PEDRO DE GUZMAN vs.

COURT OF APPEALS
Facts:
Respondent Ernesto Cendana was a junk dealer. He buys scrap materials and brings those that he
gathered to Manila for resale using 2 six-wheeler trucks. On the return trip to Pangasinan,
respondent would load his vehicle with cargo which various merchants wanted delivered,
charging fee lower than the commercial rates. Sometime in November 1970, petitioner Pedro de
Guzman contracted with respondent for the delivery of 750 cartons of Liberty Milk. On
December 1, 1970, respondent loaded the cargo. Only 150 boxes were delivered to petitioner
because the truck carrying the boxes was hijacked along the way. Petitioner commenced an
action claiming the value of the lost merchandise. Petitioner argues that respondent, being a
common carrier, is bound to exercise extraordinary diligence, which it failed to do. Private
respondent denied that he was a common carrier, and so he could not be held liable for force
majeure. The trial court ruled against the respondent, but such was reversed by the Court of
Appeals.

Issues:
(1) Whether or not private respondent is a common carrier

Held:
(1) Article 1732 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,"
i.e., the general community or population, and one who offers services or solicits
business only from a narrow segment of the general population. It appears to the Court
that private respondent is properly characterized as a common carrier even though he
merely "back-hauled" goods for other merchants from Manila to Pangasinan, although
such backhauling was done on a periodic or occasional rather than regular or scheduled
manner, and even though private respondent's principal occupation was not the carriage
of goods for others. There is no dispute that private respondent charged his customers a
fee for hauling their goods; that fee frequently fell below commercial freight rates is not
relevant here. A certificate of public convenience is not a requisite for the incurring of
liability under the Civil Code provisions governing common carriers.

First Philippine Industrial Corp. vs. CA

Facts:
Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime in
January 1995, petitioner applied for mayors permit in Batangas. However, the Treasurer
required petitioner to pay a local tax based on gross receipts amounting to P956,076.04. In order
not to hamper its operations, petitioner paid the taxes for the first quarter of 1993 amounting to
P239,019.01 under protest. On January 20, 1994, petitioner filed a letter-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 common carrier which refers solely to ordinary carriers or motor vehicles.
The trial court dismissed the complaint, and such was affirmed by the Court of Appeals.
Issue:
Whether a pipeline business is included in the term common carrier so as to entitle the
petitioner to the exemption
Held:
Article 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.

NATIONAL STEEL CORPORATION vs. CA and VLASONS SHIPPING, INC.

FACTS:
National Steel Corporation (NSC) as Charterer and defendant Vlasons Shipping, Inc. (VSI) as
Owner, entered into a Contract of Voyage Charter Hire (Affreightment) whereby NSC hired
VSIs vessel, the MV VLASONS I to make one (1) voyage to load steel products at Iligan City
and discharge them at North Harbor, Manila. VSI carried passengers or goods only for those it
chose under a special contract of charter party.
The vessel arrived with the cargo in Manila, but when the vessels three (3) hatches containing
the shipment were opened, nearly all the skids of tin plates and hot rolled sheets were allegedly
found to be wet and rusty.
NSC filed its complaint against defendant before the CFI wherein it claimed that it sustained
losses as a result of the 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 defendant to make the vessel
seaworthy -- all in violation of defendants undertaking under their Contract of Voyage
Charter Hire.
In its answer, defendant denied liability for the alleged damage claiming that the MV
VLASONS I was seaworthy in all respects for the carriage of plaintiffs cargo; that said vessel
was not a common carrier inasmuch as she was under voyage charter contract with the plaintiff
as charterer under the charter party.
The trial court ruled in favor of VSI; it was affirmed by the CA on appeal.
ISSUE:
Whether or not Vlazons is a private carrier.
HELD:
Yes.
At the outset, it is essential to establish whether VSI contracted with NSC as a common carrier or
as a private carrier. The resolution of this preliminary question determines the law, standard of
diligence and burden of proof applicable to the present case.
Article 1732 of the Civil Code defines a common carrier 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. 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. The most typical, although not the only form of private carriage, is the charter
party, a maritime contract by which the charterer, a party other than the shipowner, obtains the
use and service of all or some part of a ship for a period of time or a voyage or voyages.
In the instant case, it is undisputed that VSI did not offer its services to the general public. As
found by the Regional Trial Court, it carried passengers or goods only for those it chose under a
special contract of charter party. As correctly concluded by the Court of Appeals, the MV
Vlasons I was not a common but a private carrier. Consequently, the rights and obligations of
VSI and NSC, including their respective liability for damage to the cargo, are determined
primarily by stipulations in their contract of private carriage or charter party. Recently, in
Valenzuela Hardwood and Industrial Supply, Inc., vs. Court of Appeals and Seven Brothers
Shipping Corporation, the Court ruled:
x x x [I]n a contract of private carriage, the parties may freely stipulate their duties and
obligations which perforce would be binding on them. Unlike in a contract involving a common
carrier, private carriage does not involve the general public. Hence, the stringent provisions of
the Civil Code on common carriers protecting the general public cannot justifiably be applied to
a ship transporting commercial goods as a private carrier. Consequently, the public policy
embodied therein is not contravened by stipulations in a charter party that lessen or remove the
protection