Santiago Lighterage v. Court of Appeals, SCRA, G.R. No. 139629, June 21, 2004.

Santiago Lighterage v. Court of Appeals, SCRA , G.R. No. 139629, June 21, 2004.
Facts:
Manuel Pelaez entered into a contract with C-Square Consolidated Mines for shipping and
exporting its milled chromite ores to South Korea. Pelaez assured the Plaintiff Corporation, that MV
Christine Gay was seaworthy. The policy stipulates that the policy shall automatically be rescinded and
be inoperative if the vessel is found not seaworthy. The plaintiff paid a third-party defendant Santiaho
Lighterage Corp for the account of MAP Trading pursuant to the understanding of Plaintiff Pelaez.
Upon the vessel’s turn over to Santiago Lighterage to Pelaez, a new set of crew member took
possession of it and determined her actual condition. Engr. Simeon Panaguiton observed that the
vessel was not in good condition; nevertheless, it was allowed to make the voyage because of the
assurance that it will be repaired. The chromite ores were loaded while repairs on the vessel were
made by third party defendants Santiago Lighterage and Robert Tan. Capt. Beltran Sorongon, the
master of the vessel and Engr. Panaguiton did not allow the vessel to make her voyage because of the
inadequacy of the repair.
Thereafter, it was decided that the vessel will sail back towards Manila since sailing to Korea
would be very dangerous. In the afternoon, the engine stopped, making it to stop in the middle of the
sea. Upon notice, C-Square then served a notice of rescission of the Charter Agreement upon Pelaez
who gave his conformity thereto. Thereafter, the C-Square sent a demand letter informing Pelaez that it
suffered damages in the amount of P2.4 million because the vessel lacked the documentation and that
the vessel was not seaworthy. The counsel of Pelaez wrote a letter of demand to Santiago Lighterage
and Robert Tan informing about the demand letter of C-Square. In the letter, it demanded that Pelaez
be paid the amount of P2million and the further sum of P1million representing his unrealized profit on
the transaction.
Because the vessel suffered a breakdown, the vessel was towed by a tugboat to Manila. Pelaez
wrote a letter to Maritime Industry Authority (MARINA) requesting for a re-investigation of the
seaworthiness of the vessel. A report was issued stating that the vessel was a dead ship at the time of
inspection. Consequently, plaintiff had to contract with other companies to transport its chromite ores to
South Korea and this entailed additional expenses. The trial court held that MV Christine Gay was not
seaworthy, which was thereby affirmed by the appellate courts. Hence this instant petition.
Issue: Whether or not MV Christine Gay is seaworthy?
Ruling:
No, MV Christine Gay is not seaworthy.
According to Maritime Law, to be seaworthy, a vessel “must have that degree of fitness which
an ordinary, careful and prudent owner would require his vessel to have at the commencement of her
voyage, having regard to all the probable circumstances of it.”Thus the degree of seaworthiness varies
in relation to the contemplated voyage.
In examining what is meant by seaworthiness we must bear in mind the dual nature of the
carrier’s obligations under a contract of affreightment. To satisfy these duties the vessel must (a) be
efficient as an instrument of transport and (b) as a storehouse for her cargo. The latter part of the
obligation is sometimes referred to as cargoworthiness. And a vessel is cargoworthy if it is sufficiently
strong and equipped to carry the particular kind of cargo which she has contracted to carry, and her
cargo must be so loaded that it is safe for her to proceed on her voyage. In other words, a ship is
efficient as an instrument of transport if its hull, tackle and machinery are in a state of good repair, if
she is sufficiently provided with fuel and ballast, and is manned by an efficient crew.
Here, Petitioner asserts that MV Christine Gay is “sufficient in materials, construction,

equipment and outfit” as shown by the documents the Philippine Coast Guard (“Coast Guard”) and the
Maritime Industry Authority (“MARINA”) issued to petitioners. However, the trial court relied, however,
on the testimonies of Engineer Panaguiton and Captain Sorongon. Engineer Panaguiton when they
conducted survey around the hull and superstructures and found numerous defects.
In addition, crossing the Atlantic calls for stronger equipment than sailing across the Visayan
Sea. It is essential to consider that once the necessary degree of seaworthiness has been ascertained,
this obligation is an absolute one, i.e. the undertaking is that the vessel actually is seaworthy. It is no
excuse that the shipowner took every possible precaution to make her so, if in fact he failed. MV
Christine Gay was unseaworthy for the purpose intended in the bare-boat charter agreement. A mere
right given to the charterer to inspect the vessel before loading and to satisfy himself that she was fit
for the contracted cargo does not free the shipowner from his obligation to provide a cargoworthy ship.

Santiago Lighterage v. Court of Appeals, SCRA, G.R. No. 139629, June 21, 2004.

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Santiago Lighterage v. Court of Appeals, SCRA, G.R. No. 139629, June 21, 2004.

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Santiago Lighterage v. Court of Appeals, SCRA , G.R. No. 139629, June 21, 2004.

Issue: Whether or not MV Christine Gay is seaworthy?

No, MV Christine Gay is not seaworthy.

Here, Petitioner asserts that MV Christine Gay is “sufficient in materials, construction,

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