Pedro De Guzman vs.

Court of Appeals and Ernesto Cendana

G.R. No. L-47822, December 22, 1988,
J. Feliciano
Article 1732 of the Civil Code 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.
FACTS:
Respondent Ernesto Cendana is a junk dealer in Pangasinan. He utilized two trucks
which he owned for hauling the material to Manila for resale. 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
contracted with respondent for the hauling of 750 cartons of Liberty filled milk from a
warehouse in Makati to petitioner's establishment in Urdaneta on or before 4 December
1970. Only 150 boxes of Liberty filled milk were delivered to petitioner since the truck
which carried these boxes was hijacked somewhere along the MacArthur Highway in
Paniqui, Tarlac, by armed men who took with them the truck, its driver, his helper and
the cargo. Petitioner commenced action against private respondent in the CFI of
Pangasinan, demanding payment of the lost goods, arguing that the latter failed to
exercise extraordinary diligence required of him by the law. Respondent 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. CFI ruled in favor of
petitioner De Guzman, finding respondent to be a common carrier and liable to
petitioner. CA reversed the decision.
ISSUE:
Whether or not private respondent Ernesto Cendana may, under the facts earlier set
forth, be properly characterized as a common carrier.
HELD:
Yes. Private respondent is a common carrier. However, he could not be held liable for
the lost goods. Article 1732 of the Civil Code 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. 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” and one who offers services or solicits business only
from a narrow segment of the general population. So understood, the concept of
"common carrier" under Article 1732 may be seen to coincide neatly with the notion of
"public service," under the Public Service Act: “every person that now or hereafter may
own, operate, manage, or control in the Philippines, for hire or compensation, with
general or limited clientele, whether permanent, occasional or accidental, and done for
general business purposes, any common carrier,” A certificate of public convenience is
not a requisite for the incurring of liability under the Civil Code provisions governing
common carriers. Respondent is not liable for the lost goods within the purview of
articles 1734 and 1735. The hijacking of the carrier's truck does not fall within any of the
five (5) categories of exempting causes listed in Article 1734. It would follow, therefore,
that the hijacking of the carrier's vehicle must be dealt with under the provisions of
Article 1735, in other words, that the private respondent as common carrier is presumed
to have been at fault or to have acted negligently. This presumption, however, may be
overthrown by proof of extraordinary diligence. The duty of extraordinary diligence in the
vigilance over goods is given additional specification not only by Articles 1734 and 1735
but also by Article 1745. Under Article 1745 (6) above, a common carrier is held
responsible — and will not be allowed to divest or to diminish such responsibility —
even for acts of strangers like thieves or robbers, except where such thieves or robbers
in fact acted "with grave or irresistible threat, violence or force." We believe and so hold
that the limits of the duty of extraordinary diligence in the vigilance over the goods
carried are reached where the goods are lost as a result of a robbery which is attended
by "grave or irresistible threat, violence or force." In the instant case, armed men held
up the second truck owned by private respondent which carried petitioner's cargo.
DISPOSITIVE PORTION: ACCORDINGLY, the Petition for Review on certiorari is
hereby DENIED and the Decision of the Court of Appeals dated 3 August 1977 is
AFFIRMED. No pronouncement as to costs.
SPOUSES PEREÑA vs SPOUSES ZARATE
G.R. No. 157917, August 29, 2012
Facts:
The Pereñas were engaged in the business of transporting students from their
respective residences in Parañaque City to Don Bosco in Pasong Tamo, Makati City,
and back. The Zarates contracted the Pereñas to transport Aaron, their 15-year old son,
to and from Don Bosco.
The Pereñas employed Clemente Alfaro (Alfaro) as driver of the van or school bus
service. The driver of the said private van, while the children were on board including
Aaron, decided to take a short cut in order to avoid traffic. The usual short cut was a
railroad crossing of the Philippine National Railway (PNR). Alfaro saw that the barandilla
(the pole used to block vehicles crossing the railway) was up which means it was okay
to cross. He then tried to overtake a bus. However, there was in fact an oncoming train
but Alfaro no longer saw the train as his view was already blocked by the bus he was
trying to overtake. The bus was able to cross unscathed but the van’s rear end was hit.
During the collision, Aaron, was thrown off the van. His body hit the railroad tracks and
his head was severed.
The Zarates sued PNR and the Pereñas (Alfaro became at-large). Their cause of action
against PNR was based on quasi-delict. Their cause of action against the Pereñas was
based on breach of contract of common carriage. The RTC ruled in favor of the Zarates.
The Court of Appeals affirmed the RTC. Hence, this petition for review on certiorari.
Issues:
Whether or not the Pereñas and PNR jointly and severally liable for damages?
Ruling:
Yes.
The Supreme court held that the lower courts correctly held both the Pereñas and the
PNR "jointly and severally" liable for damages arising from the death of Aaron. Ratio:
Although the basis of the right to relief of the Zarates (i.e., breach of contract of
carriage) against the Pereñas was distinct from the basis of the Zarates’ right to relief
against the PNR (i.e., quasi-delict under Article 2176, Civil Code), they nonetheless
could be held jointly and severally liable by virtue of their respective negligence
combining to cause the death of Aaron.
As to the PNR, the RTC rightly found the PNR also guilty of negligence despite the
school van of the Pereñas traversing the railroad tracks at a point not dedicated by the
PNR as a railroad crossing for pedestrians and motorists, because the PNR did not
ensure the safety of others through the placing of crossbars, signal lights, warning
signs, and other permanent safety barriers to prevent vehicles or pedestrians from
crossing there. The RTC observed that the fact that a crossing guard had been
assigned to man that point from 7 a.m. to 5 p.m. was a good indicium that the PNR was
aware of the risks to others as well as the need to control the vehicular and other traffic
there. Verily, the Pereñas and the PNR were joint tortfeasors.

