Valenzuela Hardwood vs. CA

Transportation Law

 

FACTS:

Valenzuela Hardwood entered into an agreement with Seven Brothers whereby the latter undertook to load on board its vessel the former’s lauan round logs at the port of Maconacon, Isabela for shipment to Manila.  The charter party between Valenzuela Hardwood and Seven Brothers stipulated that the owners shall not be responsible for loss, split, short-landing, breakages and any kind of damages to the cargo. Valenzuela Hardwood insured the logs against loss and/or damage with South Sea Surety and Insurance Co., Inc.  The vessel sank resulting in the loss of the insured logs.

ISSUE:

W/N defendant acted as a private carrier for it to be exempted from liability in case of loss?

HELD:

It is undisputed that private respondent had acted as a private carrier in transporting petitioner's lauan logs. Thus, Article 1745 and other Civil Code provisions on common carriers which were cited by petitioner may not be applied. 

In a contract of private carriage, the parties may validly stipulate that responsibility for the cargo rests solely on the charterer, exempting the shipowner from liability for loss of or damage to the cargo caused even by the negligence of the ship captain. Pursuant to Article 1306 17 of the Civil Code, such stipulation is valid because it is freely entered into by the parties and the same is not contrary to law, morals, good customs, public order, or public policy. Indeed, their contract of private carriage is not even a contract of adhesion.

We stress that 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.