National Steel Corporation v.

Court of Appeals
G.R. No. 112287. December 12, 1997

Facts:
MV "VLASONS I" is a vessel of Philippine registry engaged in the tramping
service and is available for hire only under special contracts of charter party, it
does not transport cargo or shipment for the general public. It is in the capacity
that its owner, Vlasons Shipping, Inc. (VSI), entered into a contract of
affreightment or contract of voyage charter hire with National Steel
Corporation (NSC).

MVI was hired to transport NSC’s steel goods from Iligan City to Manila. In
the course of the voyage, MVI encountered very rough seas causing seawater
to overflow on its deck and hatch covers. Upon arriving in Manila it was
discovered that the goods were wet and rusty.

NSW filed a complaint for damages against VSI as a result of the alleged act,
neglect and default of the master and crew in the management of the vessel as
well as the want of due diligence on the part of the VSI to make the vessel
seaworthy and to make the holds and all other parts of the vessel in which the
cargo was carried, fit and safe for its reception, carriage and preservation.

Issue:
Whether the contract NSC undertook with VSI is one of a common carrier or a
private carrier?

Held:
The contract between NSC undertook with VSI is one of a private carrier.

It has been held that the true test of a common carrier is the carriage of
passengers or goods, provided it has space, for all who opt to avail themselves
of its transportation service for a fee.

A carrier which does not qualify under the above test is deemed a private
carrier. Generally, private carriage is undertaken by special agreement and the
carrier does not hold himself out to carry goods for the general public. 

In the instant case, it is undisputed that VSI did not offer its services to the
general public,  it carried passengers or goods only for those it chose under a
"special contract of charter party."

Ratio Decidendi:
Private carriage is undertaken by special agreement and the carrier does not
hold himself out to carry goods for the general public.
First Philippine Industrial Corporation v. Court of Appeals et. al.
G.R. No. 125948. December 29, 1998

Facts:
First Philippine Industrial Corporation (FPIC) is a grantee of a pipeline
concession under Republic Act No. 387, as amended, to contract, install and
operate oil pipelines. It is engaged in the business of transporting petroleum
products from the Batangas refineries, via pipeline, to Sucat and JTF Pandacan
Terminals. 

Sometime in 1995, FPIC applied for a mayor's permit with the Office of the
Mayor of Batangas City. However, the City Treasurer required FPIC to pay a
local tax based on its gross receipts pursuant to the Local Government Code. In
order not to hamper its operations, petitioner paid the tax under protest.

FPIC claims exemption from paying tax on gross receipts under Section 133 of
the Local Government Code (LGC), further pointed out that transportation
contractors are not included in the enumeration of contractors under Sec 131 of
the same code.

The City Treasurer denied the protest contending that FPIC cannot be
considered engaged in transportation business, it asserts that pipelines are not
included in the term "common carrier" which refers solely to ordinary carriers
such as trucks, trains, ships and the like and thus it cannot claim exemption
under Section 133 of the LGC.

Issue:
Whether or not FPIC is a common carrier?

Held:
FPIC is a common carrier.

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."

Under the Petroleum Act of the Philippines (Republic Act 387), petitioner is
considered a "common carrier.

Ratio Decidendi:
The definition of "common carriers" in the Civil Code makes no distinction as
to the means of transporting, as long as it is by land, water or air. It does not
provide that the transportation of the passengers or goods should be by motor
vehicle.
ASIA LIGHTERAGE AND SHIPPING, INC. v. COURT OF APPEALS et. al.
G.R. No. 147246. August 19, 2003

Facts:
Goods from Portland, Oregon was shipped for delivery to consignee, General
Milling Corporation (GMC) in Manila. The shipment was insured by
Prudential Guarantee and Assurance, Inc. (PGAI) against loss or damage under
a Marine Cargo Risk Note.

The carrying vessel arrived in Manila and the cargo was transferred to the
custody of Asia Lighterage and Shipping, Inc. (ALSI). ALSI was contracted by
GMC as carrier to deliver the cargo to GMC's warehouse in Pasig City, the
goods were loaded on barge PSTSI III (Barge).

As the Barge was underway to deliver said goods, a warning of an incoming

storm was issued. Along the way, the barge sank and never made it to Pasig
City. GMC sent a claim letter to the ALSI, and another letter dated PGAI for
the value of the lost cargo.

PGAI indemnified GMC and thereafter, as subrogee, sought recovery from

ALSI but to no avail. PGAI filed a complaint against the ALSI for recovery of
the amount of indemnity. The trial court and the Court of Appeals both found
ALSI liable. ALSI  insists that it is not a common carrier but a private one.