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN

vs.
MARJORIE NAVIDAD G.R. No. 145804,
February 6, 2003
Vitug, J.

FACTS:
On 14 October 1993, Nicanor Navidad, then drunk, entered the EDSA LRT station after
purchasing a “token” (representing payment of the fare). While Navidad was standing
on the platform near the LRT tracks, Junelito Escartin, the security guard assigned to
the area approached Navidad and a misunderstanding or an altercation between the
two apparently ensued that led to a fist fight. Navidad later fell on the LRT tracks. At the
exact moment that Navidad fell, an LRT train, operated by petitioner Rodolfo Roman,
was coming in. Navidad was struck by the moving train, and he was killed
instantaneously.
A complaint for damages was then filed against Escartin, Roman, the LRTA, the Metro
Transit Organization Inc. and Prudent for the death of Navidad.
The RTC then held that Prudent and Escartin were liable and it ordered them to pay
jointly and severally the damages for the death of Navidad. On appeal, the CA
exonerated Prudent and Escartin from any liability for the death of Navidad and held
that LRTA and Roman jointly and severally liable. It ruled that the contract of carriage
had already existed when Navidad entered the place where passengers were supposed
to be after paying the fare and getting the corresponding token therefor.
ISSUE:
Whether or not the LRTA and Roman are liable for the death of Navidad.
RULING:
The law requires common carriers to carry passengers safely using the utmost diligence
of very cautious persons with due regard for all circumstances. Such duty of a common
carrier to provide safety to its passengers so obligates it not only during the course of
the trip but for so long as the passengers are within its premises and where they ought
to be in pursuance to the contract of carriage.
Thus, in this case, the foundation of LRTA’s liability is the contract of carriage and its
obligation to indemnify the victim arises from the breach of that contract by reason of its
failure to exercise the high diligence required of the common carrier. In the discharge of
its commitment to ensure the safety of passengers, a carrier may choose to hire its own
employees or avail itself of the services of an outsider or an independent firm to
undertake the task. In either case, the common carrier is not relieved of its
responsibilities under the contract of carriage.
On the other hand, there is no showing that petitioner Roman himself is guilty of any
culpable act or omission, he must also be absolved from liability. Needless to say, the
contractual tie between the LRT and Navidad is not itself a juridical relation between the
latter and Roman; thus, Roman can be made liable only for his own fault or negligence.

First Philippine Industrial Corp. v. CA, Paterno Tac-an, Bantangas City, and
Adoracion Arellano (treasurer of Batangas)
G.R. No. 125948 December 29, 1998
Martinez, J.

