PEDRO DE GUZMAN vs.

COURT OF APPEALS and ERNESTO CENDANA

FACTS:

Ernesto Cendana, a junk dealer, was engaged in buying up used bottles and scrap metal in Pangasinan. Upon
gathering sufficient quantities of such scrap material, respondent would bring such material to Manila for resale. He
utilized two six-wheeler trucks which he owned for hauling the material to Manila. On the return trip to Pangasinan,
respondent would load his vehicles with cargo which various merchants wanted delivered to differing establishments
in Pangasinan. For that service, respondent charged freight rates which were commonly lower than regular
commercial rates.

Pedro de Guzman a merchant and authorized dealer of General Milk Company (Philippines), Inc. in Urdaneta,
Pangasinan, contracted with respondent for the hauling of 750 cartons of Liberty filled milk to his establishment.
However, 600 of which were hijacked. De Guzman now filed a complaint for the recovery of the value of lost items
arguing that Cendana is a common carrier and thus must exercise extraordinary diligence.

Cerdana denied that he was a common carrier and argued that he could not be held responsible for the value of the
lost goods, such loss having been due to force majeure.

ISSUE:

Whether or not Cendana is a common carrier?

RULING:

Yes. Article 1732 of NCC defines common carrier. This article makes no distinction between one whose principal
business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary
activity (in local Idiom as "a sideline"). Article 1732 also carefully avoids making any distinction between a person or
enterprise offering transportation service on a regular or scheduled basis and one offering such service on an
occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services
to the "general public," i.e., the general community or population, and one who offers services or solicits business
only from a narrow segment of the general population.

The occurrence of the loss must reasonably be regarded as quite beyond the control of the common carrier and
properly regarded as a fortuitous event. It is necessary to recall that even common carriers are not made absolute
insurers against all risks of travel and of transport of goods, and are not held liable for acts or events which cannot
be foreseen or are inevitable, provided that they shall have complied with the rigorous standard of extraordinary
diligence.
FIRST PHILIPPINE INDUSTRIAL CORPORATION vs. COURT OF APPEALS, HONORABLE PATERNO V.
TAC-AN, BATANGAS CITY and ADORACION C. ARELLANO, in her official capacity as City Treasurer of
Batangas

FACTS:

Petitioner is a grantee of a pipeline concession under Republic Act No. 387, as amended, to contract, install and
operate oil pipelines. The original pipeline concession was granted in 1971 and renewed by the Energy Regulatory
Board in 1992. Sometime in January 1995, petitioner applied for a mayor's permit with the Office of the Mayor of
Batangas City. However, before the mayor's permit could be issued, the respondent City Treasurer required
petitioner to pay a local tax based on its gross receipts for the fiscal year 1993 pursuant to the Local Government
Code. They paid the assessment. Later on, FPIC filed a letter protest alleging that they are a pipeline operator with a
government concession granted under the Petroleum Act. It is engaged in the business of transporting petroleum
products from the Batangas refineries, via pipeline, to Sucat and JTF Pandacan Terminals. As such, their Company is
exempt from paying tax on gross receipts under Section 133 of the Local Government Code of 1991.

The City Treasurer denied the protest contending that petitioner cannot be considered engaged in transportation
business, thus it cannot claim exemption under Section 133 (j) of the Local Government Code.

Issue:

Whether or not pipelines are included in the term "common carrier"?

RULING:

Yes. A "common carrier" may be defined, broadly, as one who holds himself out to the public as engaged in the
business of transporting persons or property from place to place, for compensation, offering his services to the public
generally. The test for determining whether a party is a common carrier of goods is:

1. He must be engaged in the business of carrying goods for others as a public employment, and must hold
himself out as ready to engage in the transportation of goods for person generally as a business and not as
a casual occupation;
2. He must undertake to carry goods of the kind to which his business is confined;
3. He must undertake to carry by the method by which his business is conducted and over his established
roads; and
4. The transportation must be for hire.

RULING:

The petitioner is a common carrier. It is engaged in the business of transporting or carrying goods, i.e., petroleum
products, for hire as a public employment. It undertakes to carry for all persons indifferently, that is, to all persons
who choose to employ its services, and transports the goods by land and for compensation. The fact that petitioner
has a limited clientele does not exclude it from the definition of a common carrier.

