight In and Out including Stevedoring and Trading", which means that the handling, loading and unloading of the cargoes are the responsibility of the Charterer
    • Par 5: Charterers to load, stow and discharge the cargo free of risk and expenses to owners 
    • par 10: Owners shall not be liable for loss of or damage of the cargo arising or resulting from: unseaworthiness unless caused by want of due diligence on the part of the owners to make the vessel seaworthy, and to secure that the vessel is properly manned, equipped and supplied and to make the holds and all other parts of the vessel in which cargo is carried, fit and safe for its reception, carriage and preservation; . . . ; perils, dangers and accidents of the sea or other navigable waters; . . . ; wastage in bulk or weight or any other loss or damage arising from inherent defect, quality or vice of the cargo; insufficiency of packing; . . . ; latent defects not discoverable by due diligence; any other cause arising without the actual fault or privity of Owners or without the fault of the agents or servants of owners.
  • August 12, 1974: vessel arrived with the cargo at Pier 12, North Harbor, Manila
  • August 13, 1974: allegedly found to be wet and rusty
  • August 24, 1974: unloading was finished; delay was due to the heavy rain which interrupted the unloading operations
  • MASCO ventured the opinion that "rusting of the tinplates was caused by contact with SEA WATER sustained while still on board and they also found bad order packing materials of the tinplates
  • RTC: dismissed the complaint and ordering  National Steel Corp to pay the defendant on the counterclaim 
  • CA: modified by reducing the demurrage from P88,000.00 to P44,000.00 and deleting the award of attorneys fees and expenses of litigation
1. W/N seaworthiness certificates were admissible in evidence and constituted evidence of the vessel's seaworthiness at the beginning of the voyages
2. W/N a charterer's failure to insure its cargo exempts the shipowner from liability for cargo damage