FACTS:
 FPIC – grantee of a pipeline concession under Republic Act No. 387, as amended, to
contract, install and operate oil pipelines
 It applied for a mayor’s permit with the Office of the Mayor of Batangas City. Before
the permit could be issued, 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.
 It filed a complaint for tax refund alleging that 1) the imposition and collection of the
business tax on its gross receipts violates Section 133 of the Local Government Code
which grants tax exemption to common carriers; 2) the authority of cities to impose
and collect a tax on the gross receipts of “contractors and independent contractors”
under Sec. 141 (e) and 151 does not include the authority to collect such taxes on
transportation contractors for, as defined under Sec. 131 (h), the term “contractors”
excludes transportation contractors; and, 3) the City Treasurer illegally and
erroneously imposed and collected the said tax, thus meriting the immediate refund of
the tax paid.

ISSUES: 1. WON FPIC is a common carrier; 2. WON it is exempted from paying the
taxes required by the City Treasurer
HELD: 1. Yes. FPIC 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.
 common carrier - 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 (see also Art. 1732)
 test for determining whether a party is a common carrier of goods:
 a. 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;
 b. undertakes to carry goods of the kind to which his business is confined
 c. undertakes to carry by the method by which his business is conducted and over his
established roads
 d. transportation is for hire
 common service coincides with public service
 public service – includes every person that now or hereafter may own, operate.
manage, or control in the Philippines, for hire or compensation, with general or limited
clientele, whether permanent, occasional or accidental, and done for general business
purposes, any common carrier, railroad, street railway, traction railway, subway motor
vehicle, either for freight or passenger, or both, with or without fixed route and
whatever may be its classification, freight or carrier service of any class, express
service, steamboat, or steamship line, pontines, ferries and water craft, engaged in the
transportation of passengers or freight or both, shipyard, marine repair shop, wharf or
dock, ice plant, ice-refrigeration plant, canal, irrigation system gas, electric light heat
and power, water supply and power petroleum, sewerage system, wire or wireless
communications systems, wire or wireless broadcasting stations and other similar
public services (CA No. 1416, as amended, otherwise known as the Public Service
Act)
 FPIC - considered a common carrier under Art. 86 of the Petroleum Act of the
Philippines (RA 387), which provides that: Art. 86. Pipe line concessionaire as
common carrier. — A pipe line shall have the preferential right to utilize installations
for the transportation of petroleum owned by him, but is obligated to utilize the
remaining transportation capacity pro rata for the transportation of such other
petroleum as may be offered by others for transport, and to charge without
discrimination such rates as may have been approved by the Secretary of Agriculture
and Natural Resources.
 FPIC is also a public utility pursuant to Art. 7 of RA 387 which states that “everything
relating to the exploration for and exploitation of petroleum . . . and everything relating
to the manufacture, refining, storage, or transportation by special methods of
petroleum, is hereby declared to be a public utility”
 2. Yes. Legal basis is Section 133 (j), of the Local Government Code which provides
that “Unless otherwise provided herein, the exercise of the taxing powers of provinces,
cities, municipalities, and barangays shall not extend to the levy of the following:
Taxes on the gross receipts of transportation contractors and persons engaged in the
 transportation of passengers or freight by hire and common carriers by air, land or
water, except as provided in this Code”.
 Reason for the exception: to avoid duplication of tax

Spouses Cruz vs. Sun Holidays, Inc.

GR No. 186312
29 June 2010

FACTS
Spouses Cruz files a complaint for damages against Sun Holidays arising from the
death of their son who perished with his wife on board the boat M/B Coco Beach III that
capsized en route Batangas from Puerto Galera where the couple had stayed at Coco
Beach Island Resort owned and operated by respondent. Their stay was by virtue of a
tour package-contract with respondent that included transportation to and from the
Resort and the point of departure in Batangas. Eight of the passengers, including
petitioners’ son and his wife, died during the accident. Sun denied any responsibility for
the incident which it considered to be a fortuitous event. Petitioners allege that as a
common carrier, Sun was negligent in allowing the boat to sail despite the storm
warning bulletins issued by PAGASA. Respondent denied being a common carrier,
alleging that its boats are not available to the public but are only used as ferry resort
carrier. It also claimed to have exercised the utmost diligence in ensuring the safety of
its passengers, and that contrary to petitioners’ allegation, there was no storm as the
Coast Guard in fact cleared the voyage. M/B Coco Beach III was not filled to capacity
and had sufficient life jackets for its passengers.