There is no doubt that petitioner is a "common carrier" and, therefore, exempt from the business tax as provided for
in Section 133 (j), of the Local Government Code. It is clear that the legislative intent in excluding from the taxing
power of the local government unit the imposition of business tax against common carriers is to prevent a duplication
of the so-called "common carrier's tax." Petitioner is already paying three (3%) percent common carrier's tax on its
gross sales/earnings under the National Internal Revenue Code. To tax petitioner again on its gross receipts in its
transportation of petroleum business would defeat the purpose of the Local Government Code.
SPOUSES TEODORO1 and NANETTE PERENA vs SPOUSES TERESITA PHILIPPINE NICOLAS and L.
ZARATE, NATIONAL RAILWAYS, and the COURT OF APPEALS

FACTS:

Spouses Zarate engaged the services of spouses Pereña for the adequate and safe transportation carriage of the
former spouses' son from their residence in Parañaque to his school at the Don Bosco Technical Institute in Makati
City. During the effectivity of the contract of carriage and in the implementation thereof, Aaron, the minor son of
spouses Zarate died in connection with a vehicular/train collision which occurred while Aaron was riding the
contracted carrier Kia Ceres van of spouses Pereña, then driven and operated by the latter's employee/authorized
driver Clemente Alfaro, which van collided with the train of PNR, at around 6:45 A.M. of August 22, 1996, within the
vicinity of the Magallanes Interchange in Makati City, Metro Manila, Philippines.

ISSUE:

Whether or not Perena are considered engaged in common carrier transport?

RULING:

Pereñas operated as a common carrier; and that their standard of care was extraordinary diligence, not the ordinary
diligence of a good father of a family.

The operator of a school bus service is a common carrier in the eyes of the law. He is bound to observe extraordinary
diligence in the conduct of his business. He is presumed to be negligent when death occurs to a passenger. His
liability may include indemnity for loss of earning capacity even if the deceased passenger may only be an
unemployed high school student at the time of the accident.

A carrier is a person or corporation who undertakes to transport or convey goods or persons from one place to
another, gratuitously or for hire. The carrier is classified either as a private/special carrier or as a common/public
carrier. A private carrier is one who, without making the activity a vocation, or without holding himself or itself out to
the public as ready to act for all who may desire his or its services, undertakes, by special agreement in a particular
instance only, to transport goods or persons from one place to another either gratuitously or for hire.

There is no question that the Pereñas as the operators of a school bus service were: (a) engaged in transporting
passengers generally as a business, not just as a casual occupation; (b) undertaking to carry passengers over
established roads by the method by which the business was conducted; and (c) transporting students for a fee.
Despite catering to a limited clientèle, the Pereñas operated as a common carrier because they held themselves out
as a ready transportation indiscriminately to the students of a particular school living within or near where they
operated the service and for a fee.
BRITISH AIRWAYS, INC vs. COURT OF APPEALS, and FIRST INTERNATIONAL TRADING AND GENERAL
SERVICES

FACTS:

Private respondent sent a letter to petitioner demanding compensation for the damages it had incurred by the latter's
repeated failure to transport its contract workers despite confirmed bookings and payment of the corresponding
travel taxes. On August 8, 1981, private respondent received a telex message from its principal cancelling the hiring
of the remaining recruited workers due to the delay in transporting the workers to Jeddah

It is the contention of petitioner that private respondent has no cause of action against it there being no perfected
contract of carriage existing between them as no ticket was ever issued to private respondent's contract workers
and, therefore, the obligation of the petitioner to transport said contract workers did not arise. Furthermore, private
respondent's failure to attach any ticket in the complaint further proved that it was never a party to the alleged
transaction.

ISSUE:

Whether or not airline failed to process the flights of those who will be sent to Jedah.

RULING:

In dealing with the contract of common carriage of passengers for purpose of accuracy, there are two (2) aspects of
the same, namely: (a) the contract "to carry (at some future time)," which contract is consensual and is necessarily
perfected by mere consent (See Article 1356, Civil Code of the Philippines), and (b) the contract "of carriage" or "of
common carriage" itself which should be considered as a real contract for not until the carrier is actually used can the
carrier be said to have already assumed the obligation of a carrier.

In the instant case, the contract "to carry" is the one involved which is consensual and is perfected by the mere
consent of the parties.

There is no dispute as to the appellee's consent to the said contract "to carry" its contract workers from Manila to
Jeddah. The appellant's consent thereto, on the other hand, was manifested by its acceptance of the PTA or prepaid
ticket advice that ROLACO Engineering has prepaid the airfares of the appellee's contract workers advising the
appellant that it must transport the contract workers on or before the end of March, 1981 and the other batch in
June, 1981.