PLANTERS PRODUCTS VS CA

FACTS:
Planters Products, Inc. purchased from Mitsubishi International Corporation 9,329.7069 metric tons of
Urea 46% fertilizer, which the latter shipped aboard the cargo vessel M/V Sun Plum on June 16, 1974.
Prior to its voyage, a time-charter party was entered into between Mitsubishi as shipper, and Kyosei Kisen
Kabushiki Kaisha as shipowner. Before loading the fertilizer aboard the vessel, four of her holds were
presumably inspected by the charterer’s representative and found it fit to take the load. After loading the
cargo, the steel hatches were closed with heavy iron lids, covered with 3 layers of tarpaulin then tied with
steel bonds. It remained sealed throughout the entire voyage.

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.

Upon arrival of the vessel, petitioner unloaded the cargo, which took 11 days. A private marine and cargo
surveyor, Cargo Superintendents Company, Inc. (CSCI) was hired by petitioner to determine the outturn
of the cargo shipped. CSCI reported shortage of 106.726 metric tons, and contamination of 18 metric tons
due to dirt. PPI sent a claim letter against Soriamont Steamship Agencies, the resident agent of KKKK. The
request was denied, hence, PPI filed an action for damages before the CFI Manila.

Issues:

(1) Whether a common carrier becomes a private carrier by reason of a charter party

Held:

(1) Yes. The Supreme Court defined Charter- party 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” It went
further on discussing the two types of charter-party:

a) contract of affreightment – involves the use of shipping space on vessels leased by the owner in
part or as a whole, to carry goods for others; may either be:
i. time charter -vessel is leased to the charterer for a fixed period of time; or
ii. voyage charter - ship is leased for a single voyage
b) charter by demise or bareboat charter – 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

In both types, the charter party provides for the hire of vessel only, either for a determinate period of
time or for a single or consecutive voyage, the ship owner 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.

Distinction between a “common or public carrier” and a “private or special carrier” lies in the character
of the business, such that if the undertaking is a single transaction, not a part of the general business or
occupation, although involving the carriage of goods for a fee, the person or corporation offering such
service is a private carrier.

Common carrier should observe extraordinary diligence in the vigilance over the goods they carry; in case
of loss, destruction or deterioration of the goods, it is presumed to be at fault or to have acted negligently,
and the burden of proving otherwise rests on it. Private carrier -exercise of ordinary diligence in the
carriage of goods will suffice; no such presumption applies to private carriers 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 when Planters Products
chartered the vessel M/V “Sun Plum”, the ship captain, its officers and compliment were under the employ
of the ship owner and therefore continued to be under its direct supervision and control. As stranger to
the crew and to the ship, Planters Products did not have the duty of caring for its cargo as it did not have
control of the means in doing so.