RTC dismissed the complaint. CA denied the appeal holding that Sun is a private carrier
which is only required to observe ordinary diligence and that the proximate cause of the
incident was a fortuitous event.

ISSUE
Whether M/B Coco Beach III breached a contract of carriage

HELD
Respondent is a common carrier. Its ferry services are so intertwined with its business
as to be properly considered ancillary thereto. The constancy of respondent’s ferry
services in its resort operations is underscored by its having its own Coco Beach boats.
And the tour packages it offers, which include the ferry services, may be availed of by
anyone who can afford to pay the same. These services are thus available to the public.

In the De Guzman case, Article 1732 of the Civil Code defining “common carriers” has
deliberately refrained from making distinctions on whether the carrying of persons or
goods is the carrier’s principal business, whether it is offered on a regular basis, or
whether it is offered to the general public.

Under the Civil Code, common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence for the safety of
the passengers transported by them, according to all the circumstances of each case.
They are bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with due regard for all the
circumstances.

When a passenger dies or is injured in the discharge of a contract of carriage, it is

presumed that the common carrier is at fault or negligent. In fact, there is even no need
for the court to make an express finding of fault or negligence on the part of the
common carrier. This statutory presumption may only be overcome by evidence that the
carrier exercised extraordinary diligence.
Crisostomo v CA
G.R. No. 138334 Aug 25, 2003
Ynares-Santiaga, RCA j.

Breach of Obligations>Negligence>Standard of Care

Summary:

In this case, the petitioner contracted with Caravan T&T (travel agency) for her trip to
Europe. However, the petitioner missed her flight because the flight she was supposed
to take had already departed from the previous day. Petitioner main contention’s is that,
Caravan T&T, as a common carrier should observed EXTRA ORDINARY DILIGENCE.

SC ruled that the standard of care required of common carrier is not applicable to
Caravan T&T since from the nature of the latter is not to transport people but to make
booking arrangements with their clients. The default standard of care is only diligence of
a good father of a family.

Doctrines:

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.

There is no fixed standard of diligence applicable to each and every contractual

obligation and each case must be determined upon its particular facts. The degree of
diligence required depends on the circumstances of the specific obligation and whether
one has been negligent is a question of fact that is to be determined after taking into
account the particulars of each case.

Facts:

 Petitioner : Estela Crisostomo (Lawyer, well-travelled woman)

  Respondents: Caravan Travel & Tours Int’l Inc (Travel agency), Company’s
Manager, Meriam Menor (niecec also of Estela)
 The petitioner contracted the respondent to arrange & facilitate her booking &
ticketing & accommodation in “Jewels of Europe” tour.
 Menor, manager of the travel agency, went to the petitioner’s residence & deliver
all necessary travel documents & advise the petitioner to be at NAIA on
Saturday (Jun 15, 1991), two (2) hours before the flight.
 Without checking the travel documents, the petitioner went to NAIA on Saturday.
However, she discovered that the flight she was supposed to take had already
departed the previous day.
 The petitioner then take another package (British Pageant) offered by the
respondent;
 She went to RTC to demand reimbursement on the differential cost of the two
tour packages. Petitioner holds that there was BREACH OF CONTRACT OF
CARRIAGE & DAMAGES. Lower courts’ decision below:
o RTC: Respondent is negligent. Petitioner was merely guilty of contributory
negligence.
o CA: Petitioner is more negligent. Hence, not entitled for damages.

ISSUE/HOLDING:

WON Caravan Travel & Tours is obliged to observe extra-ordinary diligence? (NO)

Respondent is not a common carrier but a travel agency. It is thus not bound under the
law to observe extraordinary diligence in the performance of its obligation, as petitioner
claims.

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. It is obvious from the above definition that
respondent is not an entity engaged in the business of transporting either passengers or
goods. Respondent did not undertake to transport petitioner from one place to another
since its covenant with its customers is simply to make travel arrangements in their
behalf. Respondent’s services as a travel agency include procuring tickets and
facilitating travel permits or visas as well as booking customers for tours

DISPOSITIVE:

Petition is DENIED for lack of merit.

Decision of the Court of Appeals is AFFIRMED