Charter party v. contract of affreightment

A charter party is 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 is one by which the owner of a ship or other vessel lets the whole or 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. 

A contract of affreightment may be either time charter, wherein the leased 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 ship owner to supply the ship's store, pay for the wages of the master of the crew, and defray the expenses for the maintenance of the ship. 

Under a demise or bareboat charter on the other hand, the charterer mans the vessel with his own people and becomes, in effect, the owner for the voyage or service stipulated, subject to liability for damages caused by negligence.

Crisostomo v. CA, 409 SCRA 528 (2003)

Problem:

Estela L. Crisostomo contracted the services of Caravan Travel and Tours International, Inc. to arrange and facilitate her booking, ticketing and accommodation in a tour dubbed "Jewels of Europe". The package tour cost her P74, 322.70. She was given a 5% discount on the amount, which included airfare, and the booking fee was also waived because petitioner’s niece, Meriam Menor, was former’s company’s ticketing manager.

Menor went to her aunt’s residence on a Wednesday to deliver petitioner’s travel documents and plane tickets. Estela, in turn, gave Menor the full payment for the package tour. Menor then told her to be at the Ninoy Aquino International Airport (NAIA) on Saturday, two hours before her flight on board British Airways.

Without checking her travel documents, Estela went to NAIA on Saturday, to take the flight for the first leg of her journey from Manila to Hongkong. She discovered that the flight she was supposed to take had already departed the previous day. She learned that her plane ticket was for the flight scheduled on June 14, 1991. She thus called up Menor to complain.

Subsequently, Menor prevailed upon Estela to take another tour the "British Pageant”, which cost P20, 881.00. She gave caravan travel and tours P7, 980.00 as partial payment and commenced the trip in July 1991.

Upon petitioner’s return from Europe, she demanded from respondent the reimbursement of P61, 421.70, representing the difference between the sum she paid for "Jewels of Europe" and the amount she owed respondent for the "British Pageant" tour. Despite several demands, respondent company refused to reimburse the amount, contending that the same was non-refundable.

Estela filed a complaint against Caravan travel and Tours for breach of contract of carriage and damages.

A) Will the action prosper?                                                          

B) Will she be entitled to damages?

Answer:

No, for there was no contract of carriage.

By definition, a contract of carriage or transportation is one whereby a certain person or association of persons obligate themselves to transport persons, things, or news from one place to another for a fixed price.

From the above definition, Caravan Travel and Tours is not an entity engaged in the business of transporting either passengers or goods and is therefore, neither a private nor a common carrier. Caravan Travel and Tours did not undertake to transport Estela from one place to another since its covenant with its customers is simply to make travel arrangements in their behalf. Caravan travel and tour’s services as a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours.

While Estela concededly bought her plane ticket through the efforts of respondent company, this does not mean that the latter ipso facto is a common carrier. At most, Caravan Travel and Tours acted merely as an agent of the airline, with whom the former ultimately contracted for her carriage to Europe. 

B) No.

The negligence of the obligor in the performance of the obligation renders him liable for damages for the resulting loss suffered by the obligee. Fault or negligence of the obligor consists in his failure to exercise due care and prudence in the performance of the obligation as the nature of the obligation so demands.

In the case at bar, Caravan Travel and Tours exercised due diligence in performing its obligations under the contract and followed standard procedure in rendering its services to Estela. The plane ticket issued to petitioner clearly reflected the departure date and time, contrary to Estela’s contention. The travel documents, consisting of the tour itinerary, vouchers and instructions, were likewise delivered to her two days prior to the trip. The Caravan Travel and Tours also properly booked Estela for the tour, prepared the necessary documents and procured the plane tickets. It arranged Estela’s hotel accommodation as well as food, land transfers and sightseeing excursions, in accordance with its avowed undertaking.

From the foregoing, it is clear that the Caravan Travel and Tours performed its prestation under the contract as well as everything else that was essential to book Estela for the tour. 

Hence, Estela cannot recover and must bear her own damage.