Issue:
Whether the ALSI is a common carrier

Held:
Yes, ALSI is a common carrier.

ALSI fits the test of a common carrier as laid down in Bascos vs. Court of
Appeals. The test to determine a common carrier is "whether the given
undertaking is a part of the business engaged in by the carrier which he has
held out to the general public as his occupation rather than the quantity or
extent of the business transacted." In the case at bar, ALSI admitted that it is
engaged in the business of shipping and lighterage, offering its barges to the
public, despite its limited clientele for carrying or transporting goods by water
for compensation. Article 1732 of the Civil Code defines common carriers as
persons, corporations, firms or associations 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. 

Ratio Decidendi:
A common carrier may have no regular schedule or clients, fixed routes,
terminals or tickets.
PEDRO DE GUZMAN v. COURT OF APPEALS et. al.
G.R. No. L-47822. December 22, 1988

Facts:
Ernesto Cendana (Cendana), is a junk dealer engaged in buying up used bottles
and scrap metal in Pangasinan for resale in Manila. He uses his own two (2)
six-wheeler trucks for hauling said materials.On the return trip to Pangasinan,
he would charged engage in hauling service for a fee to varoius merchants who
wanted their goods delivered to Pangasinan.

Pedro de Guzman (De Guzman), contracted the services of Cendana for the
hauling of 750 cartons of milk from Rizal. The milk were loaded into the two
trucks, 150 cartons on a truck driven by Cendana and 600 cartons on other
truck driven by Estrada, Cendana's driver. Somewhere in Tarlac, the truck
driven by Estrada was hijacked by armed men. The men took with them the
truck, its driver and the cargo. Only 150 cartons were delivered to De Guzman.

Cendana was sued for the value of the lost goods. It was alleged that Cendana,
being a common carrier, and having failed to exercise extraordinary diligence
should be held liable. Cendana, in his answer, denied that he was a common
carrier.

The trial court found Cendana to be a common carrier while the Court of
Appeals reversed the judgment and held that Cenadana transporting return
loads is a casual occupation — a sideline and not as a common carrier.

Issue:
Whether or not Cendana is a common carrier?

Held:
Cendana is a common carrier.

The definition of common carriers under Art 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 (in local Idiom as "a sideline"). It 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 it 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.

Ratio Decidendi:
No distinction is made by law between common carriage as a principal or
ancillary activity.
REYNALDA GATCHALIAN v. ARSENIO DELIM et. al.
G. R. No. L-56487. October 21, 1991

Facts:
Reynalda Gatchalian (Gatchalian) boarded as a paying passenger a “Thames” mini
bus, owned by Arsenio Delim (Delim), bound for Bauang, La Union.

Along the way, the Bus met an accident due to mechanical defect and went off the
road causing physical injuries to Gatchalian and other passengers.

In the hospital, while being treated for their injuries, the passengers were visited by
Adela Delim (Mrs. Delim), wife of Delim. Mrs. Delim paid for their hospitalization
and medical expenses, gave Gatchalian P12.00 for her transportation in going home
from the hospital and made all the injured passengers sign a prepared Joint Affidavit
waiving their rights to file criminal and civil complaints against Delim and his driver
from the incident.

Despite signing said affidavit, Gatchalian filed an action extra contractu against
Delim. Delim averred that the accident was due to force majeure.

Issue:
Whether or not Delim is liable to Gatchalian for the damages she suffered due
to the accident?

Held:
Yes, Delim is liable to Gatchalian for the damages she suffered due to the
accident.

A duty to exercise extraordinary diligence in protecting the safety of its

passengers is imposed upon a common carrier. In case of death or injuries to
passengers, a statutory presumption arises that the common carrier was at fault
or had acted negligently unless it proves that it had observed extraordinary
diligence as prescribed in Articles 1733 and 1755. Because of this statutory
presumption, it has been held that a court need not even make an express
finding of fault or negligence on the part of the common carrier in order to hold
it liable. To overcome this presumption, the common carrier must slow to the
court that it had exercised extraordinary diligence to prevent the injuries.

Records before the Court are bereft of any evidence showing Delim exercised
the extraordinary diligence required by law. He did not even attempt to prove
that he had indeed exercised the requisite extraordinary diligence.

Ratio Decidendi:
A duty to exercise extraordinary diligence in protecting the safety of its
passengers is imposed upon a common carrier.