First Philippines Industrical Corp. v.

Court of Appeals
G.R. No. 125948
December 29, 1998

Nature and Concept of Common Carriage

Facts:
Fir st Philippines was granted a pipeline concession under Republic
Act No. 387 for wh ich r eason the y applied for a mayors permit with
the Office of the Mayor of Batangas City. It was required by the
City Treasurer to pay a local tax based on its gross receipts for the fiscal year
1993 pursuant to the Local Government Code. It paid the tax under protest and
filed a complaint for tax refund alleging that 1) the imposition and
collection of the business tax on its gross receipts violates Section 133
and 143 of the Local Government Code which grants tax exemption to
common carriers. Hence, they claim that the Treasurer illegally and erroneously
imposed and collected the said tax, thus meriting the immediate refund of the tax
paid.
Issue: Whether or not the petitioner is a common carrier .

Ruling:
Art. 1732 of the Civil Code defines a "common carrier" as "any person,
corporation, firm or association engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public." 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.
Based on the above definitions and requirements, there is no doubt that
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. Moreover, Under the Petroleum Act of the
Philippines (Republic Act 387), petitioner is considered a "common carrier."