FIRST PHILIPPINE INDUSTRIAL CORPORATION, petitioner,

vs.
COURT OF APPEALS, HONORABLE PATERNO V. TAC-AN, BATANGAS CIT !n"
ADORACION C. ARELLANO, in #er o$$i%i!& %!p!%it' !s Cit' Tre!s(rer o$ B!t!n)!s,
respon"ents.
G.R. No. *+,-./ De%e01er +-, *--/
2ARTINE3, 4.5
NATURE5
A petition for review on certiorari assailing the Decision of the Court of Appeals affirming
the decision of the Regional Trial Court of Batangas City which dismissed petitioners'
complaint for a business tax refund imposed by the City of Batangas.
FACTS5
etitioner is a grantee of a pipeline concession under Republic Act !o. "#$. %ometime in
&anuary '(()* petitioner applied for mayor+s permit in Batangas. ,owever* the Treasurer
re-uired petitioner to pay a local tax based on gross receipts amounting to ().*/$../0.
1n order not to hamper its operations* petitioner paid the taxes for the first -uarter of '(("
amounting to 2"(*/'(./' under protest. 3n &anuary 2/* '((0* petitioner filed a letter4
protest to the City Treasurer* claiming that it is exempt from local tax since it is engaged
in transportation business. The respondent City Treasurer denied the protest* thus*
petitioner filed a complaint before the Regional Trial Court of Batangas for tax refund.
Respondents assert that pipelines are not included in the term 5common carrier6 which
refers solely to ordinary carriers or motor vehicles. The trial court dismissed the
complaint* and such was affirmed by the Court of Appeals.
ISSUE5
7hether a pipeline business is included in the term 5common carrier6 so as to entitle the
petitioner to the exemption
HELD5
Article '$"2 of the Civil Code defines a 8common carrier8 as 8any person* corporation*
firm or association engaged in the business of carrying or transporting passengers or
goods or both* by land* water* or air* for compensation* offering their services to the
public.8
The test for determining whether a party is a common carrier of goods is9
:'; ,e must be engaged in the business of carrying goods for others as a public
employment* and must hold himself out as ready to engage in the transportation of
goods for person generally as a business and not as a casual occupation<
:2; ,e must underta=e to carry goods of the =ind to which his business is confined<
:"; ,e must underta=e to carry by the method by which his business is conducted and
over his established roads< and
:0; The transportation must be for hire.
Based on the above definitions and re-uirements* there is no doubt that petitioner is a
common carrier. 1t is engaged in the business of transporting or carrying goods* i.e.
petroleum products* for hire as a public employment. 1t underta=es to carry for all
persons indifferently* that is* to all persons who choose to employ its services* and
transports the goods by land and for compensation. The fact that petitioner has a limited
clientele does not exclude it from the definition of a common carrier.
Pipe&ine %on%ession!ire !s %o00on %!rrier 6RA 7/89
>nder the etroleum Act of the hilippines :Republic Act "#$;* ?1C is considered a
5common carrier.6 Thus* Article #. thereof provides that 5ipe line concessionaire as
common carrier. @ A pipe line shall have the preferential right to utiliAe installations for
the transportation of petroleum owned by him* but is obliged to utiliAe the remaining
transportation capacity pro rata for the transportation of such other petroleum as may be
offered by others for transport* and to change without discrimination such rates as may
have been approved by the %ecretary of Agriculture and !atural Resources.6
Petro&e(0 oper!tion re)!r"e" !s p(1&i% (ti&it' 6RA 7/89
Republic Act "#$ also regards petroleum operation as a public utility. ertinent portion of
Article $ thereof provides 5that 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.6