C12. (Transpo Digest)

C12. Planters Products, Inc v.
CA
SYLLABUS:
“Charter Party” defined.—A “charter-party” is defined as 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 by which the owner of a ship or other vessel lets the whole or a 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; Charter parties are of two types:
(a) contract of affreightment which involves the use of shipping space on vessels leased by the
owner in part or as a whole, to carry goods for others; and,
(b) charter by demise or bareboat charter, by the terms of which the whole vessel is let to the
charterer with a transfer to him of its entire command and possession and consequent control over its
navigation, including the master and the crew, who are his servants. Contract of affreightment may either
be time charter, wherein the 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 shipowner to
supply the ship’s stores, pay for the wages of the master and the crew, and defray the expenses for the
maintenance of the ship.
Common carriers required to observe extraordinary diligence and presumed at fault; no such
presumption applies to private carriers.
FACTS:
 June 16 1974: Mitsubishi International Corporation (Mitsubishi) of New York, U.S.A., 9,329.7069
M/T of Urea 46% fertilizer bought by Planters Products, Inc. (PPI) on aboard the cargo vessel M/V
"Sun Plum" owned by private Kyosei Kisen Kabushiki Kaisha (KKKK) from Kenai, Alaska, U.S.A., to
Poro Point, San Fernando, La Union, Philippines, as evidenced by Bill of Lading
 May 17 1974: a time charter-party on the vessel M/V "Sun Plum" pursuant to the Uniform General
Charter was entered into between Mitsubishi as shipper/charterer and KKKK as shipowner, in
Tokyo, Japan
 Before loading the fertilizer aboard the vessel, 4 of her holds were all presumably inspected by
the charterer's representative and found fit
 The hatches remained closed and tightly sealed throughout the entire voyage
 July 3, 1974: PPI unloaded the cargo from the holds into its steelbodied dump trucks which were
parked alongside the berth, using metal scoops attached to the ship, pursuant to the terms and
conditions of the charter-partly
o hatches remained open throughout the duration of the discharge
o Each time a dump truck was filled up, its load of Urea was covered with tarpaulin before
it was transported to the consignee's warehouse located some 50 meters from the wharf
o Midway to the warehouse, the trucks were made to pass through a weighing scale where
they were individually weighed for the purpose of ascertaining the net weight of the
cargo.
o The port area was windy, certain portions of the route to the warehouse were sandy and
the weather was variable, raining occasionally while the discharge was in progress.
o Tarpaulins and GI sheets were placed in-between and alongside the trucks to contain
spillages of the ferilizer
o It took 11 days for PPI to unload the cargo
 Cargo Superintendents Company Inc. (CSCI), private marine and cargo surveyor, was hired by PPI
to determine the "outturn" of the cargo shipped, by taking draft readings of the vessel prior to
and after discharge
o shortage in the cargo of 106.726 M/T and that a portion of the Urea fertilizer
approximating 18 M/T was contaminated with dirt
 Certificate of Shortage/Damaged Cargo prepared by PPI
o short of 94.839 M/T and about 23 M/T were rendered unfit for commerce, having been
polluted with sand, rust and dirt
 PPI sent a claim letter 1974 to Soriamont Steamship Agencies (SSA), the resident agent of the
carrier, KKKK, for P245,969.31 representing the cost of the alleged shortage in the goods shipped
and the diminution in value of that portion said to have been contaminated with dirt
o SSA: what they received was just a request for shortlanded certificate and not a formal
claim, and that they "had nothing to do with the discharge of the shipment
 RTC: failure to destroy the presumption of negligence against them, SSA are liable
 CA: REVERSED - failed to prove the basis of its cause of action
ISSUE:
 W/N a time charter between a shipowner and a charterer transforms a common carrier into a
private one as to negate the civil law presumption of negligence in case of loss or damage to its
cargo
HELD:
 NO. petition is DISMISSED

 When PPI chartered the vessel M/V "Sun Plum", the ship captain, its officers and compliment
were under the employ of the shipowner and therefore continued to be under its direct
supervision and control. Hardly then can we charge the charterer, a stranger to the crew and to
the ship, with the duty of caring for his cargo when the charterer did not have any control of the
means in doing so
 carrier has sufficiently overcome, by clear and convincing proof, the prima facie presumption of
negligence. The hatches remained close and tightly sealed while the ship was in transit as the
weight of the steel covers made it impossible for a person to open without the use of the ship's
boom.
 bulk shipment of highly soluble goods like fertilizer carries with it the risk of loss or damage. More
so, with a variable weather condition prevalent during its unloading
o This is a risk the shipper or the owner of the goods has to face. Clearly, KKKK has
sufficiently proved the inherent character of the goods which makes it highly vulnerable
to deterioration; as well as the inadequacy of its packaging which further contributed to
the loss.
 On the other hand, no proof was adduced by the petitioner showing that the carrier was remise
in the exercise of due diligence in order to minimize the loss or damage to the goods it carried.

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C12. Planters Products, Inc v.

“Charter Party” defined.—A “charter-party” is defined as a contract by which an entire ship, or

 NO. petition is DISMISSED

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